Summary of this week’s crypto highlights, CoinMetro updates & more!
Considering the fact that their initial plan was flawed, being structured as a sovereign central bank, and they haven’t changed that structure yet — so, obviously they don’t have a strategic plan. They had one. It got squashed by France, Germany, the US, etc.
Libra is trying to revert from this “central bank type structure”, so they’re going down the right path.
This is not a surprise. If anything, it’s a surprise that they’re still trying to get an ETF approved, knowing that the SEC’s concerns about manipulatable markets and privacy still haven’t been addressed.
These guys tried to address it by saying that they’re going to diversify into treasury notes, and only a small portion would be diversified into Bitcoin inside a Bitcoin ETF. That might dilute volatility a bit — but does it get around manipulation? If the SEC is believing that Bitcoin markets are manipulated — and they’re probably correct — having less Bitcoin in the underlying product might mean less manipulation, but it doesn’t eliminate manipulation.
This has more to do with the maturity of the market as a whole. For example Bakkt allows SEC some type of regulated venue where they can pull price discovery information from. It’s going to help, but still in its infancy. These will continue to keep getting denied. It won’t be approved in February either.
The Philippines has now authorized 10 virtual currency exchange providers, that actually allow conversion of the Philippine peso into its digital form, so a stablecoin/smart token. They’re not yet collecting the AML/KYC reporting data from those exchanges. Something like AMLD5.
The Philippines have come out strongly to say that crypto can be used in bad ways to finance terrorism and so on, yet they’re not doing anything to track its usage. So the IMF is simply telling the Philippines to at least do the work to figure out that this money isn’t being funded into criminal activity.
Learn more about CoinMetro’s KYC/AML practices.
They did launch EUR pairs. But there’s no way to fund your account with the euro, unless you’re in Binance Jersey.
It’s not hard to launch tradable pairs on a currency. All they need to do is open up on a third party FX platform, open a hedge on the USD/EUR pairing, and they can basically price BTC/EUR and use the liquidity from BTC/USD, and hedge it against the EUR price. The same process for any other currency. Anyone can do this.
The reason why we don’t do that, is because without the ability to get streamlined onramp and offramp processes for that underlying fiat currency — or at least some type of liquid, decentralized and risk free underlying stablecoin — what’s the point of being able to trade, if you constantly have to move the currency back into your native fiat currency? If you are instead using a USD stablecoin to hedge and trade into euros, you might actually be losing more money than you are making, by inducing invisible trading costs.
Kevin guarantees that Binance will not have 180 fiat currencies in 2020. 180 crypto pairings? That can be done over a weekend. But what’s the real gain to trade a pair if you can’t liquidate out of the underlying fiat currency?
All CoinMetro listings are paired with EUR and CoinMetro supports both euro withdrawals and deposits, by Instant SEPA, SWIFT and VISA/Mastercard.
We’ve been in a downtrend on Bitcoin since $20k. We’re still in that downtrend. No bullish movements since the drop. This doesn’t mean that there can’t be retracement inside a bearish market. If this market was more mature than it is, then those Iranian fears would have caused more volatility because most people don’t react the same way that analysts do. Retail guys tend to trade what other people tell them to trade. We don’t have the market infrastructure that peaks and moves around fundamentals, yet.
CoinMetro’s Pro platform enables shorting of assets, with or without leverage.
Would you like to read about more market news? Check out our Medium post!
ETA on market makers?
Testing has been ongoing. They also had to go through our KYC process, which they passed. They just have to provide a few more additional documents so we can get their deposit levels up to par. That process is ongoing.
We’re within days of them going onto more substantial market making practice.
Any updates on the currencies?
No specific update on the currencies, but one of the main reasons we’re going after the Payment Institution License is so we can actually do this ourselves without going through so many intermediaries.
What’s going on with LHV and adding new assets?
We have an audit scheduled with LHV for the end of the month. When we pass the audit, they should be more willing to give us some feedback on some additional things that we want from them. We sent them an email today to get some feedback.
When do you think the dev team will start working on the transparency page?
Once we complete the current dev cycle, a lot of things in there — XCM rebates, the utility, tiers, revamp of trading platforms — these things will give us more data to post on a transparency page.
It’s something we want to see, but it’s secondary to finishing our main product palette, so when we go into marketing, we have everything streamlined and marketing can push people into the product. MAP and the XCM rebates will partially help users see how the products are being used.
Read our blog post on What’s in Store For XCM!
Are you courting any more IEOs currently?
The one we were talking to most recently is stalled now until the third quarter, most likely, mainly because they revamped how they wanted to raise funds and what their focus is before they raise those funds.
Outside of those guys, Kevin is actually going to meet with the company that showed interest for a fundraising process in 2019. Kevin is also going to meet the new investors in Dallas, and give some updates. There is a possibility within that group as well, some of their own projects which might require funding.
Read more about CoinMetro’s successful funding round!
How is the CSD moving along?
Kevin just came back from a meeting with the dev team in Riga. It’s going very well. Went through a demo process, where a bond was created inside of the system. The primary market sale of that bond happened on the CSD platform. Virtually buyers bought into the primary issuance, and the token was then created on Ethereum’s test network and was distributed into multisig wallets on the CSD platform for each and everyone of the primary market participants.
We basically showed the ability that this can be transferred into a omnibus wallet structure for connectivity to trading venues outside of the CSD.
January 20th is still the date for the MVP to be ready.
When will ETCFs arrive?
We require a portfolio management license for the ETCFs. Either we can try and get that done in the sandbox as well, or we have to wait until we have the license. The license is not in the cards yet, mainly because it would tie into the MTF license. The MTF license will require an additional funding license, as it requires a minimum of 1 million euro in capital.
In relation to the airdrop, we had a discussion today. Possibly we will move those airdrops onto the TraM platforms, or something in conjunction with CoinMetro Montenegro.
What kind of XCM amount makes someone an XCM whale in your eyes?
There’s 330 million XCM. Roughly 170 million circulating. If you hold 1% of an asset — you might not be the biggest whale, but holding 1% probably puts you in the top 5%. Holding 2% puts you in the top 1% for sure.
Want to work your way towards becoming a whale? Buy some XCM!
When are you getting some competent marketing people?
We’ve had lots of interviews, two more just today. We will most likely give offers to two specific people, who we think together will create what we feel is the perfect marketing person.
Where are the 2 TraM algo managers?
The company has multiple strategies, and is now fully onboarded. Now it’s a matter of pushing them in gear. They will be having a walkthrough with Oliver on how the TraM platform works.
They should hopefully have one of their algos live before the end of the month.
Learn more about CoinMetro’s TraM system here!
Any prospects who expressed interest in using the CSD when it’s ready? Are you aware of any company already offering CSD services?
There are companies that offer primary market services. Nobody is looking at crossborder, especially not global crossborder. Real time settlement is rarely looked into.
So, nothing is 1:1 the same. As far as issuers, we already have two or three issuers that are expressing interests, and that’s after talking to two or three issuers.
Is AMLD5 forcing EU based exchanges to countries like Panama? I see Deribit are moving offices to Panama and servers to London.
That has to do with the fact that those guys offer derivatives, and basically in the whole of Europe, it’s at best a gray area — and at worst illegal. It has nothing to do with AMLD5. They may use it as an excuse.
If you are running a financial service business, and you can’t do remedial KYC and AML, then you shouldn’t be in business.
Will we not see new currencies or debit cards without the Payment Institution License?
We can offer deposit currencies without the license. The license would help us connect with certain payment providers that wouldn’t work with us as just a crypto company.
But no, it doesn’t mean we need to wait. The license however will allow us more choices and we would be more robust. We will probably have Pounds, maybe Australian Dollars, and then branch out into some unique services that are centralized on our platform, no third party payments or interactions outside of the platform with that money, it would be internalized until we have the license.
In a global blockchain, latency can lead to issues. There can be multiple chains existing at any one time. When a block is found and added to the chain, in certain instances, blocks can be found and added to two separate chains at the same time. The longest chains end up becoming the point of truth.
If you have a chain in North America, and another one in China. A block comes on both of those chains at the same time, then the region that mines the block after that block, will become the point of truth. The other side’s block will become a stale block, and the transactions mined in that block will go back into the mempool.
Interested in learning more? Have a look at the video where Kevin explains “stale block”:
Get the complete scoop by tuning in to our audio version of last week’s TWiC on SoundCloud. Happy listening!
That’s a wrap for this week’s AMA with CoinMetro Founder Kevin Murcko! Please join us next week on CoinMetro’s Facebook and YouTube Channel at 1 PM (UTC) for another round and make sure you submit your questions to the CoinMetro subReddit!
As always, we’re available to answer any questions you may have on our Telegram Group 24/7.