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Bitcoin’s price rose above $7,500 Sunday for the first time since August 2018, but it has since cooled off since, and was trading just a around $7,100 by late afternoon EDT.
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The Bitfinex probe has laid bare two fundamental weaknesses in crypto infrastructure as a whole: 1) the lack of high-level banking services; and, 2) the lack of auditing standards.
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The median crypto hedge fund delivered a 46% loss in 2018. Quantitative crypto funds, which can take short positions, fared better with a median return of 8%.
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The Boston Fed is looking at setting up a “supervisory node,” a regulatory surveillance tool that should be able to connect to various banking blockchains. This node will watch the money flows and settlements between different banks.
Month: May 2019
Kiffmeister’s Fintech Daily 05/11/2019: Forbes Blockchain 50: Billion Dollar Babies
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Forbes has identified more than 100 big companies actively exploring blockchain through industry consortiums and other proprietary projects, 50 of which have minimum revenues or valuations of $1 billion.tags: Fintech Blockchain
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There is a clear correlation between bitcoin reward halving and price volatility afterward. These supply side changes happen every 4 years, and keeping that in mind can help build a better picture of what influences the price of bitcoin at different times.
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Is issuing fiat-backed stablecoins on public blockchains the best approach? Is a public, permissionless blockchain actually necessary? Let’s take a closer look at what stablecoins supposedly gain from the use of public blockchains and whether there may be more practical options available to issuers.
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Sidechains are a unique and diverse solution for disparate blockchain networks to experiment and interact with each other. Developments within sidechains will go a long way in fueling better liquidity, interoperability, and scalability of the broader blockchain and cryptocurrency ecosystem.
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“Enabling Blockchain Innovations with Pegged Sidechains” was viewed as a death blow for Altcoins. However, the type of sidechain outlined in the white paper has not materialized. Why not?
Kiffmeister’s Fintech Daily 05/10/2019: US Senators Seek Info on Facebook’s Crypto Project
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The U.S. Senate Banking Committee wrote an open letter to Facebook CEO Mark Zuckerberg, asking him to share details about its secret cryptocurrency project, with a particular focus on consumer privacy.
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The US House of Representatives Financial Services Committee has formed a Task Force on Financial Technology to “examine the current legal framework for fintech, how fintech is used in lending and how consumers engage with fintech.”tags: Fintech Regulation
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CipherTrace found that losses due to cryptocurrency thefts, scams and fraud tally more than $1.2 billion in A1 2019. This includes $356 million stolen from exchanges and the loss of $850 million by major exchange Bitfinex
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Crescent Crypto Index Services has filed a prospectus for a new crypto-based ETF with the U.S. SEC. that will track the performance of a market capitalization-weighted portfolio of bitcoin and ether.
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The Bank of Thailand and its private-sector partners have developed their first prototype for a blockchain-based system to enable digital currency for interbank settlements between the BoT and eight commercial banks.
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Fluidity is launching ethereum-powered mortgages in California and New York. The mortgages will be recorded via smart contracts, while using cryptocurrency for back-end management.
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Figure Technologies has closed a $1 billion uncommitted line of credit on a blockchain with investment bank Jefferies, which may periodically lend to Figure under a variable funding note secured by Figure’s home equity lines.tags: Fintech Blockchain
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In April, the GFIN global sandbox jointly run by 35 international regulators accepted its first eight firms into the program. The UK FCA said 44 applications were submitted. The eight successful firms will now develop plans for their cross-border trials, before being allowed to undertake tests. The firms that have successfully entered the testing stage will be announced in June.
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Germany plans to introduce draft regulations allowing blockchain bonds as soon as this summer, local daily business news outlet Handelsblatt reported May 9.tags: Fintech Blockchain
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Why do Ripple platform users still prefer to use xCurrent instead of the newer xRapid option? Only ten of the over two hundred financial institutions that are members of RippleNet are presently using XRP payment options.
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MakerDAO emerged as a clear market leader in part for its rock-bottom interest rates of 0.5 percent, which are a technological necessity for keeping its DAI stablecoin worth $1. With interest rates rising to 19.5 percent, some early borrowers are angry.
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Sci fi and courtroom drama legend William Shatner has announced a partnership with London legaltech firm Mattereum to document the authenticity of memorabilia and collectibles, on the blockchain.tags: Fintech Blockchain
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Binance this time decided not to make the deal with miners. And as time goes on, the attack becomes harder. But all it took was a private phone call. The majority hashpower lies under control of a handful of men. They can collude and reverse the chain.
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For Latin Americans living abroad sending money back home via traditional banking methods and money transfer operators can be a complicated and costly ordeal. More cost-effective approaches rely on using fintech, like mobile banking, according to a recent IMF working paper.tags: Fintech CrossBorder
Kiffmeister’s Daily Fintech News Digest 05/09/2019
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US SEC Commissioner Hester Peirce is worried that the regulator is moving too slowly for the crypto ecosystem. Rather than being heavyhanded in enforcing the rules as she once feared, the agency has instead been too sluggish to clarify or update them.
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The JPM Coin team replaced Constellation, Quorum’s privacy layer written in the Haskell computer language, with Tessera, which has a similar design, but is built in Java to make it easier for businesses to use and deploy.
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The global exchange website Currency.com has announced that it will be offering a tokenized form of Belarussian government bonds. Users can now use fiat money, bitcoin and ether to invest in and trade Belarussian government bonds.
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Last month a unit of Societe Generale sold EUR 100M of mortgage-backed covered bonds in the form of digital tokens with the French bank as the only buyer. The idea was to test how the technology can be used to cut costs and speed settlement for the securities.
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The Hong Kong Monetary Authority issued virtual banking rights to 4 more companies: Ant SME Services (Hong Kong) , Infinium, Insight Fintech HK, and Ping An OneConnect.tags: Fintech Regulation
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A group of traders from 35 digital assets firms are proposing to create a shared blacklist for parties who renege on trades and engage in dubious activities.
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Ant Financial is exploring how to issue digital assets in some form of a token on the blockchain that would represent something of value in the physical world—whether that be fiat currency or some other kind of asset.
Kiffmeister FinTech Daily Digest 05/08/2019
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Binance, one of the world’s largest cryptocurrency exchanges, said hackers withdrew 7,000 Bitcoins worth about $40 million via a single transaction in a “large scale security breach,” the latest in a long line of thefts in the digital currency space.
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Binance decided against responding to the hack with a rollback: i.e. aiming to incentivize miners to form a consensus to wield 51% of the network’s hashing power to reorganize the blockchain’s transactions after the loss.
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The Binance hackers are moving their stolen BTC into smaller and smaller wallets in an effort to hide their tracks.
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Decentralized algorithmic stablecoins (eg DAI) do not contain any of the risks outlined in this summary of the Tether situation. While they do contain a host of other risks, those that value transparency migrate may migrate to DAI.
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Bitfinex has released the official white paper for its $1B exchange token sale, said it will also launch a dedicated platform for projects to raise funds via similar initial exchange offerings.
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As is currently being done, crowd-sourcing of pricing data feeds is fundamentally broken for stablecoins because the incentives are misaligned. Stablecoins that rely on this fundamental mechanism should be considered broken.
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Relative to other shadow banks, fintech lenders serve more creditworthy borrowers and are more active in the refinancing market. Fintech lenders charge a premium of 14–16 basis points and appear to provide convenience rather than cost savings to borrowers.
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53% said that blockchain has become a critical priority for their organization this year, and 40% are willing to invest $5 million or more in new blockchain initiatives over the next year.tags: Fintech Blockchain
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Austria’s Raiffeisen Bank International (RBI) has announced it will pilot R3’s Marco Polo blockchain network for trade finance.
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Charlie Munger, Warren Buffett’s partner at Berkshire Hathaway, expressed concern over the rate at which money is printed by democratic governments. Ironically, Munger, a skeptic of bitcoin, may have accidentally pointed out the merits of the dominant cryptocurrency.
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At the heart of the initiative, under way for more than a year and code-named Project Libra, is a digital coin that its users could send to each other and use to make purchases both on Facebook and across the internet, according to people familiar with the matter.
Kiffmeister FinTech Daily Digest 05/07/2019
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Thai Central Bank Builds Blockchain Solution for Digital Currency Project
The Bank of Thailand prototype solution will enable the central bank to settle interbank transactions using a wholesale central bank digital currency among its eight commercial bank partners on the R3 on Corda blockchain platform.
tags: Fintech Blockchain CBDC
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Pieter Wuille Unveils Two Proposals for Upcoming Bitcoin Privacy Soft Fork
Blockchain developer Pieter Wuille unveiled two Bitcoin Improvement Proposal (BIP) that offers new plans for bitcoin’s next big upgrade or “soft fork.” The two proposals describe Taproot, a code change increasing bitcoin’s privacy, and paving the way for privacy and scalability improvements to bitcoin.
tags: CryptoAssets Fintech Bitcoin
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This column explains how mobile money potentially helps ameliorate several areas of market failure in developing economies, including saving, insurance, and the empowerment of women. It illustrates these effects using examples from a burgeoning empirical literature and concludes that the system-wide effects of mobile money may be even greater than current studies suggest.
tags: Fintech MobileMoney
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Azure Blockchain Development Kit for Ethereum Released
The new Azure Blockchain Development Kit for Ethereum will help developers create and deploy ethereum-based apps on Azure Blockchain Service or the ethereum blockchain
tags: Fintech Ethereum Blockchain
Kiffmeister FinTech Daily Digest 05/06/2019
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SIX Stock Exchange May Issue Its Own Token, Says Exec
Swiss stock exchange SIX’s digital exchange will go live with a native token and an “initial digital offering” (IDO) service in 2020. That would follow a trial expected to be completed late this summer. https://www.coindesk.com/six-stock-exchange-may-issue-its-own-token-says-exec
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Fidelity to Roll Out Crypto Trading ‘Within a Few Weeks’
A Bloomberg report on Monday, citing “a person familiar with the matter,” said that Fidelity will roll out the service for trading bitcoin “within a few weeks” and will focus on institutional, not retail, customers.
tags: Fintech CryptoAssets Liquidity Custody
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Bitfinex Plans To Exchange New Lamps For Old
Bitfinex’s parent company, iFinex, has come up with a brilliant scheme to plug the gaping hole in its balance sheet. Why not sell some new tokens? Rather a lot of tokens, in fact – a cool 1 billion of them.
tags: Fintech CryptoAssets AltCoins Tether
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Beware the Fake Bitfinex White Papers Appearing Online – CoinDesk
As speculation and impatience arises over the upcoming Bitfinex token sale, opportunistic fakers are creating bogus white papers that purport to describe the details of the upcoming sale. Why? To scam potential buyers out of their cash.
tags: Fintech CryptoAssets AltCoins Tether
Kiffmeister FinTech Daily Digest 05/05/2019
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Warren Buffett Calls Bitcoin a ‘Gambling Device’
“Buffett’s characterization of Bitcoin as a fraud-filled arena is particularly rich given the plethora of indictments against Wells Fargo, a bank which Berkshire Hathaway owns almost 10 percent.”
tags: Fintech CryptoAssets Bitcoin
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CB Insights Global Fintech Report Q1 2019
A data-driven look at global financial technology investment trends, top deals, active investors, and corporate activity in Q1 2019.
tags: Fintech
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‘Not a White Paper’: Marketing Document Details $1 Billion Bitfinex Token Sale
New details are emerging about a planned $1B token sale by iFinex, the parent company of Bitfinex and Tether, who are being sued by the state of New York for covering up a $850M loss in customer funds.
tags: Fintech CryptoAssets Tether Liquidity
Kiffmeister FinTech Daily Digest 05/04/2019
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Blockchain Hype Missed the Mark, and Not by a Little
Blockchains remain high-cost solutions, often beset by chaotic competition, and they exist in ecosystems beset with dishonesty, fraud and human error. Blockchains might have a chance to change the world someday, but there’s also a chance they will prove useless.
tags: Fintech Blockchain
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Indictment reveals new clues in the Crypto Capital situation
Crypto Capital founder Reggie Fowler is being charged by the SDNY with bank fraud and conspiracy to commit bank fraud, and of running an unlicensed money transmission business and conspiracy related to its operation. Crypto Capital were the money transmitters for Bitfinex and Tether.
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Crypto Capital and Bitfinex’s missing millions, and Reggie Fowler
Crypto Capital were the money transmitters for Bitfinex and Tether. They operated in the US through Global Trading Solutions. The founder of GTS, Reggie Fowler, was indicted on Tuesday. The US Government has filed a motion to detain Fowler as a flight risk.
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How Millennial Ethics Are Reshaping Fintech
“With $30 trillion in future spending power, millennials are reshaping the investing and fintech spaces to better align with their ethical values.”
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Young people and their phones are shaking up banking
“The mobile phone allows financial products to be linked with other services in novel ways.”
tags: Fintech
Conference on the Economics of Central Bank Digital Currency
The Bank of Canada and Sveriges Riksbank are holding a conference on the economics of central bank digital currency (CBDC) on October 17-18, 2019 at the Bank of Canada headquarters in Ottawa. Papers or extended abstracts must be submitted by May 10 here.