Binance Is Launching Its Own Blockchain
Binance Goes It Alone
Binance hasn’t had much use for blockchain to date. Like every centralized cryptocurrency exchange, all of its action takes place off-chain, with transactions settled simply by updating the order book stored on the company’s servers. Its own BNB token is an ERC20, but doesn’t have much use for the Ethereum blockchain it lives on since its only real use case is when using the Binance platform, where BNB transactions are again settled off-chain. The only exception is customer deposits and withdrawals. On March 13, however, the company broke the news of Binance Chain, a proprietary blockchain with a range of applications.
Three paragraphs in, the statement reads: “After extensively researching decentralized exchange frameworks and analyzing existing implementations, we believe significant improvements can be made in providing Binance users with a level of trading experience to which they are already accustomed.” This is confusingly worded, but seems to be implying that if Binance were to switch to a hybrid model, user experience would not be impacted, for the statement continues: “Centralized and Decentralized exchanges will co-exist in the near future, complementing each other, while also having interdependence.”
Buy Why Blockchain?
The reason for Binance launching its own blockchain is buried deep within the statement, but it arrives, eventually: “As a public blockchain, Binance Chain will mainly focus on the transfer and trading of blockchain assets, as well as provide new possibilities for the future flow of blockchain assets. Binance Chain will focus on performance, ease-of-use, and liquidity. Binance Coin (BNB) will be upgraded to exist on its own blockchain mainnet, becoming a native coin. At the same time, Binance will transition from being a company to a community.”
Reading between the lines, and going by a subsequent tweet from CEO Changpeng Zhao, it looks like Binance will launch a decentralized exchange that will operate alongside its existing exchange. In addition to facilitating the trade of digital assets, the DEX will likely operate as a launchpad for new coins and ICOs. Binance is a platform on the up right now, and it has earned praise for the way it has handled incidents such as the viacoin pump and dump and the unexpected downtime it was subjected to last month. It’s also got cash to splash, having already earmarked $10 million for hacker bounties this week.
12 months ago, Binance was a plucky contender that could only dream of taking on the likes of Coinbase and Bitfinex. It’s now on course to become crypto’s very own Google, a turnkey solution for a complete range of cryptocurrency services. Exchanges, perhaps in a bid to future-proof themselves and fend off the rise of DEXes and atomic swaps, are broadening their offerings, be it through custodial services, proprietary blockchains, or ICO incubators. Binance users have welcomed today’s news, but will be mindful of the risks of over-centralization and reliance on a single entity, even one whose platform may soon be partially decentralized.
Written by Bitcoin.com
Japan to Call for Crypto Rules at the G20 Summit
Stringent Regulations Won’t Be Good
Japan, a country with a proactive fintech policy, is going to urge its G20 counterparts to look into cryptocurrencies and agree on some common regulations. Japanese authorities were among the first to adopt a regulatory framework with a mechanism to oversee trading on registered cryptocurrency exchanges. Their new initiative aims at implementing international guidelines for the quickly developing crypto industry.
According to unnamed Japanese officials, quoted by Reuters, Tokyo will urge G20 members to invest more efforts in preventing the use of cryptocurrencies for illicit activities, like money laundering. Other media reports suggest that one of the sources is Japan’s Chief Cabinet Secretary Yoshihide Suga. He has shared his expectations of active Japanese involvement in the G20 discussions on cryptocurrencies and their impact on the global economy.
Differences in each country’s approach, however, are likely to limit the chances of reaching agreement on specific global rules in a joint communique, the official said. Another source confirmed that discussions will focus on anti-money laundering measures and consumer protection, and not so much on how cryptocurrencies could affect the banking system.
The general feeling among G20 members is that applying too stringent regulations won’t be good.
Finance ministers and central bank governors from the Group of 20 will meet in the Argentinean capital on March 19-20. Other nations also plan to put forward ideas for cryptocurrency regulation. In February, high-ranking French and German officials issued a letter urging their colleagues in G20 to discuss the implications of cryptocurrencies, like bitcoin. They stressed on the need for a transnational regulatory approach and announced intentions to jointly propose regulations.
The Trick: Regulate, but Don’t Stifle
The G20 countries intend to discuss issues related to cybersecurity, the fintech sector and cryptocurrencies, Russian Deputy Minister of Finance Sergey Storchak confirmed in the beginning of March. Digitalization has been included in the agenda on ministerial level for the first time. It has been discussed previously only by experts in the Financial Stability Council, Storchak said. In his words, very few of the G20 members regard cryptocurrencies the same way they view fiat money. The Russian official predicted that the summit would most likely confirm that position.
What Japan is actually worried about is that some nations have looser regulations, when it comes to cryptocurrencies and their possible use for illicit purposes. Last month, Japanese authorities carried out checks on several exchanges after the theft of over $500 million from Coincheck. They revealed almost 700 cases of possible money laundering. In Argentina, the international Financial Action Task Force (FATF) is expected to present a report exploring ways to prevent the use of cryptocurrencies to launder illicit funds.
According to one of the Japanese officials quoted by Reuters, “the trick will be to apply regulations to protect consumers and prevent illicit activity, without stifling innovation in the fast-growing cryptocurrency and fintech sectors”. The G20 countries account for more than 80% of the world’s gross product and trade. Next week’s meeting will demonstrate if they are ready for a measured approach towards cryptocurrency regulation.
Written by Bitcoin.com
Coinbase Receives E-Money License from UK Financial Regulator
Easier Tax Reporting
San Francisco-based cryptocurrency exchange Coinbase has anno
unced updated tax tools, now available to make reporting easier for its traders. The services are not designed for automatic reporting but rather as a method to help clients and their real tax professionals by simplifying the work.
Traders can get a complete view of all digital asset transactions by generating a single report with all buys, sells, sends, and receives of all currencies associated with their Coinbase account. This report provides a cost basis for all purchases and proceeds for all sales, including exchange fees. This is necessary to determine gains or losses, calculated by subtracting the cost basis from the proceeds for each individual trade. Lacking a clear standard guidance from the IRS tax professionals can be creative, but two approaches are common: First in first out (FIFO) and Specific Identification (SpecID).
The company reminds clients that “In order to create a complete view of your digital asset investments, you will need to download similar reports from all other exchanges you have used.” But if you haven’t used any other exchanges, Coinbase has an extra tool just for you.
Coinbase-Only Crypto Tax Calculator
For cryptocurrency traders who have only bought or sold on Coinbase, the excahnge also now offers a new tool that automatically calculates gains or losses based on a FIFO accounting method. The company says that this tool provides a preliminary gain/loss calculation to assist its customers, but “should not be used as official tax documentation without validating the results with your tax professional.”
The company warns that you can not use this tool if you have: Bought or sold digital assets on another exchange; Sent or received digital assets from a non-Coinbase wallet; Sent or received digital assets from another exchange (including GDAX); Stored digital assets on an external storage device (i.e., Trezor, Ledger, etc.); Participated in an ICO; Previously used a method other than FIFO to determine your gains/losses on digital asset investments.
Written by Bitcoin.com
Coinbase Receives E-Money License from UK Financial Regulator
Coinbase is officially expanding digital money services in the U.K. and EU.
The U.K.’s Financial Conduct Authority granted Coinbase an e-money license, the company announced Wednesday. The license now enables the company the ability to provide payment services and issue digital cash alternatives, which can then be used to make card, internet or phone payments.
A Coinbase spokesperson clarified that e-money is different from cryptocurrencies. As such, the license comes with stringent regulations designed to protect customers, according to the press release.
To that end, Coinbase explained:
“We are committed to making sure customer funds are always secure and this update means that our e-money operations have safeguards and operational standards at par with other regulated financial institutions. An example of this is segregation of client funds, where all customer fiat balances will be separated from Coinbase’s funds and kept in separate bank accounts.”
Notably, the FCA license allows Coinbase to operate in 23 EU member nations, though it is unclear whether the upcoming U.K. exit from the EU will affect that.
The spokesperson said that Coinbase can trade within the union until the so-called “Brexit.” If certain rules allowing the company to continue trading are not preserved, the company will have to suspend operations until a second license from a member state has been granted.
In addition to its new e-money license, Coinbase announced it was joining the U.K. Faster Payments Scheme, which aims to provide efficient bank transfers to residents. While Coinbase will launch a pilot to begin with, every U.K. customer should have access within the next few weeks, according to the release.
The push into the U.K. and EU are part of Coinbase’s efforts to meet increasing demand in the European market. To that end, the company also plans to multiply its London team by a factor of eight.
Written by CoinDesk.com