One of the holy grails of blockchain technology has always been the potential for it to support the tokenization of real-world assets, allowing users to send, receive, and exchange the ownership rights to physical goods just as easily as making a Bitcoin transaction.
But in the more than a decade that blockchain-based platforms have been around, we have yet to see a solution that managed to bring real-world assets to the blockchain in an intuitive, useful, and holistic way — by ensuring these tokenized real-world assets could be used just like regular digital assets throughout the burgeoning crypto DeFi landscape.
But this may be about to change.
Several modern platforms are now laying the foundations that may eventually make transferring real-world assets like real estate, commodities, and currencies over the blockchain a common occurrence while unlocking a whole host of new potential use cases.
Here, we take a look at some of the most promising.
KIRA is a next-generation blockchain platform that is designed to unlock the liquidity of staked assets and power the future of decentralized financial applications with its fast, interoperable, and massively scalable blockchain solution.
It introduces the unique Multi-Bonded Proof of Stake (MBPoS) consensus mechanism, which allows anybody to contribute to the security of the KIRA network by staking a vast range of tokenized assets — without sacrificing their access to their assets while doing so.
This is because when assets are staked on KIRA, users still retain market access to them, meaning they can still be traded and used in various DeFi apps while still staked and earning rewards.
Staked assets can include KIRA tokens, assets from other blockchains (like Bitcoin and Ether), stablecoins, and a host of tokenized real-world assets, ranging from real-estate to works of art, commodities, portfolios, and practically anything else.
As the total value of assets staked on KIRA increases, so too does its security, making it the only blockchain to not only allow traditional investors to enter crypto markets with their real-world assets but also earn cryptocurrency staking rewards for doing so.
The capabilities of the KIRA network are further bolstered by the Interchain Exchange Protocol (IXP) — a DeFi app that allows users to trade their staked and unstaked assets from a variety of blockchains.
AllianceBlock is a novel blockchain-based platform that wants to produce the world’s first globally compliant decentralized capital market, by providing a regulated bridge between the worlds of decentralized finance and traditional centralized finance.
The team behind AllianceBlock looks to produce an ecosystem that allows traditional firms and investors to easily gain access to structured digital assets and crypto products. They also intend to allow firms to easily launch their own regulation-compliant crypto derivative products on the blockchain — these can represent almost anything, including physical property, security tokens, crypto portfolios, and more.
AllianceBlock looks set to achieve this by leveraging its three-layer blockchain protocol, which is comprised of a cross-border regulatory & compliance layer, data governance and privacy layer, and a transactions & workflow layer — together, these help to remove the intermediaries involved in settling transactions and make capital markets safer, more transparent, and more accessible to everyone.
As part of its plans to make money markets more accessible, AllianceBlock will allow digital asset investors to gain access to tokenized physical assets (digital securities), while traditional investors will be able to access regulated digital asset markets, while benefiting from AllianceBlock’s familiar issuance, validation, and clearance processes.
As you might imagine, one of the major challenges of bringing real-world assets onto the blockchain is creating a token that perfectly replicates their properties without any loopholes or limitations that would make them a challenge to use or trade.
Synthetix looks to resolve this issue through the creation of synthetic assets, or “synths”, which are essentially tokenized versions of other assets that mimic their price characteristics and other properties.
These synths can track the price of a huge range of potential assets, including other cryptocurrencies, NFTs, derivatives, private and public stocks, land, real estate, and physical commodities like gold and oil.
To achieve this, Synthetix uses a range of price feeds supplied by Chainlink oracles. Right now, Synthetix only supports synthetic FX currencies and commodities like sGBP (synthetic Pound sterling) and sXAU (synthetic Gold per ounce). But there are plans to extend this to practically any real-world asset in the near future.
Just like regular crypto assets, these synths will be tradeable and can be sent and received with few to no barriers — making even non-divisible or illiquid physical assets easily transferable on the blockchain.
Korean Government To Levy Taxes On Bitcoin Capital Gains Starting 2022
As cryptocurrencies continue to pick up steam and encompass the features of regular asset classes, governments have likewise imposed taxes on capital gains from digital currency. South Korea is the latest country to adopt this initiative. Its Ministry of Economy and Finance said it will levy taxes on cryptocurrency profits from next year.
The South Korean government is going ahead with its proposal to tax cryptocurrency returns after several reconsiderations. A local news agency, Yonhap reported in December that the National Assembly’s Planning and Finance committee deliberated on the amendment of income tax laws and individual consumption tax laws.
As part of the income regulatory initiative, cryptocurrency traders and investors are mandated to pay 20 percent if they earn more than 2.5 million won (almost $2300 at the present exchange rate) from bitcoin and other cryptocurrencies. Gains below 2.5 million won will not be taxed. The law was initially scheduled to be implemented in October this year, but it will now be enacted in 2022.
According to the new report, bitcoin gains will be filed under ‘other income.’ Cryptocurrency investors will report their gains through an income statement and will pay taxes in May every year.
A turn of proceedings saw South Korea become a burgeoning cryptocurrency market. In 2017, the government announced that it would strictly regulate cryptocurrency transactions and even shut down exchanges in the country after Seoul-based exchange, Youbit, was hacked.
Bithumb Tax Saga
This is not the Korean government’s first attempt at bitcoin taxation. Korea’s National Tax Service asked cryptocurrency exchange, Bithumb to pay its foreign customers withholding taxes to the tune of 80 million won in 2019.
There were uncertainties surrounding that. It was unclear whether the cryptocurrency industry was subject to withholding tax. Bithumb filed a complaint to the tax tribunal over what is referred to as a “groundless” tax imposed by the NTS. It also argued that cryptocurrencies were not recognized by South Korean law and should not be taxable.
The industry has evolved since then. Cryptocurrencies are bridging the gap on conventional assets, and emerging laws classify them as taxable properties.
Vice President of Nigeria Tips Cryptocurrencies To Challenge Traditional Banking
The Nigerian cryptocurrency community was shaken to its core when the country’s apex bank released a circular warning financial institutions to desist from enabling cryptocurrency transactions. The Central Bank made arguments to justify the decision, with several notable figures weighing in on the subject.
Nigeria’s Vice President, Prof. Yemi Osinbajo is the latest to share his view on the ban. In his keynote address at the CBN Bankers’ Committee Economic Summit, Osinbajo tipped digital assets to fiercely challenge traditional and reserve banking in the future.
Calls For Knowledge-Based Actions That Will Prove Beneficial
The ban on cryptocurrencies has continued making the rounds in Nigeria. Several weeks after, it has finally forced reactions from the upper echelon of the government. Vice President Yemi Osinbajo bared his views at a summit organized by the Central Bank earlier today.
He admitted to the disruptive capacity of cryptocurrencies and blockchain technology, stating that they could well displace existing banking systems in the coming years.
Cryptocurrencies in the coming years will challenge traditional banking, including reserve banking, in ways that we cannot yet imagine, so we need to be prepared for that seismic shift. pic.twitter.com/tbIR8eah2s
— Prof Yemi Osinbajo (@ProfOsinbajo) February 26, 2021
He further opined that emerging technologies like blockchain must be adopted strategically, before praising the regulatory bodies for being ‘very articulate’ with their measures. He called for initiatives that will enable people to enjoy the benefits of blockchains and cryptocurrencies while keeping the adverse effects in check.
Prior to Osinbajo’s remarks, CBN Governor, Godwin Emefiele publicly defended the ban, saying that cryptocurrencies were created “out of thin air”. He further described cryptocurrencies as being “used to describe the activities of players in an electronic dark world”
Many Nigerians have taken the Vice President’s comments with a grain of salt. They urged him to use his influence to turn the tides instead.
Waging War Between Cryptocurrencies and Nigerian Banking System
Industry enthusiasts in Nigeria interpreted the CBN ban as a direct attack on cryptocurrencies. Speculations emerged that the apex bank was rattled by the traction gained by the digital assets and the fact that they were gradually displacing conventional banks.
A Nigerian economist shared a shocking statistic that bared the Nigerian Stock Exchange trading volume and how it measured against the trading volume on Binance.
How important is crypto in Nigeria? On binance today the value of BTC/NGN trades was worth N13.4bn. For context the volume of trade on the Nigerian stock exchange today was N5.6bn. And binance is just one exchange.
— Nonso Obikili (@nonso2) February 5, 2021
In all of these, it is widely rumored that the adoption of bitcoin in last year’s protest against police brutality was the last straw to break the camel’s back. Activists spearheading the protests started accepting bitcoin donations after the Central Bank issued orders to freeze their bank accounts. The recent ban allegedly signals the central bank’s intention to maintain a stronghold on the country’s monetary system.
Entrepreneur and investor, Victor Asemota believes that banning cryptocurrencies is self-defeating and does not address the deficient banking system. He tweeted :
“I have predicted the demise of traditional banking institutions in Africa for a while now until things accelerated during the pandemic and agent models became prominent. The cost structure of old banking Africa do not make sense. Community banking and cooperatives make more sense. What happened to Nigerian remittances during the pandemic was that people discovered more efficient channels to send money home as bank branches were closed. We now had multiple FX exchanges as people became aware that it was lucrative. Crypto is not the problem, it is banking.”
Stellar, BitTorrent, DigiByte Price Analysis: 28 February
The cryptocurrency market has had to face increased bearish momentum in the past week and with Bitcoin dropping to the $45k price range, many of the market’s altcoins too have followed BTC and traded lower. At the time of writing, Bitcoin was trading at $44,474 with a 24-hour trading volume of $42.9 billion.
For altcoins like Stellar, DigiByte, and BitTorrent such has been the case and an immediate recovery looks unlikely given the current market conditions.
Stellar’s price fell by over 15 percent in the past week and currently trades at $0.41. According to CoinMarketCap’s list, the coin has a market capitalization of over $9.3 billion and occupies the 10th spot. The coin’s price has tested the support at $0.37 in the past few days and is now making slight gains towards its immediate resistance at $0.54. If the present support would fail, XLM may even drop down towards the second support at $0.27.
The Bollinger Bands for the coin have contracted and show less volatility in the coin’s price action. The RSI indicator looks bearish at the moment as it heads closer to the oversold zone.
BitTorrent’s price fell by over 28 percent in the past 7 days and is currently valued at $0.0011. The bearish pressure is visible as the coin’s price plummeted by over 8 percent in a day’s time. The coin is currently testing its support level around its current trading price and if this support fails BTT is likely to undo all its recent gains and trade around the $0.0004 price range. There is significant resistance around the $0.0014 range if an uptrend were to occur.
The RSI indicator for the coin is falling steadily as it heads into the oversold zone. Interestingly, the EMA ribbons have settled below the coin’s trading price and are offering support for the coin.
DigiByte is currently trading at $0.051 and has a market cap of over $730 million. In the past week, the coin’s price fell by 33.6 percent and currently finds itself close to the support level at $0.049. If the downtrend were to continue there is another support around the $0.035 price level that could help stabilize the coin’s price.
The MACD indicator and the RSI signal increased bearish pressure for DGB. The MACD indicator has undergone a bearish crossover while the RSI continues to move into the oversold zone.
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