NBA Partners With Firm Behind CryptoKitties for Crypto Collectible Game

NBA Partners With Firm Behind CryptoKitties for Crypto Collectible Game

The NBA has partnered with the crypto collectibles developer behind CryptoKitties to launch a new collectibles platform and competitive game.

The United States National Basketball Association (NBA) and its affiliated union — the National Basketball Players Association (NBPA) — have partnered with Dapper Labs of CryptoKitties-fame to release a new crypto collectibles game.

According to an official announcement on the NBPA website, the upcoming game is scheduled to launch in early 2020.

The game, called NBA Top Shot, will be a roster-building competitive game that is based on crypto collectibles. According to the announcement, fans will be able to gather live footage of NBA games that can then be used in some capacity to build a competing roster for the game — or to simply be owned and trade as a collectible, as the user chooses.

Roham Gharegozlou, the CEO of Dapper Labs, provided his perspective on the planned game’s offerings, saying:

“The NBA and its players are among the greatest heavyweights in global culture [...] Through NBA Top Shot basketball fans can engage with their favorite players, teams, and each other in entirely new ways. We use the latest in blockchain technology to create assets and experiences that are guaranteed limited edition and authentic, not to mention portable and permanent in a way nothing digital has ever been before.”

Blockchain and basketball

A number of basketball organizations are getting involved in blockchain technology. As previously reported by Cointelegraph, the Sacramento Kings basketball team has opted to work with a crypto mining hardware firm to install Ether (ETH) mining machines in Sacramento’s Golden 1 Center. The proceeds of the new initiative will reportedly go to charity — specifically a program called MiningForGood, which focuses on tech education and workforce development.

Additionally, the Cleveland Cavaliers have partnered with crypto firm UnitedCoin as its official partner. The arrangement will reportedly allow for UnitedCoin to receive advertising via the Cavs, as well to provide a fintech inroad for the basketball team.

Arizona to Test Marijuana-Oriented Stablecoin in State Fintech Sandbox

Arizona to Test Marijuana-Oriented Stablecoin in State Fintech Sandbox

An Arizona startup is testing its stablecoin payments platform for the medical marijuana industry through the state’s fintech sandbox.

The state of Arizona has accepted a blockchain-based, cannabis industry-oriented payments solution into its fintech sandbox.

According to a recent press release from the Office of the Attorney General, the company — called Alta — is a cash management solution for licensed medical marijuana providers and vendors. The Arizona-based financial services startup intends to offer a stablecoin that is pegged 1:1 with the United States dollar. 

During its sandbox testing phase, Alta will trial its member onboarding and remittances platform. The end goal of the platform is to let users pay for goods and services using the stablecoin instead of fiat money.

Banking problems for the cannabis industry

Cannabis, while legal in some states in the U.S., is still considered a controlled and illegal substance by the federal government. As such, banks are hesitant to deal with cannabis-related business as it would be grounds for the government to revoke their federal deposit insurance, which is a crucial financial safety net for banks.

Sarah Wessel, the co-founder and COO of Alta, said that this blockchain-based service can provide a crucial financial service and make local communities more safe:

“The cash economy for legal cannabis in Arizona exceeds $350 million annually [...] These are legitimate companies, innovators and entrepreneurs that are forced to operate in cash. We offer them peace of mind. Our digital payment technology lifts the burdens of having to operate solely through cash and makes our communities safer.” 

Other crypto business and state governments have tried to bridge the gap between the cannabis and financial services industries. In 2017, the Dash network began paying the firm Alt Thirty Six to integrate Dash as a payment option in the cannabis industry’s point-of-sale systems.

From the legislative side, lawmakers in the state of California proposed a bill in February that would accept crypto for tax payments from cannabis-related businesses. The bill, which has not moved out of committee since March, aimed to relieve tax offices from the large piles of money brought in by cash-heavy cannabis businesses.

Arizona Fintech Sandbox

Arizona became the first state to introduce a regulatory sandbox in March 2018. Republican Congressman Jeff Weninger reportedly sponsored the legislation behind the sandbox. Weninger commented on the potential broader use cases in today’s press release, saying:

"It's exciting to have Alta as the newest participant in Arizona's FinTech Sandbox. There's huge potential for stablecoin technology in cash-intensive businesses around the world, and Arizona is fortunate to play a critical role in the development and growth of this emerging industry."

Bittrex Launches Crypto Platform for Middle East Following New Partnership

Bittrex Launches Crypto Platform for Middle East Following New Partnership

Bittrex has partnered with crypto exchange and custodian provider Rain Management WLL to launch a regulated digital asset exchange for the Middle East and North Africa.

Bittrex cryptocurrency exchange is partnering with Bahrain-based crypto exchange and custodian provider Rain Management WLL to launch a digital asset trading platform for customers in the Middle East and North Africa (MENA).

The new platform will purportedly combine Rain’s staff and expertise in the MENA region with Bittrex’s technology and security infrastructure, according to an announcement on July 31. 

The platform will offer all the tokens that are currently available on Bittrex and Bittrex International. It will also offer four Bitcoin (BTC) trading pairs with local fiat currencies: the Bahraini dinar, the Kuwaiti dinar, the United Arab Emirates dirham and the Saudi riyal.

Local Regulation

According to the announcement, this new digital asset trading platform is the first to be fully licensed in MENA. Rain purportedly took part in the regulatory sandbox of Bahrain’s central bank, which launched in February 2019. 

As such, the firm operates under the so-named Crypto-Asset legal framework established by the Central Bank of Bahrain (CBB). Earlier today, Rain announced that it became the first cryptocurrency exchange in the Middle East to receive a regulatory license in the form of a Crypto-Asset Module license from the CBB. 

According to the Rain executive team, their goal is to bring international standards for crypto exchanges to the Middle East; for Bittrex, CEO Bill Shihara said he believes the partnership will help drive blockchain awareness and adoption.

At press time, Bittrex’s 24-hour reported trade volume is $31.9 million, up 35.55% on the day, according to data from CoinMarketCap.

Blockchain trade solutions in MENA

As previously reported by Cointelegraph, The Dubai Chamber of Commerce and Industry (DCCI) recently signed a memorandum of understanding with the International Chamber of Commerce and the blockchain startup Perlin. The MoU reportedly grants the DCCI exclusive rights to offer certain blockchain solutions in MENA that were developed by the Centre of Future Trade. The solutions are reportedly designed to reduce trading risks and provide supply chain transparency.

US Senate Crypto Hearing Key Takeaways: Blockchain Is ‘Inevitable’

US Senate Crypto Hearing Key Takeaways: Blockchain Is ‘Inevitable’

A recap of U.S. Senate’s crypto hearing: discussions about financial inclusivity, potential benefits of crypto and more criticism of Facebook’s Libra...

On July 30, the United States Committee on Banking, Housing and Urban Affairs hosted a hearing on cryptocurrencies in a regulatory context. Lawmakers are showing renewed interest in digital currencies against the backdrop of Facebook’s crypto odyssey: This week’s testimony followed two Libra-focused hearings, which were held in Congress earlier in the month.

Indeed, while the recent session’s scope was meant to be broader, Libra remained one of the key topics. The main consensus was that the influx of cryptocurrencies and blockchain is inevitable and that the U.S. would prefer to be a leader in this sector. Here are the main takeaways from the latest Senate hearing.

Witness panel seemed balanced

The recent “Examining Regulatory Frameworks for Digital Currencies and Blockchain” hearing had three witnesses: Jeremy Allaire, co-founder and CEO of payments company Circle, who represented the Blockchain Association; Rebecca M. Nelson, a specialist in international trade and finance at a congressional think tank, the Congressional Research Service; and a law professor Mehrsa Baradaran from the Irvine School of Law at the University of California. 

Related: US Congress Holds Hearing on Crypto: Witness Profiles

Allaire, being a crucial industry player, advocated for positive regulations, while Baradaran — who has a history of criticizing Bitcoin and engaging with its community — stressed some of cryptocurrencies’ shortcomings. Nelson, on the other hand, did not take sides, instead providing the Senate with factual information regarding the state of crypto regulation across the world. Thus, the lineup seems to have ensured an overall balanced, informative discussion. Perhaps it was the calmer tone that allowed the Senate to finish the session in just 1 1/2 hours, compared to the more than two-hour-long discussions on Libra. 

Positive start: Crypto is “inevitable,” can’t be banned

In his opening statement, Sen. Mike Crapo from Idaho admitted that the crypto space is emerging, and it is important for the U.S. to be at the forefront of that innovation. The senator said:

“It seems to me that digital technology innovations are inevitable, could be beneficial, and I believe that the U.S. should lead in developing these innovations and what the rules of the road should be.”

Interestingly, during one of his questions to Allaire, Crapo also suggested that it would be impossible for the U.S. to ban cryptocurrencies even if it wanted to, saying:

“If the United States were to decide — and I’m not saying that it should — if the United States were to decide we didn’t want cryptocurrency to happen in the United States and tried to ban it, I’m pretty confident we couldn’t succeed.”

Allaire asked for a regulatory framework

The Circle CEO’s testimony stressed the necessity for the U.S. to adopt clear regulations for cryptocurrencies and around the custody of assets in particular. Otherwise, industry actors will have to migrate to other jurisdictions, Allaire continued. “The increase in proliferation of digital asset projects outside the U.S., the movement of companies to leave the U.S. and projects to get started outside the U.S. is definitely getting people’s attention,” the Circle head said in a post-hearing interview with Bloomberg, adding:

“I think it is ultimately going to lead to, ultimately legislative initiatives to try and ensure that there are appropriate safeguards and investor protections but also clarity, which is much needed to allow the technology and industry to flourish.”

Notably, Allaire seems to be experiencing those issues first-hand: Earlier this month, his crypto company launched a new subsidiary in Bermuda in order to serve non-American customers of Poloniex, a cryptocurrency exchange owned by Circle. Consequently, many new services, like advanced trading products and new crypto asset listings, won’t be available to U.S. consumers. 

Crapo brought up Circle’s expansion to Bermuda while interviewing Allaire at the hearing. The company’s CEO responded by saying that the Securities and Exchange Commission (SEC) has provided limited guidance on what does not constitute securities. He clarified:

“There is a fundamental mismatch between the regulatory structure and guidance that we have here in the U.S. and the nature of these digital assets. Markets around the world are adopting these, not just Bermuda but Singapore, Switzerland, even jurisdictions like France introducing tailor proposed definition of digital assets so that issuers can feel comfortable.”

Further, at some point during the hearing, Sen. Jon Tester from Montana asked Nelson from the Congressional Research Service, “Do you agree that cryptocurrencies are leaving the U.S.?” to which she confirmed: “It’s certain that other jurisdictions are ahead of the United States to become cryptocurrency hubs.” William McCormick, founder of blockchain consultancy firm Pure Knot, told Cointelegraph regarding this: 

“It is clear that the Senate is realizing that cryptocurrencies are truly global money that they cannot throw a net around, lest Asian countries take an insurmountable lead in innovating with digital assets. The US is falling behind the rest of the world in terms of regulatory clarity and this led to blockchain startups moving out of the US, evident by Circle moving to Bermuda recently to set up their exchange HQ.

Related: US Moves Closer to Accepting Blockchain, Still Uncertain Over Crypto

Later, Crapo asked Nelson to provide specific examples of jurisdictions that are accommodating to cryptocurrencies. The congressional researcher brought up Switzerland to illustrate her point, noting that it manages to police money laundering — another major concern for the Congress — despite having somewhat relaxed regulations in place. 

Another point was raised by Sen. Christopher J. Van Hollen of Maryland as he talked about real-time transactions: “Our failure to have moved forward with this technology as so many countries have already done is costing millions of Americans billions of dollars every day.”

However, Sen. Sherrod Brown of Ohio implied that new regulatory rules for cryptocurrencies are not necessary. In his view, digital assets represent a mere financial instrument, just with new technology backing them, asking, “If there aren’t really new products, why would we need rules and regulations?” Baradaran added that she sees similarities in the resistance of tech companies to regulation in the same way that large banks are resistant to them. However, some industry experts, like Jenny Shaver, who is the chief operating officer at crypto-backed loans company Salt, would beg to differ. She told Cointelegraph, “Crypto and digital currencies are evolving globally and it's crucial we update the century old laws that apply to fiat, and not apply them to digital assets which is a new asset class.”

Bringing up the 2007-08 financial crisis

Continuing his thoughts about regulations, Brown highlighted the danger of weak regulations by asking what lessons can be applied to tech companies after the 2007-08 financial crash, which was led by banking behemoths. Baradaran agreed, noting that there is a fear that the U.S. will lose its technological edge if it doesn’t let these companies grow unburdened. Notably, the law professor also referenced the 2007-08 financial collapse during her statement. Thus, in her opinion, it’s natural that people have embraced Bitcoin in the aftermath of a financial shock, saying:

“Is it any wonder that, as so many people lost trust in the system, they enthusiastically embraced Bitcoin, a new alternative, non-sovereign currency introduced on the heels of the crisis to respond to the financial system?”

Baradaran and senators argued over financial inclusivity in crypto

Following on from the ideas in her prepublished testimony, Baradaran, who specializes in financial inclusivity, argued that the current problems in the U.S. economy are issues of policy, not of technology — so blockchain (despite being an “amazing” development, as she claimed) is not necessarily the answer. According to Baradaran, there is already a public ledger in place — it’s called the Federal Reserve. 

When Sen. Catherine Marie Cortez Masto of Nevada asked Baradaran why digital currencies cannot bank the unbanked (which is apparently one of Libra’s primary goals), she explained that these people live in “banking deserts” and do not have access to anything other than cash. Cortez asked, “How does any digital-based currency help when people are operating in cash?”

Moreover, Sen. Brian Schatz of Hawaii expressed similar concerns.“What it sounds like to me is tech people wanting to wave a wand and skip a bunch of steps and avoid the tough politics of doing things for people and say, ‘We’ve got a new tech that will solve all this stuff,'” he said while addressing Allaire. “Do you really think that in a society in which only 81% of the public currently has a smartphone we’re anywhere close to democratizing the use of these products?” Schatz went on to add:

“I don’t doubt the importance of the technology or that we’ll probably all be using it in two decades but I think that’s a different assertion than ‘oh, by the way, it’s going to solve all these societal ills.'”

Facebook was grilled once again

Brown, who went as far as to say that Facebook “broke journalism” and “helped incite a genocide," during previous hearings, seized the chance to take another shot at the social media giant and its crypto plans:

“Facebook has proved over and over […] that they can not be trusted. But they don’t care. They move fast, they break things. Minor things, like our political discourse and journalisms and relationships and privacy. Now they want to break our currency and payment systems, hiding behind the phrase ‘innovation.”’

Related: US Congress on Libra Overview: Trust, Privacy and Genocide Accusations

Additionally, other senators said they were puzzled by the way Libra’s operations are reportedly backed by assets. Sen. Mark Warner of Virginia asked, “If you have a 100% reserve, where is Libra going to make money on this?”

Do congressional hearings matter?

Despite the increase in the number of Senate hearings on cryptocurrencies, the U.S. authorities still seem overall hesitant about cryptocurrencies. This could be partly explained by the design of the domestic political system, according to Cal Evans, a U.S. litigation specialist and founder of Gresham International. He told Cointelegraph: 

“The biggest problem with the U.S. system is the Federal and State governments compete with each other. We see states such as New York, Wyoming and others being proactive. Whereas the Federal government seems to be conflicted as to which direction to take. It is not so much restrictive laws or rules which hinder Crypto adoption in the U.S. it is more the total lack of any clarity which leaves people confused as to their legality and status.”

Moreover, Evans noted that such sessions, although useful, can also be quite contracted. He elaborated: 

“Politicians in the U.S. will use these to push 'agenda' points which suit their circumstances. Let's not forget, in the U.S. banking and financial institutions are large contributors to members of congress in both houses. It is unlikely that those who's political positions are financed by the banks, will be backing a technology which ultimately, will replace them.”

Nevertheless, the U.S. would not want to forfeit the crypto space to other jurisdictions, according to McCormick. “It is clear that the Senate is realizing that cryptocurrencies are truly global money that they cannot throw a net around, lest Asian countries take an insurmountable lead in innovating with digital assets,” he told Cointelegraph. “The US is falling behind the rest of the world in terms of regulatory clarity and this led to blockchain startups moving out of the US, evident by Circle moving to Bermuda recently to set up their exchange HQ.”

Indeed, the hearing ended on a high note, as Crapo reiterated his argument about the inevitability and potential benefits of cryptocurrencies. “I want the U.S. to stay at the forefront of this technology, which both has incredible potential and incredible risk,” the senator noted before adjourning the meeting.

Dubai to Launch KYC-Focused Blockchain Consortium for Businesses in 2020

Dubai to Launch KYC-Focused Blockchain Consortium for Businesses in 2020

The DIFC, Mashreq Bank and Norbloc will jointly launch a blockchain-based KYC data-sharing consortium in the first quarter of 2020.

A new partnership between the Dubai International Financial Centre (DIFC), Mashreq Bank, and fintech firm Norbloc aims to launch a blockchain-based Know Your Customer (KYC) data-sharing consortium in 2020. The official UAE news agency, Emirates News Agency, reported on the new development on July 31.

The DIFC, Mashreq Bank and Norbloc — a Stockholm-based blockchain project focused on KYC and a member of the Hyperledger consortium — are planning to jointly launch the consortium in the first quarter of 2020 to support businesses in Dubai.

As part of the project, the parties will establish a consortium agreement to amalgamate the KYC efforts of future participating financial institutions and government bodies. The program will purportedly create a single digital KYC record, which can subsequently be authenticated with an electronic ID, allowing users to share data with other financial institutions. The CEO of the DIFC Authority, Arif Amiri, commented:

"This initiative provides a unique opportunity to harness innovative technology to deliver a seamless experience for both newly established and existing companies at the centre."

Earlier in July, the Dubai Chamber of Commerce and Industry (DCCI) entered a joint initiative to promote the adoption of blockchain trade solutions. The trade solutions will support the DCCI’s recently launched Digital Silk Road platform, which aims to apply blockchain tech to eliminate major vulnerabilities in the global trading system.

Last month, the Dubai Land Department and telecoms firm Etisalat signed a memorandum of understanding concerning blockchain technology for real estate. Both parties said they aim to implement smart government standards and introduce paperless management and digital contracts for property transactions.

Price Analysis 31/07: BTC, ETH, XRP, LTC, BCH, BNB, EOS, BSV, XLM, ADA

Price Analysis 31/07: BTC, ETH, XRP, LTC, BCH, BNB, EOS, BSV, XLM, ADA

Will volatility in cryptocurrencies pick up after the Fed’s announcement today? What are the critical levels to watch out for?

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Market data is provided by the HitBTC exchange.

The United States Federal Reserve cut rates today for the first time since 2008, which some believe is unwarranted as the economy is on strong footing. The rate slash is seen by some as a means to appease President Donald Trump, who has been critical of the Fed’s monetary policy.

The rate cut could attract investors to Bitcoin, which is not influenced by any political or central bank intervention. With its halving due in 2020, markets will also focus on the deflationary nature of Bitcoin. 

On Tuesday, U.S. Senate Banking Committee Chairman Michael Crapo said that even if the country wanted to ban cryptocurrency, it was unlikely to succeed. Circle CEO Jeremy Allaire said that the U.S. will need to create appropriate regulation to protect investor interests and “to allow the technology and industry to flourish.” 

It will be interesting to note how Bitcoin and altcoins react to the Fed rate cut. Let’s identify the actionable levels on the major cryptocurrencies.


The failure by bears to sink Bitcoin (BTC) below $9,080 is attracting buyers. The bulls will now try to propel the price above both moving averages and resume the uptrend. If successful, the cryptocurrency will move up to the downtrend line, which might act as a resistance. However, if this line is scaled, the next target is a retest of the recent highs at $13,973.5. As the signs are positive, we suggest traders initiate long positions as recommended in an earlier analysis.


The 20-day EMA has started to flatten out, which suggests that bears are losing their grip. The 50-day SMA is still sloping up, which shows that the medium-term trend is up. Our bullish view will be negated if the BTC/USD pair turns down from the moving averages and plummets below $9,080. Such a move will indicate selling at higher levels. Below $9,080, the next support is at $7,451.63.


After holding the uptrend line for the past few days, Ether (ETH) has started a recovery. The bulls will now try to push the price above the 20-day EMA. If successful, a rally to the 50-day SMA is probable. There is minor resistance at $235.70, above which the digital currency is likely to gain strength. Hence, traders can buy as suggested in our earlier analysis. 


Contrary to our expectation, if the ETH/USD pair fails to rise above the overhead resistance and turns down, it will indicate selling at higher levels. The next dip might break below the uptrend line because it will force the aggressive bulls to liquidate their long positions. With both moving averages sloping down and the RSI in the negative zone, bears still have the upper hand. We might get a clear directional move within the next few days.


XRP has moved up to the 20-day EMA, which is the first resistance. If this is crossed, the pullback can reach $0.34229, above which we anticipate the cryptocurrency to show strength. The traders can wait for the price to close (UTC time frame) above $0.34229 before initiating long positions. The stop loss for the trade can be kept at $0.275 and the first target is a move to the 50-day SMA and above it $0.45. As the cryptocurrency is stuck in a range, allocate only 50% of the usual position size for this trade.


However, if the bulls fail to propel the XRP/USD pair above the overhead resistance, it might again slide back to $0.30, below which a retest of $0.27795 is possible. A break of $0.27795 will be a huge negative as it will trigger several stop losses and can result in a quick decline to $0.19. 


The bulls are attempting to push Litecoin (LTC) above the uptrend line. If successful, it will signal a probable change in trend. There is a minor resistance at $105.676 from where the pullback returned on July 20. After this is scaled, the cryptocurrency can move up to the 50-day SMA and above it to $140.345.


Contrary to our assumption, if the LTC/USD pair fails to break out and sustain above the downtrend line, it can again dip to $83.65. A break below $76.7143 will extend the down-move. On the other hand, if the price breaks out of the downtrend line, but fails to scale above $105.6760, it will form a range. We will suggest long positions on confirmation that the uptrend has resumed. 


Bitcoin Cash (BCH) has risen above the 20-day EMA, which is a positive sign. If it breaks out of $345.80, it will complete an ascending triangle pattern that can carry it to $440.37. Therefore, we retain the buy recommendation given in the previous analysis.


Our assumption will be negated if bears defend the overhead resistance and sink the BCH/USD pair below the uptrend line. In such a case, a few days of range-bound action is likely. The trend will turn negative on a break below $251.23 and might enter a freefall if $227.70 cracks.


The bulls are attempting a recovery in Binance Coin (BNB). It will face resistance at the 20-day EMA, which is close to the uptrend line. If bulls scale this level and sustain it, a move to the 50-day SMA is possible. Failure of bears to capitalize on the breakdown of the uptrend line shows strong demand at lower levels.


Therefore, we might suggest long positions if the BNB/USD pair sustains above the uptrend line for three days. However, if the pair reverses direction from the 20-day EMA and breaks below $24.1709, it will indicate selling at higher levels. A break below $24.1709 can plummet it to the next support at $18.30.


The small daily ranges in EOS suggest that it might enter a tight range without any clear direction. It has seen two such phases in 2019 (marked as ellipses on the chart). 


Our view will be invalidated if the EOS/USD pair either breaks down of $3.30 or scales above $4.7753. A break below $3.30 can plummet the price to $2.20 while a rally above $4.775 can carry it to the 50-day SMA, above which it will start a new uptrend. As we do not have clarity on the next probable direction, we remain neutral on it.


Bitcoin SV (BSV) has stayed in the upper half of the channel since July 20, which is a positive sign. However, as the price remains stuck inside the descending channel, the trend remains down.


The first sign of a trend change will be when the BSV/USD pair breaks out of the channel. It has minor resistance at $188.690, above which the pair can pick up momentum and rally to $255.620.

On the other hand, if the price fails to breakout of the channel and slips below $136.890, a retest of $107 is probable. We do not find a reliable trade setup that offers a good risk-to-reward ratio, hence, we are not proposing a trade in it.


The price action of the past three days shows that neither the bulls nor the bears are taking any directional bet. This has resulted in the formation of doji candlestick pattern on all three days. This state of indecision is unlikely to remain for long. We anticipate Stellar (XLM) to either break out or break down decisively in the next few days.  


The next directional move on the XLM/USD pair will happen either on a breakout of $0.10 or on a breakdown of $0.072545. If the price fails to escape these levels, the pair might end up forming a range for the next few days.

While there is no bullish setup for swing traders, investors who are willing to hold through the volatility can buy at current levels with a stop loss of $0.070. The target objective is $0.0145. Though the risk-to-reward ratio is attractive, it might test investors' patience. Hence, we recommend keeping the position size about 50% of usual.


If Cardano (ADA) does not break out of the symmetrical triangle within the next couple of days, the price will reach the apex of the triangle, which will invalidate the pattern. The daily range has been shrinking for the past two days, which increases the possibility of a sharp move in either direction.


If the move happens to the downside, the ADA/USD pair will extend the decline and plummet to $0.041. Conversely, if the breakout happens to the upside, traders can initiate long positions as suggested in our previous analysis. As the pair is not in an uptrend and we are trying to take a reversal trade, we suggest traders keep the position size at 50% of usual.

Market data is provided by the HitBTC exchange. 

Canadian Judge Approves $1.6M in EY, Legal Firm Fees in QuadrigaCX Case

Canadian Judge Approves $1.6M in EY, Legal Firm Fees in QuadrigaCX Case

The Supreme Court of Nova Scotia ordered to approve the activities, fees and disbursements incurred by firms in the ongoing proceedings of QuadrigaCX.

The Supreme Court of Nova Scotia, Canada, has approved over $1.6 million in fees for parties seeking funds from former Canadian cryptocurrency exchange QuadrigaCX, according to recently released court documents.

Justice Darlene Jamieson ordered to approve the activities, fees and disbursements incurred by the Monitor — Big Four audit firm EY — in the ongoing proceedings of QuadrigaCX. 

The exchange ostensibly lost access to its cold wallet holdings following the death of its founder, Gerald Cotten, in December 2018, and now owes over $198.4 million to an estimated 115,000 users.

Jamieson also approved the fees and disbursements of Representative Counsel, Miller Thomson LLP and Cox & Palmer. As reported in March, law firms Miller Thomson and Cox & Palmer appointed the Official Committee of Affected Users of QuadrigaCX to help the law firms represent all affected users in the court proceedings.

Miller Thomson and Cox & Palmer were appointed as QuadrigaCX’s legal representatives in February by a decision rendered by Justice Michael Wood. The representative council was set to be responsible for “managing communications with users; acting as user liaison for the monitor [Ernst & Young]; advocating for user interests before the court; identify[ing] potential conflicting interest amongst users; and advocating for user privacy.”

In June, the United States Federal Bureau of Investigation (FBI) called on former users of QuadrigaCX to fill out a questionnaire providing details concerning their experience with the company and personal data. The FBI stated that it may follow up with certain individuals based on the answers they provided.

China’s Monthly Crypto Rankings: Bitcoin Takes 11th Place, EOS Still Leads

China’s Monthly Crypto Rankings: Bitcoin Takes 11th Place, EOS Still Leads

The Chinese CCID Research Institute put Bitcoin in eleventh place in terms of technology, application and innovation in a monthly ranking of 37 digital currencies.

In its latest rankings, the Chinese CCID Research Institute put Bitcoin (BTC) in eleventh place on a list of 37 digital currencies in terms of technology, application and innovation. The ranking results were published by Forex Crunch on July 31.

The CCID Research Institute is an initiative of China’s Ministry of Industry and Information Technology that provides a monthly assessment of cryptocurrency projects. The assessment takes into account 37 cryptocurrencies and considers their properties such as basic technology, applicability and innovation, which put together form a total value index.

Cryptocurrency project EOS (EOS) leads the list, having gained the highest number of points at 153.1. EOS is followed by Ether (ETH) with 148.6 points, while Tron (TRX) took third place. Open-source, enterprise-grade project NULS (NULS) and blockchain project GXchain are ranked fourth and fifth, respectively.

Bitcoin scored only 103 points in the assessment, which brought it to the eleventh place — up 4 places from the rankings released in March. In February, Bitcoin had moved from number 15 to number 13, then falling back down two spots to occupy 15th place again.

Notably, EOS is the all-time leader in the CCID’s rankings. EOS had previously faced controversy with critics targeting its apparent lack of decentralization and ability to reverse transactions as areas of concern.

As reported earlier in July, 83% of American investors would consider a preliminary investment in Bitcoin, as the asset gains traction among an ever more mainstream audience. As an overall trend, the report notes:

“Bitcoin has [...] expanded its reach to a broad mainstream audience [...] Increasingly, savvy investors recognize that Bitcoin [...] may have unique investment characteristics that provide diversification far beyond the basic 60% stock/40% bond portfolio allocation.”

UK Financial Regulator FCA Won’t Regulate Bitcoin and Ether

UK Financial Regulator FCA Won’t Regulate Bitcoin and Ether

Major British regulator, the Financial Conduct Authority, will not regulate Bitcoin as part of its recent guidance on crypto assets.

Major British regulator, the Financial Conduct Authority (FCA), will not regulate Bitcoin (BTC) as a part of its recent guidance on crypto assets.

FCA finalizes its statement on crypto after a public consultation released in January

On July 31, the FCA issued its finalized policy statement on cryptocurrencies in a document titled “PS19/22: Guidance on Cryptoassets.” The document represents an updated version of a consultation paper on crypto assets that was first released for public comment in January 2019, and intends to bring more regulatory clarity to the existing types of digital assets.

In the document, the FCA considered major cryptocurrencies such as Bitcoin and Ether (ETH) as “exchange tokens,” describing them as types of crypto assets that are “usually decentralized and primarily used as a means of exchange.” The regulator emphasized that such digital currencies do not fall under the regulatory scope of the FCA and is outside its remit.

Security tokens and e-money are under regulatory perimeter

On the other hand, two other types of digital assets, including security tokens and utility tokens, do fall under the regulatory perimeter or may be regulated in some sense, the FCA wrote.

As such, the FCA said it will be regulating security tokens as they are considered as digital assets with specific features that mean they provide rights and obligations akin to specified investments such as shares or debt instrument. Meanwhile, activities involving utility tokens may be regulated in case if they meet the definition of e-money in some circumstances, the FCA stated.

In the paper, the FCA also noted that some stablecoins may fall under the authority’s regulation, still adding that not every stablecoin will meet the definition of e-money, or a security token.

Earlier this month, Cointelegraph reported on the FCA preparing a potential ban on the sale of crypto derivatives such as Bitcoin futures to retail investors.

S7 Airlines Processed Over $1M Via Blockchain Payment Platform in July

S7 Airlines Processed Over $1M Via Blockchain Payment Platform in July

S7 Airlines processed over $1 million through their blockchain payment system in July.

S7 Airlines, a member of major global aviation alliance Oneworld, processed over $1 million through its blockchain payment system for the month of July.

S7 processed nearly $4 million in payments on its blockchain platform since January 2019

According to an official press release on July 30, S7 has seen significant growth in transactions on its blockchain-powered sales network developed in partnership with Russia's largest private bank, Alfa-Bank.

Nikolai Mukhanov,  executive director at S7 Techlab, said that the platform has seen not only a significant increase in number of payments, which reportedly grew tenfold since January, but also in number of other automated processes. Mukhanov stressed that the platform’s success was largely brought on by the Hyperledger Fabric platform.

According to a report by crypto media outlet ForkLog, S7’s blockchain platform has processed a total of around $3.9 million in payments since January 2019 so far.

S7’s blockchain platform connects agents directly, also complying with NDC standard

S7, Russia's largest domestic airline, is planning to deploy its first online agents later on this year, S7 group sales director Ekaterina Dmitruk said in the press release. According to Dmitruk, the blockchain platform allows agents to work with the airline directly, also complying with the New Distribution Capability standard.

In July 2017, S7’s deputy CEO Pavel Voronin claimed that the company executed the world’s first flight ticket purchase through an open API blockchain to a bank. In August 2018, S7 partnered with state-owned oil giant Gazprom to apply blockchain-based smart contracts to aircraft fuelling.

Recently, Cointelegraph reported on Venezuela turning to Bitcoin (BTC) instead of the national digital currency Petro (PTR) to evade United States sanctions in airports.

Sex & Crypto: Cointelegraph Documentary

Sex & Crypto: Cointelegraph Documentary

Sex and Crypto: Cointelegraph looks into use of cryptocurrencies in the adult entertainment industry for anonymity and avoiding transaction fees

Because of its pseudo-anonymous, censorship-resistant nature, cryptocurrency has become a popular payment method in the adult entertainment industry. Pornsites, webcam sites and online sex shops have been using crypto to reduce their dependence on traditional payment services, which often impose restrictions and high transaction fees on these kinds of businesses — which are considered to be high risk. 

Sex performers, who often struggle to set up regular bank accounts, can receive crypto payments directly from their clients, counting on the immutability and censorship resistance of blockchain technology. 

Also, from the customer’s perspective, crypto is a more discreet way to pay on adult websites than to have transactions recorded on a bank statement. 

Finally, since there are no middlemen, transaction fees are lower for all parties involved. 

Having understood the potential of the crypto-adult synergy, a number of startups, such as SpankChain, and Gingr, have emerged at the intersection of the two industries and are trying to revolutionize the way adult content is purchased and consumed.

Crypto is still far from entering the mainstream due to educational barriers and the high volatility of cryptocurrencies. Still, crypto adoption is on the rise, and it might be just a matter of time until it disrupts the adult industry. 

Check out our video documentary on sex and crypto, and don’t forget to subscribe to our channel for more cool content!

Bitcoin First as LedgerX Launches Regulated Physical Futures on US Market

Bitcoin First as LedgerX Launches Regulated Physical Futures on US Market

LedgerX beat competitor Bakkt to the public launch, which comes less than a month after gaining regulatory approval.

United States Bitcoin (BTC) derivatives provider LedgerX has officially launched physical Bitcoin futures trading, becoming the first to do so on the domestic market.

In an announcement on social media July 31, LedgerX said its physical futures offering was live on its Omni trading platform. 

“It's official: we're live with retail trading on Omni!” officials confirmed. 

Physical Bitcoin futures differ from those offered by some of the first operators in 2017. Rather than merely gaining exposure to Bitcoin, investors take delivery of it, requiring them to understand how to interact with it in addition to betting on its price. 

LedgerX’s debut follows receipt of the requisite license from U.S. regulator the Commodity Futures Trading Commission (CFTC) late last month. Trading on Omni is open only to U.S. and Singapore residents, subject to a minimum deposit of $10,000 or 1 BTC (at press time equal to $9,995).

The U.S. market was previously vacant, with LedgerX the sole incumbent despite the promise of several competitors issuing their own physical futures offerings this year.

Among them is Bakkt, perhaps the most hotly-awaited operator, which began testing of its product last week. 

Regulatory uncertainty has resulted in multiple delays to Bakkt, a problem which has resulted in other businesses needing to shut out U.S. traders from using their services. 

As Cointelegraph reported, earlier this month, derivatives giant BitMEX became the subject of an investigation over allegations U.S. users were circumventing blocks to trade anyway.

Could Facebook Libra Become the Largest DApps Network to Date?

Could Facebook Libra Become the Largest DApps Network to Date?

Facebook’s Libra stands to be the largest DApp network to date, with over 2.4 billion active users — but will the dream be realized?

The official announcement and details around Project Libra were provided to the world on June 18, 2019. Firstly, Libra was introduced: a new global reserve-backed cryptocurrency built on top of the new Libra Blockchain, with everything governed by a not-for-profit consortium dubbed the Libra Association. It was clear that each of these products and technologies will play an integral role in the project’s overall mission of creating a simple global currency and financial infrastructure that empowers billions of people. 

Additionally, Facebook also announced the creation of Calibra, which is developing the initial business of Libra and its own product outside of the Libra ecosystem (i.e., an eponymous digital wallet app). 

One way to answer the question is to look at how Facebook built Libra and how similar it is to that of the main and more prevalent Decentralized Applications (DApps) framework as it was originally presented in 2014 by David Johnston and a group of foundational experts — way before any public knowledge of Facebook’s cryptocurrency plans. When the entire Libra ecosystem is broken down, could Libra be the largest DApps network to date? If it checks all the required criteria laid out in the 2014 DApps white paper mentioned previously, and if the roughly 2.4 billion active users throughout Facebook’s platforms is considered, it may just be.

Today, the main question on everybody’s mind is whether Facebook is a villain and, through the announcement, is trying to enhance its current hold on customer data, or if Facebook is genuine and is trying to make a contribution as a global citizen to a problem bigger than Facebook itself. After all, even the world’s largest companies like FedEx suggest that one company cannot control this entire DApps or blockchain movement, and that only “co-opetition” (i.e., cooperation and competition) and co-creation and regulations will help crack the problem. 

The most famous model of co-opetition is, of course, the open-source movement that was fully supported by IBM, one of the top-10 companies in the world in the 90s. IBM was later joined by the likes of Google, Facebook and Twitter to provide the mere foundation of what is today Software as a Service (SaaS) and cloud computing. So, one early community fully supported by the most prominent companies can go a long way without being preempted by the biggest companies. To the contrary, one of the biggest losers of this new technology was indeed IBM, which failed, for many reasons, to jump on the public cloud computing bandwagon by staying focused on hosted private clouds — even when public clouds showed far stronger growth. 

As the market evolves, IBM’s position may improve, but there is no doubt that, at this point, IBM didn’t benefit as fully as others of a movement that the company helped create and foster. Compared to open source, DApps are very young — probably as young as open source was in 1995, when IBM got involved. It is also struggling with many issues, with the main ones being adoption and the need of endorsement from major brands. So, is Facebook the IBM of DApps and the main contributor to something bigger than itself?

Libra as a decentralized application

When we begin to breakdown the Libra ecosystem and apply its structure against the 2014 white paper on DApps, how does it match up? According to the general theory, for any application to be considered a DApp, it must meet four areas of qualifying criteria. 

✅Criteria #1 — “The application must be completely open-source, it must operate autonomously, and with no entity controlling the majority of its tokens. The application may adapt its protocol in response to proposed improvements and market feedback but all changes must be decided by consensus of its users.”

Libra is an open-source project

Over the past year, engineers from Facebook's Calibra team have designed a blockchain from the ground up to meet the needs of the Libra ecosystem. Facebook has consciously open-sourced a prototype of Libra Core early so that the community can influence its direction. Facebook has irrevocably contributed its rights and code to the association under the terms of the Apache License and Apache Contributor License Agreement — just as any other contributor to Libra Core should.

As it states, the application must be completely open-source. However, Libra is an undertaking from many different directions — unlike anything we’ve seen since the early days of the internet. Facebook understands this and has noted that it will continue to take a fundamental leadership role on the project's development through launch and then transfer over everything accordingly, becoming open source for the community after that.

To ensure the first condition was achieved, Facebook did launch an open-source prototype version of Libra, called Libra Core — of which the testnet is now live — thus allowing the developer community to get an early preview of the soon-to-launch protocol, beginning engaging immediately. Even though Facebook can retract itself from this path, every communication seems to indicate that Libra will be open-source.

This approach is very similar to how a majority of the most successful open-source projects have been initially developed, mainly by the most prominent companies and then contributed to by the community. Successful transitions include products like Hadoop, Kubernetes, and Ruby On Rails. Over the last 15 years since its creation, Facebook has continuously been open-sourcing products that are now standards in their respective industries and the approach taken for Libra follows the same path. 

Related: Facebook Libra Regulatory Overview: Major Countries' Stances on Crypto

Libra will be run by the Libra Association, not by Facebook

The second condition to meet requires that the application must operate autonomously, allowing for decisions to be made by a consensus of its users. Facebook, as it stands, is leading the implementation of the Libra project while the vital decision-making resides with the founding members of the Libra Association. Facebook’s leadership will be transitioned to that of that Association as soon as an operating structure is in place — and hopefully no later than the end of 2019.

The association, based in Geneva, Switzerland, is the acting independent, not-for-profit, membership-based organization and consortium, whose mission is to empower billions of people through the creation of a simple global currency and financial infrastructure.

The Association has goals to:

  1. Transition to a permissionless governance and consensus node operation.
  2. Minimize the Association’s role as manager of the Libra Reserve.
  3. Coordinate the open-source community to define and operate the technical road map of Libra.

The Association's initial responsibilities will be to:

  1. Oversee and govern the operations along with the technical road map for the Libra blockchain.
  2. Recruit new founding members, raise funds from the members as well as other investors through the sale of Libra Investment Tokens (a token that grants rights to a share of the future interest accumulated in the Libra Reserve). 
  3. Design and implement incentive programs, including the distribution of such incentives to members of the association. 
  4. Distribute dividends to Libra Investment Token investors. 

Picture 1

There are three types of members in the Association

#1 -- Founding Members, who have been vetted and meet a series of requirements voted on by the other founding members, ensuring industry diversity of the members. Requirements include market value, scale (reaching more than 20 million people a year) and being recognized as one of the top-100 industry leaders by a third party. Some exceptions are allowed for newly emerging industries like cryptocurrency and blockchain infrastructure companies. Some companies may be extended invitations if their participation would make a meaningful contribution to the success of the network. 

Each must also provide a required investment of $10 million that will be used in the Libra Reserve, which backs the Libra coin and is used for operations. Additionally, each must act as a node validator (more details in Criteria #4) for the network. creating one with optimized performance. 

#2 — Social Impact Partners, who are nonprofit and multilateral organizations that must be elected by the other founding members and meet a certain number of criteria: alignment with Libra mission, global reach, trust and scale.

#3 — Academic Institutions, who are selected by the other founding members and must meet the criteria based on trust and the strengths of their computer science departments.

The second and third types of founding members are exempt of the $10 million capital contribution but would not benefit from the dividends provided to those holding Libra Investment Tokens.

Today, there are 28 initial founding members, including Facebook/Calibra, that represent six different industries/categories. The goal is to have 100 members before the project is publicly launched during the first half of 2020. Here’s a breakdown of the 28 founding members.

Libra associationAs the project continues, it will be interesting to see which categories expand (i.e., marketplaces) and which get added — real-estate, travel, entertainment? What’s clear is that the founding members are the cornerstone pieces to the bigger picture that Libra can become. 

The governing body of the Libra Association is the Libra Association Council, which is comprised of a representative from each member within the Association. Operating and policy decisions of the council require various voting thresholds, depending on the importance of the decision. The initial members of the council are the Association's founding members.

If the main governing body is the council, the Libra Association will also have a board designed to oversee on behalf of the Libra Association Council the executive team. The executive team is responsible for the day-to-day operations of the Libra.

Related: US Congress on Libra Overview: Trust, Privacy and Genocide Accusations

Each founding member’s voting rights on the council are limited to not be greater than of one vote or 1/100. One vote is given for each $10 million invested. Any voting rights gained through additional activities or further investment are delegated to the board of the association, which can assign those rights to social impact partners and academic institutions. 

With increased privacy, security and data-use concerns coming from all directions, the most substantial outstanding question has been around Facebook’s role within the project. Facebook has continued to be transparent as to its role in the project to date and, going forward, in the fact that the company will not own or be the sole decision-maker for the overall project — excluding Calibra, its digital wallet. Everything created otherwise will be governed by the Libra Association and then be open source completely later on. Facebook will also act as a validator node on the network to validate transactions with the other consortium members, a requirement for those in the group. 

An initiation of this magnitude is not just disrupting a single market but instead is challenging the entire global economic foundation and the interactions among consumers, corporations and governments. For this and many other reasons around security, privacy, data, etc., one company cannot be the sole owner — also per the 2014 white paper on the general theory of DApps. Facebook knows this, and like any DApp, there needs to be an independent, not-for-profit organization in place: Thus, the Libra Association was born. 

 ✅Criteria #2 — “The application's data and records of operation must be cryptographically stored in a public, decentralized blockchain in order to avoid any central points of failure.”

Libra is not a public decentralized blockchain, but does avoid central points of failure 

Since the goal of Libra is to create a “simple global currency and financial infrastructure that empowers billions of people,” it needs technology that can support such. Enter blockchain.

The Libra Protocol will be the underlying infrastructure for the ecosystem, with the Libra blockchain being a permissioned — not public — blockchain. It was noted that, as the technical road map advances, there is a plan over time to move toward being permissionless (i.e., open). The blockchain is maintained by a distributed network of validator nodes — also known as validators — beginning with the nodes of the Libra Association’s founding members. Each validator collectively follows a consensus protocol known as LibraBFT, which is based on the protocol HotStuff, to agree on a total ordering of transactions in the network. 

To maintain accuracy and to prevent double-spend attacks, Libra’s validator nodes will use what’s called Byzantine Fault Tolerance (BFT), which allows for the nodes to reach consensus even when the nodes can’t all agree on the state of the other nodes in the network. This process applies even if up to one-third of the voting power is held by validator nodes that are compromised or failed.

With the Libra Protocol, Facebook has introduced the Move programming language for those looking to develop on the Libra Blockchain. According to its developer site, the language is a safe, flexible and executable bytecode language used to implement custom transactions and smart contracts.

Facebook has chosen for Libra to be permission-based, which means the blockchain maintains an access control layer to allow specific actions to be performed only by certain identifiable participants. Libra is neither public nor decentralized at this point. Over the last few years, we’ve seen many blockchains shying away from the public model and redesigning themselves to be permissioned, due to increased performance and flexibility. Examples of this blockchain type include JPMorgan’s Quorum, R3’s Corda and the Linux Foundation’s Hyperledger, along with others in the blockchain landscape

Permissionioned blockchains

In the future, the stated goal of the Libra Association is to move toward a public or permissionless-based blockchain. These blockchains are entirely open, and anyone is free to join along by participating in the core activities of the blockchain network. 

✅Criteria #3 — “The application must use a cryptographic token (bitcoin or a token native to its system) which is necessary for access to the application and any contribution of value from (miners / farmers) should be rewarded in the application’s tokens.”

Libra: a different type of cryptocurrency

The Libra coin will be the network’s native token, while also being a stable, reserve-backed cryptocurrency built on top of the Libra blockchain and used throughout the Libra ecosystem, including Calibra. 

Unlike traditional cryptocurrencies such as Bitcoin, the Libra coin is built as a stablecoin, a type of cryptocurrency that is designed to maintain a stable market price. Many stablecoins have their values fixed by pegging them to the price of another asset. While most of them are pegged to the United States dollar, there are stablecoins pegged to the price of other cryptocurrencies — or even commodities, like silver or gold.

As such, Libra’s value will be backed by a basket of stable and liquid assets — such as bank deposits and short-term government securities in various currencies from stable and reputable central banks — which will provide the intrinsic value beginning on day one. Furthermore, the basket of assets will help to protect the coin against the speculative swings experienced by other cryptocurrencies. These assets will be apart of the Libra Reserve and managed by the Libra Association.

It’s also worth noting that Libra coin will be accessible to users outside of Facebook’s Calibra wallet. 

✅Criteria #4 — “The application must generate tokens according to a standard cryptographic algorithm acting as a proof of the value nodes are contributing to the application.”

Due to Libra’s current and unique structure, there will be no mining reward system in place at launch for the community beyond Libra Association members, which must also run a validator node — of which will be provided transaction and new user rewards, along with dividends from Libra Investment Tokens. All transactions on the network will run through the validator nodes. This also allows for an improved transaction speed, the primary function of the network.

However, the question remains: As the network evolves into a permissionless blockchain, will we see a proofing structure similar to that of proof-of-stake (PoS) be implemented? For reference, Bitcoin uses the proof-of-work (PoW) algorithm.

Calibra, Facebook’s WeChat challenger and why Facebook is doing this in the first place

As Facebook stated, it will be moving away from being the leader of the overall project nearer to the public launch of the project. However, that doesn’t mean it didn’t save a little something for itself. Welcome the shiny new digital wallet Calibra. We’ve seen several digital wallets rise and fall throughout the blockchain and fintech landscapes, but this one stands to be different from its predecessors because it will begin with approximately 2.4 billion global users on day one and provide them a unique ecosystem that only one other rival can provide — i.e., Tencent’s WeChat.

Picture 4

Calibra will be built natively into all of Facebook’s platforms — including Messenger, WhatsApp and Instagram — as well as having a standalone mobile app. Facebook has been transparent about it not only being the owners of wallet, but that Calibra will sit in a regulated subsidiary of the company, ensuring the appropriate handling of users’ social, identity and financial data. 

Why does Calibra matter even more so now than ever before? According to the 2017 Global Findex report from the World Bank, 1.7 billion people — 31% of the global adult population — remain unbanked, meaning they do not have access to an account at a financial institution or to mobile money. This will put Calibra in the position to provide instant financial, banking and remittance services to all of its current and future users. 

Other than the unbanked, Calibra undoubtedly will put Facebook in the position WeChat currently is as a platform — but with more than twice as many users (roughly 2.4 billion to around 1 billion respectively). 

With Calibra’s integration throughout the Facebook ecosystem, it becomes the de facto platform for everything in your life, beyond just social and communication. WeChat is this for almost a billion users globally, regularly providing users every reason to stay in the application and no reason to leave. WeChat has been able to accomplish this by allowing a user the ability to communicate socially via a social feed and privately through messaging or groups; be entertained through games, etc.; transfer money globally in seconds for little to no fee; donate to charities and causes; pay the majority if not all bills (utilities, etc.) and rent; and purchase digital and physical goods or services inside or outside of the app (restaurants, retail, etc.). Users no longer have to be concerned about currency conversion, reaching for a wallet, cash or a credit card — thus, almost completely replacing paper cash in China and other countries. 

With Libra and Calibra, Facebook could bring together global partners and all of WeChat’s additional features to create the single most significant digital currency (Libra coin) and marketplace ever in history — thus opening the door to a thriving future economy of DApps and introducing new business models, markets, products and services, all of which Facebook has successfully proven with its developer community in the past.

Related: What Is Libra? Breaking Down Facebook’s New Digital Currency

Libra, demystified

Libra is a permission-based blockchain dedicated to finding a solution for global payments, and it is a consortia with a set goal of 100 founding members. The concept of a consortium in the blockchain ecosystem is not groundbreaking, as there have been a growing number of them emerging around various industries, and with more to come. In a 2019 survey conducted by Deloitte, the researchers identified several consortia dedicated to financial services alone. In that same survey, it was shown that 41% of enterprise organizations select to join a consortium like Libra because the group’s objectives are aligned with theirs. Additionally, Deloitte found that a number of enterprises have either joined (35%) or are planning to join (34%) a consortium in the next 12 months.

Criteria orgganizations use in joining consortia

Libra is a cryptocurrency that's currently led by Facebook. Again, this is not new for an enterprise. There are at least three cryptocurrencies at the testnet level that are driven by major institutions. The others include JPMorgan Chase (JPM) and Telegram (TON). 

Related: Libra, TON and JPMorgan Coin Compared: Are They Heroes or Villains?

Libra’s expressed goal is to follow the DApp and blockchain guidelines for a permission-based system, but has not yet fully met the guidelines. However, there’s no reason to assume that it won’t achieve such a goal. Facebook has the ambition to transition toward a public blockchain while maintaining sustainable business models across the board for the parties that are investing in the greater ecosystem.

Providing access to those who are unbanked and lowering the costs for remittances are solutions to well-understood problems of today’s global financial system, even though several attempts are ongoing to find other solutions.

Facebook, of all institutions, knows how to be successful in such an environment, given its more than 10 years background of open-source development.

What makes Libra different:

  • Access to a 2.4 billion user base on day one and an established ecosystem of long-running applications (Messenger, Instagram, WhatsApp, etc.).
  • The project is not being run directly by banking institutions, even though banks are represented through Visa and Mastercard. While represented, they are not in control.
  • Regulators have not become involved in the project, yet. However, they can be involved through the association’s social impact program. 

The major outstanding issues:

  1. Can a company like Facebook leverage its monopoly power in one industry to create a competitive advantage in another? In the case of Libra, Facebook is not directly doing this because it will not control the overall governing body — i.e., the Libra Association. To the contrary, Facebook’s Calibra wallet will not only use the Libra currency but also allow for additional payment types.
  2. Will Libra become the catalyst the market has been searching for to create mainstream consumer adoption for cryptocurrency? The outstanding issues around liquidity for those instruments suddenly disappear due to the 2.4 billion users.
  3. Given Facebook's poor track record in monetizing data-driven platforms, is it the right company to be leading such an effort? Perhaps it is. Facebook drew on its strengths as open source contributor to create a meaningful roadmap. In addition, the thoughtfulness around how Libra has been created and communicated gives comfort that Facebook did learn from its previous mistakes and is giving consideration to doing the right thing. The real subject of concern is how Facebook limited university inclusion only based on the computer science departments when Libra will require the full power of many other departments — including economics, finances, sociology and others.
  4. Will Facebook be successful in creating a community around the Libra cryptocurrency? For this effort to be successful, a massive amount of new ground has to be covered. It will require a great deal of thought around this new type of partnership as well as corporate governance improvements.
  5. How is Facebook going to benefit from this all? As it is very early in the project's lifecycle, it is understandable why Facebook is not communicating on this topic, yet. Facebook should be putting forward a grander vision on how this is going to fit with the company's overall business strategy. Of course, this could be disastrous, as the project is still not yet fully formed, but it would help the public better understand Facebook's thinking about how it is all going to play out and how it will benefit from it directly. 

Not long after Facebook's initial efforts, Libra's ecosystem will begin leading the way and providing a blueprint on how to disrupt industries, open new customer markets that have otherwise been unreachable, force new business models, change the interaction as we have known it between enterprises and consumers — all of this building toward the creation of the most comprehensive social and financial system in history. This future collective effort will generate the next wave, if not the one and only real wave of digital transformation.

The article is co-authored by Kyle Ellicott and Philippe Cases. 

Kyle Ellicott is a co-founder of Topio Networks and of ReadWrite, a noted TEDx and global speaker, strategist, published author and technologist, with over 15 years of experience at the cornerstone of digital transformation between industry and technology. He’s advised over 175 companies globally throughout industries such as the Internet of Things, transportation, blockchain/fintech/DApps, artificial intelligence, digital health and smart cities — and has successfully raised over $130 million in venture funding.

Selva Ozelli, Esq., CPA is an international tax attorney and CPA who frequently writes about tax, legal and accounting issues for Tax Notes, Bloomberg BNA, other publications and the OECD.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.