Crypto Startup Puts Tesla, Apple, Facebook Shares On Ethereum Blockchain

According to a report from Bloomberg, DX.Exchange, an up-and-coming crypto startup headquartered in Estonia and Israel, will be putting a number of popular American equities onto a blockchain next week. As the firm’s name implies, DX.Exchange is an online trading platform that will allow investors to trade and transact shares of Apple, Facebook, Tesla, along with seven other household names listed on Nasdaq, even when markets are shuttered for the day.

If its inaugural trading sessions perform well, the startup intends to expand its crypto offerings to encompass shares listed on the New York Stock Exchange, coupled with those situated on Tokyo’s Nikkei and Hong Kong’s Hang Seng.

Each digital security token will be collateralized by one common share, and interestingly, stockholders will be purportedly be “entitled to the same cash dividends,” arguably making this offering just as good as buying stocks through TD Ameritrade, E*Trade, and the like. MPS MarketPlace Securities, a partner of DX, will be taking custody of the shares, allowing Ethereum tokens to be created that represent the securities.

But what are the benefits of the platform?

Well, as explained by Bloomberg, digital securities will allow traders to transact their holdings when markets are closed. This simple feature could catalyze the creation of secondary markets, drawing die-hard traders, even those without crypto knowledge and experience, to blockchain-based platforms, subsequently catapulting adoption.  Ethereum-based shares could also interact with other facets of the blockchain’s ecosystem.

These crypto tokens can also be divvied up, while trading fees can be minimized, lowering the bar for entry. The aforementioned factors, coupled with the fact that foreign investors will be able to gain access to U.S. shares, is undoubtedly a move towards financial inclusion — crypto’s underlying raison d’etre. 

And interestingly, this is all legal too. Speaking to the aforementioned outlet in a recent interview, DX chief Daniel Skowronski explained that his platform is licensed by the Estonian Financial Intelligence Unit, which has the backing of the European Union. So, DX has the legal capacity to make such an offering. Skowronski also expressed his excitement for his firm’s innovative platform, noting:

We saw a huge market opportunity in tokenizing existing securities… We believe that this is the beginning of the traditional market’s merge with blockchain technology. This is going to open a whole new world of trading securities old and new alike.

The Tokenization Of Everything

While DX.Exchange’s foray into blockchain-based securities is a step in the right direction and is something to be commended, the tokens aren’t fully decentralized, as there are still centralized counterparties. This lack of fully-fledged decentralization may introduce risk over time. But, a number of pundits believe that eventually, shares and other pertinent assets will become fully decentralized.

Anthony Pompliano, the founder of Morgan Creek Digital Assets and an anti-establishment figure, recently told BlockTV that he expects for all securities, whether it be stocks, bonds, real estate certificates, or otherwise, to be tokenized. The decentralist, well-known for his anti-bank, pro-Bitcoin rhetoric, claimed that this won’t be an easy task, however, quipping that this journey will take more than five years.

Jeremy Allaire, the CEO of Boston-based, Goldman-backed Circle, also echoed this sentiment in a recent CNBC interview. Speaking to the outlet, Allaire, who manages the aforementioned crypto startup, exclaimed that the “tokenization of everything” will eventually occur.

Allaire, who doesn’t seem to embody the hallmarks of a Bitcoin maximalist, noted he envisions a future filled with millions of crypto assets, whether they take the form of security, commodity, or utility tokens. In short, the long-time crypto advocate noted that he doesn’t believe cryptocurrencies are a “winner takes all” scenario, instead, he made it clear that a multitude of projects can live in relative harmony, due to this innovation’s ground-breaking potential.


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Author: Nick Chong
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Crypto Exchanges are Raking in Billions in Revenue Despite Market Struggles

Coinbase, the largest fiat-to-crypto exchange in the global market, is set to bring in over $1.3 billion in yearly revenue by the end of 2018.

Binance, the go-to crypto exchange for digital asset traders, recorded a profit of $200 million in January, nearing that of Germany’s biggest financial institution Deutsche Bank.

Upbit and Bithumb, two of the largest exchanges in South Korea, have reportedly been recording a monthly revenue of $100 million in early 2018 mainly from transaction and withdrawal fees.

In January, Yoojjin Investment researcher Jung Yoon-ho told local publications that considering the $2.5 billion in user funds that are actively traded on the platform, and the average transaction fee is 1 percent, Jung said that Bithumb generated $2.5 million in daily revenue earlier this year.

However, due to the bear market and the decline in trust towards crypto exchanges by investors in South Korea due to the two consecutive security breaches of Bithumb, experts predict that the monthly revenues of major crypto exchanges in South Korea have dropped from $100 million to around $60 to $70 million in the past 10 months.

Why are Exchanges Still Making a Lot of Money?

According to Bloomberg, documents obtained by the publication disclosed the projected annual revenue of Coinbase to be around $1.3 billion.

“The company’s $1.3 billion in sales for 2018 comes from the commissions on trades on its platform, as well as from gains and losses in its own crypto holdings. Because the firm looks at several internal measures of revenue, the exact figures can vary,” Julie Verhage at Bloomberg reported.

The vast majority of revenues brought in by cryptocurrency exchanges are generated through fees on buy and sell orders, as well as withdrawal requests.

Binance, for instance, publicly disclosed that it will donate all of the listing fees given by projects to be listed on the exchange to fund transparent initiatives led by reputable organizations like the UN with crypto.

“If you look at the first few UN Sustainable Development Goals, such as poverty, hunger, health and even education, these are easily addressed or improved by the charity initiatives. Yet, what we’re trying to do is a level deeper. I believe that by improving transparency in the charity sector, we will be able address all 17 goals as a whole, at a more fundamental layer,” Binance CEO Changpeng Zhao said.

As such, major crypto exchanges have concentrated their revenues to the core business model of facilitating cryptocurrency trades with minor fees.

Throughout the past eleven months, the volume of the crypto exchange market, which hovered at around $20 billion, has nearly halved. The volume of Bitcoin, the most dominant cryptocurrency in the market, dropped from nearly $8 billion to $3.5 billion.

Still, a $10 billion daily trading volume of the crypto exchange market, which is still at its infancy, is sufficiently significant for exchanges to generate large revenues.

Institutions Interested

The lucrative business model of crypto exchanges has lured in many institutions and conglomerates throughout the year.

In South Korea, all major crypto exchanges are now operated by conglomerates such as Kakao, Shinhan Bank, and Nexon, multi-billion dollar companies that dominate local industries.


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Author:  Joseph Young
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HTC is about to introduce the world’s first blockchain phone

October has been one of the busiest months in Android history when it comes to new smartphone releases. So far, we’ve seen four flagship announcements, including the LG V40 ThinQ, Razer Phone 2, Google Pixel 3, and the Huawei Mate 20. The Xiaomi Mi Mix 3 and OnePlus 6T, meanwhile, are soon to follow.

We also saw a couple of new mid-range phones get unveiled this month: the new Nokia 7.1 and the Samsung Galaxy A9. Also, Apple’s iPhone XR is going to be available online this week, and in stores on October 26th. But a phone like no other is about to be unveiled in full in just a matter of days, and that’s the world’s first blockchain handset.

Back in mid-May, we learned that HTC has embarked on the quest of creating the HTC Exodus, a phone that should have blockchain technology at its core. That’s something no other smartphone maker has attempted, and it’s all the more surprising to see HTC attempt to create one. Then, in July, we learned that it’ll be quite expensive.

Bitcoin and blockchain technology may be popular, but HTC’s phones haven’t been in recent years. What happens when you combine the two? That’s something HTC will tell us next week, on October 23rd, when the Exodus will be unveiled. So far, we only have a few details about what the Exodus may offer.

We know it’ll feature a secure built-in wallet for cryptocurrency, as well as support for decentralized applications (Dapps), and that it’s supposed to allow buyers to “truly own their data,” whatever that means. But we have no idea how the Exodus will work, and it’ll be interesting to see whether Android is involved.

The phone’s dual camera and fingerprint sensor can be briefly spotted in the teaser, and it sure looks like the Exodus will look a lot like HTC’s U12+ flagship.

The HTC Exodus event is set for October 23rd, a day later than the previously announced press event, at which point we’ll know more about HTC’s blockchain tech for phones.


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Author: Chris Smith
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Bitcoin Gradually Increased in Price in September, Case for a Bull Run in 2018

Since early September, the price of Bitcoin has gradually increased from $6,100 to $6,550, testing the $6,800 resistance level on two occasions.

Bitcoin experienced four dips in its price in the past 30 days and every consecutive drop in the price of the asset stabilized in a higher region than its previous decline in value.

On Sept. 9, the price of Bitcoin dropped to around $6,100 during its first fall in the month. On Sept. 16, a week after the initial drop followed by a corrective rally, the price of Bitcoin dropped to $6,250, at a higher point than its previous drop at $6,100.

Bitcoin price chart in September: data provided by Coinbase

On Sept. 26, around 10 days after the second dip, the price of BTC dropped to $6,400, $150 higher than the region BTC fell to on Sept. 16. On Oct. 4, it’s latest minor drop in price, Bitcoin dropped to the higher region of $6,400.

Is Bitcoin Undergoing a Gradual Recovery?

Given that Bitcoin has seen the $6,000 support level strengthen and the momentum of the asset at the $6,550 mark intensify, it is entirely likely that the asset will continue to engage in a gradual recovery throughout October.

A rapid increase in price from $6,000 to a higher region like $7,000 and $8,000 in the short-term, similar to its movement from $6,800 to $8,000 earlier this year, is not likely due to the decline in its volume.

On October 6, CCN reported that the volume of Bitcoin fell from $4 billion to $3.2 billion on Coinmarketcap and from $2.6 billion to $2 billion on ShapeShift’s CoinCap.io, suggesting that an exponential increase in price of Bitcoin is not in play in the short-term.

If Bitcoin continues to sustain its momentum it has demonstrated throughout September, it is possible that it can break out of the $6,800 resistance level and potentially eye an entrance into the $7,000 mark.

But, in consideration of the positive regulation-related developments in Japan, South Korea and the US, many analysts expected BTC to surpass major resistance levels at $8,000 and $9,000.

Masayuki Tashiro, a prominent Japanese market analyst, said in August:

“Personally I am bullish, and by the time the outline of the regulations will come together in October, those investors who will feel safer will come back. I hope things won’t get as overheated as last year, but I believe BTC can win back the value of 1 million yen (9,020$) in range.”

Gradual Recovery More Likely Than Explosive Growth

Bitcoin and the rest of the crypto market has dropped 69 to 80 percent of the valuation in the past nine months, recording some of the steepest falls in value in recent years.

A short-term bubble is often followed with a gradual recovery in value, volume, and market demand. Although the market has started to demonstrate sellar fatigue and clear signs of a bottom in the low range of $200 billion, a gradual recovery could be more beneficial for BTC in the long run.


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Author: Joseph Young 
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North Korea is Using Cryptocurrency to Evade U.S. Sanctions: Experts

Two Washington-based financial experts say that North Korea is increasingly using cryptocurrency to evade U.S. Sanctions.

According to Lourdes Miranda, a financial crimes investigator specialized in intelligence collection and analysis, and Ross Delston, an expert witness who specializes in anti-money laundering and combating the financing of terrorism, Pyongyang is creating its own cryptocurrency and is likely also using popular cryptocurrencies like bitcoin.

Cryptocurrencies are being preferred by international criminals and for terrorist financing, and the country of North Korea is no exception, the duo said in a written statement to Asia Times. They said:

“Crypto-currencies have the added advantage to the DPRK of giving them more ways to circumvent US sanctions.”

They added, “They can do so by using multiple international exchangers, mixing and shifting services – mirroring the money laundering cycle – to exploit international financial institutions that have correspondent banking relationships with the United States.”

According to Priscilla Moriuchi, a former NSA cybersecurity official, North Korea is earning around $15 million to $200 million by mining and selling cryptocurrencies. Speaking to The Hill earlier this year, Moriuchi said:

“North Korea has pursued other avenues for obtaining cryptocurrencies as well, including mining of both bitcoin and Monero, ransom paid in bitcoin from the global WannaCry attack in May and even commissioning a cryptocurrency class for North Korean students in November.”

Source: Shutterstock

Now, per the Asia Times report, Miranda and Delston stated that North Korea could use the most popular cryptocurrencies like bitcoin, or the country’s government could create its own.

“Having their own crypto-currency would also facilitate their ability to open online accounts under the guise of a non-adversarial nation using anonymous communication to conceal the user’s locations and usage on the internet,” they stated.

The researchers also said that the country would create its own blockchain in order to alter their public record of transactions to show that these transactions are coming from legitimate sources. Further, the country would create its own cryptocurrency wallet services.

Explaining about the making of successful exchange of crypto into fiat currencies — all the while undetected — the pair said that North Korean-mined cryptocurrencies would be laundered onto European exchanges, enabling the rogue nation to obtain USD “with none of those pesky sanctions attached.” The investigators are not sure about the current scale of North Korea’s crypto-currency operation.

As CCN reported, America’s rivals including Iran, North Korea, Russia, and Venezuela have recently turned to cryptocurrencies in order to counter economic pressure from the U.S. and its allies.

For example, the petro, an oil-backed cryptocurrency announced by Venezuela’s president, Nicolas Maduro, was banned in the United States. Earlier in May, President Trump issued an executive order banning American citizens from buying, trading, or dealing with the petro cryptocurrency “in light of recent actions taken by the Maduro regime to attempt to circumvent U.S. sanctions by issuing a digital currency.”

Also, Iran has recently revealed the details of its national cryptocurrency in response to U.S.-led economic sanctions. Iran’s future cryptocurrency is allegedly backed by the fiat Rial and is developed on the Linux Foundation-led open-source Hyperledger Fabric technology, the report said.


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Author: Sujha Sundararajan 
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Bitcoin Dominance Eyes 60% as Ethereum Price Flounders

The recent fallout in altcoin prices, particularly ethereum, has boosted bitcoin’s dominance of the crypto market, now commanding nearly 60% of market share.

As of today, bitcoin holds 56.72% of the market compared to ethereum’s 12.62%, according to CoinMarketCap.

The orange line presents bitcoin’s crypto market share while the dark blue line shows Ethereum’s. Source: coinmarketcap.com

The orange line presents bitcoin’s crypto market share while the dark blue line shows Ethereum’s. Source: coinmarketcap.com

Bitcoin’s price woes of the past month have not been enough to compromise its market dominance, largely because ethereum’s struggles have been disproportionately fiercer.

None of the other altcoins have been a factor in the historic bitcoin/ethereum rivalry for crypto market dominance, a rivalry that has consistently favored bitcoin.

Bitcoin’s Dominance Never Challenged

YTD Bitcoin Price. Source: Coinmarketcap.com.

June 19 of last year marked bitcoin’s weakest market position when ethereum grabbed 30.63% of the market to bitcoin’s 37.87%. Ripple was third with 9.6%, followed by litecoin at 2.25%.

Since then, bitcoin was able to regain market dominance of 65.18% by Dec. 2017, when its price was at record highs, while second place ethereum was at 9.71%. Ethereum was able to close the gap on Feb. 5, 2018, grabbing 20.46% to bitcoin’s 36.32%, but by March 30, bitcoin regained a 45.02% dominance to ethereum’s 14.63%. Ethereum fought back to 17.25% by May 5 to bitcoin’s 36.0%, but, since then, bitcoin has steadily dominated the market.

Ethereum achieved a $1,377.72 price on Jan. 13, 2018, riding the crypto market growth at the time. The leading altcoin attempted a comeback in mid-August, moving from $250 to $280 on Aug. 16 following a 20% drop on Aug. 14, as the overall market posted a recovery from bitcoin’s drop below the $6,000 on Aug. 14. But that attempt marked Ethereum’s last rally up to the present time.

Also read: Ethereum falls to $185: What’s causing ETH to drop harder than other cryptos?

Ethereum’s Woes Continue

1-Year Ethereum Price. Source: Coinmarketcap.com

Ethereum’s fallout has largely been attributed to a decline in ICO activity that boosted the ethereum price since early last year. Analysts expect the fallout to continue for the foreseeable future.

Yesterday, Sept. 10, bitcoin posted an unexpected spike in its price, jumping from $6,190 to $6,450, a boost that it did not share with the rest of the market. Bitcoin has recently demonstrated stability in the $6,300 to $6,400 range and has posted decent volume at nearly $3.8 billion.

Ethereum’s struggles, meanwhile, have rubbed off on other altcoins, as VeChain, WanChain, Waltonchain and Decentraland have posted hefty losses against the U.S. dollar.


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Author: Lester Coleman
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U.S. Judge Rules That ICOs are Covered by Securities Laws

A U.S. District Judge in Brooklyn has delivered a landmark judgement with far-reaching implications for the initial coin offering (ICO) market. Judge Raymond Dearie of the U.S. District Court Eastern District of New York today ruled that U.S. securities laws cover ICO token sales.

The ruling came in a case against a fraudulent ICO promoter Maksim Zaslavskiy, whom prosecutors are looking to bring up on fraud charges for defrauding investors of more than $300,000 from a scam ICO called REcoin.

REcoin ICO Scam

In Sept. 2017, CCN reported that the SEC charged Zaslavskiy and two of his companies with defrauding investors through a number of ICO scams including REcoin. REcoin was marketed to investors as being backed by real estate and diamond assets which in actual fact did not exist.

In a pioneering ruling, Judge Dearie refused to dismiss the case against Zaslavskiy, whose lawyers earlier pled for dismissal on the basis that the ICOs in question were currencies and not securities, placing them outside the jurisdiction of the SEC Act.

An excerpt from today’s hearing file reads:

“He [Zaslavskiy] argues that the securities laws are  unconstitutionality vague as applied. The Government, meanwhile, asserts that the investments made in REcoin and Diamond were “investment contracts,” and thus “securities,” […] and that these laws are not unconstitutionally vague.”

Judge Dearie’s ruling on this matter was that an ICO is indeed a security for the purposes of federal criminal law, which is what prosecutors have argued since last year.

Implications of Dearie’s Ruling

The SEC claims the REcoin ICO scammed investors out of $300,000.

Dearie has become the first judge to deliver a ruling that places ICOs firmly within the jurisdiction of securities regulators, and this could potentially have important implications for the ICO market by creating a precedent for future cases.

While the CFTC has had some successes tackling fraudulent crypto offerings within its space, the SEC — which has long said that it has jurisdiction over most ICOs — had not yet established this authority in court.

An excerpt from Judge Dearie’s ruling reads:

“Zaslavskiy’s contrary characterizations are plainly insufficient to by pass regulatory and criminal enforcement of the securities laws. Because the indictment is sufficient under the Constitution and the Federal Rules of Criminal Procedure, and because the law under which Zaslavskiy is charged is not unconstitutionally vague as applied, Zaslavskiy’s motion is denied. The case will proceed to trial.”

While the ruling comes as a boost for prosecutors, the it is by no means a final word on the matter. In his comments, Judge Dearie noted that the ultimate decision rests with a jury and that Zaslavskiy’s lawyers can in fact still present the argument contesting the jurisdiction of securities laws to the jury.


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Author: David Hundeyin
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Hacked MEGA Chrome Extension was Used to Steal Cryptocurrency

The Google Chrome extension for the popular file upload and sharing service MEGA has been compromised by hackers looking to steal login credentials and cryptocurrency keys, according to information from security researchers.

The service, which was launched by Kim Dotcom in 2013 after the demise of MegaUpload, has had its Chrome extension removed from the Chrome Web Store presently.

SerHack was the first researcher to sound the alarm, warning in a tweet on September 4 that version 3.39.4 of the extension was hacked, and potentially harvesting user information including usernames and passwords from a number of platforms including Amazon, Github, Google and Microsoft.

Stealing Login Information

The compromised MEGA extension actively monitors user information stored in the browser, looking out for URL strings that indicate registration or login forms. The data on such forms is then sent to an unidentified host in Ukraine called https://www.megaopac.host/.

The malicious code also monitors for specific URLs such as “https://www.myetherwallet.com/*”, “https://mymonero.com/*”, and “https://idex.market/*”. If saved information is detected, it then executes a javascript function that attempts to steal private crypto keys from logged in users.

Confirming the hack, MEGA released a statement that reads in part:

“On 4 September 2018 at 14:30 UTC, an unknown attacker uploaded a trojaned version of MEGA’s Chrome extension, version 3.39.4, to the Google Chrome webstore. Upon installation or autoupdate, it would ask for elevated permissions (Read and change all your data on the websites you visit) that MEGA’s real extension does not require and would (if permissions were granted) exfiltrate credentials for sites including amazon.com, live.com, github.com, google.com (for webstore login), myetherwallet.com, mymonero.com, idex.market and HTTP POST requests to other sites, to a server located in Ukraine. Note that mega.nz credentials were not being exfiltrated.”

Google to Blame?

In the statement released yesterday, MEGA blamed Google for removing their ability to sign extensions, making it easier for such incidents to take place.

An excerpt from the statement reads:

“We would like to apologise for this significant incident. MEGA uses strict release procedures with multi-party code review, robust build workflow and cryptographic signatures where possible. Unfortunately, Google decided to disallow publisher signatures on Chrome extensions and is now relying solely on signing them automatically after upload to the Chrome webstore, which removes an important barrier to external compromise. MEGAsync and our Firefox extension are signed and hosted by us and could therefore not have fallen victim to this attack vector. While our mobile apps are hosted by Apple/Google/Microsoft, they are cryptographically signed by us and therefore immune as well.”

Security researchers examining MEGA’s Firefox extension have seen no evidence of tampering, which would appear to support the claims in MEGA’s statement.

Speaking to Bleeping Computer, SerHack who initially discovered the hack advised all Chrome MEGA users to uninstall the extension immediately. He also said that such users should immediately change all their passwords on any account they may have used on the browser, especially accounts relating to financial or government information.

CCN earlier reported that cybercriminals are continuously developing new ways to illegally acquire cryptocurrency, moving from cryptojacking to sim swapping amongst other tactics.


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Author: David Hundeyin
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This AI Tracked Unusual Market Behavior Before Today’s Big Crypto Drop

Earlier today, news spread that Goldman Sachs was sidelining plans of opening its cryptocurrency trading desk, a report coinciding with a market that took a sharp downward turn. The other day, market analysts saw someone take a 10,000 BTC short position while overall market sentiment has been positive.

Top analysts have been questioning why someone would take a $74,000,000 short position so quickly. It didn’t make sense unless he knew something that they didn’t. Only a few days after he started shorting there is some bearish news that comes out.

Others speculate that it could have been someone at Goldman Sachs themselves who took a $74m short position, waited 2 days, then announced they’re pulling out of Crypto.

These speculations have been just that, speculation. But with new AI technology keeping a watchful eye on the cryptocurrency market, there is evidence that points to a deliberate market manipulation, though by whom is still up for debate. And CCN just got the scoop, directly from the data source.

What Happened:

When the crypto drop occurred in the morning for quite some time traders were looking for news behind such unusual -10% move across the board. Bitcoin, Ether, Litecoin and other tokens all declined on substantial volume.

Later in the day, the catalyst was found: Goldman decided to pause developments on its rumored crypto trading desk. Many comments around this news were regarding potential insider trading and the fact that institutional buyers would like to get into the crypto space at lower levels thus manipulating the markets.

Data scientists and market analysts from the RoninAI team, an AI-based crypto signals platform, took a closer look into the situation to see any red flag activities surrounding the drop. A number of indicators were pointing to some unusual behavior right before the drop. One of them is the social sentiment that sporadically increased minutes before the actual drop took place.

The three-day chart below indicates that such volatility in social sentiment takes place often and each time it happens AI algorithms react to it.

This chart doesn’t indicate bullish or bearish, rather a sudden influx of activity that is not authentic. To zoom in, let’s look into the last couple of hours preceding the event. It is very clear how social sentiment spiked above the 3 standard deviations from its mean levels. Historical data indicates these spikes are not typically naturally occurring events.

Three standard deviations event occur in about 0.3% of cases and every time it happens the RoninAI team studies the event to analyze potential market effects.

In the morning drop, the break above the 3 standard deviations took place about 10 to 15 minutes right before crypto declined to spur more questions as to whether such an event was, in fact, a market manipulation or not. The timing in addition to the unnaturalness of such a spike is strong indications.

Data scientists strongly believe this was either market manipulation or insider trading, but are reluctant to give a definitive answer for obvious reasons.

Regardless, the good news for the Bulls is that whoever is shorting 10k BTC has to buy back at some point and it’ll likely push the price up significantly. The bad news is WHEN do they start closing the short positions and buying back. There’s no real way to predict how this event will affect the market in the short and long term.

Disclaimer: Data and social sentiment charts/information was provided by RoninAI and do not reflect the opinion of CCN.


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Author: Kim Adsitt
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‘World Wire’: IBM Launches Stellar-Based Blockchain Payments Platform

Computing giant IBM has launched a blockchain-based financial solution that it says has the potential to completely upend the existing status quo in global payments and remittances.

The new solution called ‘IBM Blockchain World Wire‘ combines the Stellar blockchain with digital assets to make instant money transfers possible of a guaranteed value possible.

In July, CCN reported that IBM backed a dollar-pegged stablecoin issued by Stronghold on the Stellar network. In the same month, IBM announced that it was involved in an environmentally friendly crypto project also built on Stellar.

The new Stellar-based platform describes itself as a “financial rail that can simultaneously clear and settle cross-border payments in near real-time.” According to IBM, World Wire integrates readily with any existing payment system and it supports payments of any size, to any destination, in any asset type within a high-security environment.

Describing World Wire’s potential utility, information from IBM says in part:

“With IBM Blockchain World Wire, clearing and settlement with finality happens in near real-time. The solution uses digital assets to settle transactions — serving as an agreed-upon store of value exchanged between parties — as well as integrating payment instruction messages. It all means funds can now be transferred at a fraction of the cost and time of traditional correspondent banking.”

How it Works

Under the World Wire framework, the transacting financial institutions can use a digital asset of their choice, be it central bank digital currency, crypto or stablecoin as a bridge between two fiat currencies. The digital asset facilitates the trade and supplies important settlement instructions for the transaction to be confirmed.

Using a connection to the World Wire API, institutions can use their existing payment systems to seamlessly convert their fiat currencies into the desired digital asset to be traded. The platform then simultaneously converts the digital asset into the second fiat currency (for the receiver), which completes the transaction almost instantaneously.

All transactions are recorded on the Stellar blockchain for security and clearing purposes, and this also helps with regulatory compliance because there is effectively a permanent record of every transaction that takes place using World Wire.

According to IBM, the benefits of the new solution include faster payment processing, simultaneous clearing and settlement, reduced time to dispute resolution and reconciliation and substantially lower clearing costs.

World Wire also reportedly eliminates the presence of multiple parties in a single transaction and it vastly reduces the capital requirements for cross-border transactions. In addition, IBM says that World Wire enhanced end-to-end transparency by using one exchange fee between all currencies, and it potentially reduces the existing time and cost profile of connecting with new markets and revenue flows.

Apart from being the latest of IBM’s well-documented forays into blockchain technology and cryptocurrency, the launch of IBM Blockchain World Wire also underlines the growing influence of Stellar which recently hit a milestone of 1,000,000 accounts.


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Author: David Hundeyin
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