The Interchain Foundation in Switzerland has launched its decentralised Cosmos Network offering independent, scalable, and interoperable blockchains.

A new order via Interchain Foundation

The non-profit foundation has a vision to build the “internet of blockchains” and this is part of its ambition to get there.

It was launched following the “Game of Stakes”, not a sequel to ‘Game of Thrones’ but a “rigorous” period of network testing and development,

The Cosmos Network is designed to let developers build interoperable blockchain applications and is built on Tendermint Core.

The consensus project behind Tendermint Core include $400-million blockchain fund Paradigm, and other investors such as Bain Capital and 1confirmation.

Jae Kwon, founder and CEO of Tendermint, says: “Blockchain technology is an incredible innovation that has unfortunately been hamstrung by a series of limitations, including scalability problems, a lack of usability and myriad governance and environmental issues.”

According to the company, Tendermint Core packages the networking and consensus layers of a blockchain together, allowing developers to focus on application development as opposed to the underlying protocol.

The engine uses a byzantine fault tolerant (BFT) consensus algorithm created by Kwon in 2014. This mechanism “solves the scalability, security and efficiency limitations” experienced by proof of work (PoW), the type of mining mechanism employed by various existing blockchain ecosystems, such as Bitcoin and Ethereum.

Kwon adds: “The launch of the Cosmos Network is the first major milestone in the development of this network and represents the culmination of 40 years of computer science research, with a BFT proof of stake (PoS) consensus mechanism being deployed live for the first time.”

The Cosmos Network also has various partners on board – such as cryptocurrency exchange Binance, gaming platform Loom, and interledger solutions provider Kava.

Catch up on FinTech Futures’ top five fintech stories of the week – all in one place!

An exclusive in Iraq!

Iraq’s Rafidain Bank revamps tech with Oracle
EXCLUSIVE. It is understood new tech will replace Finastra’s Fusionbanking.

Bulgaria’s Municipal Bank gets core and payments tech from Oracle
EXCLUSIVE. CSoft’s VCSBank is understood to be on the way out.

PayPal pumps $750m into e-commerce firm MercadoLibre
Paytech titan seeks some LatAm action.

RCBC files defamation suit against Bank of Bangladesh over 2016 cyberattack
A saga with no end in sight.

OneCoin boss arrested for crypto fraud
Another firm is up to something unusual in fintech’s Wild West.

The Banking Technology magazine March 2019 issue is here! Click here to read the free digital edition.

The Securities and Exchange Commission (SEC) of Thailand, the regulatory watchdog, has greenlighted the country’s first portal for scrutinised initial coin offerings (ICOs).

Thailand aims to protect investors while giving firms new ways to get funding

The Bangkok Post reports that the decision needs final approval from other government agencies such as the Ministry of Commerce, according to the SEC’s fintech director, Archari Suppiroj. However, the first ICO will be launched in the near future under the royal decree on digital asset business.

The aim of the portal is to protect investors, which is done by controlling the ICOs and auditing their smart contracts. It also has the objective of avoiding financial crime by enhancing its know-your-customer (KYC) processes.

Suppiroj says that seven or eight firms had put themselves forward to operate the portal, but that an anonymous foreign signature was selected.

He clarified that the sales of security tokens (STOs) would be regulated separately under the Securities and Exchange Law and holders would have to apply for a licence.

However, according to Suppiroj, the SEC also plans to issue regulations that allow the anonymous firm to tokenise securities and other assets.

Last month, Thailand’s National Legislative Assembly approved an amendment to the Securities and Exchange Act legalising the issuance of tokenised securities such as stocks and bonds from entities other than the Thailand Securities Depository.

Also last month, the SEC banned the use of several cryptocurrencies in ICOs and as a basis in trading pairs.

In July 2018, the commission established that only Thailand’s national currency, the baht and seven cryptocurrencies could be used to invest in ICOs. These didn’t include Bitcoin Cash, Ethereum Classic and Litecoin.

The former head of MtGox, the collapsed bitcoin exchange, has been cleared of embezzlement charges by a Tokyo court, but found guilty of tampering with digital data.

“The charge of electronic record tampering is true and deserves punishment, but there’s no criminal evidence of embezzlement”

The court says that French-born Mark Karpeles, sometimes mixed his personal finances with those of the exchange and fiddled with its accounts to hide the fact that the platform had lost money to hackers.

As reported by Bloomberg, he was given a two and a half years of suspended jail sentence, which he won’t have to serve unless he commits another violation within four years. Originally, prosecutors called for a ten-year jail sentence.

“The charge of electronic record tampering is true and deserves punishment, but there’s no criminal evidence of embezzlement,” the court said.

It also said Karpeles had inflicted “massive harm to the trust of his users,” and that “there is no excuse for the defendant, who is an engineer with expert knowledge, to abuse his status and authority to perform clever criminal acts.”

Many believe that the decrease and instability of crypto value that was triggered back in 2014 was originally caused by Karpeles’ wrongdoings, which undermined faith in the exchanges.

Prosecutors claim he splashed the embezzled money on a 3D-printing software business unnecessary for MtGox, as well as on personal expenses.

MtGox was shut down in 2014 after 850,000 bitcoins (worth half a billion dollars at that time) disappeared from its virtual vaults, a mystery that remains unsolved. The court did not address this matter.

At one point, MtGox, which started as a trading place for Magic: The Gathering cards, claimed to be handling around 80% of all global bitcoin transactions.

During the trial, Karpeles apologised to customers for the company’s bankruptcy but denied both data falsification and embezzlement.

“I swear to God that I am innocent,” Karpeles, speaking in Japanese, told the panel hearing when his trial opened.

IBM has unveiled a global blockchain network, Blockchain World Wire, that will offer near real-time cross-border payment exchange and international settlement.

“By creating a network where financial institutions support multiple digital assets, we expect to spur innovation and improve financial inclusion worldwide”

Blockchain World Wire can transfer funds in 47 currencies to locations in 72 countries, and the company is calling it the first blockchain network of its kind to integrate payment messaging, clearing and settlement in a single unified network.

“We’ve created a new type of payment network designed to accelerate remittances and transform cross-border payments to facilitate the movement of money in countries that need it most,” general manager of IBM Blockchain Marie Wieck says. “By creating a network where financial institutions support multiple digital assets, we expect to spur innovation and improve financial inclusion worldwide.”

Blockchain World Wire leverages the Stellar protocol to support point-to-point money transfers, cutting out the intermediaries of conventional correspondent banking. World Wire also shortens settlement time by transmitting value via digital assets (cryptocurrencies or stable coins).

The network currently supports settlement with Stellar Lumens and a US dollar-based stable coin. Six global banks have signed letters of intent to issue their own stable coins on the network, which will add the Euro, the Indonesian Rupiah, the Philippine Peso, the Korean Won, and the Brazilian Real to the mix.

Rizal Commercial Banking Corporation (RCBC) of the Philippines and Banco Bradesco of Brazil are among the banks that have announced their participation in IBM’s new initiative. Representatives from both institutions highlighted “innovation” and the need to “enhance” or “add value” to the customer experience as key factors in the decision to join the network. Also believed to have signed a letter of intent is South Korea’s Banco Busan.

Only recently, IBM announced its partnership with CULedger, a credit union service organisation (CUSO), to develop blockchain-based services for credit unions.

Donut, an investment app for digital assets, has completed a $1.8 million seed round led by early-stage VC Redalpine.

The team at Donut

Additional funding comes from AngelList’s Philipp Moehring and Andy Chung, N26 Bank board member Marcus Mosen, former N26 CMO Kelly Ford and other angels. EarlyBlock and previous investor Entrepreneur First are also part of the financing round.

Donut says the funding will help the company grow its engineering and design teams in addition to further accelerating product development and strengthening strategic partnerships.

“We believe most people will have the majority of their wealth stored in digital assets within the next decade. That could be anything from cryptocurrencies to fractional ownership of art or owning a piece of unique land in virtual reality,” explains Neel Popat, co-founder and CEO of Donut. “Our mission is to empower everyone to become an investor in that future.”

“We share the vision of the Donut team about the prevalence of digital assets in the future. Digital assets have many beneficial features over traditional assets, yet lack a single access point for holders to conveniently store, manage and transact,” says Harald Nieder, Donut board member and partner at Redalpine.

It is seeking to challenge the emerging digital asset market by bringing “convenience, trust and accessibility” to managing and transacting in crypto assets. The firm says its mobile platform leverages PSD2 to do so.

The company is built on the premise of making the creation of digital asset portfolio easy and hassle-free, removing the hurdles in navigating private keys, managing wallet addresses and, deciphering complicated white papers.

Donut is currently in a beta testing mode with a full launch planned this summer. More than 5,000 users have already joined the company’s waiting list.

Collaborative banking platform 2gether has announced its European expansion after a successful beta launch in its home country of Spain, Jane Connolly reports.

Paying with digital coins – straight out of a cyberpunk fantasy

The company’s prepaid Visa debit card allows users to instantly spend crypto anywhere, anytime, as easily as they would pay with euros. With the aim of making crypto a common day-to-day currency, the firm aims to circumvent the long process currently required to spend crypto, without charging a fee.

2gether customers can pay in euros or convert one of seven cryptocurrencies to pay with the Visa card: ETH, BTC, XPR, BCH, EOS, XLM and LTC. Users can also hold and manage euro and crypto balances in the same app and buy and sell crypto in two clicks with no mark-ups to exchange prices.

Ramón Ferraz, CEO of 2gether, says: “To date, there has been no consumer-owned, tangible application that connects crypto and the mainstream market.”

EU citizens need to download the app and pass the KYC process in order to join the waiting list to start using 2gether. On 27 March, 2gether will undergo a token pre-sale of the 2GT as a Virtual Financial Asset under the ticker 2GT. All EU citizens will be able to participate in the pre-sale of €5 million and experience all the services featured on the app.

For a comprehensive list of the landscape of challenger banks in Spain, check out this link!

FinTech Futures and KAE, a strategic marketing consultancy firm, have teamed up to bring you short and sweet round-ups of the week’s selected news stories – in a video format.

The latest weekly video covers:

• FIS acquires Worldpay for $34bn
• 41% of banks missed PSD2 deadline says survey
• Digital bank Tandem launches ‘Autosavings’ account
• Banking Fintech Integrates Bitcoin, Ethereum, XRP, Litecoin, Bitcoin Cash, EOS and XLM for Crypto Mass Adoption Using Visa

Over 2,000 digital assets & a total market capitalisation of $200+ billion

For many private wealth managers, investing in digital assets has been a step too far. Yet the recent news that the state of Virginia’s Fairfax County has invested two pension plans in Morgan Creek Asset Management, a digital asset manager with $1.4 billion under management, proves that an allocation to digital assets should be taken seriously.

The plans, the Employees Retirement System and the Police Officers Retirement System, have committed around $20 million in Morgan Creek’s new blockchain venture capital fund.

Accessing digital assets

It is an industry in its infancy. The market has been volatile and many of the products are unregulated: digital assets are undoubtedly higher risk than traditional mainstream investments. However, according to a recent report published by KPMG, there are over 2,000 digital assets with a total market capitalisation of more than $200 billion and there is a wide variety of digital investments on offer.

Although there is overlap between them and they are developing all the time, digital assets can loosely be divided into different silos: digital currency trading, digital asset exchange traded products (ETPs) direct equity investing using security tokens, blockchain-focused hedge funds and venture capital funds.

Investment in the asset class is done via digital asset exchanges. These exchanges began as virtual marketplaces specialising mainly in fiat to digital asset trading. In the last two years however, they have developed into state-of-the-art digital asset ecosystems. Their services encompass initial coin offerings (ICOs), security token offerings (STOs), ETPs, as well as access to blockchain venture capital start-up projects. What’s more, many exchanges are now laying the foundations for institutional-grade primary and secondary trading facilities which will comply with international regulations.

What happens when it is client-driven?

There are many in the wealth management industry that are sceptical. At present, digital assets are unfamiliar territory for everyone, and while global regulators are still at odds over regulation, managers are right to be cautious.

Nevertheless, they are starting to look at more practical ways of broadening out their investment portfolios to include digital assets. This is because often it is clients who are the driving force behind gaining exposure to digital assets.

The 2018 “World Wealth Report” by Capgemini found that nearly a third of respondents, all of whom were high net-worth individuals (HNWI), had a high degree of interest in digital assets.  In particular, investors under 40 stated that were looking for more information from their wealth management firms on the asset class.

The report found that on a global basis, 29% of HNWIs showed a high degree of interest in digital assets. In interest the Asia-Pacific region was even higher with over 50%.

Adapt to digital assets and thrive

While the report states that HNWIs showed degrees of interest only, rather than active investing, wealth managers know that they must adapt to survive.

Institutional investors are actively investing in the asset class, whether it is in subsidiaries, custody or technology infrastructure. Last year, Fidelity launched its Digital Assets subsidiary and the Chicago Board of Exchange (Cboe) with SolidX and VanEck have applied for approval for a Bitcoin ETF. Similarly, the latest report published by Cambridge Associates, an investment advisory firm, recommends exploring investments in digital assets.

Furthermore, it is becoming apparent that most digital asset investors who have the majority of their net asset value in the space are looking for opportunities and advice on diversifying into more tangible and mainstream assets.

Wealth managers must seek out the advantages of this dynamic new market. Offering digital assets as an investable option will cater to the needs of modern investors and attract new capital from the digital asset millionaires. It will be their comprehensive knowledge, expertise and access to digital asset products that will ensure they remain competitive and their businesses will thrive.

Types of digital assets

• Digital asset trading

Similar to FX, digital asset trading involves the exchanging of either fiat to digital currencies or between digital currency pairs such as bitcoin or ethereum. It is possible to invest in newly launched coins (ICOs) and also in the increasingly popular STOs.

• Digital ETPs

Structured in a similar way to ETFs in that they track an index or basket of assets, a digital asset ETP generally tracks the top ten digital currencies. Their characteristics are similar to a leveraged ETP in that investors do not own the underlying assets. They differ from security token ETFs where investors have ownership of the tokens. In this case, the ETF trades in a similar way to a traditional equity-based ETF. While there is still no US regulatory approval for a digital ETF, it is possible to invest in a bitcoin ETF through for example, an exchange-traded note on Sweden’s Nasdaq Stockholm Exchange.

• Direct investing through security tokens

This is considered a less volatile way of investing in digital assets because security tokens are uncorrelated to the broader market movements. In addition, these are regulated entities which are traded in the same way as stocks or shares. However, there is less diversification as the investments are similar to venture capital projects such as blockchain, social impact and real estate. Therefore, there is a high risk of investments failing.

• Blockchain-focused hedge funds

These funds trade in established digital currencies, as well as invest in new ICOs and a range of service providers. They actively seek out volatility in order to maximise returns. Some hedge funds allocate only a small percentage of their investments into digital assets in order to lower risks.

• Blockchain-focused venture capital funds

Used as a form of fundraising, these funds are similar to early stage investments from a traditional venture capital firm. Many projects are direct investments covering blockchain, fine art, social impact and real estate projects. There is a high risk of failure and as a result, investors require a high level of expertise in the evaluation process. However, many traditional venture capital funds aiming to gain first mover advantage are moving into this space.

By Maxim Bederov 

About the author

Maxim Bederov has nearly two decades of experience in financial services, most prominently at MLP Finanzdienstleistungen SE, a Germany-based consultancy for financial planning.

Bederov is now a serial entrepreneur and early-stage investor in a number of projects. He has been active in blockchain technology and the digital asset space since 2014. In 2018, he established one of the first retail funds incorporating digital assets.

Just weeks after launching in the US, trading and investment platform eToro announced plans to purchase Copenhagen-based blockchain firm Firmo, reports Julie Muhn  at Finovate. 

Firmo allows the tokens to be run on any blockchain

The terms of the deal, which marks eToro’s first acquisition, were not disclosed.

With today’s purchase, eToro aims to grow tokenised financial assets on its platform. To facilitate that growth, the Israel-based company is specifically interested in bringing on Firmo’s research and development team.

“This acquisition,” eToro CEO Yoni Assia told Bloomberg, “will help boost our growth in the future tokenized economy. We aim to be active players in blockchain consolidation.” And eToro may be ahead of the curve on this one– according to Bloomberg, tokenised assets will play a huge role in 2019 as investors seek to convert assets such as property and stocks into tradable digital assets.

Founded in 2017, Firmo offers a programming language called FirmoLang that runs on a sidechain. Exchanges can leverage FirmoLang to create financial instruments such as P2P lending platforms or cryptocurrency derivatives with tokens. And Firmo is versatile, allowing the tokens to be run on any blockchain.

Originally known for being a social trading platform, the company began bitcoin trading in 2013 via CFDs and in 2017 allowed clients to trade and invest in Ethereum, XRP, Litecoin, and other cryptocurrencies. eToro has raised $223 million since it was founded in 2007.

Change is on the way

It is traditional when entering a new year to review the year that has passed. While everyone will find something to remember of 2018, it is to be wondered whether, more globally, it will remain as THE year of the blockchain.

While blockchain – underlying technology of the now infamous cyber “currency” Bitcoin – was launched a decade ago, 2018 is the year everyone, even those far removed from the “tech” and financial spheres, heard of blockchain (or of Bitcoin).

Never have as many conferences devoted to blockchain been organised, news articles and reports published, or conversations held. Yet, while for the public at large 2018 was the “blockchain year”, for many “in the know” who had jumped on the bandwagon in the years before, 2018 will perhaps be remembered as a time of rude awakening.

Bitcoin started to really attract attention in 2017, when its value increased from $998 to $19,666 in just a matter of months (an increase of 18,645%!). Meanwhile, consultants and researchers had started to investigate which usages – beyond crypto “money” – could be made of this new technology. Blockchain promised everything: it was entirely decentralised, lightweight, highly secured and, first and foremost, neither required trust between participants nor a trusted authority/intermediary. As a result, advertised use cases started to burgeon; “smart” contracts, digital identity, supply chain tracking, voting, drug authenticity checks, electricity micro-grids and e-government are just a few examples.

Still scarred by the recent digital disruptions and afraid of “uberisation”, many firms started to spend tremendous amounts of money on proofs of concept (PoCs) to figure out where disruption could come next and how they could themselves “ride the wave”. At the same time, numerous blockchain start-ups were founded with the aim of offering (seemingly) new solutions to age-old problems.

While this all happened, news on the crypto currency market which is the original (and perhaps the only actual) use of blockchain, suddenly became not so good. Various raids (including by the FBI) and hacking of exchanges (sort of online repositories that make it easier to make payments with Bitcoins) showed that while the blockchain technology is itself generally secure, its usage gave rise to weaknesses that made the technology not so safe after all. As a result, Bitcoin crashed, soon followed by other blockchain-based currencies, such as Ethereum. Despite short reprieves the trend as of the beginning of 2018 was definitely downward.

Yet the demise of Bitcoin should not necessarily mean much for the blockchain technology itself – this would not be the first time that the first usage of a technology is actually not the right one. But at the same time, the PoCs commissioned by numerous companies got completed and, in many cases, the outcome was rather underwhelming. In cases where using the blockchain was actually feasible, the shortcomings of doing so begged the question: when does it actually make sense to use blockchain?

In a nutshell, blockchain is an online distributed ledger. Everyone holds a copy of the ledger, which is divided in blocks of entries linked together (hence, the name) with the help of cryptography. To be decentralised and “trustless”, blockchain has a key requirement: it should be infinitely costly to forge the ledger.

As a matter of fact, the amount of computing power that would be required to temper with the Bitcoin ledger is so high that it is generally thought that no one (even the largest and most powerful countries) would be able to do so. But this very aspect of blockchain is both a blessing and a curse because as result of this security requirement, adding an entry to the ledger can become (overall) exceedingly costly. Imagine thousands of “miners” (i.e. people using high-performance computers) making very computer-intensive calculations simultaneously in order to guess a number that will give them the right to add an entry (actually, a block of entries) and get the associated reward (e.g. Bitcoins specially created for them and/or transaction fees).

This mechanism, called “proof-of-work”, at the very core of the Bitcoin blockchain is so inefficient that a single Bitcoin transaction uses as much electricity as your fridge during an entire year and the total electricity expenditure of Bitcoin for 2018 was the same as that of the entire country of Denmark for the same year! While alternative security systems (such as “proof of stake” or “proof of authority”) have been devised, they necessarily entail either less security or less decentralisation (or both).

So what does this mean for businesses? In the vast majority of use cases, it would be far more efficient, less costly, and just as secure, to use a centralised platform, just like the one people use with their bank. People using Bitcoin do not trust each other, but most people typically trust, to a sufficient extent, their bank, the companies they buy from, etc. Not only do companies have a lot to lose in terms of reputation if they fail their clients, they are also typically regulated. This is why in the vast majority of cases where blockchain could be used, such as smart contracts, digital identity and supply chain tracking, using it simply does not make sense to do so in practice. Just as a symptom can reveal an underlying medical condition, blockchain is simply a sign that there are still many sectors where (more) digitisation is needed, and processes could be made more efficient and less costly by reducing the number of intermediaries.

So what about the disruptive potential of the blockchain? Was it all much ado about nothing? While in the case of established companies, administration, governments (i.e. those carrying the PoCs), using blockchain generally does not make sense, there are cases where it does. Start-ups may typically lack the trust they need to grow and succeed and have a strong case for using blockchain until they have reached a critical reputation level. But more fundamentally, individuals could find very good reasons to use it. We live in an age of “presumption” – digital technologies have taken us from purely passive consumers to content creators, curators and distributors through social media, service providers in the “sharing economy”, and, tomorrow, object manufacturers with tech such as 3D printing. All these stages of the evolution of prosumption have been highly disruptive for established players. But for disruption to happen, a key player had to emerge: a trusted centralised platform; examples include Facebook, Airbnb and the Apple Store.

Blockchain is the platform technology for the rest of us. It enables any group of individuals to trade and exchange without having to trust each other, and this is where disruption will come from. Just like previous waves of digitisation, blockchain will enable individuals to “take matters into their own hands”, this time not with content, services (or objects), but with platforms. As a result, disruption might happen far more often and rapidly.

This means that established players (be they businesses or government) have to watch out for new developments. Any “deviant” usage of today might become the mainstream usage of tomorrow (just like publishing a blog or renting a couch was) and companies ignoring this may well be left on the side of the road. With blockchain, just like other digital technologies, disruption will probably not happen frontally (which is what most PoCs are about), but initially through fringe usages that bypass incumbents, who face the risk of being blindsided.

As 2019 unfolds, we might be hearing a lot less about blockchain. But, rest assured, change is on the way.

By Thierry Rayna, professor of Innovation Management, École Polytechnique

About the author

Professor Thierry Rayna, PhD, is a professor of Innovation Management at École Polytechnique, within the Department of Innovation Management and Entrepreneurship.

He is also a researcher at the CNRS i3-CRG (Management Research Centre, Innovation Interdisciplinary Institute).

Struggling to complete your PayTech Awards nominations on time?

Great news! The deadline to enter PayTech Awards is being extended.

The final chance to enter the Awards is now Friday, 12 April 2019!

Nominate projects, products, services or partnerships for a Judged Award or tell us about inspirational people by nominating them for a Leadership Award. Are you an independent software vendor, integrator or consultancy with a trophy-worthy project? Enter the Ovum payments Innovation Award!

Full details on how to enter along with criteria can be found in our entry guide.

The awards ceremony will take place on 5 July in London.

For more information about the Awards or sponsorship opportunities, please get in touch with Jon Robson on jon.robson@knect365.com or call +44 (0) 203 377 3327.

Enter the Awards here.

Check out all the best bits from last year’s event in the video below!

Sila has announced an open beta programme for its all-inclusive API platform that bridges the gulf between existing financial systems and blockchain functionality, reports Jane Connolly.

The company says that the platform, which utilises Sila stablecoins and the Ethereum blockchain, will enable fintechs to drastically reduce time to market for applications in a regulatory compliant manner.

Sila was co-founded by CEO Shamir Karkal, who also founded Simple, a digital banking service in the US (it was purchased by BBVA in 2014). Karkal states that the revolutionary power of blockchain still needs to connect to traditional banking systems to move forward.

“Existing payment systems – ACH, Visa and Swift – are accessibly only to a handful of large incumbents, while the money transmission licensing process today is a nine to 18-month process,” Shamir says. “Our REST APIs provide a layer on top of the existing payment systems, making them programmable and ultimately making Sila tokens programmable cash.

“We remove barriers of regulation, legal and development cost, so that innovators can bring their app to the market in a matter of weeks and unleash the next wave of financial innovation.”

Sila offers Ethereum smart contract functionality and value transfer via ERC-20 tokens. Sila tokens are pegged to the US dollar, with other currencies to follow, via a centralised, 100% reserve held in liquid US treasuries.

There are seven modules in the Beta Sila API, which Sila says remove all the hurdles of integrating the current financial system into an application.

Human Plus, the South Korean crypto payments start-up, has unveiled its human-centric crypto payment ecosystem, HupayX.

HupayX will compete against giants like Mastercard and Visa

HupayX aims to transform traditional payment infrastructure with all-in-one blockchain-based cryptocurrency payment platform.

The platform was revealed at “Future Blockchain Summit 2019”, a blockchain festival hosted by Smart Dubai held on 2-3 April.

As Dubai’s government aims to transform the city to the blockchain capital of the Middle East, HupayX aims to become its main cryptocurrency-based payment solution partner.

Human Plus says it is already forming partnerships in South Korea through its “Alliance Group” initiative.

“Traditional payment infrastructure is not suitable to utilise cryptocurrencies in our everyday lives nor does it help us to eradicate existing cash ecosystem as a whole,” states Aibek Amandanov, head of global marketing team at Human Plus.

HupayX strives to create an infrastructure where everyone: national governments, solution providers, businesses, SMEs and most importantly general public can benefit from spending their cryptos in their commercial activities.

The company also states that compared to Visa and Mastercard, HupayX is significantly cheaper with just 0.5% processing fee per transaction for merchants of any size.

Cryptocurrencies can now be spent anywhere that Visa is accepted in all 19 eurozone countries, as 2gether launches its European expansion, Jane Connolly reports.

From today, 2gether customers can pay in euros or convert one of seven cryptocurrencies

Spanish collaborative banking platform 2gether announced the expansion move last month, after a successful beta launch in its home country.

From today (10 April), 2gether customers can pay in euros or convert one of seven cryptocurrencies to pay with the Visa card.

Customers can hold euros, managed by Pecunia Cards EDE (Pecunpay) and cryptocurrencies held on crypto exchanges and wallets managed by 2gether. The merchant receives the payment in euros and the user is debited in crypto.

“2gether is building the banking service of the future, where consumers take full ownership and control of the services they use and go beyond solely interacting with euros and dollars,” says Ramón Ferraz, CEO of 2gether.

He adds: “To date, there has been no consumer-owned, tangible application that connects crypto and the mainstream market. We’re proud to be one of the first companies in the crypto space launching a token sale with an already finished product.”

To use 2gether’s services, EU citizens need to download the app on Google Play or Apple Store, pass the know-your-customer (KYC) process and purchase at least €10 of 2GT tokens.

2gether has further plans to aggregate accounts from other banks, support financial decisions with machine learning and artificial intelligence, and create a contextual marketplace for financial products and services through the app.

Mike Rymanov, DSX Technologies: fintechs must stop squabbling with the regulators

Since its inception in 2009 crypto has had a turbulent but lucrative existence.

Its $200 billion valuation and evident success is partly due to the bolshy fintech firms uprooting this legacy sector with shiny new initiatives. And, while the advent of crypto has caused conflicts along the way, cryptocurrency remains an enticing investment option.

So what exactly does the future hold for crypto? Here’s my thoughts:

• Tech brands will try their luck at crypto

This year alone we’ve already seen two tech giants eyeing up the sector. Samsung is set to launch a crypto wallet and Facebook is reportedly developing crypto services.

Over the coming years, more consumer-facing tech giants will follow suit as they attempt their hand at crypto. Their interest in crypto signals a wider shift in consumer perceptions from it being a scary unknown to a viable investment option.

However, whether these firms can succeed in entering the space is yet to be seen. They will have to get past the regulator’s close guard and prove their involvement is legitimate before we can see any real progress.

• Industry collaboration won’t be far fetched

While I’m aware this may sound very optimistic, I believe we will also see collaboration between regulators and those who understand the market best: developers, investors and cryptocurrency entrepreneurs.

Stubborn fintechs are currently under the assumption that playing nice with regulators will slow down their progress. But they’ll soon realise that dragging their feet will actually do more harm than good, preventing any real long-term industry change. This will lead to their cooperation with regulators to create a more level playing field that still benefits them, just not at the expense of everyone else.

• Bitcoin will become an increasingly enticing investment option

Due to its infancy Bitcoin doesn’t yet have the same recognition as traditional fiat currencies. This means that it’s at the helm of the broader financial market and inevitably suffers from big swings in its value.

But as it matures over the next few years it will gain greater recognition. Its swings in value will be replaced with consistency. This will change the face of crypto – making it an accessible and enticing option for both corporates and consumers.

Ironing out existing conflicts first

No one can dispute the lucrativeness of cryptocurrency when it has a $200 billion price tag attached. And with tech giants already looking to make their mark on the sector, there’s no doubt that more brands and consumers will want to stake their claim in the market.

But fintechs must stop squabbling with the regulators for real progress to be made. They must take stock and consider how they can collaborate so that future success is guaranteed. Only then can we take crypto to the next level.

By Mike Rymanov, founder of Digital Securities Exchange (DSX)

US cryptocurrency exchange Coinbase has partnered with Apto Payments to bring a new cryptocurrency Visa debit card to the UK, reports Jane Connolly.

The company says its Coinbase Card is the first in the UK and EU to directly link to a major cryptocurrency exchange. It is powered by customers’ Coinbase account crypto balances, so they can pay using bitcoin, ethereum, litecoin and more.

Customers can use a mobile app to choose which cryptocurrency to debit. Coinbase converts crypto to fiat currency to complete the purchase.

Apto Payments – formerly Shift Payments – previously offered its own card allowing users to spend crypto from their Coinbase accounts in the US. Although that card was “retired” in February, Coinbase has now entered into a partnership providing “technology and support services” for the new card, the Financial Times reports.

Zeeshan Feroz, head of Coinbase in the UK, told the Financial Times: “We are targeting UK consumers because, generally speaking, data shows they are much more open to accepting new types of debit cards. There are a lot of challenger banks here compared with the US, where most people tend to stick with well-established businesses.”

He adds that Coinbase UK is seen as an independent arm of the company and that there is “no timeline” regarding a US launch for the card, although a European version will be rolled out later this year.

Pavel Matveev, CEO and co-founder of Wirex, tells us that cryptocurrency debit cards are not new and have been on the market for four years. However, this one in particular is a big milestone for the industry.

Matveev says he expects to see more companies focusing on real-life use cases in the future, rather than trading or cryptocurrency speculation.

Crypto compliance provider Chainalysis plans to expand further into Asia Pacific after closing a $36 million Series B round with a strategic investment from Sozo Ventures and MUFG, reports Jane Connolly.

“United in establishing ground truth for the industry”

The company, which provides cryptocurrency compliance and investigation solutions, raised $6 million in addition to $30 million already raised from Accel and Benchmark in February.

Japan’s largest financial institution, MUFG, invested via its wholly owned corporate venture capital subsidiary, MUFG Innovation Partners.

Chainalysis has doubled its clients in Asia Pacific (APAC) in the last year, increasing contracted revenue 16 times over. The company now plans to open an office there and benefit from the deeper market insights Sozo and MUFG can offer.

Michael Gronager, Chainalysis CEO, says: “Our business was founded on the belief that in order for the industry to grow, all its stakeholders – governments, financial institutions and cryptocurrency businesses – must be united in establishing ground truth for the industry.”

He adds: “This strategic investment will strengthen our relationships with financial institutions in Asia in particular, and spearhead both our growth and the industry’s advancement in an important region.”

MUFG Innovation Partners’ president and CEO, Nobutake Suzuki, states that the announcement signals a joint commitment to growing a solid cryptocurrency industry in Japan and Asia Pacific.

Social trading and investment platform eToro has unveiled the launch of eToroX at Paris Blockchain Week today, reports Julie Muhn at Finovate. 

The new platform is a digital asset exchange regulated by the Gibraltar Financial Services Commission.

Doron Rosenblum, Managing Director of eToroX, says, “We are one of the first companies in the world to obtain a license for crypto assets, and one of only a handful of regulated exchanges in the crypto space.”

The exchange supports six cryptocurrencies: Bitcoin, ether, ripple, dash, bitcoin cash, and litecoin.

EToroX will also support eight fiat stablecoins, including: eToro New Zealand Dollar (NZDX), eToro Japanese Yen (JPYX), eToro Swiss Franc (CHFX), eToro United States Dollar (USDEX), eToro Euro (EURX), eToro Pound Sterling (GBPX), eToro Australian Dollar (AUDX), eToro Canadian Dollar (CADX).

“In the coming weeks and months we will add more cryptoassets, stablecoins and tokens to the exchange and will work with other exchanges to encourage them to list our growing range of stablecoins,” Rosenblum adds.

EToro, which has 15 cryptocurrencies on its platform, launched eToroX in 2018 to support tokenised asset trading. eToroX’s cryptocurrency wallet and, soon, exchange, help drive the company’s aim to allow everyone to trade, invest, and save.

“Just as eToro has opened up traditional markets for investors, we want to do the same in the tokenized world. We want to bring crypto and tokenized assets to a wider audience, allowing them to trade with confidence,” says Yoni Assia, co-founder and CEO of eToro. “This is the future of finance. Blockchain will eventually ‘eat’ traditional financial services through tokenisation.”

EToro has raised $223 million since it was founded in 2007.

Images source: Pixabay

Almost any financial or economic analysis for the UK is framed around how it might be affected by Brexit. The uncertainty over leaving the EU means that not only can industries not put plans in motion for preparing to leave – as the date has changed several times – but there remains uncertainty as to what leaving may look like economically, if any different.

But not all industries are stymied by the Brexit debate. The blockchain industry – made famous by its underlying features of cryptocurrency such as Bitcoin, as well as the nature of the decentralised ledger that is being used to firm up contract agreements and make transfers more secure – seems to be able to solve the problem.

Blockchain is booming

The industry’s growth has certainly led to a lot of interest and investment, especially as people began to realize that blockchain was not synonymous with cryptocurrency, but with a new way of doing things. Indeed, Swift payments overseas are at risk of being replaced by Ripple, which uses blockchain technology and is being looked at by many major banks, including Santander. As such, the industry is seeing a lot of interest from investment, including those with the influence and power to allow the technology to really take off.

It’s not just huge investors that are continuing to show the usefulness of this industry. The ability for the general public to get involved with blockchain through online investment platforms which simplify the process means the industry can continue to grow. Part of the reason that blockchain could grow after Brexit is that the technology could provide logistical ways around the uncertain effects of the changing circumstances that leaving the EU, the customs union, and the single market has caused.

Images source: Pixabay

Could blockchain solve the border issue?

The major debate in terms of Brexit is the border issue between Northern Ireland and the Republic of Ireland. A hard border will affect the Good Friday Agreement, will affect businesses operating across the border, and will symbolise a return to The Troubles. Nancy Pelosi, Speaker of the House of Representatives in the US has stated that no deal will be made with the US that affects the Good Friday Agreement, proving how pivotal and important the ratified policy is.

Could blockchain pose a solution to the border issue? The ledger that blockchain is based on acts as an incontrovertible and unchangeable shared source of truth. Some experts in the field suggest that smart contracts could lead to frictionless trade across borders, owing to the speed and security of the data processing of the blockchain ledger. Indeed, Chancellor of the Exchequer Phillip Hammond claimed at the Conservative Party conference that blockchain would be a technology to solve problems for the UK in the future, nodding his hat to the continued investment in it.

Whether or not blockchain could present a solution to the border issue remains to be seen – but the fact that the industry is storming forwards with solutions when the UK government continues to stagnate on the issue shows a huge deal of growth for blockchain.

By Dan Ramsden