Indian Neobank NiYo gets Tencent on the Cap Table

Just two weeks ago we reported on Daily Fintech that the Indian SME banking sector had received a $30 million funding injection, with Tiger Global leading a round into Open, a neobank targeting the sector.

In that same article, we surveyed the booming Indian neobanking space, and drew your attention to another player similar to Open, NiYo. This neobank wants to own the banking relationship with salaried employees in India, offering 50% salary advances via its platform, at 0% interest. It also has a multi-currency Visa travel card and a tax-saving feature for employee expense management.

Just a few days ago, NiYo hit the headlines in its own right, with news another big funding fish, Tencent, was part of an even bigger $35 million round into the business.

Talk about stealing the spotlight from its competitor.

While there’s the usual chatter about new products and doubling down on distribution, it’s reported the neobank is also on the acquisition hunt, and open to bringing oboard other startups that can fast track its overall vision.

There is a slight irony in the fact that as neobanks like Open and NiYo rise, parts of the industry are in severe decline. Nowhere was this more evident this week, than the (somewhat) shocking news stalwart Deutsche Bank will retrench as many as 18,000 of its global workforce in the coming weeks. The dramatic impact technology has had on certain aspects of the two divisions feeling the brunt of the cuts at Deutsche – equities and fixed income – could have some viewing the move as a bellwether for other inefficient parts of legacy banking. No one can deny business banking is right up there – NiYo and Open are being funded because of it.

While there is no defined news on the extent to which Deutsche’s Indian operations will be affected (their equities team is a small operation), it’s worth remembering India’s huge role in processing and supporting offshore teams. The flow on effects of high salaried, and often highly leveraged employees in Western countries losing their income in a market where replacement jobs are thin on the ground, is all part of a growing concoction of financial chemicals that could pop the global asset bubble. It only takes one prick, after all.

At least in India, the opportunity for re-invention and growth in the financial technology space is abundant, where payments and banking innovation is flourishing thanks to a lack of legacy systems and throttling regulation. Might be time for a sea change for some of those ex-Deutsche employees, who are fed up with the bright lights and ruthlessness of Manhattan and London.

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.

I have no commercial relationship with the companies or people mentioned. I am not receiving compensation for this post.

Subscribe by email to join the 25,000 other Fintech leaders who read our research daily to stay ahead of the curve. Check out our advisory services (how we pay for this free original research).

Fintech has not created a level-playing field for small to mid-size banks

Temenos released in April its annual report[1] on the State of digital sales in banking. As I was reading some of the key findings reported by Jim Marous[2], I was struck by these observations:

More concerning is the reality that most of the high marks for digital sales continue to be garnered by only the largest organizations.

 Larger banks ($150B – $2,500B) not only have a financial and technological advantage, they benefit from a head start in the deployment of all digital account opening capabilities, allowing them to gain a share of mind advantage through media and word of mouth. 

 #AndTheIronyIs that technology was supposed to democratize banking not only for the end-customer but also for the smaller, less national, less international financial services provider. After all, fintech is by now overweight B2B providers. Remember it all started as a disruption, replacement to banking. Then it shifted to collaboration and partnerships with incumbents and as Jessica pointed out ‘Something’-as-a-service, the new fintech paradigm.

#AndTheIronyIs that despite the plethora of B2B unbundled fintech services out there, anything you can imagine as a service; the mid and smaller size banks remain overall behind. Of course, there is a variety of metrics and KPIs that one can use to measure their digital readiness. From mobile account opening, save and resume functionality, small business account opening, etc.

Digital transformation these days requires internal cultural and technological changes whose impact will be seen 3yrs down the road. That means that mid to small size incumbents remain at a disadvantage.

level playing field

When I look at 11Pulse, the digital benchmarking offering of 11FS that allows clients to benchmark themselves against peers on onboarding, security, PFM, …; I wonder whether mid to small size banks are flocking to take advantage of this service and to find ways to catch up.

I guess the simplistic answer is that small to mid-size banks don’t have the guts and the budget to stick to such a 3yr plan.

For sure they don’t have any internal strategic funding mechanisms like Goldman Sachs has. Goldman’s Principal Strategic Investments group has made key investments in Kensho and Tradeweb and helped create Wall Street chat platform Symphony, and much more.

Neither do VCs fund the transformation of existing banks because they are only interested in high growth stories, which means investing in those that are building the picks and shovels.

The only such example I have found is Cross River Bank that Battery Ventures, Andreessen Horowitz and Ribbit Capital invested $28million in 3yrs ago[3] and recently another $100mil was announced by KKR. Cross River bank started by supporting fintech startups with loans – $2.4 billion in loans for companies like Affirm and Upstart in 2015 alone. Today it is more than a leading marketplace lender for fintech. It is one of the top go-to bank-fintech cooperation providers. Its customers include Circle, Best Egg, Coinbase, Rocket Loans, Stripe, Upstart, Affirm, and Transferwise. Just 2 weeks ago it Cross River bank acquired Seed, a small business banking company.  Seed is a 5yr old online banking company for small business  owners and freelancers.

`If a payments company wants to become a lender or a lending company wants to do payments, then they have the ability to do that on our rails,` says founder Gilles Gade to Techcrunch.

The question to VCs, CrossRiver bank, 11Pulse, and other remains:

It is either the large incumbents (my Sharks) or the aggressively VC funded Fintechs (my piranhas) that are benefiting from the variety of  `anything Fintech as a service`. What about the bulk in between?


[1] The report includes the Temenos proprietary ‘Digital Sales Readiness Matrix’.

[2] Banks Not Meeting Digital Sales Expectations

[3] Who`s building the Banking Smart pipes

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

 I have no positions or commercial relationships with the companies or people mentioned. I am not receiving compensation for this post.

 Subscribe by email to join Fintech leaders who read our research daily to stay ahead of the curve. Check out our advisory services (how we pay for this free original research).

10 heuristics to make money trading 24/7 unregulated crypto markets and still have a life

10 heuristics.001

TLDR. Buy low, sell high is easy to say but hard to do. These are 10 heuristics to make money trading 24/7 unregulated crypto markets and still have a life. These 10 heuristics work independent of how much you have to invest (whether it is 100 or 100 million). These 10 heuristics avoid both extremes – HODL and TA trading. Buy & Hold (or HODL in cryptospeak) is not quite right when you have a such massive bull/bear market swings  (better to sell near peak and buy near bottom of each big cycle). HODL at all times may not be right, but neither is frenetic trading using Technical Analysis (machines and institutional investors will always beat you at this). Whatever your timeframe, remember that a) this is a wild west, scary/dangerous unregulated market and b) YOLO (You Only Live Once) and waking at 3am because that is when the big swings are happening in this 24/7 market is not having a life. Standard IANAFA (I Am Not A Financial Adviser) Disclosure. This is for entertainment purposes only. If this is how you get your entertainment – you need to get a life (my lawyer advised me not to say this last bit). Although the statement that this is only for entertainment purposes sounds like legal boilerplate, the intersection of entertainment and nerdy techno financial media on YouTube is part of this story. Read on for 10 heuristics  to make money trading 24/7 unregulated crypto markets and still have a life.

Heuristic means a practical way to a satisfactory but not optimal solution (aka rule of thumb, educated guess, common sense).

This update to The Blockchain Economy digital book describes the 10 heuristics to make money trading 24/7 unregulated Crypto markets and still have a life:

1. Choose Coins big enough to make pump & dump more difficult.

2. Only invest an amount that allows you to sleep at night.

3. Don’t follow individual TA gurus.

4. Avoid fake valuation science.

5. Assume you only have 10 trades in a decade.

6. Make sure you have “proof of trade” before following.

7. Have some fun with your financial entertainment.

8. Why nearly is a better word than precisely.

9. If you don’t have an edge, don’t trade.

10. Practice safe Crypto.

If you do not understand these points, do more research. If you still do not understand these points after doing more resesarch, stay away from these markets. The old poker rule applies – if you don’t know who the sucker is at the table it is probably you. If you want to trade/invest/speculate in crypto, please read on.

No 1. Choose Coins big enough to make pump & dump more difficult

Pump & dump is a) very profitable for the person pumping & dumping b) a money furnace for everybody else c) totally simple to do with crypto coins that have low trading volume.

Screenshot 2019-07-03 at 19.49.59

Look at the top 3 crypto coins by market cap and then look at 24 hour trading volume. Bitcoin has about 3x trading volume of Ethereum and 20x that of XRP. Bitcoin is a bit safer than smaller coins with less trading volume because a) you need more capital to do pump & dump b) there are more savvy traders/investors/speculators who can counteract the impact of the pump/dump operators.

The trading volume of even the biggest coin (Bitcoin) is a rounding error compared to equities, bonds and sovereign/Fiat currencies and these legacy finance markets are regulated. All crypto investing has pump & dump danger, Bitcoin just has a bit less risk than others.

Despite this risk, Bitcoin has massive upside and trading volatility opportunity, so don’t give up yet and read on to heuristic no 2.

No 2. Only invest an amount that allows you to sleep at night

Bitcoin could go to zero or 10x or 100x higher. Say you bet 100, you could lose 100 (go to zero) or make 900 profit (10x) or 9,900 profit (100x). That is a good bet (known as an asymmetric upside to downside) as long as you only invest an amount that allows you to sleep at night. What that amount is will vary depending on your risk tolerance, which depends on your age and temperament. It will usually be some % of your capital.  A low risk allocation could be 1% and some big money putting in 1% may be driving the current bull market (1% of a Family Office with $1 billion is $10 million). Some high risk players are allocating 50% or more of their capital.

No 3. Don’t follow individual TA gurus.

TA = Technical Analysis, aka charting.

Trading is a zero sum game. Your loss is my gain and vice versa.

Exchanges are like casinos. They make money when you trade, whether you win or lose. Casinos will happily give away books on “how to beat the casino”. If Exchanges offer free TA courses, be wary. It is only slightly better than paying your own hard earned money for those TA courses.

TA is a mugs game for retail traders for the simple reason that professional institutional traders working will beat you every time because they:

  • can trade 24 hours by “moving the book” around the globe. A big swing that happens while you are sleeping, is not a problem for professional institutional traders.
  • have better access to data and analytics that cost money.
  • have better access to data from exchanges that they can use to front run your orders; this happens even on regulated legacy finance markets.
  • can automate strategies to minimise losses during down markets. They can program stop losses but also use manual override if needed, particularly if they can see where Retail have programmed their stop losses by using data from exchanges.
  • use large sums of money to move markets at the precise times when the TA crowd makes that price point vulnerable. Let’s say the TA crowd says that 11,650 is a line that if crossed will lead to a big crash. Professional traders working for institutions will deploy large sums of money to short the market to ensure we fall below 11,650 and then buy in later.

You can find plenty of TA gurus who got one or two big calls just right. If you think you found one who is consistently right, look at heuristic no 6.

Following an individual TA guru is usually a mugs game, but you can look at aggregated TA sentiment as one signal (but only one) to help you make the big calls in heuristic no 5. A good source for this is Trading View, with a simple dashboard view (snapshot below).

Screenshot 2019-07-03 at 15.45.19

No 4. Avoid fake science around valuation FA

FA = Fundamental Analysis.

Many have tried to come up with fundamental valuation models. They want to be known for creating something like PE for Bitcoin. Nobody has got this right yet, which is why there are so many different fundamental valuation models. Looking at all of them is one signal to making the big calls described below, for the simple reason that many investors/traders look at these models.

No 5. Assume you only have 10 trades in a decade.

You could simply HODL (Hold) through all the wild bull and bear swings. That is certainly better than frenetically trading every little nervous tick of the market.

Yet look at the Wall Street Cheat Sheet image. How great if you could sell near peak and buy near bottom of each big cycle. There have already been a few wild cycles like this for Bitcoin. 2017 was only the latest, not the biggest in % terms and this cycle is unlikely to be the last.


Today we could be at Disbelief (= buy signal) or Complacency (= sell signal). We probably were at Capitulation around January 2019 but if today we are at Complacency then Capitulation is still ahead of us. Personally I think we are at Disbelief today.

Key to this strategy is:

  • not allocating all your capital at once (whether it is 100 or 100 million).  For example in the current market (early July 12019), don’t bet it all at once in the hope that we are at Disbelief.  Keep some powder dry in case it is Complacency. Then you can celebrate if the market crashes and buy more later at lower prices.
  • sitting on your hands unless it is a big one. This is where the mental habit of assuming you only have 10 trades in a decade helps you. For example in the current market, did you waste one of your 10 precious trades as if this was one of the big swings? Although Bitcoin trading is fairly low cost, the more you trade the more likely you will be to get it wrong occasionally. Only gurus claim to get it right all the time (see heuristic no. 3).

If it goes to zero, remember heuristic no 2

The key word is“near”. This deliberate imprecision is explored further in heuristic no 8.

This very occasional trading is a lousy way for brokers and exchanges and content sellers to make money, so it won’t be a popular topic on social media. 

All you want to do is decide if the market is at Capitulation or Disbelief (= buy signal) or Complacency (= sell signal). To make this call:

  • have a point of view in what range you think the top and bottom of this cycle will be. Start buying/selling as you get into this range. You are only looking for a range not a precise top or bottom This takes fortitude as everybody will be shouting exactly the opposite at this stage.
  • Look at signals from both TA and FA to guide how aggressively you sell. The key is to a) avoid emotional herd following b) avoid truing for accuracy and getting the precise top.

No 6. Make sure you have “proof of trade” before following.

Many trading gurus appear on media telling tales from the time they got it right. Unless they offer you a simple “proof of trade” that allows you to follow their trades (and profit from your follow), assume they are only offering financial entertainment.

No 7. Have some fun with your financial entertainment

There is nothing wrong with financial entertainment, but make sure it is actually entertaining. The great comedian John Cleese (who is also scientifically minded and a great educator) has pointed to research that shows that  when you laugh is when your mind opens up to new information. So make sure your financial entertainment is actually entertaining. One that I find entertaining is the Max & Stacey Keiser Report double act.

Two types of financial entertainment that don’t cut it for me are crypto trading gurus who:

  • do their travelogues.If I want a travel show I will choose a travel show

– parade in front of rented richistan toys (houses, cars, boats, planes) to prove how rich they are (and you will be if you listen to them).

No 8. Why nearly is a better word than precisely

The idea of precisely hitting tops and bottoms means somebody maybe picking your pocket. Hunting for magic tops and bottoms is a mugs game. It leads you to follow trading gurus who got it right once (somebody is bound to get to right occasionally given a big enough sample size of gurus). 

No 9. If you don’t have an edge, follow don’t lead.

Lead, follow or get out of the way. If you are not totally comfortable that you know what you are doing, look at heuristic no 6, find a trader to follow, pay the fees and enjoy the time you just won back.

No 10. Practice safe Crypto

Don’t lose you hard earned Bitcoin through one of these dangers:

  1. The Exchange where you hold your Bitcoin is hacked, your money is stolen and the Exchange will not refund your money.
  2. A government does not like you or wants your money and orders the Exchange to give it to them.
  3. You keep your Bitcoin in a safe protected by secure private keys on a hardware wallet but you are robbed or lose it by doing something stupid. Remember, Bitcoin is a bearer instrument.

Despite the mantra of “not your private keys = not your Bitcoin”, practicing safe crypto may mean trusting an institution like Coinbase or Fidelity.

Until and unless you are really comfortable with what it takes to keep your Bitcoin in a safe protected by secure private keys on a hardware wallet, a trusted institution maybe a better solution for you.

Trading, investing & speculating are just words; don’t define what you do by words. Trading is investing with a short holding period. Is holding for 1 year trading or investing? Speculating is just a pejorative word for trading.

Follow these 10 heuristics to make money trading 24/7 unregulated crypto markets and still have a life and then follow the 11th one:

Be Lucky!


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

I have no positions or commercial relationships with the companies or people mentioned. I am not receiving compensation for this post.

Subscribe by email to join other Fintech leaders who read our research daily to stay ahead of the curve. Check out our advisory services (how we pay for this free original research).

Softbank Group eyes LATAM’s Neobank and the unbanked market


Image Source

The past decade has seen to major leaps made in financial services in the emerging markets – largely thanks to mobile penetration. Be it M-Pesa in Africa, or more recently Tencent and Alibaba in China, the transformation on the ground depended after usage of mobile phones became mainstream. However, there is one part of the world, that is stealthily moving towards one such leap frog moments – Latin America.

Latin America has the third highest penetration of smart phones globally, after North America and Europe. In 2017, smart phone penetration in Latin America was 61% and about 50% of smartphone users accessed the internet through their mobile phones. Smartphone penetration in the region is expected to grow to 76% by 2025.

A platform for growth is well set and the impact when growth occurs is going to be big too. That is because, 70% of the population in the region is unbanked. This is due to the processes involved in opening a bank account. The documentation required to open a bank account involves, proof of citizenship, employment and financials.

Nubank was the first Neobank of Latin America, and they are fast expanding within Brazil and Mexico. Both these markets are pretty large and hot for mobile based financial services. As per a PwC Fintech report, in 2018, there were 224 Fintech startups in Brazil, 94% of them based out of the southern part of the country.


Image Source

Nubank is hailed as the “Most Valuable Startup” of Latin America. There was recent press about them doing a $1 Billion fund raise from investors like Softbank group, at a massive $10 Billion valuation. The round is not closed yet, however, I wouldn’t be surprised if it goes through, due to the traction Nubank have achieved in a massive market. They have 8.5 Million customers already and are the largest digital bank outside of Asia.

With a huge base in Sao Paolo that has a 21 Million population, Nubank has captured the urban mobile-first customer base with an average age of 32 years. While the Nubank app provides basic banking services out of the box, the Fintech ecosystem in Brazil could allow for better opportunities.

Several Fintech players offering loans, wealth management services, mortgages and insurance can plug their apps onto Nubank’s platform. The API based integration could trigger a bundling up of financial services to form a Fintech Super-App.

One of the closest competitor to Nubank is a food delivery business – iFood. Brazilians are getting on lifestyle apps before they embrace fintech services provided by these lifestyle apps. It is interesting to see that in LATAM, a proper Fintech app (Nubank) has taken the lead, followed by lifestyle businesses (iFood). Whereas, elsewhere in China, lifestyle businesses started offering Financial services.

Brazil has certainly got ahead with Neobanking. But the other LATAM economies are catching up too. Albo in Mexico offers a digital banking experience, and provides a Mastercard that customers can use across the world – free of charge. Uala in Argentina is yet another Neobank app, that managed to acquire close to 500,000 customers in its first year.

With investors like Softbank and several Silicon Valley bigwigs getting into the act, LATAM could soon be the global hub of Neobanking. A case study where we see Neobanks leading a mass financial inclusion drive is waiting to happen. Definitely a space to watch.

Arunkumar Krishnakumar is a Venture Capital investor at Green Shores Capital focusing on Inclusion and a podcast host.

I have no positions or commercial relationships with the companies or people mentioned. I am not receiving compensation for this post.

Subscribe by email to join Fintech leaders who read our research daily to stay ahead of the curve. Check out our advisory services (how we pay for this free original research).


A Declaration of Innovation- Happy 4th of July


“When in the Course of financial operations it becomes necessary for people to disrupt the legacy bonds which have connected them with insurance and to assume among the powers of the industry, the separate and equal station to which the technology and innovation entitle them, a decent respect to the opinions of mankind requires that they should declare the cause(s) which impel them to the separation.”

No, Thomas Jefferson and his peers did not declare insurance innovation as a cause in 1776, and his well-known version of the United States Declaration of Independence is far more articulate than the paraphrased paragraph noted above.  But it’s July 4th, the U.S. Independence Day, and it seemed fitting to have a topic that tips its tricorn hat to the day.

It’s easy to declare a need for separation from the bonds of a multi trillion-dollar legacy industry, but as with any long-standing governance or tradition the declaring is much easier to accomplish than the doing.

Insurance innovation is a heavy lift of a heavy industry.  Insurance is many things, many covers, many types of service, many jurisdictions, many carriers, and of course- billions of customers.  As the Insurance Elephant has previously noted in “The Blind Men and the Elephant, InsurTech and its Many Perspectives” , insurance innovation is comprised of many disparate parts that make the whole beast, yet each person who has motive to adopt a ‘separate and equal insurance station’ perceives the beast as the activity in which the respective ‘each’ is involved.

The industry functions and provides the foundation upon which ownership and finance can rely, yet in its entirety the industry is held captive by the tyranny of technical, organizational and process fealty.  Process inertia and associated data management are ingrained within every aspect of the insurance system with which all are required to comply, and innovation must expend valuable energy in convincing incumbent management hierarchies of its worth.

And there are plenty of data that need to be processed- one by one, by ten, by one hundred, by one thousand, million, billion, trillion forms.  The industry employs millions globally to handle the volume of paperwork/data/forms.  Customers (for the most part), vendors, providers, service persons, agencies, and regulators are accustomed to the paper chase- but will that ensure an enduring, effective industry going forward?

These truths are self-evident- insurance must free itself from the shackles of legacy complacency.

There are many ‘patriots’ resisting the tyranny- companies that have developed clever methods to structure data that exists in native unstructured form, e.g. ExB Labs whose Cognitive Workbench can “search texts and images for content,…also classify, interpret, summarize and evaluate” unstructured data.  Or RhinoDox, whose document management innovations make captured, unstructured data easier to find and use (yes, it’s clear that for now that firm’s focus is on manufacturing innovation, but their heart remains available for insurers).  And insurance process management platforms that have developed-  These are, however, just tools to mitigate the overburden of legacy systems, not the inertia-busting change that is suggested for the long-term health of the industry and its participants.

Consider- there are a whole lot of persons employed in the legacy insurance industry, persons who understand what customers need, how processes function (or don’t), how to workaround systems that are obsolete, ensure customers have the appropriate cover, adjust claims within a patchwork of old and new systems, are subject to operating priorities that vary by the quarter, and are witness to the loss of intellectual capital due to attrition and retirement of tenured colleagues.

Yet despite those self-evident factors these millions are not encouraged to participate in the active dialog of innovation and InsurTech.  Not only is that wealth of staff knowledge generally unavailable, outside of participation in conferences most of those who are putative industry leaders are reluctant to be or missing in the discourse.  The drum beat of innovation is heard in the town square but remains surprisingly mute in many parts of the industry.  In the absence of the light of discourse, the tyranny of legacy insurance prevails!

As with established global governance two hundred and forty some years ago and the onset of the nascent United States, there is optimism for change.  Perhaps it is time to examine if the current indemnity model that exists for many covers has been outpaced by data availability and alternate means of claim reimbursement, e.g., modified parametric plans.  There are plenty of vested interests holding indemnity contracts near, but is a rebellion in the offing?

There are markets that have avoided the need to innovate- those are the digital native markets such as China, or India, or South America, where insurance products have taken hold for hundreds of millions of customers by working from innovation backwards- what does the product need to be to serve the delivery channel the customers expect.  There are niche customer segments that have been found and are being served by new products and new players, but these unique markets are an insignificant (statistically speaking) part of the whole.

So let’s talk about the incumbent markets that have the technical, organizational, and process debt that innovation has yet figured out how to amortize, but that is fodder for a declaration of insurance innovation independence.  A need to cast off the yoke of what has been and find the what can be.

A very heavy lift, indeed.

A Happy Fourth of July to my U.S. colleagues.  And apologies to Thomas Jefferson, et al.

Patrick Kelahan is a CX, engineering & insurance professional, working with Insurers, Attorneys & Owners. He also serves the insurance and Fintech world as the ‘Insurance Elephant’.

I have no positions or commercial relationships with the companies or people mentioned. I am not receiving compensation for this post.

Subscribe by email to join the other Fintech leaders who read our research daily to stay ahead of the curve. Check out our advisory services (how we pay for this free original research).


Is Funding Circle the barometer for SME opinions on Brexit?

Listed SME fintech Funding Circle sent waves through their share price this week, with news the lender was halving its growth forecast for 2019.

Facing reduced credit demand from the sector, it now anticipates its 2019 revenue growth on 2018 will be 20%, rather than a previously forecast 40%.

Loans under management on the platform are up 37% for the first half of 2019 compared to the same period in 2018, currently sitting at £3.5 billion. Originations are up 14% on the prior corresponding period, at £1.2 billion. All healthy figures in their own right.

While the share price took a fall on the news growth was expected to slow, investors on the P2P lending platform are no doubt pleased with the forecasted increase in returns on a net basis. The full year 2019 outlook expects these to be in the range of 5.0 – 8.5%, up from 4.4 – 8.4% in 2018.

The company is blaming the ‘uncertain economic outlook’ as being behind the drop off in growth. With Brexit negotiations and outcomes still incredibly uncertain, it’s easy to empathise with the many UK based SMEs who must be struggling to read between the tea leaves of UK and EU policy, in order to decide whether to make capital investments in the next 12 months.

So just what do SMEs really think about Brexit?

Research released by payments provider WorldFirst in February of this year seemed to think they were smelling the Brexit roses, with the number of small businesses indicating they were broadly positive about the UK’s exit hitting 41% in the last quarter of 2017, up from 33% in the prior year.

A separate study by academics at St Andrew’s University found that in 2016, 25% of businesses viewed Brexit as a major obstacle to their success. This number had jumped from 16% in the year prior, when they were surveyed right after the referendum. Their survey canvassed 15,867 SMEs, using government data collated by the UK Department for Business, Energy and Industrial Strategy.

Research released by Co-operative Bank in January placed Brexit concerns as top of the list of worries for SMEs, followed by increase in operating costs and then competition. Access to funding was second to last on the list, which may be testament to companies like Funding Circle doing their job well.

SMEs, like most of us who are surveyed, probably say one thing and do another. My bet is that the pace at which businesses like Funding Circle are growing is probably one of the best barometers of the SME market’s true reaction to Brexit. And in line with a cliché that speaks to the human condition, they seem to be living out the phrase, ‘when in doubt, do nothing’.

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.

I have no commercial relationship with the companies or people mentioned. I am not receiving compensation for this post.

Subscribe by email to join the 25,000 other Fintech leaders who read our research daily to stay ahead of the curve. Check out our advisory services (how we pay for this free original research)

Convergence or clash of non-natives & natives going Stable – #CVC19


The 2019 Cryptovalley Conference remains true to its nature. Three days, three stages, and overweight technical and economics content. I attended for two days and became A cool kid on the Blockchain. 

The narrative has clearly changed. Lots of evidence around us. Yesterday the BIS, the umbrella organization, announced the launch of a global innovation hub in Basel,Hong Kong, and Singapore to help Central Banks to “identify relevant trends in technology, supporting these developments where this is consistent with their mandate, and keeping abreast of regulatory requirements with the objective of safeguarding financial stability”.

The EU is very serious about supporting Blockchain technology. Tom Lyons announced the Convergence conference this coming November sponsored by the European Commission, the EU blockchain observatory & Forum, Consensys, Alastria, and INATBA[1].

Several speakers and panelists participated at the Cryptovalley Conference from Central banks around the world. Of course, they repeatedly stated that they share personal opinions and not the CBs official position. Between the BOE, the Fed, the SNB, and the Bank of Italy, the conversations went deeper.

We were reminded that unconsciously we are going back to the 19th century when multiple entities issued money. I like to add to that observation that we are also going back to bearer instruments. Tomaso Atse, director of the UCL Center for Blockchain Technologies, pointed out that what is new in our era is programmable money and the creation of hybrid types of value (like combining digital identity with money or some other value) and the ability to exchange it).

Alexander Lipton, the EPFL visiting professor and founder of SILAmoney, poked and provoked and defended his point of view. In a nutshell, he is the godfather of the DLT version of Narrow Banking concept. This is a way for Central banks to deploy DLT technology by issuing a fiat-backed digital coin (FBDC). The idea is that the central bank will allow and work (indirectly) with a consortium of validators that manage the issuance of the FBDC. It is worthwhile reading about this concept `Narrow Banks and Fiat-backed digital coins` by Alexander Lipton, Alex Pentland, Thomas Hardjono (MIT). What jumps out of it is that right now, we are faced with Facebook intending to implement this kind of concept through the LIBRA association. While each Central bank is doing its in-house due diligence, concerned only with its local country monetary policy and reserves; there is a clear need for Central banks to get together. They should be designing a Central bank coordinated narrow bank consortium.

This is a wakeup call to nightmares of whether Central banks will be able to control reserves and rates on reserves if LIBRA scales. LIBRA`s adoption in countries with currency instability, is troublesome if it really scales. Can LIBRA create hyperinflation in Venezuela? Alexander Lipton, says yes.

The narrative has clearly changed, and we are shifting in a phase where understanding monetary economics is becoming important.

When I raised the question last week about the governance of the LIBRA association (see  here) and whether there could be collusion; I didn’t mean in the DAO technical sense (i.e. more 50% of validators collude and validate an invalid transaction). I meant collusion in terms of decisions about, for example, the management of the LIBRA reserve fund. Which currencies will be included, will the fund become a significant holder of US debt, how much government debt versus currencies, why share the interest of this cash cow by accepting new members, how to deploy the profits of the reserve?

Once the LIBRA reserve scales to $100billion (Ant Financial`s money market fund is currently $168billion down from a high of $250billion), the interest will be in the order of $1.5billion (assuming an average 1.5% interest rate). That is huge for an association with no reporting requirements.

We live in very interesting times.

Monetary policy issues need to be understood better.

Moral hazards are lurking everywhere.

Those that have been working on financial inclusion, self-sovereign identity, P2P protocols are feeling looted.

  • Why didn`t Facebook join the Decentralized Identity – DID- project (media report that they were invited and rebuffed an invitation)?
  • Why isn’t Facebook`s Calibra, the ID part of the LIBRA ecosystem, respectful of the open standards for verifiable credentials developed already by DID under the auspices of the World Wide Web Consortium (W3C)? Why do they want to design new ones?
  • Will this world domination-ish attitude, shoot them in the foot[2]?

Back to the native people, Lisa Nestor from the Stellar foundation, shared a great overview of the global P2P network that can be used by banks to work directly with each other, without the need for correspondent banks. Stellar is decentralized and open with 28 nodes currently. Their aim is to optimize cross-border payments and work with all currencies. They launched in 2014. In 2016 they had 9,000 accounts and today they have 3.2million. Their daily volume has reached $350k with a total cost of processing of $1.50! During the conference, they reported that the first Swiss node was launched.

Bitcoin Suisse announced that they are seeking a banking license and they will be expanding in Europe. Ficas, a Swiss crypto asset management group for HNW, was a platinum sponsor. They are based in Zug with presence in Turkey, Greece, Spain, and Australia.  Flovtec and Ovrium shared the award of the best Swiss Blockchain company at the SICTIC investor event during the conference. Orvium is a decentralized scientific collaboration platform for deploying blockchain and artificial intelligence technology. Flovtec is a liquidity provider for tokenized assets.

My opinion is that we will be seeing an explosion of stable coin issuance. CNNmoney Switzerland was at the Cryptovalley conference taking a pulse on  LIBRA (watch here).

The GOSCI  – Global Open Source Currency Index- is a novel independent volatility benchmark for Stablecoins. Launched by Bernard Lunn the same day the LIBRA white paper hit the market. Become part of it.

The was launched in October 2018 with 25 Stablecoin issuers from 16 countries. Its mission is to represent the collective interests of Stablecoin issuers to unify the industry.

Closing remarks

The narrative is now, about financial stability with privately issued coins. Several factors are forcing everyone to the table. These conversations are hard and consensus is not given.

Stable coins are creating a very collateral hungry market situation.

[1] INATBA is the new International Association for Trusted Blockchain Applications, offers developers and users of DLT a global forum to interact with regulators and policy makers and bring blockchain technology to the next stage.

[2] “That’s very world domination-ish of them,” said Kaliya Young, a co-author of “A Comprehensive Guide to Self Sovereign Identity” and co-founder of the Internet Identity Workshop. “Some of us have been working on that problem for a really long time. You already have a set of open standards for verifiable credentials that are basically done and working.” From the article `Buried in Facebook`s LIBRA paper, a Digital Identity Bombshell`

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

 I have a commercial relationship with Flovtec. I have no positions or commercial relationships with any other company or the people mentioned. I am not receiving compensation for this post.

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Prices continue to rise. Is Bitcoin going mainstream?


Last week our theme was “Facebook’s Libra looks and smells like a cryptocurrency, but it really isn’t”. Our theme for this week is “Is Bitcoin a bubble? Why does it continue to rise?”

TLDR. Bitcoin’s trajectory has been eye-catching. Most of last year it hovered below $4,000, and earlier this week its price reached $14,000. While still very explosive and volatile, many predict that it will soon go past $20,000, the highest price it ever reached, at the end of 2017.

Bitcoin’s phenomenal rise has made it hard to ignore, with many debating the potential of Bitcoin and cryptocurrencies.

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Some have called Bitcoin a fraud and many have suggested that cryptocurrency prices are in a bubble, that will eventually burst. While claims like these have sidelined many investors from getting into the market, they are not the only reason. Volatility and lack of safeguards that other financial assets have also been critical for investors.

But, do bubble claims really hold any water?

Well, since it was launched in 2009, Bitcoin has had over 8,000% ROI, according to CoinMarketCap.

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If Bitcoin was a bubble, we do we see it keep coming back, rising from the dead?

Several factors are affecting Bitcoin’s price: Increased institutional involvement, Facebook’s Libra launch, Bakkt has been cleared to test it’s futures products in July, bringing us closer to a BTC ETF.

People are HODLing

The adoption of Bitcoin is increasing, but people are still not utilizing this coin to buy an asset. Research reveals that in the year 2019, above ninety percent (98.7%) Bitcoin transactions are contributed by exchanges and the remaining 1.3% from merchants. Its involvement in payment system around the globe is still negligible, and most people just hodl Bitcoin.


Diar revealed a 26% increase in the number of Bitcoin addresses holding 1-10K BTC, specifically after the cryptocurrency established $3,200 as its bottom on December 15 last year.

Upcoming Halving

Bitcoin prices could be rising because of a “halving” next year. When Bitcoin started 10 years ago, the payout to Bitcoin miners for verifying new blocks was 50 Bitcoins and in May 2020 it will be 6.25 Bitcoins.

The halving is a very positive for Bitcoin. It increases the scarcity of Bitcoin, since the number of Bitcoins created is less. The more scarce it becomes, is the greater the demand will be, which will likely lead to a price increase.  This decrease in rate of supply growth, means less downward pressure on the price of Bitcoin over time.

Institutional Investors

Demand for Bitcoin by institutional investors appears to be increasing. Institutional investors are investing in cryptocurrencies like Bitcoin.

JP Morgan Chase has been leading the way, having announced JPM Coin earlier this year, the first cryptocurrency issued by a big international bank.

Grayscale Bitcoin Trust (GBTC), a $1.4 billion closed-end fund that invests exclusively in bitcoin, serves as perhaps the best indicator of institutional investment in Bitcoin. Data is showing an uptick in the institutional demand. By the end of April 2019, GBTC held 225,638 Bitcoins or just under 1.3% of bitcoin’s total circulating supply. Bitcoin inflows, or the amount of bitcoin added to GBTC’s holdings, have reached an all-time high in April signaling an increase in institutional demand. Nearly $58.2 million was added to GBTC’s holdings in April, which is almost as high as $60.8 million at the height of the bull market in December 2017. This shows a shift of the sentiment in the market.

Asset manager Fidelity has begun buying and selling Bitcoin for institutions, online broker TD Ameritrade rolled out trading of Bitcoin futures in December, and securities brokerage E*Trade is close to introducing cryptocurrency trading on its platform.


Facebook is one of the largest companies in the world, worth billions. Its recent launch of Project Libra has received the attention of digital and traditional media outlets. Everyone is talking about Facebook’s entrance into the cryptocurrency market. This is an amazing development for Bitcoin and other cryptocurrencies. On one hand it means that Bitcoin may face possible competition – and competition is always good because it moves things forward, it also means that huge numbers of retail investors through Facebook will get into the market. Facebook’s Libra Coin will introduce millions to the idea of cryptocurrencies. This lowers the chance of the crypto market vanishing, as some have predicted in the past.

US and China

The trade tensions between China and the United States have been good news for Bitcoin. The value of the cryptocurrency soared, as investors bought Bitcoinmto diversify their portfolios, as a hedge on investments.

A new study from Coinbase shows that 58% of Americans say they’ve heard of Bitcoin. The researchers point out key factors that indicate a rising interest in cryptocurrencies in the US, and an openness among more people to participate in a new global economy.

Well, Bitcoin didn’t die after the “last bubble.” Granted BTC fell over 80%, it has since recovered back to just 45% in the past few months. Since its bottom of $3,200 in mid-December, Bitcoin has made over 250% to current levels and it doesn’t look like it will stopping there. It has come back and with the market more mature, it’s stronger than it was before. IMHO the price of Bitcoin and cryptocurrencies are here to stay and prices will rise even more this year. The sky remains the limit.

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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 and has no positions or commercial relationships with the companies or people mentioned and is not receiving compensation for this post.

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