Nasdaq Could Help Overstock Push Blockchain Tech into Financial Mainstream

Bitcoin Magazine
Nasdaq Could Help Overstock Push Blockchain Tech into Financial Mainstream
nasdaq

Nasdaq has become one of the first multinational financial services companies to delve into non-currency usage of blockchain technology. On Monday, May 11, the company announced that it would begin to leverage the colored coin protocol Open Assets to “expand and enhance the equity management capabilities offered by its Nasdaq Private Market platform.”

According to Nasdaq CEO Bob Greifeld, the distributed ledger function of the blockchain will “modernize, streamline and secure typically cumbersome administrative functions, and will simplify the overwhelming challenges private companies face with manual ledger record-keeping.”

Nasdaq joins the blockchain-integrated securities exchange market field just a few weeks after Overstock’s Medici Project filed S-3 forms with the Securities and Exchange Commission, outlining its intention to issue new stocks or securities, including the potential to issue digital securities.

In an interview with Bitcoin Magazine, Overstock.com’s director of communications, Judd Bagley, welcomed Nasdaq’s announcement, noting several ways in which it could have a positive impact on the financial sector.

The first is in overcoming the hurdle of market acceptance. “The actual people who will be clicking the mouse authorizing real trades need to feel comfortable with this new paradigm, which upends a 75-year-old system some don’t currently see as broken,” said Bagley. Having Nasdaq on board could help to push blockchain technology into the financial sector mainstream.

Regulatory acceptance is another matter. According to Bagley, it’s up to companies like Overstock and Nasdaq “to impress upon regulators that a stock exchange based on decentralized ledgers is not only as good as what’s currently in place, but better.”

Bagley said that with Overstock in the process of getting SEC approval to issue digital shares, it has developed some “very interesting financial innovations” that will be rolled out on the Medici platform in the near future.

“Understandably, we’re expecting some probing questions. After all, regulators are, by nature, conservative. But this is one of the reasons we are so pleased to see NASDAQ getting in on blockchain trading. We can use all the support we can find when it comes to getting this new approach approved. Having NASDAQ working to meet the same regulatory goals as we are can only help us.”

Overstock CEO Patrick Byrne has been outspoken in the past about Wall Street’s culpability when it comes to shielding bad actors in the financial sector. Bagley does not expect that Nasdaq’s latest move will do much to affect this larger problem.

“One of the reasons young companies avoid the public equity markets is concern over the predations of illegal short sellers,” he explained. “Blockchain trading of pre-IPO shares will go far to keep bad actors from preying on these companies. So on that level, Nasdaq is joining us in doing a good thing.”

Trading of pre-IPO shares, however, represents only a small fraction of the overall financial trading picture, Bagley added. “Decentralized ledgers like the blockchain are also extremely well-suited for the trading of shares of public companies, and so we’re incorporating that functionality into Medici as well.”

 

 

 

Photo: Time Square/New York / CC BY 2.0

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The Euro Banking Association Publishes Crypto Technologies Report
eba-day

The Euro Banking Association (EBA) has published two reports on Digital Customer Service Interfaces (DCSI) and crypto-technologies, with the intention of detailing the electronic payments landscape of the future. The reports have been announced at the EBAday payments conference in Amsterdam, Finextra reports.

The Euro Banking Association is a practitioners’ body for banks and other service providers supporting a pan-European vision for payments, with membership including more than 180 institutions from across Europe and beyond. Its mission is to provide payment professionals with a country-neutral forum for driving and contributing to the delivery of pan-European co-operative payment initiatives and business practices.

The reports, produced by the EBA’s Working Group on Electronic Alternative Payments (e-AP WG), are intended to help financial institutions (FIs) navigate the changing payments landscape. The publication of the EBA reports follows closely the EU Commission’s “Blockchain and Digital Currencies Workshop” on April 27.

According to the EBA, digital currencies such as bitcoin or ripple have the ability to disrupt the payment and banking landscape and assist in the fight against cyber-criminals.

The opinion paper on Digital Customer Service Interfaces focuses in particular on a ‘virtual layer’ on top of the existing single euro payments area (SEPA) transfer and card payment infrastructure, referencing the EBA’s MyBank offering that is seeking to become a ‘one stop shop’ e-commerce transaction platform.

The crypto-technologies paper, titled “Cryptotechnologies, a major IT innovation and catalyst for change,” is an information paper for transaction banking and payments professionals. It details four categories (currencies, asset registry, application stack, asset centric), applications such as remittances and real-time payments and scenarios, and describes the respective potential for these different categories of applications to have a major short-term impact on the architecture of systems and processes in a number of digital transaction-based industries. It also details four use cases for the most promising category. It concludes by setting forth four different scenarios of how organizations in transaction banking and payments could position themselves with regard to these new technologies.

“Cryptotechnologies are a key subject for further study for transaction banking and payment professionals, especially against the background of evolving financial infrastructures,” said Vincent Brennan, deputy chairman of the Euro Banking Association and chair of the EBA e-AP WG. “The information paper put together by the e-AP Working Group provides a hands-on introduction to this topic, which specifically focuses on the practical potential and related implications of cryptotechnologies for the transaction banking and payments area in the short to medium term.”

The four scenarios analyzed by the paper reflect different degrees (high and low) of cooperation between banks and the crypto-community, and crypto-adoption by banks. The four scenarios are dubbed:

“Out in the cold” – the creation of a separate cryptoconomy.
“First amongst equals” – an approach where individual payment service providers (PSPs) strive to position themselves as developers of cryptotechnology applications.
“Awake and aware” – a collaborative approach based on constant dialogue and possible partnerships in selective areas.
“United we stand” – a collaborative approach based on partnerships between PSPs and the cryptotechnology community embracing a successful integration of processes.

Fidor Bank, a bitcoin-friendly German bank that makes extensive use of social media, is presented as a technology innovator and an example of a bank that leverages the latest regulation to provide cryptotechnology-powered services to its customers.

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London School of Economics & Bank of England Represented at Inaugural Bitcoin & Blockchain Leadership Forum
bitcoin-leadership-forum

On May 14 the Social Media Leadership Forum will host the inaugural meeting of the Bitcoin and Blockchain Leadership Forum, a new initiative to explore the future of bitcoin and other digital currencies as well as the disruptive impact of the blockchain.

The event will take place in London at Allen & Overy, a legal consulting firm.

Currently, the Bitcoin and Blockchain Leadership Forum website is scant on details and invites interested readers to subscribe to their mailing list. On Twitter, the Forum invites people to come and explore the next generation Internet and hints at regular sessions after the inaugural event.

The Social Media Leadership Forum is a membership organization that organizes periodic events focused on business-related aspects of emerging digital technologies, hosted in the offices of a variety of world-leading member organizations based in London.

According to an invitation email shared on Reddit, representatives of the London School of Economics and the Bank of England will participate in the Bitcoin and Blockchain Leadership Forum and give talks.

The participation of representatives of the Bank of England is especially interesting. As recently noted by The Financial Times, Great Britain is on its way to becoming a global hub for bitcoin and other digital currencies, with both the government and Bank of England having made recent moves designed to stimulate the development of digital fintech.

A few months ago the Bank of England published a research paper titled “Innovations in payment technologies and the emergence of digital currencies.” The initial three bullet points provide a concise summary of the Bank of England’s thinking:

Modern electronic payment systems rely on trusted, central third parties to process payments securely. Recent developments have seen the creation of digital currencies such as bitcoin, which combine new currencies with decentralized payment systems.
Although the monetary aspects of digital currencies have attracted considerable attention, the distributed ledger underlying their payment systems is a significant innovation.
As with money held as bank deposits, most financial assets today exist as purely digital records. This opens up the possibility for distributed ledgers to transform the financial system more generally.

“Digital currencies do not currently pose a material risk to monetary or financial stability in the United Kingdom, but it is conceivable that potential risks could develop over time,” reads the conclusion of the Bank of England’s report. “The distributed ledger is a genuine technological innovation that demonstrates that digital records can be held securely without any central authority.”

A recent U.K. Treasury document titled “Digital Currencies: Response to the Call for Information” shows that the U.K. government is interested in supporting and understanding blockchain-based digital fintech, and understands the potential benefits it could bring to society. In particular, the government is launching a new research initiative that will bring together the Research Councils, Alan Turing Institute and Digital Catapult with industry in order to address the research opportunities and challenges for digital currency technology, and will increase research funding in this area by £10 million (U.S. $14.6 million) to support this.

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Merchant Site PayIvy.com Acquired by Digital Currency Investor Newnote Financial
newnote

After its recent purchase of the bitcoin exchange Cointrader.net, Canadian company Newnote Financial has now moved into the multi-vendor website market. On May 12, 2015, the Vancouver-based corporation announced its acquisition of PayIvy.com, an online site that allows vendors to register and sell digital products and services, including ebooks, software, graphic designs, web designs and intellectual property.

PayIvy co-founder Lode Kennes says in a press release that the company hopes to better reach its potential following the acquisition.

“With the investment from Newnote, PayIvy will be able to serve more sellers with features that no other site can offer,” he said.

Kennes, along with co-founders Ton Manh Nguyen and David Snyder, will stay on at PayIvy to assist with daily operations and development.

“This is a very strategic acquisition for Newnote,” said Newnote CEO and President Paul Dickson. “Each of our services will be integrated into one another utilizing our APIs.”

Besides Cointrader.net, Newnote also owns and operates the CoinExchange Android app, Coinpayments.net, and the BitVisits.com paid-to-surf advertising platform, in addition to several other cryptocurrency-related assets.

“Merchants can now set up shop with PayIvy.com, accept payments through Coinpayments.net, convert bitcoin to cash on Cointrader.net, and transfer the funds into their bank account or remit overseas instantly,” says Dickson. On April 24, 2015, Newnote announced that it had signed a strategic partnership with Rebit.ph of the Philippines to enable remittances.

PayIvy merchants are also able to protect their digital wares from online piracy and other unauthorized software distribution and sharing. Custom fields enable customer data collection and an advanced affiliate program is available for sellers looking to promote their products. The site accepts various crypto-currencies, including bitcoin, litecoin and omnicoin via Coinpayments.net.

Dickson stressed Newnote’s commitment to cracking down on recent illicit sales of Netflix and other accounts through the PayIvy site.

“Our priority is to protect intellectual property,” Dickson said in a telephone conversation with Bitcoin Magazine.

In its first six months of operation, PayIvy has registered over 10,000 merchants, processing over $200,000 per month in sales. Newnote reports paying a purchase price of CDN $260,000 in cash and stock.

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Onename Launches Blockchain Identity Product Passcard
passcard

Blockchain startup Onename launched its new product Passcard this week, which uses a blockchain-tied profile to create a secure and “trustless” identity. Onename plans on eventually using it as a sort of digital key to your identity, potentially replacing passwords, the keys to your house and even your passport.

Onename takes advantage of Bitcoin’s distributed ledger, the blockchain, which is used to record and verify bitcoin transactions. It is what enables the digital currency to properly function and can also be used to record any kind of information in a public ledger.

“Passcards are a digital form of identity and access control designed to initially replace passwords, and in the future, replace forms of physical identification like passports and driver’s licenses. You’ll be able to use it to enter your apartment or your office and when asked to present identification in an in-person context. The future of identity is here,” read the company’s blog post.

Your access to everything

Passcards will expand upon the company’s earlier blockchain identity product, which was just a onename.io-hosted profile, by creating a fuller identity, allowing users to post their Passcard on websites, such as a blog or company website.

The move in is preparation of enabling blockchain profiles to be used to log into websites and apps. That will give the product its first real use case and actual utility.

“Currently, passwords help you access your online life just like your wallet and keys help you access your physical life. At a high level, passwords, identity cards, and keys are all forms of access control. Want to enter a bar? Show an identity card that says that you’re over 21. Want to access your Twitter account? Login with the username/password that you used to signup. Want to enter your home? Use the key that unlocks the door,” read a public statement.

Passcard can be seen in use on the blog of Onename investor Fred Wilson and the team page of decentralized marketplace project OpenBazaar. To get your own passcard, you can sign up at a registrar such as Onename.io or Namecoin.info. Onename also created Passcard.info, which serves as a portal for the new product and hosts a list of registrars.

Passcard uses a technology called Blockchain Name System (BNS), formerly called Onename, which, according to the company’s founders, Muneeb Ali and Ryan Shea, is similar to Domain Name System (DNS), but offers more security as there are “no trusted third parties or servers.”

The startup will be announcing more about BNS and will launch the app login feature soon.

Onename was founded in March 2014. The company raised an undisclosed seed round from Barry Silbert’s Bitcoin Opportunity Fund, Fred Wilson through Union Square Ventures, AngelList CEO and co-founder Naval Ravikant and investment firm SV Angel.

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