Digital Currency Weekly Recap 12-20-2015
The Downer Roundup
Digital currency consumer warnings, news of real or threatened cryptocurrency bans, and doom-and-gloom prognostications seemed to be in vogue this week. With one state’s BBB issuing a cryptocurrency warning to its citizens, two nations disavowing the technology, and another well-known CEO predicting that it will be banned altogether, the Downers of the world were certainly not a loss for words. Here’s a quick look at the week’s attempts at spreading negativity:
- The Better Business Bureau in Connecticut issued a warning to consumers, businesses, and investors about the risks associated with digital currency.
- Armenia’s Central Bank issued an advisory to its citizens, recommending that they avoid cryptocurrency due to the lack of regulation.
- The Central Bank of Kenya issued a similar recommendation via a public service announcement campaign, and cited cryptocurrency’s perceived insecurity and imagined role in terrorism financing as reasons for the warning.
- Eugene Kaspersky, the co-founder and CEO of Kaspersky Lab, predicted that national governments will almost certainly ban digital currencies if they ever gain enough mainstream acceptance that they become a threat to existing national currencies. That bit of negativity was at least softened by Kaspersky’s praise of digital currency as a “brilliant invention.”
Japan Reportedly Readying Bitcoin Regulations
The first draft of Japan’s regulatory scheme for digital currency would require cryptocurrency exchanges to obtain government license, adopt consumer protections, and face regular audits. Those measures were being debated late this week by members of the Financial Services Agency, and legislative action is expected to be taken by the Diet next year.
If the legal framework follows draft proposals, digital currency exchanges will be subject to the nation’s laws governing money laundering. In addition, new account identity verifications will be required, and suspicious transactions will need to be reported. New security standards, record-keeping processes, and capital reserve requirements would also be enforced.
eCurrency Mint Proposes Centralized Digital Currency
In a move that is almost certain to evoke an unenthusiastic response from most digital currency enthusiasts, a company called eCurrency Mint is proposing a technological solution that could give central banks the tools they need to start issuing their own digital currency. According to reports, it would be centralized, and the supply of the currency would fluctuate in accordance with a given nation’s monetary policies. If that sounds almost indistinguishable from today’s fiat dollar, it is with good reason: the developers consciously worked to include many of the dollar’s features in their new currency.
BoA Has Ten More Crypto Patent Applications Published
This week, the US Patent and Trademark Office published ten additional Bank of America patent applications related to digital currency. This new group of applications includes patents for everything from risk detection and suspicious user alert systems to a digital currency payment system and a transaction validation process. The new group of applications brings the total number of BoA digital currency patent requests to 11.
Ripple Trade Support Ending in 2016
Declaring that “Ripple Trade is on to a new beginning,” an announcement on Ripple’s forum this week delivered news that support for Ripple Trade is being discontinued sometime in early 2016. Existing customers will receive email instructions helping them transition to new wallets and gateways.
Pentagon-Sponsored RAND Report Plays Up Crypto Threat
In a new report from the RAND Corporation, “National Security Implications of Virtual Currency”, digital currency is portrayed as a potential tool for terrorists and other insurgents. The report details how non-state actors could use cryptocurrency technology to thwart attempts by nation-states to disrupt their operations. It also notes that terrorist efforts to acquire the skill sets necessary for creating their own cryptocurrencies could provide them with the knowledge and experience they need to enhance their own ability to crack nation-state cryptographic security systems.