Crypto News Roundup – October 19, 2019

Weekly Crypto News

Crypto News Roundup – October 19, 2019

At-A-Glance

  • Visa, Mastercard, Paypal, and other Libra token partners have announced their departure from Facebook’s Libra Association.
  • Federal Reserve Bank of Dallas President Rob Kaplan claims the US Central Bank is actively debating the creation of a “digital dollar”.
  • Facebook’s Libra reveal has prompted China to try and expedite the development of a yuan-backed cryptocurrency.
  • The US Department of Justice traced Bitcoin transfers as part of a successful operation to break up the world’s largest child pornography website.

Visa, Mastercard, eBay, Stripe All Leave Libra

NewsBTC

Facebook’s Libra had the potential to be a game-changing cryptocurrency hit that would attract mainstream usage across the social giant’s platforms. In the wake of regulatory scrutiny, however, Libra’s partners are backing out. Stripe and eBay both announced their exit from the Libra Association last Friday, while Visa, MasterCard, and Paypal followed suit within hours. Facebook’s Mark Zuckerberg will speak before Congress on October 23, which may either restore the Libra’s prospects or put the final nail in its coffin.

It first started on Friday morning, with the Financial Times revealing that both eBay, the e-commerce/online marketplace giant, and Stripe, a fintech giant, have dropped out of the Libra Association.

Speaking to the outlet, an eBay spokesperson asserted that while the company “respects the vision of Libra”, the American firm will not be moving ahead with its participation in the Association, citing a focus on ” rolling out eBay’s managed payments experience for our customers.”

Stripe made a similar comment, telling the FT that it is “supportive of projects that aim to make online commerce more accessible for people”, but will not be moving forward with the Facebook-backed crypto project at this time.

Top Fed Official Says US Central Bank ‘Actively’ Debating Digital Dollar

CoinDesk

Ever since Bitcoin first debuted in 2008, traditional and crypt-based financial experts have speculated on whether fully digital currency was in the cards. Now it seems the US Central Bank is discussing this exact question. In a recent statement, Federal Reserve Bank of Dallas President Rob Kaplan noted the Central Bank is giving “active” thought to a digital currency. While the Central Bank hasn’t made a decision just yet, such a move could mitigate fears if the US dollar lost its reserve currency status.

Because of the dollar’s prominent role in international commerce and the dominant U.S. leadership position in global affairs over the past century, many foreign central banks, commercial banks and investors hold assets denominated in the American currency.

If that stopped happening due to the existence of an attractive and viable alternative, the thinking goes, then demand for U.S. assets such as Treasury bonds would shrink, in turn pushing up interest rates on the national debt, which is now approaching an unprecedented $23 trillion.

Kaplan noted that the U.S. government’s interest rates could jump by some $200 billion if a loss of the reserve-currency status sent interest rates jumping by a single percentage point, or 100 basis points in the lingo of bond traders.

As Facebook’s Libra faces headwinds, China is racing to launch its own global cryptocurrency

CNBC

Facebook’s primary competition for the Libra token may not be another corporate, but the nation of China. According to reports from RBC Capital Markets analysts, the People’s Bank of China has expedited efforts to launch a yuan-backed crypto token following Libra’s announcement last June. Experts suspect the motivation may be to gain an advantage over growing US interest in crypto markets.

“If U.S. regulators ultimately dismiss Libra and decide not to draft regulation to encourage Crypto innovation in the U.S., China’s [Central Bank Digital Currency] may be strategically positioned to become the de facto global digital currency in emerging economies, largely through Alipay, WeChat, UnionPay and other messaging & payment apps,” RBC analysts Mark Mahaney and Zachary Schwartzman said in a research note Tuesday.

Cryptocurrency would add to a long list of existing tensions between the global superpowers. The U.S. and China are locked in a stalemate on trade, and a battle for dominance in 5G, the mobile network promising faster data speeds. The U.S. Treasury Department has also labeled China as a currency manipulator — a complaint that could be exacerbated if a yuan-backed cryptocurrency takes off.

Fed chairman Jerome Powell said earlier this year that the U.S. is keeping an eye on sovereign-issued digital currencies but that it wasn’t something he was “actively considering.” In the meantime, other digital currencies could “dampen the domineering influence of the U.S. dollar on global trade,” Bank of England governor Mark Carney said during a speech in Jackson Hole, Wyoming, earlier this year.

US Law Enforcement Traces Bitcoin Transfers to Nab ‘Largest’ Child Porn Site

Forbes

It’s not unusual for criminals to use cryptocurrency to make a quick buck or avoid law enforcement, but those days may be drawing to a close. The Department of Justice recently announced it had tracked Bitcoin transfers to identify the owner of Welcome to Video, the largest child pornography site on the internet by volume. A federal grand jury indicted Jong Woo Sun, a 23-year South Korean citizen currently serving a sentence in his home country. The operation has also led to the rescue of 23 minors within the United States.

WTV offered these videos for sale using bitcoin, rather than simply sharing the videos and images over a chat forum. According to the indictment, the site claimed more than a million downloads of child exploitation videos by its users.

Each user received a unique bitcoin address to create an account on the website. An analysis of the server revealed that the website had more than one million bitcoin addresses, signifying that the website had capacity for at least one million users.

That’s the roundup for October 19. Check in next week for the latest news of cryptocurrency innovation and regulation around the world!

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