This week Bitcoin has managed to top gold in terms of the per unit value. As of Thursday’s close of trade, the price of Bitcoin stood at $1,268 against $1,233 per troy ounce of gold. Is Bitcoin about to become more valuable than gold?
According to Bloomberg, the gold price has been at a three-year low, with a larger share of investors divesting from gold, when compared to Bitcoin. The advantage of cryptocurrency lays in its absolute uncorrelation with other assets such as real estates, equities, oil, etc. However, despite tremendous upsides, Bitcoin is still a highly volatile currency. The price changes are like a roller coaster ride with its ups and downs. Recent significant price hike is believed to be caused by the rising demand in China, as well as the speculation around possible Bitcoin ETF approval by the Securities and Exchange Commission.
Though this overtake of gold can be considered as a significant milestone for cryptocurrency, it is still a big question whether Bitcoin will leave traditional assets in the dust.
Bitcoin Core 0.14
At the recent Bitcoin Meetup Switzerland, Bitcoin Core contributor Jonas Schnelli shared some of the key features of upcoming Bitcoin Core 0.14. The main improvements will concern optimization of codebase and overall performance, introduction of new signature cache, extensive network refractor, and a number of other cleanups.
Bitcoin Core 0.14 will address the issue of fees estimation, as well as the default confirmations target in the GUI. It introduces manual pruning, which allows users to prune old blocks on their hard drive with an RPC command.
In addition, some warning and activity messages tools were added to improve communication of users with the software.
The EU advances in cryptocurrency regulation
With the accelerating speed of cryptocurrency acceptance, some lawmakers are still concerned about it being used for illegal activities. Supposedly Bitcoin’s “anonymity” attracts criminals to use it for money laundering, drugs and weapons trafficking, but also the opinions regarding this theme are divided among the law makers. Last month, the representative of Bank of Finland, Aleksi Grym, indicated that the anonymity and transaction speed of Bitcoin were not suitable for criminal activities and that the questionable reputation of bitcoin in that sense was unreasonable:
“For illegal activity there are considerably better ‘currencies’ whose existence we don’t know. Even traditional cash plays a way larger role in criminal activity than Bitcoin.”
Even though the use of bitcoin for illegal activities is not extended, a slightly tighter regulation in cryptocurrencies and anonymous prepaid cards is not negative for the future development of the sector.
This week, cryptocurrencies were included into Amendments to the European Union anti-money laundering law approved by the Economic and Monetary Affairs and Civil Liberties committees seeking to eliminate gaps in the EU legislation to ensure prevention of money laundering and financing of terrorism.
Even though the volume of operations with cryptocurrencies is lower comparing to other financial activities, there are about 70,000 of such transactions per day, according to the European Central Bank. Directive places digital currencies under the same rules and obligations as other payment institutions. Thus, custodian wallet providers and cryptocurrency platforms will have to comply with the same requirements as other payment institutions and services. They will be obliged to verify identity of customers and monitor transactions in order to prevent them being used for laundering criminal proceeds.
Members of the European Parliament have previously supported suggestions for changes in the identification requirements. Thus the threshold for identification was lowered from €250 to €150 with the aim to discourage the use of prepaid cards for making transactions.
Inclusion of cryptocurrencies into amendments will certainly streamline regulation of cryptocurrencies in the EU and coordinate activities of member states to fight money laundering.
Bahrain and Singapore to pilot blockchain project
This week it was reported that Bahrain has held talks with the Monetary Authority of Singapore (MAS) addressing their intention to cooperate in piloting a blockchain project within the island-nation.
In November 2016, MAS has presented the proof-of-concept for a new payment system. Pilot project implies that partner banks will deposit cash as collateral with MAS in exchange for a digital currency issued by MAS which can be further used for instant international transactions.
Lately Bahrain government has been working on establishing a regulatory sandbox to enable fintech businesses to test their products and services solutions while ensuring their compliance with national regulations. State officials believe that blockchain technology has a huge potential in revolutionizing financial systems and business models, and intend to drive Bahrain to leading position in this space. Beside the area of commercial transactions, blockchain is believed to advance national real estate industry, as well as exchange of title deeds.
The first cryptocurrency-friendly bank
Polybius Foundation has announced the launch of Polybius Bank, the first bank specializing on provision of financial services for global businesses working with blockchain technology and digital currencies.
The idea to establish a cryptocurrency-friendly bank first emerged in 2016, and was followed by the establishing of Polybius Foundation. It would be fair to say that traditional banks are often suspicious when it comes to working with projects involving cryptocurrencies. Polybius Foundation aims to tackle this problem of lack of trust by offering an individual approach and creating a comfortable environment for businesses in the cryptocurrency and blockchain space. The Bank will be providing a wide range of services from credits secured through cryptocurrencies, to creation and management of investment portfolios. CryptoPay, HashCoins, and AmbiSafe are reportedly behind the initiative to establish the Bank.
Enterprise Ethereum Alliance to advance industry development
A number of world’s most innovative enterprises in the blockchain space have announced the establishment of the Enterprise Ethereum Alliance, which seeks to build and promote Ethereum-based technology solutions and standards.
Global giants such as Accenture, Banco Santander, BlockApps, ConsenSys, IC3, Intel, J.P.Morgan, Microsoft, and Nuco have reportedly formed the board of newly established consortium.
The main focus of EEA will be placed on the creation of an enterprises grade blockchain solution that could make it easier for its members to comply with various regulatory requirements existing in their industries. At the same time, Alliance will help members in finding ways to capitalize on the benefits offered by blockchain. The group will also experiment around development of industry governance and standards and facilitating open source collaboration in order to enable mass adoption of Ethereum-based solutions.
Founders of Alliance believe that it will play an important role in standardizing approaches to privacy, permissioning, consensus algorithms, safety and scalability with the general purpose to accelerate development of Ethereum ecosystem.
Writer: Alisa Tciriulnikova (Content Editor at Prasos Ltd)
Alisa Tciriulnikova is an explorer curious about the future of cryptocurrencies, blockchain, and fintech. Alisa holds a MSc in Social Sciences from the University of Tampere (Finland) and is currently pursuing a PhD researching integration of PPP model into pension industry.
Alisa Tciriulnikova is Content Editor at Prasos Ltd. She is an explorer curious about the future of cryptocurrencies, blockchain, and fintech. Alisa holds a MSc in Social Sciences from the University of Tampere (Finland) and is currently pursuing a PhD researching integration of PPP model into pension industry.