A Month Ago

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)).

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Banking
Digital Currency
Fintech
Softbank Vision fund is a massive Venture Capital fund, having participated in more than 530 funding rounds, investing over $82 billion in 200 different companies globally.

It is based in Dubai, and those that have invested in Vison fund include Apple, Larry Ellison from Oracle, and the Saudi Arabian sovereign wealth fund. Softbank’s Vison fund crystallised a $7 billion profit this week, as Uber carried out its IPO, because Softbank had invested in the taxi firm a few years ago. Softbank has recently reported a profit of over $17 billion, considerably helped by its Vision fund.

This week Softbank’s Vision fund invested in two firms that are using Blockchain technology in the financial services sector, buying $900 million of Wirecard, which is a German publicly quoted company. Softbank also invested $800 million into Greensill, doubling its value compared to last year from $1.6 billion to over $3.5 billion.

This now arguably makes Greensill more valuable than Oak North, which is valued at $2.5 billion, so Greensill is now the UK's most valuable FinTech company. This is impressive given Greensill was only established in 2011!


Wirecard is a digital payments company which has been active in the Crypto payments sector, having worked with the company Crypto.com. Crypto.com is based in Hong Kong and offers Visa debit cards, which it claims are the first Crypto debit cards to be made available in Asia. Wirecard is also working with Telegram, which was one of the largest Initial Coin Offerings (ICO) to date, as it raised over $1.7 billion last year. Telegram is using Wirecard to build a digital global payments platform to create TON, which is to be Telegram’s digital token.

Greensill was set up in 2011, and its HQ is in the UK with offices also in the US, Germany, Australia, and South Africa. Greensill provides supply chain funding (also called working capital finance) to help companies’ cash flow. Greensill also uses Blockchain technology and sees huge potential for further growth, as it claims that over $55 trillion of cash is locked up in businesses that it aims to target.

The above graphic illustrates the types of opportunities that Greensill states are available for it to help finance. Greensill offers businesses early payment based on their invoices, due to be paid at a later date by large companies and government agencies. The payment fee to Greensill to provide financing is 1%, and Greensill is paid in full by the suppliers' customers when the invoices are settled.

However, the founder of Softbank, Masayoshi Son, despite proving to be a canny investor and making billions from holdings in Uber, Nividia, WeWork, and Flipkart, had to nurse a reportedly $130 million loss on Bitcoin. It is alleged that the Japanese billionaire Masayoshi Son bought Bitcoin when it was trading close to $20,000, and then sold his Bitcoins less than a year later when the price was closer to $5,000. So just goes to show even the best investors do not always get their timing spot on.

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Fintech
Investment

2 Months Ago

In 2017, over $6.2 Billion was raised by Initial Coin offerings (ICOs) and, of the 875 companies that issued a Cryptocurrency, many were small start-ups using Blockchain technology i.e. “Bottom Up”.

However, we are now seeing multinational corporations like IBM, BMW, Google, London Stock Exchange, Amazon, LVMH, BP, Alibaba, FedEx, Facebook, Fidelity, JP Morgan, BVVA, Nike and governments embracing Blockchain technology as they realise the benefits this technology can offer.

The Mexican government is looking at using Blockchain technology and Internet of Things (IoT) to track grain, so grain producers can monitor the warehouses where the grain is stored. The company behind this project, GrainChain, is also hoping its platform will provide precise tracking, data, transparency, and reliability for grains in the supply chain. Meanwhile, the Central banks for Canada and Singapore have just successfully completed a test project to transfer Cryptocurrencies between themselves.

“The Bank of Canada and the Monetary Authority of Singapore (MAS) have conducted a successful experiment on cross-border and cross-currency payments using central bank digital currencies. This is the first such trial between two central banks, and has great potential to increase efficiencies and reduce risks for cross-border payments,” MAS stated.

As institutions and governments start implementing Blockchain technology and Digital Assets i.e. “Top Down”, we are likely to see greater clarity around regulations which, no doubt, will lead to even greater adoption as confidence and acceptance grows.

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Blockchain
Fintech
Supply Chain
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%.

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Artificial Intelligence
Banking
Fintech
https://www.finextra.com/finextra-downloads/res...pril19.pdf
KT Corporation (KT), Korea’s largest telecoms company, is launching its new 5th generation internet service and will be using Blockchain technology to provide additional security, which they believe is important especially for the growing Internet of Things (IoT) market.

The reason they are focussing on IoT is, that according to KT, 99% of IoT devices have been subject to some form of hacking, but KT hopes that by using Blockchain technology they can make IoT devices more secure.Korea has been at the forefront of Blockchain and Digital Asset adoption, and KT had only a few weeks ago announced it was to trial the K Token in a city called Gimpo, in Korea. The K token is designed to help residents and shops in Gimpo to be able to carry out transactions faster and more efficiently, and interestingly, is also going to be used to help in social and community projects.

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Blockchain
Fintech
IOT
https://bitcoinexchangeguide.com/south-korean-t...g-network/
DLA Piper (DLA),  one of the world’s largest law firms with over 4,900 lawyers and offices in 40 countries, are working with Tokeny, who were set up in 2017.

They bring both traditional market experience and a platform that uses Blockchain technology. The intention is to bridge the gap between Blockchain and finance to help companies navigate them themselves to raise capital in a landscape that is increasingly digitised.

DLA, with its global network of offices, is looking to offer a cost-effective way to help companies that want to issue a Digital Asset in initially up to 15 different jurisdictions. Working with Tokeny’s platform, depending on where the company is based and in what jurisdiction they want to attract investors firms will be able to have access to DLA’s expertise.

The bad news is that Tokeny uses a new acronym: “T-REX” (Token for Regulated Exchanges) so investors need to learn this along with ICO, STO, IEO, DPO, Direct Access and good old IPO (as discussed in last week’s edition…).

The Digital Securities Alliance that DLA has created with Tokeny is significant, given the number of corporate clients that DLA look after in many different jurisdictions. It will no doubt lend credibility to Digital Assets and encourage reputable organisations to consider how T-Rex (which will be subject to far greater regulation that Initial Coin Offerings (ICOs) have) can help firms raise capital.

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Fintech
Digital Security
https://www.dlapiper.com/en/uk/focus/digital-se.../overview/

3 Months Ago

It typically takes six months to buy a house according to Acre, a UK Fintech firm, that has just received a capital injection from one of Europe’s biggest insurance companies, Aviva.

Acre has announced a partnership with Sesame Bankhall Group, one of the UK’s leading firms of financial advisory networks, with over 11,000 advisors. Last year Sesame Bankhall Group placed £42 Billion worth of mortgages, so clearly has distribution capabilities.

Blockchain technology can create one record that the relevant parties can share in a highly secure environment, so the lender, borrower, lawyers and financial advisors have access to real-time information on the progress of mortgage applications.

Given that predominantly, lawyers and financial advisors remunerated by charging fees on a time basis, any technology that improves efficiency should be welcome.

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Fintech
Real Estate
https://www.eu-startups.com/2019/04/london-base...lockchain/

4 Months Ago

Alibaba, the world’s biggest FinTech company, which is capitalized at over $453Billion is planning to use Blockchain and Internet of Things (IoT) for its vast international logistics and supply chains.

Alibaba has been experimenting with Blockchain for a while with its Food Trust Framework as it tries to improve transparency, help customers track goods and ensure their authenticity. Using QR codes customers will be able to scan a good and have greater certainty over a product's provenance.

Given Alibaba’s distribution and financial clout, one wonders how long it will be before they launch the AliCoin as a possible way to encourage and reward customers in some form of loyalty scheme. An AliCoin could then be exchanged for goods and services as Alibaba continues its expansion into banking and financial services with Alipay.

 

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Blockchain
Fintech
IOT
Logistics And Supply Chain
Supply Chain
https://www.businesstelegraph.co.uk/alibaba-loo...nge-guide/
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…

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Blockchain
Fintech
https://www.forbes.com/sites/michaeldelcastillo...3ca6596e46

6 Months Ago

Dealing in digital assets is not a user-friendly experience, however, doing this on a mobile phone could further accelerate the use of blockchain and cryptocurrencies.

While Samsung has denied rumours, it is about to launch a Crypto enabled phone it has been busy filing blockchain and crypto-related patents. Meanwhile, rival phone manufacturer HTC has confirmed that their latest phone will be crypto enabled.

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Cryptocurrency
Fintech
https://www.newsbtc.com/2018/12/14/crypto-and-b...e5a560076-