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Blockchain-for-Banks Startup Switches From Hyperledger to R3’s Corda

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MonetaGo, a software development company that builds private blockchains for financial institutions and central banks, has decided to change its underlying architecture from Hyperledger Fabric to R3’s Corda platform.

The New York-based firm, which has been testing its blockchain-based anti-fraud platform for receivables financing in India, cited concerns with how Hyperledger Fabric would scale up once large numbers of participants joined the system.

 MonetaGo CEO Jesse Chanard told CoinDesk,

“As we looked at the different scalability pieces of Hyperledger, we saw that it could get challenging, at least at the current throughput of Fabric. So we started doing some testing on Corda and realized, at least in this specific case, it made a lot of sense.”

Specifically, Hyperledger uses numerous channels, or “subnets,” to ensure the privacy of data shared between parties on the blockchain. It’s this facet of its architecture – which is evolving with each version of Fabric, it must be said – that Chenard is referring to. 

“Trade finance involves thousands and thousands of participants Looking at the scalability and load testing, you have to ask how will Fabric scale when you’ve got tens of thousands of suppliers with tens of thousands of channels,” he said.

Corda, on the other hand, tackles privacy in a different way: it only shares data between counterparties to a deal (and possibly their regulators) rather than broadcasting it like on a public blockchain, removing the need for partitioning.

Hyperledger declined to comment on MonetaGo’s change of platform choice.

India to Mexico

A former bitcoin exchange that pivoted to enterprise software, MonetaGo had already been working with Corda to automate the issuance of commercial paper, yet another reason to make the change, Chenard said.

The next version of MonetaGo’s receivables anti-fraud network, built on Corda, will go live early this year in Mexico, he said. 

David E. Rutter, R3’s founder and CEO, said in a statement: “We’re excited to see the network running in production on Corda Enterprise with a number of our member banks in Mexico.”

In April of last year, MonetaGo announced that its receivables financing blockchain on Hyperledger Fabric was being tested in conjunction with the Reserve Bank of India. The central bank licensed it to three so-called factoring exchanges –  RXIL, A.TReDS, and M1xhange – where small businesses bring invoices to obtain financing from banks.

Squaring off

This is not the first time organizations that have been building on Hyperledger have changed their minds and moved to R3 Corda.

It has happened on a rather large scale in the blockchain and insurance world, where both the B3i and RiskBlock consortiums migrated to R3 after kicking the tires of Fabric.

However, the trade finance blockchain space has remained evenly split with likes of we.trade on the Hyperleder Fabric side and Marco Polo and Voltron using Corda.

Chenard explained that interoperability with the Corda trade finance ecosystem was another driver for MonetaGo’s decision, concluding:

“The trade finance solutions we are really looking at are Voltron and Marco Polo and we began to think, ‘wouldn’t it be great if you were writing this stuff natively for Corda, rather than trying to figure out how to connect Hyperledger and Corda and vice versa?’”

David Rutter image from CoinDesk archives

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Central Banks See ‘No Value’ in Issuing Digital Currency: BIS Chief

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The general manager of the Bank for International Settlements (BIS) has again warned that caution is needed when considering central bank digital currencies.

In a speech at the Central Bank of Ireland on Friday, Agustin Carstens said that central banks today “are not seeing the value” of venturing into the unknown when it comes to issuing a central bank digital currency (CBDC), as such a move could bring fundamental changes to both financial stability and the monetary system.

The current monetary system, he explained, consists of two tiers – the customer-facing banking system and the central bank – which both work together. However, with a CBDC, the deposit and lending business would shift from commercial banks to central banks, producing a one-tier system

Carstens continued:

“There are historical instances of one-tier systems where the central bank did everything. In the socialist economies before the fall of the Berlin Wall, the central bank was also the commercial bank. But I do not think we can hold up that system as something that will serve customers better.”

At times of financial stress, money tends to move away from banks that are seen as high risk towards banks that are considered more secure, the BIS chief continued. Therefore, it is “not far-fetched” to picture a scenario in which a CBDC could command a premium over a fiat currency. For example: “where one euro of deposits in the commercial bank buys less than one euro’s worth of central bank digital currency,” Carstens said.

A central bank digital currency would also impact the monetary policy environment, he said, adding that it would “change the demand for base money and its composition in unpredictable ways.”

Furthermore, with demand for cash still high in most countries, there is “no urgency” to come up with a substitute for cash in the form of a CBDC, Carstens said, adding that the technology is also still “broadly untested.”

As a result of all these uncertainties, central banks prefer to “tread cautiously” into the area of CBDCs. “Before we open up the patient for major surgery, we need to understand the full consequences of what we’re doing,” Carstens cautioned.

He stated:

“So far, experiments have not shown that new technologies would work any better than existing ones. There is no clear demand for CBDCs on the part of society. There are huge operational consequences for central banks in implementing monetary policy and implications for the stability of the financial system.”

Last July, the BIS head predicted a bad ending for cryptocurrencies, saying that they represent “a bubble, a Ponzi scheme and an environmental disaster.” And in February 2018, Carstens warned that cryptocurrencies could become “parasites” on the financial system. He also claimed that cryptocurrencies are “not sustainable as money,” adding that they fail to meet the “basic textbook definition” of a currency.

Earlier this month, the Basel Committee on Banking Supervision, part of the BIS, also warned that the growth of cryptocurrencies poses a number of risks to banks and global financial stability.

Agustin Carstens image via CoinDesk archives 

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Bitcoin Holds Just Over $4,000 as Top Cryptos See Slight Losses

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Sunday, March 24 — most of the top 20 cryptocurrencies are reporting slight losses on the day by press time, according to data from CoinMarketCap.

Bitcoin (BTC) is down just over a tenth of a percent on the day, trading at around $4,021, according to CoinMarketCap. Looking at its weekly chart, the current price is just over a quarter of a percent lower than $4,036, the price at which Bitcoin started the week.

Bitcoin 7-day price chart. Source: CoinMarketCap

Bitcoin 7-day price chart. Source: CoinMarketCap

On March 18, the option to donate Bitcoin, along with eight other cryptos, appeared on the website of Tor digital privacy software.

Ethereum (ETH) is holding onto its position as the largest altcoin by market cap, which is at about $14.4 billion. The second-largest altcoin, Ripple (XRP), has a market cap of about $12.9 billion by press time.

ETH is down by a slight half a percent over the last 24 hours. At press time, ETH is trading around $137, after having started the day at roughly the same price. On its weekly chart, Ethereum has seen its value decrease by nearly three percent.

Ethereum 7-day price chart. Source: CoinMarketCap

Ethereum 7-day price chart. Source: CoinMarketCap

Recently news broke that leading Ethereum browser extension Metamask reportedly broadcasts ETH addresses to all websites a user visits in its default settings.

Second-largest altcoin Ripple has is also down about half a percent in the 24 hours to press time, and is currently trading at around $0.309. Looking at the coin’s weekly chart, its current price is also nearly three percent lower than $0.318, the price at which it started the week.

Ripple 7-day price chart. Source: CoinMarketCap

Ripple 7-day price chart. Source: CoinMarketCap

Among the top 20 cryptocurrencies, the one reporting the most notable price action — and one of the few coins in the green over the last 24 hours — is Binance Coin (BNB), which is up by over 11 percent.

As Cointelegraph reported earlier today, Binance Coin is employed by the new format of Binance’s token launch service, Launchpad, for acquiring tickets to access a lottery to acquire new altcoins.

Meanwhile, the total market cap of all cryptocurrencies is currently equivalent to $140 billion, which is nearly identical to its value one week ago, up slightly from $139.7 billion

In recent news, the general manager at the Bank for International Settlements, Agustin Carstens, advised against the issuance of central bank digital currencies (CBDCs) in a speech in Dublin. Carstens explained that a CBDC could facilitate a bank run, enabling people to move their funds from commercial banks to central bank accounts faster, thus destabilizing the system.

At the end of last week, an analysis from cryptocurrency index fund provider Bitwise Asset Management to the United States Securities and Exchange Commission was published, claiming that 95 percent of volume on unregulated exchanges appears to be fake or non-economic in nature.





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US Institutional Crypto Exchange Seed CX Expands to Asia With New Partnership

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United States-based institutional cryptocurrency exchange Seed CX has partnered with Singapore-based fintech company Hydra X to offer its trading service in Asia. Seed CX announced the development in a press release published on March 21.

Per the announcement, Seed CX will join the list of supported digital asset trading venues available on the Sigma trading platform offered by Hydra X, which is currently in public beta. The partnership will also reportedly allow institutional Sigma users to access Seed CX’s fiat-crypto gateway.

Seed CX is a licensed digital asset exchange for both spot market and U.S. Commodities and Futures Trading Commission (CFTC)-regulated derivatives. As Cointelegraph reported at the time, Seed CX closed a $15 million funding round led by alternative investment firm Bain Capital in September last year.

More recently, in January, the exchange launched an on-chain wallet solution and then also spot trading, with both solutions limited to institutional clients.

An analysis released earlier this week by crypto index fund provider Bitwise Asset Management argued that 95 percent of volume on unregulated exchanges appears to be fake or non-economic in nature.





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