The world of cryptocurrencies is an alternate yet visible reality that is gaining ground slowly but surely amid the established Matrix of supposedly real money.
To recap, the main digital/cryptocurrency is the non-political online Bitcoin “backed exclusively by code,” according to the Bitcoin Foundation website. “This means that — ultimately — it is only as good as its software design. By funding the Bitcoin infrastructure, including a core development team, we can make Bitcoin more respected, trusted, and useful to people worldwide.”
Other cryptocurrencies have emerged since Bitcoin’s debut in 2009 and have been amassing followers.
Bitcoin may continue to dominate as Juniper Research has just released a report that argues that the number of active Bitcoin users worldwide will hit 4.7 million by the end of 2019, up from just over 1.3 million last year, according to the Hampshire, U.K.-based research company.
Yet the Juniper researchers predict cryptocurrency usage will be dominated by exchange trading, but retail adoption will be “largely restricted to relatively niche demographics.”
The researchers also found that:
- The introduction of “licensed, regulated exchanges could lead to a stabilization in currency values” and could spur an increase in retail transaction adoption;
- The protocols behind cryptocurrency could be deployed in areas such as real-time transactional settlement;
- The protocols behind cryptocurrency could be deployed in areas such as real-time transactional settlement;
- And the “altcoin market” continues to be plagued by “pump and dump” currencies created solely as short-term investment vehicles.
The researchers are also arguing that Bitcoin’s historical association with criminals for illegal purchases and money laundering “was likely to act as a further deterrent to mass adoption,” according to Juniper.
As Juniper asserts, virtual currencies are gaining ground in the real word and FTF News’ reports affirm this: earlier this month Tera Group, owner of TeraExchange derivatives exchange, reported that it is in talks to buy the online gambling firm MGT Capital Investments in order to take the bourse to the next level; the CFTC is taking comments on a possible Bitcoin options exchange and clearinghouse via LedgerX; and the Bitcoin exchange and electronic communication network (ECN) Coinsetter is launching an application programming interface (API) for the FIX electronic trading protocol.
The most recent example of the reality of cryptocurrencies is the official launch of Digital Asset Holdings, a startup founded by industry veterans Sunil Hirani and Donald Wilson.
Hirani founded trueEX, a CFTC-designated contract market exchange for interest rate swaps, and he served as CEO of the venture. Hirani also worked at Bankers Trust in the interest rate swaps group and after Deutsche Bank acquired Bankers Trust in the swaps and derivatives group. He also co-founded and was CEO of Creditex Group Inc., an execution platform for credit default swaps (CDS) in 1999. Hirani also helped create Delta Neutral Auctions, Credit Event Fixings, and the T-Zero trade processing platform for the credit derivatives industry, which were sold with Creditex to Intercontinental Exchange (ICE) in 2008. He also had a role in helping to acquire The Clearing Corp. (TCC) and the launch of ICE Trust Clearing.
Wilson is the founder and CEO of DRW Trading Group, a proprietary trading firm that works in a variety of asset classes and instruments, both domestically and internationally, officials say. He is also a founder and board member of the Eris Exchange, a designated contract market which trades an innovative patent pending interest swap futures contract, officials say. He is co-inventor of the Eris Exchange’s intellectual property, and also has been granted a patent for a method of trading a variance swap futures contracts, which has been licensed to both the CBOE and Eurex, according to Digital Asset.
Hirani and Wilson have also announced that Digital Asset’s new CEO is Blythe Masters, who made her name at JPMorgan by being an early advocate of credit derivatives. At the investment bank, Masters held many senior roles including head of global commodities, chief financial officer of the investment bank, head of global credit portfolio and credit policy and strategy and head of commercial and investment bank regulatory affairs, officials say. She also served as chair of the Securities Industry and Financial Markets Association (SIFMA). (Digital Asset has also brought onboard Andy Brown, the former chief technology officer for UBS.)
Masters will oversee Digital Asset and build a team as it promotes its IT platform to facilitate the “safe and efficient settlement” between digital and traditional currencies, company officials say. Digital Asset’s platform will also attempt to provide the speed and cryptographic security of cryptocurrencies to the transfer, tracking and settling of mainstream financial assets. Essentially, Digital Asset wants to build an infrastructure that will allow digital assets and financial systems to “work in harmony.”
In a prepared statement, Masters says that Digital Asset’s “revolutionary” platform “eliminates the counterparty risk and lack of transparency that has hindered mainstream adoption of cryptographic technology,” which could lead to cutting costs and risk in settlement.
Hirani and Wilson say that as the number of institutions working in cryptocurrency assets grows “exponentially,” their company will target the settlement obstacles in transactions that convert crypto assets to and from conventional currencies. They also want to foster more transparency and trust among counterparties using crypto assets.
It will be extremely interesting to watch Masters, Hirani and Wilson as they attempt to bring a new level of reality to cryptocurrencies.
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