Author: Dale Warburton

Dale is a former attorney turned passionate Bitcoiner with an interest in investments, macro, geopolitics, innovation, tech, nature, wildlife, MMA and Bitcoin (of course).

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Australia Banking Crime Crypto News Regulation

CBA’s Crypto Team to Help Track Down Money Launderers

Despite ongoing sentiment in traditional finance circles that crypto is the “Wild West”, Chainalysis, which recently partnered with Commonwealth Bank of Australia (CBA), has assured Australia’s biggest bank that it truly isn’t so.

The Crypto Wild West. Source: Zen Monk

Crypto Forensics On the Case

Chainalysis, which works extensively with the FBI and IRS in the US, has proprietary on-chain forensic analysis techniques that help identify criminal and money-laundering activities on public blockchains.

Speaking to ongoing discussions with local Australian authorities, Chainalysis’ Australia and New Zealand manager Todd Lenfield noted that a lot of its work centred on education.

We want to have conversations with AUSTRAC about what are they looking to regulate and explain to the tax office the lessons that can be learned from what the IRS is doing. We can take experience we have got in the space, and provide a local flavour.

Todd Lenfield, Chainalysis’ country manager in Australia and NZ

Shift in Sentiment in Australia?

In recent months, there have been positive signs that Australia may be gradually shifting towards a more crypto-friendly environment.

Earlier this month, CBA became the first Australian bank to offer its customers the ability to buy cryptocurrencies natively through its digital app. And just this week at the Australian Financial Review Super & Wealth Summit, Liberal Senator Jane Hume cautioned industry against being left behind.

Don’t be the person who thought the iPhone would never take off because people would prefer to have their music and telephone on separate devices. Don’t be the person who was still doing their financial models by hand in 2001, rather than using Excel. Don’t be the person in 1995 who said the internet was just a place for geeks and criminals and would never become mainstream. And don’t be the person who argued that email was a passing fad.

Senator Jane Hume

Despite these positive signs, the Reserve Bank of Australia (RBA) remains concerned about the risks of crypto, in particular memecoins. Over the past year, crypto has seemingly crossed the chasm into mainstream consciousness. This in turn appears to have pushed regulators towards embracing innovation and regulating it, rather than trying to undermine or shut it down.

While some regulatory risks remain, the crypto space within Australia is arguably looking brighter than ever.

Categories
Australia Blockchain Crypto News DeFi

Australian Senator Says ‘Crypto is Here to Stay’

Many in the Aussie crypto world may not have heard much about Liberal Senator Jane Hume, the Minister for Superannuation, Financial Services and the Digital Economy. That is until she voiced her views on crypto at the Australian Financial Review Super & Wealth Summit held in Sydney this past Monday.

Australia, Crypto is ‘Here to Stay’

Hume, who also serves as Minister for Women’s Economic Security, spoke of embracing innovation and “encouraging personal responsibility and informed consent”. This she saw as important as driving Australia forward from an innovation and economic perspective.

Referring to the Senate Committee’s report, she noted that 17 percent of Australians are investing in cryptocurrency.

This is an asset class that has captured hearts and minds, but beyond that ‑ whatever you might personally think ‑ it’s a technology that’s not going away any time soon.

Senator Jane Hume

One of the key areas she identified as having “huge opportunities” was decentralised finance (DeFi). After commending industry for embracing blockchain specifically, she stressed the role of government in encouraging innovation. Hume also added “as an industry, and as a government, we need to acknowledge this is not a fad. We should tread cautiously, but not fearfully”.

The Senator’s Personal View

Speaking to her personal views, Hume cautioned against being left behind the curve.

Don’t be the person who thought the iPhone would never take off because people would prefer to have their music and telephone on separate devices. Don’t be the person who was still doing their financial models by hand in 2001, rather than using Excel. Don’t be the person in 1995 who said the internet was just a place for geeks and criminals and would never become mainstream. And don’t be the person who argued that email was a passing fad.

Senator Jane Hume

Hume commented that if the past two to three decades had proved anything, it was that “innovation begins as disruption and ends as a household name”.

Overall, the response from the crypto community has been very positive:

Blockchain Australia CEO Steve Vallas shared the industry’s sentiments when he commented that the speech sent a “very strong signal” to both the market and policymakers, that treasury was taking the industry seriously.

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Bitcoin Crypto News Markets

El Salvador To Build “Bitcoin City” By Issuing $1 Billion Tokenised Bitcoin Bonds

El Salvador’s Bitcoin-friendly president, Nayib Bukele, is once again hitting the headlines. After making bitcoin legal tender earlier this year, the charismatic leader has announced plans to build “Bitcoin City” using tokenised bitcoin-backed bonds.

Volcano-Powered ‘Bitcoin City’

On Saturday, President Bukele revealed to a captivated crowd that his government, in partnership with Blockstream and Bitfinex, would be developing “Bitcoin City”, funded through the issuance of bitcoin-backed billion dollar bonds.

The party-like atmosphere was electric, leaving some observers lost for words.

Bukele told the crowd that Bitcoin City would rely on volcano-generated geothermal energy and, even more exciting, that it would be entirely tax-free for residents, save for a 10 percent value-added tax (VAT) applied to all transactions in the region.

Invest here and make all the money you want. This is a fully ecological city that works and is energised by a volcano.

President Nayib Bukele

The Nuts and Bolts

In terms of some of the practicalities, Bukele noted that half of the money raised through VAT would be used to pay off the bonds issued to fund the city’s startup costs, while the other half would be used to fund public services.

At this stage, details are somewhat sketchy but the goal is clearly to make “Bitcoin City” an attractive destination for foreign investment. As the President said: “If you want bitcoin to spread over the world, we should build some Alexandrias.”

Some of the more interesting aspects of the proposed city include that its design would be circular, and contain an airport as well as residential and commercial districts. Apparently, the central plaza may even have a Bitcoin symbol when viewed from above.

In order to issue the bonds, El Salvador has partnered with Blockstream and iFinex (the parent company of Bitfinex). The latter will be granted a securities licence in order to issue the Bitcoin bonds, something that is expected to take place within 60 days.

One interesting feature of the Bitcoin bond is that it will have special dividends attached to it generated through the staggered liquidation of bitcoin. These will be paid out to holders through Blockstream’s asset management platform. Critically, the use of this platform will enable investors to get involved for as little as US$100 – that simply isn’t the case today for retail investors who want to invest in government bonds.

Looking Forward

Thus far Bukele’s bold Bitcoin bet has paid off – it’s funded construction of a pet hospital, as well as 20 new schools, all from profits generated from the nation’s bitcoin trust.

Of all of Bukele’s moves since making bitcoin legal tender, the creation of bitcoin-backed bonds may end up being his biggest yet. While the traditional finance world may view this move as risky, those operating in the crypto space have welcomed the decision with open arms.

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Australia Banking Crypto News Gemini

CBA Makes Investment in Winklevoss Twins’ Gemini in $400 Million Fund Raise

The Winklevoss twins have several claims to fame, the least of which is founding one of the more successful exchanges in the world, Gemini. This week, the company announced a US$400 million fund raise to further grow the business, with a rather surprising investor participating in the investment – Australia’s largest bank, the Commonwealth Bank of Australia (CBA).

Gemini Valued at $7 Billion

After self-funding the business for the past seven years, the Winklevoss twins have raised Gemini’s first round of capital, bringing the company’s valuation to US$7.1 billion. After enjoying success in Singapore, the company announced earlier this year it would be expanding into Australia.

While the twins retain 75 percent ownership in the company, it is estimated that their net worth would almost double from US$6 billion to US$10 billion as a result of the deal. The investment round was led by digital asset giant Morgan Creek Digital, to the tune of U$75 million, and included several others including Jay-Z’s Marcy Venture Partners and CBA.

It is believed that part of the investment would be to expand the company’s reach into the metaverse, a theme the brothers picked up in early 2021, ahead of arch-rival Mark Zuckerberg. Zuckerberg’s Facebook recently rebranded to Meta as part of the company’s move into the space, but it has been met with much derision.

There’s these two parallel paths, in terms of technology right now …There’s a centralised path, like Facebook or Fortnite, that is one step away from being a metaverse, and that’s totally fine. But there is another path, which is the decentralised metaverse and that’s the metaverse where we believe there’s greater choice, independence and opportunity, and there is technology that protects the rights and dignity of individuals.

Cameron Winklevoss, co-founder, Gemini

CBA’s Surprise Investment

CBA’s investment into Gemini is surprising in one sense, but entirely predictable on the other. On the one hand, you have a situation where traditional banks, including CBA, have been debanking crypto businesses in Australia, allegedly on the basis of operational and/or compliance risk. Cynically, you could argue that compliance was used as a guise to stifle competition and prevent the outflow of funds onto exchanges.

However, on the other hand, you see CBA taking the lead by its recent announcement that clients could buy crypto directly through its app, incidentally through a partnership with Gemini.

As traditional banks start to feel the squeeze of customers’ funds pouring onto crypto exchanges, it isn’t surprising that they would like to retain control of the funds on their own platform – or, failing which, investment in platforms benefiting from such outflows.

In this case, if you can’t beat them, invest in them.

Categories
Australia Blockchain Crypto News

Aussie Government Includes Blockchain in its ‘Blueprint for Critical Technologies’

Australian Prime Minister Scott Morrison has announced the federal government’s Blueprint for Critical Technologies, a strategy aimed at protecting and promoting critical technologies, including blockchain.

Protect and Promotes 63 Technologies

According to the Prime Minister:

The blueprint sets out a vision for protecting and promoting critical technologies in our national interest. It aims to balance the economic opportunities of critical technologies with their national security risks. And it gives us the right framework to work domestically and with like-minded countries to support the further development of these technologies.

Scott Morrison, Australian Prime Minister

He continued:

Australia is already a global leader in several aspects of quantum technology. We have some world-class research capabilities and scientists, and strong foundations for a thriving quantum industry. Now, we need to take it to the next level.

Scott Morrison, Australian Prime Minister

The blueprint sets out four goals for Australia, which include:

  • having access to critical technologies and secure systems;
  • being recognised as a trusted and secure partner in relation to critical technologies;
  • preserving the integrity of local research in order to maximise its sovereign IP; and
  • supporting regional resilience and shaping an international environment that enables open, diverse, and competitive markets and secure and trusted technological innovation.

Part of the blueprint is an action plan, defining critical technologies as “current and emerging technologies with the capacity to significantly enhance or pose risk to our national interest”.

Blockchain’s Role

Blockchain is among the technologies listed in the action plan, which also includes AI, cybersecurity technologies, robotics and quantum computing.

Specifically, the document makes reference to “distributed ledger technology”, referring to “digital systems for recording transactions, contracts and other information across multiple systems or
locations”.

It also recognises the power of distributed consensus mechanisms as being capable of reducing the risk of fraud and cyber-attacks, since the need to maintain a central database is eliminated.

Blockchain, it goes on to describe, is an example of a distributed ledger technology that can be used for “verification of supply chains such as for product provenance and emissions monitoring and verification, tracking recoverable and recyclable product content, land records, and share trading”.

Australia is certainly on the front foot when it comes to embracing technology and, specifically, blockchain. As practical use cases continue to grow, it is likely that blockchain will increasingly become part of how everyday Australians engage with government. As the techno-democratic state becomes a modern-day reality, it will be interesting to see how concerns around privacy are accommodated in this brave new world.

Categories
Crypto News Gaming Investing Metaverse

Morgan Stanley: the Metaverse is the Next Big Investment Theme

In a fairly short space of time, the metaverse has shifted from relative obscurity into mainstream consciousness. As the entire metaverse ecosystem has exploded in recent months, it remains somewhat surprising that global investment bank giant Morgan Stanley is bullish on the sector.

It can fundamentally change the medium through which we socialise with others.

Edward Stanley, Morgan Stanley equity strategist 

In a note to investors, Morgan Stanley noted that this alternative concept of reality was gaining a lot of attention from Meta (ex-Facebook) and Microsoft, both of whom are actively positioning themselves for growth in the sector.

‘Metaverse’ Next Big Investment Theme

According to Morgan Stanley, the metaverse is a concept that includes “construction of an alternative universe where individuals can model their image to whatever they want to be, and perform real-life tasks such as buying things, gaming with friends, and other activities”.

Edward Stanley, an equity strategist at Morgan Stanley, noted that there was a growing cohort of companies shifting their focus towards the metaverse. He considered tech and gaming companies as being well-positioned to profit from their first mover advantage.

Source: Morgan Stanley

Newsflow around the metaverse concept has been high and companies are embracing it in growing numbers. Of any major theme, companies and analysts have greater interest in the metaverse than any other theme at present.

Edward Stanley, Morgan Stanley equity analyst

He was, however, quick to acknowledge how early we were in the process and that a fully integrated, interoperable and collaborative metaverse would still be years away. When that time comes, users would be able to move seamlessly from one platform to another, moving their experiences and avatars with them in the process.

Metaverse and Gaming

Gaming and its relationship to the metaverse was one area that Morgan Stanley appeared most optimistic about. Noting that 50 million Americans took up gaming in 2020, the report saw three main bullish developments in the space:

  1. Social-gaming convergence – gaming has increasingly become a means for making, building and maintaining social relationships.
  2. In-game monetisation – gamers conduct in-game micropurchases to express their personalities and connect with others in the virtual world.
  3. Emergence of new games on new platforms – higher visual resolution, faster storage and enhanced gameplay are leading to groundbreaking new titles.

While older generations struggle to understand the appeal of socialising, interacting or living in a virtual world, one thing is patently clear – the younger generation not only love and embrace alternate digital realities, but in many cases they actually prefer it.

Categories
Charity Crypto News NFTs

Rhino Horn NFT Sells for $7,000 at South African Charity Auction

In an effort to raise funds and create greater awareness for the plight of South Africa’s endangered rhino, one progressive conservationist has capitalised on NFT fever by auctioning off the world’s first rhino horn NFT.

Rhinos in South Africa

Rhino poaching wasn’t always a major conservation issue requiring significant resources and creative fund-raising efforts.

Historically, demand for rhino products was relatively stable until the rapid growth of nouveau riche Vietnamese and Chinese saw demand soar. These days, while demand remains somewhat lower, much of the reduction can be attributed to highly effective anti-poaching efforts.

Rhino poaching incidents vs rhinos poached. Source: Helping Rhinos

Despite the success of anti-poaching, which has shifted from conservationist to military-style special forces, rhinos remain critically endangered in Africa and even more so in Asia.

Global rhino population. Source: Save the Rhino International

NFTs and Conservation

An auction was held last week to raise money to protect South African rhinos. The winning bidder, Charl Jacobs, paid R105,000 (approximately US$7,000) for a rhino horn NFT which he planned to place in trust for his children. The real horn would be locked away for safekeeping.

If [in a] worst-case scenario rhinos go into complete disarray, then I would still own a rhino horn, because the NFT is a token of the physical rhino horn.

Charl Jacobs

Proceeds from the sale will go to the private Black Rock Rhino conservancy, home to 200 rhinos that are able to breed while protected from poachers. Conservationist Derek Lewitton noted that the conservancy was doubling the population of rhinos every four years, so conservation remained critical.

But it costs a fortune. If you don’t want to get poached, you have to spend a ton in terms of manpower and security infrastructure, and this a way to help us fund that.

Derek Lewitton, Black Rock Rhino conservancy

While the rhino horn NFT is a first, the use of NFTs to raise funds for charity or conservation isn’t. Earlier this year, tourism-starved Seychelles issued NFTs of an endangered magpie robin to help support conservation efforts. And closer to home in Australia, the Koala Intelligence Agency NFT series was launched in August, with a portion of proceeds going towards koala conservation.

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Bitcoin Crypto News Payments

Miami To Offer Residents A Bitcoin Yield On Their MiamiCoin

Miami Mayor Francis Suarez, who earlier this month announced he would be taking his salary in bitcoin, has continued his push to make the Floridan city one of the most crypto-friendly in the world. This week, he announced that eligible Miami residents would qualify for a bitcoin dividend in exchange for staking their MiamiCoin.

MiamiCoin – Reducing the Tax Burden

MiamiCoin is the city’s token that residents hold or trade. The underlying protocol generates revenue for the city when residents mine tokens. Those running the software receive 70 percent of the coins they mint and 30 percent is returned to the municipality in a city wallet.

This project has proved to be an economic windfall for Miami, generating over US$21 million since its launch in September. On an annualised basis, that equates to US$400 million in tax revenue, or approximately 20 percent of current annual tax receipts. Suarez has suggested that over the long run, this project could completely eliminate the need for taxes, describing the move as “revolutionary”.

I do see very quickly a world where the satoshi system is what is used to make payments … We need for people to understand that … yes, we want you to hold bitcoin but we also want to increase the utility of bitcoin.

Francis Suarez, Miami Mayor

From the outset, Mayor Suarez stated his intention to reduce the tax burden on Miami and thus far his bold experiment appears to be paying off.

Earning BTC on MiamiCoin

On November 11, Suarez announced that eligible residents would soon be able to generate a bitcoin yield from staking the city’s MiamiCoin. In order to qualify, residents would be required to acquire a wallet, register for the dividend and pass a straightforward verification process. Thereafter, the proceeds from staking their MiamiCoin would be paid, in bitcoin, into their registered wallet.

We’re going to be the first city in America to give a bitcoin yield as a dividend directly to its residents.

Francis Suarez, Miami Mayor

One of the challenges Suarez noted was determining who would qualify for a wallet:

Is it going to be, for example, taxpayers? Is it going to be people that vote in the city? People that have a city address? That’s going to be a challenge.

Francis Suarez, Miami Mayor

Miami is making moves in the crypto space and Mayor Suarez is its chief conductor. While his bitcoin yield program still has a few outstanding issues to iron out, one thing that isn’t in doubt is Suarez’s commitment to attracting crypto capital and talent from around the country.

No doubt, other cities will be watching closely. If Miami’s move proves successful, don’t be surprised to see a bunch of cities follow suit.

Categories
Australia Bitcoin Crypto News Real Estate

Bitcoin Surges to New All-Time High Amid Highest Inflation Levels in 31 Years

Over the past year, the US Federal Reserve has repeated the line that inflation is “transitory”, so much so that it became a meme. The latest data from the Bureau of Labor Statistics would however suggest that inflation may be more sticky than expected. For the 12 months to October 2021, the CPI hit 6.2 percent, the highest rate recorded in 31 years.

“Transitory” inflation. Source: Twitter, @Bitcoinbaddie

“Transitory” Inflation

In June this year, US inflation hit 5.4 percent, the highest recorded level since 2008. Notwithstanding, the Federal Reserve and US politicians continued to push the narrative that this was “transitory” and due to short-term, pandemic-related supply bottlenecks. In some cases, they even argued that inflation was a good thing.

As per the latest report, the inflation increase was “broad-based”, although energy and used car prices recorded exceptionally high double-digit increases.

CPI. Source: US Bureau of Labor and Statistics

Bitcoin Soars on Inflation News

Upon news of US inflation numbers recording their highest level in over three decades, bitcoin, which is viewed as a store of value and inflation hedge, rose over US$3,000 within hours to print a new all-time of US$69,044.

Shortly after, however, it dipped sharply and at the time of writing was trading at US$64,894 with US$70,000 appearing to be the next psychological resistance-level to overcome.

Bitcoin chart. Source: Coingecko

Gold, bitcoin’s analogue equivalent and more traditional inflation hedge, broke above a long-held resistance at US$1,830 to trade at a five-month high of $1,853. Michael Saylor, however, remained convinced that gold wasn’t the solution to these historic inflationary times:

How Are Things Faring In Australia?

Comparatively speaking, Australia would appear to be doing better than the US, considering the RBA’s latest CPI data that inflation is at 3 percent. This remains at the upper band of the RBA’s target of 2-3 percent inflation.

CPI. Source: RBA

However, it isn’t all good news, as Australians are currently paying record prices for fuel and housing. RBA data shows that across all capital cities, real estate prices have grown between 14-20 percent year-on-year. In more affluent and high-demand areas, there is evidence of house prices increasing by a staggering 30 percent per annum.

As home ownership becomes increasingly out of reach of young Australians, it is no surprise that many have turned to crypto to help make up for lost ground.

Given that BTC holders are currently enjoying a 317 percent increase over the past year, compared to ETH’s stellar performance of 907 percent over the same period, crypto may well offer a solution to both inflation and rampant house price growth.

Categories
Bitcoin Crypto News

Apple CEO Personally Invested in Crypto, but Has No Immediate Plans for the Company

Earlier this week at The New York Times‘ Dealbook conference, Tim Cook, the venerable CEO of Apple, disclosed that he held crypto in his personal capacity, describing it as “interesting” and something that he had been “researching”.

Crypto For Cook, Not Apple

When asked about crypto and potentially accepting it through Apple Pay, Cook responded:

It’s something we are looking at. It’s not something we have immediate plans to do … I would sort of characterise it as there are things that I wouldn’t do, like … our cash balance. I wouldn’t go invest it in crypto not because I wouldn’t invest my own money in crypto, but because I don’t think people buy an Apple stock to get exposure to crypto … so I wouldn’t do that.

Tim Cook, CEO, Apple

Whichever way you look at it, Cook was quick to pour cold water on any notion that Apple would become either the next company to put bitcoin on its balance sheet, or otherwise accept it as a means of payment.

I am not planning in the immediate future to take crypto for our products, as a means of tender, but there are other things that we are definitely looking at.

Tim Cook, CEO, Apple

When asked what he was “definitely looking at”, Cook laughingly responded: “like I wouldn’t want to have anything to announce today”. The subtext was fairly transparent. Apple, a company notoriously secretive about upcoming announcements and innovation, appears to be working on something, but as yet is not ready to disclose anything.

Michael Saylor, famous for referring to MicroStrategy’s cash reserves as a “giant melting ice cube”, couldn’t resist adding his two cents when he suggested that a shift to the Bitcoin standard could generate at least US$1 trillion in shareholder wealth:

Something is Brewing at Apple, But What?

As the second-largest company on Earth with a market capitalisation of US$4.4 trillion, any moves made by Apple into the crypto space would necessarily be considered and measured. Unlike Saylor, who retains control of his company, MicroStrategy, changes to treasury strategy or product line in a company such as Apple is a lot trickier to implement.

Things are no doubt happening at Apple, but at present it isn’t clear what these changes are going to look like. In May this year, Crypto News Australia reported that Apple was in the process of hiring an expert with experience in digital currencies and wallets.

Does this mean it will start accepting crypto, or allowing crypto purchases with Apple Pay or adding bitcoin to its treasury? Nobody knows for sure, but one thing remains clear – Apple is working on something and usually, that something is big.