DOCSLIB.ORG

Wherenextfor Public Cryptocurrency?

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Wherenextfor Public Cryptocurrency? MARGIN MARGIN MARGIN CROP MARKS CROP MARGIN CROP MARKS CROP Where next for public cryptocurrency? KPMG LLP UK Blockchain Centre of Excellence March 2018 CROP MARKS CROP kpmg.com/uk MARGIN CROP MARKS CROP MARGIN MARGIN MARGIN MARGIN MARGIN MARGIN CROP MARKS CROP MARGIN CROP MARKS CROP Contents Executive summary 2 Cryptocurrencies: market 3 overview Major cryptocurrencies 5 Classification of money 7 Recent governmental 9 responses to cryptocurrencies Market developments in 11 banking and payments Key risks associated with 12 cryptocurrencies Strategic considerations for 13 central banks Advantages and risks of 14 issuing CBDCs for central banks Appendices 15 CROP MARKS CROP MARGIN CROP MARKS CROP MARGIN MARGIN MARGIN MARGIN MARGIN MARGIN CROP MARKS CROP MARGIN CROP MARKS CROP Content page Executive summary • The market proliferation of cryptocurrencies has been fuelled by speculation and tokenisation, namely through the launch of initial coin offerings (ICOs). • Governmental and regulatory responses to cryptocurrencies vary geographically and are constantly evolving. • The private sector is also investing heavily in blockchain and cryptocurrencies. • Cryptocurrencies introduce new risks, including cyber crime; smart contract security; systemic risk; and sovereign risk. • There are a number of advantages and risks associated with the issuance of Central Bank Digital Currencies (CBDCs). The issuance of CBDCs could transform central banks’ current functions. CROP MARKS CROP 2 MARGIN CROP MARKS CROP MARGIN MARGIN MARGIN MARGIN MARGIN MARGIN CROP MARKS CROP MARGIN CROP MARKS CROP Cryptocurrencies: market overview The previous 12-18 months have seen cryptocurrencies garner significant attention from the media, financial analysts, governments, regulatory institutions and investors. Bitcoin and other cryptocurrencies are underpinned by blockchain technology. Blockchain functions as a database and/or an accounting system to track the ownership and transfer of tokens from one party to another in the absence of traditional financial intermediaries. Blockchain was the first of many Distributed Ledger Technologies (DLTs) to be developed. Primary market $4bn An increasing number raised of start-ups are through launching ICOs to raise $189bn ICOs significant capital global IPO IPO ICO proceeds in 2017 More than 1,500 cryptocurrencies (March 2018) Regulation of ICOs is immature. Reception of ICOs 66 is largely worrisome cryptocurrencies from authorities in 2013 CROP MARKS CROP 3 MARGIN CROP MARKS CROP MARGIN MARGIN MARGIN MARGIN MARGIN MARGIN CROP MARKS CROP MARGIN CROP MARKS CROP Cryptocurrencies are broadly defined as digital assets in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of any central bank. Secondary market CAGR growth of approx. Start-ups have 166% launched exchanges to between 2014 enable trading of and 2018 existing coins Combined market cap for all cryptocurrencies stood at US$800bn (Jan 2018 – Bitconnect) Bitcoin had a approx. Coinmarketcap.com collates data from 35% over share of the cryptocurrency 182 market in Jan exchanges 2018 CROP MARKS CROP 4 MARGIN CROP MARKS CROP MARGIN MARGIN MARGIN MARGIN MARGIN MARGIN CROP MARKS CROP MARGIN CROP MARKS CROP Major cryptocurrencies Top 10 cryptocurrencies by market capitalisation (as at 16 January 2018): Bitcoin Ethereum Bitcoin Cash Ripple Litecoin (BTC) (ETH) (BCH) (XRP) (LTC) Bitcoin is a digital Officially launched in Bitcoin Cash, Ripple, released in Litecoin was cryptocurrency 2015, Ethereum is a launched in July 2012, is a launched in 2011 and comprised of decentralised 2017, is a fork of the cryptocurrency that is considered to be processed data computing platform Bitcoin blockchain uses a ‘global the ‘silver’ to blocks. Launched in that features its own ledger, with consensus ledger’. bitcoin’s ‘gold’, due 2009, it was the first Turing-complete upgraded consensus The Ripple protocol is to its more plentiful decentralised peer- programming rules that allow it to used by institutional total supply of 84 to-peer payment language. The grow and scale. actors such as large million LTC. It network that is blockchain records Further, people banks. A function of borrows the main powered by its users scripts or contracts holding Bitcoin when the token XRP is to concepts from with no central that are run and Bitcoin Cash was serve as a bridge Bitcoin but has authority or executed by every created automatically currency between altered some key middlemen. participating node, became owners of national currencies parameters (e.g. the and are activated Bitcoin Cash. that are rarely traded mining algorithm is through payments and to prevent spam based on Scrypt with the attacks. instead of Bitcoin’s cryptocurrency SHA-265). ‘Ether’. US$0.06 (2009) US$2.83 (2015) US$413.1 (2017) US$0.005 (2012) US$4.35 (2011) value: Launch Launch US$12,059.9 US$1,086.2 US$1,929.9 US$1.36 US$200.1 value: Current Current CROP MARKS CROP 5 MARGIN CROP MARKS CROP MARGIN MARGIN MARGIN MARGIN MARGIN MARGIN CROP MARKS CROP MARGIN CROP MARKS CROP Dash NEM Monero Ethereum IOTA (DASH) (XEM) (XMR) Classic (ETS) (MIOTA) DASH, launched in NEM is a peer-to-peer Launched in 2014, Ethereum Classic, Launched in 2016, 2014, is a cryptocurrency and Monero is a system launched in July IOTA is an open- cryptocurrency blockchain platform that aims to provide 2015, is a source distributed focused on privacy. launched in March anonymous digital continuation of the ledger. It uses a In addition to offering 2015. Its stated cash using ring original Ethereum directed acyclic all the features of objective is a wide signatures, blockchain, featuring graph (DAG) instead Bitcoin, DASH also distribution model. It confidential smart contract of blockchain. It has advanced has introduced new transactions and (scripting) claims to be able to capabilities, including features to blockchain stealth addresses to functionality. It address the instant transactions technology, such as obfuscate the origin, provides a scalability and (InstantSend), private its proof-of- transaction amount decentralised Turing- transaction cost transactions importance (POI) and destination of complete virtual concerns inherent in (PrivateSend), and algorithm, transacted coins. It machine, the other distributed decentralised multisignature saw a substantial Ethereum Virtual ledger technologies governance (DGBB). accounts, encrypted increase in market Machine (EVM), that are based on a messaging, and an value in 2016. which can execute blockchain. Eigentrust++ scripts using an reputation system. international network of public nodes. US$0.214 (2014) US$0.0004 (2015) US$2.47 (2014) US$0.752 (2015) US$0.638 (2016) US$796.4 US$1.11 US$343.2 US$32.48 US$2.99 CROP MARKS CROP 6 MARGIN CROP MARKS CROP MARGIN MARGIN MARGIN MARGIN MARGIN MARGIN CROP MARKS CROP MARGIN CROP MARKS CROP Classification of money Clarification of terms: Virtual Currency (VC): Digital Currency (DC): a digital representation of a digital asset with monetary value, ordinarily issued and characteristics. DCs are considered controlled by its developers. to fall within the definition of a VC if VCs are not issued by central it is denominated in non-fiat units of banks, credit institutions, or value, or if it is issued in a e-money institutions, decentralised way. It is a meaning they are seldom combination of two elements: an regulated. In some asset and an exchange mechanism. circumstances, VCs can be Commercial bank deposits and e- used to pay for goods and money are types of digital currency. services and can therefore be Digital currency that is issued by a seen as an alternative to central bank is defined as a ‘Central money. Bank Digital Currency’ (CBDC). Key: Electronic Peer-to-peer (no intermediaries) Liability of the central bank Universally accessible (easy to obtain, easy to use) Liability of the issuer (financial institution, local government, company, or group) Settlement Cryptocurrency CBDC (private Centralised virtual accounts Reserve (private sector, sector, wholesale) currency accounts wholesale) Deposited currency CBDC Commercial bank Cryptocurrency accounts (not (public sector, deposits, (privately created) available) retail) E-money Cash Commodity money Local currency CROP MARKS CROP 7 MARGIN CROP MARKS CROP MARGIN MARGIN MARGIN MARGIN MARGIN MARGIN CROP MARKS CROP MARGIN CROP MARKS CROP Properties of money versus cryptocurrency Property of money Cryptocurrency does have the property Cryptocurrency does not have the property Fungibility: Most digital currencies allow greater divisibility than Some argue that Bitcoin doesn’t satisfy this, as the Individual units must fiat currencies. history of each coin is visible. Some users might refuse be interchangeable to accept ‘dirty money’, or coins whose lineage could reduce anonymity. Durability: Digital currencies are durable as long as the ledger is It is possible that ‘miners’ or validators of transactions Able to withstand maintained, and ledger storage sizes are widely lose the incentive to maintain the ledger. repeated use manageable. Coins of limited supply could succumb to ‘entropy’, where access to coins is lost forever; coins are forgotten about; or countless transactions leave minute denominations of coin behind (‘dust’). Portability: Transported via the internet. Arguably crypto-wallets are not user-friendly; user Easily carried and Portable through online wallets, mobile wallets, hard- experience needs to be improved to enable
Load more

Recommended publications
  • Central Banking in a Digital Age: Stock-Taking and Preliminary Thoughts
    A p r i l 2 0 1 8 Over Central Banking in a Digital Age: Stock-Taking and Preliminary Thoughts Eswar Prasad ______________________________________________________________________ THIS PAPER IS ONLINE AT https://www.brookings.edu/research/how-will-fintech- and-digital-currencies-transform-central-banking ABOUT THE AUTHOR Eswar Prasad is the Tolani Senior Professor of Trade Policy at Cornell University. He is also a Senior Fellow in the Global Economy and Development Program at the Brookings Institution, where he holds the New Century Chair in International Economics, and a Research Associate at the National Bureau of Economic Research. A CKNOWLEDGEMENT S I am grateful to Isha Agarwal, Ritesh Shinde, Kaiwen Wang, Ethan Wu, Eva Zhang, and Yujin Zhang for excellent research assistance. I also thank my colleagues at Brookings, especially David Wessel, for thoughtful comments and discussions. Central Banking in a Digital Age: Stock -Taking and Preliminary Thoughts 2 HUTCHINS CENTER ON FISCAL & MONETARY POLICY AT BROOKINGS 1. Introduction This note provides a broad overview of how technological changes are likely to affect the practice of central banking. While the advent of decentralized cryptocurrencies such as Bitcoin has dominated the headlines, a broader set of changes wrought by advances in technology are likely to eventually have a more profound and lasting impact on central banks. While it is premature to speak of disruption of traditional concepts of central banking, it is worth considering if the looming changes to money, financial markets, and payments systems will have significant repercussions for the operation of central banks and their ability to deliver on key objectives such as low inflation and financial stability.
    [Show full text]
  • Virtual Currencies in the Eurosystem: Challenges Ahead
    STUDY Requested by the ECON committee Virtual currencies in the Eurosystem: challenges ahead Monetary Dialogue July 2018 Policy Department for Economic, Scientific and Quality of Life Policies Authors: Rosa María LASTRA, Jason Grant ALLEN Directorate-General for Internal Policies EN PE 619.020 – July 2018 Virtual currencies in the Eurosystem: challenges ahead Monetary Dialogue July 2018 Abstract Speculation on Bitcoin, the evolution of money in the digital age, and the underlying blockchain technology are attracting growing interest. In the context of the Eurosystem, this briefing paper analyses the legal nature of privately issued virtual currencies (VCs), the implications of VCs for central bank’s monetary policy and monopoly of note issue, and the risks for the financial system at large. The paper also considers some of the proposals concerning central bank issued virtual currencies. This document was provided by Policy Department A at the request of the Committee on Economic and Monetary Affairs. This document was requested by the European Parliament's Committee on Economic and Monetary Affairs. AUTHORS Rosa María LASTRA, Centre for Commercial Law Studies, Queen Mary University of London Jason Grant ALLEN, Humboldt-Universität zu Berlin Centre for British Studies, University of New South Wales Centre for Law Markets and Regulation ADMINISTRATOR RESPONSIBLE Dario PATERNOSTER EDITORIAL ASSISTANT Janetta CUJKOVA LINGUISTIC VERSIONS Original: EN ABOUT THE EDITOR Policy departments provide in-house and external expertise to support EP committees
    [Show full text]
  • An Empirical Investigation of Volatility Dynamics in the Cryptocurrency Market
    This is a repository copy of An empirical investigation of volatility dynamics in the cryptocurrency market. White Rose Research Online URL for this paper: http://eprints.whiterose.ac.uk/147457/ Version: Accepted Version Article: Katsiampa, P. orcid.org/0000-0003-0477-6503 (2019) An empirical investigation of volatility dynamics in the cryptocurrency market. Research in International Business and Finance. ISSN 0275-5319 https://doi.org/10.1016/j.ribaf.2019.06.004 Article available under the terms of the CC-BY-NC-ND licence (https://creativecommons.org/licenses/by-nc-nd/4.0/). Reuse This article is distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs (CC BY-NC-ND) licence. This licence only allows you to download this work and share it with others as long as you credit the authors, but you can’t change the article in any way or use it commercially. More information and the full terms of the licence here: https://creativecommons.org/licenses/ Takedown If you consider content in White Rose Research Online to be in breach of UK law, please notify us by emailing [email protected] including the URL of the record and the reason for the withdrawal request. [email protected] https://eprints.whiterose.ac.uk/ An empirical investigation of volatility dynamics in the cryptocurrency market Abstract: By employing an asymmetric Diagonal BEKK model, this paper examines volatility dynamics of five major cryptocurrencies, namely Bitcoin, Ether, Ripple, Litecoin, and Stellar Lumen. It is shown that the conditional variances of all the five cryptocurrencies are significantly affected by both previous squared errors and past conditional volatility.
    [Show full text]
  • In Re Bitconnect Securities Litigation 18-CV-80086-Third Amended Class Action Complaint
    Case 9:18-cv-80086-DMM Document 48 Entered on FLSD Docket 07/03/2018 Page 1 of 64 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA WEST PALM BEACH DIVISION IN RE BITCONNECT SECURITIES LITIGATION Lead Case No.: 9:18-cv-80086-DMM CLASS ACTION JURY TRIAL DEMANDED THIRD AMENDED CLASS ACTION COMPLAINT Respectfully submitted, SILVER MILLER LEVI & KORSINSKY, LLP 11780 W. Sample Road EDUARD KORSINSKY Coral Springs, Florida 33065 E-mail: [email protected] Telephone: (954) 516-6000 30 Broad Street, 24th Floor DAVID C. SILVER New York, New York 10004 Florida Bar No. 572764 Telephone: (212) 363-7500 E-mail: [email protected] Facsimile: (212) 636-7171 JASON S. MILLER Florida Bar No. 072206 DONALD J. ENRIGHT E-mail: [email protected] E-mail: [email protected] ELIZABETH K. TRIPODI E-mail: [email protected] JOHN A. CARRIEL E-mail: [email protected] LEVI & KORSINSKY, LLP 1101 30th Street, N.W., Suite 115 Washington, DC 20007 Telephone: (202) 524-4290 Facsimile: (202) 333-2121 Co-Lead Counsel for Plaintiffs Case 9:18-cv-80086-DMM Document 48 Entered on FLSD Docket 07/03/2018 Page 2 of 64 Lead Case No.: 9:18-cv-80086-DMM TABLE OF CONTENTS Page NATURE OF THE ACTION ..........................................................................................................1 JURISDICTION AND VENUE ......................................................................................................8 PARTIES AND RELEVANT NON-PARTIES ..............................................................................8 I. PLAINTIFFS ...........................................................................................................8
    [Show full text]
  • A Survey on Volatility Fluctuations in the Decentralized Cryptocurrency Financial Assets
    Journal of Risk and Financial Management Review A Survey on Volatility Fluctuations in the Decentralized Cryptocurrency Financial Assets Nikolaos A. Kyriazis Department of Economics, University of Thessaly, 38333 Volos, Greece; [email protected] Abstract: This study is an integrated survey of GARCH methodologies applications on 67 empirical papers that focus on cryptocurrencies. More sophisticated GARCH models are found to better explain the fluctuations in the volatility of cryptocurrencies. The main characteristics and the optimal approaches for modeling returns and volatility of cryptocurrencies are under scrutiny. Moreover, emphasis is placed on interconnectedness and hedging and/or diversifying abilities, measurement of profit-making and risk, efficiency and herding behavior. This leads to fruitful results and sheds light on a broad spectrum of aspects. In-depth analysis is provided of the speculative character of digital currencies and the possibility of improvement of the risk–return trade-off in investors’ portfolios. Overall, it is found that the inclusion of Bitcoin in portfolios with conventional assets could significantly improve the risk–return trade-off of investors’ decisions. Results on whether Bitcoin resembles gold are split. The same is true about whether Bitcoins volatility presents larger reactions to positive or negative shocks. Cryptocurrency markets are found not to be efficient. This study provides a roadmap for researchers and investors as well as authorities. Keywords: decentralized cryptocurrency; Bitcoin; survey; volatility modelling Citation: Kyriazis, Nikolaos A. 2021. A Survey on Volatility Fluctuations in the Decentralized Cryptocurrency Financial Assets. Journal of Risk and 1. Introduction Financial Management 14: 293. The continuing evolution of cryptocurrency markets and exchanges during the last few https://doi.org/10.3390/jrfm years has aroused sparkling interest amid academic researchers, monetary policymakers, 14070293 regulators, investors and the financial press.
    [Show full text]
  • Research and Evaluations in Social, Administrative and Educational Sciences
    RESEARCH AND EVALUATIONS IN SOCIAL, ADMINISTRATIVE AND EDUCATIONAL SCIENCES EDITED BY Assist. Prof. Dr. Özlem KAYA AUTHORS Prof. Dr. Anil K. BERA Prof. Dr. Bülent GÜLOĞLU Assoc. Prof. Dr. Cevdet KIZIL Assoc. Prof. Dr. Ergun DEMIREL Assoc. Prof. Dr. Laura Sînziana CUCIUC ROMANESCU Assist. Prof. Dr. Ayhan BULUT Assist. Prof. Dr. Dilaysu ÇINAR Assist. Prof. Dr. Özlem KAYA Assist. Prof. Yılmaz DELİCE Dr. Abdullah TÜRK Dr. İlkay ERARSLAN Dr. Halil KÜÇÜKLER Dr. H. Vedat AKMAN Dr. Necip İhsan ARIKAN Dr. Osman DOĞAN Sevdenur KÜÇÜKLER RESEARCH AND EVALUATIONS IN SOCIAL, ADMINISTRATIVE AND EDUCATIONAL SCIENCES EDITED BY Assist. Prof. Dr. Özlem KAYA AUTHORS Prof. Dr. Anil K. BERA Prof. Dr. Bülent GÜLOĞLU Assoc. Prof. Dr. Cevdet KIZIL Assoc. Prof. Dr. Ergun DEMIREL Assoc. Prof. Dr. Laura Sînziana CUCIUC ROMANESCU Assist. Prof. Dr. Ayhan BULUT Assist. Prof. Dr. Dilaysu ÇINAR Assist. Prof. Dr. Özlem KAYA Assist. Prof. Yılmaz DELİCE Dr. Abdullah TÜRK Dr. İlkay ERARSLAN Dr. Halil KÜÇÜKLER Dr. H. Vedat AKMAN Dr. Necip İhsan ARIKAN Dr. Osman DOĞAN Sevdenur KÜÇÜKLER Copyright © 2021 by iksad publishing house All rights reserved. No part of this publication may be reproduced, distributed or transmitted in any form or by any means, including photocopying, recording or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law. Institution of Economic Development and Social Researches Publications® (The Licence Number of Publicator: 2014/31220) TURKEY TR: +90 342 606 06 75 USA: +1 631 685 0 853 E mail: [email protected] www.iksadyayinevi.com It is responsibility of the author to abide by the publishing ethics rules.
    [Show full text]
  • Luciana De Paula Soares.Pdf
    UNIVERSIDADE NOVE DE JULHO FACULDADE DE DIREITO MESTRADO EM DIREITO LUCIANA DE PAULA SOARES CRIPTOMOEDA E BLOCKCHAIN: O RIGOR DAS REGRAS BRASILEIRAS FRENTE AO MERCADO TRADICIONAL São Paulo 2021 LUCIANA DE PAULA SOARES CRIPTOMOEDA E BLOCKCHAIN: O RIGOR DAS REGRAS BRASILEIRAS FRENTE AO MERCADO TRADICIONAL Dissertação de mestrado apresentada ao Programa de Pós-graduação em Direito da Universidade Nove de Julho - UNINOVE, como requisito parcial para obtenção do grau de Mestre em Direito. Orientador: Prof. Dr. Dr. h.c. João Maurício Adeodato São Paulo 2021 Soares, Luciana de Paula. Criptomoeda e Blockchain: o rigor das regras brasileiras frente ao mercado tradicional / Luciana de Paula Soares. 2021. 119 f. Dissertação (Mestrado) - Universidade Nove de Julho - UNINOVE, São Paulo, 2021. Orientador (a): Prof. Dr. João Maurício Adeodato. 1. Criptomoeda. 2. Blockchain. 3. Regulamentação. 4. Receita Federal do Brasil. 5. Banco Central do Brasil. I. Adeodato, João Maurício. II. Titulo. CDU 34 Luciana de Paula Soares CRIPTOMOEDA E BLOCKCHAIN: O RIGOR DAS Dissertação apresentada ao REGRAS BRASILEIRAS FRENTE AO MERCADO TRADICIONAL Programa Pós-Graduação Stricto Sensu Em Direito da Universidade Nove de Julho como parte das exigências para a obtenção do título de Mestre em Direito São Paulo, 04 de março de 2021. BANCA EXAMINADORA __________________________________ Prof. Dr. João Mauricio Leitão Adeodato Orientador UNINOVE ________________________________________ Prof. Dr. José Renato Nalini Examinador Interno UNINOVE ________________________________________ Profa. Dra. Alexandre Freire Pimentel Examinador Externo UNICAP AGRADECIMENTOS Agradeço primeiramente à minha família que sempre me apoiou nessa estrada sem fim e de inestimável valor, o estudo. Agradeço, ainda, a paciência dos meus filhos, ainda pequenos, em disponibilizar sua mãe para os livros em plena pandemia da Covid-19.
    [Show full text]
  • Decoding the Dilemma of Cryptocurrency Regulation in Kenya
    DECODING THE DILEMMA OF CRYPTOCURRENCY REGULATION IN KENYA UNIVERSITY OF NAIROBI JACQUELINE WANJIKU WAIHENYA G62/8613/2017 TO BE SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF THE DEGREE OF MASTER OF LAWS - SCHOOL OF LAW, UNIVERSITY OF NAIROBI [PUBLIC FINANCE AND FINANCIAL SERVICES LAW] NOVEMBER 2020 Declaration by the Student I JACQUELINE WANJIKU WAIHENYA declare that this is my original work and that the same has not been presented to any institution of higher learning for the award of a diploma, degree or post-graduate qualification or for consideration of any certification. It has been complemented by referenced sources duly acknowledged. Where text, data (including spoken words), graphics, pictures or tables have been borrowed from other sources, including the internet, these are specifically accredited and references cited using current OSCOLA systems and in accordance with anti-plagiarism regulations. Signed by:- NAME: REGISTRATION SIGNATURE: NUMBER JACQUELINE WANJIKU WAIHENYA G62/8613/2017 Date: Thursday, November 19, 2020 Supervisor: This Project has been submitted for been submitted for examination with my authority as University Supervisor. Approved Signed:……………………………………………….. Date:……………………… PROF. PATRICIA KAMERI MBOTE GRADUATE SCHOOL OF LAW UNIVERISTY OF NAIROBI ii DEDICATION: -dedicated to- Alexis, Nicolette, Lilian, William, Maureen, Remy, Ryley & Dave -My Family- You don’t choose your Family, They are God’s gift to you, as you are to them. -DESMOND TUTU iii ACKNOWLEDGEMENTS In the first instance I thank the Almighty God for establishing me to lengthen my cords and strengthen my stakes. I wish to express my most sincere appreciation and heartfelt thanks to my Supervisor, Prof.
    [Show full text]
  • Virtual Currencies: International Actions and Regulations Last
    Virtual Currencies: International Actions and Regulations Last Updated: January 8, 2021 No Legal Advice or Attorney-Client Relationship: This chart is provided by Perkins Coie LLP’s Decentralized Virtual Currency industry practice group for informational purposes only and is not legal advice. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Recipient should not act upon this information without seeking advice from a lawyer licensed in his/her own state or country. For questions or comments regarding this chart, please contact [email protected]. Developments Over Time Country Current Summary Date Occurrence Sources 2/20/2020 The Financial Services Regulatory Authority has updated and Guidance expanded its guidance through amendments to its cryptoasset regulatory framework. The amendments change the terminology used in the framework from “crypto asset” to “virtual asset,” a change that aligns with those descriptions used by the Financial Action Task Force (FATF) (see Issuers and intermediaries of virtual Financial Action Task Force (below)). The FATF currencies and “security” tokens may be recommendations are an international standard for regulation Abu Dhabi subject to regulation—depending upon of crypto assets including KYC requirements, anti-money the nature of the product and service. laundering and fraud prevention rules, and sanctions and screening controls. The amendments also overhaul regulations to move the applicable rules from a singular category to those respective to the underlying activities. This means that such assets can be regulated according to their idiosyncratic natures and not as a monolithic class. 29032535.40 10/09/2017 The Financial Services Regulatory Authority (FSRA) of Abu Supplementary Dhabi issued guidance on the regulation of initial coin/token Guidance – Regulation offerings (ICO) and digital currency as supplemental of Initial Coin/Token guidance to the existing 2015 Financial Services and Markets Offerings and Virtual Regulations (FSMR).
    [Show full text]
  • How Global Is the Cryptocurrency Market?
    How Global Is The Cryptocurrency Market? Gina C. Pieters Trinity University, Economics Department, San Antonio, Texas, USA University of Cambridge, Judge Business School|Cambridge Centre for Alternative Finance, UK Abstract Despite the size and global reach of crypto-markets we dont know how much individual countries have invested in cryptos (market exposure), what share of the market individual countries account for (market power), or how those two measures are related. Movements originating in high market power countries will impact high exposure countries, representing a new channel for financial contagion. This paper constructs multiple estimates of exposure and power, using purchases by state-issued currencies and including adjustments to account for the purchase of cryptocurrencies by other cryptocurrencies. All measures find that the market is highly concentrated in just three currencies|the US dollar, the South Korean Won, and the Japanese Yen account for over 90% of all crypto transactions. Market expo- sure and market power cannot be explained by economic size, income, financial openness, domestic stock market size, or internet access. This analysis also reveals that a country's Bitcoin market share is not representative of a country's crypto-market share: a warning for regulators or researchers focused exclusively on Bitcoin markets. Keywords: Bitcoin; Cryptocurrencies; International Asset Market. JEL Codes: E50, F20, F33, G15 Email address: [email protected] ( Gina C. Pieters) 1. Introduction The FSB's initial assessment is that crypto-assets do not pose risks to global financial stability at this time. This is in part because they are small relative to the financial system. Even at their recent peak, their combined global market value was less than 1% of global GDP.
    [Show full text]
  • Persistence in the Cryptocurrency Market
    1703 Discussion Papers Deutsches Institut für Wirtschaftsforschung 2017 Persistence in the Cryptocurrency Market Guglielmo Maria Caporale, Luis Gil-Alana and Alex Plastun Opinions expressed in this paper are those of the author(s) and do not necessarily reflect views of the institute. IMPRESSUM © DIW Berlin, 2017 DIW Berlin German Institute for Economic Research Mohrenstr. 58 10117 Berlin Tel. +49 (30) 897 89-0 Fax +49 (30) 897 89-200 http://www.diw.de ISSN electronic edition 1619-4535 Papers can be downloaded free of charge from the DIW Berlin website: http://www.diw.de/discussionpapers Discussion Papers of DIW Berlin are indexed in RePEc and SSRN: http://ideas.repec.org/s/diw/diwwpp.html http://www.ssrn.com/link/DIW-Berlin-German-Inst-Econ-Res.html Persistence in the Cryptocurrency Market Guglielmo Maria Caporale* Brunel University London, CESifo and DIW Berlin Luis Gil-Alana** University of Navarra Alex Plastun*** Sumy State University December 2017 Abstract This paper examines persistence in the cryptocurrency market. Two different long- memory methods (R/S analysis and fractional integration) are used to analyse it in the case of the four main cryptocurrencies (BitCoin, LiteCoin, Ripple, Dash) over the sample period 2013-2017. The findings indicate that this market exhibits persistence (there is a positive correlation between its past and future values), and that its degree changes over time. Such predictability represents evidence of market inefficiency: trend trading strategies can be used to generate abnormal profits in the cryptocurrency market. Keywords: Crypto Currency, BitCoin, Persistence, Long Memory, R/S Analysis, Fractional Integration JEL Classification: C22, G12 *Corresponding author.
    [Show full text]
  • Initial Coin Offerings the Frontier of Financing
    Initial Coin Offerings The Frontier of Financing February 2018 Initial coin offerings (ICOs) are a new fundraising model whereby a venture issues a new cryptocurrency to raise capital. ICOs offer both benefits and risks. This paper provides general background information on initial coin offerings, while our forthcoming companion report, ICOs: Defining Characteristics and Taxonomy of Crypto Coins and Tokens, delves into the technical elements and characteristics of initial coin offerings. What is an ICO? An ICO is a means of crowdfunding startups, whereby the venture issues a new crypto token1, specific to its own protocol or network, to investors in exchange for capital—typically an established cryptocurrency like ether or bitcoin. Startups use the raised capital for future expenses associated with developing their business. A typical ICO works as follows: a white paper outlining the project’s objectives and purpose is released to the public and a new crypto token is created on a platform such as Ethereum. Network participants settle on the tokens value through different auction models which play out during the fundraising process. Most ICOs function by having investors transfer funds (typically ether or bitcoin) to a smart contract that safeguards the capital and automatically redistributes an equivalent value in the new crypto asset in the future based upon pre-determined conditions. Some firms using ICOs have raised millions of dollars seconds after opening bidding, illustrating both the frenzied market and the reach of the technology. ICOs leverage crypto and smart contract technologies to replace venture capital (VC) and other funding models with more direct, automated, and decentralized solutions for participants to fund and then benefit from the development of a crypto network.
    [Show full text]