Insurtech Retrospect, a review for 2018

Retrospect

The Theme last week was blockchain still alive in InsurTech.

A late Merry Christmas and an early happy New Year to dear readers of DailyFintech!

At the end of the year, we bring you the theme for this week: Insurtech Retrospect, a review for 2018. This is a tough year for investors and startups. The shadow of trade conflict between US & China and economic volatility have grave effects on business. How is InsurTech coping with that?

For more about the Front Page Weekly CXO Briefing, please click here.

Incumbents embracing InsurTech is a common theme in our posts. This time, it’s about customer engagement.

Story 1: Digital Insurance’s top 10 stories of the year

Extract, read more on Digital Insurance:

“What a wild year for insurance — or insurtech — or whatever you want to call it! 2018 will surely be remembered as a banner year for the industry’s transformation agenda. Carriers big and small, across lines of business, rolled out all sorts of next-generation technologies with the aim of getting the best ever-exclusive customer experience. And money flowed into insurtech, with more than 15 investment rounds of more than $40 million dollars going to some leading startups.”

Lots of stories happened in InsurTech community in USA this year. You can see Uber and Amazon are mentioned, and old school incumbents like Travelers embracing digitalization as well.

Story 2: Top 100 Insurtech: Quarter four update

Extract, read more on Insurance Post:

“It’s time for the final 2018 update on the Insurtech 100, the global index compiled for Post by Tällt Ventures. Here founder and CEO Matt Connolly rounds up the latest investment and partnership news.”

You can find most of the financing records of the year of InsurTech startups in this article, as well as partnerships, product launches, expansions, even personnel changes.

Story 3: Quarterly InsurTech Briefing Q3 2018

Extract, read more on Willis Towers Watson:

“In this edition of the Quarterly InsurTech Briefing, we look at event-based, or “parametric,” insurance offerings and ask ourselves whether event-driven cover is just a niche product or a Trojan horse that can simplify and fundamentally change the industry.”

Wills Towers’ 46-page quarterly briefing includes an industry theme for 2018Q3, startup profiles, transaction spotlight, thought leaderships and data center.

InsurTech has delivered a relatively better performance in 2018 than other sectors in technology and Internet industry. At least that’s the case in China. When economy goes down, people are more inclined to put money in insurance.

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

Check out our advisory services(how we pay for this free original research).

To schedule an hour of Zarc’s time for CHF380 please click here to send an email.

Could Square be the first global small business bank?

Late last week we learned Square was back for round two of its banking licence application. The company was reported to be reapplying for the license, after withdrawing its initial application earlier this year.

While the bank will be Utah based, it isn’t hard to imagine the U.S. company as having global small business banking ambitions. Today its payments and merchant ecosystem is available in Canada, Australia, Japan and the U.K. These are all jurisdictions that have struggled to produce good small business banking alternatives during the fintech boom, despite many offering ‘neobank type’ licenses.

Square has had a pretty good run over the past two quarters, after slower growth in the preceding three. In the 2018 third quarter the company saw net revenue grow 51% YoY to $882 Million, on Gross Payment Volume of $22.5 Billion. While the company is still a relative minnow alongside competitor PayPal (by way of comparison, the payments giant pulled in revenue of $3.68 billion for Q3 on $143 billion in total payment volume) Square is no doubt banking on a license to help it further encroach on PayPal’s market share. It would also position it to further solidify its objective to own the lion’s share of commerce requirements for small businesses.

Square also has a hand in the crypto jar, with $43 million of Q3 revenue attributed to bitcoin. In August of this year the company was awarded a patent for its crypto payment network, and reports suggest adding bitcoin to its Cash App back in January helped Square make a dent in PayPal’s Venmo during 2018.

PayPal started from a consumer first strategy, and then pushed through into the SME space. Square on the other hand has played a reverse strategy. And while Square could have been seen as a acquisition target for PayPal up until a year or two ago, the banking license play now feels like a solidly competitive move on the chessboard. If Square can deliver on SaaS banking for SMEs, rather than the hodge podge of services and pricing that exists today amongst the incumbents, then it may have a real killer advantage. It will need it, because PayPal has deep pockets, and can instigate a price war it can almost certainly win.

Certainly one to watch in the SME banking space in 2019.

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.

Blockchain my heart – Q4 of 2018

timestamp

Time Stamp this past October! It was a decade since the Halloween white paper titled ““Bitcoin: A Peer-to-Peer Electronic Cash System” was sent to a mailing list of the few select cryptographers.

#AndTheIronyIs that the Nakamoto groundbreaking technology is being championed by banks as a way to radically improve the financial system. #AndTheIronyIs that this out of the UBS Blockchain site.

#AndTheIronyIs that Wall Street is working hard on structuring new derivative products (a business they know all to well) for crypto assets. Morgan Stanley and Goldman Sachs were the first to clear the Bitcoin futures for CBOE and CME. MorganStanley now plans to offer a Bitcoin swap trading product.

#AndTheIronyIs that my top October Tweet by all metrics was Screen Shot 2018-12-21 at 7.20.17 AM.png

At the Swiss Women Blockchain breakfast panel discussion, I shared my passion for Blockchain use cases in Financial inclusion. This is the reason I worked with Arun Krishnamkumar to launch a thematic podcast series on this exact topic. Listen to guests from Wala project in Africa, Stellar protocol, the Agentic Group in NY and more.

In Europe there is no consensus on the definition of a Security. Europe has MIFID, without a standard definition of a Security. The European Parliament supported the Blockchain Resolution, which presents regulatory principles that are Technology neutral, Business-model neutral, and pro-Innovation. The main principle behind the Blockchain Resolution is Disintermediation Economics that build Trust. Read details In the EU Blockchain Resolution we Trust.

This quarter I participated in three Blockchain conferences and several blockchain meetups. My talk in Athens at Decentralized is online:  “Unlocking value in Fintech: The Blockchain deity at work”.

Noteworthy news from my clients:

EquibitGroup, a P2P capital markets infrastructure, moved its headquarters from Toronto Canada, to Zug and was already listed as an upcoming challenger in the Swiss Crypto ecosystem of 400 companies (report presented at the CryptoSummit).

Desico, a fully compliant way to issue a Security token out of Lithuania, successfully raised 1million from the crowd through a Revenue Sharing Note (with an ISIN number allocated by Nasdaq CSD: LTM 000010008).

LCX, the early stage institutional grade exchange out of Liechtenstein, launched the Blockchain LCX event series. Dr. Zhang and Don Tapscott were two distinguished guests that gave talks and I had the pleasure to moderate a discussion thereafter. Watch here.

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: Coinbase IPO… waiting for the bull.

coinbase

Last week our theme was “Basis shuts down. Will regulation kill crypto?”

Our theme for this week is “Basis shuts down. Will regulation kill crypto?

In a recent interview on CNBC, when Asiff Hirji, President and COO of Coinbase, was asked about Bitcoin’s price surge during the holiday season, he said that “it’s not surprising that Bitcoin has bounced back.” He also said, that “the company is a long way from an IPO and is currently focused only on building a great business.”

While we’ve all heard the rumors of Coinbase’s upcoming IPO, its evident that the company won’t IPO until it sees, from it’s proprietary data, that bear market is over.

In 2017, Coinbase crossed $1 billion mark, when Bitcoin hit $20,000. In October 2018, it was valued around $8 billion. What’s even more impressive is that the company expects  to meet its target $1.3 billion in revenue.

Screen Shot 2018-12-24 at 3.44.30 AM.png

Company document obtained by Bloomberg

For now, Coinbase has been on a strategic march, launching new services, expanding into new horizons and showing no signs of stopping. Coinbase’s CEO thinks that the total number of people in crypto will reach one billion within the next five years.

Coinbase is certainly preparing for it.

Today, Coinbase is the largest cryptocurrency exchange in terms of users, with 25 million registered users and $7 million worth of cryptocurrencies traded on the platform every single day.

According to the November 2018 research report from the Blockchain Transparency Institute, Coinbase led the pack with 422,000 daily active users, with Binance trailing in second place with 313,000 daily active users. OKEx and Huobi barely made it over 100,000 daily active users, with 105,000 and 101,000 respectively.

A couple of weeks ago, Coinbase announced that it will potentially support 30 new crypto assets in the near future, stating on their blog: “We are continuing to explore the addition of new assets, and will be working with local banks and regulators to add them in as many jurisdictions as possible.”

Recently Coinbase launched its OTC trading desk for institutional customers and added free PayPal withdrawal for its users. Coinbase also announced the expansion of its trading platform to new markets in a move to aggressively push the market forward in the coming year. It has expanded to Lithuania, Iceland, Andorra, Gibraltar, Guernsey and the Isle of Man. Earlier this year, Coinbase partnered with Barclays Bank, the first agreement between a leading U.K bank and a cryptocurrency exchange. Coinbase acquired Paradex, a non-custodial trading site built on the 0x decentralized protocol.

Coinbase is the king of the digital currency jungle. Coinbase was the first U.S. cryptocurrency startup, to become a “unicorn” and to generate $1 billion in annual revenue. With 25 million customers, its comparable with brokerages like Charles Schwab. The press is buzzing about its potential IPO. For now, the cryptocurrency market is much lower from where it was in 2017. Lots of investors got burned, making them more cautious. When Coinbase decides to IPO and creates huge returns for VC investors, it will give investors a chance to interact with the digital currency market, through a public company.

For more about the Front Page Weekly CXO Briefing, please click here.

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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.

The No-deal Brexit Shock and Fintech, who is the winner?

“Its going to be a No-deal Brexit.”

“No-deal could be damage control”

“May might have left it too late.”

“It could be a managed explosion”


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And the headlines keep coming. There is some serious soul searching that the country and its leaders need to do after/if this saga comes to an end. An interesting article in The Guardian articulates with pictures, the catastrophe that is waiting to happen if a deal wasn’t reached.

While the nation’s and the region’s future, along with the livelihoods of people are at stake, today we focus on what it means to Fintech.

There was a time, not too long ago, when I felt that pragmatism would prevail through the Brexit deal making process. If that had indeed happened, London could have very well maintained its lead as the Global Fintech Hub. Yet again, mankind has proven to be less rational than I hoped.

I felt there were several factors that helped the City of London maintain its lead in Fintech.

  • A matured and a fundamentally strong Financial Services industry
  • A strong in-flow of skills from UK and Europe
  • The English language
  • Time Zone
  • A innovation friendly regulatory regime, thanks to the FCA

With the Brexit plans in motion, there was a stress test exercise conducted across UK’s high street banks and the scenario involved key three risk factors,

  1. 4.7% decline in UK GDP,
  2. 33% fall in house prices and
  3. 27% decline in the value of pound sterling

No surprises there, banks passed the stress tests. So the incumbents are prepared. However, as a precautionary measure many high street banks, asset managers and Fintechs have set up shop in Ireland. Thanks to Brexit, Ireland now has over 400 Financial Services firms, and over 100 firms queued up for regulatory approvals to use Ireland as their location to passport services to Europe.

Just looking at the above factors, Ireland shares many of the regional and language benefits that London benefits from. And with an attractive corporation tax of 12.5%, its going to be challenging UK’s might in attracting top Fintech entrepreneurs.

All the above factors are working in Ireland’s favour and it has most of the key ingredients to attract Fintechs if a No-Deal Brexit happened. Top FS players setting shop, a conducive environment for entrepreneurs, regional and language advantage.

The UK’s FCA is clearly struggling to cope with the uncertainties that the political landscape is throwing at them, there is a lack of clarity on how several regulatory aspects will be treated post Brexit – with a deal or no-deal.

From payments to passporting, from transaction reporting to fund management, the regulatory guideline is

KEEP CALM AND CARRY ON, and stay tuned for more updates.

With the EU and UK fighting hard, and with the uncertainty this has caused in the business landscape, Ireland may well be the winner, when it comes to Fintech.


Arunkumar Krishnakumar is a Venture Capital investor at Green Shores Capital focusing on Inclusion 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 – Blockchain not dead in insurance

Blockchain insurance

The Theme last week was Incumbents on customer engagement.

The Theme this week is Blockchain not dead in insurance. Blockchain, or cryptocurrency is dead for many investors, but it is still a promising future for insurance.

For more about the Front Page Weekly CXO Briefing, please click here.

Incumbents embracing InsurTech is a common theme in our posts. This time, it’s about customer engagement.

 

Story 1: Ant’s Alipay uses blockchain to process health insurance claims in seconds

Extract, read more on Ledger Insights:

“Alipay is processing health insurance claims within seconds using a blockchain system, state-owned Securities Daily reported yesterday.

Alipay runs a free health insurance product as part of its rewards system. When users pay offline with AliPay, they earn bonus points towards the health insurance product. The plan is run with one of China’s largest life insurers Taikang Insurance. Within a month of launching in April 2017, 13 million people had signed up for the rewards program which amounts to 11% of Taikang’s online users, according to Asean Today.”

Ant Financial is the Fintech arm of Alibaba and is known for its exploration spirits. They tried to launch a mutual insurance project in October this year, but was compromised due to a rumored and undisclosed conflict of interest. One fails, keeps going with another. They certainly still have faith in blockchain.

 

Story 2: State Farm turns to blockchain for subrogation

Extract, read more on Digital Insurance:

“State Farm is working on a blockchain application to assist in subrogation, leveraging open-source software and in partnership with at least one other insurer.

The company’s goal is to establish whether blockchain technology can make subrogation more efficient, in particular by preventing repetitive transfers of funds back and forth between insurers.”

Subrogation is a relatively new field for applications of InsurTech and State Farm is getting a first-mover advantage.

 

Story 3: Australia: National Transport Insurance Partners on Blockchain for Food Safety Trial

Extract, read more on Cointelegraph:

“Australia’s National Transport Insurance (NTI) has announced it will trial a blockchain system to improve supply chain integrity for beef exports abroad. The trial was reported by local transport industry magazine Fully Loaded ATN on Dec. 10.

NTI will reportedly be partnering with BeefLedger, an Australian “integrated provenance, blockchain security and payments platform,” which combines blockchain with Internet of Things (IoT) technology to bolster product credentials across the supply chain.”

Both NTI and BeefLedger are not well known in the InsurTech community. And the alleged application is not insurance-centered. However, it’s a trial involving trans-border business, origin tracing and liability monitoring. It can be enlightening for insurance, if it pans out.

2018 is a very bad year for blockchain enthusiasts, but on the bright side, we might have entered post-bubble era just like the early 2000s. With less hype, expectation and more commitment, blockchain can still find its appropriate values.

Image Source

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

Check out our advisory services(how we pay for this free original research).

To schedule an hour of Zarc’s time for CHF380 please click here to send an email.

Is ‘ikigai’​ the key to unlocking financial freedom for millennials?

I’ve been reading a book on a Japanese concept called ‘ikigai’ from the island of Okinawa, and it inspired me to think about how it relates to the way we think about life, money/wealth, purpose, and really never ‘retiring’ in the traditional sense.

I mean, if there was no such thing as retirement, how would you think about life differently?

In Okiniwa, this is something they face daily, as there is no word for retirement in their language. Instead, there is one word that permeates their entire life, and that word is ‘ikigai’.

Ikigai (pronounced ‘ick-ee-guy’) is best translated as “that thing that gets you out of bed in the morning”.

It’s a combination of your passion, your mission and your profession. Your ikigai can be very clear, or something you are still hunting.

Having a purpose like ikigai is said to be one of the key reasons why Okinawa has more than its fair share of centenarians. Even at 90, many are still filled with plans for the future.

By default many of us subscribe without thinking to the idea of retirement. We put up with a crappy job and meaningless work so we can enjoy ‘the golden years’. But maybe the ‘golden years’ are right now, and they are always in the present, not the future? Maybe we all need a little more ikigai, and a little less ‘retirement planning’?

Equally fascinating is to put a concept like ikigai at the centre of how you redesign and rethink financial products. Why should our lifestyles be defined by financial products – mortgages and pensions being two good examples. Financial products should be designed to adapt and suit our lifestyles, like debt free home ownership, subscription living and nomadic careers.

Baby boomers are already killing retirement. The average retirement age in the US, according to Gallup, is now 62 – the highest since Gallup’s survey began in 1991. A key driver in this increasing retirement age has been a lack of financial securityBut money is only half the story.

It turns out many baby boomers who are arriving at retirement, are quickly seeing beyond the veneer of glossy cruise brochures and timeshares. According to a study by RAND, a growing number of US retirees are delaying retirement for ‘fulfillment rather than finances’. Are they seeking ikigai?

Ikigai could be a simple but fundamental switch in how we think about financial product design. We need to stop digitising the old and start observing life a little more closely. Then we might create something truly life enabling. Financial freedom doesn’t have to be an abstract point in the future. It could, with the right ingredients and attitude, be right now.

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.

2018 Year-end review through 3 distinctions

Three

In my first Daily Fintech post[1] of 2018, I wrote about Vitalik who “sounded the alarm on Twitter as he has become deeply concerned about all crypto communities getting lost in a pile of monetary gains instead of being ambassadors of a radical, positive and purposeful societal change.” (BTC/USD around 14k).

12 months later there is no FOMO left in the crypto markets. Decentralization has taken a regulatory hit in more than one ways. From exchanges being forced to shut down or find an accommodating jurisdiction (Binance) or become more centralized (Lykke, Shapeshift).

The blockchain ecosystem is more focused on solving scalability issues and has had to put aside some of its “decentralization” ammunition.

The bottom-up blockchain movement has been embraced by corporates/institutions who experiment more and more. 2018 has seen more supply chain and logistics blockchain projects go live (IBM & Maersk, Wall Mart).

As the New Year starts, let’s all reflect on three main distinctions that I have identified as essential in this tech wave:

Traders versus investors.

Corporations versus communities.

Private success versus social impact.

Blockchain Traders & Investors. In 2018, the crowd got slaughtered because it fell into the Crypto Currency Trading trap. Investors with all sorts of exposures in Blockchain ventures, where tortured with regulatory guillotine threats.

Sadly, retail investors got cut out of the next generation of crowdfunding promised by ICOs.

Corporations versus communities. 2018 was not the year that the corporate structure lost grounds to a bottom up community structure of governance. In traditional Fintech, we saw more unicorns globally – Ant Financial, Stripe, Lu, One97, Robinhood, Coinbase, Sofi,. [2]  “Go Big” remained the way to go in Capital markets.

Fintech acquisitions were strong with an increase in total dollars due to mega deals. Notable acquisitions from incumbents include iZettle, Kensho, Seedinvest, Quandl, Cashcare, Lumo, Poloniex, Bittrade, Chain, ….

And incumbents like Blackrock, Vanguard, State Street, and Fidelity, continue to grow their assets managing close to $17trillion and Vanguard brought $1billion a day of new money last year[1]. I call this the mushrooming of the Buy-side[3].

Even in the Venture Capital sector saw the rise of mega-funds and a shift of focus towards later-stage and large dollar investments. Early-stage entrepreneurs are left with less services from VCs as they favor opening their networks and sharing their wisdom for those with the network effects already visible. I call this another new financial exclusion trend.

Divestitures of Fintechs from incumbents were also notable, showing that Fintech/Finance partnerships are as challenging as marriages. BPCE’s purchase of mobile bank Fidor in 2016 seemed like a 21st-century fintech love story. In November 2018, the Fintech romance ends with a cultural clash. Chris Skinner, wrote Clash of clans … or new bank versus old bank (Fidor, BPCE). 

The only disruptor of the corporate structure and its strategies was the appearance and use of Utility tokens that promised to build large, decentralized communities with network effects. In 2018, the narrative of the Utility token potentially revolutionary use, got crushed[4]. Lots of peculiarities exist and we can only say that we are in the experimentation phase still.

Utility tokens are not dead by no means IMHO. I foresee that they will re-emerge in some combination once the markets take a breather.

Private success & social impact. In 2018 Sustainability gained a tad more ground in our consciousness. In spending choices and even in investing[5]. There is more awareness of the silos that persist in our current setup which has finance and tech on a throne and Sustainability and Social impact as an add-on.

#DeleteFacebook proved not to be enough, for the Self-Sovereign identity movement to attain mass adoption. From my personal anecdotal evidence, not even 10% of people know that there is an alternative to being captive through our data. The Internet is broken but the narrative is not strong enough by any metrics. We remain trapped in an ever-connected world in which loneliness is increasing simply because it lacks purpose. As soon as we use technology to turn purpose into a competitive advantage, then social impact a private success won’t be competing and we will be living in a better world. Easier said than done, but the tools are there.

Looking forward to 2019

Daily Fintech has been and continues to be a unique insight-driven content platform. We are committed to this work of love. You can tap into our knowledge and expertise with the Book an Expert for an hour service and benefit in a private and customized setup.

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.

 

 

 

 

 

[1] Vitalik’s concern hit the nail on the head: The seasaw problematic

 

[2] One97 – From selling Astrology services over the phone to a Global Fintech Unicorn

 

[3] What has changed a decade after the financial crisis?

 

[4]Like blind men groping around an elephant, we all see Utility Tokens from our own perspective. This Chapter aims to offer a wide-angle view so that we can actually see the elephant.” In Investing in Utility Tokens.

[5] Stop Borrowing from the future

Basis shuts down. Will regulation kill crypto?

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Last week our theme was “The Action in China.”

Our theme for this week is “Basis shuts down. Will regulation kill crypto?

Basis, a cryptocurrency stablecoin, is shutting down and returning the capital to its investors because of regulation challenges. Basis, raised some $135 million from top VCs, but decided to shut down because of concerns that regulators would view its tokens as securities.

Ventures capitalists that lend funds to Basis were one-time Federal Reserve governor Kevin Warsh, longtime hedge fund manager Stan Druckenmiller, Digital Currency Group, NFX Ventures, Valor Capital, Bain Capital Ventures, GV, WingVC, Ceyuan, Andreessen Horowitz,one-time Lightspeed Venture Partners, Zhenfund, Sky9 Capital, Foundation Capital, and others.

Basis had a specific contract with investors defining how the majority of capital raised was required to be held. Most of the money was legally required by contract to be held in the currency in which it was contributed and could not be touched by the company until Basis launched its stablecoin.

2018 has been the year of the stablecoin. According to a report from Blockchain.com, the amount of stablecoins skyrocketed in 2018.

What is a stablecoin? A stablecoin is a form of cryptocurrency that is pegged to other stable prices or assets. Some of main advantages of stablecoins are that they are global, have no affiliation to a central bank and rarely are prone to price volatility.  But, one of biggest issues they face, is trying to establish if they are subject to national securities and money service laws.

One of the big themes at the recent G20 Summit in Buenos Aires was regulation:

“We will regulate crypto-assets for anti-money laundering and countering the financing of terrorism in line with FATF [Financial Action Task Force] standards and we will consider other responses as needed.”

The summit also focused on taxation, mentioning that it is working on a “globally fair, sustainable and modern international tax system” based on tax treaties and transfer pricing rules.

The main issue governments have with crypto is that there are too many blind spots. No one can give a clear answer of what a cryptocurrency is. Is it an asset? How should it be taxed? How should it be monitored; How can we identify confidential transactions? Another big gray area, are ICO tokens.

For some time now, ICOs have been a headache for financial institutions. Initial Coin Offerings are a way for companies to raise money, by issuing tokens and selling them to the public for Bitcoin, Ethereum, other cryptocurrencies or fiat currency. In many cases, projects promise investors, not just the product they plan to develop, but speculative returns from the potential price of the token, when it lists on exchanges. But some companies that collected funds using an ICO, turn out to be scammers. The worse part is that they took the money and ran and never delivered the product.

The most infamous case is Tezos, that collected $230 million. A class-action lawsuit against the Tezos has been filed by a group of investors in the Supreme Court of San Francisco, accusing the the company of fraud and trade of unregistered securities. Tezos is not the only one facing a lawsuit, the list includes other high profile ICOs, like Paragon Coin, Cloud With Me and Latium Network.

Can governments protect investors from fraud?

The most fearsome of all regulators for the cryptocurrency world, is the U.S. Securities and Exchange Commission. The SEC is waging a war on ICOs and in recent months its been handing out fines like its candy. The SEC’s 2018 report already mentions dozens of ongoing investigations, so virtually any startup that recently had an ICO is probably being investigated by the SEC.

In Singapore and Switzerland, central banks have issued guidelines for conducting an ICO and described cases when tokens are be defined as securities and thus must fall within the scope of the law. The Chinese government went even further and completely banned Chinese companies to hold token sales or its citizens from participate in them.

In the short-term, stablecoins are undoubtedly the key to mass-implementation of cryptocurrencies in everyday life. But, scalability and trust will be the biggest issues in 2019 and regulation will play a important role in the adoption of cryptocurrencies. Considering how popular stablecoins have become and the fact that they are very closely linked to fiat, it’s clear that financial regulators, will try to find a legal framework for stablecoins, especially the ones pegged to the U.S. dollar.

People have different opinions if crypto should be regulated or not. Some crypto supporters argue that regulatory control contradicts the philosophy of cryptocurrencies. Others believe regulation is a sign that cryptocurrencies are already accepted by authorities and regulation can only help them grow.

The key to successful regulation of cryptocurrencies is to ensure that it does not stifle innovation.

For more about the Front Page Weekly CXO Briefing, please click here.

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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.

Announcing Jessica Ellerm, SME & PensionTech  expert in Oz, joining the Daily Fintech Expert Service

jessica

Each week we are adding a new Expert to the Daily Fintech Expert Service. Today we are bringing on board Jessica Ellerm who has been writing every Wednesday on the Daily Fintech platform since February 2016. 

Jessica is the person to call if you are involved with with Small Business Finance & Payments or the reinvention of pensions (aka “PensionTech”) or if you plan to launch your Fintech service in Australia or New Zealand. Jessica also has a lot of experience in how to apply digital marketing & behavioural economics to Fintech.

Now you get a chance to talk to somebody who really understands those markets as a serial entrepreneur,  for only CHF 380 per hour.

For more on Jessica, please go here, or click on her LinkedIn profile, or see Jessica’s posts on Daily Fintech.

To book an hour with Jessica for CHF 380, please click here to send her an email.