A Month Ago

Yes, which is the fourth biggest bank in India, has just helped raise fresh capital for a natural resource company, called Vedanta Ltd, and it is the first time in Asia that Blockchain technology has been used to issue corporate paper (CP).

Arun Kumar, Group CFO, Vedanta Group, said, “Vedanta will benefit from the digitized and simplified workflow which shortens the laborious process running into hours to just a few minutes and complete transparency that this platform offers to all stakeholders.”


Usually not backed by any form of collateral, CP is an unsecured money market-instrument issued in the form of a promissory note. The issuance of CP in India is substantially down, partially due to a lack of confidence and transparency in the banking sector. India’s banks were exposed in the last few years to the issuing thousands of fraudulent “Letter of Understandings” (LoUs), which triggered a liquidity panic across the market. People started looking for transparent and secure platforms for the issuance of LoUs and CPs. It is thought that Blockchain technology could help provide a solution. Blockchain can assist in the issuance of CPs, helping to reduce the turnaround time for issuance and redemption, while also increasing transparency for all participants, so boosting confidence.

#FrontierInsights
Banking
Blockhain
Capital
Deutsche Bank finally revealed what the market had been expecting for years, that it needed to reduce its cost base and become leaner and fitter against a backdrop of anaemic global growth.

This has led to Deutsche Bank cutting 18,000 jobs.
In April 2019, Christine Lagarde, Managing Director of the International Monetary Fund, told CNBC that cryptocurrencies and financial technology developments are “clearly shaking” the banking system. She also added, “We do not want innovation that would shake the system so much that we would lose the stability that is needed.”
However, like the story of the emperor who wore no clothes, the real problem is DEBT at a personal, corporate, and national level - and it is a global problem. Furthermore, with historically low-interest rates, the options available to central banks to stimulate economic growth in the event of an external crisis are extremely limited.
To give you a feel for the truly horrific state of affairs of how utterly out of control the debt in most major countries is, look at the US Debt Clock which illustrates in “real-time” how debt mountains are piling up in a selection of the very biggest countries in the world.
While the national debt numbers are a cause for concern, what is truly alarming is the foreign debt - otherwise referred to as the external debt as a percentage of Gross Domestic Product (GDP). This is the ratio between the debt a country owes to non-resident creditors and its GDP. External debt is the part of a country’s total debt which was borrowed from foreign lenders and is, therefore, vulnerable to the confidence foreign investors have in the ability of another country to keep paying its own debts.
The amount of debt owed to foreigners as a % of GDP for different countries has to be of concern - France 201%, Germany 145%, Italy 136%, Japan 105%, USA 87% and Holland with a massive 457 %. Asking for your money back, or not lending an indebted nation any further capital, potentially is one of the levers that foreign investors have in the event of the escalation of trade wars, disputes, and disagreements.
As we have seen, geo-political uncertainties can also trigger an enormous financial crisis e.g. the financial crash in 2008, and was also demonstrated by the spike in the price of oil in the 1970’s and the Wall Street crash in 1929 (which led to the global depression in the 1930s and was arguably the precursor to World War II).
Deutsche Bank estimates that the impact of the U.S - China trade wars has already resulted in over USD 5 trillion from the financial market, and the two largest economies in the world have yet to agree on terms. Given the uncertainty in Europe over Brexit, Greece has just voted-in a government that is going to reverse the spending cuts and tax hikes that it agreed to, as part of its financial bailout. If this leads to Greece getting back into financial trouble, will the Germans agree to bail it out again? Meanwhile, Italy looks to be headed for a confrontation with the European Union as its national debt spirals out of control to over $2.3 trillion (which is the...


#FrontierInsights
Banking
Cryptocurrency
Global Debt

2 Months Ago

On the face of it, why would Ripple (a cutting-edge technology company) want to invest in MoneyGram, which is a USA-quoted international payment transfer business?

Surely, Ripple has enough on its plate trying to replace the Society for Worldwide Interbank Financial Telecommunication (SWIFT), the platform that has been used by global banks since 1973 to make international payments? Ripple’s token price increased by over 35,000% in 2017, sparking a Cryptocurrency frenzy globally.


While MoneyGram can trace its roots back to the 1940’s, it was not until 2004 that it was trading as a separate entity. Unfortunately, despite its well-known brand internationally, it has been struggling of late as it looks to repay its $902 million of debt. It was also fined $120 million in the USA for failing to stop potential fraudulent payments. In January 2018, it had a $1.2 billion bid from the Chinese company Ant, blocked on the basis that it would enable the Chinese to have too much financial information on US citizens. MoneyGram’s share price has fallen from $17.81 in April 2017, to $1.67 in December 2018, although on the announcement of the investment by Ripple it did rise by 150% to $3.64.


While Ripple claims that it can help MoneyGram improve the efficiency of payments, cutting costs and reducing the time it takes to send money globally, I suspect it is MoneyGram’s existing distribution network that appealed to Ripple…..


Will we see more new Crypto firms buying into more “old money” companies as they look to introduce their new technology into existing customer-bases?

 

#FrontierInsights
Alternative Investments
Banking
Cryptocurrency
The Chair of Russia’s Central Bank, Elvira Nabiullina, has admitted that various central banks are investigating the possibility of issuing a Central Bank-backed Digital Currency.

The general stance in Russia towards Digital Currencies seems to be softening, as it had been very anti these assets. It was only just last week in Russia the Central Bank admitted that it would consider using a Cryptocurrency, backed by gold, for international settlements. Russia currently holds over $492 billion of gold which, if Digitised, some could be used to settle outstanding international debts and be a way around the economic sanctions Russia is subject to.
More and more governments are looking at Digital Currencies as a way to create more transparency, so minimising their “black economy” and, by using Smart Contracts, they could offer the potential to introduce an automatic collection of taxes - which would be faster and potentially more efficient for revenue authorities. 
Interestingly, Russia has a lot to gain from embracing Digital Assets as it is a big producer of commodities. These assets typically only trade for a few hours a day and only 5 days a week. A Digital Asset pegged to different commodities could help reduce the volatility of these commodities, and provide an alternative way for Russian companies to raise capital, so getting around the aforementioned sanctions. In Germany, BSAF’s new electric car battery factory, which has been built to use commodities such as palladium and produced by Nornickel (the huge Russian commodity miner), would potentially benefit from Digital Assets. This has not been lost on Nornickel as it has been discussing with Swiss regulators the idea of establishing a digital platform to offer tokens based on palladium and nickel. 
According to reports in Bloomberg, Vladimir Potanin, the Russian billionaire and CEO of Nornickle, is interested in creating new Cryptocurrency backed by palladium.
These Digital Assets could allow Nornickel to raise capital and potentially avoid sanctions.
Anything that can reduce the costs of trading in commodities has to be welcomed, and such Digital Assets could offer an interesting New Asset class for investors, as well as creating potentially greater liquidity and low commodity volatility for existing institutions.
Indeed there had been some reports, in February 2019, that Russia would develop an oil-backed Cryptocurrency. 
More recently, on the back of the announcement from Facebook about its new Libra Digital currency, Russia has said that it will not legalise Libra. In an interview with local radio station Kommersant FM, Anatoly Aksakov, Chairman of the Russian State Duma Committee on Financial Markets, said “With regard to the use of Facebook cryptocurrency as a payment instrument in Russia at this stage – my opinion is that. in our country, it will be banned.” 
Unfortunately, recent reports that the biggest ever hack of a Cryptocurrency exchange on  Coincheck, in Japan, (where it lost $530 million in January 2018) will not endear any regulators, including Russia, to Cryptocurrencies.
Nevertheless, Russia’s Agency of Far East for Investments and Exports is reported to be looking at creating a Cryptocurrency hub in the Chinese Russian border, on an island called Bolshoy Ussuriysky. This island falls under the national border of both Russia and China! Has Bolshoy Island been chosen for...


#FrontierInsights
Banking
Blockchain
Digital Assets

3 Months Ago

Bank of New York Mellon (BNY) is the largest custodian in the world, with assets in its custody of $34.5 trillion, and has been experimenting with Blockchain technology since 2016.

However, the first firm it has agreed to look after it’s Digital Assets on a public Blockchain is Bakkt. Bakkt is a company backed by International Clearing Exchange (ICE) which, in turn, owns and runs over a dozen regulated stock exchanges around the world. BNY is keen to emphasise that it is currently providing “safekeeping of Digital Assets for Bakkt” and not providing a custody service for them, partly because BNY feels the need to have far more regulatory clarity before it can offer full custody services.

One of BNY’s bigger custody competitors, Northern Trust, is also looking at offering custody for Digital Assets (according to Forbes) as it realises it, too, needs to keep ‘up to speed’ with how it may be able to offer services for those that wish to deal with this fast developing new asset class – Digital Assets. However, it is not just both the massive and traditional existing custodians who are looking at offering custody services for Digital Assets. Anchorage is a newly launched, crypto-custody firm backed by Silicon-valley based and highly successful VC investors, Andreessen Horowitz.

Bank Frick is a private bank based in Liechtenstein which now has a range of Blockchain-banking services, including Digital Asset custody. BitGo, from California, has been offering for Bitcoins a qualified custodian service since 2018. The California-based company is using its six years of experience as a ‘security-as-a-service provider’ to provide financial institutions and fund managers with Digital Asset custodianship. Also from California, San Francisco-based Digital Asset exchange and wallet provider, Coinbase, added a crypto custody service to its offering in 2018. Coinbase Custody is a qualified custodian which enables institutional investors to store over 30 different Digital Assets securely with a regulated and insured third-party storage solutions provider. Regulated Digital Asset exchange, Gemini, launched its qualified custodian service for institutional investors also in 2018.

Fidelity Digital Assets is the recently launched crypto-venture by Fidelity Investments Inc, which has $7.2 trillion of clients assets. The New York-based asset manager launched its crypto custody service in March 2018. Also in New York, Digital Asset exchange itBit launched a crypto-custody service last year to complement its exchange and Over The Counter (OTC) business. As a regulated New York State Trust Company, itBit ensures that all customer assets and funds are fully backed by mandatory capital reserves.

Alternative asset custodian Kingdom Trust, launched in 2017, was one of the first custodians to provide Digital Asset storage solutions. Currently, the Kentucky-based company has become a market-leading qualified Digital Asset custody service, with insurance provided by Lloyd’s of London. Koine, launched in June 2019, offers Digital Asset custody and settlement for institutional clients. The London-based start-up is targeting trading venues, institutional investors, Digital Asset issuers, and market infrastructure providers.

Prime Trust is a Las Vegas-based qualified Digital Asset custodian which supports Bitcoin, ETH, and ERC20 tokens. Finally, Xapo is one of the longest-standing Bitcoin storage solution providers. In the past five years, the Hong Kong-based company has grown its assets in storage to over 700,000...


#FrontierInsights
Banking
Blockchain
Financial Services
Digital Assets
The Bank of England has been working with a number of FinTech companies exploring possible uses for Blockchain technology, as it looks at possible solutions to upgrade the Clearing House Automated Payment System (CHAPS) platform.

CHAP processes £500 billion a day as it transfers money between banks in the UK. It was first introduced in 1984 but, at a cost of £35 per transaction, cheaper, faster and more efficient alternatives are being researched.

One of the firms that the Bank of England has been working with is Clearmatics, which raised $12million last year, and now Reuters has reported that a consortium of some of the world’s largest banks are looking to invest a further $50 million into Clearmatics.

Clearmatics has been working on a project which aims to create a more efficient clearing and settlements platform and hopes to have it running by 2020.

BNY Mellon, ICAP, Deutsche Bank, and Santander all joined UBS bank and Clearmatics on the “utility settlement coin” (USC) project. Clearmatics founder, Robert Sams, said: “USC is as a form of digital cash that is fully backed by cash assets at the central bank.” It is understood USC would be like a “central bank-backed cash digital equivalent” that would run on a platform powered by Blockchain Technology, i.e. it would be convertible at parity and backed by cash assets held at a central bank. Therefore, using the USC would be the same as spending the fiat currency it would be paired with. However, in order to be successful, the USC project will need to have multiple central bank approval and prove that it can be scalable to handle potentially millions of transactions securely and accurately on a daily basis. This potentially will require different jurisdictions to agree on the legal compliance and potential tax treatment for this Digital Asset, which could pave the way to help others adopt Digital Assets.

Meanwhile, The Central Bank of The Bahamas (CBoB) is looking to launch its own digital currency by 2020, as the bank has announced that it has selected a company called NIZA to provide the technical expertise for its digital currency. The CBoB’s aim is to have a digital currency, so enabling its citizens and businesses to have an affordable electronic payment system and to have cheaper, easier access to global markets.

In Sweden, where the use of cash is the lowest in Europe as more and more people use credit and debit cards, the Swedish Riksbank believes that an e-krona (a state-backed national currency using Blockchain technology) could be a promising and reliable substitute. But Riksbank is not rushing to introduce this asset to the general public in the short term. These are clear examples of how Digital currencies are being driven “top-down” (i.e. by governments and global banks) as opposed to Digital tokens being driven “bottom-up”(start-ups issuing cryptocurrencies via Initial Coin Offerings (ICOs)).

#FrontierInsights
Banking
Digital Currency
Fintech

4 Months Ago

The market for offering custody services globally is massive, with the top 15 providers having over $131 Trillion of assets in custody.

As we see more institutions investing in Digital Assets, we will need to have organisations offering custody services to cater to this new asset class.

This opportunity has not been lost on custody providers, as one of the largest custody providers Northern Trust has for a while been rumoured to be launching a custody service for Digital Assets. Fidelity, Goldman Sachs, and Coinbase are already offering custody services for Digital Assets.

Intercontinental Exchange (ICE), that runs 12 different stock exchanges and with a revenue of over $6 Billion, has just acquired DACC which offer Digital Asset custody services for over 100 Cryptocurrencies for 13 Blockchains. It is understood that one of ICE’s subsidiaries, Bakkt, has applied to the New York Department of Financial Services to be a trust company, which will enable the firm to serve as a Qualified Custodian for digital assets.

Kingdom Trust, which is a US-based custodian, was the first custody provider to get Lloyds of London to ensure its Digital Asset custody service last year.

Nomura, the massive Japanese bank with over 26,000 staff and offices globally, announced last year a joint venture with Ledger and Global Advisor Holdings, (a Cryptocurrency manager based in Jersey in the Channel Islands), to launch an institutional-grade custody solution for digital assets. The three parties have established a company called Komainu, which is looking to offer custody services that will also cover the insurance, regulation, and certification of the Digital Assets that it offers custody services for.

It would appear that we are seeing a reversal to where we were before asset managers relied on nominees and custodians. In the 1970s, due to the huge amounts of paperwork that bearer securities created, nominees like DTCC were created. Interestingly, Digital Assets which can be traded and transferred using Blockchain technology, are not dissimilar to bearer securities as records of the ownership of these assets are not held by a third party.

This means the “bearer” (the person presenting the asset), is paid directly, should they wish to sell. Blockchain technology is able to record the transfer digitally of assets, efficiently and potentially at a cheaper price, and without the need for many of the current intermediaries - all of whom charge fees for their services, so adding to the friction costs of trading securities.
There is an argument that with the creation of Multisig wallets custodians are no longer required. A third party, like a trustee, could be appointed and authorised the transfer of assets from a digital wallet under agreed terms and conditions.

This type of trustee service is currently being investigated by trustee providers, like PTTrustees, for the holders of digital assets. So we can see that, as the adoption of Digital Assets increases, there are new as well as traditional custody service providers beginning to offer a range of services for pension funds, asset managers and banks, and no doubt there will be more to follow…

It is of note that trust companies are moving from The Channel Islands, where they...


#FrontierInsights
Banking
Digital Assets
https://cointelegraph.com/news/ices-bakkt-annou...dium=email
Société Générale issued a $112 million corporate bond last week using smart contracts on the Ethereum Blockchain - a public, not a private, permissioned Blockchain.

This was a surprise as many institutions thought that it would be better, from a regulatory standpoint, not to use a public Blockchain, but a private one. If you were to buy $100 of Société Générale’s bond which it has just issued, you could be due a coupon/income of $2 every six months. However, the cost to receive this income could be greater than the actual payment due. This is because the cost to receive your coupon could be as high as $40, since the cost of processing the income payment on the Ethereum Blockchain maybe this much.

Therefore organisations believe that a private Blockchain, where potentially the price of transactions can be controlled, is a more suitable Blockchain.

Société Générale now joins companies like BVVA, Commonwealth Bank of Australia and Nivaura, all who have issued bonds using Blockchain technology. There has been a lot of attention given to how Security Token Offerings (STOs), are going to enable equities to be traded 24/7, and enable companies to raise capital. However, the bond market is $40 Trillion while the equity market is $30 Trillion in size, so there are huge opportunities for more banks to start issuing bonds using Blockchain technology. If it is proven, it is indeed more efficient, prone to fewer errors and from a compliance standpoint, better, and cheaper for organisation to issue bonds using Blockchains. We could see the whole bond market being shaken to its core!

Although the European Banking Authority and Moody (the credit rating agency), have warned that if we saw the widespread adoption of institutions using one Blockchain, this could lead potentially to counterparty systematic risk. Moody has also said that using Blockchain technology could reduce the risk of errors and afford greater transparency, as all parties involved would be using just one set of records. If this is the case, then the biggest issuers of bonds are governments, so they have the most to gain. Since, if a bond issued on a Blockchain has a better credit rating like Moody is proposing, governments may be able to offer a lower rate of interest on the bonds they issue, thus generating potentially significant savings. If governments start issuing bonds on Blockchains this will also act as a powerful incentive for regulators in different jurisdictions to offer clearer guidance. This, in turn, could accelerate more organisations to use Blockchain technology when issuing bonds.

#FrontierInsights
Banking
Finance
https://www.coindesk.com/societe-generales-work...a-big-deal
In a recent report from Oracle and Finxtra Research, “Key Drivers, Emerging Trends, and Development in Corporate Banking”, they discussed how Fintech start-ups are increasingly becoming a threat to the status quo that traditional banks have enjoyed for years.

One of its key findings was how Artificial Intelligence (AI) and Blockchain technology are able to securely store, interrogate, capture, and validate data, while removing the need for multiple records so improving the efficiency of data management . As many of the banks’ customers are becoming more global, and as economies are becoming more digital, banks are being asked to provide faster services - whether that be for cash or credit management, while improving the efficiency of money transfers at ever lower transaction costs.

One of the key factors is for a bank to maintain its customers' trust and confidence, as banks have traditionally been a place to store cash, borrow money and transact. However, in a survey carried out in the USA by Gallop, it has seen since 1979 to 2018, that confidence in banks has fallen from 60% to 30%.

Banks’ public image and trust, since the financial crisis in 2008, has been severely challenged as summarised by a quote from The American Banker magazine, “A lack of widespread trust raises questions about banks’ relevance in the digital age and leaves them open to further political attack.”

In a report back in 2015 from the World Economic Forum, it stated that it believed “Blockchain technology, replaces the need for third-party institutions to provide trust for financial, contract and voting activities”. Traditional banks, with their legacy IT systems, are struggling to adapt. FinTech firms that do not have diverse hard and software systems to maintain and integrate are able to embrace technologies like Blockchain and AI and offer solutions. This has led to traditional banks moving away from building more in-house solutions and turning to nimbler Fintech firms.

If we look at ‘Know Your Client’ (KYC) costs, firm Consult Hyperion states it can cost a bank between £10 to £100 per client to carry out these checks which, depending on the riskiness of the client may need to be done every year. While carrying out these checks, vast quantities of personal data need to be collected and then securely stored which creates its own set of challenges. Alternatively, KYC checks can be carried out by firms like Blockpass, which can offer KYC services for less than £2 per person, and it does not store the personal data, so does not have the onerous burden and complexities around storing of this information.  In the area of fraud detection, Teradata is an AI firm selling fraud detection solutions to banks. It claims it helped Danske Bank to reduce the bank’s false positives by 60 %, and this was expected to reach 80% as machine-learning continued improve the model. At the same Teradata has increased detection of real fraud by 50%.

#FrontierInsights
Artificial Intelligence
Banking
Fintech
https://www.finextra.com/finextra-downloads/res...pril19.pdf
Bloomberg reported last year that The Peoples Bank of China (PBoC) was looking to launch its own Digital currency, which would enable it to have more control and be able to track transactions, be able to reduce the Black market economy and even automatically refuse companies loans who had been blacklisted.

The PBoC has registered 78 patents since 2016, according to Bloomberg. In October 2018, PBoC was looking to recruit staff at its Digital Currency Institute, who have experience in software and encryption law. It would appear that China wishes to create a Digital Currency that is centrally controlled, arguably the opposite originally planned for Bitcoin when it was created in 2008!

China is looking to launch its own Digital CurrencyTo be called “Digital Currency for Electronic Payment”, and the governor Zhou Xiaochuan of the PBoC, was recently quoted saying its focus would be on “convenience, rapidity, and low cost in a retail payment system while taking into account security and protection of privacy.”

Meanwhile, ahead of a G20 meeting in Osaka in Japan in June this year, the Japanese have launched a manual for Cryptocurrency regulation as it looks to try and coordinate the approach that countries currently take. In some jurisdictions, regulation is minimal, while others take a more stringent or draconian approach.

#FrontierInsights
Banking
Cryptocurrency
Digital Currency
Finance
https://coinnewstelegraph.com/china-is-set-to-a...-populace/
The giant Dutch bank, ING, has called upon the cryptographic skills of Stanford University in California, University College London, and start-up Blockstream, to offer greater privacy when transferring Bitcoin, by hiding certain transaction details.

ING are calling this new method ‘Bulletproof”, and claim it is 300 times more efficient than some other methods of sending Digital currencies. Interestingly, this new method may be extremely helpful as a way to record data using Blockchain technology and still comply with GDPR regulations across Europe.Keeping user-information and data private has been a real challenge for exponents of Blockchain technology, and has led to some organisations turning to private or permissioned Blockchains.

Bulletproof Blockchains could also be ideal for security tokens, especially where the underlying asset is a publicly quote equity or may contain price-sensitive information. It would appear that, as it is now possible using ING’s bulletproof system, it could be possible to carry out transactions using a Blockchain, but not disclose the price of the asset, who is the buyer or seller, or how much is being transacted.

This would be a real breakthrough and would help to allay compliance officers’ concerns within asset managers and banks about having price-sensitive information in the public domain.

Enthusiasts of Digital Assets believe that if user's transactions can be made private and not available to prying eyes, it might help minimise scams and frauds, and attract more investors.

#FrontierInsights
Banking
Blockchain
https://cryptosumer.com/2019/04/15/ing-bank-is-...ockchains/

5 Months Ago

Fedwire is a real-time settlement system used by the US Federal Reserve and by US banks to settle financial transactions.

To maintain confidence in the financial markets, it is vital that Fedwire is always available, so it was not good news to see this comment posted on Reddit on 2nd April 2019–Today the United States Federal Reserve experienced an unexpected issue and went completely down. No incoming or outgoing wires went through in the entire country. It’s still unresolved and yet not one single news outlet seems to be reporting on this and the massive impact it has.”

Fedwire processed over $2.8 Trillion of transactions daily in January 2019, but as they’re a centralised system, it will always be more vulnerable compared to a Decentralised system. Bitcoin was created as a decentralised system and has only been unavailable for 0.02% of the time since it first started over ten years ago. Bitcoin now has more than 10,000 nodes, so it is doubtful they will all be non-operational at the same time, thus the attraction of a decentralised mode of operation.

Several previous Fed bank payments experts have been recommending for a while that the Fed updates its system, so maybe it will look at Blockchain technology to be part of its upgrade?

#FrontierInsights
Banking
Financial Market
https://bitcoinist.com/federal-reserve-offline-...in-uptime/
The use of Blockchain technology, though not appropriate for all organisations, offers a powerful tool to cut costs, improve efficiency, increase transparency, and hold and share data using cryptographic security.

In an increasingly digital ecosystem, where the flow of money, data, identity and information is ‘in play’, we need secure digital solutions.

Central Banks have been encouraged to look at Digital Currencies by IMF MD Christian Lagarde, saying, “digital currencies issued by central banks can reduce the risk of global financial instability by eliminating the psychological motivation behind a bank run”. 

Blockchain technology, along with Artificial Intelligence, Internet of Things, Big Data and Machine Learning, will all help as economies migrate from paper, manual, and analogue processes to digital processes.

Several countries have recently announced their digital intentions, including UAE / Saudi Arabia, Iran, Venezuela, Cambodia, Lithuania and the Eastern Central Caribbean Bank.

Central banks have quoted various reasons as to why they are looking to issue their own digital currency – to tackle their black economy, to reduce their reliance on the “petrodollar”, and to improve the efficiency of transferring money internationally.

#FrontierInsights
Banking
Blockchain
Digital Currency
https://www.coinspeaker.com/wef-40-central-bank...ocurrency/
London School of Economics (LSE) research associate Dr Garrick Hilemanbelieves that central banks stockpiling Bitcoin could result in the coin rising in value.

Given the low of volatility in Bitcoin prices currently, as seen below, and the fact that Bitcoin finally seems to be consolidating above $4,000, are we about to see the much-heralded next leg up in Bitcoin prices?


Source :
https://bitvol.info

There has been much talk of the next global recession being imminent. Which may explain why the  Russians, amongst others, are stockpiling gold thus resulting in
January 2019 seeing the net biggest monthly accumulation of gold for central banks since January 2002.

Further evidence of a potential recession has been the yield curve in the
US inverting i.e. short term interest rates are now higher than long term rates - historically a predictor of recessions.  Another indicator followed by many is the Shiller ratio, which seems to be showing that S&P 500 stocks are not cheap:

So where do central banks invest? Could Crypto Currencies like Bitcoin be seen as a hedge - an alternative asset for them to hold ahead of the next economic downturn?


Interestingly over th
e last four years, Bitcoin continues to have a better Sharpe ratio (adjusted return) than many other assets. A fact that will not have been lost on many!

As a sign that Bitcoin’s fortunes are beginning to improve, OKeX, a Maltese Digital Asset exchange, recently reported that it had turned over
$2.4 Billion in a day and over 56% of its traders are now long of Bitcoin!

If Central banks start accumulating Bitcoin and we see a rise in its price this will significantly help many of the 5,200+ Digital Assets which have been issued, as many of them were funded by investors using Bitcoin.


Therefore, a rise in the value of Bitcoin ought to inflate the price of many other Digital Assets and help improve their balance sheets...

#FrontierInsights
Banking
Bitcoin
Digital Assets
https://www.forbes.com/sites/billybambrough/201...03ad57380b
Yes, $2 Trillion was laundered by regulated banks last year according to a recent report, yet banks remain resistant to offer banking services to firms involved in Cryptos.

Despite claims that 90% of all US$ banknotes have traces of Cocaine on them, banks and regulators still believe those in our society that want to carry out nefarious activities are using Crypto, not cash. But why would someone carrying out a criminal activity want to use a form of payment that leaves a digital footprint - a Crypto, when cash leaves no traces and banks seem to still be accommodating these activities?

Since 2008 banks have been fined over $26Billion JUST for KYC/AML non-compliance, with the USA regulator being the most active. While in Europe the UK’s FCA has imposed the largest number of fines. It is no surprise that many claim the current system needs to change, and while it was refreshing to see the FCA being proactive creating the FCA sandbox in 2016 where it allows regulated companies to trial new technology, which hopefully can improve the robustness of the financial system, more recent moves have called their ongoing commitment to innovation into question.

#FrontierInsights
Banking
Crypto
Cryptocurrency
https://www.btcwires.com/c-buzz/regulated-banks...-adoption/

6 Months Ago

SWIFT handled on average over 34million messages a day last December and is used by many international banks to settle FX and cash positions daily.

SWIFT has had a virtual a monopoly with global banks but has been facing increasing pressure from RIPPLE, the third most valuable cryptocurrency which is capitalized at over $13 Billion, and at one stage in 2018 had grown in value by a whopping 37,000% in 12 months. SWIFT is now using Blockchain technology and is working with the Singapore stock exchange, HSBC, Standard Chartered, DBS and Deutsche bank to create a more efficient way to handle share voting. The majority of publicly quoted shares are held in nominee accounts and proxy voting has become increasingly difficult and cumbersome.

The new e-voting service SWIFT are developing is designed to be faster and more transparent and reduce errors which in the past have proved to be very expensive. In 2016 it cost a US brokerage over
$190million to compensate shareholders due to share proxy errors, as the current system is largely paper-based.

#FrontierInsights
Banking
Blockchain
https://www.chainbits.com/news/swift-partners-w...in-voting/
BlockFi, who raised over $54million last year has launched a high-interest account paying 6% p.a. if they hold your Bitcoin or Ethereum assets.

The reason they can pay such high-interest rates is because they lend out your Crypto to other institutions but more importantly, your Digital Assets are held by a custodian independent of BlockFi called Gemini Trust Company. Gemini was co-founded by Cameron and Tyler Winklevoss and is regulated by the New York Department of Financial Services.

This new way to hold Cryptocurrencies is another example of how the traditional and the Digital worlds are converging, as BlockFi are offering in effect an instant-access, high-interest account to depositors while providing institutional asset lending facilities. Because the transactions are stored on a Blockchain there are fewer intermediaries involved, it is secured using military-grade security and not reliant on one company’s server/computer as the records will be distributed thus reducing concerns over disaster recovery.

#FrontierInsights
Banking
Bitcoin
Blockchain
Cryptocurrency
Financial Services
https://www.newsbtc.com/2019/03/06/highest-yiel...-interest/
Bank of Iwate, Aomori Bank, Akita Bank, and Yamanashi Chuo Bank, together with IT firms including AIT Corporation, IBM Japan, and NEC, have established “Fitting Hub’.

Although they have been working on this project since 2017 the first service they are going to roll out is an ‘electronic delivery service’ designed to send and receive data from different institutions on one screen.

This is a significant development and will not go unnoticed by other banks as
Japan has four of the largest banks out of the top twenty banks in the world and still remains the third-biggest economy. The banking industry continues to search for ways to cut their cost base and be more efficient hence the impressive rise of the Fintech sector globally.

It was only in September 2018 that Money Tap the first Blockchain powered money transfer system was licensed in Japan as a way to cut the cost and time it takes to make payments within Japan in the banking system. The granting of a license to Money tap meant that Japan was the first major economy to use Blockchain technology to carry out transfers between banks.

#FrontierInsights
Banking
Economy
https://www.yahoo.com/news/japanese-banks-unite...00409.html
Signature bank of New York has announced that it is now offering bank accounts for businesses based in Bermuda that deal in Digital Assets.

There are believed to be over 60 companies that initially this will be of great assistance to, as despite the Bermuda government changing it’s law no locally based bank offer accounts in the Crypto sector. However, Signature bank claims that they are signing up companies that are also not involved with Cryptos.

The lack of banking facilities is a major hurdle facing businesses that deal in Digital Assets globally as it is extremely difficult to get a bank account in many jurisdictions around the world.In the UK Clearbank  which is the first bank in over 250 years to be granted clearing bank status, is one of the is one of the few banks to offer bank accounts to firms engaged in Digital Assets but the company needs to be FCA regulated or in the process of applying to the FCA to be accepted by Clearbank.

#FrontierInsights
Banking
Cryptocurrency
Digital Assets
https://coinfomania.com/signature-bank-services...n-bermuda/
Nivaura has secured $20m of fresh capital, with investors including The London Stock Exchange (LSE), Santander and the law firm Allen and Overy. LSE will also have one of their staff joining the Nivaura board.

Nivaura was the first company in the world in 2017 to issue a bond for a client using a Blockchain while in the UK FCA Sandbox and they claim that the time needed to issue bonds could be reduced by 60% by using Blockchain technology. They have recently been followed by BVVA in Spain who issued a bond using Blockchain technology to raise $160m.

If it proves to be so much cheaper to access the debt markets using Blockchains then bonds could become an option for SMEs to raise capital, which in turn could be competition for the Peer 2 Peer lenders...

#FrontierInsights
Banking
Capital Markets
https://www.forbes.com/sites/michaeldelcastillo...1d0d146e46
Signature bank of New York has announced that it is now offering bank accounts for businesses based in Bermuda that deal in Digital Assets.

There are believed to be over 60 companies that initially this will be of great assistance to, as despite the Bermuda government changing it’s law no locally based bank offer accounts in the Crypto sector. However, Signature bank claims that they are signing up companies that are also not involved with Cryptos.

The lack of banking facilities is a major hurdle facing businesses that deal in Digital Assets globally as it is extremely difficult to get a bank account in many jurisdictions around the world.

In the UK Clearbank  which is the first bank in over 250 years to be granted clearing bank status, is one of the is one of the few banks to offer bank accounts to firms engaged in Digital Assets but the company needs to be FCA regulated or in the process of applying to the FCA to be accepted by Clearbank.

#FrontierInsights
Banking
Blockchain
Crypto
Digital Currency
https://coinfomania.com/signature-bank-services...n-bermuda/
Julius Baer with $382 Billion under management plans to offer access to digital assets through a partnership with Swiss start-up SEBA Crypto in the latest move into cryptocurrencies by a Swiss private bank.

Julius Baer markets head Peter Gerlach said, “We are convinced that digital assets will become a legitimate sustainable asset class of an investor’s portfolio,”

This announcement is just another sign of traditional banks offering Digital asset services as their clients are asking how they can get involved in this sector, so helping this new asset class to be more widely accepted. It follows the announcement that of the JPMorgan Coin and  Fidelity Investment and Goldman Sachs both offering Crypto custody services to its clients and no doubt we will see more institutions getting involved…

#FrontierInsights
Banking
Cryptocurrency
Digital Assets
https://www.ccn.com/major-swiss-bank-julius-baer-crypto
Banco BTG Pactual is to launch a Digital Asset linked to distressed Real Estate and aims to raise $15m.

BTG will pay investors a share of the rental income from the property and expects the returns to be approximately 15% p.a. BTG claim they decided to launch the token as Crypto investors are looking for high-risk investments. The bank is going to provide liquidity using their own capital and at $15m is a  sign this large Brazilian bank is just putting a toe in the water to test the appetite for this type of offer.

#FrontierInsights
Banking
Crypto
https://www.bloomberg.com/news/articles/2019-02...cked-token
Mizuho Bank who are part of Mizuho Financial Group with 30,000 employees and $1.8 trillion of assets is following Goldman Sachs and JP Morgan and launching a Stablecoin linked to the Japanese Yes in March 2019.


Mizuho will be launching the J-Coin in conjunction with 60 other Japanese institutions and say there will be no transaction charges between the banks and the J- Coin wallets. It plans to charge merchants/shops much less than the 2% to 5% transaction fees that credit cards currently charge in order to offer a competitive advantage and gain traction.

The Digital Asset market in Japan is well established with e-commerce giant
Rakuten, Japan’s equivalent of Amazon, and Line, a messaging App like WhatsApp, having launched their own Digital Assets already.

#FrontierInsights
Banking
Bitcoin
Digital Assets
https://www.fxstreet.com/cryptocurrencies/news/...1902211402