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Crypto credit has expanded too quickly and is headed for a blow-up, says a group of former Wall Street traders who are now seeking riches in digital assets. A near $5 billion industry has emerged from nothing just two years ago and the number of loan platforms is rapidly proliferating.
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CME Group has just published the specifications for its upcoming bitcoin options contracts. Each contract would be based on one of CME’s bitcoin futures contracts (five bitcoin); the contracts would be quoted in U.S. dollars per bitcoin with a tick size of $25 (or $5 for reduced tick sizes).
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Although the U.S. dollar is the world’s reserve currency, the U.S.’s ability to apply strong and effective sanctions has very little to do with the U.S. dollar itself.
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MBK, a Tokyo-based and Tokyo Stock Exchange-listed merchant bank, has signed a deal for the tokenization of property in Estonia.
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The Association of German Private Banks has presented a position paper advocating the establishment of a European digital currency and a common identity standard across the Eurozone.
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Overstock’s security token platform tZERO and the Tezos Foundation have partnered on a project that will tokenize £500 million in planned real estate development financed by U.K.-based Alliance Investments.
Month: October 2019
Protected: Kiffmeister’s CBDC Monitor, October 2019
Kiffmeister’s Fintech Daily Digest 10/30/2019
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The People’s Bank of China will certify 11 types of financial technology hardware and software that are widely used for digital payment and blockchain services with its new verification system called the Certification of Fintech Products.
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Bitfinex could very well be the victim and there could be many others, although not enough information is available yet to certainly say if they were indeed victims or not, but it would seem highly likely. At the same time, it’s interesting that this is only coming to light now and did not make more noise when it actually occurred or rather noticed. You would think with such a large amount of money someone would raise the alarm much sooner.
Kiffmeister’s Fintech Daily Digest 10/29/2019
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“The main gap, or next frontier in terms of central banking activities would be to find efficient ways to connect our fast payment systems so that they can be used by citizens to transfer remittances to send money back home, to send money across borders, so that cryptocurrencies would be less needed in the first place.”
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A number of central banks around the world are seriously considering issuing retail central bank digital currency, with one likely to arrive in the next five years. That is the key finding from a report from IBM and OMFIF, a central banking think tank.
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Uber is creating a new division called Uber Money to handle its growing financial services business. The group will oversee everything from the company’s credit and debit card offerings, to digital wallets for riders, to products used by drivers to get paid in a timely manner.
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At the heart of the Raisin model is a platform that allows savers to move their deposits to banks that offer a higher interest rate than their local providers. “The average interest rate on deposits at the large US banks is 0.01 percent. But there are around 6,000 U.S. banks. Some of them offer rates of more than 2 percent.tags: Fintech
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The U.S. SEC granted Paxos no-action relief to settle equity securities trades on a blockchain platform for broker-dealers. Credit Suisse and Société Générale would be the first two companies to utilize the new Paxos Settlement Service.
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Crypto exchange OKEx is planning to launch Tether-based futures trading, offering a linear futures contract with leverage of up to 100x. The contract will have daily settlement and offers supported pairs with Bitcoin, EOS, Ether, Litecoin, Bitcoin Cash, XRP, Ethereum Classic, Bitcoin SV and Tron.
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According to cybersecurity firm Ciphertrace, its software can track 87% of the global cryptocurrency transaction volume, which may mean that authorities can use monitoring methods not only against criminals but also against ordinary people.
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For some years now there has been a discussion at the European Commission regarding harmonization of online capital formation rules. Today, crowdfunding is regulated at the member state (national) level creating a mish-mash of European regulations that defy the entire concept of a single market – the entire reason the Europe Union was created.tags: Fintech Crowdfunding
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Of all the many emerging blockchain use cases for enterprises, supply chain track and trace is a hot topic. The idea that food especially can be safely and securely traced from farm to table is something that benefits many players in the production sector.tags: Fintech Blockchain
Kiffmeister’s Fintech Daily Digest 10/28/2019
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The Central Bank [of the Bahamas] is exploring an early entry of Project Sand Dollar into Abaco. It will allow the Bank to test aspects of the emergency wireless communications features that would enable rapid financial services recovery; and to connect with many retail businesses early in their recovery process. The Sand Dollar infrastructure is being designed to connect with bank accounts, so that remote access to these facilities is also quickly re-enabled for deposits and withdrawals.
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The Government of Bermuda, saying that the risks of launching its own digital currency outweigh the opportunities, will accept payments in stablecoins fully backed by U.S. dollars for taxes, fees and other government services, starting with USDC.
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Bakkt is working on developing an app to let consumers use digital assets when purchasing goods from merchants.
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Intercontinental Exchange Inc. said Monday that it will begin testing its consumer app for digital assets with its partner Starbucks Inc. in the first half of 2020.
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RTGS.global aims to link together the existing wholesale payments infrastructure run by central banks within their borders, to settle cross-border payments in real time, and vastly cut down on the costs and burden of the correspondent banking system.
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Total new worldwide funding commitments to the InsurTech sector in 2019 have already surpassed the 2018 full-year total, and during the third quarter exceeded $1.2 billion for the fifth consecutive quarter-year period, according to the new Quarterly InsurTech Briefing from Willis Towers Watson.
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The World Bank Group and the Cambridge Centre for Alternative Finance published a survey containing responses from regulators in more than 110 jurisdictions around the world on their approaches (and challenges) to the regulation of peer-to-peer lending, equity crowdfunding, and initial coin offerings.
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It seems like Hyperledger and Quorum are currently in their own race to see who will become the leader of the crowd. It turns out, the final verdict may rest in a number of projects including Besu and Adhara.
Kiffmeister’s Fintech Daily Digest 10/27/2019
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Ripple Expands Into Washington, DC
Ripple has become the first major blockchain company with a dedicated global regulatory team in the US capital. Ripple also joined the Blockchain Association, and Craig Phillips, former Counselor to the Secretary at the U.S. Treasury Department, has joined Ripple’s Board of Directors.
tags: Fintech Blockchain Regulation
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UAE Accepts Crypto Regulation, Blockchain Projects Stand to Benefit
While countries like Turkey, Iran and Israel are in the process of investigating the advantages of blockchain technology, the UAE, along with both Bahrain and Saudi Arabia, is leading the charge when it comes to positive crypto and blockchain legislation. The UAE, in particular, already hosts several blockchain initiatives that stand to benefit significantly from the new regulations.
tags: Fintech CryptoAssets Regulation
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UAE SCA seeks views of financial industry partners in draft crypto-asset resolution
The United Arab Emirates Securities and Commodities Authority has drafted a resolution on regulating crypto-assets to provide greater clarity for crypto-related projects.
tags: Fintech CryptoAssets Regulation
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This paper identifies four challenges created by cryptocurrency forks and other blockchain-based assets and provide evidence of their severity and pervasiveness. It considers three existing taxation approaches, and how they cope with the challenges above. While no option is perfect, the paper’s conclusions are that the Japan’s “calving” approach is the least burdensome, while the U.S. “treasure trove” approach is the least appropriate.
tags: Fintech CryptoAssets Taxation
Kiffmeister’s Fintech Daily Digest 10/26/2019
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Can Libra and Other Crypto Find a Ground to Navigate Regulation?
The regulatory control that most governments seek is generally related to money laundering and illegal activity. While cryptocurrency creators have no desire to foster such practices, many nevertheless hope to move away from the sorts of regulatory controls that are seen as centralized, less cost-efficient and often domineering.
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The Claim That Facebook’s Libra Is A Cryptocurrency Is False Advertising
Big corporations and regulators don’t like the unsupervised free-for-all of Bitcoin. They like to control things. And that’s exactly why Bitcoin was invented – to escape the control of a central authority but still have a system that works. It’s a brilliant concept, and Bitcoin’s success shows that it works.
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Moneyness: A free market case for CBDC?
“Let governments issue CBDC and compete for the attention of the fixed-price floating-rate investor, just like they already compete for the attention of the 30-year bond investor. This would remove an inefficient distortion, namely a subsidy to banks and a penalty on non-banks.”
tags: Fintech CryptoAssets CBDC
Kiffmeister’s Fintech Daily Digest 10/25/2019
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“In a presentation entitled “The Future of Money: The Impact of Digitization” Tommaso Mancini-Griffoli, Deputy Division Chief in the Monetary and Capital Markets Department from the IMF pitched the concept of a “synthetic CBDC” (Central Bank Digital Currency).”
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“It’s an extract from one of his books written in 1930 about the origins of The Bank for International Settlements, the so-called central bankers’ bank set up in the same year to manage reparations payments in the aftermath of World War One. You know what they say about what’s under the sun…”
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Accenture, SAP and R3 will work together to build a real-time gross settlement (RTGS) system that will allow for integration and interoperability between DLT-based and classic government-issued payments and settlements. The prototype design uses currency tokens to facilitate end-to-end settlement.
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Tencent and Alibaba’s Ant Financial expanded into financial services like lending and asset management only after online payments were well entrenched. One key lesson from China’s experience is that these changes do not occur overnight. It took years to develop this infrastructure and for enough consumers to trust Internet companies with aspects of their financial lives. But perhaps most importantly, fintech innovation came about because a few companies would not accept missing pieces of their environment as a given. They built new, more efficient systems rather than waiting for incumbents to do it for them.tags: Fintech PaymentSystems
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Bitfinex claimed Friday that it was the “victim of a fraud” at the hands of Crypto Capital, a payment processor that allegedly lost $880 million of Bitfinex’s money. Crypto Capital’s president, Ivan Manuel Molina Lee, was arrested Thursday by Polish police on charges of money laundering.
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According to a 2014 survey of Latin American countries, 80% of Haitians din’t have a bank account. However, mobile phone ownership in Haiti has increased rapidly in the past decade, culminating in just under 60% of its citizens owning cell phones. Thanks to mobile money apps that can be accessed with a phone, many bankless Haitians have become more financially stable.tags: Fintech MobileMoney
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P2P lending is a booming sector in Indonesia’s rapidly growing fintech industry, representing 43% of the country’s fintech companies, according to a paper by the Asian Development Bank Institute.
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The New York State Department of Financial Services has joined the Global Financial Innovation Network. Launched by the U.K.’s Financial Conduct Authority, GFIN is a network of 50 international organizations committed to supporting financial innovation in the best interests of consumers.tags: Fintech Regulation
Kiffmeister’s Fintech Daily Digest 10/24/2019
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Bakkt Announces First Regulated Options Contract for Bitcoin
Bakkt announced on Oct. 24 that it will be launching the first regulated options contract for Bitcoin (BTC) futures on Dec. 9.
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Revolut Finally Launches in Singapore
London based fintech Revolut officially announced the launch of its services in Singapore.
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The average lifespan of a fiat currency isn’t 27 years
The “the average lifespan of a fiat currency is 27 years” idea has been showing up around the sillier corners of the internet for several years now. Economist and blogger JP Koning has done a brilliant job of finding exactly where this meme originally came from, and debunking it, in a comprehensive blog post last month.
tags: CryptoAssets Money Fintech
Kiffmeister’s Fintech Daily Digest 10/23/2019
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None of Libra’s founding partners have anted up their $10m entry fee. So far no agreement has been made, and the fee was not discussed at the Libra Association’s first general assembly last week.
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“Libra will be backed mostly by dollars and I believe it will extend America’s financial leadership… As well as our democratic values and oversight around the world. If America doesn’t innovate, our financial leadership is not guaranteed.”
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Zuckerberg reassured that Libra would operate under a coalition of partners and independently from Facebook, but he also made clear that Facebook will not help launch the payments system anywhere in the world until U.S. regulators approve.
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“The future in five years, if we don’t have a good answer, is basically China re-wiring” a large part of the world “with a digital renminbi running on their controlled blockchain,” Marcus said. He warned about the prospect of “having a whole part of the world completely blocked from U.S. sanctions and protected from U.S. sanctions and having a new digital reserve currency” with no alternative.
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Governments, central banks and regulators need to recognise new opportunities for faster and cheaper payments, particularly cross-border, and greater financial inclusion. So far, however, cryptocurrencies are overhyped, the new payment platforms useful and Libra worrying.
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In China, where cryptocurrency exchanges are banned, people can pay cash over the counter to get Tether with few questions asked and from there trade Tether for Bitcoin and other cryptocurrencies.
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One of the untold stories of the past few years is that the CFTC, the Treasury, the SEC and the [National Economic Council] director at the time, Gary Cohn, believed that the launch of bitcoin futures would have the impact of popping the bitcoin bubble. And it worked.
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Crypto investor Michael Terpin has written an open letter to US FCC chairman Ajit Pai requesting urgent action on SIM swapping fraud. He asked the regulator to make mobile carriers hide customer passwords from employees and to provide a “no port” option, whereby customers would have to go through a company’s fraud department before transferring their SIM information to a new phone. In a SIM swap, criminals pose as the owners of a victim’s mobile phone number, convincing telecom providers to grant them access to the SIM card.