Friday, April 24, 2020

AirAsia launches Freightchain, a blockchain-based air cargo network

 

AirAsia has launched a blockchain-based air cargo network, aiming to make it easy and convenient to book for cargo space on its airlines. Known as Freightchain, it seeks to eliminate the tedious manual process previously involved, making it convenient for both the clients and the airline.

AirAsia, which is Malaysia's largest airline, launched the network through Teleport, its logistics arm. It allows the clients to view the available cargo spaces on its airlines and make bookings in real time. It relies on a bidding process, enabling the clients to make informed decisions on costs and convenience.

Freightchain will replace the previous system where the clients would manually search for the cargo airlines that best suit their needs. This process was quite tedious, with the clients often having to send several emails and make calls to several airlines. Even then, they were not sure they were getting the best deals and often had to settle for what they got.

Launching Freightchain under the current COVID-19 pandemic was strategic, the network's CTO Vishal Batra said. The crisis has brought global supply chains to their feet, with many critical players being forced to shut down operations. Freightchain can take advantage of this, and help bridge this gap, Batra believes.

He commented, "We deliberately launched Freightchain during this period of uncertainty within global supply chains, caused by the coronavirus pandemic. Agile software platforms like Freightchain help to connect uneven supply and demand amidst a rapidly evolving environment. Trust and transparency are needed now more than ever."

In its pilot, Freightchain shipped pharmaceutical products from Bangalore in India to Ulan Bator in Mongolia. Since direct flights from the two locations weren't available, the system scheduled connecting flights via Malaysia and South Korea, connecting three different carriers. The network utilized smart contracts and according to AirAsia, the process was ten times faster.

AirAsia revealed that the network will benefits the airlines as well, allowing them to manage their cargo space better. For instance, it will allow clients to take advantage of underutilized flights to ship their cargo at a lower rate, with both the airline and the clients standing to benefit.

AirAsia has seen a big turnaround since businessman Tony Fernandes took over in 2003. It was only then that the company, previously owned by the government, became profitable. Fernandes has gone on to make AirAsia one of the world's leading low-cost airlines. The savvy businessman has sought to expand the company's interests into payments with the BigPay e-wallet. As he told CoinGeek a few years back, his goal is to democratize remittances.

Sunday, April 19, 2020

Russia not letting up in bid to bring Alexander Vinnik home

 


Russia has requested the home detention of Alexander Vinnik amid concerns over COVID-19, in its latest attempt to secure the extradition of the alleged money launderer.

Vinnik is currently in the custody of authorities in France, after being implicated in a $4 billion BTC money laundering scandal. The former BTC-e founder has been the subject of an intense legal struggle in recent months, with several states, including his native Russia, asserting their own rights to prosecute.

However, while Vinnik is wanted by authorities in France and the U.S. on money laundering charges, Russia has been attempting to secure his extradition on less serious charges. This is widely believed to be a legal tactic by Russia to extradite Vinnik, and to ensure he faces less serious charges in his home country.

The latest extradition request, reported by Russian media, highlights concerns for Vinnik's safety amid the COVID-19 outbreak.

Speaking to RT, former Russian agent Maria Butina said Vinnik has existing health conditions which make his ongoing detention in France risky: "Vinnik's health situation is indeed very complicated, and the coronavirus infection could pose him a risk of fatal outcome. I hope that the French authorities will be guided by their own stance of humanism and choose to save the life of a person who is at severe risk by giving Vinnik the opportunity to await the trial under house arrest."

The request asks France to hand over Vinnik to Russian authorities, promising to detain him on behalf of French authorities under house arrest. According to the proposal, Vinnik will be detained by Russian authorities in a state-provided apartment, to allow him to avoid exposure to the potentially deadly coronavirus.

So far, requests for extradition have been ignored by French authorities, who remain determined to prosecute Vinnik on the outstanding money laundering charges.

Since his arrest in Greece in 2017, Vinnik has been in detention for some 30 months, as various states grapple to secure his extradition.

With the new Russian proposals on the table, it looks like his future remains uncertain.

Corona Money Printing Worries – Housing Prices Slide Downwards First Time in 10 Years in Northern Europe

 


Real estate price reports from March in northern countries like Denmark and Sweden now show negative developments for the first time in over 10 years. If furloughed workers continue into unemployment, the effects on the housing markets will be even more significant, says Claudia Wörmann at SBAB Bank.

Spring Real Estate Price Increase, Trend Broken
Inhabitants of the northern countries of Finland, Sweden, Norway and Denmark have gotten used to very low interest rates and constantly increasing real estate prices. In Sweden, interest rates were dipping into negative territories and in Denmark, famously some homeowners have been offered payments for taking out a mortgage (negative interest rates).

Normally, homeowners in these regions see price increases each spring but this year the trend is broken and prices of apartments, houses and land plots have instead decreased a few percentage points. The change is large compared to the regular price increases. The development is worrying many citizens and has slowed the pace of sales to a virtual halt in April.

In Denmark, prices have decreased in seven out of 10 regions, including in Copenhagen where prices fell around 1.5% in March, according to Birgit Daetz, communications officer at housing watch outlet Boligsiden. She continued:

The real estate season normally starts in March and that means increasing prices. This year that hasn't happened and due to the health crisis we expect prices in Copenhagen to continue to fall in the coming months.

Swedish Real Estate Statistics Agency Mäklarstatistik concurred with the Danes' outlook and reported a drop in the number of sales in Sweden. During the last two weeks of March, the number of sales dropped more than 15% and continued on a downward trend into April.

Norway's stats look almost the same and in Finland, prices fell slightly in most regions. Real Estate Norway reported single-digit decreases in prices last month, with an average decrease of 1.4%.

Early morning on April 19 in Stockholm city, where real estate prices started to slide in March due to the effects from actions taken to combat the coronavirus. Cafés and restaurants are still open but every second table stays unoccupied for social distancing reasons.

Banks Must Continue to Provide Financing
Since the start of the coronavirus crisis, the Swedish government and central bank have been starting up the printing presses and made over 100 billion Swedish kronor available to the banks. Government parties are now suggesting printing more than 100 billion kronor ($12 billion) per month. Even with falling prices, the question is if this unprecedented money printing will later result in increased inflation, and possibly a Cantillon effect on housing prices — again leading to higher nominal real estate values while at the same time devaluing currencies like the dollar or the Danish krone due to the increase in money supply.

"What is important now is that banks continue to provide intermediate financing," Real Estate Norway CEO Henning Lauridsen said. He continued:

Experience from the financial crisis shows that a change in the dynamics of buying first and selling afterwards is counterproductive and destructive to the housing market. Although a more restrictive credit policy may seem rational to the individual bank, this collective is irrational.

The capital city of Stockholm saw the biggest price falls by an average of minus 1.7%. Real estate in cities in the Nordic regions lost more on average than in the countryside.

To counteract the slowdown in sales and the falling prices, governments in the region abruptly changed many rules and regulations pertaining to mortgages. From last week, citizens in Sweden can skip their mortgage payments until further notice. Similar actions are either underway or being discussed in neighboring Nordic countries, where politicians hope to boost the price of their real estate holdings.

Friday, April 10, 2020

Bitcoin Garners New Users as Governments Flood World With Fiat

 


Governments around the world are careening toward a period of dramatic spending.

The U.S. Federal Reserve announced another $2.3 trillion in lending programs on Thursday to stabilize America's coronavirus-stricken economy. The Bank of England announced it would likely extend billions of pounds to directly finance the government's crisis response.

All this inspires inflation concerns around the globe, which appear to be driving demand for bitcoin (BTC) in some corners.

"The non-stop quantitative easing process will finally impact the mid-term and long-term market," said Danny Deng, a leading member of both the China Blockchain Application Center and the National Internet Finance Association of China. "Bitcoin is designed for this kind of situation. So I'm optimistic about bitcoin's future."

China is also expected to announce a stimulus package of its own. Deng said he expects the People's Bank of China to use a digital currency to distribute a stimulus package, which he sees as a complementary catalyst to the bitcoin mining industry.

While central banks continue printing money, there will only ever be 21 million bitcoin. The halving of bitcoin miners' block rewards is scheduled for May in what some are calling an act of quantitative tightening.

Broadly speaking, dozens of nations are reevaluating which currencies and industries they depend on. Bitcoin fits into this broader spectrum as some nations with strong central governments, like China, shore up hard assets and digital infrastructure. Meanwhile, there has been a surge in retail crypto investors from nations with unstable currencies, such as Argentina and Russia.

"We see that interest in cryptocurrencies has grown significantly in Russia … due to the economic situation in the country," said Gleb Kostarev, Binance's head of operations in Russia. "The ruble has tumbled a lot in 2020. In addition, authorities are introducing a new tax on income from bank deposits from next year, which encourages people to withdraw funds from banks."

Bitcoin is hardly the most important asset in the broader economic turndown. However, recent bitcoin trends highlight the local impact of global developments. In places where distrust of banks historically runs high, many households now consider bitcoin among the assets they trust more than the local fiat currency.

Speculator's market
Some critics may see decline in bitcoin's wild volatility during the start of the coronavirus economic crisis, including what crypto traders called Black Thursday.

But the institutional sell-off and subsequent trading rush stimulated more diverse distribution, usage and liquidity options, all while making crypto companies a hefty profit.

Marius Reitz, general manager at the African crypto exchange Luno, said there was a 25 percent increase in new signups during Q1 2020 compared to Q4 2019. This includes "thousands" of new users from Nigeria, South Africa, Zambia and Uganda. He added there was a 100 percent increase in trading across the continent.

"People saw an opportunity to recover some of their earlier [traditional market] losses in bitcoin," Reitz said. "It's very much still a speculator's market."

According to the asset manager and research firm Bitwise, nearly all exchanges experienced an increase in volume during March. North American exchanges including Coinbase, Kraken and Gemini saw the most growth in trading volumes. Kraken's bitcoin strategist, Pierre Rochard, said the exchange saw a 300 percent increase in new users getting verified in March, compared to the previous month.

"These are new users who didn't have any crypto beforehand," Rochard said.

Fiat-denominated prices aren't the only way to measure bitcoin's performance. The number of active bitcoin wallet addresses is now comparable to metrics during the sky-high prices of September 2017, according to Coin Metrics, which estimated roughly 770,915 active accounts on March 30, 2020 compared to 718,184 on Sept. 29, 2017.

Although the price of bitcoin briefly dropped 40 percent, down from $9,160 in early March, it recovered to roughly $7,300 as of press time. As such, Luno's Reitz said bitcoin suffered less of an impact, and recovered faster, than many other asset classes.

Institutions that sold off in early March quickly bought back in, according to Diogo Monica, co-founder of crypto custody firm Anchorage. Plus, BitGo CEO Mike Belshe said his custody startup saw such high demand for bullish loans in March that he will double the size of the team handling crypto loans. Exchanges and custodians are actually making more profit during the recession.

Read more: Retail Investors Are Buying the Bitcoin Institutions Are Selling, Traders Say

When the market crashed, speculative crypto trading and demand for custody options soared. Ledger CEO Pascal Gauthier said hardware wallet sales saw "double-digit growth" in Q1 2020 compared to the same time last year, with sales still accelerating.

"We are increasing our hardware [wallet] production as a result," Gauthier added.

As speculative traders rush in, Latin Americans increasingly turn to bitcoin for savings and loans.

Latin America
"The main usage is to save. … People are seeking safety," said Ripio CEO Sebastian Serrano, whose Latin American company offers both crypto loans and an exchange. "Argentina was on the brink of default and that happened on Sunday."

Argentina isn't the only country to default, either. Lebanon, Ecuador and Venezuela are also on the brink. Bitcoiners in Lebanon often focus on savings because they, like Latin Americans, share a distrust in banks.

Cryptobuyer CEO Jorge Luis Farias said orders for crypto point-of-sale (POS) devices doubled in March, mostly in Venezuela. He's also shipping three new bitcoin ATMs to Chile, where the local currency hit a historic low in March.

Subsequently, by the first week of April, Chilean activity on LocalBitcoins reached an all-time high of $371,063.

"More people are looking for options to receive payments," Farias said on April 7. "We received 100 new [POS device] requests only last week."

Bitcoin Beach
@Bitcoinbeach
My daughter buying veggies from the latest business in our community in #ElSalvador accepting Bitcoin.  300 families received BTC stipends last week and BTC is keeping families fed and businesses going in this time of crisis @b4_humanity @bitcoinmom @crypto_birb

"I think the economic situation has to do with it, in Argentina and Mexico. Mexico had a run-up in exchange-rate disparity," Bartolomeo said. "We expect to see a lot of demand from Latin America to save in options that aren't their local currency."

If the rate of bitcoin savings and reliable loans remain steady throughout the broader economic crisis, that may arguably be a more bullish signal than fiat-denominated price increases.

Asian alliance
Meanwhile, several Asian nations are reacting to the recession by increasing their economic interdependence.

The Shanghai Cooperation Organization with China, Russia, Kazakhstan, Uzbekistan, Kyrgyzstan and Tajikistan agreed in March to work with local currencies, instead of U.S. dollars, when conducting bilateral trade and issuing bonds. Deng said the Chinese government aims to make its currency regional tender, "then a global currency" like dollars.

"China's national digital currency will accelerate this process," he added.

The crypto industry could provide the infrastructure for this distribution. Kazakhstani entrepreneur Tilektes Adambekov said in April he is still working to launch a regional crypto exchange that will eventually include "fiat trading and security tokens," although these aren't plans specifically focused on China's digital currency.

"This region will accommodate global initiatives under the 'Belt and Road' global development strategy," Adambekov said during a meeting with Chinese business associates in January.

As for bitcoin itself, traders from the above-mentioned markets sometimes liquidate their crypto by investing in real estate, especially now that oil and bond markets are highly volatile.

Middle East
Gold, oil and real estate investments appear to increase, along with bitcoin transactions, when stocks and bonds dip.

Arms & McGregor International Realty CEO Makram Hani said his company is working to close a Dubai property purchase, worth $140 million, using multiple cryptocurrencies from a single Asian buyer.

Out of the hundreds of prospective customers who expressed interest in potentially buying real estate with cryptocurrency, Hani said the most popular property locations are Dubai, London and Berlin. It appears bitcoiners in nations with increased surveillance may be seeking a liquidity hedge with traditional assets, while others in the Middle East are willing to accept large amounts of cryptocurrency.

"We have seen a significant growth in real estate transactions that have been paid for, in one way or another, with funds originating as bitcoin or other currencies," Hani said.

Rain co-founder Yehia Badawy, who also serves bitcoiners in Dubai via his Bahrain-based exchange, said trading volumes increased 200 percent from January to March 2020, with 34 percent more new user signups driven by "high-volume retail."

"People are still trying to figure out how permanent the [economic] changes will be," Badawy said.

Due to the oil market slump, Bahrain, Saudi Arabia and Qatar have struggled to retain investor confidence in their debts. The oil market collapse could have more dire impacts on weaker states like Lebanon and Iraq, which were already saddled with crippling foreign debts before the pandemic hit.

Mikhail Kholodov, an oil market expert at MOL-Russ LLC, described the global market these days as "all speculation" and "hot money in a casino-like arrangement" that won't regain balance "anytime soon."
When spooked investors diversify, some now rank bitcoin alongside tangible investments like gold or real estate.

At least in the short term, Gabor Gurbacs, director of digital asset strategies at investment firm VanEck, wrote, "bitcoin correlation to gold has increased significantly" during the coronavirus pandemic.

People’s Bank of China will ‘undoubtedly’ launch digital yuan

 


The People's Bank of China has said it will "undoubtedly" launch a digital yuan, in what has been seen as one of the strongest signals to date of the central bank's support for the policy.

In a notice published on April 4, the bank said it would continue the development of a digital currency, with a view to launching as soon as practical: "The People's Bank of China (PBoC) will undoubtedly further its research and development of the national digital currency with enhanced top-down design."

The notice was published following the 2020 National Currency Gold Silver and Security Work Video and Telephone Conference, an event convened by the bank's Vice Governor Yifei Fan where the bank set out its priorities for the coming year.

This is the third time a digital yuan has been raised at the event, but the language in this year's notice has been widely interpreted as a strong signal of advancing plans and intentions.

In 2018, the bank said it was working at a "steady pace," before upping this to pledge to "accelerate" the development process during 2019.

Some analysts have reported the project may be advancing quicker than anticipated due to coronavirus, with the bank already concerned about transmission issues from physical bank notes. Back in February, the bank said it was preparing to quarantine and disinfect cash, as well as issuing some 600 billion in new notes to limit possible transmission through bank notes.

The Bank for International Settlements (BIS) has suggested central bank digital currencies (CBDCs) worldwide could be accelerated in response to the pandemic, with digital payment adoption likely to be increased by central banks worldwide in response to the crisis.

In the notice, the bank said it was also looking to overhaul the systems around withdrawing cash, with further plans to manage the flow of currency through China's financial system.

The bank will also be focusing on cracking down on counterfeit money, as well as increased cash testing to better manage the physical money flow across the economy.

At the 2020 National Currency Gold Silver and Security Work Video and Telephone Conference, the bank was joined by representatives from major state-owned commercial banks.

Friday, April 3, 2020

Manufacturers Mark Down Bitcoin Miners as Price Drop, Halving Change Calculus

 



Last month's crash in cryptocurrency prices has prompted manufacturers to sell inventories at a discount, in some cases as steep as 20 percent, over the past few weeks. Both the newest models and slightly older machines have been marked down.

Complicating the matter is the imminent bitcoin halving in May that will reduce the network's mining reward by half, causing most miners to be less profitable if bitcoin's price doesn't increase significantly by then.

For instance, DJ Miner, an overseas distributor for Shenzhen, China-based MicroBT, was advertising about $2,500 per unit of the manufacturer's flagship WhatsMiner M30S early last month. After bitcoin's March 12 crash – the worst sell-off in seven years – the price is now cut by 20 percent to $2,000 per unit.

The WhatsMiner M20S, a less advanced but popular model that boosted MicroBT's market share against major rival Bitmain in 2019, is also seeing a 20 percent price cut from $1,679 to now $1,340, DJ Miner's website shows. Pangolinminers, another distributor for MicroBT shows similar pricing rollbacks on its website.

Similarly, while Bitmain is advertising $1,567 for its AntMiner S17+ with a computing power of 67 terahashes per second, various resellers are posting quotes on WeChat seen by CoinDesk at around $1,300 per unit.

The Beijing-based mining giant has previously announced the pricing for its latest flagship AntMiner S19 Pro at about $2,900 per unit but the shipment won't take place until May and so far is only available for investors inside China.

See also: How Bitcoin's Price Slump Is Changing the Geography of Mining

Efficient market
It is important to note that most specialized bitcoin computers, known as ASICs, had already been dropping in price since the fourth quarter of last year, as the manufacturers adjusted their strategies in line with bitcoin's price swing.

These machines are priced assuming it would take the buyer on average 15 months to make back their equipment investment. Holding the payback period relatively constant, manufacturers would adjust the prices of their equipment according to bitcoin's market price and the level of competition on the network – the two factors that determine how much revenue a miner can generate in a day.

Miner pricing data compiled by research startup TokenInsight shows that, for example, the Whatsminer M20S and the AntMiner S17 Pro were priced at around $2,400 and $3,000, respectively, in mid-October 2019. The price for both had dropped to around $1,500 as of March 10.

"ASIC miners have experienced a relatively large market devaluation since Q4 2019. However, the miner market has found some level of price floor during Q1 2020 despite the recent crypto market downturn," said TokenInsight analyst Johnson Xu. "Some experienced miners are currently looking to purchase some secondhand ASICs at a significant discount … based on their carefully structured model."

Blockware Solutions, a reseller of bitcoin ASIC miners in North America that also operates mining facilities, said in a recent research report that the market crash in March, together with the coming halving, has led to a significant decrease of bitcoin's mining computing power – which in the long run, could be an encouraging sign for the market's efficiency.

"If Bitcoin remains at lower price levels for 2-4 months, post-halving, many miners operating at a loss will be forced to shut off," Blockware said. "After all the miners that are operating at a loss shut off, the miners that survive experience significant margin relief. We will witness a network in short-term chaos, but difficulty adjustments will reinstate stability once the inefficient miners shut off."

Russian rapper busted by the FBI for digital currency money laundering

 


If you want to conduct illegal activity, it's best not to leave a trail of any sort that can prove your involvement. A Russian rapper residing in California has learned this lesson the hard way after being arrested by the FBI. The federal law enforcement agency picked up Maksim Boiko and accused him of laundering money through digital currency exchanges and transactions, allegedly while doing little to hide his identity.

Court documents released (in pdf) on March 30 indicate that Boiko conducted his extra-curricular activities using platforms such as the now-defunct BTC-e digital currency exchange, a portal that was also shut down for money laundering. The documents also show that Boiko allegedly has ties to QQAAZZ, an organized crime syndicate that operates in several countries around the world.

The rapper's downfall began when he showed up at Miami International Airport this past January. At that time, he had $20,000 in cash, which is twice the amount allowed to be carried across borders without a written declaration of the source of the funds. It isn't clear if Boiko presented a declaration or not, but he was questioned about the money and explained that it came from digital currency investments and rental properties.

The explanation was not received with a great deal of credibility, and an investigation began. Subsequently, Boko was picked up by authorities in Miami toward the end of last month. He is charged with "knowingly and intentionally conspire and agree with other persons known and unknown, to commit money laundering in violation of Title 18, United States Code, Section 1956(h)."

In building its case against Boiko, the FBI was able to come across several interesting finds. It was able to determine that he had registered an email account, plinofficial@me.com, using his own name and created a username of gangass. That username was also picked up on several underground communications channels used predominantly for criminal activities.

In addition, Boiko had been a little too willing to brag about the amount of money he had in his possession on several occasions, posting pictures of himself holding huge stacks of bills, and even one that appeared to show him getting ready to launder funds through a Chinese bank account. He didn't appear in the picture, but a placard with "Maksim" and a screenshot of a "plinofficial" account on Instagram are clearly seen.

Boiko apparently had greater success as a criminal than he did as a rapper, but everything he did made it easy for law enforcement to conduct its investigation. As a rapper, he uses the moniker Plinofficial.