Goldman Sachs (NYSE: GS), a Wall Street investment banking heavyweight has revealed plans to launch its own distributed ledger technology (DLT) based cryptocurrency just like Jamie Dimon’s JPMorgan, reports Forbes on August 9, 2020.
Institutional Investors Betting Big on Cryptos and DLT
In the latest development, 51-year-old Wall Street investment banking, securities, and investment management heavyweight, Goldman Sachs has made it clear that it’s weighing the possibility of rolling out its own blockchain-based stablecoin, just like its major competitor, JPMorgan Chase bank.
In a bid to make its blockchain project a success, earlier in July, Goldman Sachs appointed Mathew McDermott, a veteran in the traditional financial ecosystem, as its new global head of digital assets. McDermott has revealed that the investment bank is interested in joining the stablecoin bandwagon and as a statement of intent, Goldman Sachs has engaged the services of Oli Harris, JPMorgan’s head of digital assets who is the brain box behind the bank’s dollar-pegged JPM Coin.
“We are exploring the commercial viability of creating our own fiat digital token, but its early days as we continue to work through the potential use cases.”
It’s worth noting that Goldman Sachs has always had a love-hate relationship with bitcoin (BTC) but believes the underlying technology has all it takes to disrupt all sectors of the global economy.
As reported by BTCManager in April 2018 Goldman Sachs hired Justin Schmidt to manage its digital assets operations and a proposed crypto trading desk. Fast-forward to May 2020 and the firm’s analysts listed five reasons why they think bitcoin is not an asset class worth investing in.
However, it appears Sachs and its financial experts have now had a total change of heart as McDermott has revealed the firm intends to use DLT to revolutionize its operations and create forward-looking crypto and blockchain-powered consortiums, as “there is now a resurgence of interest in cryptoassets.”
Goldman Sachs is not alone in its crypto adoption journey. A recent report from bitcoin and blockchain analytics firm, Chainalysis has revealed that more and more institutional investors are now buying bitcoin and other digital currencies.
At press time, the price of bitcoin (BTC) is hovering around $11,991, with a market capitalization of $221.32 billion, as seen on CoinMarketCap.
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China Central Bank ‘Blacklists’ Local Bitcoin OTC Merchants
Firms in the blacklist will lose access to online banking for over five years, with many crypto OTCs reportedly shutting their business ahead of potential repercussions.
- Bitcoin and crypto OTC dealers in China are facing widespread issues in the country.
- Those found transacting in crypto may see thier bank accounts suspended for five years.
- The move is part of a broader crackdown on money laundering in China.
The People’s Bank of China (PBoC), the nation’s central bank, is flagging accounts related to large cryptocurrency traders in its latest crackdown, according to local news outlet WuBlockchain.
The move is part of a broader crackdown on money laundering in China. Earlier this year, the PBoC launched its drive to eradicate illegal earnings and partnered with the country’s local banks to share account information and transactional details to prevent the proliferation of unlawful funds, of which cryptocurrencies form a part in China.
Facing the brunt are China’s over-the-counter (OTC) crypto dealers—or firms that conduct trades outside of the public market (such as on crypto exchanges) and usually transact with upwards of millions of dollars.
Some crypto OTC accounts have reportedly been put on a “blacklist” maintained by the PBoC and are forbidden to use bank-issued cards for the next three years or conduct online transactions in the next five years, the report said. These rules apply to all blacklisted accounts and are not limited to cryptocurrency accounts.
The specific process is that, after a bank’s risk system has flagged and restricted transactions from a certain account, it reports the account to a regional branch of the PBoC. This ensures that information regarding blacklisted accounts is then shared across all Chinese banks, hence preventing OTC dealers from opening new accounts in other locations.
Lack of laws affecting business
The move has to lead to many crypto OTC dealers shutting down their business in fear of repercussions, the report said.
However, some industry observers say the blacklisting does not apply to simple cryptocurrency sales. “Normal cryptocurrency transactions are not illegal, and only those involving black money and illicit assets will be frozen,” said crypto exchange and OTC desk Huobi, in the report.
Still, the lack of unified rules across all banks would mean an OTC business would find itself in the blacklist regardless of its legitimacy, the report noted. China has no concrete laws on cryptocurrencies either, making the asset class a legal gray area and hence susceptible to the judgment of individual banks.
For China, the crackdown on cryptocurrencies is ironic considering its development in state-backed digital currencies. On the one hand, the country is pushing to launch the digital yuan—its digital version of the national fiat—and is already conducting testing in rural areas and taxi-sharing services. But public cryptocurrencies like Bitcoin are a strict no-no. Or perhaps that’s all part of its plan.
Africa reports the least illegal activities involving cryptocurrency.
According to a new report, illegal activity only makes up 1.4% of all digital currency activity in Africa. The report by blockchain analytics firm Chainalysis revealed that Latin America is the leading region for digital currency scams, with East Asia ranking second. The rapid rise in the adoption of cryptocurrencies in Africa has seen the number of scammers targeting traders shoot up as well. However, the number of traders falling for such crypto scams has remained relatively small in the region.
African traders are wary of falling to crypto scams.
The Chainalysis report also revealed the biggest cryptocurrency scams in Africa, with Mirror Trading International leading the way. Through its website MyMTIClub.com, the South African firm reportedly commands a dominant 95% lead in the past seven months. The number of funds it has managed to raise from African trades had surged steadily since December 2019, when it received under $1 million, to June 2020, when it received $8 million. Other scams that have brought in millions of dollars include SBlock.com, CloudTokenWallet.com, WoToken.pro, and F2Trading Corporation.net.
Crypto adoption increases in African countries this year.
Cryptocurrency adoption in African countries has increased this year amid the ongoing pandemic. The bitcoin trading on Peer-to-Peer platforms witnessed a rapid growth in recent months, with the African continent now the second-strongest region in the world for P2P volume, just behind the United States. The African continent is the only region to post an increase in the seven-day P2P trade in July. Since early this year, the sub-Saharan African continent has overtaken the Asia-Pacific, Eastern European, and Latin American regions to emerge as the second-strongest peer-to-peer market by a volume margin of more than 50%. Twitter CEO Jack Dorsey and several other industry giants believe that Africa will play a huge role in the mass adoption of crypto.
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