As the crypto-craze continues, canny companies are clamoring to climb aboard the digital train destined for greater profits. Kodak is the latest company to join the crypto club with announcements of its own blockchain platform and digital currency.
Just a day after we read about Russian owned messaging platform Telegram starting its own cryptocurrency another big name joins the fray. Crypto is currently a hot potato and companies are looking for a slice of the pie by getting onboard with the tech that everyone is talking about. The 130-year-old photo company has been looking for a cash injection since its film revival fell flat, and building a blockchain is as good an idea as any.
New York-based Kodak has announced a partnership with Wenn Digital to develop an image rights platform called KodakOne. This will run in tandem with a new photo-centric virtual currency called KodakCoin. The coin will be designed as a payments platform for photographers to get paid instantly and securely via the blockchain when their photos are sold online. Meanwhile, KodakOne will crawl the internet looking for image copyright violations. The concept is to create an encrypted distributed ledger of rights ownership running on the Ethereum platform using smart contracts.
Kodak chief executive Jeff Clarke had this to say;
“For many in the tech industry, ‘blockchain’ and ‘cryptocurrency’ are hot buzzwords, but for photographers who’ve long struggled to assert control over their work and how it’s used, these buzzwords are the keys to solving what felt like an unsolvable problem,”
The ICO will be launched on January 31 but only open to accredited investors from a few countries including the US, UK, and Canada. It was a good day for Kodak shareholders as the price tripled in the hours after the announcement. According to NASDAQ Stock in the Eastman Kodak Company surged from around $3 to just under $10 in six hours. Currently Kodak stock is up over 190% proving that affiliation with the world’s hottest tech at the moment is great for company coffers.
Whether the company actually needs this technology and has a clear vision for its future or whether it was just an attempt to cash in on the current trend in cryptocurrency remains to be seen. What is guaranteed though is that more companies will follow in the coming weeks and months; crypto fervor is at an all-time high.
Hong Kong-based Cathay Pacific is the first airline to introduce blockchain technology to manage its ULDs in real time via a mobile app and will ultimately eliminate paper receipts, following a successful trial last year.
The first stage of the project began in July. It will initially focus on ULD transactions in Hong Kong and selected locations in the US before being rolled out across the entire Cathay Pacific network.
The carrier describes its blockchain-enabled system as a “single source of truth” that provides standard data and greater visibility for all concerned parties. Once all ULDs have the necessary sensors installed, it can become a total paperless solution.
Cathay Pacific e-cargo and digital enablement manager Calvin Hui, who initiated the project, said: “Using blockchain to establish a trustworthy ULD database across the network will not only assist with ULD management, but also improve the service quality and experience for our customers.
“The most obvious benefit we expect to see is having sufficient ULD stocks for our customers during peak cargo periods, because we will know where exactly to find our ULDs.”Cathay Pacific
Banning cryptocurrencies in India is not the solution as this would inhibit new applications and solutions from being deployed and would discourage tech startups, the IT industry’s apex body Nasscom said on Tuesday.
An inter-ministerial committee headed by Economic Affairs Secretary Subhash Chandra Garg last week submitted the report and the draft bill on banning of cryptocurrencies and regulating official currency in the country.
“Nasscom believes that the recent proposal of the inter-ministerial committee of the government to ban all cryptocurrencies barring those that are backed by the government, is not the most constructive measure.
Instead, the government should work towards developing a risk-based framework to regulate and monitor cryptocurrencies and tokens,” it said in a statement.
A ban would handicap India from participating in new use cases that cryptocurrencies and tokens offer.
The panel in its draft report had said that for private cryptocurrencies, given the risks associated with them and volatility in their prices, “the group has recommended banning them and imposing fines and penalties for carrying on of any activity connected with them in India”.
According to Nasscom, cryptocurrency-based businesses can be tested in the regulatory sandboxes being launched by the financial sector regulators across the country.
“We should work towards creating a regulatory framework that will constantly monitor and prevent illegal activities. Regulating would allow the law enforcement agencies to be better equipped to understand these new technologies, enable them to gather intelligence on criminal developments and take enforcement actions,” said the IT industry’s apex body.
US Capital Global Securities, an affiliate of US Capital Global, is offering to accredited investors a $10 million equity investment in CityBlock Capital’s first tokenized venture fund, NYCQ Fund LP (the “Fund”), as the Fund’s exclusive placement agent. US Capital Global Securities recently added the Fund to its own expanding portfolio. The Fund has holdings in leading names in the FinTech and blockchain infrastructure arena, including Coinbase, Bakkt, Nomics, and Tagomi:*
Headquartered in San Francisco, Coinbase is a digital currency wallet and platform where merchants and consumers can transact with new digital currencies like Bitcoin, Ethereum, and Litecoin. Coinbase’s global revenue last year totaled approximately $520 million, according to Reuters.
Bakkt is a digital asset and currency exchange launched by the Intercontinental Exchange (NYSE: ICE). The company is expected to begin testing its two Bitcoin futures contracts on its platform on July 22 this year. Backed by a diverse array of big names, including Starbucks Corporation (SBUX) and Microsoft Inc. (MSFT), Bakkt aims to be a game changer in the cryptocurrency investment industry.
Nomics is a cryptoasset data company that delivers professional-grade market data APIs to institutional crypto investors and exchanges. It offers products and services that allow funds, fintech apps, and exchanges to access clean, normalized and gapless primary source trade and order book data. The firm also provides white-label market data APIs to exchanges.
Tagomi is an electronic brokerage offering prime services for investors of Bitcoin, Ethereum, and other digital assets. Tagomi provides a single touch point for digital asset trading at institutional operational standards, treasury management, transparency, custody solutions, and other services. Tagomi aims to make it easy to navigate the extremely fragmented global digital asset landscape.
“Combining low minimum investment amounts and early liquidity opportunities, the Fund gives accredited investors access to blockchain infrastructure investments normally available to institutional investors,” said Charles Towle, CEO at US Capital Global Securities. “Our firm is keen to back forward-thinking strategies at the frontline of the digital market era. The opportunity to participate in this $10 million equity investment in the Fund is still open to eligible investors.”
John Watson, 23, left home to work and asked for a Didi. Before entering the office, he stopped at a bakery and bought a loaf of bread and juice, using his card. In the middle of the day, he ordered a snack from Uber Eats as he had a discount coupon. His co-worker, Bob, charged him with money he owed, which John did at the same time, using the app. At the end of the day, Gabriel realized that he did not have the physical money to buy the subway ticket and had to cash in before going home. It seems like an ordinary day, and it really is. The difference is that John did all this using cryptocurrency.
In September, CoinBene — in partnership with Mastercard, launches its own card, which will use full cryptocurrency. You may use the card for any activity in your routine, such as a digital account. Cash withdrawals, cashback, payment of bills, direct money sending and even integration with WeChat are some of the features.
Benefits of a digital account — and even more
The card will have an app, where the person may pay their monthly bills, track their balance, get cashback in the agreed establishments and much more.
Deposits can be made directly from your CoinBene account, by bank transfer or even a ticket. There will be two types of cards, Gold, and Platinum, aimed at different audiences. The launch of the card will honor the 70th anniversary of the founding of the People’s Republic of China.
Besides the traditional ATMs, the CoinBene Card customer will manage to withdrawal money in any establishment that has the label “Friendly Withdraw”, estimated to be more than 15,000 places in Brazil. Just take your digital account app into the store, enter the amount you want to withdraw, read a barcode and you’re done! The checkout counter will make available the amount chosen.
Peer to peer transfer
CoinBene Card costumers will be allowed to transfer money among themselves instantly and without any fees, using a simple QR Code.
There are more than 15,000 stores and restaurants with the cashback benefit. When you use your CoinBene Card at a merchant’s convenience store using the CoinBene Card, you get exclusive discounts, which are credited back in cash directly into the card. This credit — which varies from 1% to 10% of cashback — can be used anywhere in the world for other expenses or withdrawn from the ATMs of the banks that are affiliated. Simple like that!
WeChat is an application with almost 1 billion users. With it, you can solve almost every problem of daily life in a few clicks, especially in China, where the application has more features. It is possible to order food, consult a doctor, book travel packages, flirt, buy all kinds of products, call a taxi, see friends’ posts, check fan pages and still pay from the coffee to the new car. All of this is done with WeChatPay. The digital payments in China today move around 4 trillion dollars a year. The CoinBene Card will be integrated with the application.
The CoinBene Card is operated by Mastercard, which allows the customer to participate in the Mastercard scoring program. Earn 1 point each time you use your card, regardless of the value of your purchase. From 5 points, you can buy a product and take another to share with someone special. Buy one, take another. There are several partners, from restaurants to travel packages.
Paying bills, shopping on the internet and even making withdrawals in reais has become easier for the user of crypto-coins. Brazil is the fifth country with the largest number of people who have some crypto actives — 8.1% of Brazilians between 16 and 64 years old. Now they will have more functionality for their cryptos. For example, use them in your routine life.
tZERO, the global leader in blockchain innovation for capital markets, through its tZERO Crypto unit, announced today that an Android version of its recently launched cryptocurrency mobile app (the “tZERO Crypto App”) is now available. Investors who want to participate in the global cryptocurrency market will be able to buy, sell and hold digital currencies directly on their mobile phone through the tZERO Crypto App, rather than using more vulnerable, third-party exchanges for custody.
Initially, the tZERO Crypto App will support bitcoin and ethereum, two cryptocurrencies vetted for longevity, however, the company anticipates introducing additional digital assets to the app in the future. The iOS version of the digital wallet and exchange services app for cryptocurrencies was launched on June 27 and has been well received by users.
tZERO CEO Saum Noursalehi said, “We are excited to bring our platform to Android users, which we believe will significantly expand our user-base. The accessibility of the tZERO Crypto App is critical in our plan to provide an intuitive trading experience for all digital assets
tZERO Crypto is committed to compliance and safety and will utilize biometric authentication for added security and ease of use. Investors will also have access to tZERO’s unique private key recovery system to restore their funds and cryptocurrencies in the event that they lose their private keys or mobile phone.
tZERO is a technology firm that was founded in 2014 with the goal of utilizing blockchain technology to revolutionize Wall Street so that financial processes could become less beholden to traditional institutional market structures and to bolster and enhance market integrity. tZERO is a keiretsu company of Medici Ventures, the blockchain subsidiary of Overstock.com, Inc..
Ripple publishes the quarterly XRP Markets Report to provide regular updates on the state of the market, including quarterly programmatic and institutional strategy and sales, relevant XRP-related announcements such as Xpring and RippleNet partnerships, and commentary on previous quarter market developments. As an owner of XRP, Ripple believes in proactive transparency and in being a responsible stakeholder. Ripple urges others in the industry to follow its lead to build trust, foster open communication, and raise the bar industry-wide.
CHANGE IN VOLUME BENCHMARK
In June 2019, Ripple shared that the company’s sales of XRP in Q2 2019 would be lower as a percentage of reported volume than in the previous quarters due to the concerns about misreported, falsified and inflated reported trading volumes.
Ripple worked with trusted partners to evaluate new sources of legitimate trading volume. After evaluation, Ripple decided CryptoCompare’s Top Tier (CCTT), the exchanges rated “AA,” “A,” and “B” by its Exchange Benchmark, offers a more complete look on the quality, regulatory environment, management, and structure of exchanges that filter out a majority of unverified volumes. Publicly available sources of trusted trading volume are still in relatively early stages, but CCTT is in line with what Ripple believes to be more accurate XRP trading volumes. For now, Ripple will use CCTT as its benchmark, and will continue to work proactively with industry participants toward resolving the issues around unreliable industry volume data.
Overall market capitalization of digital assets sharply increased in Q2.
Ripple sold $251.51 million XRP in Q2 2019 and is substantially reducing future sales of XRP.
Given the concerns about overstated market trading volumes, CryptoCompare will be Ripple’s primary benchmark for XRP market volume going forward.
Three billion XRP were released out of cryptographic escrow, 2.10 billion returned to escrow.
XRP is now listed on over 130 exchanges worldwide.
Q2 AND FUTURE XRP SALES
In Q2 2019, Ripple sold $106.87 million XRP in institutional direct sales and $144.64 million in programmatic sales. In total, the company sold $251.51 million XRP in Q2. Given the reports of inflated volumes, which Ripple took seriously, the company temporarily paused programmatic sales and placed limits on institutional sales to evaluate the problem in early Q2. Ripple later resumed XRP sales at a rate that was 50% lower versus previous guidance, at 10 basis points of CoinMarketCap reported volumes.
Ripple plans to take a more conservative approach to XRP sales in Q3. As noted, the company switched benchmarks to CCTT and will target programmatic sales at 10 basis points of CCTT reported volumes.
INSTITUTIONAL VS. PROGRAMMATIC SALES
Institutional (OTC) Sales
Ripple’s long-term view is that efficient, liquid XRP markets should resemble the traditional FX markets, given XRP’s use case of global value transfer. As a large portion of FX trading occurs on the OTC markets, in 2017, Ripple began providing, through XRP II, a licensed subsidiary, OTC purchases of XRP to meet institutional demand, at a time when XRP/USD liquidity was limited. Since then, XRP listings increased as Ripple has partnered with the top digital asset brokers and used inventory to serve as a backstop for XRP liquidity. This allowed these OTC liquidity providers the ability to source XRP, even when institutional quantities of XRP were difficult to access across exchanges.
Ripple decided to pull back from providing XRP over-the-counter at scale toward the end of Q2, in light of the OTC desks’ ability to source institutional demand for XRP in the open markets. Going forward, Ripple plans to focus institutional sales on markets where the on-exchange liquidity for XRP is insufficient to meet institutional demand.
Ripple’s programmatic XRP sales have been done with the goal of minimizing market impact. The company did this through limiting XRP programmatic sales to what it considers a small percentage of traded volume, which was executed across multiple exchanges. Ripple relies on programmatic sales partners who mainly execute trades passively; their trading volumes do not vary based on changes in the price of XRP, but they do increase as overall XRP trading volumes increase.
As discussed earlier, because of misreported trading volumes, Ripple has changed its sales strategy and benchmark for Q3, and will continue to closely monitor the situation.
Q2 ESCROW ACTIVITY
In Q2 2019, three billion XRP were again released out of escrow (one billion each month). 2.10 billion XRP were returned and subsequently put into new escrow contracts. The remaining 900 million XRP not returned to escrow are being used in a variety of ways to develop use cases for XRP, including Xpring initiatives and RippleNet partnerships (such as MoneyGram). All figures are reported based on transactions executed during the quarter.
The overall market capitalization of digital assets increased by 122.86% from Q1. XRP price gained 28.20% over Q2, ending the quarter at $0.40 on coinmarketcap.com
According to CCTT, the daily volume for XRP increased in Q2. The average daily volume was $429.51 million in Q2 and $156.01 million in Q1.
For reference, according to coinmarketcap.com, the average XRP daily volume was $1.74 billion.
Volatility and Correlation
XRP’s volatility of daily returns over the quarter was 5.01%. Though there was a slight increase in volatility from Q1, XRP was in line with other top digital assets. In addition, XRP’s correlation with bitcoin dropped from Q1, while its correlation with ether remained high.
In Q2, 12 new exchanges listed XRP bringing the total number to over 130 exchanges worldwide.
Q2 saw the highest number of customer transactions on RippleNet. In fact, the number of xRapid transactions increased 170% from Q1 to Q2 and Ripple had a 30% increase in the number of live xRapid partners in Q2. Ripple anticipates this momentum in transaction volume to continue as more partners and customers go live.
Notably in Q2, Ripple announced it agreed to enter into a strategic partnership with MoneyGram (NASDAQ: MGI), one of the world’s largest money transfer companies. The company operates in the $600 billion global remittance market, serving millions of customers in more than 200 countries and territories, supporting multiple currencies. Through this partnership, which will have an initial term of two years, Ripple would become MoneyGram’s key partner for cross-border payments and foreign exchange settlement using digital assets. In conjunction with the partnership, Ripple has agreed to provide a capital commitment to MoneyGram, which enables the company to draw up to $50 million in exchange for equity over a two-year period.
The partnership with Ripple focuses on the xRapid product. xRapid is a solution for on-demand liquidity, which leverages XRP, the native digital asset of the XRP Ledger, as a real-time bridge between the sending and receiving currencies.
Xpring is Ripple’s initiative to support the open source community of developers, building on the decentralized XRP Ledger and use cases for XRP on that ledger. This support is done in two ways: 1) helping innovative blockchain projects grow through partnership and investment; 2) building crypto infrastructure through contributions to open source crypto protocols such as the XRP Ledger and Interledger projects. In addition, Xpring is building a developer platform to support open source developers to leverage these protocols. Xpring makes investments using a mix of traditional currency and XRP. XRP investments are generally subject to sales restrictions and intended for direct use in the tools and services being developed.
Companies and developers continued to build on the XRP Ledger, and utilize ILP and XRP. Significant developments from companies and projects, which Xpring invested in and supports, include:
Bolt Labs is a privacy-focused payment channel network supporting multiple digital currencies. Bolt scales off-chain transactions while preserving privacy.
Agoric enables developers to build secure smart contracts and new digital assets that can connect to public and private blockchains.
Robot Ventures is a (pre-)seed investor in early stage companies in the decentralized finance and blockchain space.
Notable Regulatory Activity
The SEC announced that it would establish nodes on certain open source, permissionless ledgers, such as the XRP Ledger, to help inform its policy making.
The UK’s Financial Conduct Authority analogized XRP to ETH, which it recognized was a hybrid utility/exchange token, not a security token.
Technology companies enter the space
New entrants into the ecosystem brought global awareness around crypto and blockchain. Most notably, Facebook’s announcement of the Libra whitepaper in June brought mainstream attention from all audiences. Akin to JP Morgan’s announcement of its JPM Coin trial, the news brought market validation to the space, highlighting the benefits that blockchain and crypto bring to payments. However, Facebook faced significant regulatory headwinds as regulators questioned the company’s ability to protect consumer data and comply with anti-money laundering and know-your-customer laws. Facebook was not the only tech company that announced it was breaking into crypto and blockchain this quarter:
Amazon was granted a patent to build a proof-of-work cryptographic system to fight DDOS attacks. Also, Amazon Web Services launched its Managed Blockchain service, which supports open-source framework Hyperledger Fabric, for its enterprise clients.
Yahoo! Japan went live with Taotao, its cryptocurrency exchange, where bitcoin and ether will be initially traded, and margin trading of XRP and litecoin will be available.
Google announced that Ethereum app builders using Google software will be able to integrate data from sources outside the blockchain through a partnership with Chainlink.
Samsung announced the development of its own Ethereum-based blockchain and may issue its own token.
Increased Institutional Interest
Digital assets experienced increasing levels of institutional interest over the past three months. Last quarter, futures trading and other crypto derivatives were widely discussed as the market capitalization of digital assets increased, CME reached a record high for BTC futures and Bakktannounced plans to begin testing its future contracts.
Banks continue to bet on crypto and blockchain
Established banks continued to show interest in blockchain and crypto as they build their own private blockchain solutions and tokens. Last quarter, a group of 14 financial firms led by UBS including Barclays, Santander, and Canadian Imperial Bank of Commerce created Fnality International to aid in the development and launch of a utility settlement coin (USC) to improve cross-border payments. JPMorgan announced that it will start customer trials of its JPM Coin with corporate clients, and Goldman Sachs CEO said the bank is doing extensive research on asset tokenization and stablecoins.
Crypto exchanges reported record trading volumes and profit. Traditional brokerage firms plan to offer cryptocurrency trading to their institutional clients.
ADDITIONAL REGULATORY HIGHLIGHTS IN Q2
Americas and Europe
The G20 officially announced its support of the FATF’s crypto guidelines and ongoing work by the Financial Stability Board (FSB) to explore the implications of decentralized fintech and how regulators can better engage stakeholders.
SEC Commissioner Hester Peirce said current guidance falls short of clarity that the industry needs to move forward to develop additional guidelines regarding crypto.
France pushed for the EU to adopt a cryptocurrency framework to achieve uniform laws.
Bitstamp was granted a virtual currency license by the New York Department of Financial Services.
The SEC sued Kik for allegedly running an unregistered securities sale back in 2017 when it launched an ICO for its kin token.
Reserve Bank of India considered a law that mandates payments data should not be allowed to leave its borders, and announced a framework for its fintech sandbox that invites blockchain projects to take part, but excludes cryptocurrency-related businesses.
Nepal banned AliPay and WeChat Pay, citing they are not registered as official payment systems.
Japan’s lower and upper houses passed new crypto regulation in National Diet (Japan’s bicameral legislature) to strengthen local regulations and cryptocurrency trading practices.
Brazil established a new commission to consider crypto regulation in the country. The commission will be composed of 34 members in accordance with the House Rules of Procedure. Also, the country’s major financial authorities announced a regulatory sandbox for blockchain, fintech and crypto.
The Chilean government introduced a bill on cryptocurrencies for congress.
Middle East and Africa
Egypt lifted its ban, and will allow licensed cryptocurrency companies.
Pakistan Central Bank announced its intention to launch a digital currency by 2025, in an effort to go fully digital by 2030.
Q2 was marked by increased regulatory activity, landmark partnerships and high profile announcements from new entrants and key industry players. These activities underscore the continued maturation of the blockchain and crypto markets. In addition, Ripple has taken proactive steps to address the issues of inflated volumes by reducing future XRP sales and changing its volume benchmark.
If interested, please find the Q1 2019 XRP Markets Report here.