Digital Currency Weekly Recap 11-20-2016
It’s Officially a Trend... Sovereign Digital Currencies
Last week, we highlighted the growing number of countries that seem to be serious about replacing their cash-based monetary systems with national digital currencies. Countries like the Ukraine and Senegal have been making noise about just such a move in recent months. Singapore is talking about testing its own cryptocurrency as well. Now it looks as though the dam is about to really break, as there are even more reports of other countries contemplating similar actions. Sweden is just one more example, as that nation’s central bank hopes to begin issuing digital currency before 2020.
Reports from China have previously suggested that the world’s most populous country was considering its own sovereign cryptocurrency. A recent news report from the South China Morning Post indicates that the People’s Bank of China is doubling down on its efforts to create a national digital currency. China’s effort to create its own sovereign digital currency is in part motivated by fear of the impact that decentralized cryptocurrencies like Bitcoin might have on its own economy. As the head of the central bank’s research team noted, those private sector currencies might potentially “affect the performance of payment systems, monetary systems and financial stability.” As a result of those worries, the People’s Bank is hoping to launch its own digital currency “as soon as possible.”
IRS Trying to Gain Access to Coinbase User Records
The Internal Revenue Service - America’s favorite government agency - has moved to gain access to Coinbase’s user records to help facilitate an investigation into U.S. taxpayers who have made transactions on the exchange using digital currency. The agency this week petitioned a California District Court to allow it to serve that summons to the company. The move comes on the heels of suggestions that the agency wasn’t doing enough to “police” Americans who use digital currency
According to reports, that summons demands that Coinbase turn over information related to user profiles, preferences, and security settings, as well as the history of any profile changes users have made. Other details that are being sought include transaction histories, known devices used to make those transactions, and the payment methods customers utilized. No specific user names are being requested. Instead, the summons is a “John Doe” request that seeks information about everyone who used the exchange’s services between 2013 and 2015.
We used to call that kind of “investigation” a fishing expedition.
Cryptocurrency and the Wall
No, not the iconic Pink Floyd album – the other wall. Much of the last year has involved a seemingly endless debate in the United States about President-Elect Donald Trump’s proposal to build a wall separating the United States and Mexico. The debate over his call for a wall has been at times acrimonious and at other times unintentionally hilarious. And much of the conversation has revolved around who would actually pay for such a structure even if it were to be built. The soon-to-be President claims that Mexico will pay for its construction. That country’s President has steadfastly refused to do any such thing.
One Dutchwoman has a novel solution: create a digital currency devoted to the project, and allow those who support the wall’s creation to pay for it by buying crypto tokens. According to Annemieke Dirkes, theCOO of OpenLedger ApS Denmark, that would allow the wall’s proponents to “put their money where their mouth is.” Her suggestion involves creating several billion tokens that she’s tentatively dubbed the “Wally” and selling them for one U.S. Dollar apiece. The idea would also allow contractors who want to take part in building sections of the barrier to present proposals online, and would empower stakeholders to vote on various proposals.
Setting aside individual feelings and opinions about any proposed wall on the southern border, the idea is one that digital currency users should be able to appreciate – at least conceptually. It’s market-based, democratized, and almost certainly more transparent than any government-run infrastructure project of the past.