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Facebook Officially Launches Libra Despite High-Profile Departures

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Libra

Libra

Libra, the highly-scrutinized planned cryptocurrency led by Facebook (NASDAQ:FB), officially launched in Geneva yesterday despite several high-profile defections from the project last week.

Libra Launches With 21 Chartered Members

The Libra Association, the non-profit governing body of the digital currency, officially signed on 21 charter members at a meeting at its Swiss headquarters. The association was originally made up of 27 members; however, the high level of regulatory scrutiny leveled at the project led to several prominent defections in recent weeks. These include Visa (NYSE:V), PayPal (NASDAQ:PYPL), and Mastercard (NYSE:MA), which all jumped ship last week as it emerged that Mark Zuckerberg would defend his plans to launch Libra before a Congressional committee.

Libra also named its board of directors and formalized the association’s executive team in Geneva. David Marcus, Calibra CEO and former head of Facebook’s blockchain activities, will take a seat on the five-person board. Joining him will be Katie Haun, a general partner with Andreessen Horowitz; Wences Cesares, CEO of Xapo; Patrick Ellis, general counsel at PayU; and Matthew Davie, chief strategy officer of Kiva. Notable companies making up the 21 chartered members include Spotify, Uber, Vodafone, and several prominent investment firms.

High-Profile Defections

Despite the high-profile defections and intense regulatory resistance to the project, The Libra Association has said that more than 1,500 entities have expressed an interest in signing up, with 180 of them meeting the requirements to do so. In order for new members to join the association, a two-thirds vote is required by the current group of 21. The Libra Association was initially meant to consist of 100 companies; however, no further update on that figure has been provided, nor has an official launch date.

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Regulatory Resistance

Should Libra ever come to fruition, it will be a stablecoin backed by a basket of fiat currencies including the US dollar (50%), the euro (18%), the yen (14%), the British pound (11%), and the Singapore dollar (7%). However, regulators on both sides of the Atlantic have been highly opposed to the plans, with France’s finance minister saying he will block any attempts to develop the coin in Europe, while members of the Federal Advisory Council in the US described the project as a “monetary threat.”

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Tim Cook Talks Cryptocurrencies | It’s a No for Tech Behemoth

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Tim Cook

Tim Cook

Three months ago, Facebook (NASDAQ:FB) disclosed plans to roll out a cryptocurrency in the summer of 2020. Such news has made several headlines, with the latest being negative, as PayPal (NASDAQ:PYPL) might pull out of Facebook’s project. Even worse for the technology behemoth is that Apple (NASDAQ:AAPL), another tech giant, has expressed zero desire in following in the company’s footsteps, according to Tim Cook. Which brings forth the question: is it correct for Facebook to involve itself with virtual currencies?

Here’s what we know about Apple’s latest comments.

Tim Cook Talks Cryptocurrencies

Last week, Tim Cook talked cryptocurrencies, establishing his view on the sector once and for all: he’s not for it. When asked whether Apple will follow Facebook, Cook said to Les Echos newspaper that he has no current plans to venture into the crypto sector, adding that he doesn’t think companies should try to gain power by creating currencies.

“No. I really think that a currency should stay in the hands of countries. I’m not comfortable with the idea of a private group setting up a competing currency,” Cook explained. “A private company shouldn’t be looking to gain power this way.”

>> Coinbase Pro Increases Fees, Resumes Accepting GBP

There was once a time when the market thought Apple might get into cryptocurrencies, with rumors surfacing in September when an Apple executive was quoted as saying the company was “watching” cryptocurrency. Tim Cook has squashed that hope. “Currency, like defence, needs to stay in the hands of countries, that’s the heart of their mission,” the billionaire said. The market doesn’t seem to be holding it against the company this week, though, with AAPL stock trading up 1% on the Nasdaq.

Takeaway

Are you disappointed that Tim Cook has said he isn’t interested in cryptocurrencies, or do you agree with him? Should currency stay in the hands of countries? Let us know your thoughts in the comments below!

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Mastercard and Visa Reconsider Libra as Regulatory Criticism Intensifies

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Libra

Libra

On Tuesday, the Wall Street Journal reported that MasterCard Inc. (NYSE:MA) and Visa Inc. (NYSE:V), among other financial partners, could be reconsidering their position in Facebook Inc.’s (NASDAQ:FB) cryptocurrency project Libra.

Backers Not Ready for Criticism from Regulators

The Journal report indicated that the financial backers of the cryptocurrency project are not ready to draw criticism from regulators. Libra has received criticism from legislators owing to the reputation of Facebook regarding how it has been handling personal information. Many have declined Facebook’s request to support Libra publicly.

In an interview with CNBC, Visa CEO Alfred Kelly had indicated that although they had signed a letter of intent with the Libra Association, they were nonetheless not a member of anything. He further added that the company will not be part of the association unless there is proof of compliance with regulations.

Libra has two dozen backers, and the report indicates that policy execs of the Libra Association have received a summons to a meeting in Washington. Last week, the association head indicated that the leaders of the project were committed to addressing regulatory concerns about the token. According to Bloomberg, Stripe Inc. and PayPal Holdings Inc. (NASDAQ:PYPL) are still unsure about signing on with the project.

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Facebook Pushes Back the Launch of Libra

Last week, Reuters reported that the coin’s launch could be pushed back in order for Facebook to address growing regulatory concerns across the globe. Facebook had planned to launch its stablecoin in mid next year in collaboration with Libra Association members. Libra Association leaders will meet in Geneva on October 14 to review a charter for the association as well as appoint directors.

The cryptocurrency project was seen as the path to the mainstream adoption of virtual currency. However, the project has met political and regulatory criticism with some EU countries such as Germany and France vowing to block it from Europe. Last month, Bruno Le Maire, the economy and finance minister of France, indicated that Libra is a threat to monetary sovereignty under current circumstances and should not operate in Europe.

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PayPal Might Quit Facebook’s Libra Project

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PayPal

PayPal

When it comes to the payments space, there is no other company that has a reputation as big as that of PayPal (NASDAQ:PYPL). Hence, when it emerged that the payments giant was going to be a part of the Libra Association, there was a lot of anticipation about the sort of product Libra was going to be.

Key Details

However, according to the latest reports, it has emerged that PayPal is now considering pulling out of the Libra Association. The reason behind the decision is tied to the regulatory issues that have dogged Facebook’s (NASDAQ:FB) supposed cryptocurrency over the past months.

Ever since Facebook first announced that it was going to launch its own stablecoin named Libra in 2020, there has been a lot of regulatory backlash against it. While it is true that the company has stated that it will only launch Libra once all regulatory issues are cleared, it seems to have led to doubts among partners like PayPal. Facebook is not the only company that is going to work on Libra. The tech giant has brought together a wide range of other corporate giants into the Libra Association in order to create the cryptocurrency. PayPal is one of the key members of the association at this point.

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The Financial Times reported that a representative from PayPal did not attend the latest Libra Association meeting that took place on Thursday. Considering the troubles that Libra has faced over the past months, the withdrawal of one of the biggest payment companies in the world from the project is not going to be a good thing. Since Libra is going to be backed by fiat currencies, central banks have expressed fears about the crypto token destabilizing the markets.

Although the head of policy of the association, Dante Disparte, did not speak about PayPal specifically, he said that each corporation who has become part of the project must make its own assessment.

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Bitcoin (BTC) is Back in Momentum

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Bitcoin

Bitcoin

Bitcoin has retaken the $10,000 psychological level after coming under bearish pressure in recent weeks. The spike comes hot on the heels of growing optimism that Facebook’s Libra will make its much-awaited entry into the sector, in the first half of next year. The unveiling of Libra is of great importance as it is poised to fuel mainstream media coverage of cryptocurrencies.

Bitcoin Price Catalysts

The fact that the likes of Visa (NYSE:V), Mastercard (NYSE:MA), PayPal (NASDAQ:PYPL), and Uber (NYSE:UBER) have already invested in becoming members of the Libra Association all but raises the prospects of cryptocurrencies gaining mainstream adoption. In addition to the Libra impact, investors are increasingly buying cryptocurrencies on the dip in anticipation of further rallies to all-time highs.

Bitcoin has also continued to surge in anticipation of its halving event. The much-awaited event will result in the reduction of the number of Bitcoins that enter the market with the addition of a new block. Just as it has been the case in previous years, Bitcoin has always rallied a year in advance to a halving event.

The world largest interdealer broker TP ICAP announced plans to launch a digital asset desk for Bitcoin futures, which is another factor behind BTC’s strengthening sentiments in the market. The desk will seek to take advantage of institutional traders, who are looking for ways to venture into the cryptocurrency business.

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Bitcoin Price Analysis

Bitcoin has continued to elicit buying pressure with each pullback in the market. The cryptocurrency is already up by more than 300% for 2019 as it continues to recoup losses accrued over the past year. BTC is currently trading in the $10,000 to $11,000 trading range with a bullish bias.

However, the Relative Strength Index and Stochastic indicator have started to turn down after clocking overbought levels. Bearish momentum might develop as part of the consolidation seen early in the month, as indicated by a negatively crossing monthly Moving Average Convergence Divergence (MACD). A positively crossing monthly MACD, on the other hand, signals further upside going forward.

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Libra Testnet Surpasses 50,000 Transactions Since September Launch

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Libra

Libra

The Libra testnet has logged over 51,000 transactions since it was reset in September, with 34 projects having been developed on the network according to an update released by The Libra Association last week.

In a blog post titled “Five months and growing strong: the Libra project,” the project’s lead developer, Michael Engle, said, “It’s been just five months since we announced the Libra project on June 18, 2019, and nearly a month since the Association charter was signed by its members in Geneva. We’ve been working diligently to build the global community of developers and the technical infrastructure needed to support it.”

Of the 34 projects developed in the seven weeks since launch, 10 of those are wallets and a further 11 are blockchain explorers. Libra has emphasized the importance of involving the extended community, which supports the planned digital currency and recently held a Core Summit with Association technical team members. Topics covered at that summit included an overview of Libra core and its roadmap as well as how to run a node and build a wallet. From November 26, the project will launch a new streamlined process for submitting code and documentation.

The technical milestone is welcome news for proponents of the project, which has received substantial scrutiny and regulatory pushback from governments and regulators around the world, casting doubt as to whether the digital coin will ever actually come to fruition. The Libra Association, the nonprofit body overseeing the project, was launched last month after 21 members signed the association’s charter.

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The launch came despite several high profile defections from the project, with Visa (NYSE:V), PayPal (NASDAQ:PYPL), and Mastercard (NYSE:MA) all jumping ship just a week before Facebook (NASDAQ:FB) CEO Mark Zuckerberg was due to defend his plans for Libra before a congressional committee hearing. Zuckerberg said that Libra will not hit the market without US approval, with the launch of the stablecoin delayed until mid-2020 at the earliest.

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Libra Chief Praises Its Anti Money Laundering Standards

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Libra

Libra

Libra Chief David Marcus has claimed that the Anti Money Laundering Standards of the underfire project are superior to any other payment networks on the market today.

Libra Scrutiny Means Its On Track, Says Chief

Marcus is the CEO of Calibra, the corresponding digital wallet of Libra, and previously served as president of PayPal and a member of the Board of Directors at Coinbase. Speaking at the Money 20/20 conference in Las Vegas, he said, “I want to say that the efficacy of sanction enforcing can be much higher on Libra than other payments networks.” He pointed to the benefits of blockchain technology in enabling regulators to quickly identify risks in the system without having to rely on external reports.

Libra has been under fire from regulators in the US and Europe, who fear that it poses a threat to the economic sovereignty of nations. Speaking on that scrutiny, Marcus said, “These headlines are a preamble to more hard times ahead, and we must govern the network into a place where it will meet regulatory standards, then we will see the network come to life. People deserve much better than they have.” However, he added that the scrutiny was a sign that Libra was on the right track, saying the most meaningful innovations are always met with “damning headlines.”

The Libra Association

Despite the criticism, the Libra Association was officially launched earlier this month at its headquarters in Geneva. The Association’s charter was signed by 21 founding members, down from the original figure of 27 after several high profile defections, including Visa (NYSE:V), PayPal (NASDAQ:PYPL), and Mastercard (NYSE:MA), which all jumped ship after it was announced that Mark Zuckerberg would defend his plans to launch Libra before a Congressional committee.

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At the launch, Libra announced its executive team, which will include Marcus as well as four other high profile figures in the digital payments industry. Katie Haun, a general partner with Andreessen Horowitz; Wences Cesares, CEO of Xapo; Patrick Ellis, general counsel at PayU; and Matthew Davie, chief strategy officer of Kiva, will complete the five-person board.

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Libra Will Not Hit the Market Without US Approval, Says Zuckerberg

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Libra

Libra

The crypto sphere is known for being a disruptive force, but even this sector got a disruptive jolt of its own when Facebook (NASDAQ:FB) announced it would be launching its own cryptocurrency, Libra, in 2020. However, ever since the company announced the launch of its own stablecoin, it has come under fire from regulators from all over the world.

Major Setback?

As a matter of fact, even the United States President slammed the project and asked the company to instead apply for a banking license. It has now emerged that Mark Zuckerberg is going to tell the US Congress that the company is going to delay the eventual launch of the cryptocurrency.

The project has come under intense pressure from lawmakers, regulators, and even other companies that had initially agreed to participate in the project. Recently, some of the big names like PayPal (NASDAQ:PYPL) have decided to exit the project altogether, and the whole thing is looking quite grim for Facebook. Mark Zuckerberg seems to have conceded that the backlash against Libra is currently too strong, and hence, it would be better if the company delayed the launch altogether. In the statement, the Facebook founder wrote, “I believe this is something that needs to get built, but I understand we’re not the ideal messenger right now.”

>> Ripple Boosts Regulatory Focus With Opening of DC Office

The company had announced its very own cryptocurrency at the height of the crypto rally this year in 2019 and had scheduled the launch at some point in 2020. After the regulatory issues were raised by officials in the different parts of the world, the company stated that it was willing to wait until all issues are solved and launch the stablecoin afterward.

While it is true that the company may have explored the idea of a delayed launch in the past, the Libra project seems to now have reached an impasse from which Facebook is struggling to recover.

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Libra to Be at the Center of the EU’s New Crypto Regulations

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Libra

Libra

Libra will be the focus of the cryptocurrency regulatory framework planned by the European Union’s finance commissioner Valdis Dombrovskis.

“Common Approach” Needed, Says Commission VP

The former Latvian Prime Minister has been the Vice President of the European Commission since 2014 and said in his bid to be reappointed that the EU needs to take a unified approach to regulating cryptocurrencies. “[…] we must address risks such as unfair competition, cybersecurity, and threats to financial stability. For instance, Europe needs a common approach on crypto-assets, such as Libra. I intend to propose new legislation on this,” said Dombrovskis in a statement in Brussels this morning.

Dombrovskis comments come amidst intense scrutiny from senior EU politicians towards Facebook’s proposed digital coin. On Monday, the EU sent a questionnaire to Facebook (NASDAQ:FB) and the Libra Association seeking further clarification on how the coin will deal with financial stability, money laundering, and data privacy concerns. France and Germany, two of the leading EU nations, have said they will push to completely block Libra’s development in Europe.

PayPal Withdraws From Libra

The bad news keeps piling up for Libra, after it lost PayPal (NASDAQ:PYPL) as a backer on Friday. The payments firm said it would focus instead on its own efforts to “democratize access to financial services for underserved populations.” PayPal’s withdrawal comes after reports that several major backers were losing faith in the project, fearful that the spotlight placed on the social media giant’s proposed cryptocurrency will also bring their own separate, independent businesses into disrepute.

>> Tether Accused of Major Market Manipulation in Trillion Dollar Lawsuit

US Regulatory Scrutiny

Libra is facing equally intense regulatory pushback on this side of the Atlantic, with senior US banking officials branding it a “monetary threat” in a meeting of the Federal Advisory Council last week. Members of the council include M&T Bank CEO Rene Jones and Brian Moynihan, CEO of Bank of America. These fears were reiterated by two members of the House of Representatives in a letter to the Fed’s chairman Jerome Powell.

After Facebook’s Mark Zuckerberg refused to provide a firm date on Libra’s launch, which was planned for mid-2020, it’s beginning to look as though the project will never see the light of day.

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