CoinDesk Crypto

A hedging instrument for decentralized finance (DeFi) has closed a $2.16 million funding round, led by Dragonfly Capital, with participation from 1kx, Version One Ventures, CoinFund, DTC Capital, Uncorrelated Ventures and A.Capital.

The funding is for Opyn, which offers crypto-based derivatives, beginning with the oToken, which is a permissionless hedging instrument. The company reports $36 million in trading volume since launch. Others in the funding round include angel investors Balaji Srinivasan, formerly of Coinbase; Robert Leshner, founder of Compound; and Linda Xie, also a Coinbase alum who co-founded Scalar Capital.

Crypto getting down with the risk management business sounds like the death knell of the punk-rock era of the industry. On the other hand, as projects like Opyn become more robust, they will create ways for thesis-driven investors to make money via contrarian positions, and that could be very punk rock.  

Related: Compound Tops MakerDAO, Now Has the Most Value Staked in DeFi

With the surge in demand for the COMP token, many users may have funds that would normally be in cash rather than crypto right now, which could feel risky for users. The ability to insure their USDC deposits on Compound might now be unusually attractive.  

Read more: Options Protocol Brings ‘Insurance’ to DeFi Deposits on Compound

Opyn offers oTokens, which are basically insurance policies, but without insurance adjusters. So here’s how a user would insure their USDC using the product. An oToken would allow them, for a small fee, to recover most of the investment’s value if they turned in the underlying token.

So a user could insure $100 in USDC for $95. The user could unlock the $95 in collateral on their oUSDC token but they would have to turn in 100 USDC to do it. They can do this at any time without any kind of check or verification.  

Related: Market Wrap: Bitcoin Spot Volumes Are Weak While Options and DeFi Strengthen

“Opyn is starting a new chapter in DeFi by unlocking options and offering a new and powerful financial primitive that brings stability to a historically-volatile market,” Tom Schmidt of Dragonfly Capital Partners said in a press release. 

The company is working now on v2 of its platform, which will include many new kinds of options. 

“This release will include margining for capital efficiency, enable options spreads and combinations positions, and create the infrastructure to add governance down the line,” co-founder Alexis Gauba told CoinDesk. The update should be released later this year. 

• DeFi Startups Built on Compound Weigh What to Do With $200 COMP Tokens
• Tether’s Supply on Compound Jumps to Over $224M in a Week

Software firm BlackBerry and tech giant Intel have joined the fight against crypto-mining malware with the launch of a detection tool for Intel’s commercial PCs.

Dubbed the the BlackBerry Optics Context Analysis Engine, the tool utilizes “unique” processor telemetry from Intel’s Threat Detection Technology and a mix of machine learning and artificial intelligence in order to thwart the malicious programs, often dubbed cryptojackers.

The technology is also designed to consume limited CPU processing power when in use, BlackBerry said, adding that it “effectively stops cryptojacking” on Windows computers with the tool installed.

Related: EU Supercomputers Hijacked From COVID-19 Research to Mine Cryptocurrency

Cryptojacking involves the installation of malware on a device from a malicious third party in order to hijack computing power to mine cryptocurrency (often monero) without the user’s knowledge or consent.

“Given the cost associated with mining cryptocurrency and the payments of ransomware demands on the decline, cryptojacking becomes an attractive option for threat actors to generate revenue,” Josh Lemos, vice president of research and Intelligence at BlackBerry, said in a press release Friday. “The days of exploiting unsuspecting users for free CPU time are over.”

See also: EU Supercomputers Hijacked From COVID-19 Research to Mine Cryptocurrency

Indeed, cryptojacking has soared in popularity with cybercriminals. According to a recent data breach investigation report by Verizon, “around 10% of organizations received cryptocurrency mining malware at some point throughout the course of the year [2020].”

Related: Hackers Plant Crypto Miners by Exploiting Flaw in Popular Server Framework Salt

Over the last year, a number of major cryptojacking attacks have been discovered affecting many thousands of companies. Browser users and apps on Android and Windows have also been affected.

One attack saw mining malware installed on a company server via a flaw in Salt, a popular infrastructure tool used by major firms such as IBM, LinkedIn and eBay. And in January, Interpol led an operation trying to tackle a malware infecting over 20,000 routers.

• US Agencies Publish List of North Korea’s Alleged Crypto Crimes
• North Korea Is Expanding Its Monero Mining Operations, Says Report

XRP, the fourth-biggest digital asset by market value, has been left out of 2020’s rally in cryptocurrencies, marking the second straight year of underperformance compared with its larger and more popular rivals, bitcoin and ether. 

The token is down 2% in 2020, while bitcoin is up 30% and ether, the native token from the Ethereum blockchain, has gained 76%. 

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Related: Crypto Long & Short: What Changed My Mind About Bitcoin Narratives

Cryptocurrency analysts and investors say XRP is likely underperforming this year because of regulatory pressure, slow growth as a payments solution and a lack of classic proof-of-work mining that generates fresh supply for the trading market. Such negatives have outweighed bullish factors that include a reduced pace of sales by the XRP software developer Ripple and signs of progress in a partnership with the payments transmitter MoneyGram (NASDAQ: MGI).  

“Even throughout this most recent bull crypto market run, there has rarely ever been anyone discussing XRP,” said Jack Tan, managing partner at Taiwan-based trading firm Kronos Research, told CoinDesk in a Telegram chat. 

XRP’s lagging returns follow an abysmal 2019, when the price fell 45% while bitcoin more than doubled. The token’s share of the overall digital-asset market capitalization has tumbled to 3%, from 12% early last year, according to metrics compiled by TradingView.

Mike Novogratz, whose firm Galaxy Digital owns a $29 million stake in XRP software developer Ripple, according to a Q1 2020 filing, said in January at a conference he thought XRP would “underperform immensely again” this year. He wasn’t wrong.

Related: Money Reimagined: Ethereum’s Renaissance Creates an Opportunity – And a Major Test

“We can’t control, nor do we focus on, the price of XRP day to day,” a Ripple spokesperson told CoinDesk in an email. “What Ripple is thinking about is the utility of XRP, and building solutions that solve real problems with global payments.”

XRP has been one of the crypto industry’s most popular assets since 2012. That year, as an alternative to bitcoin, the founders of what would become San Francisco-based Ripple gifted the company 80 billion XRP out of a total 100 billion created. 

The leading software company working on XRP, Ripple is a startup with over 530 employees, according to LinkedIn, and has raised over $286 million in venture capital from firms including Galaxy. Major product offerings from the company include RippleNet and On-Demand Liquidity (ODL), which are used to facilitate fast and cheap payments. 

XRP is notable for an often vocal and devoted community of backers, who sometimes refer to themselves as the XRP Army and support both the cryptocurrency and Ripple. There are also investment firms backing the cryptocurrency. 

“XRP is a perfect currency for what we do,” Michael Arrington, the founder of TechCrunch who now runs Arrington XRP Capital, one of the largest XRP investment funds, said in a phone interview. 

XRP’s properties of being fast and cheap – Arrington said he’s been able to move millions of dollars in the digital asset for as little as $0.45 – is one major reason why the fund likes its future potential.

“Right now we think XRP is dramatically undervalued,” he said. “All else being equal, we’re buyers at these prices. Maybe not leverage buyers, but we think it’s undervalued.”

Just last week, former Commodity Futures Trading Commission Chairman Chris Giancarlo said XRP deserved to be considered a cryptocurrency, not a security. Giancarlo is now a senior partner at the law firm Willkie Farr & Gallagher, where Ripple is a client.  

The question of whether XRP might be declared a security has haunted the asset because a declaration to that effect by the Securities and Exchange Commission would likely subject the token and its ecosystem to stricter regulations and potentially enforcement actions. Multiple lawsuits, one filed as recently as May, allege XRP should be a security. 

XRP’s price didn’t really budge in response to Giancarlo’s comments, possibly an indication traders are still waiting to hear from the SEC on the matter.

Another overhang is sales of tokens into the market: Ripple Labs does sell XRP to raise cash, although according to a first-quarter market report published by the company its sales of the tokens dropped to $1.75 million during the first three months of the year, down 86% from fourth-quarter levels. 

One of the biggest users of XRP is the payments transmitter MoneyGram, which received a $50 million equity investment from Ripple Labs last year. Upon completion of the investment in November, MoneyGram announced 10% of the company’s Mexican peso foreign exchange liquidity was already using Ripple’s ODL product to move money.

In February, Ripple Labs executive Ashseeh Birla provided an update on MoneyGram’s progress using its technology:

In the first quarter of 2020, MoneyGram reported it was able to reduce its operating expenses with a $12.1 million “benefit” derived from “Ripple market development fees.” However, there’s no further information about the growth of ODL within the company’s business lines other than that the partnership, valid through July 2023, is expected to continue to reduce expenses. 

Ripple Labs has formed relationships with hundreds of partners, including Bank of America, which has reportedly piloted some of its technology.

But banks might be worried about holding the tokens for fear of having to report any gains or losses to shareholders or supervisors, Haohan Xu, CEO of cryptocurrency liquidity provider Apifiny, wrote in an email message.

“This is especially given the different regulations across the globe, and being exposed to the volatility risk when holding XRP,” Xu said. 

So can demand for XRP be driven by usage or expected usage of its network for payments? How will XRP’s regulatory issues conclude? Does selling pressure from a lack of proof-of-work mining create some concern among traders? 

“XRP is an interesting crypto asset because whilst the fundamentals seem to indicate growth and greater adoption, the price action is showing the opposite,” Simon Peters, a cryptocurrency analyst at multi-asset brokerage eToro, wrote in an email to CoinDesk. 

BTC: Price: $9,432 (BPI) | 24-Hr High: $9,441 | 24-Hr Low: $9,273

Trend: While bitcoin is flashing green at press time, it is still trading within the narrow range of $9,000–$10,000 it’s been largely stuck in for over a month. 

The leading cryptocurrency by market value is changing hands near $9,440, representing a 1.5% gain on the day, according to CoinDesk’s Bitcoin Price Index. 

Prices are rangebound for the 11th straight day amid mixed signals on the technical charts. On the bullish side, the three-day 50- and 100-candle moving averages (MA) have produced a bullish crossover. A similar cross accelerated the uptrend in June 2019 and marked the beginning of a multi-year bull run in October 2015.

However, the three-day MACD histogram, an MA-based indicator used to identify trend strength and trend changes, has crossed below zero for the first time since early April, confirming a bearish reversal. The daily chart, too, is reporting conflicting signals with the MACD hovering below zero and the 50- and 200-day SMAs, signaling a bull market. 

With indicators lacking consensus on the potential direction of the next range breakout, traders will be waiting for a strong directional cue to emerge.

A UTC close above $10,000 would restore the bull run from the March low of $3,867 and open the doors for a $1,000 rally. On the way higher, the February high of $10,500 could offer resistance. 

Alternatively, a move below $9,000 will likely yield a sell-off to the 200-day SMA at $8,267. 

• First Mover: Compound’s COMP Token More Than Doubles in Price Amid DeFi Mania
• First Mover: As US Stocks Defy Economic Gravity, Bitcoiners Shudder at March Memory

Bitcoin is reporting moderate gains on Monday as gold, a safe haven asset, rallies amid renewed coronavirus concerns. 

At press time, the cryptocurrency is priced around $9,430 – up 1.5% on the day – having put in lows near $9,260 during the Asian hours, according to CoinDesk’s Bitcoin Price Index. 

Gold, however, printed a one-month high of $1,759 per ounce early on Monday and was last seen trading near $1,750. 

Related: Bitcoin News Roundup for June 22, 2020

The precious metal looks to be rising as the markets return their focus to the coronavirus pandemic, with the number of new cases rising at a faster pace in Germany, the U.S. and other parts of the world over the past few days. Investors seem worried the major economies may reimpose lockdowns to avoid a second wave of the outbreak, which could worsen an already deep economic crisis. 

Some companies like tech giant Apple have already announced temporary store closures in four U.S. states following a jump in COVID-19 cases last week. 

Authorities in Australia have extended a state of emergency for four more weeks to July 19. Meanwhile, the uptick in the German infection rate caused by an outbreak among abattoir employees has sparked debate about working conditions in its meat processing industry, as noted by popular macro analyst Holger Zschaepitz. 

Hence, it’s perhaps not surprising safe haven assets like gold are drawing bids. A recent study by blockchain analysis firm Chainalysis shows the majority of bitcoin is held by those who treat it as “digital gold,” or an asset to be held for the long term.

Related: New Zealand Police Seize $90M Linked to Alleged BTC-e Exchange Operator

Bitcoin’s uptick seen so far on Monday may bring cheer to those who believe in the safe haven narrative. However, a closer look at the markets suggests the cryptocurrency is tracking S&P 500 futures. 

U.S. stock futures, which were down by nearly 1% during the early Asian trading hours, are now reporting a 1% gain.

Further, while gold has gained over 5% in the last two weeks, bitcoin has largely been restricted to a narrow range of $9,000 to $10,000 since the May 11 halving.

As the top cryptocurrency’s rally from the March 13 low of $3,867 looks to have stalled near $10,000, institutional investors are showing temporary exhaustion, according to one analyst.

“On the CME futures, we are seeing some signs that the bulls might be getting tired waiting for a breakout above $10,000. The average daily traded volume is trending down which is not surprising since it follows price volatility. But at the same time open interest is also trending down,” noted Ecoinometrics, a bitcoin analysis company.

As of Friday, futures listed on the Chicago Mercantile Exchange (CME), which is widely considered to be synonymous with institutional activity, registered trading volume of $195 million, down nearly 80% from the high of $914 million observed on May 11, according to crypto derivatives research firm Skew. 

In addition, open interest – the number of contracts traded but not squared off by taking offsetting positions – was $394 million Friday, down 26% from the high of $532 million seen on May 19. 

While futures activity is slowing down, CME options are reporting record open interest. 

Option contracts worth $417 million were open on the CME on Friday, representing a staggering 3,000% rise from the tally of $13 million observed on May 1. 

As such, one may argue that institutional interest in bitcoin hasn’t died down but merely shifted instruments. 

It remains to be seen if the record open interest on options is rolled over to July expiry contracts following the expiry of June contracts this Friday. 

As of this writing, there are 114,000 contracts set for expiry on June 26, according to Skew. If that open interest is not rolled over to July/September, it would confirm what futures activity is suggesting.

“The last two month-end/month-open (end of April/start of May and start of June) both saw large upside moves as stale positions were rolled off and new positions were put on,” Singapore-based QCP Capital noted on its Telegram channel. “We are questioning whether this can be 3 in a row after such a large open interest, comprising mostly upside calls rolls off, or has the short-term institutional bullishness mostly died down.”

Disclosure: The author holds no cryptocurrency at the time of writing.

• Blackballed by PayPal, Scientific-Paper Pirate Takes Bitcoin Donations
• Crypto Long & Short: What Changed My Mind About Bitcoin Narratives

The Financial Conduct Authority (FCA) has told crypto businesses it will need half a year to fully process applications before the hard deadline in January.

The U.K.’s chief financial regulator announced Monday that any company carrying out “cryptoasset activity in the U.K.” must have submitted their completed applications – outlining how they aim to follow new money-laundering requirements – to the watchdog by June 30. Although the hard deadline for applications is Jan. 10, 2021, the regulator says it wants more than six months to go through firms’ submissions.

“The 30 June date allows the FCA to review submitted applications and raise any follow-up questions with firms, with enough time for that process to be completed before 10 January 2021,” the FCA said.

Related: New York US Attorney Geoffrey Berman Steps Down, President Trump Nominates SEC Chair Jay Clayton to Post [Updated]

Businesses that haven’t successfully registered with the FCA by Jan. 10, 2021, will have to cease all activity in the U.K.

See also: UK Finance Watchdog Warns Against ‘Unauthorized’ Crypto Exchange BitMEX

The FCA first told firms they would need to register in January; soon after, the U.K. transposed FATF’s “Travel Rule” recommendation into national law, which made the regulator responsible for ensuring all crypto businesses follow the new anti-money laundering (AML) and counter-terrorist financing (CTF) requirements.

The FCA brought in guidance for cryptocurrencies last year, where it highlighted what types of tokens currently fall under its jurisdiction. In 2018, it started welcoming crypto startups into its regulatory sandbox, an initiative that allows businesses to set up and test new products and services with temporary and provisory authorization from the regulator.

Related: Russia’s Ministry of Justice Latest to Criticize Proposed Crypto Ban

See also: UK Financial Service Provider to Coinbase, Bitstamp Awarded FCA Payments License

The FCA also appointed its new chief executive, Nikhil Rathi, on Monday. Formerly a director at the London Stock Exchange, he had previously hinted blockchain technology could play a larger role in the infrastructure of the U.K.’s primary stock market.

“You can certainly see distributed ledger technology having an application in the issuance process,” Rathi told CNBC in an interview last year. “I can see that technology being used in settlement too.”

• Binance Launching Crypto Exchange in the UK
• Mauritius Releases Guidance for Regulated Security Token Offerings

New Zealand police have seized NZ$140 million (US$90 million) in bank funds linked to Alexander Vinnik, a Russian alleged to have been the controller of the now-defunct BTC-e cryptocurrency exchange.

The seizure of funds, which were controlled by a New Zealand-registered company, is said to be the largest in the country’s history by federal police. The force’s Asset Recovery Unit moved to freeze the funds amid a global investigation into the activities of the exchange and its operators, according to a report by news source NZ Herald.

U.S. prosecutors have alleged that Vinnik controlled BTC-e, a bitcoin exchange that was used to launder billions of dollars for criminal enterprises. Vinnik, who has been denying the charges for up to three years, was arrested based on extradition orders from the U.S. while holidaying with family in Greece back in 2017.

Related: Bitcoin Sees Small Gain as Gold Rallies to One-Month High

New Zealand police allege that the exchange had no anti-money laundering (AML) controls in place, resulting in criminals laundering crime-related proceeds through the platform.

“New Zealand Police has worked closely with the Internal Revenue Service of the United States to address this very serious offending,” Police Commissioner Andrew Coster said. “These funds are likely to reflect the profit gained from the victimisation of thousands, if not hundreds of thousands, of people globally as a result of cyber-crime and organised crime.”

See also: Crypto Exchange Owner Admits Laundering $1.8M in Online Auctions Fraud

Vinnik is now in custody in France after being extradited earlier this year following a ruling from Greece’s Council of State, the country’s supreme administrative court on January 23.

Related: Blackballed by PayPal, Scientific-Paper Pirate Takes Bitcoin Donations

French officials have since charged him with counts of extortion, aggravated money laundering, conspiracy and harming automatic data-processing systems for his alleged involvement in laundering money for criminals.

• Crypto Long & Short: What Changed My Mind About Bitcoin Narratives
• Market Wrap: Bitcoin Spot Volumes Are Weak While Options and DeFi Strengthen

Zhan Ketuan, the formerly-ousted Bitmain co-founder who returned to power earlier this month, is proposing a solution to end the firm’s internal war.

In a letter Sunday, Zhan, who as Bitmain’s biggest shareholder owns 36% of its stock, offered to buy back shares possessed by his rival co-founder Wu Jihan, several founding members and some of Bitmain employees, at a company valuation of $4 billion.

Wu alone controls about 20% of Bitmain and three other founding members own about 15% in total. Bitmain’s employee stock option pool has another 19% and the remaining 10% belongs to external investors.

Related: Bitcoin Miner Maker Ebang Estimates $2.5M Loss for Q1 in IPO Prospectus Update

But Zhan’s $4 billion valuation of the firm is significantly down from a market high seen in the summer 2018. Bitmain had been valued at around $1 billion in September 2017 during its Series A round. When it went on a high profile fundraise in August 2018, it was valued at $12 billion and eventually $14.5 billion in a pre-IPO round.

The offer comes in an effort to bring about negotiations that could end the divisions that have been tearing the company apart since Zhan clawed his way back into the firm after being ousted by Wu last October.

Read more: How Was It Possible for Bitmain to Oust Its Largest Shareholder Overnight?

In addition to causing division among employees, the power struggle is now endangering the firm’s miner manufacturing processes.

Related: Bitcoin Mining Difficulty Makes Biggest Jump in 29 Months

Zhan’s letter had been in response to a Sunday statement on Beijing Bitmain’s official website, which is controlled by Wu, saying that its Hong Kong parent entity had cut off the chip processor supply chain to its Shenzhen factory.

“Bitmain Hong Kong has suspended the chip supply for the time being to Century Cloud Core, which is now controlled by Zhan’s relatives, until we are assured, through negotiation with Zhan’s relatives, that they are committed to protecting the interest of Bitmain’s customers and of the company as a whole,” the statement reads.

Bitmain Technologies Limited in Hong Kong is Bitmain’s offshore sales and procurement center for crypto mining hardware. The bitcoin miner’s manufacturing business relies on computing chips supplied by semiconductor companies.

Since Zhan’s forceful return to the firm, he had seized control of Century Cloud Core, Bitmain’s packaging factory and warehouse in Shenzhen, and paused shipments to customers. According to a former employee at Beijing Bitmain who is familiar with the matter, Zhan’s brother-in-law, Zhou Feng, has been placed in charge of the Shenzhen entity.

In his letter, Zhan responded that, if necessary, he would procure chips directly via Beijing Bitmain, even if that would cause a great deal of loss for the company as a whole.

He further accused Wu of, among other things, forging a resolution passed by a claimed “shareholder meeting” last November at the Bitmain’s Cayman Islands-based holding entity. In fact, the meeting was never held because “several other shareholders including Zhan Ketuan as the biggest stakeholder never received a notice of such meeting ever,” Zhan claimed.

Beijing Bitmain Technology Ltd. is a fully owned subsidiary of Hong Kong-based Bitmain Technologies Ltd. That, in turn, is fully owned by the ultimate controlling entity, BitMain Technologies Holding, which incorporated in the Caymans but also registered in Hong Kong.

Read more: Bitmain’s Power Struggle Takes Toll on Customers as Co-Founder Halts Shipments

When ousting Zhan in October last year, Wu filed to the Hong Kong government to have Zhan’s name removed as a board director at the Cayman holding company.

The two sides now have an ongoing legal case in the Cayman Islands with regards to disputes over Zhan’s 60% voting power at Bitmain.

• Bitmain’s Power Struggle Takes Toll on Customers as Co-Founder Halts Shipments
• Hut 8 Plans $7.5M Offering to Upgrade Bitcoin Mining Rigs

Securitize Japan became the first global token issuance platform to join the Japan Security Token Offering Association (JSTOA), the company announced Thursday.

The Japanese subsidiary of U.S.-based Securitize, the company token platform could not join the association until now because JSTOA only accepts Japanese-regulated entities into its ranks. Securitize co-founder and Chief Executive Carlos Domingo told CoinDesk that a leading Japanese financial services company, SBI Holdings, was one of the founding members of JSTOA, and is a Securitize shareholder. 

Six major Japanese brokerages created JSTOA as a self-regulatory organization last year in a bid to consolidate expertise on securities and develop security token business opportunities in Japan. It is a state recognized financial instruments and exchange association that operates as a self-regulated entity. 

Related: Securitize Debuts On-Chain Royalty Payouts for Lottery.com Security Token

“So we had already talked to them, and some of the members about how as soon as the association was open to non-regulated members, we [wanted] to be the first company but we are not,” Domingo said. 

Headquartered in San Francisco, Securitize expanded its operations to Japan last year after  Japan-based VC firm Global Brain invested in the platform, and has since established a subsidiary company. 

Domingo, who lived in Japan for many years and speaks the language, said there were a number of reasons why Securitize wanted to establish business ties with the country. 

“Japan has been a very forward-thinking country in terms of blockchain and crypto,” Domingo said. 

Related: Securitize Builds Digital ID Service in Hopes of Creating Industry Standard

According to Domingo, Japanese investors are very active in the blockchain space, and Japan has comprehensive laws on cryptocurrency regulation, although it has had trouble making a clear distinction between digital assets and cryptocurrency. Large financial services institutions are also inclined towards taking advantage of adopting blockchain technology and digitization for securities, Domingo added. 

“So, if you put all those things together, we definitely saw that this was an opportunity and moreover, none of our competitors had any presence in Japan,” Domingo said. 

In his view, cracking the Japanese market is not an easy task for foreign entities. 

“Japan can be intimidating for doing business,” he said, adding that the lack of U.S. or European securities platforms operating in the country gave them a competitive advantage. 

The Chairman of JSTOA and Chief Executive of SBI Holdings, Yoshitaka Kitao, said in a statement to the media, that Securitize brings years of experience and proven market success in developing and deploying security token technology. 

“We are very proud to have them join the JSTOA, and look forward to working alongside them,” Kitao added.

• Securitize Users Can Now Directly Trade Security Tokens With Just a Web Link
• Securitize Launches Tokenized Platform to Revitalize Japan’s Rural Property Market

A solar energy trading trial run by blockchain startup Power Ledger has found the initiative to be “technically feasible” for real world use.

The trial, which was partly funded by the Australia government, surveyed 48 households in Fremantle, Western Australia and found blockchain energy peer-to-peer energy (P2P) trading delivered lower costs “desired by consumers.”

“Power Ledger has demonstrated how peer-to-peer energy trading can incentivise the right outcomes for the grid in a more cost-effective way,” Power Ledger chairman Jemma Green said in a press release. 

Related: Italian Banks Are Ready to Trial a Digital Euro

The trial ran between December 2018 and January 2020 as part of the RENeW Nexus Project and used Power Ledger’s blockchain technology to trace the transactions of rooftop solar energy traded between households. RENeW is an Australian national not-for-profit organization advocating for sustainable living.

See also: Power Ledger to Bring Blockchain Energy Trading to West Australian Housing Developments

A report detailing the findings of the trial and published earlier this month in a joint effort between Power Ledger, Curtin and Murdoch Universities found energy trading could provide localized energy markets with the ability to deliver a more stable power grid, at lower costs.

Other findings included how the Australian tariff structure needed an overhaul in order to make P2P energy trading more attractive to the consumer as well as making it more readily accessible to deal with excess solar energy (during the day) in the grid without the need for government subsidies.

Related: Online Chess Chooses Algorand Blockchain to Host Player Rankings

“Participants had a positive view of P2P energy trading and could see its benefits but stated that changes to the tariff structure would be required to make it attractive,” the report claimed.

Additionally, the project included a study of a distributed Virtual Power Plant (VPP) as well as a microgrid with a 670kWh battery that is to service homes in the “East Village development in Fremantle.”

The Village is a sustainable development initiative featuring smart homes powered by green renewable energy.

In the case of Power Ledger’s initiative, a virtual power plant is a cloud-based distributed power station that aggregates green energy resources for the purposes of enhancing power generation, as well as trading or selling power on the local electricity market.

See also: Thailand Turns to Blockchain to Boost Renewable Energy Push

“This project is a world-first with great significance for how cities around the world can learn to share solar,” report co-author Peter Newman said in a statement.

• Kraken Launches Crypto Exchange Service in Australia
• Nonprofit Energy Consortium Trials Blockchain Management for Wastewater Tracking

The Italian Banking Association (ABI) announced Thursday that its banks are willing to pilot a digital euro.  

ABI, made up of over 700 Italian banking institutions, expressed its desire to help speed up the implementation of a digital currency backed by the European Central Bank (ECB) by participating in related projects and experiments. Last year, ABI set up a working group to research digital and crypto assets. 

The group shared 10 considerations for a digital euro in Thursday’s announcement, starting with, “Monetary stability and full compliance with the European regulatory framework must be preserved as a matter of priority.” 

Related: Power Ledger’s Blockchain P2P Energy Trial ‘Technically Feasible,’ It Says in New Report

The group prioritized the need for a digital currency framework to be fully compliant with EU regulations to win the public’s trust, and said banks will play a critical role in upholding that trust. 

In its second guideline, the group said Italian banks are already working with distributed ledger technology, referencing the Spunta project. The project was an initiative by the ABI Lab to integrate blockchain to speed up the processing of interbank settlements.

According to the group, a central bank digital currency (CBDC) would lead to future innovations to the traditional banking system like P2P transactions, machine-to-machine transactions and the ability to manage exchange rate and interest rate risk thanks to the programmable capabilities of digital currencies.

“A programmable digital currency represents an innovation in the financial field capable of profoundly revolutionizing money and exchange. This is a transformation capable of bringing significant potential added value, particularly in terms of the efficiency of the operating and management processes,” the announcement said.  

Related: Online Chess Chooses Algorand Blockchain to Host Player Rankings

Italy is not the first nation to express an interest in experimenting with a digital euro. Earlier this year, France’s central bank sent out a call for proposals for CBDC experiments. The Dutch Central Bank also announced the Netherlands was willing to trial a digital euro. 

Last year, the head of Germany’s Central Bank Jens Weidmann, in a speech, warned that a CBDC could destabilize financial systems. Later in the year, the Association of German Banks made an announcement advocating for a programmable digital euro. 

The Italian Central Bank has yet to comment on ABI’s announcement. 

• Canada’s Central Bank Is Serious About Designing a CBDC, Job Posting Reveals
• Digital Currencies Could Replace Low-Interest Bank Accounts, Says UN-Linked Expert

Compound overtook MakerDAO Saturday as the decentralized finance (DeFi) protocol with the most value locked.

As of June 20, Compound has $484 million in cryptocurrency locked, while MakerDAO has $481 million, according to DeFi Pulse. The COMP token is trading at $220.25 as of this writing, according to CoinGecko. It’s all time high price has been $231.

On June 15, Compound users began earning the application’s new governance token, COMP, for all cryptocurrency lent to others on the app and also for all borrowed. Users rushed to get the first disbursements of COMP because the liquid supply on the market is so limited.

Related: Market Wrap: Bitcoin Spot Volumes Are Weak While Options and DeFi Strengthen

This drove many users to supply Compound with considerably more capital, and in most cases, for those users to turn around and borrow against that capital, so they could earn COMP both for borrowing and lending.

To date, MakerDAO has been the dominant platform in DeFi since DeFi Pulse began, so much so that the website has tracked “Maker Dominance,” the percent of all value locked in DeFi that’s held by MakerDAO. The site now lists “Compound Dominance,” which stands at 34.39%.

Last Sunday, before COMP distribution began, there was $97.7 million on Compound and $480.5 million on MakerDAO.

It will take four years for the token supply allocated for users to be completely distributed. Most tokens are held by the founders, team and investors, though in most cases this supply is subject to a vesting period. Compound’s most recent funding round was $25 million led by Andreessen Horowitz.

• DeFi Startups Built on Compound Weigh What to Do With $200 COMP Tokens
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The Bank of Thailand is developing a prototype payments system which would rely on a central bank digital currency (CBDC). 

The central bank announced Thursday that it would target businesses, and would design a payment system that could be integrated with the procurement and financial management system of Siam Cement Group, Thailand’s oldest cement manufacturer, and its suppliers. 

The bank said the digital currency prototype is being developed by Digital Ventures, a fintech-facing venture capital wing of the Siam Commercial Bank that invested in Ripple in 2016.

Related: US Fed Chair Says Private Entities Should Not Help Design Central Bank Digital Currencies

According to the statement, the project will also include a feasibility study on the payments system. The CBDC project will begin next month and is expected to conclude by the end of the year. 

“The project marks an important step in broadening CBDC’s scope and adoption to wider audiences, starting with large corporates,” said the press release published on the Bank of Thailand’s website.

The Bank of Thailand said that it expects the CBDC prototype to build on the knowledge put together under Project Inthanon. Inthanon was launched in 2018, and is a collaborative project between the Bank of Thailand, and eight leading Thai financial institutions, to bolster technological readiness in Thailand’s financial sector. 

Bank of Thailand’s prototype comes at a time when central banks across the world have been toying with the idea of CBDCs. A recent job posting on the Bank of Canada’s website revealed the Candaian central bank’s plan to develop a CBDC, and a report from April showed that one of China’s major state-owned banks was conducting trials on a test interface developed for the country’s CBDC. 

• Thailand to Raise $6.4M With Sale of Blockchain-Based Bonds
• In the Wildcat Era of Stablecoins, Commercial Banks Have New Rails to Ride
• Canada’s Central Bank Is Serious About Designing a CBDC, Job Posting Reveals

U.S. Securities and Exchange Commission (SEC) Chairman Jay Clayton may be the next U.S. Attorney for the Southern District of New York.

According to a Department of Justice press release published late Friday, Clayton was nominated by U.S. President Donald Trump to helm the prosecutor’s office, three years after he first took on the role as chairman of the nation’s top securities regulator. Clayton’s term as chairman was slated to expire in 2021.

While initially, the press release said current SDNY U.S. Attorney Geoffrey Berman would be stepping down, he denied plans to resign in a statement late Friday. Trump fired him Saturday, according to a separate statement from U.S. Attorney General William Barr, although Trump himself apparently told reporters he was “not involved.” Ultimately, Berman said late Saturday that he would be stepping down “effective immediately.”

Related: SEC Claims Brothers Lied About Digital Asset Fund Performance, Used Profits for Personal Use

“It has been the honor of a lifetime to serve as this District’s U.S. Attorney and a custodian of its proud legacy,” he said in his second statement.

In Friday’s DOJ statement, attributed to Barr, the department announced that U.S. Attorney for New Jersey Craig Carpenito would serve in the Southern District role on an interim basis starting July 3, until Clayton is confirmed by the U.S. Senate. Barr’s statement on Saturday changed this as well, announcing that Deputy U.S. Attorney Audrey Strauss would instead be filling in on the interim basis.

“I know that under her leadership, this Office’s unparalleled AUSAs, investigators, paralegals, and staff will continue to safeguard the Southern District’s enduring tradition of integrity and independence,” Berman said in his statement Saturday.

According to Stephen Vladeck, law professor at the University of Texas School of Law, it was possible Berman could continue serving until Clayton is confirmed. Martin Lederman, a former Deputy Assistant Attorney General and current law professor at the Georgetown University Law Center, said on Twitter Trump can remove Berman, but Barr cannot.

Related: Bitfinex Granted 2 of 3 Subpoenas in Hunt for Missing Millions

Preston Byrne, a partner and attorney with Anderson Kill, told CoinDesk that the issue surrounding this question is whether the provisions addressing appointments and firings conflict. In his view, “they only conflict if appointees can’t be fired.”

Marc Goldich, co-managing partner of Axler Goldich LLC, told CoinDesk “there’s a decent argument” Berman could have continued serving until Clayton is confirmed.

“Notwithstanding that (and notwithstanding arguments for prosecutorial independence), the President is of course granted executive authority which – at least customarily – includes the authority to fire U.S. Attorneys under Article II of the Constitution,” he said.

Barr’s statement did not indicate who might replace Clayton at the SEC’s helm. On Saturday, he sent an email to staff saying he would continue working at the SEC until he is confirmed, according to Bloomberg. The confirmation process will give New York’s two Senators, Democrats Chuck Schumer and Kirsten Gillibrand, a chance to weigh in on Clayton, according to NPR reporter Carrie Johnson.

“For the past three years, Jay has been an extraordinarily successful SEC Chairman, overseeing efforts to modernize regulation of the capital markets, protect Main Street investors, enhance American competitiveness, and address challenges ranging from cybersecurity issues to the COVID-19 pandemic,” Barr said in his statement.

As SEC chair, Clayton oversaw the regulator during the peak of the 2017 initial coin offering bubble and much of the aftermath. At various events, he has discussed the agency’s approach to the crypto space, including raising questions about the bitcoin market’s ability to be manipulated, size and custody solutions.

“Just speaking for myself, we have to get to a place that we can be confident that trading is better regulated,” he said last September about the crypto space.

SDNY has also been active in crypto regulation, bringing a number of cases against allegedly fraudulent crypto projects. Unlike his predecessors at SDNY, Clayton is not a prosecutor, said Politico reporter Zachary Warmbrodt.

Friday’s announcement comes on the heels of Trump announcing he would be renominating Commissioner Hester Peirce for another five-year term. The move leaves two seats vacant on the SEC, after Democrat Commissioner Robert Jackson Jr. resigned earlier this year. Trump has not yet announced who will replace him.

Commissioners Elad Roisman and Allison Herren Lee are the other two members of the SEC.

UPDATE (June 20, 2020, 22:15 UTC): This article has been updated extensively as new information became available.

• Russia’s Ministry of Justice Latest to Criticize Proposed Crypto Ban
• Mauritius Releases Guidance for Regulated Security Token Offerings

U.S. Securities and Exchange Commission (SEC) Chairman Jay Clayton may be the next U.S. Attorney for the Southern District of New York.

According to a Department of Justice press release published late Friday, Clayton was nominated by U.S. President Donald Trump to helm the prosecutor’s office, three years after he first took on the role as chairman of the nation’s top securities regulator. Clayton’s term as chairman was slated to expire in 2021.

The press release said current SDNY U.S. Attorney Geoffrey Berman would be stepping down, but he denied plans to resign in a statement late Friday. Trump fired him Saturday, according to a separate statement from U.S. Attorney General William Barr.

Related: SEC Claims Brothers Lied About Digital Asset Fund Performance, Used Profits for Personal Use

“I have not resigned, and have no intention of resigning, my position, to which I was appointed by the Judges of the United States District Court for the Southern District of New York,” Berman said in the SDNY statement late Friday.

In Friday’s DOJ statement, attributed to Barr, the department announced that U.S. Attorney for New Jersey Craig Carpenito would serve in the Southern District role on an interim basis starting July 3, until Clayton is confirmed by the U.S. Senate. Barr’s statement on Saturday changed this as well, announcing that Deputy U.S. Attorney Audrey Strauss would instead be filling in on the interim basis.

According to Stephen Vladeck, law professor at the University of Texas School of Law, it was possible Berman could continue serving until Clayton is confirmed. Martin Lederman, a former Deputy Assistant Attorney General and current law professor at the Georgetown University Law Center, said on Twitter Trump can remove Berman, but Barr cannot.

Preston Byrne, a partner and attorney with Anderson Kill, told CoinDesk that the issue surrounding this question is whether the provisions addressing appointments and firings conflict. In his view, “they only conflict if appointees can’t be fired.”

Related: Bitfinex Granted 2 of 3 Subpoenas in Hunt for Missing Millions

Marc Goldich, co-managing partner of Axler Goldich LLC, told CoinDesk “there’s a decent argument” Berman could have continued serving until Clayton is confirmed.

“Notwithstanding that (and notwithstanding arguments for prosecutorial independence), the President is of course granted executive authority which – at least customarily – includes the authority to fire U.S. Attorneys under Article II of the Constitution,” he said.

Barr’s statement did not indicate who might replace Clayton at the SEC’s helm. On Saturday, he sent an email to staff saying he would continue working at the SEC until he is confirmed, according to Bloomberg. The confirmation process will give New York’s two Senators, Democrats Chuck Schumer and Kirsten Gillibrand, a chance to weigh in on Clayton, according to NPR reporter Carrie Johnson.

“For the past three years, Jay has been an extraordinarily successful SEC Chairman, overseeing efforts to modernize regulation of the capital markets, protect Main Street investors, enhance American competitiveness, and address challenges ranging from cybersecurity issues to the COVID-19 pandemic,” Barr said in his statement.

As SEC chair, Clayton oversaw the regulator during the peak of the 2017 initial coin offering bubble and much of the aftermath. At various events, he has discussed the agency’s approach to the crypto space, including raising questions about the bitcoin market’s ability to be manipulated, size and custody solutions.

“Just speaking for myself, we have to get to a place that we can be confident that trading is better regulated,” he said last September about the crypto space.

SDNY has also been active in crypto regulation, bringing a number of cases against allegedly fraudulent crypto projects. Unlike his predecessors at SDNY, Clayton is not a prosecutor, said Politico reporter Zachary Warmbrodt.

Friday’s announcement comes on the heels of Trump announcing he would be renominating Commissioner Hester Peirce for another five-year term. The move leaves two seats vacant on the SEC, after Democrat Commissioner Robert Jackson Jr. resigned earlier this year. Trump has not yet announced who will replace him.

Commissioners Elad Roisman and Allison Herren Lee are the other two members of the SEC.

UPDATE (June 20, 2020, 19:55 UTC): This article was updated with a comment from Geoffrey Berman and additional information.

• Russia’s Ministry of Justice Latest to Criticize Proposed Crypto Ban
• Mauritius Releases Guidance for Regulated Security Token Offerings

U.S. Securities and Exchange Commission (SEC) Chairman Jay Clayton may be the next U.S. Attorney for the Southern District of New York.

According to a Department of Justice press release published late Friday, Clayton was nominated by U.S. President Donald Trump to helm the prosecutor’s office, three years after he first took on the role as chairman of the nation’s top securities regulator. Clayton’s term as chairman was slated to expire in 2021.

The press release said current SDNY U.S. Attorney Geoffrey Berman would be stepping down, but he denied plans to resign in a statement late Friday.

Related: SEC Claims Brothers Lied About Digital Asset Fund Performance, Used Profits for Personal Use

“I have not resigned, and have no intention of resigning, my position, to which I was appointed by the Judges of the United States District Court for the Southern District of New York,” Berman said in the statement.

Meanwhile, in a statement attributed to Attorney General William Barr, the DOJ announced that U.S. Attorney for New Jersey Craig Carpenito would serve in the Southern District role on an interim basis starting July 3, until Clayton is confirmed by the U.S. Senate.

According to Stephen Vladeck, law professor at the University of Texas School of Law, it is possible Berman can continue serving until Clayton is confirmed. However, Martin Lederman, a former Deputy Assistant Attorney General and current law professor at the Georgetown University Law Center, said on Twitter Trump can remove Berman, but Barr cannot.

Preston Byrne, a partner and attorney with Anderson Kill, told CoinDesk that the issue surrounding this question is whether the provisions addressing appointments and firings conflict. In his view, “they only conflict if appointees can’t be fired.”

Related: Bitfinex Granted 2 of 3 Subpoenas in Hunt for Missing Millions

Marc Goldich, co-managing partner of Axler Goldich LLC, told CoinDesk “there’s a decent argument” Berman can continue serving until Clayton is confirmed.

“Notwithstanding that (and notwithstanding arguments for prosecutorial independence), the President is of course granted executive authority which – at least customarily – includes the authority to fire U.S. Attorneys under Article II of the Constitution,” he said.

Barr’s statement did not indicate who might replace Clayton at the SEC helm.

“For the past three years, Jay has been an extraordinarily successful SEC Chairman, overseeing efforts to modernize regulation of the capital markets, protect Main Street investors, enhance American competitiveness, and address challenges ranging from cybersecurity issues to the COVID-19 pandemic,” Barr said in his statement.

As SEC chair, Clayton oversaw the regulator during the peak of the 2017 initial coin offering bubble and much of the aftermath. At various events, he has discussed the agency’s approach to the crypto space, including raising questions about the bitcoin market’s ability to be manipulated, size and custody solutions.

“Just speaking for myself, we have to get to a place that we can be confident that trading is better regulated,” he said last September about the crypto space.

SDNY has also been active in crypto regulation, bringing a number of cases against allegedly fraudulent crypto projects. Unlike his predecessors at SDNY, Clayton is not a prosecutor, said Politico reporter Zachary Warmbrodt.

Friday’s announcement comes on the heels of Trump announcing he would be renominating Commissioner Hester Peirce for another five-year term. The move leaves two seats vacant on the SEC, after Democrat Commissioner Robert Jackson Jr. resigned earlier this year. Trump has not yet announced who will replace him.

Commissioners Elad Roisman and Allison Herren Lee are the other two members of the SEC.

UPDATE (June 20, 2020, 05:09 UTC): This article was updated with a comment from Geoffrey Berman and additional color.

• Russia’s Ministry of Justice Latest to Criticize Proposed Crypto Ban
• Mauritius Releases Guidance for Regulated Security Token Offerings

Related: Drug Dealer Just Sentenced to 25 Years Hoped to Build a Better Bitcoin Miner

“His management experience and expertise in financial regulation give him an ideal background to lead the United States Attorney’s Office for the Southern District of New York, and he will be a worthy successor to the many historic figures who have held that post.”

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Racial diversity and financial inclusion are good for cryptocurrency and blockchain – and the industry has work to do.

That was the overarching conclusion of a virtual Juneteenth event put together by Cleve Mesidor, founder of the National Policy Network of Women of Color in Blockchain. 

Juneteenth is the celebration of June 19, 1865, when the last group of enslaved African Americans were made aware of the Emancipation Proclamation that U.S. President Abraham Lincoln had signed two years earlier. 

Related: Why Crypto Matters for Financial Inclusion, Feat. Celo’s Marek Olszewski

While America’s education system has left many ignorant of the origins of Juneteenth, there has been a revived interest in turning the day into a national holiday after protests sprung up around the world in response to the May 25 police killing of an unarmed Black man named George Floyd.

In a wide-ranging conversation Friday, panelists at the event said crypto has the potential to allow citizens to opt out of what they described as a racist financial system on Wall Street. That said, the panelists added, Black people and people of color must be part of the development of the technology for that to happen.

Read more: Bitcoin Is a Way to Repair Economic Injustice: Author Isaiah Jackson

Isaiah Jackson, founder of KRBE Digital Assets Group and author of Bitcoin & Black America, said he believes that Black investment in digital assets would create a more resilient system than Black Wall Street, a Black business district that was burned down by white mobs during the Tulsa race massacre of 1921.

Related: Libra Minus Facebook: Why Celo Is 2020’s Buzzy Token Project

“You can’t burn down cryptocurrency and blockchain technology,” Jackson said. “I want to encourage everyone to stay vigilant and make sure you start to move your money and savings out of this failing system. … We need to make sure we use censorship-resistant and scarce-money systems such as bitcoin.”

Sinclair Skinner, the co-founder of pan-African bitcoin remittance firm BitMari, agreed, saying the ethos of bitcoin and the ethos of the Black community are aligned.

“We say that Satoshi is Black,” Skinner said. “But Satoshi was probably a Black woman because a man would have never been able to walk away and not take credit.”

Despite crypto’s potential, however, the industry is not immune to the same societal ills that have affected the broader world, Skinner said.

“Blockchain is full of racists,” he said. “It’s just like the rest of society.”

In the fight for venture capital, blockchain enthusiasts should remember that cryptocurrency entrepreneurs and Black founders face the same issues – being turned away for being different, Mesidor said.

In turn, entrepreneurs should choose investors that have diverse funds, said Jalak Jobanputra, founding partner of Future\Perfect Ventures, an early-stage fund investing in blockchain technology and machine learning.

“We have to make sure that diverse voices are represented unlike what happened with the internet 20 years ago when it was really created by one demographic for one demographic,” Jobanputra said.

Read more: How an Art Collective Is Using Blockchain to Protest Police Brutality

One source of funding that crypto entrepreneurs could be tapping more is Black family offices, said Genevieve Leveille, CEO of AgriLedger, a U.K.-based blockchain firm trying to ensure pay equity for farmers.

“We are going to a technology which is very nascent and many people do not clearly see yet the opportunities,” she said. “There are plenty of Black family offices and we should be tapping into that network.”

Crypto is also another way that Black entrepreneurs can achieve economic equality, said Jomari Peterson, a Ph.D. student at Carnegie Mellon University focused on empowering underrepresented communities through microlending and gaming.

“We cannot wait until it’s too late and those systems are already around us,” Peterson said.

• The Time Is Now: We Need an Active Approach to Blockchain Inclusion
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The National Bank of Cambodia revealed the technical details of its upcoming blockchain-based payments system dubbed ‘Project Bakong’ this week.

The central bank, which has been building Project Bakong since 2017, views its quasi-digital currency project as a high-tech revamp of the Khmer Riel, Cambodia’s official currency but hardly its de facto cash choice, as locals have favored the U.S. dollar for decades, according to the white paper published Thursday.

The central bank said Bakong will help challenge the dollar’s reign by inducing Cambodians to pay instead via QR codes and a mobile app, with a Hyperledger Iroha blockchain facilitating real-time fund transfers between e-wallets plugged into their bank accounts. 

Related: How an Art Collective Is Using Blockchain to Protest Police Brutality

That permissioned blockchain will work between Bakong accounts and traditional accounts, record transactions on a distributed ledger, reach consensus via the block voting hash-based “Yet Another Consensus” algorithm, and process transactions in five seconds or less, according to the white paper.

“Transaction throughput is between 1,000 and 2,000 transactions per second,” depending on tech specs, the central bank said in the white paper. “This suggests that there is potential for this project to scale.”

Watch: Cambodia’s Project Bakong and the Future of Payments

The bank said its system’s peer-to-peer nature removes the inefficiencies of centralized clearing house models without costing users anything to transact. 

Related: Alchemy Notify Wants to Simplify Blockchain UX With a Single Push

“Since banks and individual users are now brought into one DLT platform both banks and users no longer face interconnectivity and interoperability problems,” the central bank said.

Cambodian officials have been hesitant to label the fiat-backed Project Bakong a central bank digital currency (CBDC) in the past, instead calling it a blockchain payments system. Users must load Riel into their Bakong accounts before they can transact with others. That’s different from a natively digital CBDC.

Even so, the white paper frames Bakong against the proliferation of CBDC projects in highly-developed countries around the world. But while the paper said such nations may turn to CBDC to address their population’s falling cash use rates, in developing countries – a category in which Cambodia may remain for decades – it said that CBDC can promote financial inclusion, improve inefficient payment systems and even reduce poverty by opening access.

(Notably, the National Bank of Cambodia is one of the few central banks whose future-of-money initiative actually relies on a blockchain.)

The demographically-young and increasingly tech-savvy population of Cambodia will likely boost Bakong adoption, according to the bank. Cambodians are increasingly porting their financial lives onto their phones: e-wallet accounts in the country climbed 64% in 2019 to a record 5.22 million, according to the paper.

See also: Policymakers Shouldn’t Fear Digital Money: So Far It’s Maintaining the Dollar’s Status

Mass adoption may also grant the central bank a greater degree of control over Cambodia’s monetary policy by breaking the dollar’s decade-long local hold. Bank officials are already moving to oust the U.S. dollar: Last month, the central bank announced plans to phase out $1, $2 and $5 banknotes by the end of August.

It is still unclear precisely when Project Bakong will fully launch. The white paper said “early 2020,” despite being published midway through the year.

• Blockchain.com
• Blockchain Firms Flocked to Hong Kong in 2019: Report

Bitcoin spot volume may have been low this week, but the real action in crypto has been in the options market and decentralized finance. 

Bitcoin (BTC) was trading around $9,274 as of 20:00 UTC (4 p.m. ET), slipping 1% over the previous 24 hours. 

At 00:00 UTC on Friday (8:00 p.m. Thursday ET), bitcoin was changing hands around $9,368 on spot exchanges such as Coinbase. It slogged around a tight range between $9,280 and $9,428 during the preceding 19 hours. Its price is now below its 10-day and 50-day moving averages – a bearish signal for market technicians who study charts.

Related: New York Fed’s ‘Bitcoin Is Just Another Fiat’ Claim Sparks Controversy

“Since the halving mid-May, bitcoin has gone nowhere, basically stuck in a range of $8,500 to $10,200,” said David Lifchitz, chief investment officer for quantitative trading firm ExoAlpha. 

Trading has dipped on spot exchanges like Coinbase, with its three-month average daily volume at $171 million. Over the past week, its seven-day average has been $82 million, more than 50% lower. 

Next week, on June 26, approximately $1 billion in bitcoin options will expire, and traders expect price movements that could be violent as a result. “Price action is like a spring,” said Lifchitz. “The longer it remains stuck in a narrow range, the more any breakout on the upside or the downside will be violent, just like a spring expands the more violently the more it is compressed.”

Read More: Outflow of Bitcoin From Miners at Lows Not Seen Since 2010

Related: DeFi Startups Built on Compound Weigh What to Do With $200 COMP Tokens

The majority of bitcoin options expiring are bullish bets on the price going up, wrote Singapore-based quantitative trading firm QCP Capital in an investor note Friday. “The end-June open interest is concentrated in calls with strikes around $10,000-$15,000, and likely a function of institutional interest as a good portion of the calls were executed on CME.”

This may suggest the smart money is betting on a better bitcoin price. CME is a venue professional commodities traders use for different futures and options strategies. The growing bitcoin options open interest there, including a record $372 million in open interest June 10, shows increased crypto interest by sophisticated investors.  

“We’ve now had a long period of sideways consolidation since the beginning of May, out of which will come a sharp move higher or lower,” said Rupert Douglas, head of institutional sales for London-based brokerage Koine. “As long as the market can hold above $9,000, I still favor the upside, which could see bitcoin testing above $12,000.” 

Excitement around COMP, the governance token of the Ethereum-based Compound lending network, has certainly given some traders new ideas on how to profit from the growing interest in decentralized finance, or DeFi. Ether (ETH), the second-largest cryptocurrency by market capitalization powering the Ethereum network, was trading around $228 and slipped 1% in 24 hours as of 20:00 UTC (4:00 p.m. ET). 

Read More: Compound’s COMP Token More Than Doubles in Price Amid DeFi Mania

One quantitative firm has seen traders use Ethereum-based stablecoin arbitrage as part of a strategy to make gains on COMP’s growth. “We saw traders using USDC to borrow USDT and other stablecoins on Compound to earn COMP, then use Curve to swap the USDT back to USDC and repeat the process,” said Peter Chen, a trader at Hong Kong-based OneBit Quant. 

Curve is a decentralized exchange, or DEX, that launched earlier this year. Many well-capitalized traders say DEXes are slow and have low liquidity, making it difficult to execute large trades. However, the growth of stablecoin-heavy Curve and other DEXes as an alternative to the centralized spot and derivative crypto exchanges may allow many traders, over the long-term, to develop exciting new DeFi-based strategies.

Curve is dominating the DEX market Friday, with its $24.7 million volume in the past 24 hours outpacing second-place Uniswap, at $16.2 million in volume, according to aggregator Dune Analytics. 

Read More: Other Eye-Opening Data Points on Compound’s Surge in Demand

Digital assets on CoinDesk’s big board are almost all in the red Friday. Significant losers include dash (DASH) in the red 2.2%, zcash (ZEC) dipping 2.1% and monero (XMR) slipping 2%. The lone cryptocurrency winner on the day is ethereum classic (ETC) up 3.4%. All price changes were as of 20:00 UTC (4:00 p.m. ET).

Read More: ParaFi Invests in Kyber Network as Buzz Grows Around DeFi Projects

In commodities, oil jumped 1.6% Friday, with a barrel of crude priced at $39.58 at press time.

Gold is up 1.2%, trading around $1,742 for the day. 

The Nikkei 225 of publicly traded companies in Japan ended trading up 0.55% Friday and in the green 0.78% for the week as the government lifted travel restrictions. 

The FTSE 100 index in Europe climbed 0.81% and closed the week up 3% on optimism government actions are having a positive impact on the economy there. 

The U.S. S&P 500 index gained 0.56%, up 2% for the week, as a roller-coaster ride Friday was fueled by concerns of the coronavirus continuing to wreak havoc on the economy.

U.S. Treasury bonds all slipped Friday. Yields, which move in the opposite direction as price, were down most on the two-year bond, in the red 15%.

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Economists with the New York Federal Reserve do not think bitcoin is a new kind of money.

Bitcoin, the decentralized, permissionless, trustless digital value system that an anonymous programmer created over a decade ago is “just another example of fiat money,” said Michael Lee and Antoine Martin in a Thursday blog post.

“Bitcoin may be money, but it is not a new type of money,” they said. Dollar bills are fiat, gigantic limestone wheels were once fiat and bitcoin is fiat as well, they said.

Related: Market Wrap: Bitcoin Spot Volumes Are Weak While Options and DeFi Strengthen

Their argument appeared to employ a definition of fiat money as being an intrinsically worthless object whose sole value derives from the bearer’s belief he or she can use it for goods.

But such a definition misclassifies the nature of bitcoin by botching the very meaning of fiat, said Nic Carter, a partner at the blockchain-focused Castle Island Ventures and frequent crypto commentator (including for CoinDesk). 

Carter said fiat currency, such as dollar bills, has value because the issuing authority says so. But that is not at all the case with bitcoin, he said.  

“I don’t know if their intent is to denigrate bitcoin but it comes off that way,” Carter said of the NY Fed economists. In a tweet he called the Fed’s argument “insane.”

Related: Outflow of Bitcoin From Miners at Lows Not Seen Since 2010

Martin and Lee posit that the Bitcoin ecosystem’s true newness lies in the novel “exchange mechanism” it spawned. “The ability to make electronic exchanges without a trusted party – a defining characteristic of Bitcoin – is radically new,” they said.

Simply put, there had never been a true means to conduct “electronic transfers without a third party” before Bitcoin came around, they said. Yes, central banks and commercial banks and an ecosystem of financial products all allowed money to flow electronically before. But those all worked because a third party said so. They said that’s not the case with Bitcoin.

Bitcoin’s innovation permits an ensuing wave of similarly trustless monies to foster and grow: stablecoins, initial coin offerings as well as unexpected assets, like CryptoKitties, they point out. But they also argue that none of those are new forms of money either.

“It is more accurate to think of Bitcoin as a new type of exchange mechanism that can support the transfer of monies as well as other things,” they said.

Carter agrees Bitcoin gave the world a new way to move money, challenged the authors’ assertion the Bitcoin blockchain should harbor other assets and said it was impossible to divorce bitcoin’s monied nature from the mechanism it exists upon.

“The monetary qualities are also essential. That was clear in the way Satoshi described” its limited supply, he said.

The economists concluded it’s important to define what is actually new about bitcoin for historical reasons. 

“History provides lessons about what makes a good money as well as what makes a good transfer mechanism,” they wrote. “These lessons could help cryptocurrencies evolve in a way that makes them more useful.”

• Market Wrap: Bitcoin Quiet at $9.3K While DeFi Gets Loud
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