Welcome Marcus to the rebranded Goldman asset mgt division and to the UK

I can’t believe that it is already 2 years from the launch of Marcus from Goldman. I wrote about it Nov 2016 in Will Goldman become a verb? Watch the Marcus ads!

  • The consumer pays a fixed interest rateon the loan (which includes a profit margin for Goldman). It has no complexities (APRs and all the usual hidden in a credit-card type of arrangement).
  • It is simple and clear. No fees for late payments.
  • It is transparent and simple! No credit-score changes! There is nothing hidden, no optionality (hiding misunderstanding and potentially Goldman outsmarting the user).

My right hand, Gaston Greindl, briefed me last week on Marcus. Goldman has decided to add a dedicated loan specialists workforce who deliver live, personalised support to client, which goes well beyond the flexibility already offered on the platform to choose payment dates and payment options to fit their payroll schedule.

During the first year of Marcus – by the end of 2017 – Marcus had more than $2.3 billion in loans ranging from 12 months to 4 years.

The deposit part of the business – Online Savings Accounts for retail – is FDIC insured, no-fee again, and offering rates higher than the national average. During the first year of Marcus – by the end of 2017 – Marcus had more than $17 billion in deposits.

After extensive research and surveying, Goldman found that customers preferred to speak with human advisers for their borrowing and savings inquiries. So, all of Marcus calls are answered by loan or deposit specialists, improving the customer experience.

What caught my attention this time around, was the Barron’s article about Goldman Sachs moving Marcus into its asset management unit, which will be renamed the consumer and investment management division. Previously, Marcus had been part of Goldman’s investing and lending division.

I always talk about Fintech towards serving your existing customers in ways not possible before. Goldman has been fearless in experimenting with new business models in serving customers and in acquiring new customers. Over the past decade, Goldman has been an investment bank that wasn’t shy to get a banking license after the subprime crisis; has opened its proprietary IP to its Buy side clients (read more in my contributing chapter in the WealthTech Book ); and has acquired 37 Fintechs already making it the No.1 bank in Fintech investments (as of end of 2017)


Marcus was born in a neighbourhood catering to the basic consumer banking retail needs. Goldman now feels that it can and should be integrated in the next generation wealth offering of Goldman in the US. No fees, human advisors, flexibility even for the very basics: online savings and personal loans. This makes sense as product lines are blurring. Clients don’t want to have shop for their financial needs in 5 different places. Integration is the name of the game. Goldman is moving gracefully in that direction.

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While Marcus is being integrating in the US in the wealth offering, at the same time Goldman is launching Marcus retail in the UK. It started just a month ago and up 50,000 customers signed up in less than two weeks. UK residents can deposit from £1 to £250,000 – and withdraw their money as many times as they like, with no fees or charges. Fully digital onboarding plus customer service with a specialist available. Now this can’t be great news neither for the challenger banks nor for the high-street banks. Marcus has a brand name and offers an interest rate of 1.5% (for the first year), which is well above the UK average of 0.6%. The Marcus account rate drops to 1.35% the 2nd year. The closest easy access savings rate is currently 1.41%, offered by Yorkshire Building Society.

Expansion in Germany was also announced in May but there is nothing talked about since.

Marcus in the US has built a loan book that is not even 5% of the $72billion loan book of Goldman. It’s value is not the amount of loans or their margin. It is the new retail customers and moreso it is the learnings that Marcus is offering Goldman Sachs’ so that they can enhance their wealth offerings with consumer best banking services (deposits and loans) which means below cost and with human specialist customer service.

Efi Pylarinou is the founder of Efi Pylarinou Advisory and a Fintech/Blockchain influencer.

Get fresh daily insights from an amazing team of Fintech thought leaders around the world. Ride the Fintech wave by reading us daily in your email.

Blockchain Weekly Front Page: Bridges across the Chasm to the Pragmatists


The Blockchain Weekly Front Page is a CXO level briefing. Our mission is to serve the mainstream business community by selecting one major theme in the Blockchain Economy each week and three news stories to illustrate that theme. This is all you need to know, each week, jargon free for CXO level business leaders and investors who will use this technology to change the world, in your email inbox each Monday at 7am CET. 

For more on the format please click here.

Last week our theme was “Cryptocurrency markets shrug off loss of confidence in Tether and equities correction.”

Blockchain and cryptocurrencies are in the early adopter stage. But it looks like we are getting closer, a lot closer to the point of Crossing the Chasm. Early adopters of a new product or technology are separated by a gap from the majority of users, but a recent story from HTC, is one of the signals that shows that the industry is reaching this point.  When we cross the chasm, we will start seeing a rise in the number of easy to use tools, aimed to every day consumers.

Well, Blockchain mobile phones are here! The HTC Exodus 1 will be the first blockchain phone, to bring dApps to consumers.

Past news about one exchange or another being hacked, is driving everyone to seek out solutions, in order to make cryptocurrencies safer. The new HTC phone will make it a lot safer, making it harder for someone to rip you off. It lets people store their blockchain data on a secure enclave. Cryptocurrency assets will be stored on a separate partition from the Android operating system, to improve the security of the crypto assets. Android phones pose security risks, to a wide assortment of malware and other threats.

The HTC phone will also come with a Social Key Recovery functionality. This will allow users regain access to funds in the case they lose or forget their private key. Users will be able to split their key among three to five people they trust. While uses won’t need their help to assign transactions, they will in the case they lose their phone.

The Exodus 1 will be able to run decentralized applications (dApps) and programs that operate on the blockchain. Also, the phone will be able to work like a node on  Bitcoin or Ethereum.

While we are still far and away from usable dApps, but if blockchain is going to go mainstream, we will need to see the widespread adoption of dApps. This is exactly what needs to happens if are to the realize the full potential of cryptocurrencies.

Stablecoins have been making the news in recent months.

Another important story this week is that Coinbase added support for Circle’s stablecoin. Last week we talked about Tether and other stablecoins and whether they will be able to hold their pegs over time.

This is the first time Coinbase has supported a stablecoin. Coinbase customers will now have the ability to purchase, receive, sell and send USDC tokens on Coinbase.com.

One of the unique twists to this story is that while customers can trade Bitcoin or Ether for USDC, exchanging USD/USDC will be risk free. Users will be able to buy 1 USDC for $1 or sell 1 USDC for $1, with no fees.

This is an important step, that opens up so many possibilities.

The use of stablecoins, like USDC or Tether, make it easier to send, store and use in dApps,. Stablecoins on exchanges let traders protect their portfolio, by easily exchanging their positions to safer crypto, that are not volatile. The USDC and other stablecoins are better suited for e-commerce, as merchants and consumers can use the digital currency without worrying about token price volatility. The support of USDC by Coinbase, will potentially draw more new investors and drive cryptocurrency use for payments.

The government of Kenya announced it will use blockchain to distributing new government-funded housing units, as part of its Affordable Housing Big Four Agenda. The new housing project, will publicly fund the building of 500,000 living units and use blockchain to fight corruption, theft and misuse of public funds.

Kenya is one of Africa’s leading countries regarding blockchain and cryptocurrency development. The Kenyan Distributed Ledgers and Artificial Intelligence Task Force was established earlier this year to focus on blockchain and how the technology could be utilized to improve outcomes in the public sector. The group includes local blockchain startups, experts, researchers and members of Kenyan regulatory bodies.

In many parts of the world, governments are responsible for providing basic and affordable housing. Blockchain provides an easy way to allow users to securely transfer the assets between parties and facilitates easy audit of user accounts.

The crypto industry is booming and expanding like never before. While cryptocurrency markets down by almost 65% since the beginning of the year, and skeptics say we’re in a bubble, there just is so much activity everywhere around the world. Still, much more remains to be done.

When the technology becomes less visible and more usable, we will be able to better communicate the values people will get from cryptocurrencies and blockchain. We are close to crossing, but we’re not there yet. Either way, crossing the chasm is not the end, but the beginning.

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Ilias Louis Hatzis is the Founder & CEO at Mercato Blockchain Corporation AG. He writes the Blockchain Weekly Front Page each Monday.

Introducing a 4 part series on Security Tokens by Sheldon Freedman from Hassans.


Editors note. This post is written by Sheldon Freedman, a fintech and funds lawyer at Hassans in Gibraltar.  Security Tokens is a big, complex subject that requires legal, technical and commercial  knowledge. We found that rare combination in Sheldon Freedman, member of the Bars of New York, Ontario (Canada) and Israel, former FINRA-registered representative, and asked him to write a 4 part series, because Daily Fintech’s job is to explain complex subjects in an engaging way. This is the first post. Tune in (subscribe by email) to get the the rest of the series over the next 3 weeks.

A blockchain token is a unique digital token created on a blockchain as part of a decentralized software protocol.  Some tokens function as digital currencies, like Bitcoin.

A utility token is digital coupon or ticket redeemable by the holder for a good or service.  A utility token, or user token or app coin as it is sometimes called, can entitle the holder upon redemption to a cup of coffee, an advanced medical device or admission to the World Cup championship game.  A utility token functions in a closed system according to the token economics designed for the system.  For more on utility tokens, please see this chapter in The Blockchain Economy.

Though utility token prices may fluctuate in value as demand for the redeemable goods or services fluctuates, utility tokens do not provide holders with, or relate to, ownership or assets relating to the entity issuing the tokens other than the redeemable goods or services. Security tokens, also known as securitized tokens or tokenized securities, are a digital investment asset with security aspects that do relate to ownership or other assets. For more on security tokens, please see this chapter in The Blockchain Economy.

Security tokens are blockchain-based value tokens that provide holders with value relating to investment assets, which may include rights in the issuing entity such as rights to voting, equity ownership, debt, derivatives, real estate, dividends, profit sharing, buy-back options, cash flow – anything related to assets or performance of the issuing entity, or any real-word asset. The spectacular promise of blockchain and related decentralizing technologies to support the reliable recording, trading and mass adoption of security tokens will undoubtedly lead to the digitization of securities becoming adopted on a massive global scale that will revolutionize finance – limited only by the imagination and daring of financial engineers.  Security tokens will have the advantages over conventional securities markets of:

  • functioning 24/7 at low transaction cost
  • high liquidity
  • rapid settlement
  • great market depth
  • automated compliance
  • transparency
  • asset interoperability (different types of assets in same wallet)
  • continuous expansion of design space for security contracts and unlimited varieties of features. 

Security tokens are programmable by sophisticated architectures deploying rapidly-developing mechanics, employing dramatic efficiencies to process large capital pools.

The versatility and seemingly limitless varieties of deployment of security tokens suddenly presents the world’s regulators with a new digital security asset that they are only beginning to understand.  Securities regulators, in their perceived role to protect the investing public (and economies in general), establish regimes of disclosure, registration and reporting to regulate the viable issuance and exchange of securities.  Understanding how security tokens markets and smart contracts function – and the complex ramifications elicited thereby- is obviously requisite to regulating them. Some notable small, nimble jurisdictions in Europe, Asia and the Caribbean have been vigorously investing since 2015 in studying and establishing early regulatory blockchain finance-related frameworks to capture early leading industry activity, while the major national jurisdiction are in the committee stages in the process of deciding what to do about the coming golden age of security token innovation, which will be no less revolutionary than the invention of the railroad. 

The United States Securities & Exchange Commission has taken the view that security tokens are securities fully subject securities regulation. Thus, the issuance and exchange of security tokens in the United States is subject to registration or must come under an exemption from registration (typically, exemptions pertaining to investors deemed sufficiently sophisticated to analyze the risks and merits of an investment, or of sufficient means capable of sustaining losses).  Other major jurisdictions are taking note of the United States position, some following, others embarking on their own regulatory reforms to address regulating of security tokens.  Since blockchain infrastructure is trans-jurisdictional and anonymous, there is an added dimension of the need for global cooperation, and for the involvement of agencies that regulate much more than securities:  banking, taxation, anti-money laundering, anti-terrorist and other crime financing, tariffs and trade finance. There is not an industry that will be left unaffected by the advent of security tokens.  From mining to pharmaceuticals to retailing to aerospace – security tokens will play a role.  The ability of small investors to participate globally will democratize investor bases. Tokenized funds and other collective investment schemes will emerge to attract passive investors.

Over the next three articles we will examine how the global security token “rails” are being laid to provide for the imminent securities token global express train. Dozens of fabulous companies are building rails of scalable, standardized, interoperable token solutions ushering in a Golden Age of securities innovation.  We will survey the many platforms available and being built for the launching and trading of security tokens.  We will also analyze the regulatory approaches major jurisdictions are taking to the challenges of regulating security tokens, taking notice of existing laws and trends. 

The schedule of the other 3 posts in this series is as follows:

  • 3rd November: Platforms for launching Security Tokens.
  • 10th November: Jurisdictional and Legal issues related to Security Tokens.
  • 17th November: The current state of the art in Security Tokens and where the puck is headed.

Tune in to receive the rest of the series by subscribing to Daily Fintech by email.

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

Get fresh daily insights from an amazing team of Fintech thought leaders around the world. Ride the Fintech wave by reading us daily in your email.

Brazil’s Moeda – The cooperative network for Women Entrepreneurs on Cryptos

Its a bit counter-intuitive when we tag a country (Brazil) to a crypto start-up. While the operational capability for Moeda is currently based in Brazil, the entire world can invest into their projects using the MDA token.


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Moeda was launched in 2017 at a UN hackathon with a view to address the UN’s Sustainable Development Goals. Their vision is to facilitate capital for social entrepreneurs who have had challenges financing their business via the traditional banking system. With their platform, where they bring the community of social entrepreneurs to the world stage, investors across the world can invest in projects, while having complete transparency on the project details.

This year Moeda have onboarded 18 projects involving family farming cooperatives in Brazil. They are also developing the Moeda Seeds App that will help global investments to arrive. In Q2 this year Moeda moved its transactions to IBM’s Hyperledger fabric composer.

In the past 18 months, Moeda have made significant progress not just in Brazil, but across other neighbouring countries.

  • They opened up operations in Uruguay and became the first blockchain firm in a free trade zone.
  • Moeda’s CEO Taynah Reis, joined Brazil’s Parliamentary Special Committee on the legislation of virtual currency.
  • Moeda presented their proposition at the UN General Assembly on Sustainable Development Goals Impact Zones.
  • In Jan 2018, Moeda started funding its first set of projects for rural Brazil
  • Taynah has also spent time with UN leaders, Nobel Prize winner Muhammad Yunus, and several top world organisations including the World Economic Forum, where they showcased and validated their business model
  • More recently Moeda implemented a fiat pegged token (MDABRL) to be used in its ecosystem.

One of the projects that Moeda have taken on board their seed programme is that of Divinia. For more than 10 years, Divina from Cooperval produced and sold frozen fruit pulp, vegetables and baked goods to schools in Formosa, Goias. The group now wants to boost production and increase their income.

For the financing of the expansion, Moeda developed a Seed Project focused on the Baru, a traditional chestnut from the region. Through this project the cooperative in partnership with a local beer company will produce 1500 bottles of Baru nut beer. Moeda have helped them establish the partnership, in marketing the product and with the entire business plan to ensure investors make returns. This project, thats planned to go on for 4 months, will give investors a 10% return within that period.

Moeda are also working with a group of women that focused on 21 local projects from more than 8 states in the region developing 25 value chains pertaining to extractivism, agricultural extractivism and traditional family farming, including the Babassu palm production chain.

These are some inspiring coming out of the blockchain world, and for people asking for real world implementations of the technology, all I would say is, look at the emerging markets – its all happening there.

Arunkumar Krishnakumar is a VC investor focusing on Inclusion, a writer and a podcast host.

Get fresh daily insights from an amazing team of Fintech thought leaders around the world. Ride the Fintech wave by reading us daily in your email

Insurtech Front Page Weekly CXO Briefing – Tech giants are serious about insurance


The Theme this week is Tech giants are serious about insurance. Tech giants making moves into insurance is not new, but continuing news update can prove that they are pretty serious.

The Insurtech Front Page Weekly CXO Briefing is all you need to know for the week, jargon free for executives, entrepreneurs and investors who want a piece of this huge, fast changing market. Each week we select one theme illustrated by 3 news items, because we know that you are busy. Our job is to filter out the noise, so you can read the signal. We bring you the raw news plus our take on why it is significant.

For this week we bring you three stories illustrating the theme of Tech giants are serious in insurance.

Story 1: Softbank Plans Big Push into Insurance Investments

Extract, read more on Insurance Journal:

“Softbank’s Vision Fund plans to pump more money into insurance, a sector it sees as both ripe for disruption and a potential booster for its bigger bets in cars, health and financial services, a Vision Fund executive told Reuters.”

Softbank is not a typical tech giant, they have contributed a lot in telecommunications, but they are better known for their investments in Alibaba, Uber, Boston Dynamics etc. They also invested in Zhong An. With Softbank’s huge fund ($100 billion) and successful investments to date, their moves into Insurance will be worth watching.

Story 2: Google Invests in Insurance Agency Software Firm Applied Systems

Extract, read more on Insurance Journal:

“Giant Google’s investment arm has purchased a minority stake in Applied Systems, a provider of insurance technology and cloud-based software for independent agencies.

The investment in Applied Systems is being made through CapitalG, the growth equity investment fund of Google’s parent Alphabet, which has also financed companies including Lyft, Airbnb, SurveyMonkey and Zscaler.”

Google’s comparison site didn’t pan out. Fortunately for the industry they are still watching and investing.

Story 3: Amazon makes another insurance move and partners with Vitality

Extract, read more on Life Insurance International:

“Vitality has announced a partnership with Amazon with gives its Active Rewards programme a boost.

As a result, members will receive a month’s access to Amazon Prime for every 160 Vitality activity points they earn. This can lead to savings of up to £79 ($104) a year.”

Amazon made several moves before, such as investing in Acko and the joint action with Berkshire Hathaway and JP Morgan into Healthcare. Partnership with Vitality seems relatively a small one, and more like a pilot cooperation. But it might turn out to be critical since it involves actual insurance work.

Since the day the word “InsurTech” was invented, tech giants have been making moves to enter insurance. They have suffered a few setbacks (e.g. Google Compare), but they are the leaders in the “Tech” part. When they have a deeper understanding in insurance, their technologies might start playing major roles.

Zarc Gin is an analyst for Warp Speed Fintech, a Fintech, especially InsurTech-focused Venture Capital based in China.

Get fresh daily insights from an amazing team of Fintech thought leaders around the world. Ride the Fintech wave by reading us daily in your email.



Crowd Sourced DD the future to unlisted asset investment explosion

Lately I’ve been thinking a lot about the flow of capital.

You do that when you run a super fund. Especially when you are thinking about the opportunities that exist when you have the ability to be significantly more agile with your investment strategy.

And when you link the use of capital to where it is needed most, to grow the economy, you naturally gravitate towards the small business sector, and the unlisted asset space.

It’s not as easy as flicking a switch though – investing pension fund money is a huge responsibility, and how it is handled is a serious business. Small business and the unlisted space is notoriously risky, and pricing and handling that risk is the dark art of this game.

But it is relatively patient capital, and there are some interesting dynamics that can be explored, based on this principle.

But before you even get to that point, you need to find good businesses, and that is another huge problem that still needs to be solved.

One fintech in that space trying to solve part of that particular problem for wealth managers, like pension funds, is Delio. Based out of Cardiff, Wales, the platform offers ‘infrastructure as a service’ to help manage the entire unlisted asset investment process, from origination to exit.

Wealth managers, private banks, investment banks, family offices and many more can use the platform’s white label digital insfrastructure to upload deals and manage the entire process, end to end. The company is already partnered with UK Business Angels Association, connecting over 15,000 angel investors with high quality deal flow.

DelioConnect also offers platform to platform integration, so clients can originate, syndicate or distribute within the trusted network.

These sorts of platforms are the future of getting capital to small business. They are potentially far more powerful than neobanks in the SME space. And they solve the crowd-sourced due diligence problem. Which until technology is sophisticated enough to manage on its own – for which we are still a way off – is critical to increasing the flow of money into productive, growth investments.

The principles behind how platforms like Delio work should be attractive to smart pension funds and new age wealth managers, looking for efficiencies and an edge in the unlisted space.

Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech. Jessica Ellerm is a thought leader specializing in Small Business and the Gig Economy and is the CEO and Co-Founder of Zuper, a new superannuation startup in Australia.

The Internet of Finance from the East & the 50mil unbanked in Brazil


Much has been written about China’s growing commercial relationships with Latin America. Some have suggested that China is replacing the United States as the region’s most important partner. The focus has been mostly on Chinese infrastructure investments in Latam.

This October one of the Internet of Finance leaders, Tencent invested $180 million in the Brazilian neobank ‘NuBank[1] the largest Latin American digital bank and credit card operator. Nubank, is a 5 yr old Latam FinTech pioneer, who has raised a total of $330 million since it was founded in 2013 by Sequoia Capital ex-partner David Vélez. Clearly, one of the best-funded start-ups in Brazil. To date, it has issued 5 million no-fee credit cards and has opened 2.5 million digital payment accounts.

Nubank’s impressive expansion has spurred growth in the Brazilian Fintech market, with 188 ventures being launched in the past 18 months. This includes standalone Neobanks such as Banco Original, SDBank, LabsBank, beBank. Incumbents have also joined the competition with Digio being one example, launched by Banco do Brasil and Bradesco in 2016 to compete directly with Nubank’s fee-free business model. These strong recent developments have earned Brazil the title of leading FinTech ecosystem in Latin America. [2]

Nubank has streamlined the onboarding process and is offering fast, transparent consumer banking mobile services to make transfers, pay bills and earn interest on deposits. Just recently Nubank got clearance from Brazilian Central Bank to offer loans to its customers which will allow the already well-funded start-up to expand further.

Nubank is the high-growth Latam Fintech that has managed to attract major international attention and investment. The recent Tencent investment is increasing Nubank’s capital by $90 million and repurchasing the equivalent amount from Nubank’s existing shareholders, pushing the neobank’s valuation up to $4 Billion. Tencent President Martin Lau explained that the investment will help Nubank “build a full-service personal finance platform.”[3] The Chinese conglomerate is no stranger to these transactions, with major shareholdings in other FinTechs and Neobanks such as the online bank WeBank, fintech business Voyager of Philippine telco PLDT, online insurer ZhongAn Online P&C Insurance Co Lt, supply chain financing provider Linklogis.

According to Nubank CEO David Velez, the investment is for Nubank a great strategic standpoint to gain insight on- and learn from the Chinese financial market. For Tencent, this is a means of expansion of their existing portfolio of challenger banks and technology-based financial services ventures as well as a robust point of entry to the booming Brazilian FinTech Market.

The Internet of Finance from the East in synergy with the 50mil unbanked in Brazil.

This not Chimerica, the term coined by Niall Ferguson to describe the symbiotic relationship between China and America more than 10 yrs ago.


This could be “Chilatam” led by Brazil who has put forward new Fintech regulations to encourage competition in their financial sector that is dominated by the Big 5 banks, much like in the UK or Australia.

#AndtheIronyIs that Chimerica, the award-winning play of Lucy Kirkwood, became 4 part TV series –  “Chimerica”. The play examines contemporary global politics and the relationship between East and West.

#AndtheIronyIs is my Twitter hashtag for cynical Finance tweets.

[1] Reuters, 2018, ‘China’s Tencent invests $180 million in Brazil fintech Nubank’

[2] Finnovista, 2018, ‘Brazil recovers the leading position as largest Fintech ecosystem in Latin America with over 370 Fintech startups

[3] Reuters, 2018, ‘China’s Tencent invests $180 million in Brazil fintech Nubank’ 

Efi Pylarinou is the founder of Efi Pylarinou Advisory and a Fintech/Blockchain influencer.

Get fresh daily insights from an amazing team of Fintech thought leaders around the world. Ride the Fintech wave by reading us daily in your email.


Blockchain Weekly Front Page: Cryptocurrency markets shrug off loss of confidence in Tether and equities correction


The Blockchain Weekly Front Page is a CXO level briefing. Our mission is to serve the mainstream business community by selecting one major theme in the Blockchain Economy each week and three news stories to illustrate that theme. This is all you need to know, each week, jargon free for CXO level business leaders and investors who will use this technology to change the world, in your email inbox each Monday at 7am CET. 

For more on the format please click here.

Last week our theme was “Big Old Money Bets on Bitcoin & Blockchain”.

Lately, Tether has been anything but stable. Earlier this week the USDT lost its peg to the dollar, after rumors surfaced about Bitfinex’s insolvency, driving is price down by eight cents, to $0.92.

In a post on Medium, Bitfinex has dismissed the rumors stating that “Stories and allegations currently circulating mentioning an entity called Noble Bank have no impact on our operations, survivability, or solvency.” Bitfinex was a customer of Noble Bank, based in Puerto Rico, and the banking institution has found itself practically on the brink of bankruptcy.

Tether (USDT) is eighth largest cryptocurrency, with a market capitalization of $2 billion. A crisis with Tether would cause serious ripple effects on the entire market. More than 21% of all crypto transactions are made up of USDT pairings. A loss of value would wipe out a billions of assets.

For months now, Tether has been haunted over transparency issues, ranging from its murky relationship to Bitfinex, to whether it USDT is fully backed by dollars and to what bank is holding these assets.

Tether is not the only stablecoin and the idea of a price-stable cryptocurrency has been around for a long time. There are basic types: fiat-collateralized, crypto-collateralized, non-collateralized and we have several examples in the market (TUSD, USDC, PAX).

Some of the newer ones, like the the Gemini dollar, are regulated by the New York Department of Financial Services. Now, if supply is a metric of success, Paxos, a new stablecoin, is taking an early lead, doubling its supply in circulation.


The fact that cryptocurrencies can be very volatile, poses risks. Today, no retailer in their right mind would price their products based on Bitcoin or any other cryptocurrency. No employee would want to be paid in crypto.

There are many critics that doubt whether stablecoins will be able to hold their pegs, over time. Some argue that creating cryptocurrency backed by a fiat currency inherits the same problems as fiat, because its supported by the same old traditional banking system.

Stablecoins offer low volatility, and have the potential to unlock the future of cryptocurrencies. While many of today’s solutions look viable, its still a crapshoot, and very early to make any kind of predictions, both from a technology and regulatory perspective.

Over the last ten months, as prices have dropped, mergers and acquisitions have reached a record high in 2018. According to JMP Securities and data from PitchBook, crypto M&A activity has doubled this year and is expected to reach a total of 145 deals by the end of 2018. Since 2010, the industry only had 88 completed M&A transactions, according to PitchBook. Crypto’s busiest years were 2015 and 2017, with 23 deals, each year.

For any growing industry, mergers and acquisitions is a big part of the game. A lot of companies use M&A as means to grow faster. Mergers and acquisitions happen for all kinds of reasons, but most of them have economic motives. The crypto industry is witnessing a “land grab” for new and innovative technologies, access to markets, customers, intellectual property, and talented employees.

In March, Coinbase hired Emilie Choi, and right after it acquired Earn for around $100 million. Also, with exchanges being some of the hottest real estate in crypto, earlier this year, Circle, announced the acquisition of Poloniex.

In many cases, many of these startups and their coins will just fall short and disappear into the night, after spending huge amounts of money from investors. Everyone is trying to position themselves for a piece of the pie, but some times its like pulling a rabbit out of a hat. With are over 2,100 cryptocurrencies on Coinmarketcap.com, no one really knows what will succeed or what will fail.

Consolidation is still relatively low, since most of these platforms are still building their core products. We can expect to see more of it, as many of these platforms try to build ecosystems that combine utility and currency tokens.

There is even a blockchain startup for M&A, Lexit, which is trying to disrupt the way companies and their intellectual property are being bought, sold, and licensed. Who knows, we might even see cryptocurrencies being used to pay for shares or assets in an M&A transaction.

For now there is a a lot of repetition, just like in the early days of the Internet. But there will be some cases, where the merger could have a significant impact, both on the crypto world and beyond.

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Ilias Louis Hatzis is the Founder & CEO at Mercato Blockchain Corporation AG. He writes the Blockchain Weekly Front Page each Monday.

Please Welcome Paul Conley as our Content Adviser

I am happy to announce that Paul Conley is joining Daily Fintech as Content Adviser on our Non Executive Advisory Committee.

Over the last four years Daily Fintech has built a reputation for high quality content, funded through advisory services. We now seek to grow the business by a) growing the content b) launching new scalable revenue lines of business.

Paul will help guide our efforts during these exciting times.

I have known Paul for many years and have a deep respect for his approach to B2B content. Paul has trained and coached legions of journalists and is also a new media savvy entrepreneur who understands the need to reinvent B2B Media by innovating on the revenue side of the business. You can see his background on LinkedIn. His finance experience at CFO Magazine and Bloomberg is particularly relevant to Daily Fintech as they are two brands that have maintained high quality content standards despite the rush to cheap online clickbait in many publications.

I will leave the last word to an introduction to Paul in an interview on a site that tracks the transformation of B2B Media:

“In the trade magazine business, not generally known for early adoption of new-media developments, Paul Conley is something of an anomaly. He is, as he puts it, “hypersensitive to how new technology opens up opportunities in old worlds.” He was among the first in the trade press to recognize the significance of social media.”

Debt crisis and a weak currency – would India follow Venezuela in launching a digital currency?

In Q2 this year, the Reserve Bank of India banned cryptocurrencies. The ban announcement was met with mixed reaction, but largely disappointment from the crypto community. While the RBI and the Indian government are taking a lot of efforts to execute Blockchain based projects across the nation, that ban was disappointing.
 In view of the associated risks, it has been decided that, with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling VCs. Regulated entities which already provide such services shall exit the relationship within a specified time. 
Earlier this week, @efipylarinou and I launched the second episode of our podcast on Blockchain and Financial inclusion on Rhetoriq. Lisa Nestor from Stellar Development Foundation discussed the challenges that Blockchain industry had in the Indian Market.
Stellar was known to be working with ICICI bank and other regional financial services players, with a view to bringing financial services to the rural population. The ban has now slowed them down, however, Lisa was confident that the research work they are doing with some of the Indian institutions should bear fruit in the long run.
Over the last 12 months or so, the Reserve Bank of India (RBI) has taken a Jekyll and Hyde approach to Blockchain and Cryptos. The stance that the Indian policy makers have taken regarding this space is confusing and conflicting. In the sense, RBI are a big no-no to cryptos where as the Indian government and other public bodies have embraced the technology in a big way.
Many technology giants (IBM, Microsoft), local government bodies and the crypto community within India have come together to create the Internet Blockchain Committee whose remit is to build a Blockchain ecosystem in India by working with the government, industry players and startups.
The RBI themselves are working on a digital currency, which they confirmed a few weeks ago. The digital currency is believed to be backed by the Indian Rupee, and the plan is to save about 7 Billion Indian Rupees annually.
The creation of a Rupee backed digital currency is not really going to make it stronger than the Rupee. However, with the creation and management of paper currency in India costing 7 Billion Rupees, combined with the advent of the new payments infrastructure well supported by the roll out of Aadhaar that brings economic identity, we now have enough motivation and a conducive environment for an RBI backed digital currency.
While all this work is being done, the ban on crypto exchanges still stand. This is being fought out in the supreme court of India, where the RBIs decision to ban cryptos is being challenged. However, I believe, just the binary stance against cryptos would push India a few steps behind jurisdictions who have taken a more collaborative approach to Cryptos.
One of the top crypto exchanges in India Zebpay have recently setup shop in Malta, and will be providing their services across 20 countries that doesn’t include India. With news from the subcontinent coming at a brisk pace, and with the INR hitting an all time low against USD, will RBI turn to digital currency?
In a recent survey conducted for bitcoin news, 80% of respondents preferred bitcoin as a safer haven than the Indian Rupee. The INR has been consistently losing about 10% per year over the last few years against the USD, and of course we know how volatile cryptos has been over the last 12 months or so. So while the results of the survey looks pretty skewed, it gives a view of the mindset of a generation that wants to now move on to digital currencies.
However, I wouldn’t be surprised if, after Venezuela, India becomes one of the first to go down the route of central bank backed digital currency. And that would still be just one step forward. Real progress would be when RBI lifts the ban against cryptos, and allows for innovation to find its feet with a collaborative approach.
Its time for the largest democracy in the world to truly embrace democracy – and move away from such absolutism.

Arunkumar Krishnakumar is a VC investor focusing on Inclusion, a writer and a podcast host.

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