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Bitcoin to Form New Economic Class: Adamant Research Report

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  • Alex Dovbnya
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    Bitcoin is creating a new economic class of people that are not dependent on traditional financial institutions, according to Tuur Demeester

Bitcoin to Form New Economic Class: Adamant Research Report
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Analytical firm Adamant Research, which is helmed by long-time cryptocurrency investor Tuur Demeester, has just released a new study entitled "Bitcoin Reformation" that draws parallels between Bitcoin and the Reformation period. 

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One of the highlights of the 18-page research paper is the part about how Bitcoin is forming a new economic class similar to that of Reformation-era merchants that upended papal authority in Western Europe.

The paper states that the technological revolution that took over Europe in the 16th century was the driving force behind rapid changes. Particularly, the printing press enabled the mass production of books, thus increasing international trade. Demeester compares it to the proliferation of computation, data storage, and cryptography in the current era. 

Eventually, due to the acceleration of trade and tech progress, a new class of merchants emerged and took away a big chunk of wealth from landlords and churches. Having lived through the horrors of the 2008 financial crisis, the millennial generation now turns to tech instead of banks. Demeester cites a Facebook study, which claims that only eight percent of millennials trust traditional financial institutions. 

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Moreover, according to multiple surveys covered by U.Today, millennials tend to be the most Bitcoin-friendly demo. Considering that this generation is projected to control the largest share of disposable income in ten years, it could end up at the forefront of the growing crypto economy. 

Hence, Bitcoin could lead to one of the biggest transfers of wealth in human history. The Bitcoin white paper, which recently turned 11, was published by Satoshi Nakamoto on Reformation Day.

The fact that these two events conveniently co-exist on the calendar side to side is not just a coincidence.      

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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with an extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets.

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Federal Reserve System: Stablecoins Pose Potential Risks to Financial Stability

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  • Vladislav Sopov
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    According to its Financial Stability Report of November 2019, the Board of Governors has warned about the dangers of stablecoins.

Federal Reserve System: Stablecoins Pose Potential Risks to Financial Stability
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The Board of Governors of the U.S. Federal Reserve System have issued their monthly Financial Stability Report. This special report is dedicated to the profits and risks of "global stablecoins".

Stablecoins: Global System with So Many "Ifs"

First, the Federal Reserve admits to the numerous advantages that stablecoins present as a concept. It has been highlighed that stablecoins are "faster, cheaper, and more inclusive payments could complement existing payment systems". This is in comparison to cases where traditional financial institutions are sophisticated and poorly accessible. Stablecoins can also be managed to eliminate the volatility of cryptocurrencies, which is one of the borders for them to be utilized as the medium for exchange.

Therefore, the "global stablecoin initiatives" like Facebook's Libra can rapidly achieve cross-border adoption. However, the major threat for stablecoins is apparent - the "inability to convert in national currency". The loss of confidence in "pegging" the stablecoin to traditional assets can lead to a run, in which several holders will attempt to liquidate their stablecoins at the same time.

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This dramatic scenario may be caused by "poor design and governance", and can result in severe consequences for international economic activity, asset prices, and financial stability.

Transparency First

The Federal Reserve also outlined in its report that in many cases, stablecoins can be utilized for money laundering, terrorist financing, and other financial crimes. Therefore, the Federal Reserve would require operators of such systems to conduct their Due Diligence, as well as Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures to avoid any abuse. Moreover, the problems of disclosure policy and protecting investor data should be of paramount importance for stablecoin issuers:

Disclosures should clearly detail consumer and investor rights and protections, including whether the holder of the stablecoin has any rights to the underlying asset. Issuers should be transparent on how the stablecoin is tied to the underlying asset, has been said in the Report.

Last but not least, the report highlighted that the Federal Reserve, together with the Group of Seven, will closely monitor stablecoin developments as well as all the risks associated with it.

Have anyone ever invested in stablecoins? Do you prefer to use it, or to pay extra fees for fiat gateways? Tell us your story on Twitter!

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About the author

 Blockchain Analyst & Writer with scientific background. 5+ years in IT-analytics, 2+ years in blockhain. Worked in independent analysis (Crypto Briefing) as well as in start-ups (Swap.online, Monoreto, Attic Lab etc.)

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