Fiat

Coinme Adds BTC Purchase Function to Over 100 Coinstar Kiosks in California

14/01/2020 by Idelto Editor

With over 21,000 kiosks in the U.S., Coinstar is a popular automated service for those who want to turn their fiat coins into paper cash. 3,000 of these kiosks have been integrated with Coinme to include crypto purchase functionality, and more than 100 BTC-integrated Coinstar kiosks are now newly available in the greater Sacramento, California area.

Also Read: Bitcoin ATMs Installed at 5 Major Malls in the US

Over 100 Kiosks Updated With BTC Purchase Capability

Coinstar found an effective business model in helping people cash in their accumulated change in quick and convenient fashion. The kiosks, found at popular shopping centers and financial institutions across the U.S., allow for loose change to be converted into paper cash, turned into e-gift cards, or used for a charitable donation. Thanks to a strategic partnership between Coinstar and Coinme, 3,000 of the over 21,000 Coinstar kiosks are now revamped to allow the purchase of bitcoin core (BTC), with over 100 machines in the greater Sacramento area being the latest addition.

Turning Loose Change Into Cash, Then Crypto

Coinstar’s kiosk network is said to be the largest in the country, and as Coinme’s ATM and kiosk network is also extensive, the integration with Coinstar seems a noteworthy opportunity for onboarding curious users to crypto. Neil Bergquist, CEO and co-founder of Coinme stated in a January 9 press release:

It’s very gratifying to meet the growing customer demand through our relationship with Coinstar, and we couldn’t ask for a better partner to help people access and utilize the power of digital currency.

Coinstar’s CEO, Jim Gaherity, also commented: “There are 3,000 Coinstar kiosk locations across the country that have the Bitcoin purchase functionality and the consumer response has been very positive. We’re happy that the expansion continues with access now in the Sacramento area.”

While BTC isn’t purchasable directly via loose change at the kiosks, users could theoretically acquire the crypto by first dumping in their change, getting the cash for the applicable fee, and then using said paper cash to buy BTC.

A Simple Process, but With Privacy Concerns

The process for turning fiat into crypto is fairly straightforward, but involves the use of vouchers, and extensive KYC requirements such as the submission of a phone number and photo ID. Users also need to have a Coinme account as part of this process. This in view, privacy valuing bitcoiners might not find the news too groundbreaking. Considering the IRS’s rabid pursuit of anyone even smelling of crypto in recent months, combined with a lack of clarity on the reporting process, some would-be new users seem to be shying away from becoming too involved.

For those who wish to acquire bitcoin conveniently, and without all the privacy invasion, private trading networks like local.Bitcoin.com allow users all over the world to buy and sell bitcoin cash (BCH) via a variety of payment options, with no KYC/AML process. A new market feature has also been added, allowing users to list items for sale to be paid in BCH.

What do you think of Coinme’s strategic partnership with Coinstar and the addition of more than 100 BTC purchase points in and around Sacramento? Let us know in the comments section below.

Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or a recommendation, endorsement, or sponsorship of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Images courtesy of Shutterstock, fair use.

Did you know you can buy and sell BCH privately using our noncustodial, peer-to-peer Local Bitcoin Cash trading platform? The local.Bitcoin.com marketplace has thousands of participants from all around the world trading BCH right now. And if you need a bitcoin wallet to securely store your coins, you can download one from us here.

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Stablecoins Are Crypto’s Version of Fractional Reserve Banking

06/01/2020 by Idelto Editor

Stablecoins provide much sought after stability in the volatile crypto markets. They are sometimes even said to affect the price of bitcoin in drastic fashion. Tether (USDT) in particular continues to be widely scrutinized for this, with recent lawsuits about conflicts of interest and price manipulation being hotly contested. More important to dive into, however, is the reality that some stablecoins are harmful to bitcoin adoption. A kind of fractional reserve banking 2.0.

Also Read: Tron-Based Tether Has Ballooned to Over 900 Million Tokens, Almost 22% of Total Supply

Backed by the State

Stablecoins can in one sense be divided into two broad classes: those that depend on fiat (government-issued money), and those that leverage other, non-fiat-based assets or commodities for their value. USDT, for example, is a centrally managed asset that depends entirely on the fiat monetary system for its value stability.

Where Tether began with claims of being backed “1-to-1” by and redeemable for U.S. dollars, that policy has since been changed. Tether silently amended this description to include “traditional currency and cash equivalents and … other assets and receivables from loans made by Tether to third parties.” Understandably this change caused quite an uproar in the crypto community from individuals suspicious of the opaque verbiage.

It’s argued that as long as the asset is backed, it cannot be compared to fractional reserve banking, the process government-regulated banks use to issue more money than is actually on hand, in order to provide liquidity and grease the wheels of an economy. In September last year, even this idea was called into question, however, when Tether co-founder William Quigley stated:

Whether or not Tether was backed by a dollar or not, actually wouldn’t matter if everybody agreed to take Tether and to value it at a dollar themselves.

With the ongoing mass-printing of new tethers, vaguely worded policies, multiple lawsuits and lack of thorough, open audits, the statement seems to imply that tether might as well be backed by faith as much as it is by dollars. As tether is the most widely used stablecoin according to reports, and its market cap has grown from around $10 million to over $4 billion in the space of three years, there appears to be no shortage of believers.

https://coinmarketcap.com/currencies/tether/

Ironically, this faith-based way of viewing a currency is similar to the system U.S. dollars themselves are built on, with one critical difference: tether isn’t forcing you to believe in it. The USD is of course no longer backed by gold as it once was, but by use, en masse. Use, which is the result of there being no other safe option. Refusal to transact within the bounds of the USD-based paradigm often results in kidnappings, cagings, finings, or otherwise, and as such it’s easier to acquiesce, and go along to get along, than to find one’s life ruined.

In a very real sense, tether can be seen as a fiat asset on top of a government fiat asset. Centralized, opaque, and depending on faith rather than true market viability for its value. That’s not to say it’s not useful or viable in the current, statist dominated context, but for many the whole point of bitcoin was to escape that madness — not embrace it unquestioningly.

Sounder Proposals for Stability

Tokens such as DAI and DGX seek to provide stability related to traditional assets by way of smart contracts with crypto collateral and gold, respectively. In DAI’s case, the fiat system of money is not necessary, but serves as a reference point. Smart contracts enable decentralization as the focus. Where physical-gold-backed DGX is concerned, it’s not magical fiat paper, but time-tested grams of gold giving a stability a little more volatile than the value fluctuations of USD, but much more economically sound long term.

The Maker website asserts: “Dai is a stable, decentralized currency that does not discriminate. Any business or individual can realize the advantages of digital money.” This proposition sounds a far cry from Tether’s fiat-dependent central bank. Where Digix (DGX) is concerned, even though the backing asset is stored in a centralized vault, it’s at the very least a real, time-tested store of value, and not just government paper that can be printed willy-nilly. Digix goes so far as to specifically boast “zero fractional reserves.”

Tokens such as those created via Bitcoin Cash’s Simple Ledger Protocol or Ethereum’s ERC20 standard can also play a non-fiat-based means of providing stability to crypto, and their popularity and utility is increasing. BCH developer Tobias Ruck recently observed:

I believe #BitcoinCash will be the platform for a lot of in-person or online payments in the near future. I don’t believe the used unit of account will be BCH. Volatility makes that impossible. BCH will be like oil to run payments. As Mises said, commodity first, currency second.

Ripping Off the FRB Band-Aid

Ruck may be onto something. Until the event that bitcoin becomes so globally ubiquitous stablecoins are no longer needed, viable crypto networks may serve as underlying platforms to facilitate payments in other ways. SLPs and other such tokens would likely continue to play a larger and larger role even after a hyperbitcoinization event, due to the unique functionalities and customization potential they provide. Still, the volatility of crypto creates a pressing market demand for stability, right now.

This brings us full circle, back to the original problem: if the goal of bitcoin is to provide financial freedom and a lifeboat away from the sinking ship of violent fiat, why bother so much with stabilizing the delay? A lifeboat is meant to be detached from the damaged vessel, after all, and not attached to it indefinitely. Adoption of assets intrinsically not headed toward a permissionless, decentralized paradigm ultimately just dilutes and slows adoption of those assets that are.

No amount of promises about USD reserves equates to true economic solvency or soundness. No centralized, fractional-reserve-fiat-based USDC or USDT — or anything in between — is going to help a homeless person in India get past KYC gateways to gain financial sovereignty and economic freedom. No New York DFS-approved asset is going to starve the state of its ability to bail out megabanks and corporations with taxpayer money. 11 years after Satoshi Nakamoto placed his message about a bank bailout in Bitcoin’s genesis block, the crypto space is riddled with milquetoast calls for greater centralized regulation, and pathetic celebratory shouts about the achievement of the same.

It is unknown if Tether and others are lying, printing out tokens in fractional reserve style on top of the already fractional reserve fiat banking system. It’s also only a secondary concern. The real sense in which many popular stablecoins can be viewed as crypto’s FRB, is in the way they’re proudly on the baited hook of that very same violent system, where bitcoin gave a math-based middle finger back in 2009 and swam away, freedom-restricting stability be damned.

What are your thoughts on stablecoins? Let us know in the comments section below.

Op-ed disclaimer: This is an Op-ed article. The opinions expressed in this article are the author’s own. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the Op-ed article. Readers should do their own due diligence before taking any actions related to the content. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any information in this Op-ed article.

Images courtesy of Shutterstock, fair use.

Want to create your own secure cold storage paper wallet? Check our tools section. You can also enjoy the easiest way to buy Bitcoin online with us. Download your free Bitcoin wallet and head to our Purchase Bitcoin page where you can buy BCH and BTC securely.

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China Takes Another Step Away From USD Hegemony

01/01/2020 by Idelto Editor

The China Foreign Exchange Trade System (CFETS) announced that effective January 1, 2020, the system “will adjust weights for CFETS RMB Index,” decreasing the weighting of the USD for the second time in the currency basket’s history from 22.40% to 21.59%, and increasing the Euro from 16.34% to 17.40%. The change could signal further disassociation with USD due to ongoing U.S./China trade difficulties. Also, reports of increased trade with the EU over 2019 and the fact that both China and the European Union are actively working on central bank digital currencies (CBDCs), have some speculating that dollar hegemony is being challenged by the move.

Also Read: Regulatory Roundup: China Blockchain ETF, France New Crypto Rules, Tokens Like Money in Russia

CFETS Adjusts Yuan Index

The CFETS yuan index has been around since 2015 and aims to measure the yuan’s performance against a basket of 24 currencies. The newly announced adjustment will see the influence of USD over this basket trimmed back for the second time since its creation. The last time the currency saw its weight diminished was in January 2017, falling from 26.40% to 22.40%. The 2020 cutback sees the dollar fall again from 22.40% to 21.59%.

The euro, on the other hand, remains the second largest currency in the basket, and will see its influence rise from 16.34% to 17.40%. The official announcement states that the change is due to updated trade data, and according to Chinese news outlet Global Times “shows the fading role of the dollar in the currency basket as the trade war between the world’s top two economies has weighed on bilateral trade.”

Also taking a hit will be the fourth largest currency in the basket, the USD-pegged Hong Kong dollar, falling from 4.28% to 3.57%.

Trade Tensions and CBDC Development

The ongoing trade and tariff war between the U.S. and China may see some changes with the upcoming “phase one deal,” which could be signed this month, bringing a proposed reduction of U.S.-imposed tariffs on Chinese goods in exchange for purchase of American agricultural products. It is not certain whether the deal will go through. Relations with China’s biggest trading partner, on the other hand, appear to be thriving.

“The nation’s yuan-denominated trade with the EU, China’s top trading partner, posted a rise of 7.7 percent in the first 11 months [of 2019], per Chinese customs statistics,” Global Times reports. The Chinese government’s relationship with the EU is interesting, especially given that both the EU and China are actively working on implementing central bank digital currencies. The ECB recently published a report on their hypothetical “Eurochain” network, and China appears to be ready for pilot testing of the digital yuan. This in stark contrast to the perceived cold feet of U.S. financial planners when it comes to creating a digital version of the greenback.

Whether CFETS adjustments signal broader intentions related to these areas is yet to be seen, but the fact that Chinese authorities are measuring the strength of the yuan now less relative to USD — at least where the trade index is concerned — has been clearly demonstrated. The CFETS Bank for International Settlements (BIS) index also notably saw changes this time around in replacing the Venezuelan bolivar with the Icelandic krona.

What are your thoughts on the CFETS index adjustment? Let us know in the comments section below.

Image credits: Shutterstock.

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Germans Rush to Buy Gold as Draft Bill Threatens to Restrict Purchases

27/12/2019 by Idelto Editor

Germans Rush to Buy Gold as Draft Bill Restricts Purchases

Reports have emerged depicting long lines in front of a physical gold sales location in Germany, in view of pending legislation which would once again lower the anonymous purchase limit, this time from €10,000 to €2,000. The last drop happened in 2017 when the limit was set at €15,000. A draft bill from the German finance ministry is being pointed to as the reason for the change, which is scheduled to take effect from Jan. 10, 2020.

Also Read: Someone Redeemed a 100 BTC Casascius Bar Worth Over $700K

Germans Rush to Buy Gold

In a tweet posted Wednesday, precious metals consultant and analyst Dan Popescu shared a picture of a long line of people waiting in front of “Degussa store to buy gold in Köln.” Popescu described, “From Jan. 1, 2020, the limit to buy gold anonymously drops from €10,000 down to €2,000. Only two years ago the limit was €15,000.” One user posted his own photo and replied “This is me line at Degussa in 23rd. The employees said they haven’t seen anything like it before.” To give an idea of the relatively small amount of gold €2,000 (~$2,224) can buy, even a 50g gold bar is currently too expensive.

Germans are queuing at Degussa store to buy #gold in Köln. From Jan. 1, 2020, the limit to buy gold anonymously drops from €10,000 down to €2,000. Only two years ago the limit was €15,000. pic.twitter.com/vhuZTBPA0Y

— 🇪🇺 🇲🇨🇨🇭Dan Popescu 🇫🇷🇮🇹🇷🇴 (@PopescuCo) December 24, 2019

After the new legislation takes effect, reports from German media state that purchases of the precious metal over €2,000 will now require customer identification for buyers, including criminal background checks for businesses. The news outlet details:

If a dealer suspects, he must report his potential customer to the authorities. If a trader fails to adequately comply with these obligations, he may face severe fines.

If given final approval, the German draft bill designed to implement EU guidelines as laid out in the anti-money laundering directive AMLD5, will take effect on Jan. 10. This is the stated deadline for member states to implement legislation accommodative of the directive.

Residents of the country appear to be very concerned about the impending limitation, as the European Central Bank (ECB) continues to draw fire for its controversial economic polices such as negative interest rates. Also for newly installed ECB President Christine Lagarde’s recent criticism of perceived German conservatism. Skeptical reactions were voiced on Reddit as well, with one user stating:

They don’t want normal people to bank run their scam paper. Gold and hard assets is how you protect yourself from inflation. They want to know every single person that tries to get out of their cage.

Germans Rush to Buy Gold as Draft Bill Threatens to Restrict Purchases — Gold prices in Germany at press time. Source: http://www.livepriceofgold.com/germany-gold-price-per-gram.html

The Far Reaching Arm of AMLD5

As news.Bitcoin.com previously reported, the 5th EU anti-money laundering directive has big implications for holders of crypto and crypto businesses. Its impending policies have already squeezed some out of the industry, at least temporarily, but crypto is far from the only area that will be affected.

Per the legislation, non-transparent assets, accounts, and even private safety deposit boxes will now be subject to state information gathering by law. Gold is a bastion for private value storage, so the stricter limits come as no surprise. AMLD5 focuses on combating the financing of terrorism (CFT) and preventing money laundering (AML), but given the state of economic affairs in the EU, skeptics maintain the new laws are part of a larger bid to establish financial control and force users to remain stuck in a faltering system.

The fact that the ECB is now also in development of its own digital currency system amplifies these concerns, as one of the last remaining escapes from bank-imposed negative interest rates is to hold paper cash privately. With central bank digital currencies (CBDCs), negative rates can be applied directly to the asset, effectively closing this escape route.

Gold is thus seen as one of the final hedges against irresponsible government policy, and the proposed new limits on the precious metal will leave residents of Germany with even fewer options. The encroaching ECB and German policies have many on social media suggesting permissionless cryptocurrencies, which can be traded privately, as a means to hedge against the growing surveillance state.

What are your thoughts on the draft bill’s limitations for anonymous gold purchases in Germany? Let us know in the comments section below.

Image credits: Shutterstock, fair use.

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Utorg Exchange Grants Access to Traders With Limited Verification

24/12/2019 by Idelto Editor

Crypto Exchange Utorg Provides Traders With Limited Verification Access

Utorg.io is a digital asset exchange based in the U.K. that allows users in Europe and around the world to trade cryptocurrencies with stablecoins and fiat money. What sets the new platform apart from many incumbents is the simplified verification procedure for traders who don’t exceed а daily limit of $1,000. Its decision to provide a no-KYC option comes amid regulatory developments that require crypto companies to introduce stricter know-your-customer procedures.

Also read: Poloniex Restores Unverified Accounts With Unlimited Trading

Former Exmo Executive Appointed CEO of Utorg

Utorg crypto exchange, which launched earlier this year, promotes itself as a practical platform providing customers with extensive capabilities in terms of a functional interface and trading features. Its team insists that unlike most competitors, their project is not focused solely on speculative trading but instead aims to solve tasks for businesses such as mining enterprises and private individuals who use cryptocurrencies in their day-to-day dealings and operations.

The exchange supports a dozen trading pairs with a couple of major cryptocurrencies, BTC and ETH, perlin (PERL), the stablecoins USDT and BUSD, and three fiat currencies at the moment – U.S. dollar, Russian ruble and Ukrainian hryvnia. Maintaining a variety of convenient deposit and withdrawal methods is one of its strong sides. The long list includes bank transfer, major credit cards such as Visa, Mastercard, and the Russian Mir as well as popular payment processors like Qiwi, Yandex money, Webmoney, Advcash, Capitalist, and Payeer.

Pavel Lerner, former Managing Director of Exmo, which is arguably the largest crypto exchange in the post-Soviet space, was recently appointed CEO of Utorg. The experienced blockchain veteran, IT specialist and crypto entrepreneur, well-known in the region’s crypto space, had been advising the project’s team since 2018. In his address to Utorg’s customers, Lerner assured the exchange is working to add new pairs while maintaining liquidity and stability.

No KYC Option Available With $1,000 Daily Limit

The London-headquartered startup is obviously targeting countries like Russia and Ukraine. However, it also accepts signups from other jurisdictions where crypto exchange services are not prohibited by the law. As a European exchange, Utorg is of course subject to a new wave of hardening know-your-customer and anti-money laundering rules. The stringent requirements come with the crypto standards adopted by the Financial Action Task Force (FATF) this year and EU’s Fifth Anti-Money Laundering directive (AMLD5) which comes into force in January 2020 and has already forced some crypto businesses to shut down.

To create an account, you need to provide a valid email address and password and then activate your account following the link sent to your email. Once you do that, you can log in and set up your 2-factor authentication and activate an IP validation feature for additional security. If you want to pass ID verification you’ll be required to provide a copy of an ID document, a proof of address and a selfie with your passport. Although it increases limits on transactions involving fiat and provides access to a wider range of financial tools, the verification is not mandatory.

Utorg’s website states that traders who exchange up to $1,000 of assets a day are not required to pass KYC. Its decision to offer this option is part of a trend among crypto exchanges seeing their volumes hurt by expanding due diligence requirements. Another trading platform that recently addressed the concerns of the privacy-conscious crypto community is Poloniex. The exchange announced last week it’s beginning to unfreeze unverified accounts and will in the future accept more of this type of signups that come with some basic limitations.

Do you think more crypto exchanges will start offering simplified verification options? Share your expectations in the comments section below.

Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or a recommendation, endorsement, or sponsorship of any third party products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Images courtesy of Shutterstock.

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