Cryptocurrency Apparently Not "Apocalypse Compatible" & Anti-Crypto Bank Fined Over FIAT Failings
A change in direction again for the cryptocurrency markets overnight. The global cryptocurrency market cap gained $11 billion to $344 billion, Bitcoin up by $167 to $7620, and Ethereum also rising $11 to $602.
The South African Reserve Bank (SARB) has announced the successful pilot of its interbank transfer project dubbed “Project Khokha” using JP Morgan’s Quorum blockchain. According to a statement from the central bank, “The results show that the typical daily volume of the South African payments system could be processed in less than two hours with full confidentiality of transactions and settlement finality. Transactions were processed within two seconds, across a network of geographically distributed nodes, with distributed consensus providing the requisite resilience. The SARB was able to view the detail of all the transactions to allow for regulatory oversight.” Currently there are no plans yet to replace the current settlement systems with blockchain technology however the project has opened the doors to more collaborative cooperation and innovation to accommodate different systems.
The Commonwealth Bank of Australia (CBA) hits the headlines again with a twist of irony. In February the CBA was the first Australian bank to ban the purchase of cryptocurrencies with its credit cards stating “We have made this decision because we believe virtual currencies do not meet a minimum standard of regulation, reliability, and reputation when compared to currencies that we offer to our customers. Given the dynamic, volatile nature of virtual currency markets, this position is regularly reviewed”. According to the Australian federal financial agency AUSTRAC, the CBA has been issued fines totaling AUD$700 million plus costs for violating anti-money laundering and anti-terrorism regulations. When traditional banks of this size get caught failing to adhere to regulations they themselves contribute to creating – one has to wonder if the initial ban on cryptocurrency purchases was more a case of trying to hide the existing failings of their ability to conduct business correctly in the first place.
FUD of the day award goes to Jim Chanos – noted for predicting the collapse of Enron many years ago – has gone on the record with the opinion that “cryptocurrency is masquerading as a technological breakthrough” and attempts to justify his conclusion by challenging the “store of value” argument by saying that in an “apocalypse” scenario food would actually serve better as a currency. Whilst I would personally agree with that statement to an extent, what is surprising is that Chanos uses food rather than the more traditional fallback currency of old – gold or silver. Perhaps one reason for that are the significantly reduced gold reserves held by banks generally? Quite what sort of “apocalypse” Chanos is anticipating is unclear – suffice to say if there is a really bad one the chances are we won’t be able to hear him say “I told you so” from behind his stockpile of food.
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Created: Wednesday, June 6, 2018
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