FATF Rules: A Threat to Crypto Companies and Privacy
16 June 2019
Each week we share the latest news in blockchain and finance. This is newsletter #40 and covers the FATF Rules that are to be published on 21 June, more on Facebook’s Libra stablecoin project, Visa’s foray into DLT, and more.
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We’ve reported on the new FATF rules on crypto-assets before. They are to be published on 21 June, and are considered as “one of the biggest threats to crypto today”. Specifically, the rules will require exchanges and others to collect and share data about customers initiating crypto transactions of >$1000.
Market participants globally have responded negatively. On the one hand, this will sharply increase compliance costs for companies around the globe, stifling innovation. On the other, the rules are seen as overkill, resulting in significant and unnecessary privacy violations.
One of the exercises was to split participants up into groups and rank the supposed benefits of security tokens. […] What was surprising, was the number that insisted the main benefit was “speed.” This was surprising, as it is based on three assumptions:
1) That speed is desirable
2) That blockchains confer speed
3) That it is a technology issue.
All of these assumptions, however, are mistaken.
— CoinDesk’s Noelle Acheson on misconceptions in security tokens.
📗 Facebook plans to release the whitepaper of stablecoin Libra next week Tuesday the 18th. Not much is known, but it seems that 1) the coin will be used for payments (through Whatsapp, Messenger), 2) it will be collateralized with a $1bn basket of currencies and 3) is planned for 2020.
It will be very very interesting to see how this will unfold; here are 6 predictions from Wyoming Blockchain Task Force’s Caitlyn Long.
🌇 Hong Kong family office Stan Group is seeking to tokenize a part of its real estate portfolio of $6.38bn. The company is partnering with Liquefy and will meet with the country’s securities commission early next year.
🔐 Fireblocks, which offers a cloud-based platform to secure digital assets in transit, has raised $16m in a Series A round, from Fidelity International among others.
☁️ British insurer Legal & General will use Amazon Managed Blockchain to record and manage bulk annuities, starting outside of its core markets (US, UK).
🏦 Visa has launched a bank to bank transactions network which is based on DLT, containing elements of Hyperledger Fabric.
🇨🇭 In a recent report, Swiss think tank Avenir Suisse urges the Swiss National Bank to “drive the development of a Swiss franc token”.
💭 In an earlier Finhash Network issue, we spoke of the $50m investment in Fnality by UBS and other large banks. In this longer read, CoinDesk covers the goal of the startup’s Utility Settlement Coin (USC) and its grander vision.
💳 Binance Research published a report on Decentralized Cryptoasset Lending and Borrowing, providing an overview of different DeFi applications (e.g. Maker, Compound, Dharma), total collateral locked, and their risks and benefits.
📦 Another report, this time on Blockchain and Trade Finance. Published by the trade finance network Marco Polo (a collaboration between R3 and multiple banks and tech providers), it covers the current state of blockchain in trade finance and analyzes several initiatives.
💸 New tokenization platform for real estate debt OpenLTV will host its first STO in the summer.
While many tokenization platforms use Ethereum to issue their tokens, some are working on other blockchains. NEO has recently partnered with Liquefy to issue security tokens on NEO, while Tokenomica is working on Waves and Smartlands is making use of Stellar.
But has anyone really made an attempt at comparing these (and other blockchains) in terms of issuing tokenized assets? We haven’t seen something like that yet, but if you have, send it our way!
See you next week! 👋
In this article, we provide an overview of Security Token Blockchains.
On Euronext’s investment in Tokeny, the Huobi Finance Chain and Fusion’s mainnet launch.
At the end of June 2019, a variety of ICO, IEO and STO Reports were published. We share them in this newsletter.
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