Federal Reserve Chair Janet Yellen had some positive words to say about the blockchain on Wednesday during an appearance at the Commonwealth Club in San Francisco. After delivering a speech in which she opined on everything from the strength of the economy to the Federal Reserve’s plans for interest rates, Yellen sat down to discuss those and other important issues with Ed Wasserman, the event moderator and Dean of the Graduate School of Journalism at UC Berkeley.
In a press release on Tuesday, the New York State Department of Financial Services (DFS) announced that it has granted Coinbase, Inc. the virtual currency and money transmitter license needed to continue its operations in New York. The company had announced that it applied for the state’s “BitLicense” in August, 2015, and has been operating in New York under the terms of a safe harbor provision while it waited for formal approval.
The Times of India is reporting that the research arm of the Reserve Bank of India (RBI) has concluded its first trade application test of blockchain technology. The end-to-end test was conducted in collaboration with banks and other financial institutions, clearing houses, and regulators, and was facilitated by the RBI’s Institute for Development and Research in Banking Technology (IDRBT). The project received technical support from cryptocurrency firm MonetaGo, which provided the technology used in the test.
Coinbase co-founder and CEO Brian Armstrong published an online post on Medium this weekend to explain his company’s position on the ongoing battle with the Internal Revenue Service (IRS) over the tax agency’s effort to access information about Coinbase customers. He also took the opportunity to offer another option that would negate the need for the John Doe Summons by issuing all Coinbase customers a 1099-B at the end of each year.
In a statement released this week, the Israel Tax Authority (ITA) announced that it has decided to treat digital currencies like Bitcoin as assets rather than as foreign currencies for the purpose of taxation. That announcement has come more than three years after Israel’s government first began talking about the possibility of taxing profits from Bitcoin trading.
The Criminal Intelligence Service Canada states that financial crimes committed by organized crime groups are costing Canadians around $5 billion a year. They further state that every one of these groups in Canada participates in some form of financial crime. Using the internet, they can actively and successfully reroute money to foreign countries, or try to legitimize it (launder it) through the stock market, online gambling sites, and anywhere else that presents an opportunity.
Many government officials are pointing a finger at digital currencies such as bitcoin as a haven for money launderers, even though it has an open, permanent, immutable ledger of every transaction that has ever occurred.
In the wake of several days of dramatic action in the Bitcoin markets, China’s central bank issued a strong warning to the nation’s investors as it urged them to adopt a rational approach with respect to digital currency investments. According to the People’s Bank of China (PBOC), the fluctuations in Bitcoin’s prices have been abnormal of late, and that abnormality should cause investors to be more cautious in their decision-making process.
The Netherlands’ Public Prosecution Service is reportedly pursuing at least three individual money laundering cases related to Bitcoin, according to DutchNews.nl. The prosecution department, formally known as the Openbaar Ministerie (OM), is the body responsible for determining whether suspected criminals should be referred for prosecution.
On Tuesday, attorneys for the Internal Revenue Service filed the agency’s response to Los Angeles attorney and Coinbase user Jeffrey K. Berns’s motion to prevent the IRS from serving a “John Doe” summons to Coinbase. That summons would require Coinbase to provide the IRS with the identities and account information of all United States customers who exchanged digital currencies on the company’s exchange from 2013 to 2015.
In a recent report titled Hong Kong Banking Outlook 2017, KPMG expresses an optimistic view of Hong Kong’s progress in the adoption of FinTech, but also urged caution in its future handling of blockchain technology. The report noted the financial industry’s increased interest in distributed ledger technology, and the accompanying rise in FinTech investment throughout Hong Kong – investment that has helped to jump-start FinTech innovation in the region. KPMG’s analysis anticipates future investment growth over the coming year.
Estonia will play host to its first major blockchain conference next year, as developers, blockchain experts, and entrepreneurs will come together in the capital city of Tallinn on March 9, 2016. Blockchain & Bitcoin Conference Tallinn will focus on blockchain solutions for government, and commercial applications for industries ranging from banking, healthcare, and trading to logistics and notary services.
As President-elect Donald Trump’s cabinet picks continue to be announced one-by-one, many digital currency enthusiasts have been searching for any signs that might indicate how the new administration will address cryptocurrency and blockchain concerns. The recent selection of Republican Representative Mick Mulvaney to lead the Office of Management and Budget (OMB) has already been favorably reviewed by many in the Bitcoin community, since Mulvaney is a well-known proponent of Bitcoin.
The Crypto Capitalism Center is a research project that collects and analyzes data on fintech and the rise of the bitcoin economy. Founded in 2014 by Jean-Philippe Vergne, a professor at Ivey Business School in Ontario, Canada, the data is used to publish unbiased, high quality research papers and to develop educational material. Since a lot of the existing publicly available research has been done with a definite slant toward whatever side of the bitcoin / fintech table you are on, the work done by the Center will be a valuable resource to regulators, policy makers, and others needing accurate information.
A partnership between business reporting standards body XBRL US and ConsenSys was announced earlier this week, as the two have created a working group designed to standardize blockchain token creation, reduce transaction friction between different blockchains, and automate token tracking. If realized, the group’s efforts would reduce processing costs and increase transaction interoperability around the world. This standardization is believed by many to be among the most important challenges the industry must overcome before it can gain widespread acceptance of smart contract technology.
The Internal Revenue Service’s effort to serve Coinbase with a “John Doe” summons has received a fresh challenge, as a motion filed this week in a San Francisco federal court seeks to quash last month’s court ruling that affirmed the tax agency’s power to obtain Coinbase customer personal data and user transaction information. That motion was filed by Berns Weiss LLP Managing Partner and Coinbase user Jeffrey K. Berns, a lawyer whose firm deals with issues involving technology – including digital currencies like Bitcoin.
This week will see the launch of the Blockchain Association of Ireland, a non-profit distributed ledger advocacy group committed to promoting blockchain technologies and establishing Ireland as a “global hub for innovation” in FinTech. The non-profit association has committed itself to working with other groups in the country to help ensure that Ireland is well-positioned to benefit when blockchain technology starts to realize its potential for transforming the global marketplace.
The Chamber of Digital Commerce’s Smart Contracts Symposium this week included a panel that focused its attention on blockchain smart contracts and the difficulties regulators could face as they try to exercise their oversight power. The panel included two representatives from U.S. regulatory agencies: the Financial Industry Regulatory Authority (FINRA) and the Commodity Futures Trading Commission (CFTC). The representatives acknowledged that both agencies have been closely monitoring the rise of distributed ledger technology.
Many people paint a mental picture in their heads of crony capitalism as a room full of old rich guys, smoking cigars, watching the ticker, and counting piles of money freshly squeezed from peasant folk. In reality, crony capitalism is more about the government wielding their monopoly of unquestionable force to choose which private businesses are winners, and which ones are losers. Some might compare crony capitalism to fascist style control over the private sector. Mega corporations and unions have very deep pockets and can buy favors such as subsidies or favorable regulation that can give them an almost monopolistic advantage over small businesses. Governments should instead be championing small businesses and all the real economic benefits they bring to the country, because without a fair and level playing field, many of these small enterprises will fail.
Cryptocurrency can play a role in ending this cycle, helping free markets thrive once again.
The United States Department of Commerce’s Internet Policy Task Force (IPTF) will be hosting a public meeting on December 9, 2016, to explore and promote options for improving the online marketplace. That meeting is scheduled to be held in the Madison Auditorium at the United States Patent and Trademark Office from 8:30 AM to 4:00 PM, and will focus on digital rights for copyrighted works, digital registry interoperability, and new technologies like the blockchain. Interested parties can view a live webcast online.
The state government in Illinois this week announced that its Digital Currency Regulatory Guidance proposal had been released for public comment. The guidance provides an overview of the Illinois Department of Financial and Professional Regulation’s (IDFPR) policy on cryptocurrency, as well as its interpretation of how the state’s Transmitters of Money Act apply to various digital currency activities. The IDFPR release is part of a broader effort to incorporate blockchain technology into the state’s official government operations.