Are Security Tokens now called Stock Tokens and are they like like an ADR on a legacy exchange?

Nerdy headlines like that will get me a stern lecture from our CMO about the need to generate more page views from clickbait. In what seems like an eon ago (on 3rd March 2021), I wrote in 4-parter on Coinbase “IPO” – Part 1 = 5 Reasons Why It Matters “The Coinbase “IPO” (actually a […]

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Part 4: What changes can we expect in future?

Politicians and media are all over this story like a cheap suit. Much change will come from all of this. Here is my rating (high, medium, low) on 8 possible changes: Front running by buying order flow becomes illegal; high. This part of the story is easy to understand and as soon as people understand […]

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Part 3: Shorting can be a valuable price discovery mechanism if done right.

Hedge Fund used to have a precise meaning. Limited Partners (LPs) invested in Hedge Funds who were bearish in order to “hedge” the rest of their portfolio which was long ie bullish. Hedge Funds then later came to simply mean a bunch of very smart people getting paid a lot of fees by LPs to […]

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Part 2: What this reveals about the business model issues of free trading on RobinHood.

When RobinHood first appeared in 2015, DailyFintech wrote RobinHood Freemium could enable a lot of new Low Cost Active Alpha services. We focussed on the free part of the story and guessed at the business model as RobinHood was not being transparent about this. We guessed wrong although now that RobinHood’s business model is in […]

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4-parter on Wall Street Bets vs Hedge Funds. Part 1: Occupy Wall Street gets even.

Some stories are too complex for our 3 minute attention span. For those stories we do 4 parts, one week apart, each a manageable 3 minute type read. Wall Street Bets vs Hedge Funds is one of those stories for sure. Today we start with the populist part of the story, how the Occupy Wall […]

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Two live Blockchain use cases in Mutual Funds administration and four pilots

In Blockchain world everybody wants to be `the World`s first`. The term started being a must in white papers, now it is all over social media, with announcements about The World`s first tokenized equity The World`s first STO The World`s first regulated Crypto bank The World`s first Initial Wallet Offering The World`s first Regulated ATS […]

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Real Time Settlement of Cross Border FX is now a 3 horse race with JPM Coin & more will join soon

Horse-racing-3.jpg

Here is the Chapter in The Blockchain Economy digital book on Real Time Settlement, updated with this post

Until recently, there were 2 horses in the race for Real Time Settlement of Cross Border FX:

  • Swift using DLT. SWIFT could do this easily at a technical level (any of the permissioned Blockchain systems will work) and as they are owned by the banks, they will get through the right doors.  This is SWIFT’s game to lose.
  • Ripple XRP. Never underestimate the ability of legacy bureaucracy to snatch defeat from the jaws of victory; so SWIFT may blow it and hand victory to a brash upstart like Ripple XRP which is publicly fighting SWIFT for banker’s attention. However, there are serious questions about a) whether a speculative coin like XRP is useful addition to a messaging system (Ripple ILP) and b) whether a speculative coin like XRP could be classified as a Security by regulators. 

Now JPM Coin is the third horse in the race that will take business away from both the other players:

  • Swift will lose volume as big banks emulate JPM and settle using their own Coin. Expect something like CitiCoin, GoldmanCoin, HSBCCoin, DeutscheCoin, etc to announce soon.  They may choose a) different branding b) different base currencies (eg EUR), but this is low hanging fruit for the Big Global Banks.
  • Ripple XRP will be forced to pitch for smaller banks (who will tend towards loyalty to SWIFT) as the Big Global Banks go for their own Coins.

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Bernard Lunn is a Fintech deal-maker, investor, entrepreneur and advisor. He is the author of The Blockchain Economy and CEO of Daily Fintech.

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