Facebook's Libra, Ripple's Aggressive Push & FINRA's Crypto Stonewalling

Off the Blocks | Vol 72, June 18, 2019

This newsletter is our weekly roundup of some of the significant blockchain news, that provides an overview of the rapidly changing blockchain landscape to help you map your blockchain strategy and be aware of regulatory announcements globally. Get your friends to Subscribe Here.

Facebook’s Libra

Facebook just announced the release of its much anticipated whitepaper detailing its foray into the wold of cryptocurrencies. Facebook’s crypto, named Libra, will run on a blockchain network secured at launch by 100 distributed or nodes. 28 companies have signed up to be the node-running members at launch. As more nodes are added, Facebook says Libra will become more fully decentralized.

The Libra blockchain will go live in 2020, with the Libra Association, a Switzerland-based non-profit organization, set up recently by Facebook. As stated in the whitepaper, Project Libra aims to create a “more accessible, more connected global financial system.” According to the whitepaper, Members of the Libra Association will consist of geographically distributed and diverse businesses, nonprofit and multilateral organizations, and academic institutions. The initial group of organizations that will work together on finalizing the association’s charter and become “Founding Members” upon its completion are, by industry:

  • Payments: Mastercard, PayPal, PayU (Naspers’ fintech arm), Stripe, Visa

  • Technology and marketplaces: Booking Holdings, eBay, Facebook/Calibra, Farfetch, Lyft, Mercado Pago, Spotify AB, Uber Technologies, Inc.

  • Telecommunications: Iliad, Vodafone Group

  • Blockchain: Anchorage, Bison Trails, Coinbase, Inc., Xapo Holdings Limited

  • Venture Capital: Andreessen Horowitz, Breakthrough Initiatives, Ribbit Capital, Thrive Capital, Union Square Ventures

  • Nonprofit and multilateral organizations, and academic institutions: Creative Destruction Lab, Kiva, Mercy Corps, Women’s World Banking

In the initial version of the system, only founding members will be able to be a node that participates in the consensus algorithm. Over time, it’s designed to transition the node membership from these founding members who have a stake in the creation of the ecosystem to people who hold Libra and have a stake in the ecosystem as a whole.

- Ben Maurer, Facebook’s blockchain technical lead

“Move” is a new programming language for implementing custom transaction logic and “smart contracts” on the Libra Blockchain. Facebook says that Move is designed with safety and security as the highest priorities. Specifically, Move is designed to prevent assets from being cloned. It enables “resource types” that constrain digital assets to the same properties as physical assets: a resource has a single owner, it can only be spent once, and the creation of new resources is restricted.

Facebook Releases Cryptocurrency White Paper for Libra Currency
Image Source: CoinTelegraph

To be sure, critics are not far away. Noted economist and cryptocurrency skeptic Nouriel Roubini has said that the project is not really crypto.

It has nothing to do with blockchain. Fully private, controlled, centralized, verified and authorized by a small number of permissioned nodes. So what is crypto or blockchain about it? None.

However, to learn more about the project, it is best to dig into the whitepaper and other resources and learn for yourself:

Now some significant news form the world this week:

  1. Payments | Ripple to Invest Up to $50M in MoneyGram: Blockchain payments startup Ripple has struck a deal to buy a stake in money transfer giant MoneyGram. Under the deal, according to the Wall Street Journal and Fortune, Ripple will spend $30 million to buy shares at a price of $4.10 apiece. And in the next two years, MoneyGram has the option to sell an additional $20 million worth of shares to Ripple at the same price. As noted by the Journal, MoneyGram shares were trading at about $1.45 apiece at the close of day, meaning Ripple’s purchase price is close to three times the current market value. Ripple and MoneyGram anticipate settlement fees dropping from $30 per transaction to “fractions of a penny,” while settlement times are expected to drop from 15-60 minutes to just a few seconds. [ … Read More on Coindesk]

  2. Applications | Blockchain Applications by US Federal Government: The research organization Data Foundation and IT firm Booz Allen Hamilton have published a report with five proposed questions to guide the United States federal government on where and how to implement blockchain initiatives. According to the report, blockchain solutions make the most sense when applied to some sort of procedure with a predetermined level of consistency and a low level of agility, assuming that the immutable ledger provided by blockchain is valuable for the task in the first place. The report lists five questions they came up with for how a federal organization can decide whether a blockchain solution makes sense:

    1. Does the blockchain offer a real benefit for information security, trust, or transparency?

    2. Can blockchain be practically and efficiently applied?

    3. What blockchain design is most appropriate?

    4. Is the cost of applying blockchain merited relative to information gains?

    5. Does the application satisfy applicable data sharing and confidentiality laws?

    [ … Read More on CoinTelegraph]

  3. B2B Payments | Visa Goes Live With Blockchain-Powered Business Payments Service: Visa’s blockchain-powered business-to-business payments service, first made public in October 2016, has officially gone live. the payments giant has launched its Visa B2B Connect network – a product that was originally developed alongside blockchain startup Chain. Visa B2B Connect at launch will serve businesses seeking to make payments to 30 markets, according to the report, with 90 more corridors  expected to be covered by the close of 2019. The service has been designed to help Visa’s corporate clients sidestep the slow correspondent banking network, opening up near instant international payments using a system in part powered by distributed ledger technology (DLT).

    By creating a solution that facilitates direct, bank to bank transactions, we are eliminating friction associated with key industry pain points.

    - Kevin Phalen, SVP, global head of Visa Business Solutions

    [ … Read More on Coindesk]

  4. Regulations | Stonewalled by FINRA, Up to 40 Crypto Securities Wait in Limbo for Launch: Blockchain startups waiting for approvals from U.S. securities regulators are getting restless, and wondering what’s the holdup. The Financial Industry Regulatory Authority (FINRA), Wall Street’s self-regulatory organization (SRO), has sat for months on some 40 applications from companies that touch cryptocurrencies. Several industry members believe the regulators have set an unofficial moratorium on these approvals. Among this group, some think that FINRA is waiting for clear guidance from the Securities and Exchange Commission (SEC) on how cryptocurrencies are to be treated under securities laws. Others are firmly convinced the SEC has explicitly told FINRA to hold off. Technically, FINRA only approves broker-dealers, not qualified custodians. However, companies are required to be a registered broker-dealer before they can apply for the latter registration, and while FINRA oversees the governance of ATSs, these entities must register with the SEC – which may publish the registration application for a public comment period before the companies can begin operations. [ … Read More on Coindesk]

  5. Latin America | Huawei Considering Launch of Blockchain Services: Chinese telecommunications hardware giant Huawei is studying the entire Latin American market and considering expanding its operations. Per the report, a Huawei executive said at the CIAB Febraban conference that it is possible its blockchain-enabled products and services will soon be available on the continent. The company claimed to have several contracts with the Brazilian government for storage solutions and to be in talks for 5G infrastructure deals. In April last year, Huawei also launched its blockchain-as-a-service offering through its cloud platform, which reportedly allows the creation and management of blockchain applications at low cost. Blockchain software consortium R3 revealed that it is developing a blockchain platform in Brazil with banks Bradesco, Itau and B3. Yesterday news broke that CIP, a facilitator of Brazilian banking and financial infrastructure, has officially launched its blockchain ID platform via a partnership with IBM using Hyperledger Fabric. [ … Read More on Yahoo]

The Final Word | 44% of European Healthcare Organizations Have Never Heard of Blockchain

44% of European Healthcare Organizations Have Never Heard of Blockchain: IDC Survey

Only a limited number of healthcare firms in Europe are aware of the benefits of blockchain applications, according to a survey by American market research firm International Data Corporation (IDC). As much as 44% of European healthcare organizations had never heard of distributed ledger technology (DLT), while only 12% of those are related to the tech in some sense. Only 1% out of those 12% have a certain blockchain initiative in production, while 1% have multiple DLT projects, the report notes. The research is based on a survey of 290 healthcare firms in Europe. Based on the research, there are three major use cases for blockchain technology in the European healthcare industry, including transaction agreements, identity management and shared records management. The identity use case reportedly had the biggest number of production projects at 2%, with a further 6% planning adoption within the next 12 months. [ … Read More on CoinTelegraph]

About Proteum
Proteum is a global blockchain advisory firm that works with public, private and start-up companies to help them transition into the world of blockchains and decentralized applications. We help companies strategically build their ecosystem and unique capabilities so that they can own and control their future. ProteumX, our accelerator program, invests in and accelerates the time to market for companies building blockchain solutions.

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