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Joint regulators’ statement on Libra; Bloomberg found a correlation between bitcoin and gold. Walmart patents stablecoins; MasterCard is searching for blockchain specialists.
The authorities of Great Britain, the European Union, the USA, Canada and Australia published the joint statement concerning the Libra project. It is reported that Facebook has previously been caught out in insufficient attention to customers’ confidential data, so they feel anxious now that it can get information on a huge number of users.
They were also concerned about the fact that regulators had not yet received additional information regarding confidentiality and protection of information in the Libra Network project. In their statement they asked the Libra Association members to provide more detailed information on this issue.
David Marcus, the Head of Facebook blockchain division, had to withstand a number of strong statements against the new project at past US Congress hearings. Most of them were associated with data and confidential information security.
It sounds like the countries’ authorities found the most acute issue for the company. It leaked users’ data for several times, and now this has turned out to be the most vulnerable spot. But hardly the true reasons for the authorities’ dissatisfaction concern this area. Apparently, they are concerned about the influence of Facebook cryptocurrency on the global economy.
For example, the People’s Bank of China has yet again confirmed its plans to accelerate the national cryptocurrency development. During videoconference, it was announced that the US could receive unjustified preferences once Facebook launches cryptocurrency. Therefore, the authorities are forced to speed up the study of the technology of using digital financial assets. It can be concluded that Facebook provoked a conflict. Despite the opposition from the regulators of the USA, Great Britain, EU, Australia and Canada, they will be forced to promote new technologies themselves.
Bloomberg experts conducted another study tracking the gold and bitcoin rates correlation. Over the past three years, this index has been continuously growing. If a year ago it was 0.496, then now it has risen to 0.827. If this figure increases to 1.000, this will bear evidence of almost complete trend coincidence.
Financial markets crisis increases the interest in cryptocurrencies purchasing. Many events have taken place in recent months speaking of an unfavorable situation in the global economy. The trade war between the US and China keeps developing; moreover, it is now moving to a new level. The Chinese are weakening yuan rate, and the Federal Reserve System is reducing interest rate for the first time in many years. Investors seek hiding place for their assets, and bitcoin and gold are starting to be in almost equal demand.
For the first time since 2008, the US Federal Reserve reduced the rate by 0.25 points. Delphi Digital researchers are confident that this portends a perfect storm in global financial platforms. Following the Americans, other countries will soften monetary policy.
The fact of reducing interest rate speaks of emerging problems in the global economy. In the long run, this will lead to the inevitable devaluation of national currencies. More affordable money will spur emission and inflation, which will lead to the growth of bitcoin as a reserve asset. Stocks will become not so reliable as usual because the companies will also come under pressure during uncertainty.
In fact, investors have no choice. The government securities yield will also decrease after interest rates reducing and only gold and cryptocurrencies insure the devaluation risks. This is exactly what can be attributed to Bitcoin growth last week.
Despite serious pressure on the part of regulators and the Libra project criticism, the BTC/USD pair was able to approach $ 12,000 by adding almost 20% in a week. This serves as the best indicator of increased investors’ interest in risk hedging. Gold also showed significant growth: troy ounce cost exceeded $ 1,500.
Walmart, the largest US retailer, has registered a patent for the use of digital currency via blockchain. Its details indicate that the company plans to launch its own stablecoin, which will be fully controlled by it. It was earlier reported that a number of retail chains expressed dissatisfaction with the high payment systems commissions. However, previously they received payment in cryptocurrency using third-party services.
The advantage of such payment mode is the lower transaction cost via blockchain, which gives huge savings on a global business scale. However, their competitors do not mark time. For example, MasterCard announced the search of key employees for cryptocurrency projects.
There is an information on the employee search website that MasterCard is searching for a vice president on blockchain products, an engineer and a head of cryptocurrency wallet development.
However, experts do not connect this with the retailers’ initiative to switch to goods payment by means of cryptocurrency. Most likely, new specialists will work on Facebook project. Although it is criticized by regulators, it will hardly be able to stop progress.
MasterCard is a part of the Libra Association along with VISA, its main competitor. That is, they both can get the opportunity to become leaders in the development of cryptocurrency based payment system. Under such circumstances, wasted time can adversely influence the industry.