tocurrency exchange and the PaxosTrust, which owns the itBit exchange, is-sued the Paxos Standard stablecoin.Their “regulated” status makes themunique - they are both are licensed bythe New York State Department of Fi-nancial Services, or NYDFS. The NYDFS astate body that regulates money trans-mitters, including PayPal and Square.Regulation is a big pain point in theCrypto arena - this is a very big step for-ward and paves the way for other Stable-coins.

THE FUTURE OF STABLE COINS While crypto-evangelists may balk at Sta-blecoins because of their reliance oncentralised custodians, they cannot be

written off. In fact, they are most likelyjust a stepping stone to another iterationof this innovative asset class. We have al-ready seen massive development of theblockchain protocol that originally un-derscored bitcoin, and in relative terms,the technology is still in its infancy. Aswe speak, there are literally millions ofdevelopers writing billions of strings ofcode to improve and enhanceblockchain technology. We have no for-ward view of what the future holds forthis new protocol and the cryptocurren-cies that proliferate on it. So, are stable-coins a cop out? Not in my opinion, itbrings the masses one step closer to fullutilisation of these assets and can onlybe a positive force as we navigate thenew world of digital money.

James Bowater, City AM’s Crypto Insider

London Blockchain Week is anevent series in its fifth year. Itfeatures a hackathon, conference,

workshops and evening drinks. Theaim has always been to unite theinternational Blockchain communityincluding governments, enterprise,startups and investors. The event hasgrown organically over the yearsattracting some of the most influentialpeople in the space. The last 12months have been a real roller coasterride for anyone involved. Last yearICOs captured the imagination ofeveryone including mainstream press.Billions were made and billions werewiped away. 2019 promised moreregulation and a more mature marketplace with security tokens and stablecoins replacing the wild west ofrandom coins. There are also a lotmore projects gaining traction in theenterprise or government space. Withthe hype dying down, BlockchainWeek is a great place to connect withthe people that are shaping the next

iteration of distributed ledgertechnology.“Blockchain/DLT technology is here

to stay and revolutionise the waybusiness and governments collaborateand use data. There’s money to bemade in the long term if you don’t loseyourself in hype cycles.”I’ve been involved in the sector since

2012 when I started exploringpayments innovation. Bitcoin hadbeen around for 4 years by then but itwas still not commonplace see largecorporates or banks talking about. It

Week and in 2015 we dedicated anentire conference to Blockchain. At thefirst event we had the Bitcoinfoundation trolling Ethereum aboutthe delivery date of a stable product.Some of the enterprise speakers Iwanted on stage had issues gettingcorporate sign-off due to theassociation of Bitcoin with crime andthe deep web. In the end we did get agood mix of banks, enterprise andprojects like Ethereum on stage. Sincethen we’ve tracked all the trends andthe people creating them. Bitcoinvolatility scares the life out me but isstill the most robust example of thetechnology at scale. I’m really excitedabout the progress being made usingBlockchain to solve problems thathave an impact on society. There’salso serious money being invested andlots of commercial opportunity. Partof what we’re doing with BlockchainWeek is bottling up that excitementand connecting people in order to fasttrack adoption of Blockchain. WithBlockchain Week, we try to avoidbeing a sea if people pushing theirwares, but more like a comfortableplace to get involved. We’re a smallteam that’s genuinely passionateabout the future of Blockchain. Wejust see this as doing our part.

For more information visitwww.blockchainweek.com

22 TUESDAY 4 FEBRUARY 2019FEATURE CITYAM.COM 23TUESDAY 4 FEBRUARY 2019 FEATURECITYAM.COM

and that the issuer has sufficient re-serves for all coins in circulation, theprice of the stablecoin should retain itsvalue. The most widely used stablecoinsare Tether, TrueUSD and USD Coin, andthe recent contender Dai -all of whichbind their value to the US dollar. Creating a cryptocurrency backed by a

fiat currency means that the coin’secosystem has to be integrated into a tra-ditional banking system to hold the un-derlying fiat currency or a centralizedcustodian. This fact diehard crypto en-

The markets have been pretty flat thispast week although Bitcoin (BTC) diddip below $3,400 level. At the time of

writing, BTC is trading at US$3,452.53,Ripple (XRP) at US$0.3015 and Ethereum(ETH) at US$107.17 with the overall MarketCap at US$113.7bn.(data source:www.CryptoCompare.com) During this pretty stagnant period and focusing

on BTC, which makes up circa 53% of the overall Market Cap, Ithought that it would be interesting to highlight the underlyingvalue growth. This is best done by reviewing the all timecalendar year lows: 2012 $3.88; 2013 $13.16; 2014 $91.66; 2015$157.30; 2016 $366.20; $2017 $739.55 and 2018 $3169.(datasource: www.CryptoCompare.com) The figures speak forthemselves and go along way to explaining why institutionalinvestors have been looking so seriously at the Crypto marketand building the infrastructure to get involved so as not to missout given that during the same period BTC has outperformedevery major stock market. Since last week’s edition the CBOE (Chicago Board of

Exchanges) resubmitted a their revised application to list theVan Eck Bitcoin ETF on the 30th January. This is clearlyencouraging and now all eyes will be on the SEC for theirdecision on this along with the Bitwise and NYSE Arca BitcoinETF application I reported in my last column.On 31st January Fidelity Digital Assets Medium channel

pinged to life (first time since it’s 15th October launch) with ashort read ‘Update on Our Wok’ to reveal that they have beenbusy building the required technical and operationalcapabilities and further that they engaged with selected eligibleclients to enter final testing. This is more encouraging news onthe path to institutional adoption.In the retail space Binance, the largest cryptocurrency

exchange by trading volume, announced last week that theywould be accepting credit and debit cards. This move will nodoubt provide the exchange with an uptick in fiat currencyreceipts. However, one cautionary note is that, whilst it makestrading more accessible to the the general public, it could makeit too easy to run up debts through over trading. It would begood to know if there are safeguards in place.This Friday sees the official launch of London Blockchain

Week (see today’s Spotlight article below) and I’m very pleasedto say that I have five free VIP two day conference passes for the11th-12th February. Please email me directly atCryptoInsider@cityam.com with the reasons why you wish toattend and I will provide the code to the five lucky readers. Finally, German Kraft have launched their Craft Beer Coin.

Scan their ad (below right), get the app and grab a free pint!

thusiasts a tad hot under the collar asthey say it is moving away from the ori-gins of cryptocurrencies (decentralisa-tion).

REGULATIONStablecoins have also opened the doorsto regulation, their stability means thatfinancial regulators and institutions aremore willing to licence and integratethem into traditional infrastructures.The Gemini dollar was issued by GeminiTrust, which also runs the Gemini cryp-

Cryptocurrencies - love them orhate them, but it looks likethey are here to stay. With acurrent combined market capof around $ 417 billion, the

chances of a total wipe-out are unlikely-despite their recent foray with the bears.While we have to get the salt-cellars outwith predictions, some market expertsare forecasting a rise of 25% by the endof 2019. Cryptocurrencies are the enigma of

the 21st century, with no underlying as-sets to support them, they have mademillionaires and paupers. The naysayersare revelling in their “I told you so” rhet-oric, as cryptocurrencies languish in asideways market. However, as with all disruptive prod-

ucts, a new iteration may take cryptocur-rencies to higher plains. These whiteknights are called Stablecoins. Stablecoins provide the stability of tra-

ditional currency with cryptocurrencies’ease of circulation. They are set up witha reserve of stable assets that can be usedto redeem the tokens (e.g. 1 token = 1USD). They can also be used for pay-ments, savings or as a tool for investorsto hold their crypto. They are viewed as the middle ground

between crypto and traditional curren-cies. They provide users with a degree ofstability because they are pegged to ei-ther a traditional currency or a physicalasset (like gold). However, there is acaveat - the underlying asset may also besubject to volatility caused by funda-mental shifts such as geopolitics, terror-ism and natural disasters. So eventhough the Stablecoin does not fluctu-ate wildly, it is not impervious to marketforces. While the coins do not totallyavoid market risk, they do address oneof the biggest reservations people holdwhen considering cryptocurrencies – ex-treme market volatility. Pavel Matveev, CEO and co-founder of

Wirex, a digital payments platform thatallows users to easily convert and spendtheir cryptocurrencies like traditionalcurrency, has just added the Dai stable-coin their platform. He says “Stablecoinsare an effective way store value, allowingholders to send funds anywhere in theworld without excessive fees and delays.This unique combination of characteris-

tics has encouraged an entirely newgroup of people to consider integratingcryptocurrencies into their financiallives. Stablecoins have also provided aboost for the adoption of cryptocurren-cies in traditional financial services”.

WHY ARE THEY GROWING IN POPULARITY?Unlike other cryptocurrencies, stable-coins regulate their worth by being re-deemable for something of intrinsicvalue, like regular fiat currencies such as

US dollars, or gold. Tiberius Group AG - aSwiss asset manager and commoditiestrader, offers Tiberius Coin (TCX), backedby a combination of 7 precious metals:gold, platinum, tin, nickel, cobalt, alu-minium, and copper. There are now over50 stablecoins on offer and their num-bers are growing steadily. The stablecoins’ underlying asset is

normally deposited with a trusted bankor custodian. In theory, if people are con-fident, they can redeem these coins inexchange for a hard currency or asset,

Designed by Phill Snelling,Bowater Media

In association with

CITY A.M.’SCRYPTO INSIDER

Crypto A.M. shines itsSpotlight on LondonBlockchain Week

@CityAm_CryptoE:CryptoInsider@cityam.com

JAMES BOWATER

PARTNER CONTENT

Our series on AI, Blockchain, Cryptoassets and Tokenisation

We’re a small teamthat’s genuinely

passionate about thefuture of blockchain

When the right new connections aremade then exciting things happen.Insights, opportunities, techniques

and technologies that can change theworld. sometimes just deals.Indeed the creation of blockchain tech-

nology itself, in pursuit of money ‘by thepeople for the people’, is an excellent exam-ple of this. Satoshi Nakamoto brought to-gether some existing technologies withpeer to peer technology in a completelynew way. London blockchain week is in its 5th year,

starting as fintech week. London is a con-tender to help lead the world in the remak-ing of the internet.This is a great example of the value cre-

ated when different worldviews and ideascollide, sparks fly, new insights are born,and, in this case, deals are done in the con-text of the wide open territory this technol-ogy has created.The relative certainty provided by the re-

cent FCA consultation forms part of thebackdrop this time: It's now clear that theFCA and the government recognise at leastthree new kinds of tokens - with the poten-tial for us to leapfrog America, given theprotectionist attitude of the SEC. Broadlythey are utility tokens, for future services,exchange tokens for fractionalised assets(think fine-art, gold, diamonds...) and secu-rity tokens for everything else - loans, bonds,shares etc.Now that it is clear just how restrictive the

latter will be they will no doubt be the sub-ject of debate and battles for better support.Because in effect this looks like the applica-tion of existing regulation, with all the fric-tion that involves, to all activities other thanthose covered by the other two token types.So, no doubt, while this is hotly debated

over the week deals will be done, new con-nections made, and likely many new ven-tures conceived.Which is why, from the research we com-

pleted for Britain's frontier technologies as-sociation (bbfta.org), loud and clear thenumber one demand from all of those in-volved in the field was: Networking.This makes perfect sense. The leading

edge is out there - no longer with major cor-porations or even the likes of Google andApple, but in the wild. In startups and newventures scattered around the world. Evenmore so with blockchain and DLT thanother technologies, including AI and IoT.Progress is across such a broad front of in-dustry verticals and is moving so fast thatit is impossible for publishers much lessacademe to keep up.If you're planning or executing a venture

in this space the insights, knowledge andexperience you need are in these teams - inthe heads of those at and near the leadingedge. Sometimes in major enterprises butmost often in startups and new ventures.As is the talent.So when we asked, it makes total sense

that the number one demand by a countrymile should be networking. As a conse-quence and as significant as Londonblockchain week itself we, the bbfta, will beannouncing the networking of theblockchain ecosystem itself during the con-ference.Unveiling not just a new modern, rein-

vented, industry association that is also forthe industries which are being disruptedand remade, as well as those within theblockchain and DLT space. But a beyondthat, a major new business platform thatwill harness new and frontier technologiesto not just connect the ecosystem, and thepeople in it, but catalyse and nurture valu-able connections, towards the creation ofnew task forces, ventures, consortia andmore.

See you there Monday 11th, join us, free fornow at bbfta.org, or hear more fromfounder Luis Carranza, founder at ICOrad.io

Even thoughStablecoins do not

fluctuate wildly,they are not

impervious tomarket forces

Windows‘98 was the first edition ofWindows to come to marketincluding the TCP/IP protocol

stack as standard. In many ways it is thesame time in the evolution of Blockchain -only it's 2019 rather than 1999. Enterpriseadoption of the Internet was nascent andthe question was: What's your Internetstrategy?Even with various surveys indicating

that companies are “interested inBlockchain”, as yet we have seen only afew projects publicly announced. So whatis holding enterprise back from adoptingBlockchain technology?One reason is a general

misunderstanding of the Blockchainspace. Some companies still believe thatBlockchain is only used for illicit and illegal

transactions. Some believe thatBlockchain is bad for the environmentdue to its excessive energy use. Still othersthink that Blockchain simply will not scaleto meet the needs of the enterprise. Thereality is that each of these is true only in aspecific context. Blockchain technology isa broad category of protocols (there ismore than just one Blockchain) and eachof the other issues can be addressedthrough good planning, governance andarchitecture.The number 1 reason why enterprises

are not adopting blockchain: Enterprisecannot see how it drives top-line revenueand business growth. Blockchain does agreat job at removing inefficiencies,unneeded middlemen and cross-industry waste. Yes, thus far, there have

not been any use cases where usingBlockchain technology has been part ofdriving enterprise growth.Today there are a wide range of

blockchain projects being developed forindustry bodies, consortia and strategicpartnerships to solve cross-industryproblems. When these projects move outof stealth mode it will clear away much ofthe misunderstanding and - just possibly -reveal the killer app that shows howBlockchain Technology can drivebusiness growth.Do you have an answer to the question,

"What's your Blockchain strategy?"

Blockchain Rookies - ProvidingBlockchain education and strategy toenterprise clients

Troy Norcross, Co-Founder Blockchain Rookies

BLOCKCHAIN AND ENTERPRISE: WHAT ARETHE BLOCKERS TO ENTERPRISE ADOPTION?

Last week, the bitcoin price in USDremained relatively steady, moving ina range of 4.6% . It registered a low of

$3322 on Tuesday and a high of $3480 onSunday. The $3400 level has been crossedseveral times this week, touching lowerlevels than the previous week - signallinga possible return of the bears. Volumesremain very low - they are at levels similarto that of the previous week. Large buyersare not particularly showing interest astrading remains flat. As long as volumesexchanged on markets remain low andwithout any fundamentally positivedriver, there is no reason to believe anupward reversal will happen in the shortterm.The higher volatility on Tuesday was

probably driven by uncertainty aroundthe CME Bitcoin futures monthly expiry.However, Cointelegraph has pointed outthat the cash settled nature of the CMEfutures should only have a marginalimpact on the markets around thecontract’s expiration date. In traditionalmarkets, large movements in prices ofphysically settled contracts are morecommon. Such movements occur whenfor instance, when a large institution,targeting a constant market exposurebefore and after expiration, fails to rolltheir long positions (sell expiring contracts

and buy contracts expiring at the very nextexpiration date). Consequently, thisinstitution would find itself required tobuy the new contracts as a matter ofurgency, paying a high cost for marketimpact.In general, news this week did not help

the market find a clear direction. OnTuesday, all major currencies dropped,including XRP (-8.2% from Monday high toTuesday low), despite news by Coingatesupporting XRP based payment options,and ETH (-8.95%).As the bear market lingers, more

cryptocurrencies and crypto-relatedcompanies are entering a critical phase.Crypto-news reported that the NEMfoundation is planning “layoffs andorganizational restructuring” to survive asa result of (amongst other things) theirtreasury management soundness beingquestioned. The layoffs at NEM mirror thestaff attrition at a raft of other companies,albeit for different reasons. Coinbase theyimplemented layoffs in customer support,Shapeshift they cut one third of their staff,Steemit cut 70% of their staff andConsensys cut 60% of their workforce.Conservative and diversified strategiesshould be implemented for thesecompanies to survive the currentdepression in the market.

THE WIREX WEEKLYMARKET VIEW

Beyond London Blockchain Week

was around that time that Fintech wascatching fire as a buzzword andBlockchain occupied an exotic place inthe FinTech ecosystem. Conversationsabout crypto usually led to

discussions about crime and the darkweb, but soon shifted to the potentialof novel applications for Blockchain.That’s when everything changed. In2014 we launched London Fintech

STABLECOINS –AN ELEGANTSOLUTION FORCRYPTO CHAOS

Luis Caranza, Founder of London Blockchain Week