The week’s developments in the crypto currencies world including Bakkt Rolls Out ‘Critical’ Bitcoin Custody After NY Gives Green Light

Unilever, O2 and Sky Join Blockchain Pilot for Digital Ad Transparency

Unilever, O2 and Sky are among the latest big firms to sign on to Jicwebs’ blockchain pilot program designed to improve trust and transparency in digital advertising. The news was revealed in a Nov. 12 report from United Kingdom-based industry magazine Campaign.

Jicwebs — an acronym for the U.K. digital ad trading standards body, the Joint Industry Committee for Web Standards — first announced its blockchain pilot initiative in May 2019. It counts the participation of major global media agencies Zenith, OMD UK and Manning Gottlieb OMD, who have been evaluating the potential for blockchain technology to bolster transparency in the sector and increase operational efficiency.

According to Campaign’s report, the U.K.’s popular online platforms Gumtree, Netmums and Rightmove have also all signed on to the project. To complement the Jicwebs pilot, ISBA — an entity representing the U.K’s leading advertisers — is also conducting an end-to-end audit of some of the problems that plague the digital ad sector, notably in regard to trust and brand safety. Richard Reeves, managing director of the Association of Online Publishers, said that the body welcomes “all initiatives that increase transparency for our members and shed light on where advertising spend is being distributed across the digital supply chain.” If the pilot proves successful, Jicwebs reportedly plans to consult the digital ad industry on how to implement the blockchain solution in 2020.

Source: “Unilever, O2 and Sky Join Blockchain Pilot for Digital Ad Transparency”, available at https://cointelegraph.com/news/unilever-o2-and-sky-join-blockchain-pilot-for-digital-ad-transparency)

Bakkt Rolls Out ‘Critical’ Bitcoin Custody After NY Gives Green Light

Institutional Bitcoin (BTC) trading platform Bakkt has announced it has launched its custody feature for its entire client base following regulatory approval.

In a blog post on Nov. 11, Bakkt said it had received the go-ahead from the New York Department of Financial Services (NYDFS) to offer custody services to any institution. Previously, the option was only available for those trading its Bitcoin futures.

Commenting on the release, Bakkt described the custody tool as “the critical link in the institutional adoption of Bitcoin.”

“Safely storing digital assets demands a comprehensive approach to custody. Institutions and sophisticated investors need more than cutting-edge technology. They require proven infrastructure, robust operational controls, and independent oversight,” the blog post added.

As Cointelegraph reported, the wider cryptocurrency sphere has keenly eyed the appearance of custody solutions following initial futures rollouts beginning in 2017.

Among them is Mike Novogratz, the serial investor who recently identified Bakkt’s offering as forming part of the essential metamorphosis of Bitcoin’s institutional appeal.

“But more importantly they’ve got a custody solution that’s just coming online… world-class custody which allows more and more people to feel comfortable with it,” he said in an interview late last month.

Bakkt’s Bitcoin futures contracts have set new records of their own in recent days, with $15 million traded daily.

Source: “Bakkt Rolls Out ‘Critical’ Bitcoin Custody After NY Gives Green Light”, available at https://cointelegraph.com/news/bakkt-rolls-out-critical-bitcoin-custody-after-ny-gives-green-light

China Digital Currency ‘Not Seeking Full Data Control’ — Central Bank

China is not launching a war on cash by introducing its own digital currency, a senior official from the central bank has said. As Reuters reported on Nov. 12 quoting Mu Changchun, head of the digital currency research institute at the People’s Bank of China (PBoC), Beijing still intends for the new currency to complement the paper yuan.

Mu was speaking at a conference in Singapore, as speculation swirls the digital currency could appear within the next three months. China would be one of the first countries in the world to issue a domestic digital currency, along with Tunisia. “We know the demand from the general public is to keep anonymity by using paper money and coins… we will give those people who demand it anonymity in their transactions,” Mu explained. He continued: “But at the same time we will keep the balance between the ‘controllable anonymity’ and anti-money laundering, CTF (counter terrorist financing), and also tax issues, online gambling and any electronic criminal activities. That is a balance we have to keep, and that is our goal.”

China already employs strict monitoring of the financial sphere. The use of popular mobile payment operators such as WeChat Pay and Alipay requires extensive personal information, and until recently was only available to those with a Chinese bank account. Mu’s comments build on previous moves from the PBoC to protect cash. In July, it announced a crackdown on merchants refusing to accept paper fiat.

Nonetheless, Mu appeared keen to state that digital currency did not imply increased control of user data, despite the ease of aggregation of such data with digital transactions. “We are not seeking full control of the information of the general public,” he added. Other attempts to digitize previously cash-based transactions have met with much criticism. In India, where the government is conversely attempting to limit cash usage since 2016, spectators have voiced alarm at a scheme to tie replacement digital transactions to consumers’ real identities.

Source: “China Digital Currency ‘Not Seeking Full Data Control’ — Central Bank”, available at https://cointelegraph.com/news/china-digital-currency-not-seeking-full-data-control-central-bank

Investment App Abra Expands US Offerings with 60 New Cryptos

Abra is expanding its U.S. offerings, adding support for 60 new cryptocurrencies and doubling users’ bank deposit limits. The crypto wallet and investment app provider announced Tuesday that U.S. customers are now able to deposit, withdraw or trade bitcoin SV, DAI and cosmos, among many other crypto assets. Additionally, customer withdrawal and deposit amounts will rise to $4,000 per day, $8,000 per week and $16,000 per month.

The service expansion also adds deposit and withdrawal capabilities for at least four stablecoins, including tether, TrueUSD, paxos and DAI, according to the firm. In coming weeks, Abra will open up access to the new assets for users outside the U.S. as well. The additions bring the total number of cryptocurrencies on offer to over 200. Unlike most exchange services, Abra allows users to freely exchange all in-app assets without trading pair limitations.

The new options will not include Qtum (QTUM), bitcoin gold (BTG), EOS or OmiseGo (OMG), a spokesperson told CoinDesk. Abra announced earlier this year that its U.S. customers would not be able to hold those particular cryptocurrencies from Aug. 29, due to “regulatory uncertainty and restrictions” in the country.

At the time, the firm also said that residents of New York state could no longer use bank ACH or wire transfers, or American Express cards for deposits and withdrawals after the same date. Other U.S. users can currently fund accounts with AmEx, Visa and Mastercard, as well as bank and wire transfers, and crypto. Founded in 2014, the San Francisco-based firm has received investments from American Express Ventures, Foxconn Technology Group and First Round Capital.

Source: “Investment App Abra Expands US Offerings with 60 New Cryptos”, available at https://www.coindesk.com/investment-app-abra-expands-us-offerings-with-60-new-cryptos

 

CME says it will Launch Bitcoin Options in January

Derivatives exchange CME Group has announced it will launch options on its bitcoin futures contracts in January.

In a notice on its website on Tuesday, the Chicago-based exchange said, as long as it gets the green light from regulators, the options will go live on Jan. 13, 2020.

In late October, the firm published details of the options product, saying each contract would be based on one bitcoin futures contract (comprising of five bitcoin). They will be quoted in U.S. dollars per bitcoin with a tick size of $25 (or $5 for reduced tick sizes), and will trade between 5:00 P.M. Central Time on Sundays to 4:00 P.M. Central Time Fridays.

In today’s announcement, Tim McCourt, the exchange’s global head of equity index and alternative investment products, said:

“Since the launch of our Bitcoin futures nearly two years ago, clients have expressed a growing interest in options as another way to hedge and trade in these markets. We have worked closely with clients and the industry to establish a robust and increasingly liquid underlying futures market here at CME Group, and we believe Bitcoin options will now offer our customers greater precision and flexibility to manage their risk.”

Providing some data on the performance of its bitcoin futures contracts to date, CME said it’s seen average daily volume of over 6,500 contracts so far in 2019, which equate to roughly 32,500 bitcoin. There are now more than 3,500 individual accounts registered for trading the products, and almost half of trading volume comes from outside the U.S.

Source: “CME says it will Launch Bitcoin Options in January”, available at https://www.coindesk.com/cme-says-it-will-launch-bitcoin-options-in-january

Claire Cummings

Claire practises financial services law with a focus on regulatory issues, cryptocurrencies and tokens, trading and brokerage documentation and advising both existing and start-up funds and fund managers.

If you would like to discuss any of the points we raise, please contact me or one of our other lawyers.

Phone: 0207 585 1406
Email: claire.cummings@cummingsfisher.com

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