Barclays has spoken to regulators about bringing bitcoin ‘into play’

Barclays’ says talks with Britain’s Financial Conduct Authority says use of crypto currencies is ‘not ready for prime time, we’ll get there soon’

 PUBLISHED : Monday, 26 June, 2017, 5:25pm
UPDATED : Monday, 26 June, 2017, 5:26pm

 Barclays has been in discussions with regulators and financial technology – or fintech – firms about bringing cryptocurrencies like bitcoin “into play”, the bank’s U.K. chief executive told CNBC on Monday.

Ashok Vaswani revealed that the banking giant has met with Britain’s Financial Conduct Authority (FCA) watchdog to talk about how to make bitcoin safe in response to a question about whether Barclays could support bitcoin.

“We have been talking to a couple of fintechs and have actually gone with the fintechs to the FCA to talk about how we could bring, the equivalent of bitcoin, not necessarily bitcoin, but cryptocurrencies into play,” Vaswani told CNBC at the Money 20/20 fintech conference in Copenhagen, Denmark.

“Obviously (it’s) a new area, obviously an area we’ve got to be careful with. We are working our way through it.”

Vaswani did not expand on to what extent Barclays could be involved with bitcoin. Barclays has recently been involved in the digital currency space. Last year the bank partnered with social payments app Circle. The start-up, which received a license from the FCA last year, allows users to send money to each other in messages, and supports bitcoin. Barclays provided Circle with an account to store sterling, as well as the payments network to transfer money.

Banks have typically been very cautious of being associated with any companies involved with bitcoin due to the cryptocurrencies bad reputation as being used to buy illegal items on the so-called “dark web”.

But the world’s largest cryptocurrency by market cap has seen rising retail investor interest, as well as a major rally since the start of the year that has seen its price hit record highs. Even though the price has pulled back in recent days and there is still volatility, regulators are becoming interested in bitcoin, which is lending legitimacy to the digital currency.

For example, Japan made it legal for merchants to begin accepting bitcoin as payments and Russia is also looking at ways to regulate it. The FCA in the U.K. has been cautious on bitcoin, however.

Chris Woolard, the FCA’s executive director of strategy, said that there needs to be caution from institutions dealing with bitcoin.

“We don’t prohibit regulated firms from engaging in digital currency trading, nor do we prohibit banks from offering banking services to deal with currency firms that use [blockchain]. I am not saying that we view digital currencies as an inherently bad thing… but we do have to exercise a degree of caution,” Woolard said at a recent event, according to website Financial News.

While bitcoin has garnered plenty of interest recently, the banking industry is focused on using the technology that underpins it called blockchain. This is a distributed public ledger of activity on the bitcoin network. Banks see blockchain-like technology being applied to areas of their businesses from trading to money transfers. The promise is cost savings and faster processes.

Barclays and a number of other banks have been trialing different use cases for blockchain technology. Last year, the U.K. bank tested derivative trading using blockchain technology. Still, the industry admits it is early days and more work needs to be done to integrate this into everyday processes in banks.

“(We’re) working on it, (it’s) not ready for prime time, we’ll get there soon,” Vaswani told CSC

The US Government Clamps Down on Ability of Americans To Purchase Bitcoin

The US Government Clamps Down on Ability of Americans To Purchase Bitcoin

Currencies / BitcoinJun 18, 2017 – 10:43 AM GMT

Currencies

You have to feel sorry for Americans. They are some of the most financially enslaved people in the world.

The bankrupt US government has been instituting capital controls for years now and have ensured that Americans can’t open a bank account nor even a bitcoin exchange account outside of the US through things like the Foreign Account Tax Compliance Act (FATCA) and just outright threatening to attack any bank or bitcoin exchange in the world who accepts Americans as clients.

This leaves Americans in the “land of the free” with very few options for bitcoin exchanges.

No exchange outside of the US will accept Americans as clients. They’ll accept North Koreans. Iranians. Russians. Chinese. Anyone… except for Americans.

And due to all the regulations in the fascist/socialist mixed US economy, it is incredibly hard to even operate a bitcoin exchange in the US.

While there are now a few other options, which we’ll discuss further below, until recently, there was only one option. Coinbase.

To be fair to Coinbase a lot of the issues with the exchange aren’t its fault directly. They are due to the myriad of rules and regulations that are strictly enforced in the US police state.

This has led to countless complaints about how difficult it is to open an account at Coinbase. Many have said that it is just as difficult to open an account at Coinbase as it is to open a bank account in the US… which usually requires a phone book stack of documents and needing to report in each morning with what you ate for breakfast.

And there have been countless reports of people saying that Coinbase closed their account without reason or notice. And many others have reported that their bank accounts have been closed once the bank noticed they were doing business with Coinbase.

Matters were made worse when late last year the IRS requested a John Doe summons as part of a bitcoin extortion-evasion probe, seeking to identify all Coinbase users in the US who “conducted transactions in a convertible virtual currency.”

After all, the thieves at the IRS expect to get their cut.

To add to that, the US federal government is pushing a bill called “Combating Money Laundering, Terrorist Financing, and Counterfeiting Act of 2017” – which we talked about a few days ago.

This bill takes a further step to target bitcoin and wants to put any business which “issues” cryptocurrency under this umbrella of anti-money laundering regulations. Also, it will include bitcoin on the list of monetary instruments that must be reported when entering or leaving the US.

As you can see, trying to do anything related to bitcoin in the “land of the free” anymore is becoming more and more difficult. This combined with the SEC turning down a bitcoin ETF months ago has all but ensured that many Americans missed out on massive gains in the rise of bitcoin and other altcoins in the last year.

All in the name of protecting Americans, of course!

Lately, the site has also been plagued by technical issues as it is unable to handle the demand from customers.

There have been numerous website inefficiency and maintenance issues which rendered buy and sell orders useless for extending periods of time.

Plus there were extended periods of time when the site couldn’t be accessed at all, which left users unable to move their funds into other wallets. It’s worth noting as well that the majority of these instances occurred during periods of massive price movement which probably costs users millions in potential profits and losses.

As if all that weren’t enough to make its users furious, it just came out that Coinbase disabled the fundraising account being used to pay the incarcerated founder of the Silk Road, Ross Ulbricht’s defense attorneys.

Ross Ulbricht, for those who don’t know, was given numerous life sentences for having a website in the, need I say again… “land of the free.” Here was my recent interview with his mother on the massive injustice done to him.

This happened not long after Coinbase hired the former Silk Road’s federal prosecutor, Kathryn Haun.

Wait a sec… why in the world is Coinbase hiring US government criminals?

Many libertarians were going to give the boot to Coinbase after hearing this… but it turns out this prosecutor was the one who put the corrupt FBI agents who stole Ross’s bitcoin in jail.

So, she may not be totally evil. We aren’t passing judgement just yet.

And, yesterday, Ross’s account was enabled again:

So, Coinbase saved some face this time.

But, if they can’t somehow lessen their adherence to the millions of US government regulations and fix their site technically they will lose customers to competitors.

At this time we are only aware of two other bitcoin exchanges operating in the US that will allow users with American bank accounts to exchange fiat for bitcoin.

There is New York-based Winklevoss twin’s Gemini exchange and the San Francisco-based Kraken exchange.

We recommend Americans at least consider them as alternatives to Coinbase.

That’s just being prudent.

As always, though, ignore Mike the Health Ranger Adams on anything to do with bitcoin.

He recently put out an article entitled, “Bitcoin wallet COINBASE now seizing accounts of Americans… users rage against ‘total ripoff’ as their Coinbase accounts VANISH,” saying that Coinbase stole everyone’s money.

This, as usual from Mike, is completely untrue. Please stick to vitamins Mike… we got the cryptocurrency space covered over here.

You can tell Mike doesn’t understand what he’s talking about in his article because he refers to Coinbase as a “popular bitcoin wallet”. Of course, it provides users with different wallets for different currencies, but only an inexperienced user would refer to an exchange as a “wallet.”

Mike goes on to quote an issue Coinbase is having with Wyoming users saying Coinbase is stealing their money;

“Although we strive to provide continuous access to Coinbase services, Coinbase has indefinitely suspended its business in Wyoming and we regret that we cannot currently support services in Wyoming. You can find a further explanation of our account suspension policy here. We hope to restore service in Wyoming soon, so please check back again.”

While it is true that many users in the state of Wyoming experienced this issue, Coinbase hasn’t yet stolen the funds Mike, let’s not jump to conclusions. And, as I said earlier, this issue is caused yet again by the egregious labyrinth of laws in the “land of the free”, not by Coinbase.

It seems like lately Mike seems to be jumping at any opportunity to incite more bitcoin-based fear propaganda, maybe he’s upset he sold his bitcoin at such a low price level?

In any case, one thing is clear through all of this. As an American, it is becoming harder and harder to get access to bitcoin.

This should be a wake-up call to many. The US government is bankrupt. The US government is installing capital controls to ensure Americans cannot leave the country with their money.

And, they are making it harder and harder for Americans to convert their US dollars into bitcoin.

The writing on the wall is clear. And if you haven’t begun to get at least some of your assets outside of the US you should be running not walking to do so.

This is what every country on Earth does just before their currency hyperinflates into worthlessness or the government defaults. Just ask people in Greece. The government there has just decided they will begin taking people’s homes and the contents of their safety deposit boxes in order to keep the country from bankruptcy.

People like Peter Schiff have been warning people to stay out of bitcoin since it was $20. And now the Health Ranger is warning you to stay out of it too.

You have to wonder what is the motivation of these people who should be smart enough to know that we are on the verge of a collapse of the US dollar to warn people away from alternatives that could save them.

Cryptocurrencies have a lot of risks and we wouldn’t recommend anyone put all their assets into them. But we do recommend you begin to use them, put a small percentage of your assets into them and learn more about them.

For that I have created a free four-video webinar on the importance of cryptocurrencies which you can view HERE. And we’ll even send you your first $50 in bitcoin if you accept our offer to get more information in the videos.

To summarize, Coinbase has a lot of issues, but most of the issues are just because it operates in the US. It still, however, is the largest exchange in the US and does offer an excellent bitcoin ATM/debit card. And you can get $10 in free bitcoin if you signup using this link.

Americans can expect to have more and more problems as the US government bankruptcy and Federal Reserve hyperinflation of the dollar nears closer.

My advice is just to get out of the US for much freer places across the world where you can trade easily in bitcoin.

But, if you can’t, or won’t, you should be at least ensuring your assets are kept out of the easy reach of the world’s largest terrorist organization, the US government and the world’s largest extortion racket, the IRS.

Bitcoin is just one easy way to do that. You can find out more in my free four-video webinar here.

Anarcho-Capitalist.  Libertarian.  Freedom fighter against mankind’s two biggest enemies, the State and the Central Banks.  Jeff Berwick is the founder of The Dollar Vigilante, CEO of TDV Media & Services and host of the popular video podcast, Anarchast.  Jeff is a prominent speaker at many of the world’s freedom, investment and gold conferences as well as regularly in the media.

 

What is Bitcoin Backed By?

 

Buy BitCoin !

Bitcoin and The Chinese power manufacturers

Wondering what bitcoin is backed by? The answer is nothing at all, but that’s actually not a bad thing. Like most modern currencies bitcoin is not backed by gold or other precious commodities. In a sense, bitcoin’s value is derived from our common belief that bitcoin has value. The same is true of the American dollar, the British pound, and the European Union’s euro, as well as nearly every other modern currency.

Historically speaking, up until August 15th 1971 most currencies were backed by a commodity, usually gold or silver. In fact, before the invention of paper money, most currencies were coins fashioned from precious metals. Further, following World War II and up until 1971, most of the world’s countries operated under the Bretton Woods agreement, currencies were backed by gold.

The Bretton Woods Agreement and the End of Commodity Backed Currencies

In order to understand the current system, it’s important to understand the old system. Under the Bretton Woods system, central banks would be able to trade gold amongst one another, and currencies would be tied to the value of gold, and pegged against one another. When an exchange rate is pegged, this means its value is set. So if the American dollar buys .75 British pounds, that is the value that it is set at. Most peg rates are actually adjustable peg rates, meaning that policy makers can adjust the value when needed.

The Bretton Woods system was designed to reduce the currency fluctuations seen in the 1920’s and 1930’s. During this period currencies were moving rapidly and uncontrollably, which caused international instability, and helped to worsen the Great Depression, and create the conditions that led to the outbreak of World War II. While the Bretton Woods system worked well for awhile, it eventually caused disruptions of its own.

The End of Bretton Woods and the Rise of Fiat Currencies

The Bretton Woods succeeded in creating stability in the years immediately following the second World War. By the end of the 1960’s, however, serious faults in the system were beginning to emerge. Among the biggest faults was that the U.S. dollar was too strong, which caused disruptions in international trade. For this reason, among others, governments decided to abandon the agreement, and to use “fiat” currencies instead.

Basically, a fiat currency is a free floating currency that is not backed by any sort of commodity. In the past, your dollars or other currencies would have been worth a certain amount of gold or another commodity. In practice, trading in dollars for gold was often highly restricted, still dollars were at least hypothetically worth a certain amount of gold.

Now, the dollar is no longer tied to gold. Of course, you can still buy gold with your dollars, but their values are independent from one another. Most major currencies are also not pegged to one another, but instead are allowed to float. Exchange rates can thus vary between different currencies. A few years ago, a euro could have bought about $1.4 American dollars. Now? A euro will buy only about $1.13 dollars.

Bitcoin is sort of a Fiat Currency, but So What?

Like the dollar and the euro, bitcoin and most other digital currencies are somewhat fiat. They are allowed to float in the market, and their value is determined by the market. In sense, you could even say that digital currencies and their value are determined by consensus.

Unlike traditional fiat currencies, however, there are several key factors that make bitcoin’s value potentially more reliable. First, bitcoins must be mined through computers, which requires an investment of time and money. As it becomes more expensive to mine bitcoins, it is likely that the value of the bitcoins themselves will slowly increase.

Second, while governments can increase their money supply at any given time, thus depreciating the value of individual currency units, bitcoin’s supply is tightly regulated, and the number of new bitcoins entering the market is slowing decreasing. Bitcoin is not subject to the whims of government officials or anyone else for that matter. It is a free and independent currency.

What “Backs” a Currency is Irrelevant, Perception is What Matters

Since the end of the Bretton Woods agreement, the idea that commodities are needed to back currencies has become irrelevant. Instead, public perception and economic policies are what matter. Money has value because we believe it has value. This is true of the dollar, the euro, the pound, and yes even bitcoin.

We can trade our money for goods. Many retailers now accept bitcoin as payment. In fact, when evaluating new “exotic” currencies like bitcoin, adoption rates, the ability to buy goods and services, established history, and community size are arguably the best indicators of a currency’s value. Are people using it to buy goods? Is the community itself large, sustainable, and established? For bitcoin, the answer to these questions is yes.

Many people think of bitcoin as more of an investment asset than a true currency. Part of the reason for is because bitcoin prices tend to swing somewhat dramatically. The value of all fiat currencies can swing also dramatically, however. This is true even for government-backed currencies, which are subject to the whim of government policies. The British pound, for example, has lost much of its value over the past few weeks following the Brexit vote.

In some cases, hyper inflation can even strike with money becoming nearly worthless. Consider Zimbabwe, where inflation got so bad a few years ago that the government started printing up 100 billion dollar bills. When the currency was phased out, 35 trillion Zimbabwean dollars equaled 1 American dollar. More recently, in April the IMF reported that Venezuela would suffer inflation of approximately 500% this year, and 1,800% next year. As this inflation unfolds, Venezuelan money will quickly lose its value.

More often than not, the rapid onset of inflation is caused by government mismanagement and the over-printing of money. This is why bitcoin aims to be government free. People create their own money through mining. Then, bitcoin is allowed to be freely traded in the market. Further, since the money supply itself is limited and already set, policy negotiations are no longer possible. So while it’s true that bitcoin isn’t tied to any commodity, and that it is dependent on our collection perception, like most modern currencies, the P2P currency is arguably a more reliable currency than government-backed fiat currencies.

Bitcoin Is Bigger Than Ever, And Here’s Why That Matters

The Bitcoin symbol.

The Bitcoin symbol.

The money you’ve been using all your life is backed by a government of some sort, and it exists in a tangible way. Bitcoin is neither tangible nor backed by anyone, but it’s still worth a great deal to some people. This digital currency began circulating on the internet in 2009 with each Bitcoin worth just a tiny bit of “real” money, but right now a single Bitcoin is worth more than $2,000. Bitcoin is fascinating from a technological standpoint, but it’s also fueling online crime and violence because of the anonymity it offers. Here’s how Bitcoin works and why you should care.

What is Bitcoin?

Bitcoin is what’s known as a cryptocurrency, a digital asset that exists only as data. You probably have money in the bank that is digital, but those digits equal physical currency. Not so with Bitcoin. Bitcoin also has no centralized regulation nor innate legal framework. As such, the value of Bitcoin is dictated entirely by the market, and the market is hot right now.

Bitcoin is stored in a digital wallet, which you can save locally on a hard drive or phone, or online with any number of Bitcoin exchanges. Saving your Bitcoins locally is like keeping all your money under the mattress. If something happens to the digital wallet, all your money is toast. Sending and receiving money is handled by pointing your Bitcoin client or web exchange toward a Bitcoin address, which every wallet has. A few minutes later, the Bitcoin will leave your wallet and show up in another. Websites that accept Bitcoin are rare, but they are out there. Spending it in real life is considerably more tricky, but again, there are a few system in place to manage it.

Is Bitcoin really anonymous?

Transactions are at the heart of Bitcoin — it’s powered by what’s known as a blockchain. You can view blockchain information for any wallet address, too. You don’t necessarily know whose wallet is whose, but you know what’s in them because it’s a public ledger. Perhaps you’ve heard about “mining” Bitcoin? That’s when you use a computer to crunch numbers for the blockchain. This is how transactions are verified, and in return you get some Bitcoin. It used to be easy to mine Bitcoins, but the difficulty increases substantially over time. Now, you need a server farm to earn much this way.

The blockchain info a WannaCry wallet.

Blockchain

The blockchain info for a WannaCry wallet with $41,000 in Bitcoin.

The “proof of work” model for the blockchain has been of great interest to organizations that want nothing to do with Bitcoin. A blockchain database is by its very design resistant to tampering and can be managed in a distributed manner. Both Senegal and Tunisia use blockchain-based national currencies. The Bill and Melinda Gates Foundation also hopes to use blockchain technology to help poor people without access to banking save and spend money.

How is Bitcoin involved with Ransomware?

So, Bitcoin could do a lot of good things, but you often hear about it in negative contexts. The anonymous aspect of Bitcoin has drawn cybercriminals to the digital currency. Ransomware attacks started occurring a few years ago as the price of Bitcoin shot upward, and the WannaCry ransomware made news just a few weeks ago. When your computer is infected with ransomware, it encrypts your important files and demands a Bitcoin payment to a specific address in exchange for the key. It’s not like criminals can ask you to wire some easily traceable money to their bank account, so Bitcoin is the perfect solution. After a few hops in the public blockchain, the money is essentially clean.

wcry_ransomnote-730x555

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The WannaCry ransomware alert.

Bitcoin is very much the wild west of international finance. Security firms have reported that some cryptocurrency from ransomware attacks ends up in the hands of North Korea, which is barred from many traditional financial markets by international sanctions. The same has been said about terrorist groups and organized crime, which risk having assets seized in traditional banks. All those ransomware payments are just the tip of the criminal iceberg, too. Numerous Bitcoin exchanges have also been the victim of hacking and fraud, which has led to Bitcoins being stolen from users. That money is just gone—there’s no FDIC to refund people when Bitcoin is stolen.

What does Bitcoin mean for the economy?

Despite all these issues, Bitcoin is surging in part because more people are using it. Bitcoin fans believe steadfastly that it’s the future. Regular people are becoming interested in cryptocurrencies, but it’s still too complicated for mainstream adoption. If that ever happens, we could see a lot more highs and lows in the global economy as Bitcoin’s value swings. And it does… a lot.

value

Coindesk

The value of one Bitcoin over the last few years.

If you’d bought $1,000 of Bitcoin in 2010, you’d be worth $35 million right now. However, if you bought $1,000 worth of Bitcoin in early 2014, you’d have only had a quarter as much buying power a year later. Imagine being paid in Bitcoin, and then finding your money was only worth half as much a few days later. Economies with that kind of inflation are not stable, but Bitcoin has the advantage of operating alongside regular government-backed money. Almost no one has all their assets in Bitcoin.

Is Bitcoin going to last?

As a backdrop to all this, programmers are arguing over how best to manage Bitcoin going forward. There are calls to “hard fork” the currency, which could lead to two competing standards. That would cause even wilder swings in price. Whatever the long term ramifications of these decisions, Bitcoin (or whatever cryptocurrency it becomes) isn’t going anywhere.