- Congressman Gosar Introduces Crypto-Currency Act of 2020
- Morningstar Rates Ethereum-based Digital Representation of Securities for the First Time
- Verizon Uses Blockchain Technology for Cybersecurity Purposes
- Figure Technologies Securitizes $150 million of HELOCs on Blockchain
Congressman Gosar Introduces Crypto-Currency Act of 2020
Congressman Paul Gosar introduced a bill that, among other things, seeks to clarify which United States regulator is responsible for different digital asset types. The act, short titled the Crypto-Currency Act of 2020, proposes three primary definitions for blockchain-based digital assets: (1) Crypto-Commodity, (2) Crypto-Currency, and (3) Crypto-Security.
These definitions are intended to bucket the digital assets into categories that help identify the federal agency with authority to regulate. The categories and the federal agencies are noted as follows:
- Crypto-Commodities – the Commodity Futures Trading Commission (CFTC)
- Crypto-Currency – the Financial Crimes Enforcement Network (FinCEN) and the Office of the Comptroller of the Currency (OCC)
- Crypto-Securities – the Securities and Exchange Commission (SEC)
Morningstar Rates Ethereum-based Digital Representation of Securities for the First Time
DBRS Morningstar audited the digital representation of securities of Fatburger, an American fast-food chain, that are on the Ethereum blockchain – marking the first time for such an occurrence. While the Ethereum tokens are a digital representation of ownership of the Fatburger securities, the use of the Ethereum blockchain does not govern actual ownership. Instead, the blockchain-based transactions will only occur outside of and parallel to actual ownership transactions.
Among other things, the audit highlighted the increased transparency and efficiency that the Ethereum blockchain brought to the securitization process.
Verizon Uses Blockchain Technology for Cybersecurity Purposes
Verizon announced two blockchain-based cybersecurity systems, building upon a 2019 patent awarded for a blockchain-based system for virtual SIM cards. The first system, branded as Verizon Identity, stores information about users’ login credentials on mobile phones, which could eliminate the need for passwords. Verizon Identity also integrates multi-factor authentication and biometrics data into the system as well.
The second system, Machine State Integrity, converts operational data from decentralized systems into “clear, actionable insights on potential compliance and security issues.” Verizon believes that the distributed database is more secure due to there being no central point of failure or single point of entry.
As noted by the chief product officer of security services at Verizon Business, “Now, more than ever, organizations need to be thinking differently about security, and leveraging cutting edge technology to help mitigate against cybercrime.”
Figure Technologies Securitizes $150 Million of HELOCs on Blockchain
Figure Technologies completed the $150 million securitization of a bundle of home equity lines of credit (HELOCs) this week. According to Figure Technologies, everything from the origination to bond issuance to collection of payments is run on Figure’s blockchain (Provence).
Figure Technologies noted the improved speed of the process and the decrease in expense. The CEO of Figure Technologies, Mike Cagney, stated that “[i]t costs us significantly less to originate loans on blockchain” and that they don’t have to pay for boarding costs or loan defects while simultaneously reducing quality control expenses.
Figure Technologies also stated that it can approve a HELOC in 5 minutes and fund the loan in 5 days, instead of the normal 30 to 60-day process.