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Mastercard, Visa, eBay and payments company Stripe are dropping out of the coalition of companies Facebook enlisted to launch its Libra global cryptocurrency-based payments network.
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U.S. CFTC, FinCEN, and SEC leaders issued a joint statement to remind persons engaged in activities involving digital assets of their anti-money laundering and countering the financing of terrorism (AML/CFT)obligations under the Bank Secrecy Act (BSA).
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Aggarwal, Chainlink, Web3 Foundation and Hashed say their names were used without their permission on the OpenLibra slide deck presented at Devcon. The OpenLibra project aims to ensure that access to the Libra stablecoin and its technology remains free from corporate control.
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UK-based Block Matrix is developing Bottle Pay – a new application that allows users to send and receive BTC using social networks. Users can send BTC to any of their connections regardless of whether they have a Bottle Pay account or not.
Month: October 2019
Kiffmeister’s Fintech Daily Digest 10/10/2019
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Russia’s Central Bank sees no obvious need to issue a national cryptocurrency, said head of the regulator Elvira Nabiullina speaking at the Finopolis forum of innovative financial technologies.
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Alipay has declared that it will be banning any transactions related to any cryptocurrencies. This follow’s Binance’s announcement that it is accepting fiat currencies through Alipay and WeChat (see below), although the exchange is not working directly with WeChat or Alipay.
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Binance is set to add two more channels to its fiat gateway – WeChat and Alipay, allowing users in China to buy bitcoin with the two payment options.
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CFTC Chairman Heath Tarbert believes ether is a commodity and falls under the CFTC’s jurisdiction. He also anticipates ether futures trading on U.S. markets in the near future. Tarbert agrees with the SEC’s previous guidance that bitcoin and ether are not securities.
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One of the key issues addressed by the new IRS guidance is how to determine the cost basis of each unit of cryptocurrency that is disposed of in a taxable transaction (such as a sale). This is an issue because someone might buy bitcoin in multiple transactions over a span of years; when they sold some of it, it was unclear which purchase price to use for calculating taxable gains.
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Binance has launched P2P trading functionality with BTC, ETH and USDT available for trading against Chinese Yuan. Access to P2P trading will be initially provided to Android users. We will slowly roll out this service to iOS and web interface users going forward.
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The US SEC has rejected a proposal to list the Bitwise Asset Management and NYSE Arcaa Bitcoin exchange-traded fund, because they did not meet the necessary requirements regarding possible market manipulation and illicit activities.
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Institutional investors still face a conundrum when deciding how to hold their crypto assets in custody, according to the results of an informal poll done by crypto-exchange operator Gemini.
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The humble DEX has come a long way since the days of Etherdelta, and the scope and quality of decentralized trading platforms has evolved greatly. As an examination of several new and emerging platforms shows, DEXs can finally hold a flame to CEXs.
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Using Ripple’s blockchain-based platform, Finastra users can now connect with the 200 partners on RippleNet, a global payments network utilizing XRP. RippleNet users also have access to Finastra’s banking partnerships, which settle millions in transactions per year.
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Launched in mid-2018, we.trade is ahead of rivals like Marco Polo, a trade finance blockchain backed by TradeIX and R3 that’s still in the pilot stage. The we.trade platform is now all about commercial adoption and it’s taking a two-pronged approach: attract more banks and onboard more SMEs.
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The Next Capital markets Union High-Level Group brings together European personalities recognized for their expertise in capital markets, digitalization and/or financial innovation and reflects the viewpoint of the real economy including SMEs, investors, financial intermediaries and market infrastructures. The members have been appointed by the Ministers of Finance.tags: Fintech
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This report explores the government role in supporting, growing and sustaining the Mobile financial services sector and conducts a comparative research into Singapore, Malaysia and Thailand to understand the steps taken by these governments to develop their own FinTech, specifically MFS, industry.tags: MobileMoney Fintech
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In 2016, Ghana’s AgroCenta launched AgroTrade, an online platform that connects smallholder farmers in the staple food value chain to a wider online market. The start-up provides access to truck delivery services and real-time market information via SMS and IVR. Building on this platform, AgroCenta now enables farmers to receive mobile money, build their credit score and access financial services (like crop insurance) through its latest mobile product, AgroPay. AgroCenta has also set up a mobile money API integration partnership with MTN and Vodafone to pay smallholder farmers directly and seamlessly via mobile money through its AgroPay platform.tags: Fintech MobileMoney
Kiffmeister’s Fintech Daily Digest 10/09/2019
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Thirty different blockchain companies and nonprofit organizations plan to fork the Libra crypto project to build their own permissionless version, dubbed OpenLibra. OpenLibra will function as a stablecoin pegged to the actual Libra cryptocurrency.
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In a letter filed to the New York State Supreme Court Tuesday, attorneys for Bitfinex, Tether and other affiliated entities wrote that a request made by the NYAG’s office relating to a $900 billion loan between sister companies Bitfinex and Tether should be denied.
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The Swiss Centre will examine the integration of digital central bank money into a DLT infrastructure. This new form of digital central bank money would be aimed at facilitating the settlement of tokenised assets between financial institutions. The project will be carried out as part of a collaboration between the SNB and the SIX Group in the form of a proof of concept.
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The US federal tax service’s Revenue Ruling 2019-24 addresses common questions of taxpayers and practitioners regarding reporting crypto hard forks and airdrops.
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Two U.S. lawmakers – Senator Sherrod Brown of Ohio and Senator Brian Schatz of Hawaii – have asked three payments giants Visa, Mastercard and Stripe to reconsider their partnerships with Facebook-led proposed stablecoin project, Libra.
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UNICEF has launched a crypto fund to receive, hold and distribute donations of bitcoin and ether in its aim to back open source technology for children around the world.tags: Fintech CryptoAssets
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FAT Brands, the parent company of franchises such as Fatburger, Bonanza Steakhouse and Ponderosa Steakhouse, in cooperation with digital securitization platform Cadence, is tokenizing a bond offering on the ethereum blockchain
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The Libra Association is thinking of radical approaches to reach the unbanked in certain locations, including a “step-ladder” approach to KYC regulations. The FATF said it is open to working with Libra about potentially building new forms of digital identity. Libra believes blockchain forensics firms like Chainalysis, Elliptic and Coinfirm will help strengthen the case for “tiered KYC” by monitoring wallet profiles and transaction histories. Non-profits in the Libra Association like the Kiva Foundation may play a key role.
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Hong Kong’s Insurance Authority announced on Tuesday that it has granted the first authorization for virtual general insurance under Fast Track. The license was granted to Avo, a local insurtech company providing products like health and travel insurance”
Kiffmeister’s Fintech Daily Digest 10/08/2019
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“BigTech firms have unique advantages that banks cannot easily replicate and therefore present a much stronger challenge to established banks in consumer finance and loans to small firms. Both Fintech and BigTech are contributing to a secular trend of banks losing their comparative advantage as they have less access to unique information about parties seeking credit.”tags: Fintech Regulation
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The cryptocurrency industry isn’t replacing Wall Street just yet. But inventors and entrepreneurs are working on it, with some initial success, albeit modest. In this case, an option premium of 0.0202 bitcoin paid via a smart contract may have just become the proof of concept.
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While nowadays there are multiple ways of bypassing MFA protections, the FBI alert specifically warned about SIM swapping, vulnerabilities in online pages handling MFA operations, and the use of transparent proxies like Muraen and NecroBrowser.
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With BitSwing binary options users can take long or short positions on bitcoin’s price within a one-minute time horizon.
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Lykke launched a token called Short Lyci (pronounced as Lucy). Investors in Short Lyci profit whenever the underlying index falls. If for instance the index of 25 currencies declines by a tenth, Short Lyci owners will gain 10 percent,
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The report describes three disruptive ways that fintech can shift the center of gravity of the financial system towards the citizen: first, by increasing the quality and user-friendliness of relevant financial information; second, by reducing financial intermediation that does not add consumer value; and third, by presenting citizens with platforms for collective action, whether through crowd-funding or through consumer, employee, or shareholder actions.tags: Fintech
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TransferWise has launched TransferWise for Banks in the U.S. This allows banks, credit unions and other financial institutions to integrate TransferWise’s API directly into their infrastructure, so customers can make international payments from within their banking app.
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Jennifer Robertson, the widow of QuadrigaCX founder Gerald Cotten, is transferring nearly C$12 million in assets to EY Canada, the bankruptcy trustee for the now-defunct crypto exchange.
Kiffmeister’s Fintech Daily Digest 10/07/2019
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Roche Freedman filed a class-action suit claiming that stablecoin firm Tether and its affiliate crypto exchange Bitfinex have been involved in defrauding investors, manipulating markets and concealing illicit proceeds, the firm’s founding partner Kyle Roche tweeted on Oct. 7.
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LEO is a curiosity in the crypto space, spawned after an initial exchange offering (IEO) by Bitfinex that ran until June 10. According to the claims of Bitfinex, the exchange raised $1 billion from private placements. Conveniently placed, the IEO in effect offset the $900 million debt to Tether, Inc.
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Anchorage, one of the 28 Libra Association founding members, will allow organizations developing products and services on Telegram’s blockchain-based Telegram Open Network platform, to store their gram online currency securely when it launches next month.
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A WIRED analysis finds that 15 of the 27 founding members of the Libra Association are directly or indirectly tied to Facebook. The total includes members that employ former Facebook executives, members whose boards include Facebook board members, and numerous ties through common investors.
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CoinFLEX is offering physically-settled futures that will deliver Libra tokens if the so-called stablecoin is live by Dec. 30, 2020, or the settlement date. If Libra is not operational by then, investors will receive nothing and will have lost their initial investment.
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Bitfinex in conjunction with EOSFinex, its decentralized trading platform, have announced that they had successfully completed a “chainswap” to convert $5 million worth of Tether stablecoins onto the EOS blockchain protocol.
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“Decentralized finance (known as DeFi, for short) essentially involves a brand-new monetary system being built on public blockchains.”
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Here is a quick survey of the SDR and the many appearances it makes in modern life. The SDR is a fairly minor currency, but it is surprising to see some of the economic nooks and crannies where it is being used.
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John McAfee has launched a decentralized exchange (DEX) running on the Ethereum (ETH) blockchain.
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Hong Kong’ Securities and Futures Commission published a new set of rules for crypto-asset fund managers. They include guidelines on how funds should be structured, risk management, custodianship, record-keeping, asset segregation, and other legal and logistical matters.
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“MakerDAO and DeFi more generally are helping to provide an answer to the question that hangs over crypto. After the bubble, then crash, of 2017 and 2018, it’s natural to ask, ‘What do we use this stuff for?’ DeFi is the first legitimate answer to the question. DeFi is starting to have its moment because it’s the next chapter for crypto.”
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This is a nice capsule summary of the existing stablecoin landscape, although bizarrely it doesn’t include USDC which is #2 by market cap.
Kiffmeister’s Fintech Daily Digest 10/06/2019
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This short paper introduces the Libra project and analyses the potential responses open to regulators worldwide.
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A study done by the University of Texas published in June of last year was making the claim that Bitcoin’s price was majorly affected by the issuance of new USDT tokens. Just recently, research performed by TokenAnalyst.io shows that when Tethers are issued, the Bitcoin price rises as much as 70% of the time.
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The Parliament of Liechtenstein approved the Blockchain Act, which aims to improve investor protection, combat money laundering and establish clarity. The new law will enter into force on Jan. 1, 2020.
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Over the past 10 years mobile-based lending has grown in Kenya, but there are concerns about the business model. The most prominent is the debt culture that has become a byproduct of mobile-based lending: borrowers fall into the trap of living on loans and accumulating bad debt.tags: Fintech MobileMoney
Kiffmeister’s Fintech Daily Digest 10/05/2019
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Over the past 10 years mobile-based lending has grown in Kenya, but there are concerns about the business model. The most prominent is the debt culture that has become a byproduct of mobile-based lending: borrowers fall into the trap of living on loans and accumulating bad debt.tags: Fintech
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The Depository Trust & Clearing Corporation (DTCC) has pushed back the release of its blockchain-based post-trade system for derivatives by several months, in part because of complications created by Brexit.tags: Fintech Blockchain
Kiffmeister’s Fintech Daily Digest 10/04/2019
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In a recent blog post, IMF economists Tobias Adrian and Tommaso Mancini-Griffoli called on policymakers to take “prompt regulatory action” to address the “notable risks” posed by privately issued digital currencies, called stablecoins, that are designed to maintain a consistent value. More to the point: central banks may need to get into the stablecoin business themselves.
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“To really determine whether concepts like central bank digital currencies (CBDCs) are a logical evolution, it’s thus essential to step back in time as far back as the 80s when the big fintech discussions of the day were centred not around distributed ledgers or cryptocurrencies but RTGS systems.”
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“It is a hopeful sign of the beginning maturation of the digital asset markets that various players are staking out their positions and arguing their opinions about market structure. The topic often becomes mired in technical details so for this piece, we have taken a step back to discuss a broader set of market structure points, informed by history and experience, aiming to see the forest in addition to the trees.”
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“Even if antitrust enforcement moves forward, social welfare regulations are also required. This is why there have also been calls for the creation of a new regulatory agency focused on digital platforms. Such an agency would need to be able to address not only concerns about competition but also these broader social welfare concerns. Essentially, then, we need a robust public interest framework for platform regulation.”
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Russia has set out to divide cryptocurrencies into three legal categories. They are thus legitimizing it within the country’s borders.
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BigTech firms are entering finance, and their access to massive amounts of information may give them an edge in areas like credit assessment and beyond. This column assesses the economic forces behind the adoption of Big Tech services in finance. It shows that BigTech lenders thrive in countries with less competitive banks and less strict regulation, and that they have an information advantage from the use of big data and machine learning.
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Switzerland’s principal stock exchange now has seven cryptocurrency exchange-traded products (ETPs) listed. They allow investors to either gain exposure to individual cryptocurrencies or invest in portfolios of top cryptocurrencies. Four ETPs track the prices of single cryptocurrencies.
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On Oct. 7 at 22:00 UTC, Coinbase will usher in higher rates for new tiers of accounts transacting under $10,000, and between $10,000 and $50,000.
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Coinbase has a new banking partner in Britain that will provide real-time payments for customers, three months after losing the service when it broke with Barclays. Coinbase is now a client of ClearBank, a lender that started operations in 2017.
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While waiting for the US SEC to approve its proposed bitcoin ETF, VanEck and SolidX have launched a bitcoin security under Rule 144A. It is the first open-ended DTC-eligible bitcoin security that can be held in a brokerage account and is designed to trade close to the net asset value per share.
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The Vanguard Group is testing a blockchain-powered platform that will allow asset managers to trade currencies while avoiding the big investment banks.
Kiffmeister’s Fintech Daily Digest 10/03/2019
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PayPal is on the verge of quitting Facebook’s Libra project as three people familiar with the situation said it had pulled out of a key meeting in Washington on Thursday.
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The initial coin offering (ICO) is all but dead. In terms of money raised the total for 2019 should be around $338 million – or 95% less than in 2018.
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Some fintech products are helping to improve dramatically the spendability of decentralized digital money in a fiat-dominated world. There’s now a choice of crypto debit cards that will help you pay with BCH anywhere bank cards are accepted.
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In a little over two weeks, Hedera Hashgraph’s HBAR cryptocurrency has dipped from a high of $0.36 cents to around $0.03 as of press time. The blockchain-like network’s CEO now says he will re-evaluate the token’s economic model and potentially change HBAR’s distribution schedule to give the company time to reassess.
Kiffmeister’s Fintech Daily Digest 10/02/2019
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Policy executives from the Libra Association have been summoned to an October 3 meeting in Washington DC, and on the 14th representatives from the companies are slated to meet in Geneva to review a charter for the Libra Association and appoint a board of directors.
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Visa Inc., Mastercard Inc., PayPal Holdings Inc. and Stripe Inc. are undecided about formally signing onto Libra’s organizing charter because they’re concerned about maintaining positive relationships with regulators who have reservations about the project, the people said.
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Switzerland is more worried about cryptocurrency projects developing outside official scrutiny than about the Facebook-conceived Libra project, which is being handled with openness, the head of Swiss financial supervisor FINMA said on Tuesday.
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One of the key selling points of Facebook’s Libra project was that it would prove a boon the world’s 1.7 billion-strong unbanked community. Over in Africa, however, the humble mobile phone has been fulfilling such a role for the past 20 years.
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Coinbase customers can now earn interest on their USDC stablecoin holdings at a 1.25% annual rate, paid out on a monthly basis.
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Mexican central bank’s real-time payment system CoDi (Cobro Digital, Digital Charge) went live on September 30. Use of the payment system, which uses QR codes or NFC, requires a smartphone and an account at a financial institution.
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Ripple’s Xpring is launching a platform it says makes it possible for developers to integrate fiat and cryptocurrency payments into any application.
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The paper presents data on regulatory sandboxes and innovation hubs and argues that the data so far available does not justify the statement that regulatory sandboxes are the most effective approach to building FinTech ecosystems.
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For anyone working in the digital assets space — be it cryptocurrencies or asset tokenization — the question of how the custody industry can evolve to support digital assets is still unresolved. The starting point perhaps should be: What do we actually mean by digital custody?
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US banks are future-proofing by actively investing in fintech startups. In 2019 YTD, US banks have participated in 24 equity deals to fintech companies. This follows a record 2018, where US banks backed 45 equity deals to fintech startups — a 180% increase from 2017.tags: Fintech