The Weekend Read: April 2

 Left-to-Right: High Lizard Buterin, Master Lizard Swanson, Grand Lizard Grant

Left-to-Right: High Lizard Buterin, Master Lizard Swanson, Grand Lizard Grant

It’s been a busy week for magic internet money and their cousins, magic internet ledgers.

On the cryptocurrency-side of the world there were a few op-eds related to Bitcoin as an asset class.

  • At the beginning of the week David Andolfatto, a VP at the St. Louis Federal Reserve asked, “Is Bitcoin a Safe Asset?”  Andolfatto argues that it could be.


  • One of the multiple responses includes Frances Coppola who wrote a counterpoint in Forbes, that “it is a lousy asset.”


  • Independently, Warren Weber, a staff economist at the Bank of Canada, published a working paper looking at a hypothetical “bitcoin standard” – comparing it in juxtaposition with a “gold standard”.  Spoiler alert: he doesn’t think such a standard would arise for multiple factors including external competition from both the private sector and governments themselves.


  • Ethereum, the step-brother that is currently taking some of the spot light from Bitcoin, had a big week too.  The New York Times did its first full story on it and Microsoft announced that developers could now use Visual Studio to write Solidity-based smart contracts.


  • Earlier this week, CB Insights (a witty venture tracking firm) held a webinar that covered the “Bitcoin / Blockchain” ecosystem (deck) (recording).  It provides a good general overview, though I think it lacks a number of recent developments in the overall “Blockchain” capital markets world.  For instance, Tradeblock recently launched Axoni (a private / permission blockchain) and Peernova isn’t really a “Blockchain” company now.  And it is a little outdated on the cryptocurrency side of things.  For example, Mirror is completely out of the ecosystem altogether, 21inc is basically a software company at this point, Buttercoin is bankrupt and Blockscore shouldn’t be included in either bucket. 


  • Deutsche Bank published its 6th in a series of posts on talking points related to blockchains.


  • The Dutch Central Bank announced that it was creating a prototype “DNBCoin” to better understand how digital currencies work and the impact a central bank issued digital currency would have on other areas of the financial system.


  • CFTC commissioner, J. Christopher Giancarlo gave a keynote speech at a DTCC event (photos) regarding blockchains.  The tl;dr is that the CFTC would like to work with other regulators to “develop a “do no harm” framework” just as regulatory bodies did 20 years ago with the nascent interwebs.  For those keeping score at home (not counting the footnotes or title) the phrase: “distributed ledger” appeared 7 times, “blockchain” appeared twice, “DLT” appeared 33 times and “bitcoin” appeared zero times.


  • SEC Chair Mary Jo White also briefly mentioned distributed ledger and blockchain technology in a speech at Stanford this past week as well and noted that, “One key regulatory issue is whether blockchain applications require registration under existing Commission regulatory regimes, such as those for transfer agents or clearing agencies.  We are actively exploring these issues and their implications.”


  • Also on the regtech front, speaking at a Tokyo conference last week, a representative with Japan’s Financial Services Agency (FSA) singled out distributed ledgers and blockchain technology as tools for Asia to gain a competitive advantage in financial services.


  • Speaking to Risk.net about individually segregated accounts (ISA), Lee Braine, a bank architect with Barclays CTO office, argues that the industry needs “to come up with an automated solution to help individual segregation, where you could have a plethora of subaccounts, and potentially a shared ledger solution could help with that.”  (See also: ‘Smart’ derivatives can cure XVA headaches by Massimo Morini and Robert Sams.)


  • American Banker had a good overview on identity management efforts connected with banks


  • IBM explained where some of the inspiration came for building its Open Blockchain effort.


  • And lastly, in the spirit of April 1st, the Ethereum Foundation has formally announced its stealth partnership with R3: Lizardcoin  (see signing ceremony at top).