Blockchain is once again at the center of an initiative to improve operational efficiency and reduce costs, this time in the field of correspondent banking. A blog post by the team, comprising of a partnership between Wells Fargo, Swift and ANZ, has described the prototype system they have created using blockchain. Using a distributed ledger to create a real-time transaction log, the system will track payments made on the swift platform to enable banks to track such payments much quicker. The system should offer significant improvements over current methodology.
For the cryptocurrency industry, gaining the trust of the wider populous to grow the user base has always been a critical challenge to overcome. Progress has been steady, but it has, ironically, taken a series of incidents of turmoil within the fiat monetary systems of various countries that has helped the industry grow in that aspect. Now, with the prolonged restrictions placed on the movement of both fiat currency and assets into and out of Venezuela, we are seeing a further shift to Bitcoin. Peer to peer Bitcoin payments are on the increase and web based freelancers are now moving towards payment via Bitcoin, bypassing the fiat system entirely.
In the United States alone, Baby Boomers (those born between 1946 and 1964) are on track to inherit around $12 trillion from their savings-conscious parents who were raised in the era of the Great Depression. Over the next thirty years, these boomers will pass on an estimated $30 trillion to their Generation X children. These two events are on track to make up the largest transfer of wealth in history.
There is however, another potential wealth transfer brewing that could end up being the greatest of them all…
Defining the legal status of digital currencies has become something of an issue, with contrary rulings coming one of after the other, no sooner has one judge ruled bitcoin is not money, another judge in New York, Judge Alison Nathan, rules that it is money and should be treated as such in the case she is presiding over. This illustrates a clear need for legal ruling, especially in the US, to enable the industry to move forward. A final decision is important to the broader digital currency industry and will be needed for new initiatives to succeed.
Blockchain payment company Circle have just announced that with the release of the new iOS 10 software, Apple’s mobile operating system found in all their latest iPhones and iPads, their easy to use instant payment system that allows funds in several currencies, including Bitcoin, will be integrated into the iOS 10 message service, iMessage. Given the sheer popularity of not just Apple’s products, but iMessage as a communication tool, it is often cited as the worlds most used app, this represents an opportunity for the digital currency industry.
Having Bitcoin funds was, in the early days, a means to an end, in that the entire point for owning Bitcoin was to own some digital currency. Things have moved on in the following years, and today the digital currency industry is focused on ensuring that any cryptocurrency is not just easy to purchase, but easy to use, and the more uses the better. It has transitioned from an idea to a platform that wants to be a genuine alternative to fiat currency, and with the latest announcement from Straits Financial LLC, that users of their trading platforms will be able to fund accounts directly using Bitcoin, the industry has taken another step closer to that goal.
Blockchain has become a movement in its own right, the technology that forms the underlying platform for Bitcoin and other digital currencies is being adapted to all kinds of applications today. From insurance documents to identity verification, stock tracking to the veracity of artwork, it seems blockchain has an application everywhere. Now Australian company Power ledger is aiming to revolutionize the energy market by using blockchain to create a market where excess solar energy can be sold directly to consumers. The promise is that of cheaper energy for consumers, and better prices for suppliers, with tests beginning later this month.
Viability, trust, these are concepts that are difficult to attribute to yourself, but this has been the challenge that the digital currency industry has faced since its beginning. As we see the fallout of the UK referendum on the EU both gather pace and promise more turmoil to follow, the uncertainty of the fiat financial system, both currency and markets (while Bitcoin remains relatively stable), is providing that viability for the industry by itself.
Trust, it is one of the most important things any monetary system has to have, both the financial aspects and those controlling it. As a new idea built in new technology, it has been an uphill battle for Bitcoin and the cryptocurrency industry to build that trust with a wider audience. The concept of a digital currency has been difficult for some to understand, and the technology itself similarly, however with a recent report showing that in Brazil Bitcoin trading volume exceeded that of spot Gold in the first 6 months of 2016, is this a sign that the battle for trust has been won?
One of the key challenges for the digital currency industry is to gain acceptance by the wider audience, including private citizens, businesses and governments. With the announcement that the UK government are trialing a blockchain powered payment solution for the country’s welfare system suggests that for blockchain at least this barrier is being eroded. In partnership with banking giant Barclays and startup GovCoin, along with University College London and energy firm RWE, the new trial will reveal the suitability of blockchain for welfare payments and its effect on the recipients of such payments longer term.
Human capital flight, or brain drain, occurs when skilled workers emigrate from their nation of origin, usually for financial or political reasons. Human capital flight can put tremendous strain on any nation, because they lose their best and brightest who would otherwise go on to be great leaders in their respective fields. We need to find ways to financially incentivize these talented people to stay and help build their nation into something great. Could a decentralized monetary system such as cryptocurrency ease human capital flight by cutting political red tape and freeing the flow of money to developing nations?
The ‘three-legged stool of retirement’ is a term dating back more than sixty years, and is used to describe the most typical sources of retirement income. Those sources are Social Security, employer sponsored pensions, and personal savings.
Times have changed and none of these legs have the kind of strength needed to support the retirement needs of a nation. All three are facing serious financial shortfalls that will devastate the retirement plans of a significant percentage of the population.
Perhaps the time has come for the old stool to get a new leg…
China’s Civil Code Could Be Changing to Reflect New Attitude Toward Cryptocurrency
North Carolina’s Senate Amends Money Transmitter Act to Include Cryptocurrency
Justice Department Official Urges Cryptocurrency Regulation
Citi Report Claims Bitcoin is Potential Complement for Banking Services, Not a Threat
Sometimes it is difficult for the cryptocurrency industry to understand how end users of any digital currency are finding their experience. With daily innovation in such a young industry, new ideas, new solutions and new processes are appearing daily, but sometimes we see evidence that the users are not having their needs met. One such instance comes from a small petition on change.org, which gives a clue as to the issues the digital currency industry must address to see wider success and growth.
Colu Continues Focus on Central Bank Cryptocurrency Issues
DAO White Hats Counter Attack to Prevent Additional Theft
Winklevoss Twins to Open Gemini Branch in UK
Despite Fears Over Brexit Impact on FinTech in UK, Reasons for Optimism Remain
Interest in all aspects of the cryptocurrency industry, whether it is digital currencies themselves or the underlying blockchain technology, from central banks has been increasing rapidly over the last 24 months. While on the surface this brings a level of validity and publicity to the cryptocurrency industry, it is important to examine exactly how the technology is being proposed to be implemented to understand whether this is good for the industry moving forward.
Alleged DAO Attacker Claims Ether is Legally His
Canadian Central Bank Not Launching Digital Currency in Near Future
Masters: Digital Currency Principled Response to Financial Crisis
MGT Capital Taps Voorhees for Crypto Advisory Board
With its highly innovative machine-payable web concept, cryptocurrency startup 21 Inc has delivered some genuinely interesting ideas for the future application of Bitcoin. Until now the software behind their 21 network and 21 Marketplace was a closed system, but they just announced a move to open source, offering the ability to experiment and innovate the concept through the now freely available software. The interesting thing about this idea is that it is only possible through digital currency, a unique application that could go a long way to validate the cryptocurrency industry itself as well as build trust with digital currencies.
Until now, there has been a lot of discussion and research into digital currencies by the financial industry, but reports coming from a national newspaper in Japan, The Asahi Shimbun, suggest that things may be moving faster than they first appear. It is suggested that Japan’s largest bank, the Bank of Tokyo-Mitsubishi UFJ Ltd., will be launching its own digital currency, to be known as the MUFG Coin, as soon as 2017. Such a big step represents the first such coin launched by a global bank, and it could have wide ranging effects on the cryptocurrency industry.
With state-by-state licensing being a well observed issue and roadblock to innovation and progress within the U.S cryptocurrency industry, the U.S. Office of the Comptroller of the Currency is looking for industry input into the situation. Many in the industry are looking for some form of national licensing to replace the current system and help the industry grow and innovate more easily. The process is still ongoing but this move from government represents a significant step in the development of the digital currency industry within the U.S.