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British Financial Historian Niall Ferguson Says Bitcoin Is ‘an Option on Digital Gold’

World famous historian Niall Ferguson believes that Bitcoin is “an option to digital gold,” and a type of insurance.

Niall Ferguson, British economic and financial historian, believes that Bitcoin (BTC) is “an option an digital gold,” as he said in a interview with a blockchain magazine Breaker Mag on Feb. 13.

Ferguson, a world famous historian and author fourteen books such as The Ascent of Money, declared that Bitcoin itself is “only money in a very limited sense,” stressing that the oldest cryptocurrency is incapable of being money as a means of payment due to massive volatility.

However, in near future, Bitcoin’s main function will be serving as a type of insurance, Ferguson stated, explaining that it is an asset that is hard to confiscate, and anyone might hold private keys the same way the European wealthy used to hoard gold jewelry and precious stones.

While Ferguson said that it is clear that the money of future will be digital, he still expressed scepticism about stablecoins, which are digital currencies that are designed to provide minimum volatility and pegged to fiat currencies, commodities or algorithms.

Ferguson stated that fiat currencies have indeed performed very well in recent years in terms of inflation. In this context, Ferguson said that building a substitute for something that has been doing well since its inception in the 1970s is “not an obviously winning strategy.” He said:

“Stablecoin builders should remember that Bitcoin is an unusual kind of asset, which isn’t closely correlated to other asset classes. Investors like that idiosyncrasy.”

Regarding the future of money, Ferguson expressed hope that the global community will adopt a universal payment system that treats everyone equally, from the “0.1 percent” to the “huge class” of people who are outside the financial system, and have to rely on cash and payday loans. Ferguson also expressed concerns about huge centralized entities that might gain control over customer transactions:

“My nightmare would be that Amazon, Google, or Facebook creates some hugely popular version of a digital dollar at which point every transaction is going to be monitored by the network platforms’ big data and [artificial intelligence] AI systems, to an even greater extent than is already true.”

Earlier today, Mike Novogratz, a former Goldman Sachs partner and founder of crypto merchant bank Galaxy Digital, argued that Bitcoin is going to be a digital gold, claiming that it will be sovereign money.

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Mongolia Partners With Stablecoin to Use Blockchain for Lending Services, Money Transfers

Mongolia’s capital city administration is set to replace utility bills and government subsidies with blockchain-based payment methods.

Mongolia’s capital city of Ulaanbaatar has partnered with a stablecoin company to release instant money transfer and lending services, Asia’s largest tech media platform e27 reported on Jan. 11.

Ulaanbaatar City’s administration has agreed to partner with a South Korean blockchain company, dubbed Terra, in order to eventually replace the current payment methods for utility bill and government subsidies with the Terra stablecoin, according to the publication.

The pilot program is scheduled to be launched within the next six months, and will start in the city of Ulaanbaatar’s Nalaikh District, with plans to expand throughout the whole city. The article also states that the program within the Mongolian capital will contain both peer-to-peer payments and mobile payments.

Terra is a stablecoin project co-founded by Daniel Shin, the creator of South Korean e-commerce marketplace Ticket Monster. The stablecoin project closed a $32 million funding round in August 2018, with participation from Binance Labs, OKEx and Huobi Capital, as well as Polychain Capital.

Back last fall, the Bank of Mongolia, the country’s central bank, had given permission to Mongolia’s largest mobile telecoms operator to issue its own digital currency, as Cointelegraph reported on Sep. 28.

Terra, the stablecoin project, had already partnered with South Korean messaging app giant KakaoTalk back in last November as well. The partnership is aimed at developing a blockchain-based payment system and creating a blockchain ecosystem that would allow a large number of people to use its services, Cointelegraph wrote on Nov. 14.

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Circle Reveals $24 Billion Cryptocurrency OTC Trading Volume in 2018

Goldman Sachs-funded cryptocurrency startup, Circle, recently released its list of accomplishments for the year 2018. The company says it executed over-the-counter (OTC) crypto trades to the tune of $24 billion in notional volume.


Circle Does $24 Billion in Cryptocurrency OTC Trading

Circle announced its 2018 achievements in a blog post published by the company on Thursday (January 3, 2019). Circle Trade, the OTC desk of the company, executed over 10,000 OTC trades worth $24 billion, it reveals.

Commenting further on the growth of the Circle Trade platform, the announcement notes:

Circle Trade has become a core liquidity provider to the entire crypto ecosystem — including miners, exchanges, project developers, and founders — and to the new crypto asset investor base of VCs, crypto funds, hedge funds, and family offices all around the world.

The figures published by Circle are indicative of the recent trend observed in the OTC arena. In December 2018, Bitcoinist reported a boom in Bitcoin OTC trading according to research by Diar. Other major players like Coinbase also show an increase in trading volumes during OTC hours.

The $24 billion notional trading might even indicate that Circle executed more OTC trades than Coinbase and Greyscale (GBTC) combined. Data from Diar showed Coinbases’s OTC volume at about $12 billion with $11 billion for GBTC.

A Couple of Acquisitions

The acquisition of Poloniex by Circle was arguably one of the significant developments that occurred in 2018. Back in February 2018, the company announced its acquisition of Poloniex, one of the largest cryptocurrency exchange platforms at the time.

According to Circle, it has made great efforts in improving the platform’s compliance standards. In May 2018, Bitcoinist reported on the uproar caused by new KYC requirements introduced at the time. Many legacy account holders felt the move broke several assurances provided by the company in late 2017.

For Circle, the steps taken have yielded fruit especially in the area of customer support. The blog post revealed a 99.5 percent decrease in the number of open tickets since the acquisition.

In 2018, the Goldman Sachs-backed Circle also acquired SeedInvest as part of its drive to become a regulated broker-dealer. With tightening regulations in the US crypto landscape, startups like Circle and Coinbase have been pursuing regulatory approval to expand their cryptocurrency product catalogs.

Stable Coin Launch and Company Growth

Circle also ventured into the stablecoin arena with the launch of USD Coin (USDC). This development led to the creation of the CENTRE consortium, a joint venture with San Francisco-based exchange giant, Coinbase.

According to the announcement, USDC is now the second-largest fiat collateralized stablecoin after Tether with a market capitalization more than $280 million. Multiple cryptocurrency exchange platforms also support the stablecoin.

2019 will be Circle’s sixth year in existence, and the company says that it wants to focus on capacity building for the industry regardless of market conditions. Circle says:

We see the future of the global economy as open, shared, inclusive, distributed, and powerful — not only for a few chosen gatekeepers but for all who connect.

What do you think about Circle’s 2018 figures despite a drop in overall prices? Let us know your thoughts in the comments below!


Image courtesy of Twitter (@zhusu) and Circle, Shutterstock

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Stablecoin Supremacy Battle Heats Up; Binance Lists USDC, Tether Below a Buck

Once up a time there was crypto and fiat. If you wanted to trade in altcoins you had to first buy Bitcoin. Tether changed all that when it came onto the scene on Bitfinex in 2015, today there are a slew of stablecoins all competing for supremacy.

USDC Listed on Binance

The controversy surrounding Tether coupled with its recent volatility has led to the birth of several similar dollar pegged stablecoins. Once has been created by Coinbase and partners at Circle, USD Coin. On Thursday USDC was granted a new realm of legitimacy when Binance, the world’s top crypto exchange by trade volume, announced that it would be listing new pairs.

According to the announcement Binance will be offering two new USDC pairs for Bitcoin and its own Binance Coin (BNB) as of November 17. To quash the auditing concerns that plagued Tether, the exchange added;

“Additionally, for increased transparency, USDC has engaged a top-ranking auditing firm to release monthly balance attestations of the corresponding USDC and USD balances held/issued.”

USD Coin is only a few months old but it is growing in power as an alternative to USDT. It still has a way to go though, with daily volume, according to Coinmarketcap, at $16 million, compared to $4.7 billion in Tether trade. However, with USDC available on Coinbase and now Binance, its usage is expected to grow rapidly especially when more trading pairs are introduced.

According to the company blog “Circle and Coinbase co-founded the CENTRE Consortium with the goal of establishing a standard for fiat on the internet and providing a governance framework and network for the global, mainstream adoption of fiat stablecoins.”

If complete transparency and audits are forthcoming it may not be long before USDC surpasses USDT however the centralization issue raises its head again when one company is holding all of the cards. This is especially true if Tether continues to show volatility and inability to maintain its dollar peg.

Tether in Turmoil

During the recent crypto rout Tether fell to $0.964 whereas USDC actually hit a peak of $1.06. The Gemini Exchange’s GUSD spiked at $1.18 according to CMC. At the time of writing USDC is still trading over a dollar and USDT is under it. Fortune has noted that if Tether collapses “it could deliver a shock to the crypto markets that makes this week’s wipeout look like a hiccup.”

The good news is that there are now several alternatives to Tether in addition to USD Coin, such as TrueUSD (TUSD), Gemini’s own GUSD, Maker DAO’s Dai, and the Paxos Standard Dollar (PAX). So traders are no longer tethered to Tether, go ahead and take your pick, some are even offering more than buck right now.

Image from Shutterstock

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Tether Announces Relationship With Deltec Bank in the Bahamas

On November 1st Tether said they have established a banking relationship with the Bahamas-based Deltec Bank & Trust Limited.


Tether Limited made a few notable announcements on Thursday, November 1st.

Early in the day on Twitter, the firm confirmed a new banking relationship with Deltec Bank & Trust Limited (Deltec), which has a headquarters in the Bahamas.

In a brief post, Tether wrote that Deltec carried out a “due diligence review of our company” before taking it on as a client. The post also came with an attachment to a letter penned by Deltec confirming the “portfolio cash value of your account with our bank was US$1,831,322,828,” at the close of business on October 31st.

As of press time, CoinMarketCap listed Tether’s circulating supply at 1,776,421,736 UST with a price of $0.98.

Letter Provided ‘Without Liability’

In the letter, Deltec was clear to note the letter with Tether’s portfolio cash value was “based on the information currently in our possession.”

The letter was just signed by “Deltec Bank & Trust Limited” with a quick scrawl, which attracted the attention of some commenters on Reddit.

A few people questioned why a person at the bank would not be willing to attach their name to the holdings report. Tether has been the focus of intense scrutiny and attention amid allegations it does not actually hold the dollar reserves it claims.

Tether asked law firm Freeh, Sporkin & Sullivan back earlier in the year to carry out a review of its holdings. The firm concluded Tether’s “unencumbered assets exceed the balance of fully-backed USD Tethers,” as of June 1st.

However, the law firm noted the review was not conducted with Generally Accepted Accounting Standards. Many question Tether’s holdings claims because they have so far been unwilling to undergo an audit.

Others point to a mid-October Tweet by Cameron Winklevoss, co-founder of the Gemini dollar, who wrote how it is not possible to carry out an audit on a stablecoin since “there is no financial report framework.” Winklevoss argued a 3rd party would have to just attest to the accuracy of an assertion about a 1:1 peg.

A Rigorous Review by Deltec

In the blog post, Tether said Deltec looked over compliance processes, policies, and other procedures, and carried out background checks of company officers, shareholders, and ultimate beneficiaries.

Tether wrote the review process occurred across several months and included an assessment “of our ability to maintain the USD-peg at any moment.”

The company said they are currently registered with the U.S. Treasury Department’s Financial Crimes Enforcement Network and is reviewed by Deltec “on an ongoing basis.”

What do you think of Tether’s new banking relationship? Let us know in the comments!


Image courtesy of Bitcoinist archives, Shutterstock, Twitter (@Tether_to, @whalepool).