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Venezuela to Use Petro as Unit of Account for Salaries, Goods and Services

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Venezuelan President Nicolás Maduro has announced that the Petro will be used as a unit of account in the country.

Venezuelan President Nicolás Maduro has announced that the national oil-backed cryptocurrency, the Petro, will be used as a unit of account within the country, news outlet ABC International reported August 14.

Nicolás Maduro reportedly announced in a television address, that the state oil company PDVSA will use the Petro as a unit of account. Additionally, the government will introduce a new salary system and a pricing system for goods and services that are anchored to the Petro. ABC quotes Maduro:

“As of next Monday, Venezuela will have a second accounting unit based on the price, the value of the Petro. It will be a second accounting unit of the Republic and will begin operations as a mandatory accounting unit of our PDVSA oil industry.”

According Maduro, the implementation of a new Petro-based salary and pricing system “will mean a substantial improvement in the income of the workers” and will help “the maximum retail price to reappear.”

Starting August 20, Venezuela will have two government currencies, the Petro and sovereign bolivar, the latter of which will be indexed to the former. The sovereign bolivar will take five zeros away from the current national currency, the bolivar fuerte, in an eventual monetary reconversion.

The Central Bank (BCV) will reportedly “begin to publish the official figures of the value of the sovereign bolivar according to the Petro and the value of the petro according to international currencies.” Maduro also said that the BCV and private banks in the country have already received the new banknotes.

The Venezuelan government launched the pre-sale of the Petro in February, with 82.4 million of the world’s first national oil-backed cryptocurrency available at that time. The country introduced the currency in an attempt to attract foreign investors and skirt U.S. and E.U. sanctions, as well as overcome catastrophic hyperinflation which is projected to hit 1,000,000 percent in 2018.

According to the Petro whitepaper, the cryptocurrency fully complies with Venezuelan legislation, though the opposition in the National Assembly publicly claimed that issuing Petro was illegal.

While some parts of the document lack fine details and others are not backed by any sufficient arguments, there are some clear economic use cases. Paying taxes and other settlements with state bodies would be at least 10 percent cheaper with the Petro, which is planned to be expanded into other payment markets in the future.

The whitepaper says that the Petro can be be easily converted into U.S. dollars and other currencies, which will help Venezuela in export trade. Still, there’s a possibility that it could be purchased with funds that were received illegally at crypto exchanges or privately, and then exchanged to oil that can be ‘laundered’ and documented to eventually be sold through above-board business practices in various jurisdictions.

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Bitcoin Big Money Coming From Institutions – John Mcafee calls out Jamie Dimon

Most of the money coming into the market is institutional money, not so much amateur investor money. Also John Mcafee sends a public announcement to Jamie Dimon about Bitcoin and cryptocurrency. DISCLAIMER The information discussed on the Altcoin Buzz YouTube, Altcoin Buzz Ladies YouTube, Altcoin Buzz Podcast or other social media channels including but not […]

Chamber of Digital Commerce Report, Reviewed

On July 30, the Chamber of Digital Commerce proposed guidelines for the “responsible growth” of the crypto market.

On July 30, the Chamber of Digital Commerce (CDC) Token Alliance published a 108-page collaborative report of proposed guidelines for the “responsible growth” of the cryptocurrency market.

In the accompanying press release, CDC member Paul Atkins, CEO of Patomak Global Partners and former U.S. Securities and Exchange Commission (SEC) Commissioner, argued that guidelines are needed for the smart regulation that “strikes the right balance between protecting investors while allowing for innovation in this new technological frontier.”

What is Chamber of Digital Commerce?

The CDC is a U.S.-based advocacy group that promotes the industry behind virtual currencies and underlying technologies like blockchain. It was founded in July 2014 by Perianne Boring, who previously worked as a legislative analyst in the U.S. House of Representatives and a television anchor of an unspecified “international finance program,” according to her bio aon the CDC’s website.

Being established as a public education outlet, as well as a tool for influencing lawmakers and regulators about digital currencies, the Chamber started to build up its credibility with authorities from the very start: In August 2014, it registered a political action committee (PAC) with the U.S. Federal Election Commission (FEC). Two months after that, in October, the CDC received a nonprofit status from the Internal Revenue Service (IRS).

At this point, the CDC is comprised of approximately 350 participants — ranging from technologists and economists, to token experts, lawyers, former regulators and membership companies as large as Microsoft, Deloitte and IBM.

Tokens are not necessarily ‘securities’ or ‘commodities’ and therefore fall into a grey zone

The CDC report is dubbed “Understanding Digital Tokens.” It is the first installment of what is supposed to become a series, and it focuses upon a particular type of coin — tokens that are not designed to represent securities or commodities, meaning that they should be situated in a grey zone not controlled by the SEC and U.S. Commodity Futures Trading Commission (CFTC) respectively.

In the introduction of the paper, the authors argue that the industry has come to a point where digital tokens do not necessarily fall into one precise category, a sentiment similar to the one voiced by experts at a recent U.S. Congressional hearing, which argued that a digital token’s legal status is fluid these days:

“Some tokens may serve as a virtual currency, others may represent or track physical assets in the real world, some may explicitly represent a security and others may have a utility function. These functionalities are not necessarily mutually exclusive, and a token’s legal treatment may depend on the manner in which the token was marketed.”

The CDC then lists examples of U.S. regulatory bodies’ various approaches toward virtual currencies, outlining the uncertainty of the current regulatory landscape. “In such a volatile regulatory regime (not to mention economic market), reasonable guidelines
are imperative,” the paper argues.

The first part of the report is a regulatory overview of five different jurisdictions: namely, the U.S., Canada, the U.K., Australia and Gibraltar. The CDC goes over various legal aspects like taxation of tokens, Know Your Customer (KYC) and Anti-Money Laundering (AML) compliance, investors protection, etc.

In every reviewed case, a specific regulatory framework for generation and distribution of digital tokens is absent. Therefore, such actions tend to fall on the periphery of the law and are defined on a case-to-case basis, where certain aspects of a token are studied by regulators. Even in Gibraltar, where a DLT framework was brought into effect in January 2018 and aimed to help facilitate DLT-backed businesses, it “does not extend to the generation and sale of digital tokens,” albeit with some exceptions, the paper concludes.

Token’s white paper: Dos and don’ts

Based on the assumption that digital tokens “can take a variety of forms and serve many purposes” that was supported by the aforementioned examples, the paper then attempts to outline principles and guidelines for ‘Token Sponsors’ — defined as an individual or group that either “generates or distributes” or “undertakes to lead or control the development, adoption, or distribution of a digital token” — to manage the risk that the offering and distribution of a digital token may entail, considering certain securities and commodity laws.

Significantly, tokens mentioned in this report are not securities or CFTC-regulated instruments, and the paper itself does not contain legal advice.

The CDC suggests risk management based on the broad definition of what might be deemed as “securities” along with the Howey Test, as well as stating the cases in which the CFTC may exercise general anti-fraud and anti-manipulation authority over any digital token.

The next section in the report focuses on what should and what should not be included in the token’s white paper:

“Thus, the Token Sponsor should provide clear explanation of the project, along with the underlying technology, include descriptive or illustrative case studies of the application, disclose potential risks and employ utility-oriented promotion that does not ‘encourage interest in acquiring the token based solely on investment expectations or a fear of missing out on an investment,’ as it would constitute securities.”

The authors then argue that the white paper should not, however, describe the process of token distribution — as those details can be disclosed in additional materials, if needed:

“If a Token Sponsor’s digital token will be distributed in private sales, a limited public sale or auction, airdrop or a similarly limited event, it may be more appropriate to describe the event in separate materials that can be superseded when the event is completed, rather than in the Token Sponsor’s white paper.”

Moreover, the white paper should stay away from making misleading statements, promising financial returns, discussing strictly investor-oriented details and mentioning prior investments or major projects completed by the development team, its advisors and consultants.

The CDC stresses that following these guidelines “provides no guarantee that a federal or state regulator will not take issue with the digital token issuance, sale or other distribution” as they are intended to assist a Token Sponsor when thinking through critical issues related to “its digital token issuance, sale and distribution.”

Due diligence is the number one priority for platforms trading tokens

Further, the Chamber report focuses on token trading platforms, “entities that allow the trading of digital tokens.” The paper first warns that “responsible” platforms “should do more than merely avoid regulation by the SEC or the CFTC”:

“They should voluntarily conduct business in a manner that protects token consumers, protects the integrity of secondary markets and builds public confidence in the broader blockchain industry.”

Then, the section discusses how token trading platforms may manage risks that arise when a regulator or a court contends that a digital token trading on their platform is a security or a CFTC-regulated instrument “notwithstanding the Token Sponsor’s claims to the contrary.” Essentially, the report suggests the platform to do due diligence, keep the Howey Test in mind and review the token’s present utility before listing it on their service.

CDC will continue publishing reports to improve the token ecosystem

The report comes to a close by noting that the “concept of digital tokens is complex” and by citing SEC Commissioner Hester Peirce, who declared that she “used to know what a token was,” while its present state is much more perplexing — which, in turn, shouldn’t “breed anxiety and therefore bad regulation.”

The subsequent CDC reports will highlight topics including AML/KYC potential regulatory adjustments; promoting the concept of a “utility token” among policymakers; and how the industry might play a role in self-regulation, among others.

Fundstrat's Robert Sluymer Says Crypto Market Technicals Suggest Buying

Fundstrat’s Robert Sluymer gave his technical analysis of 2018’s cryptocurrency markets on CNBC, concluding that “you want to be buying.”

Robert Sluymer of Fundstrat Global Advisors gave his technical analysis of 2018’s cryptocurrency markets, with particular focus on Ethereum (ETH) and Bitcoin (BTC), on CNBC Tuesday, May 1.

Sluymer drew a parallel between the significant impact of uncertainties surrounding regulation and taxation on trading prices in January 2018 – which saw ETH plummeting from $1,000 to $350 – and today’s situation.

Commenting on the markets’ response to this week’s reports of an ongoing SEC probe into ETH, Slyumer came out positive. He showed that ETH has been rallying back into the $700 range, and is seeing a lot of resistance around its 200-moving-day average.

He further pointed out that one of the momentum indicators (Relative Strength Index) shows that the coin was in fact “pretty overbought,” before the recent correction.

Slyumer generalized this positive trend to “most cryptocurrencies.” Bitcoin (BTC), he said, is seeing “a tremendous amount of support” between $8200-8400. He explained:

“[BTC] is starting to stall at the 200-day[moving average], momentum’s gotten overbought, we’re starting to see [a] consolidation, there’s a tremendous amount of support here… The key point here is [the] huge downtrend that’s been in place since January is now reversing. So the question is, are we seeing a bigger bubble or is this a bottoming phase? We think it’s a bottoming phase that’s taking hold, and you want to be buying this pullback from the short-term overbought.”

Slyumer mentioned some onlookers’ comparisons of 2018’s crypto markets to the collapse of the NASDAQ bubble in 2002, which suggest that the year’s early dips could be followed by even more momentous plummets.

Sluymer refuted these for a couple of reasons. Firstly, the BTC market has had “nowhere near” the institutional and private investment that NASDAQ saw in its “bubble” years between 1995-2000. Secondly, Bitcoin’s bull market has only been around for a couple of years, and is now showing very positive signs, given its 70% correction back to the 200-day moving average.

Slyumer nuanced Fundstrat’s Tom Lee’s suggestion that a massive sell-off of crypto-holdings before U.S. Tax Day was behind BTCs and ETH’s worst ever first quarter performances, saying that early 2018’s lows were due to a combination of factors coming together in “a perfect storm.”

He emphasized that the recovery this spring has been relatively “orderly” and “timely,” suggesting a bullish outlook for the future. In January, Lee himself told CNBC that he predicted BTC would hit $25,000 by the end of 2018.

Bloomberg Partners Novogratz’s Galaxy Digital Capital To Release Crypto Benchmark Index

Bloomberg and Mike Novogratz’s crypto merchant bank have announced a collaborative launch of a crypto benchmark index.

Bloomberg and Mike Novogratz’s crypto merchant bank Galaxy Digital Management have launched the Bloomberg Galaxy Crypto Index (BGCI) that will track ten cryptocurrencies from the “largest, most liquid portion of the cryptocurrency market,” Bloomberg reports today, May 9.

The coins to be listed on the index currently are Bitcoin (BTC), Ethereum (ETH), Ripple, Bitcoin Cash, ESO, Litecoin, Dash, Monero, Ethereum Classic, and Zcash. Bloomberg writes that the BGCI offers the “first institutional benchmark for the cryptocurrency market.”

Global Product Manager for Bloomberg Indices, Alan Campbell, said that the “launch of the Bloomberg Galaxy Crypto Index reflects our clients’ growing interest in cryptocurrencies.” Last week, Goldman Sachs reported that they would begin trading in Bitcoin contracts after being “inundated” with client requests for the service.

At the beginning of April, a former Goldman Sachs executive reportedly joined Galaxy Digital as its new COO. More recently, the owner of the New York Stock Exchange showed an interest in allowing its customers to hold and sell Bitcoin.

Bitcoin Big Money Coming From Institutions – John Mcafee calls out Jamie Dimon

Chamber of Digital Commerce Report, Reviewed

Fundstrat's Robert Sluymer Says Crypto Market Technicals Suggest Buying

Bloomberg Partners Novogratz’s Galaxy Digital Capital To Release Crypto Benchmark Index