Coinbase has been in the news for quite some time, for issues related to its ‘links’ with government authorities. We first heard that the crypto exchange, had a deal with the US authorities. This was for the development of applications that, would help track cryptocurrency transactions. Crypto media reported that, this move resulted in a fairly large number of Coinbase clients, getting off the exchange. Not sure just how significant the size of that exit was.
Before we pass any comments about Coinbase or any other crypto exchange, let’s just step back and visualize how the future of the crypto industry is taking shape. The coronavirus pandemic would be hastening, many of the crypto related actions that governments are expected to take. There is now a strong acceptance for CBDCs (Central Bank Digital Currency). Many government and monetary organizations (including the IMF) have recognized the importance of cryptocurrency. We are steadily moving to a world where, the use of paper money would be discouraged and at least partially, replaced with CBDC.
Cryptocurrency has already staked its claim in the online payment sector, retailers are increasingly accepting cryptocurrency as a mode of payment. That it is only a limited range of cryptos that are now being accepted is something that, the crypto industry needs to ponder about. In simple terms, cryptocurrency is being transacted on par with conventional money – though currently on a limited scale.
But despite what has been mentioned above, not everything is right with cryptocurrency and the crypto industry. Cryptocurrency is being misused to fund illegal activities, it is also raising its head as a medium of money laundering. Within this spectrum that defines the negative side of cryptocurrency, we also have security threats. These range from crypto hacking, stealing of cryptocurrency by scammers and even extreme threats like crypto ransom crime. During the peak of the pandemic, we had cases where fraudsters disguised as medical consumables and equipment dealers, defrauded innocent buyers. This was done after, buyers were convinced to make payment through cryptocurrency! Medical products were in short supply and buyers were willing to go to any length, to lay their hands on them. In many cases, the products never arrived and the crypto scammer could never be traced.
It would be fair to say that, conventional money and finance also have their share of scams, frauds and crime. What makes cryptocurrency a bigger threat is something, that forms the foundation of the technology that backs crypto – yes, blockchain. The underlying concepts of blockchain are anonymity and secrecy. And these are things that make it tough and often impossible, to trace, track and punish cryptocurrency crime. While blockchain tech gurus, do manage to deep trace just how the crime was committed – the trail ends with a bunch of long wallet numbers and faceless criminals. Identification of a human behind the crime is rarely acquired.
That paragraph combined with the fact that, cryptocurrency is increasingly being used instead of conventional money – will highlight just where the crypto industry needs to head. It is imperative to make transactions transparent, imperative to have precise identification details of the humans behind accounts opened in various crypto exchanges. Law enforcement must have access to all that information if, they are to track and apprehend crypto criminals.
Back to the Coinbase episode, let’s put its actions into true perspective. There was another incident where the UK authorities, requested and received some user data related to Coinbase account holders. This probably related to crypto taxation issues as, the information request was restricted to users with a UK address.
The point is that, crypto regulations and laws are being formulated or implemented in most nations today. Exchanges are being forced to register their operations, sharing of user and transaction data with government authorities is something that will be mandatory – sooner rather than later.
So it is really not what Coinbase did today or tomorrow, the developing situation will make it obligatory for crypto service providers to maintain transparency – this is inevitable. While diehard tech pundits might disagree with the dilution of the secrecy and anonymity factors – it is something that will be done for the overall benefit of all stakeholders.
We are fast reaching the point when, cryptocurrency will be widely accepted as being a member of the ‘real money’ family. That is the point when monetary policies and laws, would be required to govern cryptocurrency.
GLITZKOIN: A quick recap of the Glitzkoin project and the GTN crypto token. The project was launched to improve the demand for natural diamonds and to enhance, the efficiency and productivity of the multibillion dollar industry.
The DiaEx diamond trading platform was developed using Stellar blockchain resources. The GTN token was launched as part of the project and is designated, as the mode of payment on DiaEx. Promoted by second generation diamond veteran Navneet Goenka, Glitzkoin assigned a multifaceted role to the GTN token.
The trading platform was completed in 2019 and was put through rigorous testing in early 2020. A team of diamond dealers subsequently did a pilot run on DiaEx with, actual transactions made on the platform. This process was largely successful and revealed a few areas for improvement. The Glitzkoin tech team was handling the minor adjustment when, the pandemic and subsequent lockdowns slowed down the process. The management will reschedule the full launch of DiaEx once the health crisis eases.
Talking about the multifaceted nature of the GTN token, the project is also focused on further increasing usage for the crypto – this aside from crypto exchange trade and the payment usage on the DiaEx platform. The concept is to have operators of various businesses, accept the GTN token as a mode of payment in their operations. Moving this idea forward Glitzkoin has confirmed a partnership with online ticketing giant Myticket.asia, wherein clients of the ticketing portal could use the GTN token as a mode of payment. Technical requirements for the integration of systems on both sides is at an advanced stage, nearing completion. Reviewing the challenges that the entertainment industry has been going through during the COVID pandemic, both managements have decided to set a launch schedule when the situation starts to normalize. The arrangement setup between Glitzkoin and Myticket.asia will form the blueprint, for similar deals to be negotiated with other business operators.
Related Resources: [Project Updates]