Category Archives: Financial News

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Could Wall Street Banks Become Crypto Custody Specialists?

Wall Street banks are slowly beginning to consider crypto custody as another mainstream service.

This, despite the occasional dig at crypto from the big players on Wall Street such as Goldman Sachs recent “cryptocurrency mania” comment last week citing it as one of the top risks for the market, even though the very same bank is dipping into Bitcoin derivatives on behalf of its fund manager clients.

The above service offered by Goldman Sachs may well be client-driven but behind the usual anti-crypto spin, a different picture can be detected after a bit of surface scratching. The Financial Times suggests that “trendy young crypto-types” are the new kids on the Wall Street financial block, although what crypto-related products will come from these young brains is still to be revealed. However, the trend is very much toward research and crypto is the name on the tip of everyone’s tongues.

Analysts are suggesting that the new frontier on Wall Street could well be cryptocurrency assets custody; looking after customer’s cryptocurrency funds. At the back of this are fees, another way the bank can make money out of cryptocurrency without dabbling themselves. In this way, billions of dollars held in custody by the banks can be another payday for the big names on Wall Street.

Recent Bitcoin News reports have illustrated some of the problems of safe storage of cryptocurrency assets, which vary in degrees of complexity from multiple vaults with random back up keys to Swiss Bunkers carved into the sides of mountains. Thus, there is clearly scope for bank intervention on behalf of clients.

Reportedly, forerunners in this new race are New York City-based ItBit, Gemini and more lately Goldman Sachs and JPMorgan now lining up to offer their services. Others are Japanese broker Nomara and notably the Swiss Stock Exchange part-owned by the 130-bank SIX group conglomerate.

Sam Mcingvale, San Francisco-based head of Coinbase Custody suggest that his company is joining the custody fray with plans to cold-store USD 5 billion of institutional crypto assets by the end 2018. Customers need these services, he argues:

“People were saying: “Hey, we’re already holding Bitcoin with you, we trust you, but we need more; we need a regulatory component, we need monthly statements, we need a different type of insurance.”

 

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$6 Trillion Asset Manager BlackRock Explores Crypto Potential

Asset managing giant BlackRock is rumored to be considering moves into cryptocurrency, writes Cryptoglobe.

Citing a report in the Financial News, the company, which is the world’s largest asset manager with assets under management of over USD 6.3 trillion as of November 2017, is said to be putting together a team of experts in the field to investigate blockchain and cryptocurrencies.

If the reports are correct, then this would represent a huge turnaround since cryptocurrencies where disparagingly rejected by the company just earlier this year. The following comment was made by BlackRock in February:

“We see cryptocurrencies potentially becoming more widely used in the future as the markets mature. Yet for now, we believe they should only be considered by those who can stomach potentially complete losses.”

Although the comment could imply that it saw at that point that potential wasn’t readily available in view of the crypto markets’ immaturity, it is undeniable that after CEO Larry Fink’s comments that Bitcoin was simply “an index of money laundering” that the company had little respect for the nascent industry earlier this year.

Although at this stage it’s unclear what exactly has changed at executive level, the company has made announcements which point to a significant change in attitude towards the industry. To quote the London-based Financial News, BlackRock “has created a team from different parts of the business to investigate cryptocurrencies and their underlying infrastructure, blockchain”.

The report also suggests that the working group will consider if the company should invest in Bitcoin futures and plans to examine what its competitors are also doing in the crypto business as regards the impact that this may have on BlackRock itself.

BlackRock is a hugely successful company and any move into the cryptocurrency arena is sure to have ramifications. The Financial Times reported that the company increased its new business revenue by 76% in 2017 with expectations the company’s global assets could double by 2022. The company currently employs 13,000 in 30 countries.

 

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China State TV: Blockchain 10 Times More Valuable Than Internet

China’s primary state television CCTV has broadcast on its finance channel that the value of blockchain is “ten times more than that of the internet” in a discussion on the potential and the risks of the new technology in China, writes Coindesk.

In an hour-long discussion between representatives of both private and industry sectors and host Chen Weihong, it emerged that the panel viewed blockchain as “exciting”, labeled as the Internet’s “second phase”.

In its Dialogue segment aired on Sunday night, the panel included Canadian business executive Don Tapscott, the well-known author of ‘Blockchain Revolution – an acclaimed book on blockchain which explains how to capture the opportunity and avoid the dangers of the burgeoning technology.

Other speakers included Chen Lei, CEO of cloud network giant Xunlei and Zhang Shoucheng, a physics professor at Stanford University and founder of Danhua Capital, a venture capital firm that invests in blockchain technology.

Chen presented the discussion with his claim that that blockchain has become the second phase of the Internet and now has a value ten times greater.

Stanford’s Zang commented, “While the real value of the internet is aggregating individual pieces of information into one place, which is exactly what Google and Facebook do, we are now entering an era where information is being decentralized so that individuals can own their individual data. And that’s the real value of blockchain that makes it exciting.”

However, each panel member was asked to comment on fraudulent ICOs and their marketing slogans and explain them to the nationwide audience, highlighting the Chinese government’s prohibitive stance on cryptocurrencies.

By summarizing some of the usual marketing slogans used by potentially fraudulent ICOs and having each speaker to explain them to the station’s wide audience base, the program again signaled the station’s ongoing efforts to scrutinize cryptocurrency projects in China.

Recently, the state-run broadcaster in its Financial News program described token sale activities as still “rampant,” despite a 2017 ban on ICOs in the country.  The state media outlet said that the recent ICO ban had not prevented a get-rich-quick mentality driving a rush into the cryptocurrency space.

 

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