'Digital Asset' businesses embrace regulatory compliance with new industry group

dataAnnounced this week at the Inside Bitcoins conference  the new DATA industry group aims to represent businesses not just in the Bitcoin space but any digital asset including, “emerging payments, virtual currency, and other financial technology innovations”.

DATA, or the Digital Asset Transfer Authority’s founding members include the CEO’s of leading Bitcoin businesses such as BitInstant, BitPay, & BitStamp as well as the CEO’s of other digital currency businesses including Ripple’s OpenCoin and Ven.

However, the groups stated goals seem sure to heat up the regulation debate.

From DATA’s official announcement

To reach this potential, to inspire confidence in the services we offer, and to ensure fair and responsible treatment of consumers and merchants, we believe our industry must evolve in compliance with law and regulation. We must work proactively with regulators and policymakers to adapt their requirements to our technologies and business models. We must develop and implement common risk management and compliance standards that address the public policy concerns associated with our businesses. And our firms must build risk management and compliance programs that meet those standards.

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Bitcoin, Regulators and Online Markets – a look at the World of Bitcoin Exchange

forexExchanges are the link between the old world of banking and the new world of crypto-currencies; they play a vital role in supporting the growing Bitcoin economy. If Bitcoin hopes to continue rapidly gaining new users it needs this bridge between the old and new systems to be up and functioning. While Bitcoin is in no way dependant on a link to the traditional banking system, its smooth transition into mainstream use certainly is.

Unfortunately these bridges which make up the exchange market are concentrated and often broken.  This leads to concerns over reliability and security, which can cause market panic and extreme volatility. As Bitcoin enters the mainstream a wave of new businesses, services and software developers have recently dedicated their efforts to solving this problem. Their task will not be easy, and the while the exchange rate has seen some recent stability, there is a long way to go before obtaining bitcoins can be called user friendly and reliable.

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The Real Asset Co: Backwardation, negative GOFO and the gold price

Continuing her look at the global gold market, the Real Asset Co.’s Jan Skoyles explains gold backwardation and how it could mean “a perfect storm for the gold price.”

The term ‘backwardation’ has suddenly popped up in the mainstream financial media and is being touted as the signal that the price of gold is on its way back up.

What does backwardation even mean?

 

Read The Real Asset Co’s “Backwardation, negative GOFO and the gold price

A possible Bitcoin fork? – Bitcoin 2: Freedom of Transaction

Those following the internal rift in the Bitcoin community over regulation have often discussed the possibility of a fork.  The Bitcoin world moves quickly.

Hitting the web only hours ago is a paper detailing the how and why of a proposed “Bitcoin 2”. The authors, and many in the Bitcoin community, are concerned that changes will be made to the Bitcoin protocol turning it into “a distributed PayPal instead of a censorship resistant currency”.  

The paper discusses inherent weaknesses and changes to the protocol currently being discussed which could see users lose the option of anonymity or see miners concentrate into larger centres of control. The proposed “Bitcoin 2” aims to increase Bitcoin’s resistance to centralization, censorship and political control and prevent it from being “absorbed by the established financial and regulatory environment.”

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Bitcoin Foundation Comments on Liberty Reserve Special Measures

After shutdown of Liberty Reserve in May this year FinCEN proposed an “Imposition of Special Measure Against Liberty Reserve S.A. as a Financial Institution of Primary Money Laundering Concern”. The primary purpose of the ‘Special Measure’ being to cut Liberty Reserve off from the banking system.

FinCEN noted Liberty Reserve’s irrevocable transactions and lack of ID verification as evidence that “Liberty Reserve’s system is structured so as to facilitate money laundering and other criminal activity,” these comments worried the digital currency community and was likely what scarred off many of their banking partners.

On the 19th, the Bitcoin Foundation responded to FinCEN’s proposed special measure urging them to clarify that not all virtual currency transactions are inherently suspect.

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Inside the white hot Chinese gold market

Shanghai-Lead-Image-IIIJan Skoyles and the Real Asset Company are continuing their look at the global gold market, this time with review of the Shanghai Gold Exchange.

Released last week the review covers contracts, deliveries, Inventory, pricing and SEG members.

In the next part of our on-going look at the global gold market we now turn our attention to the Shanghai Gold Exchange. An exchange which has received more interest of late, than any other in the world of gold and silver.

Previously we have looked at the global gold market, COMEX, and more recently the London Gold Market. The next logical focus of our investigations is the Shanghai Gold Exchange. We also have a great infographic providing you with the top figures.

Given the significant rise of gold exports from Hong Kong to China, 68% yoy, this is a timely and informative research piece which shines a spotlight on the Eastern gold market in a time when many are declaring the end of the gold bull market. Given the huge demand for physical and reportedly high premiums on the gold price, we ask if this market may well be a better indicator of gold demand, and subsequently true gold prices, than either COMEX or London.

  Read the report here

Using M-Pesa to bring Bitcoin to Africa

The M-Pesa mobile payment system is huge in one of Africa’s biggest economies, Kenya. An estimated 31% of Kenya’s GDP travels through the person to person payment provider. The country has a large rural population making traditional branch banking an unattractive option. This is certainly one of the reasons that M-Pesa’s SMS based mobile payment system has caught on. But what is clear from the M-Pesa story is that the worlds ‘under-banked’ need better solutions.

Could Bitcoin be a solution for Africa’s under-banked? It’s certainly a possibility and why not start in Kenya with a population who both has a need for and a familiarity with digital money.

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Matonis: Why I Accepted Executive Director Position for Bitcoin Foundation

Via the Bitcoin Foundation Blog

I am proud to have been associated with the Bitcoin Foundation since its launch just nine short months ago. A nonprofit organization for Bitcoin can add greatly to the political and economic discourse for cryptographic money and monetary freedom. As Executive Director, I welcome the new challenge.

The Foundation has never claimed to represent all of Bitcoin nor all of its users because that would be impossible for any organization. Rather, the Foundation has consistently attempted to fill the gap where market-based incentives may not have produced the same outcome, such as in the areas of specialized grants and compensation transparency for volunteer developers as well as legal challenges to bitcoin usage and the sponsorship of aggressive legal defense.

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HuffingtonPost: The Crime of Alleviating Poverty – A Local Community Currency Battles the Central Bank of Kenya

Via the HuffingtonPost:

Complementary currencies can help eradicate poverty.

Proving that may be difficult in complex economies, due to the high number of factors influencing outcomes. But in an African slum with little of the national currency available, supplying residents with an alternative currency has a positive effect that is obvious, immediate and incontrovertible.

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The e-gold story

As Bitcoin continues its move towards the mainstream and Bitcoin businesses experience rocky relations with bankers and regulators, now is a good time to look at previous leaders in the digital currency world.

In the late 90’s and early 2000’s, e-gold was the industry leader.  As one of the world’s first successful online payment systems e-gold was a pioneer using many now standard practices such as SSL connections and API’s.  Brought down by a run in with regulators in 2008 the e-gold story is required reading for anyone involved in the digital currency world.

Sent in by Wikipedia editor Cadwallader, below is a thoroug review of the e-gold story.

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