JPMorgan picks up one of crypto's basest tricks

USD-backed "stablecoins" are great for the issuers and terrible for users; now the big blue bank will see if any of its biggest customers are willing to fall for the ruse. For users, as with other USD-backed stablecoins, the first step to using the JPM coin is depositing USD. (It's unclear whether such a reserve account would be interest-bearing at JPM, but they are not on other platforms.) Once value is conferred into token form, detailed information about transactions are available to the host of the system. If these transactions are solely between the client and JPM, then that's no big deal; but if these "Jamie coins" are meant for broader use amongst institutions, that's another story. If the world has learned anything from Facebook's growign profitability, it's that behavioral data is highly monetizable--for reasons both legitimate and nefarious. For a business of any scale, especially a financial business or investment manager, transaction patterns should not be given away in exchange for some added measure of convenience. Real innovation in financial infrastructure is to be found in Bitcoin, which is poised to become ideal collateral for an open, global, and digitally-native financial system--see The Block's assessment below.

J.P. Morgan Creates Digital Coin for Payments
"J.P. Morgan this month became the first U.S. bank to create and successfully test a digital coin representing a fiat currency. The JPM Coin is based on blockchain-based technology enabling the instantaneous transfer of payments between institutional accounts. We sat down with Umar Farooq, head of Digital Treasury Services and Blockchain, to find out more about the announcement and what it means for the future of payments."

Rehypothecation: BTC’s path to becoming king of collateral
"This is how BTC becomes king collateral for the world:

  1. Lightning Network Swap Dex’s
  2. Inter-chain Counterparty Value Adjustment Options Exchanges
  3. Reinsurance-like market for Graph Default Swaps that create side-bets, mostly for hedging purposes we assume, on the credit risk of different galaxies of the LN.
  4. Now with the ability to have yielding synthetic cash, leveraged bets, options markets, the works, and leading the way in new derivatives frontiers that attract the brightest quantitative traders to seek fortunes in a new wild west of risk hedging, we finally show the legacy financial system what a parallel, independent, systemic risk-quantified financial system can look like."

Other News

Visa, Mastercard mull increasing fees for processing transactions: WSJ
"Visa Inc and Mastercard Inc, the two biggest U.S. card networks, are preparing to raise certain fees levied on U.S. merchants for processing transactions from this April, the Wall Street Journal reported on Friday, citing people familiar with the matter."

Binance delists 5 projects including SALT Lending
"Binance, the largest crypto exchange by traded volume, announced Friday that it has decided to delist and cease trading of five tokens - CloakCoin, Modum, SALT, Substratum and Wings. Binance says that it periodically reviews projects to ensure that they 'continue to meet the high level of standard.' According to Binance, the delisted projects no longer fulfill the necessary standard after conducting the recent reviews."

Apple Hints at Behind-the-Scenes Blockchain Work in New SEC Filing
"Notably, however, the Feb. 15 filing makes mention of Apple’s involvement in the drafting of 'Blockchain Guidelines' for the Responsible Business Alliance’s Responsible Minerals Initiative. According to an RBA press release, those 'voluntary guidelines' were published in mid-December of last year and 'represent a first industry effort to define a common set of principles, attributes and definitions for the application of blockchain technology to support mineral supply chain due diligence.'"

Indonesia Officially Recognizes Bitcoin as a Commodity
"Regulators in Indonesia have finally recognized Bitcoin and other cryptocurrencies as commodities, thus providing legal backing for trading virtual currencies. Consequently, cryptocurrency exchanges in the country now have a set of requirements that must be satisfied before being allowed to operate."

Venezuela’s Government Appears To Be Trying to Hack Activists With Phishing Pages
"While studying the fake website, researchers found phishing sites hosted on the same IP address. And there’s evidence that the people behind the second, apparently fake and malicious, website were working for the government of Maduro, according to security firm CrowdStrike and independent researchers. 'It’s clearly the work of the Venezuelan government trying to identify the people working against them, so that they can put a stop to it,' Adam Meyers, the vice president of intelligence at CrowdStrike, a firm that’s analyzed the attacks, told Motherboard in a phone call."

POV Crypto Episode 29 – Evaluating Currencies with Murad Mahmudov
"Murad is famous for his in-depth analysis and commentary on currencies, their adoption process, how capital and the social layer interacts, and much more."

Wyoming Digital Asset Property Rights

New AI fake text generator may be too dangerous to release, say creators
"OpenAI, an nonprofit research company backed by Elon Musk, Reid Hoffman, Sam Altman, and others, says its new AI model, called GPT2 is so good and the risk of malicious use so high that it is breaking from its normal practice of releasing the full research to the public in order to allow more time to discuss the ramifications of the technological breakthrough. "


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