France’s Largest Bank BNP Paribas Loses $80 Million Due to Trader’s Pre-Vacation Snafu

According to multiple sources, BNP SA, known by many as the largest bank in France, reportedly made a loss of $80 million in derivative trades connected to the United States.

The sources confirmed that Antoine Lours, the Head of U.S index trading at BNP, is yet to return to his position at the bank. Lours has been away on vacation since Christmas when he initiated trades on the S&P 500 Index.

Increasing tensions between the United States and China over tariffs and trade disputes caused U.S stock prices to slump over the holiday. Although the stocks did regain their ground, the high volatility concerned many traders and investors, causing massive stock selloffs.

U.S. Trading Desk Shutdown

It hasn’t been the perfect start of 2019 for BNP Paribas. In addition to the $80 million lost over trades gone awry, the bank will close down its U.S. commodities derivatives desk. The commodities division consisted of 16 traders who traded commodities such as agricultural products, metals, and energy. The decision to close is in line with an earlier decision made by the bank to cease financing oil sands and shale projects.

According to an unnamed source, the decision indicates a series of adjustments made by the bank, aiming at protecting its profitability.

Jean Pierre Lambert, Analyst at London-based Keffe, Bruyette & Woods, said:

“The bank seems to be adopting enhanced discipline on costs and profitability at its markets activities.”

Opera Trading Desk

The bank will also be shutting down Opera Trading Capital, its proprietary trading division. The division, which makes risky bets with BNP’s capital, is being shut down after last year’s market volatility saw it struggle to make profits. The business is reportedly funded with over $600 million. The bank is reportedly closing it so its resources can be reallocated to client-focused businesses.

Major Banks Call Grim Results

BNP’s key trading business saw a 10% drop in revenue over three-quarters of 2018, while Citigroup Inc. also reported a 21% drop in trading fixed income, commodities and currency on Monday. JPMorgan Chase &Co. followed on Tuesday, claiming that its trading business was greatly affected by “challenging market conditions.”


Source
Author: Melanie Kramer
Image Credit

Does Bank of America’s Crypto Custody Show Irrelevance of Bitcoin ETFs?

This week, $312 billion Bank of America (BoA) filed a patent to offer crypto custody, targeting large-scale institutional investors and retail traders.

Some experts have said that the efforts of major financial institutions to create institutional products around cryptocurrencies will bolster the adoption of crypto in US markets, which will naturally lead to other publicly tradable instruments such as Bitcoin exchange-traded funds (ETFs).

LIONBIT

Bitcoin ETFs Not Necessary?

The patent of BoA, filed with the US Patent and Trademark Office, described a vault system with which institutions can safely store digital assets like Bitcoin. It read:

“The processor is also able to deposit the quantity of cryptocurrency into a vault connected to a network and determine a total quantity of cryptocurrency deposited into the vault. The processor may also, in response to determining the total quantity of cryptocurrency deposited into the vault exceeds a threshold, facilitate the disconnection of the vault from the network.”

In essence, the system of BoA is similar to the services offered by Xapo, a Hong Kong-based Bitcoin vault company that has been storing over $10 billion in Bitcoin on behalf of institutions since early 2014.

With such a system in place, BoA will be able to provide a platform for its clients and large institutions in the finance sector to allocate large sums of money into the crypto sector without concerns regarding security and regulation.

BoA stated that the primary purpose of its crypto vault system is to allow enterprises to safely store large amounts of digital assets while being able to conduct transactions on a daily basis.

“Enterprises may handle a large number of financial transactions on a daily basis. As technology advances, financial transactions involving cryptocurrency have become more common. For some enterprises, it may be desirable to securely store cryptocurrency,” BoA said.

In an interview with Forbes, Jonathan Hamel of Acadamie Bitcoin in Montreal explained that the introduction of institutional products around crypto like the BoA custody solution and Bakkt, a joint venture created by Microsoft, Starbucks, and the New York Stock Exchange, will significantly improve the physical over-the-counter (OTC) and institutional infrastructure.

TIP

In the near future, Hamel said that institutions will be able to comfortably invest through existing custodian solutions that are sufficient to bring in billions of dollars in new capital into the space.

As the OTC and institutional market improves, Hamel noted that ETFs and other publicly tradable instruments will inevitably arrive in US markets, emphasizing that investors do not have to be concerned about the approval of ETFs just yet.

“I don’t think (the rejections) are that important. The ‘physical’ over-the-counter/institutional bitcoin infrastructure is only getting started. The development of financial vehicles backed by bitcoin is inevitable. It’s not if, it’s when,” Hamel stated.

Institutional Market is Improving

Currently, the vast majority of investors are highly anticipating the debut of the first Bitcoin ETF because most believe that an ETF would bring in substantial capital into the asset class.

But, officials at the US Securities and Exchange Commission (SEC) have made it clear that there exists certain requirements ETF operators will have to meet and the first Bitcoin ETF is unlikely to emerge in US markets until early 2019.

In the meantime, as Hamel said, investors are still able to invest in the market through custodian solutions and the institutional market improves, more institutions will be willing to consider cryptocurrencies as a legitimate market to invest in as an alternative.


Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

Source
Author: Joseph Young
Image Credit


Peoples Token

Bank of Korea Says Crypto Investment Poses ‘Insignificant’ Risk to Local Financial Market

According to South Korean central bank the Bank of Korea (BOK), the outstanding balance of virtual currency accounts in domestic banks totalled $1.79 billion as of Dec. 2017, local news outlet Yonhap reported Friday, July 5.



The BOK’s report considered the $1.79 billion (2 trillion won) figure to be relatively low, as it is equivalent to around 8 percent of the total deposits operated by the country’s brokerage houses -–– reportedly worth 26 trillion won ($23.27 billion).The report therefore suggested that crypto markets do not pose a threat to traditional local financial markets:

“The amount of crypto-asset investment is not really big, compared with other equity markets, and local financial institutions’ exposure to possible risks of digital assets is insignificant. Against this backdrop, we expect crypto-assets to have a limited impact on the South Korean financial market.”

Notably, the BOK’s data set covered the height of the cryptocurrency markets’ unprecedented growth in late 2017 –– when Bitcoin (BTC) famously hit the $20,000 price point.

The central bank’s conclusion that cryptocurrencies pose a relatively limited risk to the traditional financial sector comes in the very same week that the Korean Financial Services Commission (FSC) revealed it is “not opposed” to cryptocurrencies and plans to align itself with the G20’s vision of “unified,” transnational crypto regulations.

March’s G20 summit proposed a firm July deadline for drafting regulatory recommendations for cryptocurrencies, calling on “international standard-setting bodies (SSBs)” to assess necessary “multilateral responses” that would then proposed for “global implementation.”

Korea is affirming the G20’s multilateral vision of the future of crypto regulations at what is arguably a pivotal time for its domestic crypto sphere. Important positive news has been forthcoming from the government throughout spring, notably including plans to lift the country’s blanket ban on domestic Initial Coin Offerings (ICOs).

Just last week, in a major legitimizing move, three Korean government ministries revealed a draft version of new blockchain industry classification standards, which notably recognized crypto exchanges as regulated financial institutions for the first time.


Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

Source
Author Marie Huillet 
Image Credit 

Don’t forget to join our Telegram channel for Crypto, Business & Technolgy news delivered to you daily

 

‘Whale’ Moves 48,000 Bitcoin for 4 Cents in Fees As Scaling Solutions Develop

The development of scaling solutions, along with a decrease in Bitcoin transaction throughput, has allowed for Bitcoin fees to drop under a dollar. A Bitcoin ‘whale’ utilized these dropping fees, moving 48,000 Bitcoin for just four cents.



$290 Million Transaction for Four Cents, Where Else Can You Do That?

Bitcoin fees were the talk of the town in December 2017, as Bitcoin fees briefly reached $50 when the network confirmed nearly 400,000 transactions each day. Since then confirmed transactions have halved, dropping to an average of 200,000 transactions on a daily basis.

This decrease in transactions has allowed for Bitcoin’s mempool to clear, as the network became clogged with transactions in the latter half of 2017. According to info aggregated by popular cryptocurrency infrastructure firm, Blockchain, the number of transactions waiting for confirmation has dropped by over 95%, from an average of 100,000 to 5,000.

It was widely speculated that Bitcoin’s critics, hell-bent on ruining Bitcoin’s credibility and reliability, purposely inflated Bitcoin transaction fees. These critics reportedly filled up Bitcoin blocks with ‘spam’ transactions, using the Bitcoin network for no real purpose.

However, others observed that the exponential increase in transaction fees was also due to the growth in the interest of Bitcoin, with retail consumers looking to transact value using the ‘flavor of the month.’

 

 

A whale, unidentified at the time of writing, has proved this point, paying four cents of fees for the transaction of over $290 million worth of Bitcoin. The transaction occurred late last night, with the Bitcoin user moving 48,500 Bitcoin for mere pennies, a far cry from the fees of late 2017. The ‘Whale’ paid 0.00000675 Bitcoin in fees, offering a rate of 3 satoshis per byte of transactional data.

It came as a surprise to some that a user with such a large amount of cryptocurrency holdings would pay fees well-below the rate suggested by Blockchain, at around 5 satoshis per byte.

A Twitter user, with the handle, @martybent, said:

“Can you imagine trying to move $300M for $0.04 using the traditional banking system? No, no you can’t.”

However, users have sought for more, looking for ways to decrease transaction fees to the bare minimum, while increasing Bitcoin transaction throughput limits. This search has signaled the development of Bitcoin scaling solutions, pertinent to the future success of this world-changing network.

Scaling Solutions: Segwit and the Lightning Network

For the uninitiated, Segwit is an improvement on the Bitcoin network that changes the transaction format of BTC transactions. Segwit allows for transaction sizes to be reduced drastically, helping to reduce fees, along with allowing for an increased amount of transactions to be stored within one block.

This protocol, activated in August 2017, has already caught on with the network, as over 36% of all transactions now run on Segwit addresses.

The implementation of the Segwit protocol was vital in making sure that the Lightning Network, another popular scaling solution, could function. The Lightning Network is an off-chain scaling solution that promotes the use of Bitcoin for micro-payments. This specific scaling solution utilizes balance sheets, payment channels, and multi-sig addresses to ensure that all parties get the money they deserve. By using this system, thousands of transactions could be made per second for minimal fees, the holy grail for any cryptocurrency network.

Blockstream, leading cryptocurrency infrastructure and development company, recently announced that Lightning Network adoption has grown at a staggering rate, saying:

“Around the announcement of the Blockstream Store, the Lightning Network had a total of 46 open channels and 0.682 BTC in capacity. Today, there are roughly 7,800 open channels with 26 BTC of capacity. That is a 16,856% increase in channels and a 4,084% increase in channel capacity in 6 months!”

Hopefully, the adoption of scaling solutions can continue, as Bitcoin begins to seep into traditional financial systems, finding a place in daily commerce.


Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

Source
Author: NICKCHONG
Image Credit
Image Credit

BBVA Partners with Repsol to Leverage Blockchain, the Bank Issues €325M Credit Facility with DLT

The Spanish bank BBVA partnered with the energy company Repsol to develop corporate finance solutions based on blockchain. As a first move, the banking giant transferred a credit facility worth 325 million Euro using several public and private blockchain platforms. The deal comes despite the fact that BBVA CEO Carlos Torres has recently said that blockchain was immature and had significant challenges.


Join in the fun and play on the world’s First Hybrid on-line Casino with BTC and Fiat currency payments. Check on-line for latest promotions.


In April, BBVA became one of the first major banks in the world to apply distributed ledger technology (DLT) for a real use case when it carried out a corporate loan deal using Hyperledger and Ethereum testnet.

The Bilbao-based bank claims that this is the first instance when a credit facility has been issued with the use of blockchain. The technology speed ups processes and increases security. As in the transaction in April, BBVA conducted the transfer using a private blockchain network based on Hyperledger, while the signed contract was recorded on Ethereum testnet via a hash to ensure immutability.

Speaking at the Spanish Association of Economic News Journalists (APIE) conference held at the International Menéndez Pelayo University (UIMP) in Santander, BBVA’s head of strategy and blockchain Alicia Pertusa said:

“This operation is the fruit of BBVA’s pursuit of integrating innovative and disruptive financial products for corporate clients and to offer them the best solutions that meet their needs.”

The bank also said that it intends to continue with its blockchain-based loan facilities and will trial negotiating and contracting syndicated loans using DLT.


Don’t forget to join our Telegram channel for Crypto, Business & Technology news delivered to you daily.


Nuria Ávalos, head of Blockchain and Digital Experimentation at Repsol, commented:

“Repsol wants to actively take part in collaborative environments. Blockchain is a disruptive technology that is here to stay and the agreement with BBVA advances our strategy of driving digitization in all areas of our activity.”

Speaking at the same event in Santander, BBVA’s CEO noted that blockchain technology was not mature enough and faced several challenges, such as the high volatility of the underlying cryptocurrencies and compatibility issues with financial regulators. However, he admitted that the technology had disruptive potential and that the bank would adopt it.



Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

Source
Author: Anatol Antonovici
Image Credit

The Mostly Unspoken Hurdle to a Government Supported Cryptocurrency

This article in ComputerWorld provides a great snapshot on government adoption of anonymous cryptocurrencies. Technologists here argue that deployment of an anonymous cryptocurrency is in our future, yet none explain how existing anti-money laundering legislation will be addressed.

Arguing that cash is anonymous, and so no obstacles exist for anonymous crypto, is not a very astute observation relative to the current political environment. The US Government has passed seven increasingly restrictive Anti-Money Laundering Acts since 1986 designed to address terrorism and the rise in criminal activity:

“Last year, Garratt worked as a digital currency technical advisor to the Bank of International Settlements (BIS) in Switzerland. The BIS, whose purpose is to foster cooperation between central banks around the globe, has been exploring the role cryptocurrencies could play if nations begin backing them.

While the prospect of a government-backed digital currency that also provides anonymity may seem is far-fetched, Garratt noted that cash, too, is essentially a P2P process.

“It might sound strange to think about the central bank providing something that allows anonymity from itself, but that’s what cash is,” Garratt told attendees at the MIT event. “So, it’s not such a crazy thing.”

A government-backed digital currency could do away with banking fees that often target the poor who make many small, electronic payment transfers via services such as Western Union, while at the same time creating greater efficiencies. For example, the time it takes for to clear and settle funds could be greatly reduced, with  cryptography used to ensure privacy. Cryptographic keys controlling funds could be in a consumer’s control; the consumer could be issued a private key associated with their electronic funds and be able to use public keys for payments.”

Mercator started its Prepaid Service in 2005 and since then has conducted significant research evaluating the challenges associated with servicing low and moderate income families to bring them into the eCommerce and online banking world. The fact is this: Current AML and other government mandated legislation has made it extremely difficult to properly service this demographic in a sustainable way. Prepaid cards were initially thought to be the answer. Prepaid brought electronic banking to the underbanked by charging only for the transactions the consumer executed. Innovators provided overdraft protection at a cost so low it would make banks blush, yet step by step legislation was introduced that made these prepaid programs unsustainable or illegal. So technology isn’t the primary challenges associated with introducing a cryptocurrency, its politics.

Perhaps the greatest insight came for Robleh Ali, that questioned the basic premise that a cryptocurrency had to be deployed on a blockchain and then described a few logical use cases for a cryptocurrency:

“Robleh Ali, a digital currencies research scientist at the MIT Media Lab, said a government-backed digital currency wouldn’t necessarily have to exist on a distributed ledger, as bitcoin does today. It could be centrally administered by the Federal Reserve and other central banks.

The question central banks need to ask themselves is what are they trying to accomplish, he said.

“Do we want a token that can integrate with this new token economy? Then they may want to use an architecture that’s similar to those [bitcoin] tokens to issue fiat money,” Ali said.

In 2013, Garratt was involved in a multi-bank proof of concept called Project Jasper, which explored the use of blockchain as the basis for a new bank-to-bank digital payments system for large monetary transfers. So, for example, if a homeowner were to sell their house, banks could use the electronic distributed ledger to settle the transfer of funds.

If the Federal Reserve or other central banks were to back digital currency, it could take on many forms. For example, it could be operated as a closed system between banks for large money transfers, such as those used for daily clearance and settlement of thousands of smaller transactions. Or, it could open central bank accounts available for any consumer’s use, a type of virtual bank account.

The Fed could also issue a digital coin, similar to bitcoin, that would represent the stored value of fiat money.”

Or perhaps we need a cryptocurrency that can be easily integrated into the tokens currently being deployed by the card networks. Properly designed this would extend bank control over ownership while also enabling immediate worldwide acceptance. Of course, this bumps smack into the political issue of government control versus the private companies that control existing payment networks.


Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

Source
Author: Tim Sloane
Image Credit