Three Bitcoin Finalists Vie for BBVA Open Talent Competition Honors in Barcelona

Bitcoin Magazine
Three Bitcoin Finalists Vie for BBVA Open Talent Competition Honors in Barcelona
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On September 22nd, the winners of the European division of the BBVA Open Talent Competition were announced in Barcelona, Spain. This year, three of the 15 finalists come from the Bitcoin and blockchain sector: Everledger, Safello and Vaultoro.

The purpose of the competition is to discover and support up-and-coming innovators in financial technology who are poised to “disrupt [the banking] industry in e-commerce, security, mobile payments, data and others.”

The two winners are selected from each of three territories: Europe, Latin America and the United States and the rest of the world. Those six companies not only take home $30,000 each, but also benefit from extensive mentoring and networking support from BBVA in the form of a two-week intensive course.

This year, Everledger was named one of the two European winners.

Based in the U.K., Everledger is a permanent ledger for diamond certification and related transaction history. Using blockchain technology, it acts as a fraud-detection system, overlaying big data from closed sources such as insurers and law enforcement.

“BBVA Open Talent provides an inflection point in the growth curve of Everledger and validates our role in the financial services ecosystem,” Everledger’s CEO Leanne Kemp told Bitcoin Magazine.

“Everledger is a business that will make a difference: At our very core we focus on the ongoing presence of blood diamonds, combatting fraud, theft and counterfeit luxury goods — a problem for consumers, law enforcement and insurers that tops £50 billion a year,” she said. “Blockchain provides a distributed global solution to a fragmented, scattered and complex global problem. With the support from the Barclays Accelerator, and now as a finalist in the BBVA Open Talent Competition, we are having conversations to create new financial and insurance products for diamonds.”

Joshua Scigala, co-founder of Vaultoro, was enthusiastic about the BBVA’s inclusion of his U.K.-based bitcoin and gold exchange.

“We are really proud to be a finalist in the BBVA awards,” Scigala told Bitcoin Magazine. “The developing world skipped the landline and went direct to mobile phones. They are now doing the same with traditional branch banking because it’s just too uneconomical to set up. Vaultoro enables anyone to easily enter the global economy securely by utilizing the native Internet currency, bitcoin, and removing the extreme volatility by combining the security of assigned gold bullion. This will go very far towards ending poverty by including a potential 5 billion people who have no real access to banking.”

Vaultoro is a real-time Bitcoin gold exchange that allows its users to convert their bitcoin instantly to gold and back, alleviating volatility risk for bitcoin users. Its “bank-independent trading” allows users to trade gold in amounts as small as 0.001 gram.

The third bitcoin finalist, Safello, is a Swedish-based exchange that works with a wide network of European banks providing direct payment options, allowing customers to buy and sell bitcoin instantly, thereby avoiding exposure to market volatility.

“What’s most noticeable about this Open Challenge is the sheer amount Bitcoin selected,” Frank Schuil, CEO of Safello, told Bitcoin Magazine. “It shows the dedication from BBVA to embrace blockchain technology. With regards to our selection, of course our recent announcement with Barclays is sparking interest from other financial institutions. The fact that we are essentially building a new type of bank on top of blockchain technology is sparking interest.”

Everledger joins BitNexo, winner of the Latin American regional competition, as the second Bitcoin-based company to take home a BBVA award this year.

“In BitNexo’s mission to bring simplicity, speed and savings to cross border payments for SMBs through the use of blockchain technology, we had the honor of sharing the stage with 13 other amazing FinTech Startups from all around Latin America,” said Darren Camas, CEO and co-founder of BitNexo in a blog post. “To say I was impressed with the level of competition is an understatement.”

Information about all 15 finalists can be found on the BBVA Open Talent competition website.

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Austrailian Regulators Investigating Banks for Closing Accounts of Bitcoin Companies
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The Australian Competition and Consumer Commission has confirmed the launch of a formal investigation about the abrupt termination of banking support for many bitcoin companies in the country.

“It appears to me to be an amazing coincidence that a number of large banks have all of a sudden decided to deny services to fledgling Bitcoin and digital currency operators. They are clearly competitors to their business model, albeit small ones at this stage, and there are clear laws that we’ve got against businesses refusing to supply other businesses if they do so for an anti-competitive purpose.” said Senator Matthew Canavan, who encouraged the ACCC chairman Rodd Sims to lead an investigation on the incident.

Canavan requested an investigation to question the banks’ motive and reasoning behind the blacklisting of bitcoin companies.

“I think the ACCC should be asking the banks some serious questions about why they’ve done this and on what legal grounds they believe that they should not be providing services to Bitcoin operators,” said Canavan.

It has been reported that 17 bitcoin companies in Australia have had their bank accounts closed down, and have been cut off completely from all banking support.

“I’ve been blacklisted from Commonwealth Bank, National Australia Bank, Westpac, St George, Bank of Melbourne, Bank SA, Bank of Queensland, Rams and BT Superfund,” said Bitcoin trader Michaela Juric.

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Bank of England Chief Economist: Blockchain-based Digital Currency Issued by Central Banks Could Replace Cash
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In a talk given at the Portadown Chamber of Commerce in Northern Ireland on September 18, Andrew G Haldane, Chief Economist at the Bank of England (BoE), has hinted at the possibility that the U.K. government might issue a digital currency. Though the disclaimer “The views are not necessarily those of the Bank of England or the Monetary Policy Committee” ensures plausible deniability, Haldane’s talk seems to indicate that the BoE is at least seriously considering the possibility.

Haldane is chief economist at the BoE and executive director of monetary analysis and statistics. Listed by Time Magazine in 2014 as one of the 100 most influential people in the world, Haldane is a member of BoE’s Monetary Policy Committee and oversees research and statistics across the bank.

Haldane focuses on the inability of central banks to set negative interest rates to stimulate economic growth, which hinders the effectiveness of monetary policy and is known as the Zero Lower Bound (ZLB) problem.

“A central bank cannot reduce nominal interest rates below zero,” explained a 2014 IMF working paper cited by Haldane. “This constraint arises from the existence of an asset, cash, with a guaranteed return of zero. A negative interest rate would mean that someone lends $100 and receives less than $100 in the future. Such a loan would never occur, because the lender could do better by putting cash in a safe deposit box.”

Therefore, Haldane suggests looking for technological means for implementing a negative interest rate on physical currency. More than a century ago, German economist Silvio Gesell proposed a stamp tax on currency to generate a negative interest rate. Modern variants of the stamp tax on currency have been proposed – for example, by randomly invalidating banknotes by serial number.

Another possibility is to abolish paper currency, which would also represent a way to fight criminal activities that rely on cash exchange.

Yet another possibility would be to issue government-backed currency in an electronic rather than paper form.

“This would preserve the social convention of a state-issued unit of account and medium of exchange, albeit with currency now held in digital rather than physical wallets,” says Haldane.  “But it would allow negative interest rates to be levied on currency easily and speedily, so relaxing the ZLB constraint.”

Haldane observes that the technology underpinning digital currencies has changed rapidly over the past few years, due to the emergence of Bitcoin and crypto-currencies.

“What I think is now reasonably clear is that the distributed payment technology embodied in Bitcoin has real potential,” says Haldane. “On the face of it, it solves a deep problem in monetary economics:  how to establish trust – the essence of money – in a distributed network.  Bitcoin’s “blockchain” technology appears to offer an imaginative solution to that distributed trust problem.”

Whether a variant of this technology could support central bank-issued digital currency, and whether the public would accept it as a substitute for paper currency, are, according to Haldane, open questions that do not have easy answers.

“That is why work on central bank-issued digital currencies forms a core part of the bank’s current research agenda,” concludes Haldane.  “Although the hurdles to implementation are high, so too is the potential prize if the ZLB constraint could be slackened.  Perhaps central bank money is ripe for its own great technological leap forward, prompted by the pressing demands of the ZLB.”

In a previous presentation, Haldane stated that digital currencies are “harder money” than a gold standard, because “sustained adoption would see ongoing deflation.” A few months ago the Bank of England published a research paper titled “Innovations in payment technologies and the emergence of digital currencies.”

“The distributed ledger is a genuine technological innovation that demonstrates that digital records can be held securely without any central authority,” reads the conclusion of the paper.  A recent U.K. Treasury document titled “Digital Currencies: Response to the Call for Information” shows that the British government is interested in supporting and understanding blockchain-based digital fintech, and understands the potential benefits it could bring to society.

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Bitcoin Derivatives Company LedgerX Appoints Ex-CFTC Commissioner Wetjen to Board
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LedgerX, an institutional bitcoin trading and clearing platform, announced this week that Mark Wetjen, the ex-commissioner of the U.S. Commodity Futures Trading Comission (CFTC), will join its board.

Nominated by President Barack Obama in 2011 and unanimously confirmed by the Senate as one of the five CFTC commissioners, Wetjen both helped to implement the first trading mandate for certain types of interest rate and credit default swaps and pushed the CFTC to undertake approximately 95 enforcement cases under the Dodd-Frank Act and Commodity Exchange Act.

He also served as the acting chairman and sponsor of the CFTC’s Global Markets Advisory Committee, which advises the CFTC on issues relating to the “the integrity and competitiveness of U.S. markets and U.S. firms engaged in global business.”

LedgerX already recruited a CFTC Commissioner to their team: James E. Newsome, Ph.D., an Independent Director at LedgerX, served at the CFTC from 2000 until 2004, when he assumed the role of President and CEO of the New York Mercantile Exchange, which was acquired for $11.2 billion in 2008 by the CME Group, the parent company of the Chicago Mercantile Exchange.

LedgerX applied for both a Swap Execution Facility (SEF) and Derivatives Clearing Organization (DCO) license last year with the CFTC but has received only a temporary SEF registration at this point. LedgerX CEO Paul Chou has publicly stated that “only with both SEF and DCO licenses from the CFTC can we clear and physically deliver the underlying commodity, offer an order-book trading venue and attract institutional traders.”

Following last week’s announcement from the CFTC declaring bitcoin a commodity, the Wetjen’s appointment will certainly help LedgerX navigate the CFTC’s SEF and DCO license application process in order to become a sanctioned bitcoin trading and clearing platform.

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BitGo Processes Over $1 Billion in Bitcoin Transactions in Third Quarter
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Leading bitcoin security platform and multi-signature / P2SH (pay-to-script hash) bitcoin wallet provider BitGo has transacted more than $1 billion worth of bitcoin transactions in a single quarter.

“BitGo was the first to pioneer the secure, multi-signature wallet platform for bitcoin,” said BitGo CEO and co-founder Mike Belshe. “Security is never a finished feature, so we’re continually raising the bar. As we reach this billion-dollar milestone, we’re happy know so many customers are seeing the value of our solution.”

The BitGo wallet platform and API have not experienced a single breach or theft of bitcoin since its launch in 2013. The company has been focused on creating the world’s most secure bitcoin wallet, prioritizing security and multi-signature solutions.

The platform’s API services and products designed for both developers and institutions enable users to create hundreds of thousands of addresses, with a real-time view of digital asset transactions and settlements.

“For the sake of accuracy, our metrics do not count change address outputs. As an example, if a user sends someone $13 from a wallet with $17 in it, we only count the $13 transaction and not the transfer of $4 back into the wallet.” said Regina Scolaro, Director of Marketing for BitGo. “We have chosen to use this methodology because we believe that in order to get a true sense of activity within the Bitcoin space, this should be the standard measurement.”

Furthermore, the BitGo platform has secured its bitcoin wallets with multi-signature pay-to-script hash technology, also known as P2SH, allowing users to send bitcoin to addresses secured in various unusual ways without knowing much about the security details, thus creating completely unique transactions and settlements.

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