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Former Fed Chief Bernanke Backs Blockchain, but Not Bitcoin

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Former Federal Reserve Chair Ben Bernanke took a leaf out of Jamie Dimon’s playbook Monday by talking up the benefits of blockchain while damning cryptocurrency to failure.

Former Central Banker Doesn’t Like Decentralized Currency

Ben Bernanke didn’t have nice things to say about bitcoin on Monday, and dismissed any notion that blockchain currency could rival government-controlled fiat money.

“Bitcoin is an attempt to replace fiat currency and evade regulation and government intervention. I don’t think that’s going to be a success,” Bernanke said in Toronto, as reported by Jeff John Roberts in Fortune. “Eventually governments will take any action they need to prevent [that].”

In August, Bernanke told a conference hosted by Ripple that bitcoin is a “mostly speculative venture” that “hasn’t shown itself to be a real transactional currency.”

At the same time, he acknowledged the benefits of blockchain technology, especially for its role in facilitating cross-border payments. Blockchain’s tamper-proof technology has proven to be a valuable commodity for central banks, such as the Bank of Japan and Bank of England. (More info on Bernanke’s comments can be found here.)

Bernanke chaired the Federal Reserve between 2006 and 2014, and was part of the policy committee that tried to engineer the post-crisis recovery.

Bank of America Chimes In

Bank of America Merrill Lynch is the latest institution to chime in on bitcoin. The Wall Street behemoth told investors on Monday that bitcoin’s true value is “impossible to assess.”

BoA analysts argue that brokerages must be careful before offering cryptocurrency investments because they could impact both the overall liquidity of the market as well as the total capitalization for each digital asset.

Wall Street’s reaction to cryptocurrency has been mixed. Goldman Sachs is considering a new trading option dedicated to bitcoin and other cryptocurrencies.  Meanwhile, J.P. Morgan Chase & Co is helping clients buy bitcoin despite what its CEO has said about cryptocurrency.

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4.6 stars on average, based on 498 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Government of Malta Passes New Cryptocurrency Legislation

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Malta’s embrace of digital currency came full circle Tuesday after lawmakers passed three separate crypto-related bills that could transform the island nation into a blockchain powerhouse.

‘First in the World’

CCN broke the news Wednesday that all three bills have gone through Malta’s legislative process, putting them on track for full implementation. The second reading of the bills was carried out Tuesday night in a plenary session that began at 6:00 p.m. local time, parliamentary records show.

The approved bills include the Virtual Financial Assets Act (VFA),  the Innovative Technology Arrangements and Services Act and  the Malta Digital Innovation Authority Act (MDIA).

VFA deals specifically with the regulation of initial coin offerings (ICOs), ordering new token projects to publish whitepapers and detailed descriptions of the entire project.

The  Innovative Technology Arrangements and Services bill governs blockchain startups and other businesses looking to leverage distributed ledger technology.

MDIA will effectively serve as an industry-specific governing body that will support the development and implementation of blockchain-based regulations.

Parliamentary Secretary Silvio Schembri said the bills were a ‘first in the world’ development and also announced the person heading the newly created MDIA:

“Today Maltese Parliament unanimously approved 3 bills on DLT/blockchain, a 1st in the World. Honored to have driven these bills. Announced that Mr Stephen McCarthy will be the CEO of the new #Malta Digital Innovation Authority.”

Blockchain Island

Malta has quickly emerged as a prominent player in the blockchain industry, having already lured major exchanges and businesses to its borders. Binance has announced plans to relocate to the tiny Mediterranean nation and earlier this month disclosed that it has opened a bank account in the country. OKEx, another prominent exchange, has also announced plans to make Malta its new home.

Binance and OKEx are the world’s largest cryptocurrency exchanges by trading volume, each processing more than $950 million in daily transactions.

Binance’s decision to relocate was largely driven by its desire to enable fiat-to-crypto deposits and withdrawals, something Malta says it will accommodate through local bank partnerships.

Changpeng Zhao, Binance’s CEO, has described Malta’s regulatory stance toward blockchain and cryptocurrency as “logical, clear and forward-thinking,” adding that “dozens” of similar exchanges are planning to relocate to the country.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

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Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 498 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Bithumb Hack Prompts South Korea to Hasten Cryptocurrency Regulation

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South Korea’s second-largest cryptocurrency exchange suffered a security breach on Wednesday, prompting local authorities to hasten their adoption of stricter regulations.

Bithumb Hack

Bithumb confirmed Wednesday that cyber criminals “seized” 35 billion won ($31.6 million) worth of digital cash in an apparent attack targeting user accounts. The exchange halted deposits at approximately 00:53 UTC and began a wholesale transfer of funds to cold storage to prevent further theft.

“We checked that some of cryptocurrencies valued about $30,000,000 was stolen,” Bithumb tweeted Wednesday. “Those stolen cryptocurrencies will be covered from Bithumb and all of assets are being transferring to cold wallet.”

The exchange has confirmed that it will fully compensate affected users.

An earlier update on Bithumb’s Twitter account reveals that a security upgrade was being carried out last week where it transferred to a cold wallet for safe storage. However, it is unclear whether the upgrade is linked to the theft.

In terms of trade volume, Bithumb is the world’s sixth-largest cryptocurrency exchange. The platform processed more than $355 million worth of digital currency transactions in the last 24 hours, according to data provided by CoinMarketCap.

Bithumb is the second South Korean exchange this month to have been hacked. Less than two weeks ago, more than $37 million was compromised in a coordinated attack on Coinrail. The attackers went after the exchange’s coins and lesser-known ERC-20 tokens.

South Korea to Boost Regulation

South Korea’s financial regulators have announced plans to implement stricter guidelines for virtual exchanges, and to do so more expeditiously than previously planned. The announcement, which came on the heels of the Bitthumb attack, follows months of deliberation about whether to regulate cryptocurrency exchanges like banks and other financial institutions.

As CCN notes, cryptocurrency exchanges are presently regulated as “communication vendors,” which means virtually anyone can launch an online trading platform. This designation prevents direct oversight of digital currency exchanges by financial regulators.

New crypto regulations are expected to be rolled out in the coming months, which will put South Korea’s financial authorities on par with their counterparts in the United States and Japan. In those countries, cryptocurrency exchanges must comply with laws pertaining to security and consumer protection.

Park Yong-kin, a committee member of the National Assembly, has championed stricter regulations since last year. According to local media, his views are now being echoed by other government officials.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

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Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 498 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Chinese President Xi Jinping Comes to Terms With Blockchain

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Chinese President Xi Jinping may not like cryptocurrencies, but he is a fan of the blockchain. For a nation that has cracked down on the cryptocurrency industry more than any other jurisdiction, as evidenced by a ban on initial coin offerings (ICOs) and bitcoin trading in the mainland as well as a target on bitcoin mining, the process by which more coins are created, his acceptance of the blockchain is surprisingly refreshing. He reportedly said:

“A new generation of technology represented by artificial intelligence, quantum information, mobile communications, internet of things and blockchain is accelerating breakthrough applications.”

While President Xi Jinping’s celebration of the blockchain is juxtaposed by the country’s intolerance for cryptocurrencies, it’s a step in the right direction. He said he wants China to “become the global center” for technological innovation.

China has seemingly been able to separate the blockchain from cryptocurrencies considering that in spite of the broader ban in Beijing blockchain startups and government officials have been working together to unlock the potential of the technology in the region, as CNBC reported. Meanwhile, as anecdotal evidence, hundreds of Chinese locals attended a recent blockchain conference in the United States where a pair of sessions were given in Mandarin.

But Bobby Lee, who is the co-founder of China’s maiden bitcoin exchange BTCC, which has since rebranded and whose China trading capabilities have been shuttered, suggests that the lines surrounding blockchain technology often get blurred.

Technological Revolution

President Xi Jinping in his speech to the Chinese Academies of Sciences and Engineering acknowledged the feverish pace at which technological innovation has been unfolding in the 21st century, saying: “A new round of scientific and industrial revolution is reconstructing the global innovation map and reshaping the global economic structure.”

But in key ways, Xi has shut the door to that innovation by clamping down on what once comprising the lion’s share of bitcoin trading. But if you ask Lee, he reportedly believes that at some point, the ban on bitcoin trading will be eased and China could adopt a licensing process, he’s just not sure when.

Blockchain pioneers including the likes of Wences Casares and Joseph Lubin have offered perspective on cryptocurrencies that might serve Xi well, with Lubin recently saying that “cryptocurrencies should remain unfettered” as it relates to regulation. Casares, the CEO of blockchain startup Xapo, once described the harmony in which the blockchain and bitcoin are designed to operate, saying: “If you were to remove the bitcoin, miners would disappear and so would the blockchain.”

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 23 rated postsGerelyn has been covering ICOs and the cryptocurrency market since mid-2017. She's also reported on fintech more broadly in addition to asset management, having previously specialized in institutional investing. She owns some BTC and ETH.




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