Control of the U.S. dollar and the global financial system that depends on it gives the American government an incredibly powerful tool in shaping international affairs. As such, it is not surprising that its geopolitical rivals around the world will try to exploit the invention of cryptocurrency to take the USD down a peg. The latest example comes from Iran that now wants to create a digital token backed by gold.
On Saturday, July 13, Tehran-headquartered Mehr News Agency reported that the country’s first cryptocurrency issued under permission of the Central Bank of Iran (CBI) is set to be unveiled. This was according to an announcement by an official from the Iran Chamber of Commerce, Industries, Mines and Agriculture, a non-profit institution established to facilitate economic growth and development in the country.
The official, Shahab Javanmardi, said that the indigenous digital coin will be mined by a consortium of private Iranian IT firms in accordance with the agreement of the CBI and also called on the government to issue regulations for the country’s crypto mining sector. He claimed that “the Iranian cryptocurrency is backed by gold but its function is similar to foreign rivals.” Furthermore, he revealed that “the domestically encrypted money is to ease optimal use of Iranian banks’ frozen resources.”
Iran has reportedly been preparing to launch its own cryptocurrency for a long while now. Last July state-controlled media also claimed that a large number of homegrown Iranian tech companies were developing such a project in cooperation with the CBI. At the same time, the Iranian government has also made it harder on its own citizens to mine and trade cryptocurrency, with limited success.
Tools for Bypassing American Sanctions
Cryptocurrencies sanctioned by the government or even directly issued by central banks are not a new concept. Various countries around the world have floated the idea or claimed to have tested it in some capacity. Sweden, for example, is known to be probing the creation of an e-krona, its version of central bank digital currency (CBDC), with the help of private blockchain development companies. However, while the Scandinavian country is considering the move due to its ability to support a transition to a cashless society and other economic factors the Iranian goal for its own crypto is very different.
By imposing economic sanctions on other nations the U.S. can deter them from taking actions it disapproves of or even brings an enemy country to its knees without firing a single shot. Iran has been on the receiving end of various American sanctions for decades now and the development of local cryptocurrency needs to be seen in this context. Simply put, the main purpose of any Iranian digital asset will be to bypass the established banking and financial system in order to evade economic sanctions.
The prime example of a cryptocurrency created specifically for bypassing financial sanctions is the Venezuelan petro. Like the purported Iranian token, it is also a resource-backed digital asset, just with mainly oil instead of gold. When president Nicolás Maduro introduced the petro to the public on TV back in December 2017, he stated that it would allow the country to “advance in issues of monetary sovereignty”, and make “new forms of international financing” available to Venezuela.
In reality, these promises have failed to materialize so far and many consider the petro nothing more than a scam run by a corrupt government. It was of course also not helped by the U.S., which used all its powers to target the oil-backed coin. American citizens were forbidden from investing in it, and earlier this year the Treasury Department imposed sanctions on a Russian bank which was the primary international institution financing the petro’s launch.
Washington Must Lead International Crypto Race
All of these new crypto developments are not taken lightly in the U.S. which knows the power it may lose if they actually come to pass. Just a few days ago the Foundation for Defense of Democracies (FDD), a right-wing think tank based in Washington, DC, has published a report warning American policymakers about this threat.
The FDD paper details that Russia, Iran, and Venezuela have initiated experiments that their leaders admit are tools to offset U.S. financial coercive power. It claims that the petro serves as a case study for other regimes to learn what not to do and that Russia and Iran are strong allies in a plan to develop a digital currency that could be used for trade outside the SWIFT financial messaging system.
The report also focuses on America’s main trade war rival, China. It explains that the country is wary of the ever-present threat of sanctions against its officials. While China is less threatened by sanctions than other adversaries at the moment, the FDD notes that displacing American influence in the global financial system is a Chinese national priority. It warns that Chinese engagement may be the biggest variable in sanctions resistance efforts. “China’s buy-in, if it involved moving its trade onto a blockchain platform outside the conventional system, would be a game-changer.”
The think tank finds that technology has created a potential pathway to alternative financial value transfer systems outside of U.S. control. “Washington, therefore, must understand the benefits and threats posed by new financial technologies, maintain the integrity of global finance, and cultivate the expertise and influence to lead in what is becoming an international crypto race.”
This may help explain the Trump Administration’s recent interest in cryptocurrency.
What do you think about Iran issuing a crypto backed by gold? Share your thoughts in the comments section below.
Images courtesy of Shutterstock.
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Roughly a year ago, the Simple Ledger Protocol (SLP) debuted on the Bitcoin Cash (BCH) network, giving anyone the ability to mint, store, receive, and send SLP tokens. Since then there’s been a ton of tokens created on the BCH network as the simplicity of the system outpaces tokens built on alternative chains like ERC20s and sending the tokens is far cheaper than most networks as well. The following walkthrough describes how to create SLP tokens and airdrop them to your friends and family in a short space of time.
Over the last few months the Simple Ledger Protocol, a tokenization platform built on top of the Bitcoin Cash network, has grown very popular among BCH enthusiasts. The reason for this is due to how easy it is to create an SLP token in a matter of minutes. To show how simple it is to mint, store, and airdrop tokens using the SLP tokenization platform, we’ve created a guide on the two easiest ways to get started. After reading this post and performing a few test runs on either the Memo.cash or Electron Cash applications, you’ll be able to create SLP tokens faster than the Fed prints dollars.
One of the quickest ways to mint a token on the BCH network using the SLP platform is through the application Memo.cash. You first need to sign up for Memo.cash and load the account with a small number of satoshis (nickel or dimes’ worth will do) because every action on Memo is basically created with a BCH transaction. If you already have a Memo account you can skip ahead, but if you don’t have an account you can quickly create one here.
After the Memo account is created, the top right-hand side of the account page shows a Bitcoin symbol which leads to Memo’s native wallet. To fund the account, choose and copy the BCH address on the right-hand side of the page or simply scan the QR code. After the Memo account is created and funded, you can play around with Memo’s functionality or head directly to the memo.cash/token/create page. Again, your account needs to be funded with a small fraction of BCH in order to create a token using the Memo platform.
The memo.cash/token/create page shows all the custom fields that can be customized before minting an SLP token. This includes the token’s ticker, name, decimal amount, custom URL, and the initial quantity. After deciding on the specifics of your new token, press “Create” and the new SLP token creation will be broadcast to the BCH network. Memo provides an SLP wallet so after you create a token, it will be stored in your account which can be found in the wallet section. After that step, you can do whatever you want with the new tokens and send them to people on a whim. There is one thing to remember when creating an SLP token on Memo.cash: everything is recorded onchain when you mint a token or send tokens to someone else from your Memo account. Of course, if you wanted you could create a throwaway account on Memo to build an SLP token in a private manner.
Designing an SLP Token Using the Electron Cash Light Client
Another way to create an SLP token is using the Electron Cash wallet SLP version. You can download the Electron Cash SLP 3.4.14 release here and the wallet is supported by Windows, Mac, and Linux operating systems. Electron Cash SLP allows you to create, mint, burn and send SLP tokens using the light-wallet implementation. After downloading the wallet, the software will ask you to create a new wallet or import existing funds into the platform. If this is your first time, create a new wallet and record the seed phrase on paper as you would normally do when creating a new wallet. After that step, just like Memo, you will need a small fraction of funds to start creating tokens and for sending them as well. So at the top of the Electron Cash wallet, choose one of your BCH addresses and send a fraction of BCH ($0.05-0.10 is plenty) to the address. Once the wallet is funded you can now create a token using the Electron Cash wallet in a matter of minutes.
At the top of the wallet, there’s a tab on the right-hand side that says “Tokens” and you choose this tab to create an SLP token using the wallet. After selecting the “Tokens” tab at the bottom of the wallet, there’s a tab that says “Create New Token” which will bring you to the token creation window. The customizable fields in the creation window include an optional ticker symbol, token name, document URL or email, a document hash, decimal amount, token quantity and the ability to customize the SLP receiving address.
The Electron Cash wallet has a few more functions as well, including the ability to upload a token document from the wallet itself, and you can also preview the customized settings before broadcasting the token’s genesis transaction to the network. The Electron Cash SLP version can also make it so your token is fixed or you can keep the baton open making minting more tokens possible in the future at any time. If you are comfortable with all the settings you chose, simply press “Create New Token” and Electron Cash will initiate the genesis creation transaction.
Creating a token on the SLP tokenization platform is super easy and creating one is much faster than designing an Ethereum-based ERC20 token. There’s a number of wallets that support SLP tokens now as well including Badger Wallet, Electron Cash, Memo, Ifwallet, and Crescent Cash. Users can put even more time into creating a token and design something that might gain value like collectibles or coupon tokens. For instance, I created a set of coins called PKMN S1 which stands for Pokémon Series 1. The Pokémon collection isn’t quite finished, but can be viewed at this address.
Each token is nondivisible and there is only one coin for each Pokémon character in the series. Each token is also tied to a unique URL that leads to the official Pokédex. In order to make sure my tokens are unique, I used one address for the genesis creation of PKMN S1. I also signed and verified a message that proves I own the address that is tethered to the Pokémon series. My idea is to one day airdrop these rare Pokémon characters to random people who share their SLP address online. So if you happen to randomly get a Pikachu, Bulbasaur, Charmander, or Squirtle sent to your wallet, you’ll know where it came from. If you want to airdrop your newly created tokens to your friends all you need is their SLP address.
BCH Tokenization Using SLP Has Matured a Great Deal With Wallet Support and People Making a Variety of Tokens
The BCH tokenization platform the Simple Ledger Protocol (SLP) has been gathering steam lately as many Bitcoin Cash proponents and businesses have been experimenting with the protocol. For instance, the most popular SLP tokens used today include Honk, Spice, the Official SLP Token, Honestcoin, and Dogecash. Then there’s the micronation of Liberland which created Merits which acts as Liberland community funding coin. The city of Dublin, Ohio is in the midst of creating a city-based token using the SLP platform and the coin will be used for city-wide discounts and rewards in Dublin.
The Tokyo-based Alliance Cargo Direct minted the SLP-minted token ACD which is now traded on the Altilly exchange. The ACD token will be used at online and brick-and-mortar merchants from Japan, according to Alliance Cargo Direct, a subsidiary of ANA Holdings (ALNPF). Additionally, on June 12 the digital asset exchange Coinex announced the listing of a new SLP-based stablecoin USDH. Created by the Honestcoin.io team, USDH is fully regulated and backed 1-to-1 for U.S. dollars.
Making a token isn’t hard and they are fun to send to friends and people learning about the Bitcoin Cash ecosystem. You can even follow the vast amount of SLP tokens created using the Simpleledger.info transaction explorer or other explorers like Bitcoin.com’s BCH Block Explorer. After experimenting with SLP you’ll be well versed in creating tokens on top of the Bitcoin Cash network in no time and who knows, maybe after airdropping your token it could become used widely or gain monetary value.
What do you think about creating SLP tokens using either Memo.cash or the Electron Cash wallet? Let us know what you think about this subject in the comments section below.
Disclaimer: This article is for informational purposes only. Readers should do their own due diligence before taking any actions related to the mentioned applications and services. Bitcoin.com and the author are not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
Image credits: Shutterstock, Simple Ledger Protocol, Bitcoin.com, Jamie Redman, Memo.cash, the official Pokédex, Badger Wallet, Ifwallet, Crescent Cash, and Electron Cash.
Bitcoin ATMs are not currently governed by EU money laundering regulations, and arrests coordinated by Spanish police and Europol in May are bringing new focus to this loophole. A group of eight Spanish and Latin American individuals have been arrested, along with several of their associates, for using crypto ATMs to fund drug traffickers in Columbia. While large cryptocurrency exchanges worldwide are subject to increasing oversight and regulation, bitcoin ATMs often fall in legal gray areas, prompting debate amongst regulators and crypto users alike.
Back in June, police in Canada commented that the convenient crypto exchange hubs effected by bitcoin ATMs are “an ideal money-laundering vehicle.” According to a report from the Vancouver P.D. to the police board in February:
The other issue with unregulated Bitcoin ATMs is that they are an ideal money laundering vehicle. Since there are no requirements to register any customer details, it is easy to see how cash can be transferred into Bitcoin and vice versa. A user can also launder an unlimited amount of money using smaller transactions so as not to arouse suspicion, like they would at a regular bank.
Now, the mayor himself is pushing for direct bans on the ATMs. This is notable since the first ever bitcoin ATM was installed in a Vancouver coffee shop in 2013. The city is currently host to over 70.
Japan, often known as the world leader for crypto adoption and regulation, has already tackled the issue with a set of iron-fisted legal protocols of its own. Though just years ago Tokyo bitcoiners could easily find multiple ATMs allowing easy exchange from bitcoin to fiat or vice versa, the April 2017 Payment Services Act changed all this.
Many small business owners who had previously hosted the machines experimentally, or as a service to growing crypto-savvy customer bases, found themselves slapped with heavy licensing fees and tedious legal restrictions. Areas like the Roppongi district—once a small, but rapidly burgeoning hub of crypto ATM exchange—saw the machines essentially “ripped out” as a result of Japan’s FSA clampdown.
In Japan, where digital assets like bitcoin and others are officially recognized as legal currency, this is not surprising. ATMs in other regions, however, continue to afford users relative autonomy and privacy in transaction.
United States Regulations
Similar in some sense to the regulatory climate in Spain regarding ATMs, America’s licensing requirements for merchants are still in flux. Every state—other than Montana—has a licensing requirement, but not every state agrees on what bitcoin actually is. The cryptocurrency wedges itself as a kind of monkey wrench in the gears of traditional policy, owing to its unique characteristics and technological capabilities.
Unlike Japan, it’s still pretty clean and easy to make an ATM exchange in the states. Users don’t need to worry about each and every single transaction’s realized gains or losses for tax purposes. Where in the U.S. bitcoin is treated similar to a stock, and subject to capital gains tax, in Japan every last miniscule transaction must be recorded, and the gains calculated for later reporting.
Crypto ATMs Across the Globe
There are an estimated 5,000 crypto ATMs globally, servicing locales subject to remarkably diverse regulatory and legal frameworks. How these machines should be managed is fiercely debated, though governing bodies tend to agree on the swelling capacity for use in criminal enterprise. With a forecasted compound annual growth rate of 56.9% from 2019 to 2026, it’s not hard to see why.
Companies like the United States’ Genesis Coin, General Bytes in the Czech Republic, and Lamassu in the U.K., are all leading industry players in the field of ATM manufacturing. Even established legacy system ATM manufacturers like Japanese Oki have entered the market in the recent past.
Government Reaction to Illegal Use
When Indian exchange company Unocoin tried to install India’s first bitcoin ATM in 2018, the company’s co-founder was swiftly arrested by the cyber crime unit of the CCB (Central Crime Branch) which stated:
The ATM kiosk installed by Unocoin in Bengaluru’s Kempfort Mall has not taken any permission from the state government and is dealing in cryptocurrency outside the remit of the law.
According to Unocoin, they were actually trying to help with legal adoption in the context of regulatory hurdles, as users could make withdrawals and deposits in BTC, but not buy or sell. In fact, at the time of the arrest the ATM was not even operational yet.
Regarding the Spanish scandal, EU regulations are now being proposed to take effect in 2020, which would include exchanges and online wallet custodians becoming subject to new anti-money laundering laws. As such, KYC policies and similar measures vetting users and customers are likely to become more widespread in the near future.
Arguably the most vital function of bitcoin and other cryptos is the ability to effect quick, low fee, and relatively private P2P transactions. Some users are growing uneasy as tighter regulatory measures sap this functionality, and seem to force the asset back into legacy-type, cumbersome processing channels. On the heels of recent criticism from U.S. President Donald Trump, claiming bitcoin facilitates money laundering and criminal activity, some privacy-minded users are beginning to sound off.
Bitcoin ATMs have up until now provided—at least in some measure—a relative safe haven for private, autonomous exchange of crypto, as well as direct and simple means for onboarding new users.
The Spanish Laundry Cycle
Laundering money with these machines, however, is not so simple. The busted scammers in Spain had used false identities to set up two bitcoin ATMs in a Madrid office, claiming to be a center for crypto exchange and remittances. When connected Colombian drug lords sold their product in Europe, the illicit euros were deposited into these ATMs. The crypto was then directed back to the cartels, and finally exchanged for “clean” Colombian pesos.
To facilitate this relatively straightforward-sounding loop, however, the group was utilizing a complex and layered network of cartel-connected bank accounts and corporations. Though Spain is home to just around 80 bitcoin ATMs, authorities are nonetheless concerned and are urging swift action in the face of this scheme coming to light.
What do you think about bitcoin ATM regulations? Let us know in the comments section below.
Image credits: Shutterstock, Twitter
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Popular BCH and BTC wallet joins Foundation for Interwallet Operability (FIO) to improve crypto usability across blockchains
DENVER, CO — 16 July 2019: Bitcoin.com wallet, the official wallet of Bitcoin.com, has joined the Foundation for Interwallet Operability (FIO) in a move that will assist the wave of new users who are expected to join cryptocurrency markets as a result of June’s recent coin and token price increase.
As the newest member of the FIO, Bitcoin.com wallet joins a consortium of 23 other leading companies in the crypto ecosystem, including Binance’s Trust Wallet, BRD Wallet, ShapeShift, MyCrypto, Edge Wallet and Coinomi Wallet.
The FIO Protocol is a decentralized service layer that enables several major usability features across any blockchain, token or coin.
This includes functionality that puts an end to the need for a 64-character gibberish alphanumeric string to transfer crypto, integrated request for payment workflow that virtually eliminates errors when sending crypto and standardized metadata that provides context for the purpose of a transaction.
Future roadmap items include subscription billing, multi-signature routing for security and cross-wallet data visibility.
“Crypto usability is still one of the biggest challenges the industry has to solve and our new relationship with the FIO is all about trying to find a solution to this big issue, ” said Stefan Rust, Global Head of Business Development of Bitcoin.com.
“With prices rising once again, we’re likely to see more and more new entrants everyday. Therefore, we should be trying to ensure crypto is as easy as possible to use, which is why we have joined this consortium of leading companies already involved in the FIO.”
One of the main attacks that the FIO Protocol can help deflect is a keylogger attack, where the hacker can covertly monitor and record keystrokes. In addition, the FIO Protocol can be used to send public addresses in a more secure way than via email or text, eliminating the risk of man in the middle attacks.
A usability survey conducted by the FIO found that 75% of crypto users are less than completely confident when they send blockchain tokens and coins, and more than half experienced problems with transactions during 2018.
“Our research tells us that even those users who consider themselves comfortable with crypto are still not completely confident things will go as planned when engaging in blockchain transactions. We need to ensure they and all the new entrants we expect to see have a user experience across all blockchains that is easy and accurate, which is why it’s fantastic to have such a popular wallet as Bitcoin.com join the consortium and help us fulfill our mission for crypto usability,” commented David Gold, Founder and CEO of Dapix, the team behind the protocol’s development.
The addition of Bitcoin.com wallet to the FIO consortium comes after ChangeNOW joined in June and Enjin Wallet joined in April.
FIO sits alongside all other blockchains, providing a decentralized layer of messaging, communication and workflow about the sending of value on those blockchains. FIO does not send crypto value—it makes the sending of value on any blockchain better. Additionally, FIO is not a wallet—it enables all wallets to be safer and more user-friendly.
Crypto wallets, exchanges and payment processors can learn more about the Foundation, as well as the benefits of becoming a member, by visiting https://fio.foundation/.
About FIO Protocol:
The Foundation for Interwallet Operability (FIO) is a consortium of leading wallets, exchange, and crypto payment processors supporting the FIO Protocol — a decentralized Service Layer that removes the risk, complexity, and inconvenience of sending and receiving tokens and coins identically across every blockchain. The FIO Protocol is not a wallet and does not compete with other blockchains, rather, it makes the user experience better across every wallet and every blockchain.
To learn more visit: https://fio.foundation/
A draft cryptocurrency bill for India has been leaked in full, but details of the bill have raised some questions. News.Bitcoin.com talked to a number of experts in the field who shared their analyses of the bill’s content and its implications on the Indian crypto industry.
The draft cryptocurrency bill, which has been causing quite a stir within the Indian crypto community, has surfaced in its entirety. Varun Sethi, founder of Blockchain Lawyer, shared on Monday the document entitled Banning of Cryptocurrency and Regulation of Official Digital Currency Bill 2019. News.Bitcoin.com previously provided a preliminary analysis of this rumored bill after Bloombergquint and The Economic Times made outrageous claims about it.
India is currently deliberating on the regulatory framework for cryptocurrency. An interministerial committee headed by Finance Secretary and Secretary of Economic Affairs Subhash Chandra Garg was tasked with studying all aspects of cryptocurrency and recommending crypto regulation for India. Garg said last month that his committee’s report was ready to be submitted to the finance minister for approval.
Important: Bill Is Unofficial and RBI Denies Involvement
Before paying much attention to this bill, there are several important points to note. First and foremost, this bill was not announced by the Indian government so its veracity is in dispute.
Advocate Mohammed Danish, co-founder of Crypto Kanoon, an Indian platform for blockchain and crypto regulatory news and analysis, told news.Bitcoin.com:
This document cannot be claimed as the final recommendation of the expert committee to the Ministry of Finance. The document contains no mark of authentication on it nor it has come out from any official source.
Another important observation is that at least one of the regulators listed on this bill has denied its involvement. The last page of the bill provides a list of “appropriate regulators,” namely the Insurance Regulatory and Development Authority of India, the Pension Fund Regulatory Development Authority, the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), “and any other appropriate regulator as may be notified by the central government.”
However, in its reply to a Right to Information (RTI) request filed by Sethi, the RBI stated last month that it did not have any knowledge of this bill. In addition, the central bank confirmed that it neither proposed a ban on crypto assets nor had knowledge of any other government departments doing so. After sharing a copy of the bill, Sethi asserted Monday:
This looks like a very very rough draft of a proposed bill … [it might be] just a random discussion paper and it may not actually become [a] bill in the same manner and mode in which this has been stated.
Draft Bill Far From Becoming Law, Plenty of Changes Expected
Nischal Shetty, CEO of local crypto exchange Wazirx, immediately tweeted in response to the leaked bill. He advised everyone not to panic until a bill becomes law. “This crypto bill has not been introduced in [the] current Parliament session,” he emphasized. “This looks like a rough draft, plenty of changes to come.” Shetty has been running a Twitter campaign calling for the Indian government to introduce positive regulation for cryptocurrency.
He explained to news.Bitcoin.com that “The Monsoon session of Parliament will not be discussing this bill, which means now we need to see if it gets discussed in the next parliament session which might be in December,” adding:
Regardless, there are many bills pending to be discussed in Parliament so there’s low likelihood of this bill being heard.
The CEO opined: “If this is a real draft then it’s a very regressive approach to new technology. I’m certain our lawmakers will question and amend it such that the ban applies on money laundering and not on entrepreneurship or public participation.”
Sumit Gupta, CEO of local crypto exchange Coindcx, said to news.Bitcoin.com that “I am not sure if the government will actually go ahead and implement this, given the recent discussions Prime Minister Narendra Modi and our Finance Minister Nirmala Sitharaman had at the G20 summit in Japan.”
India, along with other G20 nations, declared its commitment last month to applying the crypto standards set by the Financial Action Task Force (FATF). Sitharaman and other G2 finance ministers and central bank governors also jointly declared their commitments to applying the FATF crypto standards.
Gupta believes that “If this becomes a law, this would be one of the biggest mistakes by the Indian government.” He described, “We will see blockchain startups moving out of the country, proficient blockchain developers moving abroad or working only on foreign projects,” adding:
At a global level, the industry will keep on growing, innovation will keep on happening, and India will lose out its technological edge, just because the government is not ready to understand this technology well.
Advocate Danish believes that “based on the language of the document coupled with other information based on earlier filed RTIs, it can be safely assumed that it may be that document which the committee has recommended.”
Positive and Surprising Aspects of the Bill
Sethi noticed some positive and surprising aspects of the bill. Firstly, according to the bill, cryptocurrency “means any information or code or number or token not being part of any official digital currency, generated through cryptographic means or otherwise, providing a digital representation of value which is exchange with or without consideration, with the promise or representation of having inherent value in any business activity which may involve risk of loss or an expectation of profits or income, or functions as a store of value or a unit of account and includes its use in any financial transaction or investment, but not limited to, investment schemes.”
Surprised that this definition includes “any information,” Sethi pointed out how this bill’s definition of crypto is “massively different from the interpretation” of other countries. As an example, he explained that if he encrypted a message to tell his friend that it is raining in Delhi and his friend decided to cancel his business trip based on this message, that piece of information would be considered cryptocurrency based on this bill’s definition.
Secondly, he also noticed that the bill allows cryptocurrency to be used for research purposes. He raised the question of what if all developers declare that their crypto projects are for research purposes. Moreover, if a college professor issues tokens for research purposes, Sethi questioned whether the professor would be allowed to sell the tokens and if anyone would be allowed to buy them.
Professor A. Damodaran of the Indian Institute of Management in Bangalore shared some thoughts with news.Bitcoin.com regarding the aforementioned bill. He remarked, “It is narrowly scoped. By design, the bill is meant to strengthen India’s Payment and Settlements Act 2007 and attack money laundering. Crypto tokens (including ICOs) which are assets/ securities are out of the ambit of this Bill,” elaborating:
The good news is that the bill does not prevent crypto tokens from being used as a development instrument to help India’s unbanked population, most of whom are poverty ridden.
About the Rumored Draft Bill
The draft bill has six main parts. Part 1 introduces the bill, states that it applies to all of India, and defines 18 terms including cryptocurrency, digital rupee, distributed ledger technology, foreign digital currency, investment schemes, miner, mining, and the RBI.
Part 2 outlines the activities prohibited. Part 3 addresses the regulation of the digital rupee and foreign digital currency, as well as prohibition on various uses of cryptocurrency. It also describes offenses and penalties. Part 4 details the powers of the investigating authority while Part 5 talks about the penalties and proceedings. The last part of the bill covers miscellaneous items such as “protection of action taken in good faith.”
The bill also proposes to amend the Prevention of Money Laundering Act 2002, and also provides a list of five appropriate regulators, as previously mentioned.
Proposed Prohibitions and Offenses
Advocate Danish further told news.Bitcoin.com: “Now coming to the provisions of the bill, the definition clause attempts to transgress than what is actually required which is giving rise to confusion in understanding the terms like ‘cryptocurrency’ and ‘distributed ledger technology’ among others. The bill prescribes punishment of fine/jail term of up to 10 years for even buying, selling and storing of cryptocurrency. The bill not just cracks down on industry players but it also gives a shock to influencers by prescribing jail term up to 7 years for soliciting or inducing participation for use of cryptocurrency.” He noted:
By making some of offences cognizable and non-bailable, this bill conveys a clear message about the policy of zero tolerance.
Danish continued: “I must say that for implementing such a special legislation, the administration/ investigating agency must be well equipped. And I don’t think the decision of Home Ministry to provide special training to the police officials in September is a coincidence.” The advocate is referring to the cryptocurrency course by the Sardar Vallabhbhai Patel National Police Academy for high-ranking officers, as news.Bitcoin.com previously reported.
Regarding the content of the bill, Chapter 5 deals with “prohibition on use of cryptocurrency,” which excludes “digital rupee, or any foreign digital currency recognized as foreign currency in India.” Section 7 of this chapter explains that “Cryptocurrency shall not be used as legal tender or currency at any place in India … No person shall directly or indirectly use cryptocurrency in any manner, including as – (a) a medium of exchange; and/or (b) a store of value; and/or (c) a unit of account.”
Section 8 of this chapter states that “No person shall directly or indirectly use cryptocurrency” for the activities subsequently spelled out. The activities are “as a payment system; buy or sell or store cryptocurrency; provide cryptocurrency related services to consumers or investors which includes registering, trading, settling, clearing or other services; trade cryptocurrency with Indian currency or any foreign currency; issue cryptocurrency related financial products; as a basis of credit; issue cryptocurrency as a means of raising funds; and/or as a means for investment.”
Chapter 6 of the bill lists offenses: “Whoever directly or indirectly mines, generates, holds, sells, deals in, transfers, disposes of or issues cryptocurrency or any combination thereof with an intent to use it for any of the purposes mentioned in [Section 7 and 8] … shall be punishable with fine as may be prescribed by the central government in the First Schedule or with imprisonment which shall not be less than one year but which may extend up to ten years, or both.” News.Bitcoin.com has previously provided some analysis of this bill.
Helping Indian Government Understand Crypto
Sethi explained to news.Bitcoin.com that this bill presents an opportunity to talk to the government about cryptocurrency. Noting that most of the bill “looks as if crypto is a crime on [the] same terms as child pornography or kidnapping,” he reiterated that “a more democratic conversation is needed with the government to make them understand what the real matter is,” suggesting:
Things like the results we got from the signature campaign shall now become more relevant … we can use it to talk to the government now.
Last month, Sethi started a campaign on Change.org for the government to start regulating the crypto industry. He now urges stakeholders to “ramp up efforts” to engage with the government to help them understand.
Akshay Aggarwal, Blocumen Studios CEO and co-founder of Blockchained India, shared with news.Bitcoin.com that “It is sad to see that after witnessing the largest industry consultation drive in India, the government didn’t pay any heed to the recommendations of the industry stakeholders.” Blockchained India recently hosted a conference called India Dapp Fest, after organizing a series of roadshow town halls for anyone to voice their regulatory suggestions. Nonetheless, he maintains:
There is still time that the Indian government takes an open outlook towards ensuring that the young entrepreneurs grab opportunities that this paradigm shift presents.
The Indian government has not given a timeframe for when the recommended crypto regulation will be made public. However, the country’s supreme court is scheduled to hear the crypto case on July 23. The court is expected to address the writ petitions against the banking restriction imposed by the central bank. The RBI issued a circular in April last year banning regulated entities from providing services to crypto businesses.
The court may also follow up on its request made in February for the government to submit the crypto regulatory report from the Garg committee within four weeks. However, the case was postponed and the court has yet to follow up on this request.
What do you think of this draft bill? Do you think it’s legitimate? Do you think the Indian government will pass this bill as is? Let us know in the comments section below.
Images courtesy of Shutterstock and India Today.
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Another week has passed for the Bitcoin Cash (BCH) community and as usual, there’s been a bunch of announcements and developments. BCH supporters this week saw the release of a multi-party onchain escrow system, Ethereum cofounder Vitalik Buterin discussed using the BCH chain as a data layer, and more BCH-accepting merchants were onboarded.
The cryptocurrency ecosystem is filled with new applications and developments nearly every day and many announcements stem from the BCH community. Last week we mentioned the first exchange-traded product (ETP) tracking the performance of bitcoin cash, Jonathan Toomim’s scaling benchmark, and how the rising transaction volume on the BCH blockchain makes the network one of the most valuable chains according to the founder of Ryan Research, Peter Ryan. Since then there’s been a slew of new announcements and developments within the BCH environment.
Multi-Party Onchain Escrow Transactions Using OP_Checkdatasig
On July 12, the cofounder of Cointext, Vin Armani, announced the release of “Jeton Lib,” a Bitcore library extension that provides users with the ability to create multi-party onchain escrow transactions using OP_Checkdatasig. “I want to see more people experimenting with BCH power,” Armani stated during the release announcement. According to the Jeton Lib documentation on Github, it explains that the BCH protocol has a unique script functionality that’s not available on other Bitcoin forks like the opcode OP_Checkdatasig.
“This functionality allows Bitcoin Cash users to participate in onchain, noncustodial escrow transactions and more,” Jeton Lib’s readme summary details. Developer Chris Troutner called the work a “game changer” and mentioned how the BCH peer-to-peer marketplace Local.Bitcoin.com uses OP_Checkdatasig for secure escrow transactions. Armani wholeheartedly believes that noncustodial escrow is a very big deal when it comes to the crypto industry. On Twitter Armani insisted:
Non-Custodial Escrow — This is the biggest immediate win in my opinion. Local.Bitcoin.com has implemented the first crack at this. In its final form, this will be totally peer to peer and done 100% from mobile wallets. This allows prediction markets of all types — Disruptive.
Onboarding More Merchants
This past week, North Carolina resident and BCH supporter Laura Young onboarded a new BCH merchant in her region. The local tea house called Sipsum in Maggie Valley, NC now accepts BCH for services and goods thanks to Young’s persistence. “I just onboarded a new merchant to BCH today — Congratulations Sipsum in Maggie Valley, NC welcome to economic freedom,” Young said on Twitter. Electron Cash founder Jonald Fyookball complimented Young’s work and said: “Great job Laura — Adoption is everything.” “That means a lot coming from you, thank you,” Young responded.
Moreover, on the Reddit forum r/btc, the BCH supporter u/Neonwasteland explained that the website Acceptbitcoin.cash now has 1116 online merchants listed in a “Merchant Monday” post. “There are 1294 brick-and-mortar merchants listed on Marco Coino, which is 43 more than last week,” u/Neonwasteland noted. “And you can find 1128 merchants of all types on Green Pages, which is 1 more than last week.”
Ethereum’s Vitalik Buterin Discusses Using the Bitcoin Cash Network for a Data Layer
In a Ethresear.ch (research blog) post, Ethereum cofounder Vitalik Buterin proposed using the Bitcoin Cash network as a short-term data availability layer for Ethereum. In the long term, Buterin details that scaling the Ethereum network may require testing data throughput using an alternative blockchain.
“Particularly [blockchains] that have lower transaction fees per byte than Ethereum, as the data layer — Bitcoin Cash arguably fits the bill perfectly for a few reasons.” Buterin listed four specific reasons as to why the BCH chain may fit the bill as a secondary data layer which includes:
High data throughput (32 MB per 600 sec = 53333 bytes per sec, compared to ethereum ~8kb per sec which is already being used by applications)
Very low fees (whereas BTC would be prohibitively expensive)
We already have all the machinery we need to verify Bitcoin Cash blocks inside of ethereum thanks to http://btcrelay.org/; we just need to repoint it to the BCH chain and turn it back on. Verifying BCH blocks is also quite cheap compared to eg. ETC blocks
The BCH community seems to be friendly to people using their chain for whatever they want as long as they pay the tx fees (eg. https://memo.cash)
Cashshuffle Blasts Through More Than 100,000 BCH Shuffled
Since March 27, the bitcoin cash shuffling application Cashshuffle has mixed 101,718 BCH according to statistics. That’s a whopping $31.9 million dollars (at the time of publication) shuffled by participants using the bitcoin cash mixing protocol.
On Twitter and BCH-centric forums, Cashshuffle fans were thrilled with the milestone on July 15. BCH proponent and developer @Acidsploit said on Twitter: “We just blasted through 100,000 BCH shuffled — More bitcoin cash made fungible every day thanks to Cashshuffle. Get started now at Cashshuffle.com, because what you do with your money is your business — Cashshuffle helps keep it that way.” On the Reddit forum r/btc, Electron Cash developer and Cashshuffle engineer, Jonald Fyookball, was delighted with the news and stated:
That’s quite a milestone — This proves Cashshuffle is indeed a highly used solution, not a nerd-only curiosity. And I think we surpassed Wasabi for total coins shuffled.
A Recurring Payment Plugin for Electron Cash Designed for Noncustodial Patronate
On July 14, software developer Karol Trzeszczkowski launched a new plugin for the Electron Cash wallet that enables recurring payments in a noncustodial fashion. After the Patreon-like application Bitbacker project went silent, Trzeszczkowski explained that the crypto community suspected it was an exit scam. Trzeszczkowski told r/btc forum participants that he was inspired by the Bitbacker situation and designed a covenant-based smart contract solution called Mecenas. The open source tool operates from the Electron Cash wallet and lets you establish a direct mecenas-protege relationship with others, Trzeszczkowski stated.
“Mecenas was created as a solution for bitcoin patronate exit scam risk. The plugin creates and manages a contract that shifts the responsibility for making the transaction from the sender to the receiver with time and value restriction,” the project’s Github documentation details.
Trzeszczkowski is also the creator of Last Will, a smart contract program for the inheritance of bitcoin cash. The Last Will protocol is also an Electron Cash plugin, but allows users to create and manage BCH endowments. The Mecenas covenant-based smart contract system is done onchain, in a noncustodial manner, and is permissionless by design. “The contract is defined by a special address that is cryptographically determined by the contract itself,” the Mecenas document reads. Trzeszczkowski revealed that he’s also mentioned the project to the CEO of Honest.cash and the creator of Cashies.org as well to discuss the possibility of integrating Mecenas in the future for a patronate bitcoin cash service.
Bitcoin Cash Developers Public Meeting #12
On July 11, the 12th Bitcoin Cash Development video meeting for 2019 took place in order to discuss plans for the upcoming November 2019 Upgrade. Developers who participated in the meeting include Amaury Séchet, Jason B. Cox, Antony Zegers, Mark Lundeberg, Emil Oldenburg, and Andrea Suisani. Bitcoin Cash proponents interested in reading the draft specification summary for the next upgrade can review it now. Upgrade features proposed include enabling Schnorr signatures for OP_Checkmultisig(Verify), implementing a minimal push and minimal number encoding rules in Script, enforcing NULLDUMMY and changing the rule that limits signature operations in script. During the meeting, the developers also discussed the upgrade’s timeline and asked people to review the code before the feature freeze on August 15, 2019. Draft specifications are up for review at Bitcoincash.org and during the meeting, programmers conversed about what needs to be done in order to remove the 25 chained transaction limit as well.
A Steadfast Focus Toward Infrastructure Growth and Merchant Adoption
It was a busy week for BCH fans and it’s hard for everyone to keep track of all the different announcements and developments. Meanwhile, BCH market prices have dipped in value over the last seven days as well. At the current market value between $310 – 325, BCH has lost 22% over the course of the week. However, most digital assets are down by 10-40% this week depending on the coin, as the overall cryptoconomy’s market valuation has plummeted to $284 billion. Despite the price downturn, BCH supporters still show a lot of optimism in contrast to other crypto communities. The latest developments revealed this week indicate passionate proponents have continued to bolster BCH infrastructure growth and merchant adoption instead of focusing in on market speculation.
What do you think about all the developments within the Bitcoin Cash ecosystem? Let us know what you think in the comments section below.
Disclaimer: This editorial is intended for informational purposes only. Readers should do their own due diligence before taking any actions related to the mentioned companies or any of their affiliates or services. Bitcoin.com or the author is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.