The US Risks Getting Left Behind on CBDCs

The US Risks Getting Left Behind on CBDCs

This week, as world leaders gather virtually for DC Fintech Week in Washington, D.C., a key focus will be on central banks issuing their own digital currencies (CBDC). A pivotal player here is the United States, which faces an increasingly urgent decision: whether to take serious steps towards issuing a CBDC, as the Bank of China and others have begun. The sooner it decides, the better.   

Many countries are addressing this issue seriously and quickly, as surveyed by tracking projects at the Atlantic Council and elsewhere. Pilot programs are ongoing in multiple nations, most notably China, which recently ran a trial with 50,000 residents of Shenzhen – reigniting concerns about its rapid progress and geostrategic implications. By contrast, the U.S. remains comparatively cautious and quiet. 

The authors are attorneys and advise digital currency projects at the law firm of Schnapper-Casteras PLLC. JP Schnapper-Casteras is also a Non-Resident Senior Fellow at the Atlantic Council, focusing on CBDCs and financial technology regulation.

On CBDCs, Federal Reserve Chairman Jerome Powell said this week that it is more important for the U.S. to “get it right than to be first.” The most concrete CBDC exploration is at the Federal Reserve Bank of Boston, which is collaborating with MIT to survey 30-40 available technologies over two to three years. Treasury Department officials hint more work is happening behind the scenes, but little has been made public.

If the U.S. wants to lead on CBDCs, there is much more it could reasonably do, and soon – even short of being “first.” It could test out several pilot projects at the same time, as underscored by the Digital Dollar Project (a group led by Chris Giancarlo, former chairman of the Commodity Futures Trading Commission) and along the lines of what the Bank of France and People’s Bank of China are already undertaking.

U.S. stakeholders, including Congress, should start wrestling with the crucial and complicated issues of the digital dollar’s design, including the paramount issue of privacy. Giancarlo stressed that may turn out to be “ace to play in the contest for the future of digital money” and could help contrast the “digital dollar” against other nations’ CBDCs that reflect different values and priorities.

If, on the other hand, the U.S. wants to continue waiting while other countries move forward on CBDCs, it could lean into a substantial role for the private sector. The prospect of private sector “digital dollars” scared some policymakers when Facebook announced its libra cryptocurrency last June, but recently Powell and his colleagues have started looking favorably at different forms of private-sector collaboration. In the absence of a clear national policy, the private issuance of “digital dollars” is already happening, evidenced by the surge in privately issued “crypto-dollars,” a phenomenon profiled by Coin Metrics cofounder Nic Carter. 

What could be even worse is waiting, and getting left behind.

Moreover, the Treasury’s Office of the Comptroller of the Currency (OCC) recently gave banks the okay to hold bank reserves on behalf of certain “digital dollar” issuers. If the U.S. engages the private sector, we believe it should embrace and demand the model that worked for the early internet: open-source and interoperable technology standards. 

At one level, the Federal Reserve’s current “wait and see” approach is understandable: It is a historically conservative institution and, as the issuer of the world’s reserve currency, has much to lose if its CBDC efforts flounder. Cybersecurity flaws might scotch a digital dollar launch, for example.

Still, there is surely a greater cost to all this waiting. 

As CFTC Chairman Heath Tarbert candidly admitted on Monday at DC FinTech Week, “The only thing that scares me is the U.S. falling behind [on CBDCs].” 

Other countries that move earlier on CBDCs may stand to gain from that first-mover advantage: reaching or surpassing the United States on infrastructure, establishing industry standards or expanding their spheres of influence via digital currency adoption. 

Domestically, moving too slowly and maintaining the status quo could deprive the U.S. of new and important fiscal and monetary tools, including the ability to rapidly and precisely disseminate stimulus funds directly to citizens during a recurring pandemic or lingering depression. 

In the worst case, the U.S. would muddle along the next few years with the worst of both worlds: neither material progress on national financial infrastructure nor enhanced regulatory clarity or open standards for private providers. 

The United States faces a pressing decision about whether to join other countries and start working, openly and urgently, on a digital currency that would complement paper cash. As tough as the decision may be, what could be even worse is waiting and getting left behind. 

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Source: www.bit-cointalk.com


FinCEN fines a Bitcoin mixer operator a $60 million civil money penalty

FinCEN fines a Bitcoin mixer operator a $60 million civil money penalty

Larry Dean, who is also facing money laundering charges, has been penalised with a $60 million fine by the Financial Crimes Enforcement Network (FinCEN)

It is the first time the FinCEN has levied a penalty against a Bitcoin mixer, as detailed in a press release. Larry Dean, the owner of Helix and Coin Ninja, has been charged with criminal money laundering.

Bitcoin mixers are used to jumble individual users’ coins with other users’ coins to preserve transaction privacy. Mixers have been perceived illegal by the US Department of Justice (DoJ), more so when used to conceal illegal activities. The bitcoin mixing services have been an uncomfortable subject in the cryptocurrency sector.

No one would, intentionally or accidentally, like to be in a situation similar to Larry Dean’s, so there’s an inherent desire to avoid any activity or operation related to it. Today, many exchanges have started blocking user accounts with any transactions connected or linked with mixers.

It is alleged that Dean had a hand in obscuring the origin of more than $300 million in Bitcoin AlphaBay darknet users between 2014 and 2017.  The Financial Crimes Enforcement Network claims that he achieved this via more than 1 million different Bitcoin transactions.

FinCEN reported that Dean ran Helix between 2014 and 2017 without registering the business. “The investigation demonstrated that Mr. Harmon deliberately disregarded his obligations under the [Bank Secrecy Act] BSA and implemented practices that allowed Helix to circumvent the BSA’s requirements. This included a failure to collect and verify customer names, addresses and other identifiers on over 1.2 million transactions”.

FinCEN added that Dean neither adhered to the anti-money laundering compliance nor kept transaction records. The bureau reports that he instead “actively deleted even the minimal customer information he did collect” including when he dealt with scammers and drug traffickers.

The investigation conducted by the enforcement network led to the discovery of about 356,000 Bitcoin transactions through Helix that was run by Dean.

The news about Larry Dean’s criminal activities comes when the United States’ federal government is struggling to usher in more stringent policies around cryptocurrency operations. The past warnings issued to cryptography and encryption services in regard to helping facilitate crimes in or involving the cryptocurrency sector seem to have landed on deaf ears. 

Law enforcement authorities have now started offering rewards to developers and FinTech experts to help combat crypto related crimes. Last month, the Internal Revenue Service made a post announcing that it was offering a reward of up to $625,000 to anyone who could manage to crack untraceable privacy blockchain like Monero and help in tracing Lightning Network transactions.

Source: www.bit-cointalk.com


Sufferer Stung for BTC 22 as DoppelPaymer Scammers Declare Newest Sufferer

Sufferer Stung for BTC 22 as DoppelPaymer Scammers Declare Newest Sufferer

A hapless sufferer has reportedly forked out a whopping BTC 22 – value over USD 263,000 – to DoppelPaymer ransomware scammers, per knowledge printed by monitoring web site ScamAlert.

Earlier this yr, antivirus software program developer Avast warned that there had been a latest resurgence in scammers making use of the infamous ransomware.

Like different, comparable malware, DoppelPaymer locks the sufferer’s arduous drives, encrypts them, and calls for that ransoms be paid in crypto.

Avast acknowledged that DoppelPaymer customers incorporate virus-themed e mail topic strains to “entice victims.”

The corporate added,

“This one is critical within the variety of totally different distribution strategies which have been used within the three years since its progenitor, BitPaymer, was first found. What makes DoppelPaymer nastier than your common ransomware [is the fact that] its authors submit its success tales on-line, which has a double intent of shaming the victims and making it simpler for the press to validate the breach.”

What future awaits cryptocurrencies?
GOODBAD

The hackers are additionally growing ransomware by investing in an affiliate mannequin, paying a spread of specialists to distribute DoppelPaymer – and utilizing a spread of phishing traps to dupe unsuspecting victims.

The ransomware has been used to devastating impact previously. Avast says it was used on an assault on the IT community of the town of Torrance, California, final March, whereby municipal backups had been erased and encrypted – with greater than 200 GB of information stolen.

Some Reddit customers stated they had been puzzled as to why the sufferer would select to pay such a steep ransom as a substitute of merely reformatting their arduous drive.

One Redditor wrote,

“With regards to forking over 1 / 4 of 1,000,000 USD or reformatting my pc, I’m fairly positive I might be inclined to decide on the latter. I can not consider what any information precious sufficient to be prepared to make that alternate, may even be.”

___
Study extra:
Hack Forces Journey Firm to Pay USD 4.6m in Bitcoin Ransom
Hackers Assault Telecom Argentina, Demand USD 7.5m In Monero
UK Courtroom Freezes a Ransomware-linked Bitcoin Account on Bitfinex

Source: bitcoinflashnews.com

Author: By admin


Bitcoin Prepares to Set New 2020 Trading High at $12,000

Bitcoin Prepares to Set New 2020 Trading High at $12,000

  • BTC faces a near-term resistance at $12,000 which will decide a possible bullish break or a medium-term reversal zone.
  • A bearish divergence between rising prices and falling daily active addresses signals potential exhaustion of bullish momentum.
  • The outcome of tonight’s U.S. stimulus talks could add fuel to a bullish breakout or extinguish building momentum. 
  • Bitcoin has risen by more than 3% since the weekly price open as the pioneer cryptocurrency trades within touching distance of the psychological $12,000 resistance level.

    The surge in BTC came after Federal Reserve Chair, Jerome Powell, discussed the possibilities of rolling out Central Bank Digital Currency and how the Libra project has reinforced the complexities of launching a national digital currency.

    With BTC’s fundamental outlook appearing extremely bullish, a break above $12,000 could provoke a continuous rally towards the $13,000 level, placing the 2019 trading high around $13,900 firmly in focus.

    Traders should treat the latest move higher in BTC with some degree of caution. A lower time frame analysis shows that bearish divergence has been developing on the MACD indicator since the cryptocurrency broke above the $11,000 level earlier this month.

    Typically crypto traders use this trend following indicator to reveal the rising or falling momentum of an asset’s trend. A crossover of the MACD (blue line-the deviation between 12 days and 26 days-moving averages) and the signal line (yellow-9 day moving average of the MACD) to the upside indicates an incoming bullish trend, while a crossover to the downside signals a bearish trend.

    The current four-hour price chart shows the MACD bars getting smaller and smaller while price rises, confirming negative price divergence. Additionally, the MACD signal line is also showing negative price divergence and has been declining while BTC price has been rising.

    Should Bitcoin start to pull back from current levels and trade below its weekly opening price then the risk of price dropping towards $11,000 and eroding the negative MACD price divergences increases dramatically.

    Data from on-chain crypto sentiment platform Santiment shows that a clear-cut bearish divergence between rising prices and a falling number of BTC daily active addresses has been forming over recent days, signaling a potential slowing in Bitcoin buying activity.

    Santiment recently tweeted that,

    “Bitcoin’s mild climb of around +3% this weekend was a bit of a surprise, considering the 730.5M daily active addresses transacting on the network Sunday was the lowest mark since June 28th. Our model points to a fairly clear-cut bearish divergence forming.”

    As the deadline looms for the next COID-19 stimulus talks, any positive developments ahead of the election would almost certainly have the potential to override the bearish divergences outlined and send BTC towards the current yearly high, and possibly the 2019 yearly high.

    However, should the deadlock remain in place between Republicans and Democrats, and a stimulus package cannot be agreed upon until after the U.S. election, then the mentioned on-chain and technical divergences may become even more hazardous for Bitcoin bulls over the coming weeks.

    The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.

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    Source: cryptobriefing.com

    Author: by
    The Analyst Team


    The US Risks Getting Left Behind on CBDCs


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