Universal Protocol Alliance Launches Interest-Paying Stablecoin UPUSD

Universal Protocol Alliance Launches Interest-Paying Stablecoin UPUSD

A consortium of blockchain companies including Bittrex International, Brave, Cred, and Bitgo is launching a new stablecoin. Universal Protocol Alliance’s Universal Dollar (UPUSD) is a dollar-pegged token whose holders will earn interest, just like a regular savings account. The consortium has announced ambitious plans to launch UPUSD in Africa and Latin America first, to attract “the next 100 million users into cryptocurrency.”

Also read: Turkish Real Estate Agency Sells 9 Houses for BTC

Crypto Assets That Pay Interest Are So Hot Right Now

Competition for the USD ticker is fierce these days. In addition to TUSD, GUSD, and USDC, the stablecoin economy now has UPUSD. Universal Protocol’s stab at a stablecoin, developed with the backing of Bittrex International, Uphold, Brave, Cred, Blockchain at Berkeley, Bitgo, and Certik, is an ERC20 token that will allow its holders to earn interest for staking. In that respect, there are clear parallels to be made with Blockfi’s crypto interest account, which launched this week promising BTC and ETH holders 6 percent per year. Dan Schatt, president of Cred, told news.Bitcoin.com that UPUSD will pay quarterly interest as high as 10 percent annually.

Universal Protocol Alliance Launches Interest-Paying Stablecoin UPUSD

What distinguishes the Universal Dollar from the competition is the target market it’s designed for. Countries crippled by weakened national currency, such as Venezuela and Zimbabwe, will purportedly be among the first beneficiaries of UPUSD. The Universal Dollar stablecoin promises a “competitive annual rate of return” and it is anticipated that uptake will be particularly strong in countries with high inflation or limited access to traditional banking. Dan Schatt explained:

Today, Uphold and Cred service hundreds of thousands of users in developing and high-inflation countries. Many Venezuelans use Cred’s service, looking for the same returns and stability as the rest of the world. The difference is they are in a country with a 10 million percent inflation rate.

A Passive Income for Token-Holders

The UP platform will enable users to lend their USD-pegged assets and earn interest via Uphold’s Cred Earn application. UPUSD will also be rolled out in developed countries, where it will permit users to store their digital assets on a 1:1 basis at FDIC-insured banks. The token will launch on March 8 on Uphold, whose UP platform has been praised by UPUSD backer Brendan Eich, co-founder of Brave, for its “usability and familiarity.”

The platform incorporates a number of features designed to enhance its user-friendliness, particularly to non-technical users who may be new to cryptocurrencies. This includes key recovery, using a 2-of-3 private key-sharing system that will enable the wallet owner and one of their approved third parties to restore a lost wallet. Users can also delegate control over their assets to a third party such as a centralized exchange for temporary trading, before taking back custody of the funds and restoring them to their personal wallet. The development of UPUSD is the latest example of crypto assets taking on the form and features of the legacy financial system that they were originally designed to leave behind.

What are your thoughts on interest-paying cryptocurrency accounts? Let us know in the comments section below.


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Kai Sedgwick

Kai’s been playing with words for a living since 2009 and bought his first bitcoin at $19. It’s long gone. He’s previously written white papers for blockchain startups and is especially interested in P2P exchanges and DNMs.

Revolut Now Offers Stop Orders for Trading BTC, ETH, XRP, LTC, and BCH

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UK-based digital bank Revolut is now offering an “auto-exchange” feature that “automatically exchanges your money from one currency into another based on a target rate you set.” And “currency” can be “fiat” or crypto”, which means you can use this feature for automatic fiat-to-fiat, fiat-to-crypto, crypto-to-fiat, or crypto-to-crypto conversions. 

Revolut was founded in July 2015 by Nikolay Storonsky (CEO) and Vlad Yatsenko (CTO). It has over four million customers, and has so far processed more than 250 million transactions.

On 7 December 2017, Revolut introduced cryptocurrencies to its platform (which can be accessed via a mobile app that is available for both iOS and Android). This meant that customers could “buy, hold and exchange Bitcoin, Litecoin and Ethereum in just 30 seconds at the best possible rates.” Later support for two more cryptocurrencies—Bitcoin Cash (BCH) and XRP—was added.

Revolut says that “one of the best things about the Revolut app is the ability to instantly exchange money into 24 different fiat and 5 cryptocurrencies with no rubbish rates, all at the tap of a button,” and that this new “auto-exchange” feature will make life even easier for customers.

Here is the example Revolut uses to introduce this feature. Let’s say that you want to convert “100 EUR into GBP whenever 1 GBP costs less than 1.1 EUR (or any other value you want to set).” With the auto-exchange feature, you “can kick back and relax, knowing that your money will only be exchanged when the stars align and the markets work in your favour, automatically giving you the most bang for your buck.”

To use this feature, here is what you need to do:

Load up your Revolut app, navigate to any currency pair in the Rates page, or go to Rates, Actions and tap on Auto-exchange. Choose the two currencies you want to exchange between, the amount you want to convert and tap on ‘Set target’.

Then, carefully read and accept the risk disclaimer, set your target rates and tap the Auto-exchange button to set it live. The exchange will only trigger once your target rate has been reached.”

Once you click on the “Set Target” button, you are presented with the following disclaimers:

  • Low Balance (auto-exchange will fail if “you don’t have enough money in your account when the auto-exchange is due”)
  • Daily Exchange Limit (you can’t have more than 30 auto-exchanges per day)
  • Crypto Transaction Limit (you can’t exchange more than 10,000 euros worth of crypto per day)
  • Blocked Account (auto-exchanges do not work if your account is currently blocked for any reason)
  • Price Volatility (during times of high volatility, “your target value might have shifted in the brief windows between the target value being hit, and the auto-exchange being performed; if “the rate moves more than 0.75% either side of your target value for fiat currencies, or 5% for cryptocurrencies,” then the auto-exchange won’t take place and the system will wait for the next time that the target value is hit before making another attempt)

What Revolut has effectively introduced support for is what is called “stop-market orders” on more professional trading platforms. A stop-market order allows you to specify that you want to have a buy/sell market order to get automatically executed once the market has reached the stop/target price.

Here is the example of when you might want to set a target value that is above the current rate:

“Let’s say you want to exchange 100 Pounds to Euros and today’s rate was  £1 = €1.12, you might want to set a target rate of £1 = €1.16, to take advantage of a better exchange rate as the market fluctuates. Setting the values this way is like saying ‘exchange my 100 Pounds into Euros whenever 1 Pound is greater than or equal to 1.16 Euros.’ Conversely, if you want to sell Euros (ie. exchange Euros to Pounds), you can simply swap the currencies in the app, look at the current rate and set your target slightly higher.”

And here is an example of when you might want to set a target value that is below the current rate:

“… let’s assume a doomsday scenario where you think there is a serious risk of the Pound losing most of its value. You can then set your target lower than the current value, for instance £1 = €1, which means that the exchange won’t be executed if the rate is equal to or less than your target.

In this scenario, what you’re basically saying is: ‘If the Pound plunges and gets as low as parity with the Euro, I think there is a significant chance that it will keep going down, and so I want to sell my Pounds for Euros now, before the value drops any further’.”

 

Featured Image Courtesy of Revolut

Starbucks’ Alleged Bitcoin Adoption Could Place Risk on Consumers

Starbucks’ Alleged Bitcoin Adoption Could Place Risk on Consumers

Crypto users were sent into a frenzy over March 4, 2019, reports that Starbucks had earned significant equity in Bakkt and might begin accepting crypto payments. However, this could prove to be a tax nightmare for Starbucks users.

Trouble Ahead?

In August 2018, it was revealed that Starbucks was one of the backers behind Bakkt, a new firm dedicated to bringing crypto-friendly payment technology to institutional investors. At the time, not a lot was known about the coffee giant’s involvement in the firm, except that they were one of the backers.

Now, more information has come to light and was made known to the public on March 4, 2019, that Starbucks has acquired significant equity in Bakkt and as a result, the coffee chain might begin accepting cryptocurrency as payment for their products. This was met with an outpouring of excitement from crypto users as well as coffee lovers who were simply happy at the thought of a new form of payment. After all, many businesses such as KFC have also begun accepting crypto as a means of payment.

However, on closer inspection, there are a number of factors that could make this new development overly complex and inconvenient for Starbucks and, surprisingly, the IRS.

Paying Your Dues

The idea of paying for coffee with crypto sounds simple enough. Consumers get their product and pay as they would with fiat currency. There is one thing that makes payment with crypto significantly different than those with fiat: the tax implications.

With the current tax rules in place in the United States, all purchases made with cryptocurrency, regardless of size, must be reported to the Internal Revenue Service to determine possible gains or losses on the transaction, even if it was as simple as a beverage. Crypto tax laws are already complicated and often confusing enough, but this would add yet another layer to the issue.

Also, it must be kept in mind that Starbucks serves millions of customers each day. If even a small fraction of them were to pay in crypto, the number of increased transactions being reported to the IRS would be ridiculous at best.

The volatility of the crypto market must also be taken into consideration. If the 2018 crash has shown anything, it is that the value of a token can be halved overnight and this means that the prices of something as simple as coffee could constantly be changing.

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Swissquote Bank Launching ‘Nuke Proof’ Crypto Custody

Online banking and trading group Swissquote is launching a crypto custody service later this month.

The Switzerland-based firm announced Friday that, starting March 21, retail and institutional customers will be able to transfer cryptocurrencies from external wallets to be stored in a Swissquote account.

Swissquote has partnered with Zug-based Crypto Storage AG, a subsidiary of Crypto Finance AG, for the new offering.

Crypto Storage AG offers a proprietary solution for managing cryptocurrency private keys using “highest grade hardware security modules” (HSMs), according to information on its website.

“Our HSMs are the same as those built for the Swiss National Bank [the country’s central bank] and that nothing is outsourced or could allow for a backdoor to be built in,” Crypto Storage CEO Stijn Vander Straeten told CoinDesk.

He added:

“Our server racks are stored in a former military bunker in the Swiss Alps which is nuke proof. So, yes, we care about security.”

Swissquote already offers cryptocurrency trading services, having launched bitcoin (BTC) trading in partnership with Bitstamp back in July 2017. It added support for bitcoin cash (BCH), ether (ETH), litecoin (LTC) and XRP later the same year.

In November 2017, the firm also launched a bitcoin exchange-traded certificate that moves investors’ holdings between bitcoin and U.S. dollars with the help of a machine learning algorithm, aimed at curbing the cryptocurrency’s volatility.

In early 2018, Swissquote launched a multi-cryptocurrency certificate on the SIX Swiss Exchange, offering exposure to bitcoin, bitcoin cash, ether and litecoin. The bank has also been listed on SIX since 2000.

Swissquote image via Shutterstock 

Smart Contract Firm Quantstamp Reveals Investment From Financial Giant Nomura

United States smart contract security company Quantstamp has announced its expansion to Japan following an investment from local financial giant Nomura Holdings. The news was revealed in a press release from Quantstamp published on March 6.

According to the announcement, the U.S. firm has received a “significant investment” from Nomura, which provides investment, financing and related services to individual, institutional and government customers. Venture company Digital Garage, which invests in successful internet startups across the world, reportedly also contributed to the round.  

Information that the corporate funding round was led by Nomura also appeared on Crunchbase on March 6. The exact amount of the investment has not been disclosed. As of press time, Nomura has not responded to Cointelegraph’s request for comment on the move.

As the press release outlines, the U.S. company is set to establish a limited liability company, Quantstamp Japan GK, to assist Japanese startups. The firm aims to provide tools that help identify and secure vulnerabilities in smart contracts automatically and prevent security breaches.

Quantstamp’s co-founder and CEO, Richard Ma, believes that the market for smart contract-driven applications in Japan will keep growing in the following years.

As cited by Quantstamp, Chuzaburo Yagi, senior managing director in charge of innovations at Nomura Holdings, said that smart contracts will play an increasingly important role in the financial world, as blockchain technology gains more adoption. “Security assurances through auditing and certification will become increasingly indispensable,” his statement reads.

Earlier in 2019, Nomura Holdings signed a memorandum of understanding with major Japanese messaging app Line and Lvc Corporation, which oversees the messenger’s digital asset and blockchain business units. The three partners are considering establishing a financial alliance focused on blockchain.

Fintech Firm Launches Blockchain CBDC Pilot with Eastern Caribbean Central Bank

Fintech Firm Launches Blockchain CBDC Pilot with Eastern Caribbean Central Bank

Bitt, a portfolio company of Medici Ventures, the leading blockchain accelerator and subsidiary of Overstock, has joined forces with the Eastern Caribbean Central Bank (ECCB) to conduct a distributed ledger technology (DLT) based Central Bank Digital Currency (CBDC) pilot across member countries in the Eastern Caribbean Currency Union (ECCU), according to a press release on March 6, 2019.

National Stablecoin

As reported by BTCManager in March 2018, the ECCB and Bitt, a Barbados-based fintech firm inked a partnership deal to carry out a blockchain technology pilot focused on developing a central bank-backed digital asset that could be used by all the member countries of theECCU.

Fast forward to 2019 and the blockchain pilot is now live.

The team is looking to use blockchain technology to securely mint and issue a digital version of the Eastern Caribbean dollar (DXCD) that would be used by all licensed financial institutions, non-bank financial institutions, as well as consumers and merchants in the ECCU.

Importantly, the team has hinted that stablecoin will enable residents to carry out peer-to-peer transactions via their smartphones.

Facilitating Feeless Payments

As stated in the ECCB press release, the digital currency will make it easier for people residing in the ECCU member countries to carry out zero fee peer-to-peer transactions in real-time.

Commenting on the matter, the Governor of the ECCB said that:

“This pilot is a live CBDC deployment that could eventually be rolled out to the public in phases. The initiative is part of the ECCB’s Strategic Plan 2017-2021, which is focused on reducing cash usage within the ECCU by 50 percent, boost financial stability and accelerate the growth of member countries.”

Accordingly, the DXCD pilot is now underway and is expected to be executed in two phases.

The development and testing phase will reportedly run for twelve months, followed immediately by a six-month rollout and implementation phase in nations that participated in the pilot.

Created in 1983, the ECCB member nations include Anguilla, Antigua and Barbuda, Commonwealth of Dominica, Grenada, Montserrat, St Kitts and Nevis, Saint Lucia and St Vincent and the Grenadines.

If all goes as planned, the CBDC blockchain project would mark a huge milestone for the entire cryptospace and could motivate other apex banks to join the movement.

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Enjin Coin (ENJ) Surge Sparks Altcoin Season Talk

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Crypto Research Claims Ethereum PoS Unsustainable, Vitalik Hits Back

For the longest time, the developers behind the Ethereum (ETH) blockchain have had their eyes set on Proof of Stake (PoS). Serenity, as core developers call the iteration of their brainchild based on staking rather than mining, is slated to come to fruition over the coming years.

But, some, including those predisposed to be enamored Bitcoin’s relatively simple Proof of Work (PoW) mechanism, which harnesses deflation, difficulty adjustments, and the sheer power of computational processes, have claimed that this alternative consensus medium may post all but solid results.

Staking On Ethereum May Not Be Economically Viable

After a number of failed attempts, due to bugs and consensus misalignment, the fabled Constantinople blockchain upgrade went live last week. Constantinople, for those who missed the memo, introduced changes to Ethereum’s virtual machine that reduces smart contract gas consumption (lower fees), along with a -33% shift in how much Ether is issued each block. Although this blockchain upgrade had roots in bolstering the short-term scalability prospects of Ethereum, Constantinople moves the project one step closer to the advent of Serenity.

But, the New York-based Delphi Digital recently expressed concerns about the viability of staking, especially in the context of current market conditions, which have drastically depressed the value of ETH.

The research boutique, which recently joined hands with 51Percent and accepted Bitcoin bull Anthony Pompliano as a board member, broke down how the planned PoS model, especially the cryptoeconomics facet, could pan out in real life.

Delphi’s team, headed by Tom Shaughnessy, note that the proposed yields offered through staking “look low,” even without factoring in operational expenses that come with running a server. The proposed yields offered to validators, which will be equivalent to miners on the Serenity chain, will be 18.19% APR at most — this being the case only if there is 5,000,000 Ether staked, even as transaction fees spike through the roof. More conservatively and representative of real life, validator yields will likely be well under 5%, possibly even as low as 2% to 3%. On the matter of the economic sustainability of these returns, the researchers remarked:

“It’s clear that not only will network fees (gas spent) be the primary driver of higher validator yields, but that the reward structure is not economically sustainable without significant growth in those fees.”

The American group then goes on to break down an Ethereum validator’s net yield, factoring in the expense of running hardware or a cloud server (which introduces centralization) for validation. They note that at current prices levels, staking will be wildly unprofitable, maybe even more so than the levels that capitulating Bitcoin miners faced in December of 2018. Mythos Capital founder Ryan Adams notes that per Delphi’s chart, at $100 per ETH (effectively current levels) and with 400 ETH in daily network fees, the annual yield would be -26%. Ouch.

In a number of other scenarios laid out in the chart, prospects for validators seemed just as dire. Save for scenarios where Ether is booming and network fees are high, which seems unlikely considering the moves to decrease gas usage across the board, validators would be losing their hard earned money in exchange for processing Ethereum transactions. Thus, Delphi determined:

“We absolutely believe that continued Ethereum adoption and building on the platform will help the fee market develop, but it becomes a bit of a chicken or the egg situation. A diversified and profitable validator network is crucial for the security and the longevity of the network, but that’s unattainable under the currently proposed specs without significant network fees.”

Vitalik Turns The Tables

As Delphi was open to criticism in response to their caution, commentators quickly threw their hats in on the matter. Even Vitalik Buterin, the Russian-Canadian coder extraordinaire behind the project, had something to say on the matter. Buterin, who has arguably become Ethereum’s version of Satoshi Nakamoto, notes that the harrowing case that Delphi laid out is “very unlikely to be true.”

He claims that such statistics imply that one million Ether issued each year “cannot pay for a few hundred times the Ethereum’s current blockchain load times at a ~256 overhead factor.” Buterin adds that he isn’t comfortable with making a “‘moon or bust’” shot, as he sees worlds where Ether will remain at $100 but could claim that #1 seat on the cryptocurrency rankings, meaning that Serenity will need to operate at such low (even negative) margins.

But Delphi was adamant that changes should be made to the validator payout structure, as they feared that a future collapse in Ether based on a PoS-backed chain could create a negative feedback loop, thus producing an environment that is far from secure. They specifically drew attention to a model where early revenues on Serenity would be centered around block rewards, rather than networks fees. They claim that this will give a “significant buffer” for validators, as the fee market will need to develop over a number of years.

Featured Image from Shutterstock

Huobi’s Derivatives Markets Platform Surpasses $50 Billion “Cumulative Volume’

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Huobi’s Derivatives Markets Platform Surpasses $50 Billion “Cumulative Volume’

huobi-s-derivatives-markets-platform-surpasses-50-billion-cumulative-volume

Huobi’s cryptocurrency derivatives market trading platform, Huobi DM, has reportedly seen its “cumulative trading volume” surge to over $50 billion since its beta version was introduced in December 2018.

In a press release shared with CryptoGlobe, Huobi Global’s CEO, Livio Weng, noted:

The desire to go both long and short in a volatile market has certainly helped fuel our growth but so has Huobi DM’s ever-expanding list of contract types, the fact that we’ve managed to keep a record of zero clawbacks since launch, and, of course, the continued support and loyalty of both retail and institutional traders – especially market makers.

According to Huobi DM’s management, the crypto trading platform has not “issued a single clawback” since it was launched. Moreover, Huobi’s development team has reportedly been working to improve the overall efficiency and functionality of its digital asset-based derivatives trading platform.

Future Upgrades To Provide “Options For Arbitrage, Speculation, Hedging”

As mentioned in Huobi’s announcement, the platform’s developers will add “trigger order functionality” to the exchange at some point later this year. This will reportedly “allow users to automatically open and close trades” – based on specific market conditions. Other features expected to be introduced during “Q1 and Q2 of 2019” include “websocket functionality” – which is described by Huobi as “a bonus feature” for traders who access their platform through an API.

As explained by Huobi’s management, the Huobi DM gives users the option to enter long and short positions on bitcoin (BTC), ether (ETH), EOS, and litecoin (LTC). Huobi is also planning to launch XRP derivative contracts so that users can long or short it in the near future. Introducing XRP-based derivatives will also provide users the “options for arbitrage, speculation, and hedging.”

Risk Controls, Real-Time Risk Supervision

According to Huobi’s press release, “20% of the income generated by Huobi DM” is used to buyback the Huobi Token (HT), which is the native cryptocurrency used on Huobi’s exchanges. As noted by Huobi, its derivatives markets platform provides “superior risk management” features such as “price limit, order limit, and position limit.”

Other features to be added to Huobi DM include:

  • Improved “risk control: with advanced “price limit mechanism”,
  • “Real-time risk supervision: constantly monitor contract prices, index prices, abnormal transactions, and positions”,
  • “Newly raised open position limits for all crypto contracts to up to twice their previous level”,
  • “User protections: 20,000 BTC Huobi Security Fund to protect users against catastrophic security failures … dedicated Risk Management Insurance Fund for each trading pair against unfilled liquidation order losses”

Iced Tea Company Goes Full Blockchain, Again

Iced Tea Company Goes Full Blockchain, Again

Long Blockchain, formally known as Long Island Iced Tea Corporation, has announced that it will sell its drinks business to EC22 Ventures Corp and plans to completely refocus on blockchain technology, in the Securities Exchange Commission (SEC) filing dated March 6, 2019.

We all know that there are times where a company comes to a crossroads and has to decide how it will proceed to profit in an ever-changing world of emerging technologies and fickle consumers. It appears as though a company that was previously focused on the iced tea industry is now looking to pivot and make blockchain technology their central focus. Interestingly enough, this is not the first time that they have considered pivoting towards the sector.

A Full Pivot

Many cryptocurrency investors are focused on the long-term ways that blockchain can improve the world, rather than focusing on short-term crypto gains.

However, that didn’t stop various companies from re-focusing on blockchain or cryptocurrency during Bitcoin’s massive bull run in late 2017. One example was a UK gaming company Veltyco, and their stock price spiked considerably after announcing that it was exploring “discussions with blockchain and cryptocurrency providers.”

One company that infamously did this was none other than a company called the Long Island Iced Tea Corporation in December 2017. Specifically, the company’s shares rose over 400 percent after announcing that they were pivoting to blockchain. The company was still planning on selling its drinks, named after the famous cocktail.

However, the company now plans on selling its drinks business to focus on blockchain entirely.

More Information

Long Blockchain, formerly known as Long Island Iced Tea Corporation, is based in Farmingdale, Long Island, and they have made ready-to-drink lemonade and iced tea products for several years.

After the massive rise in share price, the Securities Exchange Commission (SEC) stepped in to investigate in 2018. At the time of the subpoena, the company had a market capitalization of less than $5 million, which is less than 1/10th of the market capitalization of the company in December 2017.

The company has reached a deal with EC22 Ventures Corp, which is based in Canada and involves a combination of both cash and shares.

EC22 is seeking to raise $2 million for the transaction, as well. The deal is not completed, but a letter of intent is officially in place. Shares of Long Blockchain currently trade at 34 cents, as of press time.

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