IMF Launches Crypto, LSE Lists Equity Token and Pewdiepie leaves Youtube
Off the Blocks | Vol 63, Apr 16, 2019
|Apr 16, 2019|| 5|
This newsletter is our weekly roundup of some of the significant blockchain news, that provides an overview of the rapidly changing blockchain landscape to help you map your blockchain strategy and be aware of regulatory announcements globally. Get your friends to Subscribe Here.
Another Great Week in Crypto
A great week in the blockchain industry feels like a long year compared to traditional industries. Three very significant events happened in just the last 7 days that could perhaps put the breakneck speed of innovation in the silicon valley to shame.
First, Coinbase launched a new Visa debit card offering for its UK and EU customers. Coinbase Card customers will be able to spend their bitcoin (BTC), ether (ETH), litecoin (LTC) and other cryptocurrencies “as effortlessly as the money in their bank.” The exchange said it will “instantly” convert cryptocurrency to fiat currency, such as the British pound (GBP), when customers complete a transaction using the debit card. While Coinbase hogs all the attention, it is not alone - 2gether also announced a similar offering in partnership with Visa, something that they have been working on for a major part of the last year.
To date, there has been no consumer owned tangible application that connects crypto and the mainstream market. 2gether is developing the bank of the future where consumers can take full ownership and control of the services they use.
- Ramon Ferraz, CEO, 2gether
Second, Blockstack filed with the SEC in the US to raise $50M in a Reg A+ crypto token offering. Blockstack will undergo a thorough regulatory review, and a thumbs up from the the SEC will enable enable Blockstack to raise capital through the U.S. securities markets by selling a token called Blockstack Stacks (STX) in a securities offering that could be more cost effective and flexible than an IPO.
This can potentially set a precedent for others in the industry, not just for public offerings, but also as a path to launch new public blockchains and establish a path to bootstrapping decentralized ecosystems.
- Muneeb Ali, CEO, Blockstack
Third, London Stock Exchange, founded in 1571, will now trade in security tokens. The exchange approved trading in tokenized equity shares of 20|30, a fintech startup. At Proteum, we have been big advocates of equity tokens and have actively worked on creating a streamlined ecosystem to accommodate for various players that need to be a part of the equity ecosystem. As issuers think about tokenizing equity, very interesting challenges emerge, some of which have been taken for granted in traditional equity issuances. Beyond the apparent need to onboard traders and custodians of these equity tokens, corporates need to bake in corporate governance and treasury management functions into the definition of a token itself.
Fundamentally, most opportunities in this space seem to trend along major financial rearrangement, whether it is a new means of empowering consumer spending or bypassing investment banks and large institutions to access capital. It is therefore surprising to see that blockchain adoption is not a priority for financial executives. A recent KPMG survey of 450 tax and finance executives found that the hurdles to adopt include from lack of knowledge, lack of resources and unsurprisingly, lack of technical decision makers. As a result, CFOs, while seeking different solutions, are not placing a high priority on blockchain adoption. The risk for both small and large companies lies in being blindsided to the leverage afforded by uncorrelated opportunities to create highly asymmetric return profiles. The fatal error executives must avoid is in trying to force fit older concepts into new ideas. Companies that understand these new concepts will continue to enjoy competitive advantages.
At the end of the day blockchain makes multipart collaboration more efficient, whether it’s having a consortium to track data on counterfeit getting into supply chains, or how much inventory you need to create a better forecast. There is tangible ROI in the blockchain.
- Ted Kim, VP, Samsung SDS
Now for some other significant news form the world this week:
IMF & World Bank | IMF Launches Private Blockchain-Based ‘Crypto’ After Bashing Bitcoin: The International Monetary Fund (IMF) and the World Bank are purportedly joining the bandwagon with a newfangled venture. The project is called Learning Coin. For now Learning Coin will only be available within the walls of the IMF and the World Bank. In a statement, the IMF explained that this crypto asset, will give its staff a better understanding of the goods, smart contracts and transparency, and bads, such as money laundering, of this technology. Thus, it could be postulated that the IMF’s Learning Coin is a way in which the entity can look into how to restrict distributed digital assets and centralize blockchain, rather than giving consumers freedom through Bitcoin. As Lagarde said in regards to fintech companies: “they will have to be held accountable so that they can be fully trusted.” [… Read More on NewsBTC]
Equity Tokens | Blockchain Startup Raises $3.9M with Equity Tokens on LSE’s Turquoise: United Kingdom-based blockchain startup 2030.io has raised $3.9 million through a platform owned by the London Stock Exchange (LSE). Known as Twenty Thirty or 20|30, the startup has reportedly secured 3 million British pounds (GBP) by selling tokenized shares on LSE-owned equity trading platform Turquoise. In July 2018, 20|30 became one of 29 firms that were approved by the Financial Conduct Authority (FCA) to start testing within its fourth cohort of a regulatory sandbox. With FCA approval, 20|30 became authorized to issue equity tokens on the Ethereum (ETH) blockchain, with the firm announcing that LSE’s Turquoise will be the first platform to pilot the sales of its tokenized shares. […Read More on CoinTelegraph]
The company further plans to offer secondary transfers, and work our way up the ‘capital stack’ to reinvent private equity and public markets.
Tech | Why Coinbase’s Move Into Proof-of-Stake Matters: Is Coinbase going to solve the thorny challenges of proof-of-stake (PoS) blockchain governance or centralize those systems even further? That’s the question experts in the space are pondering with the recent announcement that Coinbase Custody will offer staking support for Maker, Tezos and Cosmos. The move means institutional investors will be able to vote on blockchain governance matters directly through their Coinbase accounts.
We’re hoping to bring online, frankly, the majority of institutional investors. We’re growing these three assets under custody and hoping to see an increased turnout of these votes.
That this is possible is because blockchains like Cosmos, Tezos and Maker rely on PoS to secure their networks, unlike proof-of-work chains like bitcoin and (for now) ethereum. Coinbase is hardly the only giant entering the game of stakes. On April 3, Binance’s custody provider Trust Wallet also announced plans to support Tezos staking features by the end of Q2 2019. Unlike institution-centric Coinbase Custody, retail-friendly Trust Wallet will create delegation features on the mobile wallet first, then potentially add voting options down the road. [… Read More on Coindesk]
EOS | Why we built our blockchain business on EOS instead of Ethereum: Our criteria for evaluation was simple: We needed to choose a technology that could support an unbounding financial market, assist with heavy regulation, and is consumer centric. First, is EOS’ ability to execute more transactions per second than Ethereum. Second, EOS’ design means we can scale our platform with no impact to users, regardless of whatever may be running on the blockchain. Third, EOS provides an extremely robust permissions and governance structure. Fourth, transaction costs on the EOS blockchain are much cheaper than on Ethereum. […Read More on VentureBeat]
Payments | Indian Banks Consider Promoting Blockchain Tech Use for Payments: The National Payments Corporation of India (NPCI) is considering implementing blockchain technology to increase the strength of digital transactions. The NPCI, an umbrella organization that operates retail payments and settlement systems in India and includes 56 national banks as stakeholders, was set up with the guidance and support of the Reserve Bank of India and the IBA. The NPCI will focus on developing blockchain tech in the payment domain for boosting digital transactions, the article states. […Read More on CoinTelegraph]
NPCI intends to develop a resilient, real time and highly scalable blockchain solution. It is proposed to develop this solution using an open source technology/ framework/solution.
The no 1 most subscribed Youtuber, Pewdiepie, announces that he will exclusively stream on Dlive, a video streaming site running on blockchain. Right now he has almost 94 Million subscribers and a popular video he posted only 11 days ago has already received over 70 million views. That is on average, over 4,400 views every minute for 11 days straight. And now this man is not only supporting blockchain, but he is on blockchain. In the recent past, Pewdiepie has been openly critical of youtube’s algorithms stating that poor quality and even inappropriate content is being promoted above genuine creators’ original content. [… Read More on Hacker Noon]
Proteum is a global blockchain advisory firm that works with public, private and start-up companies to help them transition into the world of blockchains and decentralized applications. We help companies strategically build their ecosystem and unique capabilities so that they can own and control their future. ProteumX, our accelerator program, invests in and accelerates the time to market for companies building blockchain solutions.