Category Archives: fintech

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Study: Blockchain Can Save Banks $27 Billion per Year by 2030

Market intelligence firm Juniper Research has published the results of its blockchain study, with the findings showing financial institutions are set to save USD 27 billion annually by 2030 should they utilize the technology.

The cost reduction for cross-border settlement transactions is shown to be reduced by over 11% when deployed on blockchain.

#Blockchain deployments to save #Banks more than $27bn annually by 2030, with cost reductions not just in #Payments processing and reconciliation, but in treasury operations and compliance. #Fintech #Banking

Read more in our press release: https://t.co/pNWXeopbjO pic.twitter.com/pYk2PYsISQ

— Juniper Research (@juniperresearch) August 1, 2018

The Future of Blockchain: Key Vertical Opportunities & Deployment Strategies 2018-2030 study also investigates alternative areas where the technology could create more cost-effective practices, including in treasury operations. The savings applicable for banking departments varies; in areas of compliance, automated money laundering checks via blockchain could create a 50% price decrease in just a few years.

Internal banking legacy systems that will most likely be required to run alongside any blockchain tech services may, however, cause the savings process to take several years to be fully implemented. Estimated service cost savings are not expected to reach USD 1 million per annum until 2024.

The full research paper can be purchased from Juniper online.

5 industries benefiting from blockchain

Besides the banking industry, the report notes the benefits of utilizing blockchain technology in a number of other sectors, including food exports and trades, as has been seen in a number of cases already including in the Australian sugarcane industry. The report estimates a nearly 50% cut in the food industry’s costs associated with fraud.

Juniper Research has also released a free white paper detailing five industries that will benefit from blockchain, including land registry, healthcare, and the automotive sector, entitled ‘5 Industries That Will Fuel the Blockchain Boom’.

It splits the research into eight key regions, including the key challenges each industry will face on the way to adoption and the top movers and shakers of the blockchain sector in 2018.

 

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KPMG Study Reveals 2018 Blockchain Investment Has Already Outgunned 2017 Total

A KPMG study finds that fintech companies’ investment in blockchain technology in 2018 has already surpassed the entirety of 2017.

Capital growth

The Pulse of Fintech 2018‘ biannual study from one of the Big Four auditing and consultancy firms took a global look at the growth of fintech investments, which in the first six months of 2018 has broken past 2017 in spectacular fashion.

The study affirms that blockchain is “moving beyond experimentation”, noting that a majority of Q1 and Q2 investors in 2018 gravitated more toward established companies and organizations moving into “additional rounds of funding”. This is contrasting to 2017 which saw significant amounts of investment in startups, especially through initial coin offerings.

Venture capitalist blockchain investment so far this year has reached USD 858 million, more than 2017’s USD 631 million. These figures are bolstered by two enormous funding rounds: Circle, which raised USD 110 million and  Ledger cryptocurrency wallet, which recently raised USD 77 million.

Safwan Zaheer, Financial Services Digital & US Fintech lead for KPMG said, “There’s more VC flow available than opportunities to invest – a sign of tremendous growth in the space… Investments in blockchain related firms already doubled in the first half of 2018 compared to 2017. Blockchain has the potential to transform banking services. If banking systems were to be rewritten today they would be based on blockchain.”

The study acknowledges the versatile list of applications for blockchain technologies, which is a contributor to its growing success, especially within the financial sector. KPMG cites banking and insurance as two of the primary uses of the technology but also explains that blockchain can “enhance processes for any number of US and global businesses.”

Initial coin offerings

With regards to ICOs, the modern crowdfunding method has also seen a sharp rise, outpacing that of 2017. A similar June report released by another of the Big Four, PwC, found that a total of 537 ICOs in the first five months of 2018 have raised more than every ICO prior to 2018, with a total volume of USD 13.7 billion.

Again, a part-cause for the ICO figure exploding in 2018 is down to the EOS ICO which lasted for a whole year, raking in a record USD 4 billion, beating the previous record of Telegram’s controversial USD 1.7 billion ICO.

The Big Four have been looking at the growing industry with a piqued curiosity; in April 2018, it was reported that the firms were receiving daily enquiries into ICOs and cryptocurrencies from clients.

 

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La Bitcoineta: Argentine Non-Profit Tackles Lack of Knowledge in Local Communities, Push for Crypto-Driven Change

As Bitcoin’s popularity and user base continue to grow, companies involved with the cryptocurrency are progressing from merely providing the infrastructure needed such as wallets and exchanges, to providing sophisticated services such as healthcare or gaming applications. With an innovative fintech sector emerging to service the cryptocurrency market, financial institutions such as Goldman Sachs have begun turning their heads, offering Bitcoin ventures such as futures trading or cryptocurrency hedgefund management.

The Bitcoin market cap at the time of press stands at USD one hundred seven billion; this significant sector still lacks international understanding, trust, and mainstream accessibility. A group of individuals based in Argentina have taken it upon themselves to liberate and educate the population of their country on Bitcoin, with the hopes of aiding sustainable economic growth via the possibilities of Bitcoin and the ensuing fintech sector.

The group has managed to create a fun, unique way of spreading the message. Pictured below is La Bitcoineta, their stylised Bitcoin education van that has taken them across the cities and towns of Argentina.

They described their objective to Bitcoin News as an ”initiative to generate bridges between those who are developing the technologies that will change the world and the different productive, social, cultural, and economic ecosystems.” The individuals in the team shared their understanding that firsthand projects can inspire new solutions, or benefit from existing technologies.

Smaller communities lacked general Bitcoin awareness

Speaking to Bitcoin News, a spokesperson for La Bitcoineta described a striking lack of awareness surrounding Bitcoin and blockchain technology in the smaller communities that they visited. Consequently, this meant that much time in these locations was spent devoted to explaining these concepts to the locals from scratch, basic education being the first step for these individuals to enter the market. Their efforts were welcomingly received; the spokesperson said ”everybody is open to the new concept and enjoys us going there.”

Bitcoin has started to make its mark in Argentina

As the spokesperson described it as surprising to some, nearly all of the smaller cities that were visited had some individuals who were knowledgeable on the subject, indicating the vast reach of Bitcoin internationally. These knowledgeable ”bitcoiners,” as they described them, shared enormous gratitude towards the team for taking the time to visit and share their knowledge with their hometown.

Is local media the answer?

The team told Bitcoin News that they have received an exponential amount of national media traction during their journey so far, with feedback for their work largely positive. They noted local media as a powerful tool in aiding their cause. Frequently La Bitcoineta would make headlines in the local newspapers and their online outlets, helping develop the regional conversation around Bitcoin and blockchain. The irony was not lost that such a traditional, established media form would come to aid this reformist cause.

Challenges and successes

The team behind La Bitcoineta see the greatest possible results of their tour as driving crypto-related change in communities that would benefit this the most, particularly in areas where individual’s efforts could be monetized or reach international markets. Through their talks, they hope to create an impact on the local fintech sector, inspiring projects, changes and pushing for a less bureaucratic government.
The biggest challenge they have faced in reaching this goal has been their ability to reach and connect with the right people. While the team has been considerably active in pushing their agenda, reaching government decision makers themselves and identifying the communities that they could positively impact the most has presented the greatest test.
Despite La Bitcoineta’s Bitcoin positivity, those behind the objective do not see it as likely, nor are they pushing for Bitcoin to be adopted as a regular payment system. This is only considered by themselves as a likely option if merchant outlets themselves incentivize cryptocurrency spending through a discounted alternative to fiat.
Instead, the biggest fruitful challenge they see is pursuing Bitcoin to be a globally recognized store of value and a better alternative medium of exchange. The impending fight against banks and governments is their biggest concerns for reaching this, but they are confident the cryptocurrency driven change they envision will be achieved.
La Bitcoineta’s journey can be followed on both Twitter and Facebook.
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Images Courtesy:La Bitcoineta

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Nigeria Can Be Empowered By Bitcoin Says Foundation CEO

Lady Victoria Walker, CEO of the United Digital Currency Reserve Foundation, has recently stressed that the understanding and deployment of bitcoin can kickstart the financial growth in Nigeria and Africa as a whole, reports Niger247News

In a recent presentation Lady Walker, who is also a blockchain and cryptocurrency speaker, as well as Principal Consultant at Cryptoria Investment Research, maintains that for Nigerian banks to deal with blockchain technologies, it first needs to understand cryptocurrencies:

“Many banks and regulators are confused and do not fully understand how Bitcoin and blockchain technology work, but I think once the Central Bank of Nigeria and other key figures get to understand the true nature of blockchain technology and what it can bring economically, I believe they may embrace the technology with open arms.”

The UK based fintech entrepreneur feels that new technologies such as blockchain and cryptocurrency are essential factors in empowering African leaders to inject growth and financial inclusivity into their economies, she argues:

“Britain imposes a ‘super tax’ on remittances sent to African countries, causing a loss of £1.8bn a year from money sent home by workers. Think about it, £1.8bn is taken away from the people sending money to support their families in Nigeria.  Imagine what £1.8bn a year could do in the pockets of families depending on money sent to them from abroad? This is where blockchain technology comes in. It solves a problem like this by making it easier and cheaper to transfer and remit payments internationally.”

Nigeria has had a difficult cryptocurrency history. Early last year it was reported that the Central Bank of Nigeria was considering implementing its own cryptocurrency, but later the same year, it was advising banks to distance themselves from virtual currency, warning them, “not to use, hold or transact in any way with the technology.”

The remarks came at a time when Nigeria’s interest in cryptocurrencies was flourishing. According to data from Coindance, weekly trading volume on Localbitcoins in Nigeria surged 500 percent in 2017.  Nigeria then, was among top countries using Google to search for ‘bitcoin’, alongside South Africa, Slovenia, Holland, and Austria. Although, it was reported at this time that a Ponzi scheme may have been partly responsible for the clicking figures. The scheme reportedly cost investors UD$50 million in early March of that year.

In a press release issued in March of this year, the CBN is now reiterating its warnings of last year, suggesting that due to crypto investments being unprotected, investors will be at risk. Lady Walker maintains that it is lack of knowledge which holds back the tide of progress in the African crypto space, which in turn creates institutional and public skepticism such as the CBN’s.

“People are skeptical because that is human nature. We are natural cynics and skeptics and rarely trust what we don’t understand. This is why I urge people to truly understand the nature of the industry, asset and also yourself”

Lady Walker believes that there will come a time when all Nigerian banks will have to adopt cryptocurrencies of their own, but due to the current volatility of the crypto market, it remains a future goal of those who see cryptocurrency as the financial future. She maintains:

“Bitcoin is a reality. We have all major world governments scrambling to make sense of it and world leaders sharing their views on the currency. For the past 700 years, our world has relied on the European legacy banking system for means of payments and transactions. Bitcoin is definitely challenging the traditional way when it comes to transfer of value. Just like the internet changed how we shop, bank, date and find information.”

About 40% of Nigeria’s population is unbanked, which blocks nearly half of the population from the financial economy. To this, the fintech CEO argues “All you require is a smartphone and internet to start sending and receiving payments. No I.D required, filling out paperwork, etc… Do you know how much this could change things for the people of Nigeria?”

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Irish University Wants Government to Push Blockchain Into Mainstream

National University of Ireland (NUI) authors of a study on the adoption of blockchain have approached the government to promote a more widespread use of the technology in the country, reports The Irish Times.

The new study involving 20 selected Irish companies, conducted in association with the Blockchain Association of Ireland examined the factors that influenced them in their decisions to adopt blockchain. On its website,  the association described its aims as, “facilitating Irish business leaders, educators, policy-makers and citizens in learning how blockchain technology can be applied to make Ireland the World’s most blockchain literate nation.”

The study is expected to receive much interest as it’s the first of its kind in the country that has examined how blockchain could be implemented and hopes to increase blockchain awareness and adoption more broadly across the nation.

Research leader at NUI Galway, Dr Trevor Clohessy, sees the need for a national initiative to promote the new technology, particularly in the light of, as yet undecided border rules, between Ireland and the north following Brexit

“…Beyond business, other beneficial uses of this technology would be in voting machines and ballot boxes to address electoral fraud and potentially looking at a blockchain enabled technology-controlled border identification system that could provide a possible solution to the current North/South Brexit border challenges.”

One of the findings of the study shows that only 40 percent of companies in Ireland have embraced blockchain technology, which the researchers felt was relatively low, despite Ireland’s 13th position on Bloomberg’s 2018 Innovation Index, with high productivity scores and advanced IT infrastructure.

In recent years, Ireland has promoted itself as a hub for fintech and blockchain business. A recent report by Financial Executives Research Foundation (FERF) released figures which indicated that 30% of global of financial executives had plans to commit to blockchain technology within the next 18 months.

The study is proposing that the Irish government promote the new technology to extend this level of interest within the country, overcoming executives uncertainties about embracing blockchain, such as lack of business cases and in-house expertise. It was noted in the report that association with ICO’s and digital currency was perceived negatively by executives.

In terms of awareness of the technology, five out of 20 company executives interviewed had a basic level of blockchain awareness, while six had a medium level and only nine were able to demonstrate a high level of knowledge.
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UK Crypto Plan Under Review

The UK’s Financial Conduct Authority (FCA) has announced that it plans to release the results of its task force on cryptocurrency in the summer.

One of the functions of the UK government’s task force is to examine the risks of blockchain technology and mitigate these while examining the benefits of distributed ledger technology in financial services. The Crypto Assets Task  Force, consisting of the UK Treasury and the FCA, has been set up for this purpose.

Chancellor Hammond’s comments at a recent Fintech conference in Australia demonstrate that the UK would open its doors to innovators and inventors, suggesting the task force as a first step towards automating financial compliance in the UK. In the context of the fintech sector, he saw it being able to “grow and flourish” in a regulatory climate that has broadly been supportive of blockchain technology and cryptocurrencies over the years.

The FCA suggests that cryptocurrencies are “an area of increasing interest for markets and regulators globally”. The discussion paper to be published this year should clarify Bank of England and Treasury views on which direction to take regarding cryptocurrency regulation.

On Friday, the authority clarified that firms offering cryptocurrency services would need to comply with new guidelines set or be prosecuted under the law. Treasury committee chair, Nicky Morgan, also made it clear that its own ongoing enquiry into cryptocurrencies would examine some of the risks and threats posed to UK consumers, as well as businesses and governments, by digital currencies.

Morgan pointed out, on a more positive note, that the committee would “examine the potential benefits of cryptocurrencies and the technology underpinning them, how they can create innovative opportunities”.

Committee member Alison McGovern suggested that the inquiry would help lawmakers and politicians educate themselves on cryptocurrencies before enforcing legislation on how the industry should conduct its business. She suggested that the UK government needed a clearer understanding of cryptocurrencies and to think more clearly about “the policy environment for blockchain technology”.

 

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Single-purpose cryptocurrencies have a problem

Let’s face it. There’s a slight problem with cryptocurrencies and no, it’s not the issue of regulation. And no, it’s probably not the volatile markets or any other buzzwords or catchphrases you can think of.

Spoilt for choice?

It comes down to the eye-watering amount of pending and existing cryptocurrencies. CoinMarketCap.com has, at present, 1,565 coins and tokens listed; it’s a mind-bogglingly large number of cryptocurrencies and, to an outsider, it doesn’t quite make sense.

Cryptocurrencies are viewed as these odd digital credits that you can purchase for real money and well, that’s about it.

Unless you’ve painstakingly spent the time searching around for places and businesses in which you can go to spend your cryptocurrencies, then you’re likely nonplussed about the whole Bitcoin boom. And if you have taken it upon yourself to search for a place, you’ll come up with a few traders and merchants that accept Bitcoin (BTC), Litecoin (LTC), Ethereum (ETH) or any of the ‘big coins’ in the business.

Or too many cooks?

Then there is the second part of this issue. It comes in the form of a question and be prepared to think about this one. When there are 180 UN-approved currencies in the world, what good is it to have 1,565 coins?

The logical conclusion would be that the majority of these coins are entirely redundant, but that just isn’t the case.

A staggeringly large number of coins are utility tokens that solely function within an internal economy on their native platform, and this also is by no means is a particularly healthy situation for the industry at large.

Imagine that, to access your Google Drive Cloud storage you had to pay with a cryptocurrency to do so. Every single time you acted within its cloud storage platform it would be ‘fuelled’ or ‘funded’ by a coin designed explicitly to do so.

Well, you have all your cloud-storage tokens, now how about some Starbucks tokens to get your coffee? Do you have enough Apple tokens to make purchases through the App store or have you not converted enough of those tokens from the tokens you use to pay your rent?

Notice anything odd with the above?

Cryptocurrencies by their hundreds tackle niches within industries, offer solutions to some particularly fringe topics which may excite the novice or veteran traders who know how to navigate the markets profitably.

But to assume that the everyday cryptocurrency users will happily and continuously go through the process of converting their primary coins such as BTC or ETH to gain access to things that regular currency can buy? It just doesn’t seem logical and will stifle the blockchain industries’ efforts to get adopted en masse globally.

The single-use tokens that exist will have to shorten out at some point if there is to be any hope for the industry to have an easily accessible, widely available and uncomplicated future for its consumers. To the average onlooker, it’s safe to say that less is more.

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