Last Thursday

Once again we see evidence of how  payment platforms are embracing digital assets. Mastercard’s Start Path program, implemented in 2014 to help businesses gain traction and scale, is a good example. Since then, Mastercard has announced a new global initiative involving 7 fintech start-ups, all of which are focused on developing crypto services. Mastercard has reported: “We believe we can play a key role in digital assets, helping to shape the industry and provide consumer protection and security. Part of our role is to forge the future of cryptocurrency, and we’re doing that by bridging mainstream financial principles with digital assets innovations.” Meanwhile, hot on Mastercard’s heals is Visa, having written a blog post titled: “Advancing our approach to digital currency”. Included in the blog was: “We’re reshaping how money moves across the globe, and that means pursuing a broad array of technologies and partnerships. In that regard, digital currencies offer an exciting avenue for us to continue doing what we do best: expanding our network-of-networks to support new forms of commerce. Fiat-backed digital currencies, commonly referred to as “stablecoins,” have emerged as a promising new payment innovation, combining the benefits of digital currencies with the stability of existing currencies like the US dollar. It’s a concept that is gaining traction beyond fintechs, and now includes financial institutions and central banks.”

Furthermore, PayPal’s CEO, Dan Schulman, has been very optimistic about PayPal’s involvement with cryptocurrencies. In a recent presentation to investors discussing PayPal’s latest earnings Schulman expanded on the features his company was introducing. He did also spend some considerable time expanding on Central Bank Digital Currencies (CBDCs), remarking that: “We are working with regulatory agencies, central banks across the world. The number of countries that are looking at CBDCs, central bank issued digital currencies is increasing rapidly. You’re like at 40 countries six months, a year ago. You’re almost up to 100 countries looking at it right now.” Added to this, ApplePay (with its 500 million customers) would also appear to be looking to embrace cryptos; it has a recent job posting advertising that it is looking for staff with: “5+ years’ experience working in or with alternative payment providers, such as digital wallets, BNPL, Fast Payments, cryptocurrency and etc.” UnionPay, the world’s biggest payment platform, although not that particularly well known outside of Asia, has 5 billion UnionPay payment cards in issue. UnionPay has an estimated 270 million internet shoppers as clients and it is worth remembering that in China, alone, on-line shopping is expected to be in excess of $2.3 trillion in 2021. Whilst there have been few recent new developments from UnionPay regarding its crypto plans it did announce at the end of 2020 that it was launching a payment card with the Korean payments firm, Danal, to offer its Paycoin cryptocurrency as an option.

One thing all the payment platforms will need to consider is the forthcoming new money laundering regulations. The EU’s Sixth Anti-Money Laundering Directive (6AMLD) has proposals to include a crypto currency sector. Therefore, those firms involved with handling cryptos will be required to verify the identity of those sending and receiving transactions. Following BREXIT, the UK will not implementing 6AMLD but HM Treasury has published a consultation and is potentially looking to implement Financial Action Task Force (FATF’s ) “Travel Rule” for crypto assets. In view of this, firms handling crypto assets will need to be able to track and transfer the ownership of crypto assets for their clients and be able to pass this information to other organisations.


On Tuesday

Blockchain technology and the digital assets it can create were once shunned and treated with suspicion but, then again, people are often reluctant to accept change. However, now we see highly respected multinational corporations and even governments beginning to figure out and start using blockchains (and digital assets) as they realise the transformational opportunities this technology offers. Greg Medcraft, who was the chairman of the Australian Securities and Investments Commission and has been in Paris at the Organisation for Economic Co-operation and Development (OECD) for three years, is very candid about the outlook for banks and what regulators need to do in reference to Blockchain technology:

“Regulators need to prepare for disruption by blockchain”.  Blockchain business models can reduce costs and make markets more transparent, but, as OECD's extensive policy work on blockchain shows, many new challenges will arise. Decentralised Finance" (DeFi) will emerge over the next decade, creating a parallel financial system operating on the internet. DeFi is revolutionary. It is the next frontier, definitely. The arrival of mainstream central financial institution digital currencies (CBDCs), which is able to allow DeFi, are maybe 5 years away With DeFi, there isn’t a friction.  You’re looking at replicating numerous current elements of banking it is inevitable that governments will have digital variations of paper cash, which can sit alongside non-public “stablecoins” (digital foreign money whose worth is pinned to an underlying fiat foreign money), to allow funds to settle reliably in actual time on blockchains”. 

This is not the first time that Medcraft has been outspoken and supportive of Blockchain technology. When he joined the OECD in 2018, he stated in the podcast The Blockchain revolution and power of positive distruption: “I see blockchain’s potential coming from its 3 key use cases: 
1. Secure transfer of value; 
2. Secure transfer of data; 
3. Cyber-security and privacy, provided by its distributed nature of nodes. 

Blockchain’s benefits for businesses include:
Reducing the number of intermediaries needed for any type of transaction. 
Improving the transparency and traceability of goods in the supply chain.
Speeding up payments and reducing costs. 
Increasing security and privacy of data and assets. 
Improving access to markets and financing, particularly for SMEs. 

To this end, policymakers’ efforts should be guided by three objectives: 
i) To be pro-active and forward looking. This will help us avoid regulatory knee-jerk reactions and resist the temptation to jump in before we properly understand developments.
ii) To ensure regulators and policymakers keep up to date with the rapid changes brought about by new distributed ledger applications, and the need to build up their capacity to understand and deal with these innovations. 
iii) To ensure a coordinated approach on two fronts: First, working collaboratively with key stakeholders, including industry, academic and consumer groups. Second, internationally. The global nature and inter-connectedness of markets call for international co-operation to avoid regulatory fragmentation, curb incentives for regulatory arbitrage, and spread best practice.”

The importance and transformational impact that Blockchain technology is likely to have, and the importance that the OECD attaches to it, can been seen with three out of the four topics for the OECD 2021 Symposium on Digitalisation and Finance in Asia this autumn which are focused on the use of the technology:

24th September 2021
SESSION 1: Central Bank Digital Currencies (CBDC): latest developments and design considerations. SESSION 2: Artificial Intelligence (AI) in Finance.
1st October 2021
SESSION 3: Decentralised Finance. SESSION 4: Asset tokenisation: latest trends in policymaking.

Meanwhile in Australia, the government is clearly taking note of the potential disruption that Blockchain technology offers. The Digital Finance Co-operative Research Centre (which is comprised of over 20 members from the finance industry in Australia) has been selected to receive AU$60million from the Australian government in order to examine the digitisation of real-world assets such as equities,...


Bitcoin mining requires considerable computer power, and therefore electricity, so naturally the major Bitcoin miners have located parts of the world where the price of electricity is the lowest.

The electricity cost to mine a Bitcoin

There is a widely held perception that Bitcoin mining has to be detrimental to the world’s environment because it uses more power than individual countries, although many do not realise that the tech sector alone accounts for 2-3 percent of all global carbon emissions according to the UN. Interestingly, while there have been concerns about the amount of electricity that cryptocurrencies such as Bitcoin use, we are now increasingly seeing alternative headlines such as: “Why Energy Concerns Around Blockchain May Be a Misconception”.

The electricity Bitcoin mining uses compared to other countries

Source: U.S. Energy Information Administration, Country Data, 2019 est. (or most recent available year)
Recently, US Federal Reserve Chairman, Jerome Powell, referred to Bitcoin as ‘essentially a substitute for gold rather than for the dollar’. If this becomes the case, we could see a significant increase in investors in Bitcoin and, as the chart below indicates, Bitcoin mining does actually use less energy than gold mining!

The amount of electricity used to mine Bitcoin v Gold in a year

Source: Cambridge University

Of importance is that the price of generating electricity from renewable sources is now often less than using fossil fuels. According to the International Renewables Energy Agency: “In the last ten years, the cost of electricity from utility-scale solar PV fell by 85 per cent, onshore wind by 56 per cent and 48 per cent for offshore wind”. However, the problem is that often renewable energy is generated in remote locations away from where any power is consumed; it is also being generated 24hrs a day including at night when electricity demand is usually at its lowest.

The cost of renewable energy is falling

This is where Bitcoin mining is able to help since, provided you have an internet connection, any surplus power can be utilised instead of being transported around a national grid or stored in still relatively inefficient batteries. Bitcoin mining offers an opportunity to wean the world off its fossil fuel dependency and transition over to using renewable energy sources by acting as a complementary technology for clean energy production and storage. An added benefit is that the more renewable energy plants there are, the lower the unit costs become due to economies of scale, whereby encouraging more investment into renewable energy projects and potentially bringing the marginal cost of producing electricity from renewable sources close to zero.

Contrary to popular belief, much of the energy required for Bitcoin mining comes from renewable energy sources such as wind, solar or hydroelectricity power plants. Because renewable energy projects can use surplus energy, they create at off peak demand to mine cryptocurrencies such as Bitcoin. This can then enhance the investment returns for a renewable energy project so encouraging further investment into other renewable energy projects. Bitcoin mining can act as a source of income for countries such as Iceland, Georgia, Russia, Venezuela because these countries have Bitcoin miners located in these jurisdictions 

Value of Bitcoins mined per day


Historically, China has accounted for up to 60% of...



There appears to be a scramble for staff in the Blockchain sector on Linkedin. Currently, the professional network platform has over 1,700 vacancies - click here and see for yourself.  On over 3,100 vacancies are being advertised. Meanwhile, on an Indian website,, over 48,800 jobs are on its advertisement page.

It seems that many traditional firms are also searching for staff. The US’s largest bank, JP Morgan (with assets of $3.2 trillion), is looking to hire staff in its Blockchain subsidiary, Onyx, which was launched back in October 2020. According to posts on LinkedIn, JP Morgan is looking for people in its auditing, marketing and engineering departments. It was not even a year ago that JP Morgan sold off its Blockchain busines, Quorum, to ConsenSys. This was followed, in April 2021, with JP Morgan along with Mastercard, UBS and other investors being part of a $65million fund raiser for Consensys. Visa recently reported that it had increased the number of “crypto partnerships” by 43% in these last four months to date as interest in cryptos continues to grow. Off the back of this, Visa is also looking to recruit more staff. Amazon is presently looking for a head of crypto payments on its website: “ You will leverage your domain expertise in Blockchain, Distributed Ledger, Central Bank Digital Currencies and Cryptocurrency to develop the case for the capabilities which should be developed, drive overall vision and product strategy, and gain leadership buy-in and investment for new capabilities”. Does this mean Amazon, as a company, is looking to invest in cryptocurrencies or start accepting cryptos as payment for goods? Binance has been searching for 350 staff globally with Zhao, its CEO, reporting to Bloomberg that: "We are hiring aggressively. We see the industry growing exponentially on a year-to-year basis, and we need to scale our team to cope with it." Furthermore, in the legal world it would seem that Tech Crunch’s headline, “the NFT craze will be a boon for lawyers”, appears to have been spot on. Specialist NFT lawyers have been inundated with new business enquiries from companies looking for regulatory and legal advice as they search how best to monetise their IP with NFTs. Charlie Kerrigan, partner at the law firm CMS, has recently commented: “NFTs are unusual because there has been such a strong uptake in a short time. We work with crypto firms and with sports, entertainment and other media firms and the level of interest and ingenuity were seeing is mindboggling. The projects are a good example of the skills modern lawyers require since they mix technical issues of regulation, IP and data alongside commercial advice, negotiation and project management. We have to listen well and be on our toes!” 
Many people in the past have complained that Blockchain and the digital assets it creates was simply ‘smoke and mirrors’ - in fact, the reality is totally different. Certainly, the above examples all clearly demonstrate a demand for those employees who can help firms ‘build-out’ their Blockchain plans. The cyberpunks who aspired to help the world’s 1.7 billion unbanked and by-pass the banks, regulators and stock markets have given way to quoted global multinationals and governments. Often well-known brands and long-established firms have realised that whilst they are not keen on crypto trading, the technology which underlines these digital assets (i.e., Blockchain) is able to address the real...


On Thursday

How many times people have asked the question: “Is now the time to buy or sell?” The answer is - no one honestly knows. Therefore, given the very volatile nature of crypto currencies, there is considerable logic in ‘drip feeding’ money into this asset class as opposed to trying to guess and suddenly find that the price of the cryptos you have acquired have suddenly fallen like a stone.

Putting money away on a regular basis is sometimes called ‘pound cost averaging’ and works on the principle that when the price of an asset is low (i.e., it has fallen) you buy more, and when it is high you buy less each month. This strategy helps to smooth out the volatility so is ideal for investors who make regular savings. Had you done this and invested $50 per month over the last three years, you would have saved $1,800. Assuming no costs and you had invested in the US Stock Market (Dow Jones Index), your money would be worth $2,239. Yet compared to this further, by putting your $50 per month into Bitcoin it would now be worth $6,925!

Effect of saving $50 per month for three years

Chart, line chart

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Source: dtca

The other golden rule of investing is diversification - e.g., not having all your ‘eggs in one basket’ - which is why many investors will have exposure to different investments such as equities, property, bonds, commodities. One digital asset to catch the eye is from Damien Hirst and he has enrolled, no less, the ex-Governor of the Bank of England, Mark Carney, to help promote his latest Non-Fungible Token (NFT) collection. Hirst has created 10,000 physical unique works on A4 sheets of paper called “The Currency”, with each being available to be bought as an NFT and having gone on sale on the 14th July for $2,000 each. Therefore, if Hirst sells all 10,000 he will raise $20million on top of the $22million he made from selling 7,481 prints earlier this year. 

The Currency - Damien Hirst

A picture containing person, older

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Source: FT

There is a twist, though, with Hirst’s latest NFTs in his press release: “Two months after the NFTs are allocated, collectors will be presented with a choice: to keep the NFT or exchange it for the physical artwork. They will have one year, until 3pm BST on 27th July 2022 to decide to keep either the digital NFT or the physical artwork. If they have not exchanged their NFT in that period, the physical artwork will be destroyed. Similarly, if they have exchanged it in that period, the NFT will be destroyed” 

As an aside, does Carney’s engagement in helping promote Hirst’s ‘The Currency’ portend the ex-Governor of the Bank of England’s as a supporter of Digital Currencies, in particular CBDCs? 

(NB: Readers are recommended to seek professional advice before taking any action based on any of the links and information above. TeamBlockchain Ltd does not accept responsibility for any action that may or may not be taken, loss or gain. Please remember that the value of investments (particularly Bitcoin) and illiquid ones (such as NFT)s can rise and fall dramatically.)


Last Tuesday

We have had a great deal of feedback from readers asking for more tangible evidence of how Non-Fungible Tokens (NFTs) are being used in different ways, having highlighted last week that NFTs are being used to help raise capital for films. Well, the creative juices of those engaged with NFTs certainly seem on the rise, with several pulling off the dust sheets in their attics and local museums. The world famous Hermitage Museum in St Petersburg is looking at selling NFTs of some of its works of art to help raise much needed cash. 

Michelangelo's Doni Tondo (1505-06).


The Uffizi Gallery in Florence has also turned to issuing NFTs as a way to help raise money, given the dramatic loss of income caused by a lack of visitors due to COVID-19. The first NFT the Uffizi Gallery has teamed up with is Cinello, an Italian company which has patented a method to make a digital replications of paintings and has sold a Michelangelo painting, Doni Tondo, for €140,000. The entrance fee to visit the Uffizi is €27.50, so Michelangelo’s NFT has generated the same amount of income as would have over 5,000 visitors. Meanwhile in Uganda, one of Africa’s oldest museums, the Uganda National Museum, has teamed up with an IT firm called Murcom to sell NFTs based on some of the artifacts owned by the Ugandan museum. The selling of NFTs by museums does potentially raise the question of who is entitled to the proceeds, since many artifacts have been given to museums by wealthy benefactors. Although museums are permitted to display the art, are they able to keep the initial and, indeed, the potential on-going income that NFTs can generate. 
It is not only museums which have been active with NFTs - the major auction houses have joined the NFT craze. Sotheby’s held an auction at the beginning of June 2021 comprising only of NFTs, called ‘Natively Digital: A Curated NFT Sale’. The Sotheby auction raised over $17million, with one NFT, ‘CyberPunk, being sold for over $11million whereby indicating the clear interest regarding this new digital art. However, as yet, the most paid for an NFT was at a Christie’s auction where a digital collage of 5,000 images created by an artist known as Beeple sold for $69m. On LinkedIn, Carl Kirchoff recently commented on a post that: “Knowing a bit about blockchain and collectibles, NFT can make you a lot of money when you run an exchange (same as crypto). The artists though - as always - will not be able to monetize their content as they still depend on other platforms. But I am certain, whenever there is a goldrush, people with shovels are near”. However, the situation this time may be different as NFTs are allowing the owners of IP i.e., photographers, musicians, artists, museums, galleries etc, to, in effect, sell a digital version of the items they own and/or have created. Interestingly, they can earn an income, almost like a royalty, every time the NFT is resold again and again and again, thanks to the exchanges. 

This new interest in digital art in the form of NFTs has certainly sparked renewed interest in the art world at large, and there would appear to be genuine enthusiasm for collecting and engaging with art in digital spaces. This has led to the creation of digital galleries such as LIKELIKE and the Virtual Online Museum of Art (VOMA). NFTs also offer the opportunity for museums to digitally display more of their rare collections which are usually locked away in vaults. According to the New York Times, as...


2 Weeks Ago

Undoubtedly, there is growing interest in crypto currencies. In the UK, an FCA survey found that there has been a 20% increase in the number of people who now hold crypto assets. In its press release, the FCA reported: “Enthusiasm for cryptoassets is growing with over half of crypto users saying they have had a positive experience so far and are likely to buy more (rising from 41% to 53%). Fewer people also regret having bought cryptocurrencies, down from 15% to 11%”. It is not only in the UK. In a recent survey by SelfWealth, which is listed on the ASX and is one of Australia’s biggest on-line brokers with over 95,000 investors, it was found that “30% invest in crypto”. 

According to CryptoFund Research, there are over 830 different funds investing in various forms of crypto assets. A PwC report looking at crypto funds established that “assets undermanagement had grown in 2021 to over $3.8 billion and the most common location for crypto hedge fund managers is the United States (43%), followed by the United Kingdom (19%) and Hong Kong (11%)”. Whilst the assets that many crypto funds invest in to are unregulated asset managers that are based in the UK that wish to manage crypto funds need to be regulated or be an appointed representative of a FCA regulated firm. As with traditional funds, there are key service providers that a crypto fund needs to have which, unfortunately, add to the total expense ratio (the true annual management fee) when running a crypto fund.

Growth of crypto funds

Source: Crypto Fund Research

A crypto fund will need a custodian who is, in effect, responsible for ensuring that the assets in the fund are kept secure. Institutional investors pay close attention to the calibre of the custodian and look to them to ensure the capital they invest is safely held, and subject to strict procedures as to who is able to get access to the money in the fund. A selection of some organisations which offer crypto custody include:

Coinbase Custody
Kingdom Trust 
Selection of crypto custodians

Source: Bitcoin Market Journal

The role of a custodian may now potentially be challenged due to the fact that Blockchain technology has brought about the development of Multi-Party Computation (MPC) which, itself, enables assets to be stored in multiple locations by a variety parties. This means that those custody firms which use MPC never have complete control of the assets and therefore do not need to be regulated and subject to the costs of insurance etc. As well as a custodian, crypto funds will usually use third party fund administrators who are responsible for calculating a fund’s value and will prepare investment reports for investors to monitor the activity of the fund in terms of performance and the assets that have been traded. Furthermore, the fund administrator is the one who prepares the fund’s financial statements. Here is a selection of crypto fund administrators:
MG Stover
Northern Trust
NAV Consulting 

As regards funds, there are two types for which asset managers can offer their services. A fund can be ‘open ended’ i.e., the size of the fund will increase or decrease depending on the number of investors who wish to buy or sell a fund. With this type, the fund manager calculates the net asset value (NAV) of the fund and then divides this by the number of units/shares/tokens in the fund. If someone wishes to buy into the fund, then more units will be issued at the price of the units based on the most up-to-date NAV. Alternatively, a fund may be ‘closed’. In this case, the fund manager initially raises a sum of capital and the monies are invested. If there are new investors who wish to gain exposure to the fund, then the...


The global film and video industry, worth over $244billion, has not ‘Gone with the Wind’ but Blockchain technology is certainly blowing the winds of change through the offices of writers, producers, and even actors. For example, MovieCoin was established as a test case to ascertain whether it was possible to finance a film by issuing tokens. This was followed during 2020 with the Litecoin Foundation producing a Johnny Knoxville horror film, whereby demonstrating the ability to finance films using Blockchain technology.

Source: Blockchain news

Looking further ahead, Anthony Hopkins is due to star in a film called Zero Contact which is to be distributed as an NFT, thus allowing viewers to own their copy of the film whilst also preventing those who do not own the NFT from watching it. NFTs are being used as a way to prevent film piracy, which is a major problem in the film industry. Each NFT is to be, in effect, a digital asset with a unique serial number that will be encrypted and stored on a Blockchain. 

Filmio. Inc., in San Diego, uses a Blockchain-based platform which enables film creators to upload their projects and market them to an audience which can vote on what they like, as well as allowing investors to check fan engagement and, hence, decide if they would like to finance the film or not. The ability for creators, investors, and the audience, to be on the same platform means it is possible to create a transparent way in which to nurture new talent and content and to distribute films and shows, all the while retrieving feedback in real time. It also offers the potential to raise funds from a new range of potential backers, as opposed to the current system which, historically, has relied heavily on a handful of studios and media moguls.

Blockchain technology seems to be disrupting many different industries and the film and entertainment industry looks set to be impacted, too. Indeed, the US bank, JP Morgan, believes that Blockchain technology is likely to effect the media and entertainment sector in fours ways, these being:

i)micropayments for content - as we see an increase in media behind subscription-based paywalls, there are likely to be consumers who will not pay a monthly subscription but would pay to view specific events or films. A Blockchain-powered platform, with the ability to keep a transparent record of its data, could allow for more accurate tracking of when and how copyrighted content is watched. A micropayment pricing model would normally be inefficient to implement, but its execution could be fully automated and cost-effective with blockchain, possibly using digital payments to cut out banking fees etc.

ii) the elimination of content aggregation - Blockchain technology could enable artists, such as musicians or writers, to distribute their work directly to consumers. The ability to bypass and disintermediate agents, managers etc, would therefore allow for a greater % of the revenue spent by consumers to be received by the creators themselves. This could impact everyone, from large media houses to independent bloggers, whereby helping artists form a direct relationship with consumers.

iii) royalty distribution - one of the most powerful features that blockchain platforms can offer is greater transparency, undoubtedly assisting in the collection and distribution of royalty payments in the music business which have only become more complex and opaquer with the growth of music streaming services such as Spotify, Apple Music, SoundCloud and Tidal. The top ten music streaming platforms alone have more than 250 million monthly customers. For instance,...


3 Weeks Ago

Arguably, the first signs of automation in the banking sector were the introduction of what we call in the UK ‘cash point machines’ or, as the Americans say, automatic teller machines (ATMs). The first ATM to be installed in the UK was in 1967 and a couple of years later, in 1969, an ATM was opened at the Rockefeller Centre in New York City. So, it is rather ironic that, while cash dispensing ushered-in banking automation, we are now witnessing the decline in the use of cash and the rise of digital currencies and the closure of bank branches.

Decline in number of bank branches in Europe and America

           Source: Payments cards and                                           Source: Visual                    

However, the pace of change in banking had arguably been given a major boost due to the impact of open banking initiatives which, again, began first in the UK in 2018 and is now being adopted worldwide. The Open Banking Organisation defines open banking as “a secure way to give providers access to your financial information. It opens the way to new products and services that could help customers and small to medium-sized businesses get a better deal. It could also give you a more detailed understanding of your accounts, and help you find new ways to make the most of your money”. So, potentially open banking could be seen to be emerging as a huge disruptor for banks since it offers customers access to a greater choice of financial products and services; this also helps to explain the rise of so many fintech firms.

Accenture has recently highlighted in a report on open banking that: 
“ the global open banking waters are relatively calm right now, but beyond the horizon a wave of change is building.
banks will soon need to choose between catching this wave or riding it out and hoping for minimal damage - up to $416 billion in revenue is at stake.
open banking will arrive at different times in different markets but when it takes off, growth will likely be rapid - sceptics may be left behind.
tomorrow’s open banking leaders will prioritise data custodianship, analytics mastery, agile partnerships, and trusted security.”

There exists a very wide selection of open banking platforms and some have become extremely successful. For example, Klarna is thought to be Europe’s most valuable start up and worth over €31billion. It is interesting to see recently that it was the payments platform, Visa, not a bank, which acquired the Swedish firm, Tink, for €1.8 billion. Visa had been disallowed by the Justice Department to acquire US-based Plaid in January 2021 for $5.3 billion . At the time it was thought that Plaid would pursue a public listing. Plaid is now estimated to be valued at $13+billion, therefore will we see a bank attempt to acquire Plaid before it lists or will a bank make a bid before it is purchased by another fintech?

Achieve open banking platform rankings 2021

Source: Achieve

Furthermore, as the publication the Entreprenuer has highlighted, banks face a number of challenges including:
legacy systems - designed over a decade ago and unable to adapt to today’s connected digital environment
deep silos - banks have long been siloed organisations, driven by design and regulations
customer evolution - fast-changing behaviour of today’s socially connected, digital, next-gen consumer
compliance demands - growing compliance and costs spurred by many post-recession regulatory mandates.

Interestingly, Blockchain technology offers open banking platforms and banks some potential solutions and a foundation...


Environmental Social and Corporate Governance (ESG) is receiving more and more attention from investors and therefore boards of companies. However, as reported by Reuters, the fact that “PwC is planning to hire 100,000 over five years in major ESG push” serves to illustrate how important it believes ESG to be, and the work that needs to be carried out by PwC’s clients. PwC is looking to invest $12 billion in the next five years and recruit 100,000 new jobs. The focus for these new staff is to help clients deal with climate and diversity reporting, and also artificial intelligence, as part of PwC’s new global strategy. Unsurprisingly, behavioural science, such as nudge economics, has been used by businesses as well as governments. In 2008, the book Nudge, by Richard Thaler and Cass Sunstein, was published and certainly proceeded to influence governments. In the UK, the Behavioural Insights Team (BIT) was created to apply ‘nudge insights’ with the aim to improve government policy and services. There are three basic ideas that define a ‘nudge’:

i) Nudges never force people to make certain decisions - a core principle is that, while ‘nudges’ may lead people in a certain direction, they never limit or eliminate options. The ultimate choice still lies with the person and in this way a ‘nudge’ is different from a rule or a law. 
ii) Nudges leverage behavioural science insights about how we make decisions - ‘nudges’ are effective because they draw on mental shortcuts and cognitive and emotional biases which impact our behaviour. For example, ‘Save More Tomorrow’ works because it asks people to make a savings commitment in the future, i.e., when they get a pay rise in the future. 
iii) Nudges are meant to be used for good - ‘nudges’ are meant to help us move from intent to action, rather than convincing or persuading us to do something that we had no intention of doing.

Swiss Re’s Behavioural Research Unit, based on more than 500 client engagements, has identified five main areas for behavioural economics to create value along the insurance value chain. Swiss Re saw a 20% increase in sales, 3% rise in underwriting disclosure, up to 10% reduction in ‘claim padding’ and 3% reduction in cancellations. 
Top 5 areas behavioural economics is creating value for insurance

Source: Daily Fintech
Earlier this year, an academic paper published by Cornell University in the US, “Tokenising behaviour change: optimising blockchain technology for sustainable transport interventions” looked at how Blockchain technology and tokens could be used to influence behaviour and be a tool to help firms and society to be more ESG-compliant. The research paper examined four projects which use Blockchain technology to try and increase individuals’ adoption of sustainable transport by encouraging people to cycle and walk more.

Projects designed to increase the number of walking journeys and or cycling

Source:  Tokenising behaviour change: optimising blockchain technology for sustainable transport interventions
This research paper concluded: “Blockchain technology can provide a technical infrastructure capable of facilitating different designs and implementations of tokenised economies to support conversion of journeys to sustainable travel behaviour. However, blockchain technology is just a part of the technical solution, which is reliant on evidence from external sources such as smartphone apps and supporting services that are capable of making informed and accurate judgements on distances users have travelled, whilst balancing motives of data gathering and protection of user privacy. New possibilities brought about by blockchain technology, from autonomous, and individually tailored, programmatic actions of smart contracts and the potential of DeFi to bring liquidity to token economies, offer a tantalising future for delivering engaging programmes to aid travellers in make sustainable choices”.

The above illustrates how cities are beginning to introduce Blockchain-powered initiatives so as to improve the ESG credentials of urban dwelling. In Vienna, the City Council has brought in the Kultur Token which tracks users’ movements and types of transport in order to calculate CO2 savings compared to if the users were driving a car. The more carbon emissions its inhabitants spare, the more points they generate - i.e, the more Kultur Tokens they are...


4 Weeks Ago

It would seem, on the face of it, that many so-called sophisticated Western economies and their central bankers are juxtaposed to the way in which China is approaching digital currencies. The Chinese are continuing to roll out their own version of a Central Bank Digital Currency (CBDC) to cover a total of 10 cities, spanning 100 million people. According to Coinidol:Over 200 vendors employed to hold the 2022 games began enabling digital payments conducted with the help of e-CNY. Among other items, the Chinese will be able to buy the Olympic tickets using the CBDC at least at some venues. Beijing and Shanghai are planning to distribute a total of more than 550k digital red envelopes each having about $31.5 USD of e-CNY to people around the two cities.” As Reuters reported back in April 2021, China has proposed new rules for CBDC, quoting:

“Interoperability should be enabled between CBDC systems of different jurisdictions and exchange;
Information flow and fund flows should be synchronised so as to facilitate regulators to monitor the transactions for compliance;
A scalable and overseen foreign exchange platform supported by DLT (distributed ledger technology like blockchain) or other technologies.”

China’s use of mobile payments leads the world


It may or may not be related, but the Chinese Banking and Insurance Regulatory Commission has introduced new regulations on the $1.15 trillion cash management products in China. Will the next overture for China be to ask for a % of these massive savings to be transferred to its new CBDC?

Meanwhile, the Guardian newspaper has reported: “The Basel Committee on Banking Supervision, which consists of regulators from the world’s leading financial centres, is proposing a “new conservative prudential treatment” for crypto-assets that would force banks to put aside enough capital to cover 100% of potential losses.”. Stablecoins, pegged to a country’s official currency, would not be subject to the same strict rules as they are deemed to be more akin to traditional assets such as bonds, loans, deposits, equities or commodities. As reported in the Herald of Scotland , Britain continues a relentless march for using less and less cash with the number of cash payments dropping by 35% in a year - only 20% of payments now involve notes or coins, as opposed to 50%+ ten years ago.

The Fed, the ECB and the Bank of England have all declared that they are investigating the potential of CBDC, but one cannot help wondering what powerful lobbying is occurring behind the scenes by those banks desperate to maintain the status quo which has served them so well to date. Bizarrely, many Western governments and their regulators seem fixated that Digital Assets will continue to offer money launderers a panacea to enable them to make payments, whereby ‘oiling the wheels’ of illicit activities. This recent argument by a Dutch official, as reported in Cointelegraph, is such an example: “Ban Bitcoin because it doesn’t meet any of the three functions of money and is handy for criminals”. Such concerns are understandable given the rise in cyber attacks and ransom demands, often with the ultimatum for payment to be in cryptos e.g., the Colonial Pipeline which resulted in a payment of $4.4million Bitcoin. However, there could well be signs that demanding cryptos as a form of payment may not be such a panacea for criminals. In the US, the Fed has succeeded in retrieving $2.3 million of the Bitcoins paid by the owners of the Colonial Pipeline, thus sending a warning shot across the bows of the perpetrators of ransom that they may be better off reverting to demanding suitcases of cash, diamonds or gold as they have done in the past!  Then again, the banks and those who regulate them know a thing or two about deficient Anti Money Laundering (AML) procedures and checks as, in the first quarter of 2021 alone, banks where fined over $1.25 billion for AML...

Blockchain technology has the potential to transform health care, placing the patient at the center of the health care ecosystem and increasing the security, privacy, and interoperability of health data. This technology could provide a new model for health information exchanges (HIE) by making electronic medical records more efficient, disintermediated, and secure. While it is not a panacea, this new, rapidly evolving field provides fertile ground for experimentation, investment, and proof-of-concept testing”.​

Wow, what an optimistic quote from Deloitte - but what is the reality? Is Blockchain simply another ‘buzz’ word being brandished about by technology lovers and consultants? Without a doubt, one of the most powerful benefits of Blockchain technology that we have written about on numerous occasions in Digital Bytes is that Blockchain-powered platforms bring greater transparency to processes and organisations. For example, Blockchain technology is now being implemented within the healthcare sector in a variety of ways including the management of patient data and medical records, in supply chains for pharmaceutical drugs, for research into new drugs and health research, handling insurance claims, and even being used as part of nudge economics to encourage patient behaviour. 
Here is just a small selection of different companies offering Blockchain-powered solutions within the healthcare sector:

Blockpharma, based in France, offers a Blockchain-powered platform to address challenges in the supply chain for pharmaceuticals to bring greater transparency, thus enabling drugs firms to help tackle the relentless counterfeiting that is so prevalent in the pharmaceutical industry. By scanning the supply chain and confirming all points of shipping, the Blockpharma’s app has the ability to track and trace drugs from point of manufacture to dispensing, so helping medical prescribers and patients to identify counterfeit medication. According to Blockpharma, 800,000 deaths occur every year due to counterfeit medicines, and there has been a 300% increase in counterfeit medicine trafficking between 2007 and 2010. Out of all the medication in circulation at the moment, 15% is counterfeit.

BloodFlow is a Canadian-based firm using Blockchain technology to offer the 36 blood donation agencies globally a combination of rewards/tokens together with a more efficient way for these agencies to digitally engage with blood doners, including information about what their donated blood was used for. For example, the blood you donated was used to help a child who was involved in a traffic accident, or your donated blood was used to help someone who has had hip replacement surgery. This enhanced engagement encourages blood donors to return to give blood - of paramount importance since many of the world blood donation agencies are desperate for more donors and also wish to reduce the % of donors who do not attend to give blood even though they have made an appointment. Did you realise that while donors are offered cup of tea following donation of a unit of their blood, the blood agencies then sell that unit of blood for $200-$300 in the US and in the UK, the NHS pays £145.22 per unit of blood? 

Coral Healthcare, based in Canada, is using Blockchain technology with smart contracts to improve the efficiency of healthcare, whilst automating many of the current paper-based, administrative healthcare systems. This is enabling doctors, scientists, lab technicians and public health authorities to access one common data base, so reducing duplication and errors.
Medicalchain, based in the UK, is using Blockchain technology to hold patient records securely. Doctors, hospitals and laboratories can all request patient information which has a record of origin and...


A Month Ago

The FCA’s on-going consumer research into cryptocurrencies is to be applauded and welcomed. Despite the FCA not regulating this fast-growing asset class (according to the FCA, the number of owners of cryptos has increased in the last year by 21%), the FCA is clearly keeping a close eye on this sector.

Main reason for buying cryptocurrencies

Chart, bar chart

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Source: FCA

Gambling and portfolio diversification are the key reasons why UK investors are buying cryptos. It would be tremendous if we could see similar research being carried out by other regulators in other jurisdictions. FCA - please keep going with the research so we can all gain insight and learn. This asset class is certainly not set to decamp, so we do need to embrace, not dismiss, what could prove to be a great asset class for diversification and/or be used for regular savings as investors smooth out the volatility by ‘pound cost averaging’ their exposure to Bitcoin and the like. In the graph below, you can see the result of investing just $10 a week:

Regular savings into Bitcoin v Dow Jones Index over the last five years

Chart, line chart

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Over three years, the savings would surmount to $1,570 in total and, assuming there were no transaction fees, the same $10 every week invested in the Dow Jones Index would be worth $1,997 - but that $10 each week placed into Bitcoin would now be worth $7,927!

Given that approximately 37% of people surveyed for the FCA report said they had bought cryptocurrencies as a gamble, this figure had us wondering how big the gambling market is. In the UK it is claimed that over 32% of the adults gamble each year - a staggering £14.22billion - and globally, the gambling industry is worth over $465billion! Whilst the gambling industry is regulated (and undoubtably most gamblers lose their bets) it does not seem to attract the same ire and passion from governments that cryptocurrencies do. Could this be due to such governments taxing gambling? In the UK alone, gambling taxes generated for the government £2.83 billion. Meanwhile in the US, the Federal tax on winnings is 24% and more states in America are looking to legalise sports betting as a way, according to the FT,for online gambling to plug their budgets created by the covid-19 pandemic”. Maybe governments need to have better monitoring of crypto profits, perhaps by simply introducing a withholding tax on exchanges to tax crypto profits, as opposed to the ‘nanny state-style’ of government we seem to be currently falling into currently with its bans and restrictions? Afterall, if people wish to treat their crypto holdings as a gamble, why not let them?

There has been a lot of activity in the asset management sector regarding digital assets. Crypto hedge fund, BlockTower Capital, has acquired rival hedge fund, Gamma Point Capital, in an announced $35 million deal which enables investors to profit irrespective of whether the price of Bitcoin is rising or falling. Furthermore, BlackTower Capital had launched a DeFi fund earlier this year. However, of real interest in the asset management world has to be the announcement that Invesco (with $1.5 trillion of assets under management) has filed with the SEC to launch two cryptocurrency-focused exchange-traded funds (ETFs). Invesco is proposing that 85% of the Invesco Galaxy Blockchain Economy ETF and the Invesco Galaxy Crypto Economy ETF will be invested in crypto-linked equities, not cryptocurrencies directly. 

Galaxy described the fund as: “The Fund will not invest directly in cryptocurrencies or crypto assets directly and will not invest in initial coin offerings. The Fund may, however, have indirect exposure to crypto assets by virtue of its investments in companies that use one or more crypto assets as part of their business activities or that hold crypto assets as proprietary investments” This investment strategy of offering exposure to crypto assets without investing directly into cryptos has been proposed by others; similarly Bitwise is looking to launch the Bitwise Crypto Industry Innovators ETF (ticker BITQ)  which has $45 million in assets less than a month after its launch. This fund holds companies exposed to cryptos such as MicroStrategy Inc., Coinbase Global Inc., and Galaxy Digital Holdings Ltd. Another firm using this strategy is the First Trust Indxx Innovative Transaction & Process ETF, which was launched in 2018 and currently has over $100million of assets.

If you are looking to invest in digital assets via a hedge fund there is certainly plenty of choice, with over 420 to select from. Interestingly, a recent survey carried out for Intertrust (a fund administration firm) found that potentially an additional $312 billion of cash from hedge fund managers could be allocated into cryptocurrencies. Claims from the 100 hedge fund managers surveyed included that they were looking to increase their holdings in cryptos to 7% of their portfolios. There is a risk, certainly in the UK, that, as hedge fund managers increase their exposure the FCA, and the press is doing all it can to prevent the general public investing in this asset class.

When asked about inflation and the Federal reserve Paul Jones, one of the world’s most successful hedge fund managers on the TV station, CNBC, said: ““If they say, ‘We’re on [the] path, things are good,’ then I would just go all in on the inflation trades,” adding, “I’d probably buy commodities, buy crypto, buy gold.” Meanwhile, Alan Howard, one of the most successful (and billionaire) fund managers in recent years has just invested in the successful and innovative crypto custody provider, Copper. Howard has been active in the digital assets sector since stepping down from the day-to-day management of one of Europe’s best known hedge fund managers, Brevan Howard, where he was co-founder and made his fortune. Latterly, Howard has established Elwood asset management, designed to make it easier for institutional mangers to get access to digital assets. One of Elwood’s products is an application programming interface (API) which enables an investor/fund manager to access thousands of cryptocurrencies being traded over 30+ crypto exchanges. Elwood also offers the Elwood Global Blockchain Index Fund which is designed to offer exposure to global companies in developed and emerging markets which participate, or have the potential to participate, in the blockchain ecosystem. Invesco has created an ETF to track this index and its Invesco Fund now has over $1 billion of assets.

However, Elwood is not the only firm to offer access to those companies exposed...


We have written and given presentations on a number of occasions about how West Coast tech firms such as Apple, Amazon, Google, Facebook etc seem to be looking to ‘take a Byte out of the Big Apple’. All these tech bemouths have been busy building their own payment platforms, rivalling those which many of New York’s financial services firms have offered historically. 

If countries such as the UK are successful and manage to cause financial services companies to be excluded from the global tax proposals for the world’s 100 biggest companies (currently being discussed), how long will it be before we see these tech firms spin out their financial services subsidiaries? UK Chancellor of the Exchequer, Rushi Sunak, is striving to get the G7 to agree to exclude financial services firms in the global tax proposals. If this were to happen, there are concerns mounting that it would undermine the City of London as a location for banks such as HSBC and Standard Chartered to have their headquarters there, all the while deriving much of their income outside the UK. The stakes are high as it is estimated by the Institute for Public Policy Research that the global tax proposals could generate as much as £7billion p.a. purely for the UK treasury.

Some believe that Apple Pay, in the US alone, is generating $1billion of revenue p.a. and over 500 million customers globally Given how it is growing, as the world increasingly turns its back on cash and embraces digital payments, its outlook would appear to be very positive. Bearing in mind that, at $108 billion, PayPal is valued over 2.5 times the valuation of Goldman Sachs’ $130billion - so what would Apple Pay, with more clients than Paypal, be valued at? Will Apple Pay, Google Pay Samsung Pay, Amazon Pay etc be spun out too, in the same way Alibaba in China spun out AliPay to create Ant Financial in 2014? If big tech firms are to see their profitability challenged by the G7 governments as they scramble to repair their balance of payment post COVID-19, how long will it be for those astute accountants and tax advisors to the tech giants search for new ways to, once again, minimise the tech giants’ tax?

                     Apple Pay growth of users                                   Paypal growth of users

                                  Source:                                                           Source:                     

As Hayden Jones, from PwC, pointed out in last week’s Digital Bytes, it is digital currencies in the form of a stablecoin which offer considerable attractions to treasury departments of multinational firms. Digital currencies enable companies to move money around the globe, by-passing correspondent banks and offering real-time cash management. With comments such as: “So-called stable coins (cryptocurrencies pegged to other assets) need to be closely monitored. The outlook for stable coins as a means of payment … [has] It caused a lot of problems. It is imperative to ask difficult and appropriate questions about the future of these new forms of digital money” coming from the governor of the Bank of England, Andrew Baily, is this a sign that stablecoins are...


For those who understand Cockney rhyming slang: “would you adam it?” (adam and eve - believe). If by passing legislation in El Salvador so that Bitcoin is treated as legal tender was not radical enough, the country’s president, Nayib Bukele, has now instructed the state- owned geothermal electricity company to look into mining Bitcoin.

Although El Salvador currently imports 19.23% of the electricity it needs, mining Bitcoin (especially at times when demand for electricity is low) may prove to be an efficient way to harness volcanoes’ geothermal energy 24/7. Will Bitcoin mining using volcanoes prove to be not only an eco-friendly way to make money for El Salvador, but profitable too? No doubt other countries will be watching with interest to see if El Salvador’s embracing of Bitcoin can encourage those who are unbanked and typically excluded from the traditional financial services. If there is a significant uptake by the citizens of El Salvador to use Bitcoin, how long will it be before El Salvador also makes a stablecoin (such as Tether or USDC) legal tender? Will we see El Salvador issue its own digital colón, backed by US$, with deposits either held by the El Salvador government or, to make it potentially more attractive, have the cash held by the IMF or World Bank? Now that would be a coup….

As the below chart shows, according to data from the World Bank the informal economy is significant, not just in El Salvador, but many other parts of the world i.e., there is a considerable amount of cash being used to pay for transactions. The informal economy is estimated to be worth USD 10 trillion, employing about 1.8 billion people globally. As a result, this makes it difficult for governments to balance their books and claim the taxes required to meet the needs of their citizens when there are vast sums of cash being used and no records of what has been paid to whom. Perversely, crypto currencies such as Bitcoin were historically heralded as a way to make payments and by-pass the banks and other financial institutions, yet now we see governments increasingly embrace cryptos and digital assets such as stablecoins and CBDCs.

Employment in the informal economy as a % of total non-agricultural employment


Another possibility is that other countries and renewable energy producers will increasingly come to realise that Bitcoin mining has the ability to help remove some of the risks associated with renewable energy projects. This possibility exists because surplus energy can be diverted to mine Bitcoin, whereby creating a valuable additional source of income. Mike Colyer, chief executive of Foundry, claims: “This could enable proposed renewable energy projects to havce a faster quicker return on eco-friendly investments, according to the head of one of North America's biggest crypto miners”. Citizens from El Salvador, Guatemala and Honduras are all sources of migrates into the USA. Therefore, instead of spending $millions on a wall between the US and Mexico, the Americans could do well to start investing in green renewable projects whereby enabling these countries to be less reliant on importing energy and, instead, turning them into cheap producers of renewable energy. The use of Blockchain technology could easily track the power being produced and the number of Bitcoins being mined. If the income from the mined Bitcoins could be identified as being spent appropriately, as...


This is the fifth in a series of articles by David Parsons, from TrustMe Property Exchange

As with digital assets, the saying "anything can be digitised" is now being fully put to the test as your imagination can now be turned into a digital asset. We will explore this alchemy and see what's behind this new digital sorcery. me, there is an invisible $18,000 statue sitting in my home library. I just had to buy it after seeing it at the artist's gallery in Italy. The artist initially wanted $100,000 but fortunately he accepted $18,000. As an invisible statue you would obviously think it's worth is much less (and closer to zero) however the sorcery is that it’s worth is actually closer to $100,000.

Value from your imagination, selling imaginary sculpture. Salvatore Garau

Source: Oddity Central

In the world of digital assets there are two types, real and imaginary - we will explore what differentiates real digital assets compared to imaginary ones. The difference between the two defines how they store value, when they are used in direct exchange, and the differences they have under the law. By understanding fully what these assets are, then the real and imaginary values can be defined, risks segregated, and their inherent uses identified.

Imaginary Digital Assets
Imaginary digital assets can be broadly defined as having no intrinsic, inherent or intuitive value (without 3i value). Generally, the only source of value is extrinsic and only therefore what other people believe the value to be based solely on their personal feelings of the asset’s worth. This opens up the value of the asset to be viewed very differently and widely by a multitude of people (example: ‘beauty is in the eye of the beholder’). The asset’s capability to be used as a storage of value, its perceived appreciation, its tradability / liquidity and the protection of the asset under the law are all very subjective. These traits lead to a trader’s dream of rampant speculation, uncertainty in value, uncertainty in protection of the law, and this ‘tradability’ (volatility) ultimately resulting in an asset becoming unsuitable for use in long term contracts or for commerce. Some examples of these imaginary digital assets are with us now in the form of Bitcoin, Ethereum and Dogecoin. 

Breaking down such imaginary digital assets’ traits into their constituent components helps us identify their value. Firstly, all of these assets in some jurisdictions (such as England and Wales) are protected by law for possession. However, the law cannot enforce ownership since no court can currently compel transfer upon these assets. No central authority or case law yet exists to control ownership. This uncertainty, therefore, creates questions as to whether the assets are truly suitable for institutional investors seeking the benefit and surety of long-term protection of the legal jurisdictions in which they operate.
The value of the above assets has no independent value other than what another person is willing to pay for them. This has led to wild swings in their perceived value. Interestingly, some of these Imaginary Digital Assets do attract considerable daily trading volumes in which billions of dollars can trade hands in just a few days or weeks. The challenge remains of using such Imaginary Digital Assets as a form of payment in a contract, as the value of such assets over the short to medium term is highly unpredictable. Such assets, then, have very limited utility value and, to add to the challenge that most of these assets are not backed by any tangible real-world assets, their value could plausibly go to zero at any time.

Source: Signet Classics
In summary, Imaginary Digital Assets would only appear to be suitable for speculative trading. This is not conducive for long term contracts or even short-term use in daily commerce.



In 2014, the Swiss and the European Union began negotiations on an institutional agreement which ultimately broke down. As of July 2019, this break down resulted in the Swiss losing their recognition of equivalence meaning that EU investment firms would not be able to trade Swiss stock, such as Nestle, Novatis, Rocche, Chubb etc trading on Swiss stock exchanges. A repercussion of this could have been a collapse in volumes with a severe impact on the stock exchanges. So, to protect against this happening the Swiss government prohibited shares of Swiss companies (which are listed or traded on a Swiss stock exchange) from being traded on EU exchanges. The impact of this was that, because Swiss companies were not traded on European exchanges, European asset managers could trade Swiss equites on the Swiss exchanges or indeed any other exchange that they were quoted.

A crypto hand of friendship

Source: TeamBlockchain Ltd
On 3rd February 2021, Switzerland’s financial regulator, FINMA, finalised what had been negotiated for a while with the UK and Switzerland, allowing Swiss shares to trade in London (given the UK’s departure from the EU). As a result of this, UK-based ETC group has announced that it will be offering Exchange Traded Products (ETP), so giving exposure to Bitcoin. This Bitcoin ETP (BTCE) is listed on the Swiss SIX exchange and will be available to trade as of 7th June on the Aquis Exchange in London and Paris. This will be the first time a cryptocurrency as an ETP has been available for trading in the UK or any other European exchange.
The Swiss and its Crypto valley for a while has seen to be more embracive of digital assets and a number of organisation have established foundations (a legal structure that it not able to be formed in the UK). While the Swiss and the UK are relatively small in terms of population both are globally renowned for their robust legal and financial service. If we are to see further collaboration between UK and Switzerland especially in the field of digital assets, we could well see these two jurisdictions attract considerable capital and talent thus tax revenues. It could also see more accommodative regulation and legal clarity. We have already seen the Swiss change their law to allow the issuance of digital securities without the need for paper based documentation. The UK continues to attract investors. According to Coinidol:  “Start-ups plus growth firms including blockchain and fintech companies operating within London attracted funding worth more than $10 bln which makes over a quarter of overall investments within Europe and is about 3 times the level in Paris (France), Berlin (Germany), Stockholm (Sweden) according to the data by Dealroom”.
% Change in deep tech investment by country/region (2019/2020)

Source: Tech Nations, Dealroom2021 
The Bank of England has announced the creation of a task force to consider issuing a sterling Central Bank Digital Currency. A true leap forward would be if either the Swiss FINMA or the UK FCA were to allow institutions to be legally able to commence issuing and trading digital bonds or digitally-wrapped equities, similar to those being offered by Bitterex and FTX in Germany. Unfortunately, while great progress is being made it is not universal. The FCA has recently announced that it is pushing back the deadline for when it will be required to process those firms which applied in December 2020 to handle crypto assets. Originally the FCA agreed there would be transitional arrangements until 9th July 2021, but this deadline has been extended to 31st March 2022. Does this mean any new firms wishing to register in the UK to be engaged with crypto assets will be delayed further? Should this be the case, the risk runs high that companies will move off-shore resulting in a loss in valuable tax revenue for the UK which, in a post COVID-19 world, is desperately needed. Even more importantly, will this, in turn, undermine overseas investors’ confidence in UK FinTech and go elsewhere?...


We have had a number of readers asking for a summary of the different types of digital assets and examples of each type. Keeping abreast of the various digital assets can appear daunting as different organisations quote competing numbers. claim there are 7,096 while Statista say that there are over 4,500.

Number of Digital assets globally 2013-2021

Source: Statista

Digital Assets have been issued by governments (Chinese digital Yan – which is currently being tested in more villages and towns around China), publicly traded companies (J.P. Morgan -JP Coin) but the fast majority have been issued by private companies many of which are start-up firms from all over the world.

Central Bank Digital Currencies (CBDC) or as the Economist are calling them “govcoins are a new incarnation of money. They promise to make finance work better but also to shift power from individuals to the state, alter geopolitics and change how capital is allocated.” The Chinese are well on their way rolling out the Chinese digital Yan and recently Mastercard has  announced that it is in talks with the Chinese authorities to have the Digital Yan accepted on its payment platform.
CBDC such as the Bermudian Sand Dollar- the worlds’ first national wide CBDC- use Blockchain technology, others such as the Chinese Digital Yuan do not use a Blockchain.

DeFi tokens
CNBC define DeFi as: “Decentralized finance, or DeFi, refers to a system of applications that aim to recreate traditional financial instruments with cryptocurrency”. 

Size of the DeFi market

Source: Coingecko

There have been a range of tokens created for the DeFi sector with the objective to enable decentralised financial services, without the need of a third party, such as a bank or the other intermediaries. DeFi tokens are rely on smart contracts i.e., computer coding and are designed to offer participants the ability to earn interest, get loans, trade etc without relying on any third party. This is a fast-moving sector and DeFi Tokens can fall and rise very fast which is what we are now seeing firms such as Novum Insights being set up to offer insight to the challenges and opportunities. With returns being offered as high as 84,000% p.a. which means that in a day your £1,000 becomes worth £3,300, (i.e., 230% per day), it is of little surprise that DeFi tokens have attracted so much interest. 

NonFungible Tokens (NFTs) in their simplest form can be described as digital collectibles. Typically NFTs are tied to art, photographs, pictures, music, or videos. 
They are called Non-fungible” as they are unique therefore can’t be replaced with something else.
NFT volume statistics in the last month


NFTs have recently been in the news with the auction house Christies selling a NFT for $69million making the artist Beeple the third highest living artist ever. In Q1 2021 it is claimed that over $2billion of NFTs have been sold.

Security tokens
Investopedia’s definition of traditional securities is: “financial instruments that hold some type of monetary value and represent ownership (stock), a creditor relationship (bond), or the representation of rights to ownership (option). They can provide a variety of financial rights to the owner of the securities, such as equity, dividends, or interest”. Security tokens are digital representations including fractions of an asset such a real estate, commodity, an equity, a bond, and non-physical assets such as data, AI. Traditional securities and security tokens value is linked to an...


This is the fourth in a series of articles by David Parsons, Co-Founder of TPX™ (TrustMe™ Property Exchanges)

In the world of digital assets there are two types, real and imaginary. The famous children’s story “The Wizard of Oz” which some academics believe was based on the 1890’s United States monetary debate of creating fake money e.g., silver compared to sound or real money e.g., gold, we will explore what differentiates real digital assets compared to imaginary ones. The difference between the two, defines how they store value, used in direct exchange, and the differences under the law. By understanding fully what these assets are, the real and imaginary values can be defined, risks segregated, and inherent uses can be identified.

Value from your imagination

Source: Flickr

Imaginary Digital Assets
Imaginary digital assets can be broadly defined as having no intrinsic, inherent or intuitive value. Generally, the only source of value is what other people believe the value to be based solely on their personal feelings of worth. This opens up the asset to be widely viewed differently by a multitude of people. Storage of value, perceived appreciation, tradability and protection under the law are very subjective. These traits lead to rampant speculation, uncertainty in value, uncertainty in protection of the law, tradability ultimately resulting in an asset unsuitable for use in commerce. Indeed one of the earliest units of account (exchange) as we more commonly known money were  Yap stones, yes stones “money of Yap, a small group of islands in the South Pacific. The Yapese have used giant stone wheels called rai when executing certain exchanges. The stones are made from a shimmering limestone that is not indigenous to Yap, but quarried and shipped, primarily from the islands of Palau, 250 miles to the southwest”.
Some examples of imaginary digital assets are Bitcoin, Ethereum and Dogecoin. Breaking down their traits into constituent components helps us identify their value. Firstly, all of these assets in some jurisdictions such as England and Wales are protected by law for possession, however the law can not enforce ownership since no court can enforce a judgment upon these assets. No central authority exists to control ownership. This uncertainty, therefore, creates questions as to whether they are unsuitable for long term protection from institutional investors seeking the benefit of legal jurisdictions in which they operate.
The value of the above assets have no independent value other than what another person is willing to pay for them. This has led to wild swings in perceived value although interestingly some of these Imaginary Digital Assets do attract considerable daily trading volumes. A challenge of using such Imaginary Digital Assets in a contract is the value over the short to medium term is totally unpredictable. Additionally, since these assets are not backed by tangible real world assets their value could plausibly go to zero.

Source: The British Museum (Money Gallery 68)

In summary, Imaginary Digital Assets would appear to be more suitable for speculative trading. This is not conducive for long or even short term use in daily commerce. So what can substitute them?

Real Digital Assets
As described above, Imaginary Digital Assets are just that, imaginary with no intrinsic value. Real Digital Assets are the polar opposite of imaginary assets e.g., real assets. They are protected in a court of law with enforceability of ownership globally. They have intrinsic value, e.g., oil, gold, diamonds, real estate, etc. They are relatively stable over a short to long term. More importantly, ownership can be moved easily and as swiftly as Imaginary Digital Assets with the same level of confidence and using cryptographic security. 
The key difference in Real Digital Assets is they represent claim to title on real world objects. Today in the gold market, gold certificates are issued representing...


2 Months Ago

The value of the global remittance market in 2019 was $554 billion and is expected to fall to $470billion in 2021 as a result of the impact from COVID-19. Nevertheless, it is still a huge quantity of money being transferred around the world, and often by some of the lowest paid workers. The World Bank claims: “If the cost of sending remittances could be reduced by 5 percentage points relative to the value sent, remittance recipients in developing countries would receive over $16 billion dollars more each year than they do now.”

It should come of no surprise, therefore, that there are a number of firms targeting the global remittance market, with some being less successful than others. Humaniq, which burst onto the crypto market with its ICO in 2017 (at one stage being valued at $95million, only to crash to its current $2million level) has almost disappeared, despite its almost evangelical supporters in the past. Others have been more successful, such as Electroneum which is in rude health and available to use in over 160 countries. It, too, carried out an ICO in 2017 and in early 2018 was worth almost $950million, now with a market capitalisation of $390million.
More recently, the Celo Blockchain has been designed to allow the transfer of money internationally via a mobile phone at a fraction of the cost of usual global money transfers and offers the Valora app. In February 2021, Celo announced it had raised $20million,  positioning itself as a way to expand and enable financial inclusion and even managing to attract Andreessen Horowitz as an investor. Then, in April 2021, Deutche Telecom announced it had joined the 130 other firms which were part of the Celo Alliance, as well as purchasing an unspecified number of Celo’s tokens. Interestingly, when making this latest announcement, Celo also reminded readers that “the resources used to run the Celo network are carbon-neutral”, once again demonstrating the importance organisations place on proving their ESG credentials.

In June 2019, Facebook grabbed the attention of not just the crypto market but central bankers when it announced that it, too, was looking to create its own digital coin (subsequently re-named Diem) to enable people to send money faster and cheaper than by using a bank. Facebook, with its 2.6 billion active monthly clients (more than three times the total population of the G7 economies), has the scale and the balance sheet to sponsor a digital coin. It is of no surprise that Diem has yet to obtain authorisation, and central banks the world over have been frantically researching how they could also have their own CBDC.  Meanwhile, Diem has decided to relocate from Switzerland and move back to the US and set up a JV with the US bank Silvergate, which has agreed to start using Diem. If Diem were able to launch and tap into the Facebook users and firms which advertise on its platform, this could have the potential to seriously undermine the use of many other national currencies. So how long might it be before Facebook starts offering Diem as a payment method to its 2.6 billion customers?

The Facebook-backed Diem coin

Source: Finance Magnates

In the past, money transfer services were traditionally carried out by banks but these days there now exist a range of other money transfer firms. Of interest, included here is just a small selection. Competition from companies such as Electroneum or Celo, which charge as little as $0.01 per transaction, means that businesses need to use technology and automate as much as possible to stay competitive - hence...


A 2-minute video looking Blockchain technology’s likely impact on the insurance sector

The insurance sector has been slow to embrace technology and the use of Blockchain technology is no exception, despite some potentially very interesting ways in which it could be used. In very simplistic terms, Blockchain technology is likely to impact the insurance sector in two predominant ways: operationally - i.e., making infrastructure much less expensive in terms of the day-to-day way it conducts its business activities, and as an investor - i.e., the way insurance companies hold as well as the types of investments insurance firms’ trade.

The publication Raconteur highlighted that Blockchain technology is able to help the insurance industry in three ways by:
  • streamlining third-party transactions

  • smart contracts and re-insurance

  • data management and security

Financial services companies, including the life assurance firms, are being faced with the challenge of the transition from LIBOR to SONIA (interest rate benchmarks) in order to ensure any contracts with third parties are correctly updated. In its own report on this, the Investment Association points out there are a number of factors to consider. So, in view of this, why not use this time to replace paper-based agreements and embed smart contracts? As Robert Crozier at Allianz Technology has stated: “Leveraging blockchain can offer a significant leap forward in terms of productivity, something which financial services providers traditionally struggle to scale”. Furthermore, insurance companies need to be prepared for IFRS-17 which comes into force as of 1st January 2023, as this will present another set of challenges for the insurance sector with firms being required to be more transparent. According to EY:Data, systems and processes will need to be shared between Finance and Actuarial departments”. The good news is, is that Blockchain technology has been proven to be highly effective at improving transparency and therefore ought to be able to support insurance firms to hold and share data more securely.

Meanwhile, the adoption of Blockchain technology, and the digital assets it can create, is not itself without real and perceived challenges such as the negative reputation crypto currencies earnt historically and the variety of legal and regulatory challenges that exist  - although regulation such as MiCA will offer greater clarity. The transition of data to be held on a Blockchain is potentially the biggest challenge, i.e., the need for management to change and migrate from many of the existing analogue paper-based processes and procedures to retaining held data, digitally, in a structured format. However, for those companies in the insurance sector that are able to meet this challenge, the potential rewards are substantial. The use of Blockchain technology to bring greater transparency will not only help firms comply with IFRS-17, but ought to create more trust. In time, higher levels of trust should lead to less uncertainty, thus lowering risks, and, in turn, affording the ability to offer lower insurance premiums. Subsequently, it is not difficult to see that once the initial reluctance to change is overcome, and just one or two firms in the insurance sector adopt the use of Blockchain technology, we are likely to see many more firms embrace this technology, too.


This is the second in a series of articles by David Parsons from TrustMe Property Exchange

You have no doubt seen in the press numerous types of digital assets, as with government money, there are many different types. With digital assets, some are used for the paying out of fees or interest on invested digital asset funds or goods and services, whilst others are used for long term storage of value and seldom used in commercial transactions. The main difference between these two types is that one depreciates in value and the other appreciates in value. 

The value of government money (such as US Dollars, English Pounds or Euros) depreciates in value and has negative interest rates when combined with monetary inflation. In an uncertain economy, people and businesses tend to hold on to their money while the economy improves. However, this behaviour weakens the economy further, as a lack of spending causes further unemployment, a drop in prices and lowers profits. This reinforces economic uncertainty whereby giving individuals and companies even more incentive to hoard their money. As spending continues to slow, prices drop again, creating incentives for people to wait as prices fall further. This deflationary spiral is counteracted with monetary policies e.g., quantitative easing from central banks, debt monetisation, social spending and, more recently, negative-interest rates. With negative interest rates, government money deposited at a bank forces depositors to pay the bank to hold their money. This means that depositors are penalised whilst borrowers enjoy earning money by taking out a loan. This has the perverse effect of penalising responsible behaviour (e.g., saving your money), instead promoting irresponsible behaviour i.e., borrowing for speculation (also known as ‘shorting the currency’).
The original hamster money
   Source: TPX
Depreciating or ‘Hamster Assets’
Some Digital Assets share the same value attributes but with much more volatility. Dogecoin is a good example. The coin has no inherent control over the money supply, so from an inflationary perspective its relative value as a unit of account can be capriciously increased in an uncoordinated method. Its rampant speculation, based solely on demand, leads to massively gyrating values of hundreds of percent in a short period of time. This type of asset can only be used in the moment as a unit of payment based on another unit of account e.g., USD, GBP, EUR. It cannot be relied upon for constant purchasing power in an employment, mortgage, or commercial contract.
  Appreciating or ‘Squirrel Assets’
Some Digital Assets are used almost exclusively for storage of value, with Bitcoin being a good example. The coin has control over its supply so, from an inflationary perspective, it’s relative value as a unit of account can be predicted and modelled precisely. Its speculation, based solely on demand, leads to gyrating values of hundreds of about 10 percent in a 24- hour period. Long term, its value has been increasing relative to government money. This type of asset can only be used in the moment as a unit of payment based on another unit of account e.g., USD, GBP, EUR. It is not useful in long term contracts due to its price instability but is very useful as a unit of payment at time of payment.

Gresham’s Law ,which has its origins back in medieval times, is a simple way of summarising ‘Hamster and Squirrel’ assets. Gresham’s law is the concept of a ‘good’ Digital Asset (an asset which is undervalued, or an asset that is more stable in value) versus a ‘bad’ Digital Asset (an asset which is overvalued or loses value rapidly). The law holds that bad assets drive out those...

Dfinity, otherwise known as the Internet Computer, debuted onto the crypto market on  May 10th with its ICP token, itself surging in value to over $90 billion on day one and briefly making it the third most valuable crypto globally. However, having reached a high of $791 it fell to $301, still giving the tokens a value of over $35billion. “The Internet Computer works in a very different way than any other blockchain,” Dominic Williams, founder of Dfinityrecently told Bloomberg. Today, a lot of blockchains run largely on the cloud. The Internet Computer runs entirely on dedicated hardware that are installed by independent parties around the world.Dfinity is a Swiss-based non-profit foundation, established in 2016 by Williams and having 188 employees based in the US, UK, Japan and Germany. Dfinity has no shareholders but is governed by holders of ICP tokens, and its blockchain is accessed using ICP tokens.

Expect to see a lot more of the Dfinity logo


Other blockchains, such as Bitcoin or Ethereum, rely on cloud-based computing services from technology bemouths such as Amazon, Google, IBM, Microsoft, Oracle etc. Dfinity will use a global network of data centres in France, Japan, Burkina Faso and Jamaica as it looks to break the strangle hold that a handful of big tech firms have on the internet, and potentially on Blockchain technology. Dfinity uses smart contracts and is following several other Blockchain firms, such as Binance smart chain, Cardano, Polkadot and Stratis now challenging Ethereum (which, due to its popularity, has become slow and expensive on which to carry out transactions).

In conversations Digital Bytes has with people from all over the world (who are typically over 35 and have business experience outside of crypto and the blockchain sector), a constant question arises: “How can some of these crypto businesses be worth so much?”, equally bemoaning: “I don’t understand how these cryptos attract the valuations that they do!” What we are seeing is the creation of a whole new infrastructure and way of doing business. Organisations such as Bitcoin, Cardano and Dfinity have been established as foundations and, instead of offering shares, they have issued tokens whereby enabling the buyers of such tokens to use their blockchain/services. The buyers believe that these foundations’ services offer tremendous growth opportunities and will become so popular that the value of the token prices will appreciate as they attract new buyers and users. It is not profitability that is driving the token price but faith that a limited number of tokens being issued by these foundations will result in the token price being driven up. 

To old-fashioned investors relying on balance sheets and earnings, they often overlook the fact that, in reality, stock markets are largely driven by sentiment. Indeed, they believe that certain companies’ products and services will be more popular than others in the future. Subsequently, even in the UK FTSE 100 index, we see long-standing, so-called secure and trusted companies, such as IAG (owner of British Airways) and British Telecom have Price Earnings (PE) of 2.68 and British Telecom a PE of 9.24 respectively. Conversely, the software computer services business, AVASAT, has a PE of 2,228 and OCADO a PE of 12,415. However, the one thing that many of the best-known publicly traded equities in the world yearn is the amount of turnover that many cryptos enjoy. In its first few days of trading, even a newcomer such as Dfinity attracted a 24-hour turnover of its tokens i.e., buyers and sellers had traded over $3billion worth of tokens in just a day. Since Dfinity, alongside other cryptos, can be traded globally 24/7/365 (subject to those jurisdictions that ban crypto trading), it would confirm there is no shortage of interest in this fast-growing new asset class. 

Meanwhile, who would have thought that 20 years ago a firm selling books would spawn the richest person in the world, Jeff Bezos? Furthermore, how many of you...