Canadian Municipality Set to Accept Bitcoin for Tax Payments

The City of Richmond Hill, a municipality in Canada, is in talks to accept Bitcoin (BTC) for property tax payments from residents and businesses, according to an announcement on Monday.

The municipality has entered a partnership with cryptocurrency trading platform and payments processor Coinberry for the initiative. Coinberry is a Toronto-based, FINTRAC-registered, financial technology solutions provider focused on blockchain and digital currency solutions.

This takes place after local council voted in July in favor of entering into this agreement with Coinberry.  Once the deal is concluded, over 200,000 residents of the city will see Bitcoin as a payment option on the municipality’s website. Deputy mayor Joe Di Paola is optimistic about the upcoming cryptocurrency implementation as the newer generation is comfortable with digital currencies.

“We believe that the demand for a digital currency payment option is only going to grow in the coming years, especially amongst millennials,” said Joe Di Paola, deputy mayor, Richmond Hill.

This is the second official partnership for Coinberry in less than six months, which highlights a growing interest for the implementation of real world digital currency solutions.

Coinberry already has an agreement with the Town of Innisfil in Ontario to provide its 36,000 residents the option of paying property taxes in Bitcoin, as part of a one-year trial. Andrei Poliakov, Coinberry CEO and Co-Founder stated:

“We are very happy to be entering into a partnership with our second Canadian Municipality […] Leaders of government and enterprise organizations are realizing that, with the right partners, they can innovate with blockchain and digital currencies. We’re pleased to be working on additional innovative solutions with leading enterprise and municipal partners, and have a number of very exciting initiatives we will be announcing over the next several months.”

Besides providing its users with the possibility to buy Bitcoin, Coinberry is driving adoption for digital currencies in practical solutions. Coinberry is currently the only blockchain based cryptocurrency platform to have secured partnerships and provide solutions to two Canadian Municipalities.

Credit Card Company Shinhan Card Wins Patent for Blockchain-Based Payment System

South Korea’s leading credit card firm – Shinhan Card – has been granted a patent for a blockchain payment system, according to local news outlet The Korea Times reported on July 15th.

According to the news, Shinhan Card has developed – with the newly patented technology – a blockchain-powered credit transaction process, which allows for setting spending limits as well as paying in monthly installments and carrying out payments.

The Korea Times cited an official from the company, who stated that “services using those key functions of credit cards will be extended to the blockchain-based system, a notable advancement from the status quo whereby most of the blockchain-based services available are limited to cash wiring or user identification for online transactions.”

The official from Shinhan Card further added that the patent had been obtained about a year and a half after the company commenced a feasibility study including technology reviews. At the moment, the company is working on acquiring patents in European countries, the U.S., Japan, China, Vietnam and Indonesia.

The patent-winning technology could also allow for card-less transactions, allowing customers to make payments via app-to-app transactions using mobile devices. Subsequently, this has the potential to get rid of three intermediaries, including credit card firms, a value-added network (VAN) service provider and a Payment Gate (PG). Value-added networks are service providers connecting credit card companies and member stores to verify and approve transactions, while the payment gate is tasked with carrying out the payment.

The patent filing, which is currently available on the website of the Korea Intellectual Property Rights Information Service (Kipris) gives an overview of the invention as follows:

“A blockchain generating unit for generating a blockchain including a virtual currency generated according to a credit limit of a consumer and updating the blockchain according to payment details, and a transaction generating unit for storing transaction conditions corresponding to each of the plurality of accounts and for making settlement using the blockchain according to the transaction conditions.”

Earlier in May, Shinhan Financial Group (Shinhan Bank), the parent company of Shinhan Card, revealed a blockchain-based platform which aimed to speed up the approval process for loan products. Particularly, the bank would use the blockchain platform to verify the items of proof required for credit lending, such as qualification or certification documents.

Shinhan Bank has sought to expand the use of blockchain technology in its processes since last year. It fully embraced blockchain technology with transactions that involve Interest Rate Swap (IRS) and smart contracts. Most recently, several reports have alluded that the bank is planning to impose tougher regulations on accounts linked to cryptocurrencies.

Facebook Unveils Its Cryptocurrency – Libra

After months of anticipation, Facebook has unveiled its cryptocurrency – Libra. The social media giant has released the white paper for the cryptocurrency and blockchain-based financial infrastructure project.

Multi-Asset Stablecoin

The aim of Libra is to provide users across the globe with easy access to financial infrastructure with seamless transactions with low fees. According to the paper, Libra will operate on the native and scalable Libra blockchain, and be backed by a reserve of assets designed to mitigate volatility fluctuations.

Reserves, which back Libra, will consist of a collection of low-volatility assets like bank deposits and government securities in currencies like USD, GBP, EUR, and JPY. Libra is not pegged to a single currency and does not have a fixed value in any fiat currency.

Libra will also issue a security token called Libra Investment Token as a way to fund incentive programs and cover operating costs. They will be only available to accredited investors as securities. Holders can earn potential profits from interest on the reserves.

Governed via Libra Association

While the reserve assets are held by a geographically distributed network of custodians in order to maintain a degree of decentralization, the reserve is managed by the Libra Association, which is the only party able to mint and destroy the coin.

Libra’s governing body, the Libra Association, is a non-profit based in Geneva, which will eventually have 100 geographically diverse founding members. The current founding members include Uber, PayPal, Visa and investment house Andreessen Horowitz (a16z).

Among the payments giants, a number of NGOs are involved in the Libra Association, including Creative Destruction Lab, Kiva, Mercy Corps and Women’s World Banking. To become a Social Impact Partner, participating non-profits must have a five-year track record of poverty alleviation work, including digital financial inclusion initiatives in the field and an operating budget of greater than $50 million.

Calibra – The Wallet

Besides Libra, the currency and network, Facebook has also unveiled Calibra – the digital wallet for the network. As part of its services, Calibra intends to follow various anti-money-laundering and know-your-customer regulations in the jurisdictions in which it conducts business.

Calibra registered as a money service business with the U.S. Department of Treasury and is now working to acquire money transmitter licenses in U.S. states that treat digital currencies as the equivalent of money.

Libra cryptocurrency and the underlying blockchain network are set to launch next year. The testnet will be released in the coming weeks. The developers will be able to build, provide feedback, and take part in a bug bounty program.

Egypt Scraps Crypto Ban, Intends to Introduce Licensing

It appears that Egypt is easing off its restrictions on cryptocurrency as a new law proposal to ban the creation, trading, or promotion of cryptocurrencies without a license is being currently drafted. The news was reported by a local online news outlet on May 28th.  Prior to this, Egypt banned all cryptocurrency under Islamic law.

The new banking law drafted for the Central Bank of Egypt (CBE) would make it mandatory to obtain licenses in advance of creating, advertising or operating platforms for issuing or trading cryptocurrencies.

According to official sources, it is stated that if the proposed bill passed, the draft law would also give CBE’s Board of Directors the right to regulate cryptocurrencies and require expensive licenses in order to operate within the country.

According to the official source, the bill aims to keep pace with fintech developments and the application of new technologies in the banking and financial services sectors. Pending regulatory rules and procedures to be issued by the CBE’s Board of Directors, the new law will accordingly establish legal status for the electronic authentication of bank transactions, electronic payment orders and transfer orders.

“The new law provides legal authority for the electronic authentication of bank transactions, electronic payment orders, and transfer orders as well as for the electronic settlement of checks and the issuance and circulation of electronic checks and electronic discount orders, provided that Board of Directors of CBE issue rules and procedures regulating all the aforementioned actions.”

Prior to this, Shawki Allam, the current Grand Mufti of Egypt, banned cryptos in early 2018, stating the technology had the potential to undermine the legal system via tax evasion, money laundering, and other fraudulent activities.

However, as the market has expanded and neighboring countries have begun exploring and embracing the technology, the government started loosen its rigid stance on the matter.

Notably, this is not the first that the Egypt is considering legalizing cryptocurrencies.

Earlier this month, it was reported that the National Bank of Egypt had recently participated in a major multinational and multibank trial of a system for letter of credit transactions using blockchain consortium R3’s platform.

Moreover, in December 2018 the CBE was reported to be conducting feasibility studies for the prospective issuance of a digital version of the Egyptian pound in order to help cut the costs of issuing and transacting physical coins and banknotes.

JP Morgan Reveals Development of Blockchain Privacy Feature

The New-York based JPMorgan Chase’s blockchain division has developed a new privacy feature that will enhance security of payment on ethereum-based blockchains, according to a press release on May 28th.

Respectively, the new privacy feature has been designed as an extension to the Zether protocol, which is a confidential payment mechanism that’s compatible with Ethereum as well as other smart contract platforms.

The protocol Zether, which was designed by researchers from Stanford University uses zero-knowledge proof (ZKP) technology to add the layer of anonymity to transactions.

JPM has stated that it will release its extension as an open-source, and will most likely implement the tool on Quorum, the bank’s own private blockchain platform built on the Ethereum protocol.

JPM’s head of Quorum and crypto-assets strategy Oli Harris has outlined what the new extension does in an exclusive interview with CoinDesk:

In the basic Zether, the account balances and the transfer amounts are concealed but the participants’ identities are not necessarily concealed. So we have solved that. In our implementation, we provide a proof protocol for the anonymous extension in which the sender may hide herself and the transactions recipients in a larger group of parties.”

He further explained that the Zether protocol uses an accounts-based approach consistent with Ethereum, as opposed to the unspent transaction output approach employed by both Bitcoin (BTC) and privacy-focused altcoins like Zcash (ZEC).

Harris believes this new privacy feature to be an efficient trustless mechanism for trustless and anonymous payments, which will benefit privacy protection within enterprise consortia as well as further JPM’s interests to develop Quorum for wider use.

When we think about the community building on top of Quorum,” said Harris, “if anyone is looking to get an efficient trustless mechanism for trustless and anonymous payments in a consortium then that’s when it’s relevant. That’s why we wanted to open-source it back to the community so anyone can build on it further and continue enhancing it and potentially put it into their use cases as needed.”

Notably, the bank has attracted some 220 banks to its Quorum-based Interbank Information Network and has been working to change the privacy architecture of Quorum with the help of Microsoft Azure, in an effort to make the platform easier to be implemented by a broader spectrum of firms.

Apart from its Quorum innovations, JP Morgan has been in the industry limelight for its recently unveiled blockchain-powered stablecoin dubbed JPMCoin.