Crypto News Roundup — August 31, 2019

Weekly Crypto News

Crypto News Roundup — August 31, 2019

At-A-Glance

  • China is gearing up to launch its crypto in the coming months and Alibaba and Tencent will be among the first institutions to receive it.
  • The legal battle between Craig Wright and the estate of David Kleiman culminated in a court order demanding that Wright surrender up to $5B of BTC.
  • Telegram plans to release its cryptocurrency by October 31st, or else, it risks forfeiting the $1.7B it raised to support the project.
  • After BTC dropped 7% in daily trading, gold bug Peter Schiff declared that the crypto “failed the safe haven test.”

Alibaba, Tencent, Five Others To Receive First Chinese Government Cryptocurrency

Forbes

As promised, China’s central bank is gearing up to launch its own cryptocurrency, which has been dubbed DC/EP (Digital Currency/Electronic Payments). Seven institutions will be among the first to receive the state-issued token, including Alibaba, Tencent, and Union Pay (an association of Chinese banks). The two largest banks in the world, the Industrial and Commercial Bank of China and Bank of China, will also receive the new cryptocurrency. The recipient institutions will then be responsible for dispersing the tokens to Chinese citizens and others doing business in the Renminbi, China’s fiat currency. The central bank also hopes that the currency will eventually be made available to spenders in the US and western institutions, though this will not happen immediately.

Many have drawn comparisons between China’s DC/EP and Facebook’s Libra. However, a major difference is that Libra is still an early-stage project, while China’s crypto is ready to launch. The DC/EP will also be equipped to handle 300,000 transactions per second, in contrast to Libra’s design, which supports 1,000 transactions per second. If China is successful, its central bank will be the first to successfully roll out a cryptocurrency.

The two-tiered strategy, where the central bank creates the currency and others distribute it, aligns with previously unreported statements made by Mu Changchun, deputy director of the Paying Division of the People’s Bank of China (PBOC).

Mu said the two-tiered system is designed to “curb” public demand for other cryptographic assets, consolidate China’s national currency sovereignty, ensure that the central bank maintains control over monetary policy affecting the currency, increase the likelihood of people using the currency, distribute the risk of having all the authority directly in the hands of the central bank and encourage competition between the organizations that receive the cryptocurrency.

“What will facilitate commercial transactions and enhance efficiency, the central government decides and they go ahead and do it,” says [Charles Liu, chairman of HAO International], adding that “China’s strategic plan is to integrate more closely with the rest of the world. Cryptocurrency is just one of the means to have a more internationalized renminbi. It’s all strategic. It’s all long term.”

Self-Proclaimed Bitcoin Creator Slammed by Judge, Ordered to Pay Up to $5B

Vice

This week, Australian entrepreneur Craig Wright made headlines again as the protracted legal regarding the estate of David Kleiman waged on. The suit, which began last year, alleges that Wright and Kleiman mined $10 billion worth of BTC together and Wright stole Kleiman’s share after his death. At last, on Tuesday, Magistrate Judge Bruce Reinhart ruled that Wright must forfeit half of any bitcoins that he allegedly mined with the deceased programmer to Kleiman’s estate. He must also relinquish 50% of intellectual property related to Bitcoin.

According to this decision, Wright must transfer the keys to access his bitcoins via bonded courier at some point in January 2020. However, the case is not yet over — it’s still unclear how many bitcoins are actually in play, or if Wright actually has access to them if he ever did. Wright still insists that he and Kleiman invented Bitcoin together, but his story many inconsistencies and contradictions. For now, it seems that Wright may be on the hook for $5 billion worth of BTC.

According to the judge, “Dr. Wright’s demeanor did not impress me as someone who was telling the truth. When it was favorable to him, Dr. Wright appeared to have an excellent memory and a scrupulous attention to detail. Otherwise, Dr. Wright was belligerent and evasive.”

Magistrate Judge Reinhart found that Wright’s story, in which he said he invented Bitcoin but chickened out of taking credit once it was used by criminals, then enlisted Kleiman, and bonded a courier for 2020, “defies common sense and real-life experience.” The judge added, “Inconceivable.”

Reinhart “completely” rejected Wright’s testimony about key matters as conflicting and “intentionally false.”

Telegram will launch its Gram cryptocurrency by October 31 or bust

The Verge

Telegram plans to release its cryptocurrency, the “Gram,” to the public in the next two months, according to a report from the New York Times. This announcement follows rumors that the messaging service could be forced to forfeit the $1.7 billion it raised if it fails to release the crypto by October 31st. According to legal documents, that deadline is real, so the company is now scrambling to make the Gram a reality.

Telegram plans to offer its 200+ million global users access to a Gram digital wallet. If its efforts are successful, Telegram will beat Facebook’s Libra project to the punch in releasing a global cryptocurrency. For now, it’s unclear whether the Gram will incite the same regulatory scrutiny that Libra has encountered. With the October deadline fast approaching, the company will do its utmost to push its initiative forward.

Telegram’s cryptocurrency — the Gram — may be going public after all. The encrypted messaging app company plans to deliver “the first batches” of the coin in the next two months, according to a report at The New York Times.

The last time we reported on the Gram, it was to note that Telegram was canceling its initial coin offering (ICO), so the news may come as a bit of a surprise… [Now] Telegram has a hard deadline to make it happen: if it doesn’t deliver by October 31st, it legally forfeits the $1.7 billion it raised to make those coins a reality.

Bitcoin ‘Failed Safe Haven Test’ After 7% Drop, Peter Schiff Gloats

Cointelegraph

After BTC dropped 7% in daily trading, gold bug and Bitcoin critic Peter Schiff declared that the crypto “failed the safe haven test.” He noted that amid escalating trade tensions, the global stock market plunged and investors “sought refuge in monetary safe havens.” Traditional store of value assets including the Japanese yen, Swiss franc, and gold all saw a spike in value. Meanwhile, Bitcoin suffered worse losses than the stocks.

Schiff’s remarks come in sharp contrast to the narrative that Bitcoin could be an option to preserve wealth in economically unstable times. Crypto analysts noted that Bitcoin network volatility hit new two-month lows last week. However, critics, such as Schiff, seize on daily downturns, eager to espouse their anti-crypto sentiments. The Bitcoin community was largely unphased by his commentary.

“Bitcoin has again failed the safe haven test… Since last Thursday Bitcoin has lost more value than any of the major stock market indexes, while gold and silver have gone up.” — Peter Schiff

Responding, the Twitter account known as Parabolic Trav rebutted Schiff on Bitcoin’s intrinsic value: “Why on earth would Bitcoin be a safe haven? Bonds are the safe haven in the current paradigm. Nor is gold a safe haven,” he wrote… “If you try to fit it into the legacy financial analysis box, you’ll be rekt Which is what you are Pete!”

That’s the roundup for August 31st. Check in next week for the latest news of cryptocurrency innovation and regulation around the world!

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