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BoE one of central banks weighing potential benefits amid decline of cash and emergence of Facebook’s libra The Bank of England will examine how Britain could adopt a bitcoin-style digital currency as part of a global group of central banks that have joined together to examine the possible pitfalls of relying on electronic money.Bank officials will meet with the Bank of Japan, the European Central Bank (ECB), the Sveriges Riksbank, the Bank of Canada, the Swiss National Bank and the Bank for International Settlements (BIS) to pool research and experiences of the potential for a central bank digital currency (CBDC). Continue reading... […]

Gerald Cotten, 30, died in ‘questionable circumstances’Canadian company founder took crucial password to the graveLawyers for customers of an insolvent cryptocurrency exchange have asked police to exhume the body of the company’s founder, amid efforts to recover about $190m in Bitcoin which were locked in an online black hole after his death.Miller Thomson LLP sent a letter to the Royal Canadian Mounted Police on Friday, requesting authorities “conduct an exhumation and postmortem autopsy” on the body of Gerald Cotten, founder of QuadrigaCX, citing what the firm called the “questionable circumstances” around his death earlier this year. Related: Cryptocurrency investors locked out of $190m after exchange founder dies Continue reading... […]

The environmental impact of such technological advances can be hugeThere is, alas, no such thing as a free lunch. This simple and obvious truth is invariably forgotten whenever irrational exuberance teams up with digital technology in the latest quest to “change the world”. A case in point was the bitcoin frenzy, where one could apparently become insanely rich by “mining” for the elusive coins. All you needed was to get a computer to solve a complicated mathematical puzzle and – lo! – you could earn one bitcoin, which at the height of the frenzy was worth $19,783.06. All you had to do was buy a mining kit (or three) from Amazon, plug it in and become part of the crypto future.The only problem was that mining became progressively more difficult the closer we got to the maximum number of bitcoins set by the scheme and so more and more computing power was required. Which meant that increasing amounts of electrical power were needed to drive the kit. Exactly how much is difficult to calculate, but one estimate published in July by the Judge Business School at the University of Cambridge suggested that the global bitcoin network was then consuming more than seven gigwatts of electricity. Over a year, that’s equal to around 64 terawatt-hours (TWh), which is 8 TWh more than Switzerland uses annually. So each of those magical virtual coins turns out to have a heavy environmental footprint.When you’ve embarked on changing the world, why let pedantic reservations get in the way? Continue reading... […]

Karatbars used former football stars Lothar Matthäus, Roberto Carlos and Patrick Kluivert to promote productsA German cryptocurrency company that used the former football stars Lothar Matthäus, Roberto Carlos and Patrick Kluivert to promote its products has been ordered by a German watchdog to wind up its blockchain-based business after allegations it was luring customers into a pyramid scheme.Karatbars, founded by a Stuttgart-born former vacuum cleaner salesman, Harald Seiz, in 2011, has promised to revolutionise the world’s financial system through its internet-based currency. Related: Blockchain could reshape the world – and the far right is one step ahead | Josh Hall Continue reading... […]

Western governments need to start thinking about their response to currencies they cannot controlThe Facebook chief executive, Mark Zuckerberg, was at least half right when he recently told Congress that there was no US monopoly on regulation of next-generation payments technology. You may not like Facebook’s proposed Libra (pseudo) cryptocurrency, Zuckerberg implied, but a state-run Chinese digital currency with global ambitions is perhaps just a few months away, and you will probably like that even less.Perhaps Zuckerberg went too far when he suggested that the imminent rise of a Chinese digital currency could undermine overall dollar dominance of global trade and finance – at least the large part that is legal, taxed, and regulated. In fact, US regulators have vast power not only over domestic entities but also over any financial firms that need access to dollar markets, as Europe recently learned to its dismay when the US forced European banks to comply with severe restrictions on doing business with Iran. Related: 'You're trying to help drug dealers': Zuckerberg faces angry lawmakers at Libra hearing Continue reading... […]

Can digital currency bring supporters from all over the world together and give them a role in the club, or is it just a gimmick?Last month, Watford took an unusual decision. Not the one to sack Javi Gracia four matches into the season; that was kind of standard. Rather it had something to do with the sleeves on the kit that, the club said, would be sporting the logo of Bitcoin. Hoping to “educate the public on the benefits of using cryptocurrencies”, the sponsorship would form part of a “wider campaign to improve awareness”.Another measure allowed supporters to pay with Bitcoin at the club’s online store. In doing so, Watford became one of the first football clubs in the world to accept digital currency. Suspicion remains they will not be turning over vast amounts of the stuff, however, when even Bitcoin’s cheerleaders – including the gambling company sportsbet.io, which is Watford’s main shirt sponsor and paid for the sleeve endorsement – accept a campaign is necessary to explain what Bitcoin is. Related: Cryptocurrency and football: the future or too volatile to be trusted? There are now hundreds of millions of fans elsewhere in the world Continue reading... […]

Facebook CEO faces growing pushback from legislators over plans to develop alternative payment systemAnalysis: how the wheels came off Facebook’s Libra project 9.45pm BSTAnd we’re done. To recap: 9.37pm BSTEarlier, Congresswoman Alexandria Ocasio-Cortez grilled Zuckerberg over the Cambridge Analytica scandal, asking him at what point he personally knew about it and at what point people internally knew about it.Here’s the clip of that moment:Be still my beating heart..@aoc asks Zuckerberg the question. I & others (notably @jason_kint) have been asking for a loooong time. When exactly did he first learn about Cambridge Analytica? Tell me, does this sound like a convincing answer to you?pic.twitter.com/3Yt7jZjuoF 9.06pm BSTRepresentative McHenry, a Republican from North Carolina, is making five minutes of closing statements now. He said it is “important to encourage innovation” here in the US, seemingly agreeing with Zuckerberg’s argument that if Facebook and the US does not launch a global cryptocurrency, China will first.“Make no mistake, for those of us here as policymakers we should have a common understanding that innovation is coming, with us or without us,” he said. 8.51pm BSTRepresentative Chuy Garcia says he will introduce a Keep Big Tech Out of Finance bill today, telling Zuckerberg “I don’t think we can trust you.”.@RepChuyGarcia, @RepDean, and I took a quick selfie in between the #Zuckerberg hearing and votes on the House Floor.We’re working hard #ForThePeople, fighting to protect the integrity of our elections and ensure that we can regulate @facebook’s Libra Project. pic.twitter.com/l8GUP1FvuQ 8.42pm BSTZuckerberg struggles to answer questions from Alma Adams about how Facebook ads discriminate based on race. compare the fluency with which Zuckerberg invoked MLK, Frederick Douglass and Black Lives Matter with his obvious extreme discomfort being questioned by Black lawmakers on the actual details of civil rights compliance and institutions 8.38pm BSTCongresswoman Alexandria Ocasio-Cortez grilled Zuckerberg over the Cambridge Analytica scandal, asking him at what point he personally knew about it and at what point people internally knew about it. Be still my beating heart..@aoc asks Zuckerberg the question. I & others (notably @jason_kint) have been asking for a loooong time. When exactly did he first learn about Cambridge Analytica? Tell me, does this sound like a convincing answer to you?pic.twitter.com/3Yt7jZjuoFAOC: "Do you see a potential problem here with a complete lack of fact checking on political advertisements?" Zuckerberg: "I think lying is bad."AOC: "So you will take down lies or you won't take down lies?"Zuckerberg will not answer. Related: Revealed: 50 million Facebook profiles harvested for Cambridge Analytica in major data breach 8.11pm BSTLike other Congress members, Representative Ayanna Pressley criticizes Zuckerberg for claiming he wants to launch Libra to address low-income people and the underbanked. Your Libra white paper finds almost two thirds of the 1.7 billion people in the world who don’t have bank accounts say it’s because they lack enough money to open one. This is not about authentication. This is not about banking costs. This is about a tsunami of hurt that millions are experiencing because of a $1.6 trillion student debt crisis, because of rising health care costs. It is about people having to use GoFundMe pages to pay medical bills. This is because of the racial and gender wealth gap. So again, you represent the power, but I don’t think you understand the pain. 7.58pm BSTRepresentative Riggleman poses what he called a “thought-provoking question” to Zuckerberg. “How realistic was The Social Network?”He joked the reason he asked the question is that he thinks a movie may be made of the ongoing saga of Facebook and “I just want to be in charge of my own casting.” 7.55pm BSTThe hearing is back from recess, and Zuckerberg is still in the hot seat. Representatives are continuing to ask questions broad in scope, straying from the focus of cryptocurrency Libra. 6.56pm BSTThe hearing is on a recess right now as members head to the House floor for a vote. Stay tuned ... 6.38pm BSTThe hearings are diverging from the topic of Libra and cryptocurrencies as many Congress members take the rare opportunity to question Zuckerberg on the Hill about other issues. Rashida Tlaib says she is speaking to Zuckerberg both as a congresswoman and “as the mother raising two Muslim boys during what is a pretty dark time in our world” and asks why he is letting hate groups use Facebook events pages to organize. 6.12pm BSTRepublican congressman Ted Budd of North Carolina takes his time on the floor to note that Libra is not technically a cryptocurrency, but a stablecoin, meaning it is not independently built on its own technology like Bitcoin and Ethereum but is tied to existing currencies like the dollar. He asks how Zuckerberg plans to allow regulation of the currency. “If we’re to remain a world leader in financial technology, it’s vital that we don’t embrace reactionary laws against cryptocurrencies.” 5.53pm BSTCongresswoman Joyce Beatty of Ohio comes out swinging at Zuckerberg, grilling him for Facebook’s failure to prioritize diversity at the company. She noted Zuckerberg has $46bn in cash or cash equivalent and asks if any of this is managed by diversity-owned companies. Zuckerberg struggles to answer. Rep. Beatty: "Do you know what redlining is?"Zuckerberg: "Yes."Beatty: "Then you should have known better." 5.47pm BSTRepublican representative Barry Loudermilk appears to compliment Zuckerberg by comparing him to Trump. “You’re both very successful businessmen, you’re both capitalists, you’re both billionaires, and you’ve done very well,” he said. “But I think really what you share in common is you both challenge the status quo – he calls it draining the swamp, you see it as innovation.” 5.38pm BSTCongressmen love capitalism, it turns out! While many members of the committee sought to grill Zuckerberg today, in the line of questioning from Roger Williams of Texas and French Hill of Arkansas, the congressmen congratulated Zuckerberg for his efforts to innovate. 4.55pm BSTRepresentative Andy Barr has perhaps the friendliest examination of Zuckerberg of the day, asserting that he supports the executive’s choice not to censor political ads, especially those from Trump. “I do find it highly troubling that politicians are trying to bully you to be a fact-checker, and to be the speech police, especially in politics which are at the core of the first amendment,” Barr said. 4.40pm BSTRepresentative David Scott also addresses Facebook’s “practice of redlining certain communities” as outlined by the recent settlement with the Department of Housing and Urban Development.“What have you put into action to eliminate these practices?” he asks. 4.30pm BSTDemocratic Congressman Lacy Clay of Missouri addresses a recent settlement Facebook made with the US Department of Housing and Urban Development related to its advertising platform violating the Fair Housing Act. Clay asked if Facebook will reveal what algorithms that led to discrimination in this case. Zuckerberg danced around an answer, saying the company does not collect data on race specifically and that it is carrying out a large-scale civil rights audit on its policies. 4.21pm BSTDemocratic Congressman Brad Sherman of California criticized Zuckerberg’s claims that Libra will help poor and unbanked people around the world enter the financial system. “The poor and unbanked need pesos, they need dollars that they can buy something at a local store,” he said. “You’ve done no effort to help the unbanked anywhere else and any other time.” 4.18pm BSTThe hearings are quickly winding into topics outside of cryptocurrency. Representative Bill Posey of Florida uses his time on the floor to ask Zuckerberg why Facebook cracks down on anti-vaccine content, seeming to support the theory – for which there is no scientific backing – that vaccines cause disabilities. Related: Facebook to direct vaccine searches to public health pages 4.08pm BSTCongressman Gregory Meeks of New York questions Facebook’s commitment to the unbanked and underbanked in a heated exchange.“Facebook is a multibillion, trillion-dollar company,” he said. “You say you are concerned about the underbanked unbanked - how much of Facebook money is in minority depository institutions?” 3.56pm BSTCongresswoman Nydia Velázquez of New York asks Zuckerberg if he agrees to a full moratorium on Libra pending congressional approval. “Facebook’s slogan for a long time was ‘move fast, break things.’ Mr Zuckerberg – we do not want to break the International Monetary System,” she said. 3.47pm BSTCongresswoman Ann Wagner of Missouri asks Zuckerberg why major players have departed from the Libra Association in recent weeks. Wagner said she finds the partners’ departures “highly concerning,” and that she questions whether he is “up to the task of meeting our money laundering and regulatory standards”. 3.41pm BSTMcHenry asks Zuckerberg why he chose to base the Libra Association in Switzerland, a diplomatically neutral location, if he plans to comply with US regulation. “We were trying to set up a global payment system,” Zuckerberg said. “Switzerland is where a lot of the international organizations are. Switzerland has certainly been forward-leaning on wanting to work through systems like this, but one of the things I want to be clear on is that the Libra Association is independent and we do not control it.” 3.37pm BSTRepublican congressman Patrick McHenry of North Carolina has the floor now, asking Zuckerberg when his views on China became more adversarial, after the CEO implied he wants to beat the country to the field by launching Libra.“Congressman, I think it’s fair to say that my views have evolved, I probably 10 years ago would have been more optimistic that trying to work in China could have contributed to making a more open society.” 3.34pm BSTHouse Financial Services Committee Chairwoman Maxine Waters grills Zuckerberg on the company’s decision not to remove false advertisements from politicians. “From a business perspective, the very small percent of our business that is made up of political ads does not come anywhere close to justifying the controversy that this incurs for our company,” Zuckerberg said. “So this really is not about money. This is on principle, I believe in giving people a voice. I believe that ads can be an important part of voice.” 3.28pm BSTMark Zuckerberg reads his opening statements, arguing in favor of American innovation and saying if the US does not allow the launch of a cryptocurrency, China will beat it to the field. “China is moving quickly the launch of similar idea in the coming months,” he said. 3.27pm BSTWaters criticizes Facebook’s failures to comply with existing diversity and security framework, ultimately questioning whether action should be taken against the company to stop it. She said Facebook failed to release its diversity statistics in the past, and that it was sued by the National Fair Housing Alliance for enabling advertisers to engage in discrimination through algorithms on the platform. 3.23pm BSTMaxine Waters hits the ground running, listing to Zuckerberg the litany of concerns she and other Congress members have regarding Libra. Plans to create a digital currency have caused many concerns “relating to privacy, trading risks, national security, monetary policy, and the stability of the global financial system,” she said. 3.14pm BSTGood morning, Kari Paul in San Francisco here, covering today’s hearing, An Examination of Facebook and Its Impact on the Financial Services and Housing Sectors. The hearing will start with opening statements from Representative Maxine Waters, more details to come. Continue reading... […]

Cryptocurrency venture facing pushback from legislators Facebook CEO says company is ‘not the ideal messenger’Mark Zuckerberg will tell Congress on Wednesday he is willing to delay the launch of Facebook’s cryptocurrency venture Libra amid growing pushback from legislators and waning support from companies that initially backed the project.“I believe this is something that needs to get built, but I understand we’re not the ideal messenger right now,” the Facebook CEO wrote in his prepared statement, released ahead of Wednesday’s hearing in Congress over the launch of the digital coin. Related: How the wheels came off Facebook's Libra project Continue reading... […]

Support for Mark Zuckerberg’s mission to reshape global finance is slipping away slowly but surely When Facebook announced plans to launch a digital currency earlier this summer, it added a full-blown revolution in global finance to its typically vaulting Silicon Valley mission statement: to create a digital currency alongside its efforts to bring the world closer together through networks.Over the past month, that mission has gone badly awry. The Libra cryptocurrency project now faces existential threats from world leaders and central bankers worried about its harmful potential: as a vehicle for money laundering, a threat to global financial stability, open to data privacy abuse, dangerous for consumers and stripping nations of the control of their economies by privatising the money supply. Continue reading... […]