While speaking at an event by the office of Financial Research Federal Reserve Vice Chairman for Supervision Randal Quarles talk about the issues digital currencies could pose to the markets; the current level of use doesn’t pose a risk but as the scale of usage increases so does the potential potential problem; Quarles said, “if the central asset in a payment system cannot be predictably redeemed for the U.S. dollar at a stable exchange rate in times of adversity, the resulting price risk and potential liquidity and credit risk pose a large challenge for the system.”; he also talked about the the benefits of blockchain technology and if the central bank would issue their own digital currency. Source.
The Reality Shares Nasdaq Blockchain Economy Index looks to provide an ETF that tracks the growth and development of companies implementing blockchain solutions; they filed for the ETF with the SEC on November 2nd; “The collaboration between Nasdaq and Reality Shares represents a tangible way to track the growth of an industry that may revolutionize the way commerce is conducted, and yet is still in its infancy,” said Fredrik Voss, Vice President of Blockchain Innovation at Nasdaq. Source.
The KPMG Pulse of Fintech Q3 report pointed to 274 deals worth over $8bn in investment; the hottest areas of investment include artificial intelligence, insurtech, regtech and blockchain; the three biggest countries come as no surprise with the US, China and the UK dominating their respective regions. Source.
The European Commission has announced a €30bn investment initiative for blockchain technology; the funding is part of the Horizon 2020 Initiative which helps commit capital to projects in security, climate, clean energy and the digital economy; “Artificial intelligence, genetics, blockchain: science is at the core of today's most promising breakthrough innovations,” said Carlos Moedas, commissioner for research, science and innovation according to CoinDesk. Source.
Business Insider takes a look at a growing trend in fintech as companies look to offer blockchain technology as a service; companies offering this already include Amazon AWS, IBM, Microsoft Azure and R3 Corda; this trend is seen as something that will only increase in the coming years as more adoption of this technology occurs in financial services and beyond. Source.
The blockchain insurance consortium B3i has secured 38 members worldwide including Allianz, Swiss Re and AIG; the project would help these insurers move away from their paper based processes and secure contracts on distributed ledgers; right now blockchain is not widely used in insurance and the project is hoping to bring along the change; B3i estimates the changes could help the industry to save over 30 percent of costs. Source.
Ravi Menon, managing director of the Monetary Authority of Singapore (MAS) spoke about the MAS completing their first blockchain pilot covering interbank payments; Menon stated, "The killer app is really to go cross-border. If we can make a blockchain-based system support payments from one country to another, that could be potentially transformative in bringing costs down."; he also spoke about the increasing understanding of fintech by CEOs of major banks and how the MAS supports partnerships between banks and fintechs. Source
Reality Shares Advisors and Amplify Trust ETF have both files with the SEC to create blockchain related vehicles; the applications are not yet complete and the SEC must rule on both before they are permitted to go ahead; CoinDesk reports that both companies will focus on companies with market capitalizations above $200mn with a six month daily trading average of $1mn. Source.
With the recent hack of Equifax still top of mind for regulators and consumers alike, there are individuals beginning to explore potential solutions including blockchain technology; Bloom and Open Identity Exchange are working on protocols and standards that could be used by any entity to create an ID system on the blockchain; having such a system would allow for more security from hackers and help to verify individuals; while there are current limitations to the technology there are many groups looking to solve these issues and a potential government led initiative could speed up development. Source.
One former trader discusses his foray into bitcoin; in a Forbes article he shares how he was wrong to dismiss bitcoin initially and why bitcoin matters more than the blockchain. Source