March 18, 2016 - In This Issue:



Bitcoin Prices: Insider Says Bitcoin Should Be Keeping Bankers Up at Night
More good news for bitcoin prices, the bitcoin Blockchain may replace SWIFT (the Society for Worldwide Interbank Financial Telecommunication) network. This prediction by Chris Skinner, a pro-bitcoin banking and technology veteran, has stirred controversy among mainstream banking circles.

Skinner, chairman of the Financial Services Club networking group in the U.K. and author of Digital Bank, made that provocative comment during a keynote he delivered at a recent conference.

A press article reported that Skinner said, "the coding behind virtual currency bitcoin could also prove to be enormously transformational, potentially even replacing the SWIFT network for interbank payments."

Skinner writes of that remark and the debate that it created in his forthcoming book ValueWeb: How Fintech Firms are Using Bitcoin Blockchain and Mobile Technologies to Create the Internet of Value. (Source: "Will the Blockchain Replace Swift?" American Banker, March 8, 2016.)

SWIFT is the backbone of the banking industry worldwide. Built in the 1970s to replace telex machines with electronic transfers, SWIFT is a co-operatively funded network by the global banking system to let the banks send funds with confidence.

The Winklevoss Twins on Bitcoin Industry Growth: "Let's Build That Bridge to the Legacy World"
The Winklevoss twins recently made an appearance at SXSW Interactive 2016, where the early Bitcoin adopters discussed how the industry has changed and matured over the past three to four years. The keys points made by the Winklevi in terms of Bitcoin's maturation had to do with clearer regulation, better protections for consumers and the increased availability of professional-grade exchanges.

When asked about how Bitcoin has grown as a technology and an industry over the past few years, Cameron Winklevoss said, "I think Bitcoin still does what it has done since day one. I think probably the biggest change is really the types of people building inside the system today."

Bitcoin Companies Are Now Protecting Consumers

One of the major signs of maturation in the Bitcoin industry has been the creation of regulated exchanges. During his appearance at SXSW Interactive 2016, Cameron Winklevoss, who co-founded the Bitcoin exchange Gemini with his twin brother, Tyler, stated:

""With Gemini, we're a regulated trust company in the state of New York; we're regulated under banking law, so we operate and have the same controls and procedures that you would expect of any financial institution (like your bank). That didn't exist in the early days of Bitcoin. Quite frankly, it didn't exist a year ago . . . It was a Wild West in the early days."

Precious Metals Dealer JM Bullion Accepts Bitcoin
Dallas-based precious metals dealer JM Bullion is now accepting bitcoin.

With the announcement, JM Bullion joins a growing list of US-based precious metals dealers that accept bitcoin for payments, including Agora Commodities and Amagi Metals.

JM Bullion will accept bitcoin through a partnership with merchant processing startup BitPay. Customers will receive 4% discounts on bitcoin purchases, an offer also extended to those who pay with bank transfers and paper checks.

Director of e-commerce Thomas Fougerousse said that he believes the decision enables the company to offer a better payment experience while reaching a new audience.

Why Criminals Can't Hide Behind Bitcoin
Bitcoin, the Internet currency beloved by computer scientists, libertarians, and criminals, is no longer invulnerable. As recently as 3 years ago, it seemed that anyone could buy or sell anything with Bitcoin and never be tracked, let alone busted if they broke the law. "It's totally anonymous," was how one commenter put it in Bitcoin's forums in June 2013. "The FBI does not have a prayer of a chance of finding out who is who."

The Federal Bureau of Investigation (FBI) and other law enforcement begged to differ. Ross Ulbricht, the 31-year-old American who created Silk Road, a Bitcoin market facilitating the sale of $1 billion in illegal drugs, was sentenced to life in prison in February 2015. In March, the assets of 28-year-old Czech national Tomás Jiříkovský were seized; he's suspected of laundering $40 million in stolen Bitcoins. Two more fell in September 2015: 33-year-old American Trendon Shavers pleaded guilty to running a $150 million Ponzi scheme-the first Bitcoin securities fraud case-and 30-year-old Frenchman Mark Karpelès was arrested and charged with fraud and embezzlement of $390 million from the now shuttered Bitcoin currency exchange Mt. Gox.

USAA Integrates Bitcoin Access to All Member Accounts
Following an initial pilot run which saw select USAA employees and members view their Coinbase accounts via the website and the mobile application, the USAA is now expanding bitcoin integration via Coinbase for all member accounts.

In a post yesterday, USAA announced that all account holders will be able to view their Coinbase accounts in tandem with the rest of their USAA accounts and financial services on the USAA website. Support for the mobile application will be available later this month, although both website and the application were a part of the November 2015 trial.

Jon Cholak, lead investment associate for USAA's corporate development team has been researching the cryptocurrency for USAA since 2014. In a statement, he revealed:

Traditionally, USAA is very good about getting in front of emerging technology trends. What we're developing is at the forefront of the financial services industries.