⚡️ Hey Zeus Fans! Every week we share the latest news in the crypto and tokenized assets industry, with our comments and thoughts on why it’s important to us, and its users! Heres what’s been going on recently:
1. The Marshall Islands Is Launching Its Own Digital Currency Through a Pre-Sale
According to an official from the Marshall Islands, the government has published an essay explaining the country’s project to create a national cryptocurrency. The issuance of the Marshallese Sovereign (SOV) was discussed in an essay, which can be found here. It was written by David Paul, the minister in assistance to the President and Environment of the Marshall Islands.
In 2018, the Marshall Islands had passed a Sovereign Currency Act in 2018, declaring its intent to create a new national digital currency. The nation has until now been using the United States dollar as the official currency for all payments, debts, taxes, and dues. In the essay, David Paul outlines that the Islands’ choice to create a second legal tender based around blockchain technology was based on the fact that centralized solutions such as the United States dollar is not ideal in a country of a little over 50,000 people spread across 1,000 Pacific islands.
“It may seem surprising that the Republic of the Marshall Islands would be issuing a currency based on blockchain technology, but actually it’s just the opposite: the Marshallese people have lived with decentralized systems for hundreds of years. For us, a country of just over 50,000 people spread across more than 1,000 Pacific islands, centralized solutions aren’t just inefficient: they’re completely unworkable. Blockchain has given us the opportunity to finally acquire monetary independence in a way that reflects Marshallese values. We intend to grasp that opportunity, innovatively and responsibly.” - David Paul.
Now recently, it has been announced that the SOV will be introduced through a token pre-sale, according to an announcement made by Marshall Island officials. Called the Timed Release Monetary Issuance (TRMI), minister David Paul explained that anyone (regardless of location) can register for the pre-sale of the SOV. David Paul also stressed that the actual pre-sale for SOV – in which users buy TRMI units that can later be exchanged one-for-one with SOV units – is not yet live and is still “a work in progress.”
The Takeaway: The SOV combines the best of two worlds: a national currency, and cryptocurrency. The intent of the country’s government for the project is the right one due to the fact that neither do they possess the resources nor the expertise to issue a national currency. Creating a cryptocurrency seems to be the right answer for them, but we should not forget that this project is the first in the world and has a chance of failing. If executed well, this will be a big turning point in the history of crypto, and it will serve as a stepping stone for other nations to follow, and can provide inspiration for the future.
2. Japan’s Central Bank Calls for Global Effort to Regulate Libra
The head of Japan’s central bank has called for international cooperation in regulating stablecoins like the Facebook-led Libra. Haruhiko Kuroda, the governor of the Bank of Japan was quoted at an event in Osaka, Japan, saying that “If Libra is introduced, it could have a huge impact on society”. He also went on to say that the highest level of regulation must be applied to such stablecoins, noting that policymakers must take action. This comes after several other governments called for similar efforts in the aftermath of Facebook‘s announcement, essentially voicing their opposition.
When it comes to Japan, it’s not surprising that the country wants to take such a harsh stance against Libra. Japan was home to the cryptocurrency exchange Mt. Gox, which effectively collapsed in February 2014, taking with it more than $450 million of customers‘ Bitcoins. Mt. Gox’s collapse sent the cryptocurrency world into chaos, with Japan trying to figure out a way to regulate the industry ever since.
Japanese authorities also recently created a task force in July to determine the impact of Facebook’s proposed cryptocurrency. This task force, made up of the Bank of Japan, the Ministry of Finance and the Financial Services Agency – met ahead of the G7 conference of finance ministers in France. The group wanted to further investigate how Libra would impact monetary policy, as well as the stability of the financial landscape. The group’s goal is to work on policies to deal with how Libra will affect payments, monetary policy, regulation and taxes.
The Takeaway: This recent development marks yet another hostile reception against Libra from policymakers worldwide, with the Bank of Japan being the latest. Libra, set for launch in 2020, has also been met with opposition from regulators and central banks around the world in recent weeks, with France and India amongst the most notable in their criticisms of the proposals. With battle lines being drawn for Facebook’s Libra in Japan and elsewhere, it remains to be seen whether the firm can overcome these barriers to launch its project as intended in 2020.
3. Kik Shuts Down Messaging App Due to ICO Legal Battle
The Canadian social media and messaging app company Kik is shutting down its popular Kik messaging app. Following numerous reports that its crypto-focused subsidiary Kin had laid off over 70 employees, Kik CEO Ted Livingston announced that Kik will also be shutting down its core messaging service. In a company blog post, Livingston stated that the ongoing troubles with the U.S. Securities and Exchange Commission (SEC) has forced them shut down the messaging app.
“After 18 months of working with the SEC the only choice they gave us was to either label Kin a security or fight them in court. So with the SEC working to characterize almost all cryptocurrencies as securities we made the decision to step forward and fight.” - Ted Livingston.
This decision to downsize and shut down its messenger app is the result of the firm’s need to manage resources in this legal battle they are prepared to have with the SEC. Kik has been fighting its initial coin offering (ICO) in court ever since the SEC sued them for an allegedly unregistered $100 million token offering. In addition to shutting down the app, Livingston said the company would shrink its crypto operations to just 19 core developers with a focus on fostering the adoption of Kik’s KIN cryptocurrency. While the Kik app is shutting down, Livingston said the core developer team is pivoting toward developing the KIN token.
“Kin is a currency used by millions of people in dozens of independent apps. So while the SEC might be able to push us around, taking on the broader Kin Ecosystem will be a much bigger fight. And the Ecosystem is close to adding a lot more firepower.” - Ted Livingston
Kik’s lawyers believe that the SEC took their quotes out of context and twisted facts in order to support their allegations because they have no strong evidence to support their claims.
The Takeaway: As many crypto startups know, one of the biggest hurdles in gaining traction is the regulatory uncertainty that many companies face. And this is exactly what happened to Kik with this ICO lawsuit. Lawsuits on cryptocurrency companies like this help us see where the regulation is going, especially in the United States. As many companies would not dare to put up a fight against the SEC, Kik is deciding to go on a full fledged war. This interesting lawsuit will help everyone understand these regulatory uncertainties, and will help paint a picture of correct rules and laws in the world of crypto startups.
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