Digital Currency News Update: Moves from China and More...
Good news, digital currency investors: It appears we're entering bullish territory.
And this bullish momentum couldn't have come at a better time. All around the world, big things are happening in the blockchain space.
China has continued to make bold moves to further its blockchain investment, Iran cracked down with statements that it plans on banning its banks from Bitcoin markets, and California could become the second state to recognize blockchain stocks.
On a token level, things are also popping.
The code for Ethereum's consensus change is officially ready for review, harkening a whole new age for the world's second most popular digital token.
We're going to break down all these events in this week's news update section. Let's get started.
China: A Waking Blockchain Giant
While China may not be the first country to come to mind when an individual thinks of blockchain, it's one of the countries most committed to this new technology.
A few weeks ago, Hangzhou, China, announced the introduction of the Xiong'An Global Blockchain Innovation Fund, which will help fund a whole new wave of blockchain innovation in the Hangzhou area.
This week, another city got in on the action.
On Sunday, April 22nd, the city government of Shenzhen, China, announced that it would be backing a dedicated blockchain investment fund.
The announcement came at a blockchain event hosted by the China Electronic Commerce Association. The goal of the fund is to invest 500 million yuan (the equivalent of $80 million USD) in blockchain startups located in Shenzhen.
40% ($32 million USD) of these funds will come from an angel fund that was launched in late March by the Shenzhen municipal government, with the remainder of the sum coming from the private sector. This means 4% of the angel fund will be invested in blockchain-based startups, with 96% going to other startups in the area.
Iran Says No to Bitcoin
Where China is getting excited about blockchain technology, Iran still seems uncertain. Regulators recently warned financial businesses that they should not be doing business in Bitcoin or other digital assets. The main fear seems to be that the cryptocurrencies could be used for illegal activities such as money laundering or terrorist financing.
The Central Bank of Iran (CBI) issued a message on Sunday backing this concern. The message contained the following statement:
Virtual currencies have the option to be used for money laundering, supporting terrorism, and exchange of sums between wrongdoers.
The report goes on to state that banks, credit institutions, and currency exchanges must avoid both the sale and purchase of virtual currencies. Beyond that, these institutions are also not allowed to promote digital currencies.
All that said, it's still unclear whether or not a central bank will be capable of blocking domestic currency activities if individuals have access to the technology. Outside of this, some public officials do support the use and development of digital currencies and blockchain technology.
In fact, back in February, Iran's Information and Communications Technology Minister stated that Iran's central bank is in the process of developing a cryptocurrency. This cryptocurrency will be controlled by the state government.
Past that, the secretary of Iran's cyberspace authority stated the nation "welcomes" Bitcoin as long as proper regulation is already in place.
We will keep Token Authority subscribers up to date as this story develops.
California Could Become the Second State to Recognize Blockchain Stocks
In positive news from the West, California could be well on its way to being the second state to recognize blockchain stocks.
Bill 838, which was introduced by Senator Robert Hertzberg in January 2018, would allow companies to store data, including information about stockholders, on a blockchain.
On April 18th, the State Senate's Banking and Financial Institutions Committee gave the measure a "do pass" recommendation. If the measure is approved, then all information about a company's stock could be stored on a blockchain.
In a statement about the bill, Senator Robert Hertzberg said:
The world around us is changing, and government must adapt with these rapidly evolving times. California needs to continue our legacy of taking on new and developing technologies, especially ones like blockchain, which is being embraced worldwide and presents a strong level of security that is resistant to hacking.
If California does approve the measure, it will join the ranks of Wyoming and Delaware, who are already using blockchain technology for administrative purposes. We will keep you up to date as the story evolves.
Ethereum on the Move: The Code for Ethereum's Consensus Change is Ready for Review
For Ethereum investors, the world is looking pretty bright.
On Friday, April 20th, Ethereum developers provided the update that code crucial to Ethereum's upcoming consensus change is ready for review.
The goal of this new consensus method is to move Ethereum toward a brighter (and greener future). The protocol is known as Hybrid Casper FFG (FFG is short for Friendly Finality Gadget). When implemented, this protocol would help Ethereum move away from the energy intensive proof-of-work (PoW) mining process and toward a far less energy-intensive mining process known as proof of stake (PoS).
Before we get to proof of stake, the Ethereum team is rolling out a hybrid of proof of work and proof of stake. This hybrid is known as Casper.
It is worth noting that these changes will not be compatible with the current Ethereum software. This means a hard fork must take place for the changes to be implemented.
If you would like to learn more about proof of stake, you can read our full Ethereum resource page here.
This is a pretty big story. In fact, it's a bit too big to be featured in just our news update section. Keep an eye on your inbox for our Monday mailing, which will break down the difference between proof of work and proof of stake, providing insights into what investors should be betting on.
Bonus Update: Could the Crypto Ad Ban Be Temporary?
You may recall when we covered the crypto ad ban a few weeks ago. At this point, multiple social media giants are holding firm on their stance that cryptocurrency ads will not be allowed back on the platform.
But for the cofounder of LinkedIn, Eric Ly, the ad ban doesn't seem to be a great cause for concern.
In an interview with CoinDesk, the cofounder expressed his beliefs:
These kind of platforms are conservative protective approach for themselves. Recently, the Securities and Exchange Commission (SEC) has been asking a lot of questions and subpoenas for information from people and companies. I believe that is a protective measure from a lot of these companies to not engage in new form of not advertising, but activities by ICOs, they probably want to avoid potentially uncertain interactions with SEC. But I do believe that this is a temporary period because like many domains, advertising has an incentive to support as many domains as possible. So when regulatory clears itself up, I believe there will come a time again when advertising of this nature around token sales will be re-permitted on these platforms.
Ly's statements echo those made by other experts in the space, where the view seems to be that these kinds of ad bans are simply symptoms of a rapidly growing and unregulated industry.
We will keep investors up to date on the ad ban as changes occur.