Digital Currency Weekly Recap 11-29-2015
Swift Report Offers Crypto Recommendations for EU
A recent report published by the Swift Institute examines emerging third party payment providers (TPPs) and cryptocurrencies, and offers some recommendations for how European Union legislators and regulators should manage these innovations. Though published prior to the recent terror attacks in Paris, the document’s sober examination of TPPs, digital currency, and the current EU regulatory framework still offers timely insight at a time when many in Europe have clamored for tighter regulation of cryptocurrency.
The report covers a broad range of topics, including legislative initiatives like the Fourth EU Anti Money Laundering Directive (AMLD4) and Payment Services Directive 2 (PSD2), as well as regulatory actions taken by jurisdictions outside the EU. Ultimately, the authors offer a variety of recommendations that include addressing current ambiguities in the regulatory framework, greater regulatory coordination within the EU, increased global cooperation, and the adoption of what is referred to as a “rational outlook on virtual currencies.”
BIS Warns That Cryptocurrency Threatens Central Bank Power
The Bank for International Settlements (BIS) released a report this week that has some dire warnings for the world’s central banks. After studying the emerging technology for the last two years, the BIS has apparently determined that digital currencies such as DNotes and Bitcoin could pose a serious threat to the existing central bank model if cryptocurrency ever reaches the level of widespread acceptance that its proponents seek.
The main fear that is expressed in the document is that central banks would lose their ability to influence monetary and economic policy if digital currency ended up replacing any sizable portion of the traditional currencies that are currently in circulation. That would reduce central banks’ ability to manage the flow of money, and could significantly decrease those banks’ currency earnings. The authors expressed even greater concern about the possible widespread implementation of a distributed ledger system like the blockchain - noting that such a ledger could, in conjunction with a widely-accepted digital currency, make central banks all but obsolete.
Quantum Physics Could Provide Greater Security for Cryptocurrency
Ongoing research in Canberra, Australia could help to eliminate one of the digital currency concerns most often raised by those outside of the cryptocurrency universe: the perceived lack of cybersecurity. Physicists in Canberra are currently focused on encryption based on quantum physics that they believe could provide the world with the first “unbreakable” system for securing data.
Unlike traditional encryption techniques that rely on mathematics, this new method of security would not be dependent on defeating an attacker’s potential computational power. Instead, the encryption would rely on the very laws of physics that govern photon quantum entanglement. With quantum computing continuing to move closer to reality, these developments in quantum cybersecurity should come as welcome news for digital currency advocates concerned about the continuing security of blockchain technology.
Jenkins Says FinTech Disruption of Banking Will be Significant
Anthony Jenkins, one-time Group CEO of Barclays, has recently suggested that the banking industry faces a tremendous amount of disruption from emerging FinTech innovations. In a speech at Chatham House in London, he predicted that these new technologies will be so disruptive that as many as half of all the people employed within the financial sector could lose their jobs over the next decade.
Jenkins compared the threat faced by financial service entities to the disruption that Uber caused to traditional taxi services. He also cautioned that many of the world’s banks are likely to struggle to adapt to these changes. At the same time, however, he seemed to offer little sympathy for the industry, as he inferred that the financial service sector has been remiss in its responsibility to help maintain a society that functions for everyone.
GameCredits Launching Wallet and GrandPrix Game
GameCredits (GMC) is launching its new online wallet, as well as a new racing game that provides players an opportunity to win the digital currency by placing in the top 3 race rankings in a three-week tournament. The contest is designed so that players all use the same racing car to ensure that everyone shares an equal chance of winning, and a finite number of race attempts are provided to each person. However, social media shares can yield additional attempts, or players can simply buy extra runs with their GameCredits.
GameCredits is a welcome addition to both the digital currency universe and the gaming industry. GMC’s involvement with gaming can not only help to educate more people about how cryptocurrency works, but also provide them with greater exposure to its uses and benefits. As GameCredits moves forward with plans to launch its own GameHub platform, small developers will be able to use it to gain exposure that they might otherwise be unable to afford.