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.
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 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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Insurtech Front Page Weekly CXO Briefing: InsurTech doesn’t stop at borders

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The Theme this week is InsurTech doesn’t stop at borders. This indicates that InsurTech is truly a global trend.

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 InsurTech doesn’t stop at borders

Story 1: Berlin Insurtech Startup Simplesurance Sets Sights on U.S. for Future Expansion

Extract, read more on Insurance Journal:

“Based on the edge of Berlin’s trendy Mitte district in bright, open offices, Simplesurance is yet another insurtech startup seeking to transform insurance. It is also eyeing the U.S. for future expansion.

Simplesurance began in 2012, employs more than 150 people, and its cross-selling software operates across Europe. E-commerce partners can sell insurance products by adding the option to purchase insurance for a device with just one click on the platform’s shopping basket. As well, Simplesurance now offers an insurance broker app in Germany.”

US is definitely a primary market for any companies who want to do a global business. And it’s time for Simplesurance.

Story 2: HCS Capital Deploys $3MM into Growing InsurTech Opportunity, Jooycar

Extract, read more on The VentureBeat:

“HCS Capital Partners (“HCS”) a Miami, FL based Private Equity and operating firm, announced today it has completed a $3mm investment in Jooycar, a fast growing Chilean company disrupting the auto insurance and telematics space in Latin America. This InsurTech investment marks the most recent for HCS, as they continue to deploy capital from their Tech Fund 1 into InsurTech and FinTech opportunities in the U.S. and South America.”

Jooycar is aiming to expand in US. The help from HCS should come in handy.

Story 3: Prima Italian Insurtech MGA Raises €100 Million from Goldman Sachs and Blackstone

Extract, read more on InsurTechnews:

“Goldman Sachs Private Capital Investing along with several funds managed by The Blackstone Group’s Tactical Opportunities have invested €100 mln in Prima Assicurazioni, a Milan-based InsurTech start-up that sells auto insurance.”

Prima’s action is only one of them in Italy. After Germany, UK and France, Italy can be another influential force in the InsurTech community.

Countries like United States, China, Germany have been leading the digitalization age in the 21st century. It’s good to see more voices in InsurTech. And the mature market in US can be a good place to test new InsurTech models.

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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.

Lenders Avant and On Deck spin out new platform businesses

Fintech is often viewed through the challenger, disruptor lens. But more often than not, fintech is an incubation vehicle for banking proof-of-concepts. Not many banks deeply, organisationally get this. Even their Corporate Venture Capital arms struggle to deliver. If they did, the pace of banking innovation would be tremendous. It’s not.

But fintech lenders like On Deck and Avant do, and are now in the maturity phase of their fintech lifecycle that this ‘incubation’ phase is starting to produce white label opportunities for their proprietary technology.

Small business lender On Deck has launched ODX, a separate company that helps banks build digital SME lending products, while personal loan startup Avant is taking a similar tack, launching a new infrastructure platform called Amount that will help banks build digital consumer lending products.

Many startups struggle with the white label or disrupt model early on in their lifecycle. White-labelling is often appealing when cash flow is tight, and the hurdle to achieve market share seems overwhelming.

But as On Deck and Avant have shown, if you time things correctly, it really is possible to do both – and do them well. On Deck for example has originated over $10 billion in loans since 2006 and Avant has issued over 750,000 personal loan, auto loan and credit card products through its technology platform.

The financial institution of the past obsessed about owning the customer at every step of the financial journey. The fintech first financial institution of the future possibly cares less about that, and more about owning the technology layer.

What is interesting is that beyond one to one partnerships with banks, of which both Avant and On Deck have established in the past, both fintechs see a business case in creating a platform strategy and business line specifically focused on this area. This suggests a fundamental shift in attitudes in banks to work with alternative technology platform providers who are also, in many senses competitors.

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.

Crowdfunding, investing, & listing – DESICO for STOs

Interesting times! I am not referring to politics but financial markets both the traditional stakeholders and the disruptors. From Roubini lashing out on the crypto ecosystem, to Morgan Stanley gearing up to trade crypto derivatives, and Circle buying crowdfunding and broker-dealer Seedinvest.

The narrative around tokens has shifted Q1 2018. Utility tokens are no more darlings, STOs seem “the way to go” but pieces are missing still to satisfy the much-anticipated institutional appetite. #AndTheIronyIs that the ICO frenzy aimed to democratize early stage startup investing. It was supposed to allow retail to fund and participate in the startup tsunami that is building the winners of the 4th industrial revolution. Transparency and no gate-keepers were also promised.

#AndTheIronyIs it became about whales (the new gate-keepers) and now it is about crypto funds (the other new gatekeepers) and the conventional institutional money (e.g. the Ivy League US endowments[1]).

On the regulatory front, Europe seems to be leading with frameworks that try to not choke the blockchain early-stage innovation and at the same time provide some guidelines. The recent support from EU parliament of the Blockchain Resolution[2], is significant for several reasons. Switzerland, Liechtenstein, Malta, France, etc have also made progress on the regulatory front. Lithuania is one of the small Baltic countries which has attracted several Fintechs (even the Revolut unicorn) because it has been offered licensing and therefore EU passporting to these Fintech innovators.

In a September Forbes article[3] the Central Bank of Lithuania is singled out because of a new law allowing to invest in crypto assets through Security Token Offerings (STOs) in Europe. DESICO is referenced as it is taking advantage of this retail STO law and building a token platform for issuing, listing and trading security tokens in a fully compliant way.

DESICO has designed a different business model

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The founders of the DESICO platform are Fintechers, founders of Finbee a P2P online lending platform. They saw a business opportunity to not only legally launch an ICO platform for early-stage startups in which both institutional but retail also can invest; they are also designing it to onboard revenue generating SMEs (not necessarily blockchain businesses) that need to raise capital. As Laimonas Noreika, the CEO of DESICO, said to TechStartups “Desico doesn’t want to focus on tokenizing pension funds, investment funds, or real estate projects.”

DESICO will filter companies for scams and will let the crowd vet projects on the DESICO platform. The costs of the entire ICO process will be cut to one third the current costs, and various service providers will be onboarding on the DESICO platform. Once the token sale is successful, the tokens will be listed on the DESICO exchange and investors will be able to trade (no waiting times, no exorbitant costs). Investors (both retail and institutional) will be legally able to buy the tokens on the DESICO platform. Any kind of security token issued on the DESICO platform will be fully compliant. With the support and backing of the Lithuanian Ministry of Finance, the Ministry of the Economy and the Central Bank of Lithuania, and under the crowdfunding law, any funding under 5million euros following the crowdfunding requirements is a legal security token.

The DESICO platform will be an end-to-end platform (for early startups and SMEs) to crowdfund, to list and trade on an exchange, and to invest. The founders are in the process of acquiring the three required licenses, a crowdfunding license, an e-money licenses, and brokerage licenses.

The DESI token is a security token and the sale starts on November 7. DESI token holders will receive a revenue share of 12.5% of DESICO’s gross income over the next 30 years. Payouts will be quarterly, with no cap on the revenues. It is a 30-year Revenue Participation Note that is callable after 5 years at any time.

DESICO revenues will come from primary and secondary market fees of the tokens issued and traded on the DESICO ecosystem. The primary fees will be paid by the security token issuers in a mix of fiat and project security (STO) tokens. Secondary market fees will come from the exchange activities.

DESICO is as close as it gets to the next generation of a crowdfunding platform with in-house liquidity. It’s design is for the crowd too, not only for institutional. It’s business model borrows elements from Angel list, as its revenues include security tokens issued on the platform. The founders know how to work with regulators and license providers and know how to build an investor base. For details, read thoroughly the white paper.

Disclaimer: I am an advisor to the DESICO platform.

[1] Report: Harvard, Stanford, MIT Endowments All Invest in Crypto Funds, Cointelegraph

[2] In the EU Blockchain Resolution we Trust, DailyFintech

[3] Institutional Investors Bet On Crypto Market With Tokenized Securities, Forbes

Efi Pylarinou is a Fintech thought-leader, consultant and investor. 

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: Big Old Money Bets on Bitcoin & Blockchain

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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 “Decentralized Exchanges (DEX)”.

If you are still having doubts about cryptocurrencies, it looks like the old is meeting the new. Its been going on for a while now and in some cases not always getting a lot of coverage.

Last week in an announcement, Yale University invested in a $400 million in Paradigm, a crypto fund operated by veterans from cryptocurrency and finance industries.

Paradigm was created by Fred Ehrsam, Coinbase’s co-founder, Matt Huang, former Sequoia Capital partner, and Charles Noyes, an ex-employee from the Pantera crypto hedge fund.

The university has allocated 60% of its assets for 2019 in alternative investments, like venture capital, hedge funds, leveraged buyouts and now cryptocurrencies. Yale is among the few large institutions to invest in the cryptocurrencies, which has tumbled, since its rocket growth in 2017.

While in February, 96% of endowments and foundations responding to a survey by consulting firm NEPC said they don’t invest in digital currencies and didn’t expect to change their stance, a recent poll by Apeiron Ventures showed that around 40% of family offices are looking to invest or have already invested and view cryptocurrencies as a new asset class.

Crypto funds have been launching at a record pace, with more than 90 new crypto funds having launched this year alone. At this rate, there will be 120 new crypto funds launched this year. The total number of crypto funds is now approaching 500.

It has been reported that multiple high profile banking interests have also moved into cryptocurrency, most notably, George Soros, the Rockefellers, and the Rothschilds.

George Soros is looking to trade various cryptocurrencies and the Soros Fund Management venture internally approved the trading of virtual coins. In January of 2018, he described cryptocurrency as a bubble. With the price of Bitcoin at third of the price in December, Soros has turned into a believer. George Soros may be controversial, but when it comes to investments, he’s rarely wrong.

The Rothschilds connection to cryptocurrency has been documented in several articles. Last summer, the family purchased Bitcoin for the first time. In February, Tether accounts of Bitfinex were opened in the Dutch bank ING, owned by the Rothschild.

The Rockefellers have also joined the party. Venrock, the official venture-capital arm of the family, reportedly signed a partnership with Coinfund, a cryptocurrency investment fund, to back virtual tokens and blockchain business innovations.

In the past, bankers and large financial institutions have not a had a clear position, one minute bashing cryptocurrencies and the next praising them. I think they are starting to realize the attractiveness of Bitcoin and other cryptocurrencies, and their ability to hold value in a decentralized network, that is not dependent on the global economy.

For a while now, Bitcoin has been relatively stable in mid-$6,000 range. IMHO, Bitcoin stability is extremely healthy indication. The low volatility we’ve witnessed, is very important for large investors and in part we can probably can attribute the stability to institutional investors coming in.

In September, billionaire investor Mike Novogratz tweeted that the crypto market has already reached a bottom at $186 billion, and is ready for new rally:

“This is the BGCI chart… I think we put in a low yesterday. retouched the highs of late last year and the point of acceleration that led to the massive rally/bubble… markets like to retrace to the breakout..we retraced the whole of the bubble.”

Novogratz also said that a “Herd of institutional investors are moving into crypto”. The entrance of pension funds, academic institutions, and large-scale financial companies into the market could trigger FOMO, amongst institutional investors.

According to research conducted by Satis Group, crypto trading volume will grow by over 50% in 2019. In the United States, the volume of cryptocurrencies traded will overtake the trading volume of corporate debt this year. And even more significantly, the trend shows that crypto trading volume is set to reach 10% of the equity trading volume in the world’s largest economy and home to the globe’s biggest stock market. Currently, the volume of U.S. equities is estimated to be over US$74 trillion, while that of crypto trading is US$7.3 trillion.

But as most look at prices as a measure of performance, it’s certainly not the only way to look at things.

Adoption is a equally important, if not more important. Potentially, usage and adoption are what will drive prices up in the future. Crypto has being growing on all fronts. When we compare Internet and crypto adoption, we’ll see a steep upward trend for wallet growth.

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Bitcoin has been making significant steps with the Lightning Network. CoinGate, a payment processing gateway, recently announced its support for Lightning Network, across its entire merchant base. This could be a major boost to Bitcoin adoption, as CoinGate, will be  adding all 4,000 of its merchants to the off-chain system. In September the capacity of Lightning Network reached 100 BTC, according to data from monitoring resource 1ML. The network’s capacity six months ago, was as low as 3 BTC.

The articles we’ve been reading paint a completely different picture, not necessarily reflected by today’s crypto prices.

NYSE’s parent company introduced Bakkt, that will bring big brands, like Microsoft and Starbucks, into the market and drive the adoption at the merchant level. The UAE has a vision to be a world leader in the adoption of blockchain technology. The EU recently ratified its Blockchain Resolution. Leading giants, like IBM, MasterCard, Microsoft and others, are continuously applying and accumulating patents for crypto and blockchain. Facebook has put together a Blockchain team to develop the technology in their products. Walmart wants to store payment data on a blockchain. Revolut introduced a card allowing  its customers to receive cash back in Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and XRP. Over 90 central banks across the globe are engaging in research and development of the blockchain technology.

And these are just some of stories that have been floating in the news.

Bitcoin’s present stability was necessary. We needed a cooling period, during which a stronger base would be established, for the next bull run. This period is useful because it can be used to further develop the network and allow institutional capital to flow in. The entrance of some major institutional money, could spark more and more major organizations to invest at a large scale in cryptocurrencies. Ultimately this will benefit the entire crypto ecosystem and over time shoot prices upward, driving even greater adoption.

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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.

Venezuela’s Petro: Does Blockchain deserve this?

May be you are tired seeing the Petro saga unfold and spam your social media feeds. May be you are thinking, there you go, the joke of the decade. May be you are angry that the PR nightmare that has affected Cryptos is getting worse with this.

I must confess, I had all these thoughts going through my head when I saw that video of the Venezuelan President, Nicolas Maduro talk about Petro. The question that popped on my head is, how can human greed create so much mess? Does Blockchain deserve this?

Philosophical points aside, I must share my brain dump of the thoughts I have around this episode. Let us start with where Venezuela are economically – and perhaps that will set the context.petro

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Venezuela’s currency Bolivar has been hit by hyper-inflation which is at about 16800%. What does this mean? An economist and an entrepreneur originally from Venezuela told me this week that he has had experiences of buying a property, and going to bed only to find the property value had depreciated by 30% the following day.

That is the reality on the ground when hyper-inflation hits. Its worse than the worst Bitcoin price action.

Venezuela has been hit with sanctions which meant they don’t have free access to world markets and in essence capital. They have historically relied on their oil reserves to bail them out.

Venezuela is one of the most crypto savvy nations in the world. Their per capita crypto usage is one of the highest across the world. Put all these points together, there can be a logical happily-ever-after finish with a state-backed-stable coin. And that is exactly what they have tried to do.

While that is the logical way forward to get back some economic sanity, it can only be fruitful if the transition from Bolivar to Petro was well executed. Well executed in this case would include words like integrity, transparency, governance, monetary policy etc.,

The Petro has its own Blockchain, and derives its value from oil, gold, diamonds and iron. 50% of the value is derived from oil, and the supply of the Petro has a cap. But the state owned oil firm PDVSA has debts which is almost 8 times the market cap of Petro. So, I would doubt the integrity behind the decision of using Oil as an asset to back the crypto.

While there were close to 200,000 global purchases of the crypto as per the government, there hasn’t been any audit of these purchases. That makes the decision sound like a scam. There have been several other complaints about the petro. But for me, if a state backed stable coin cannot demonstrate sound policy and principles behind it, it is prone to a major failure.

However, if this is a genuine attempt by the government to turn its economy around , and if it managed to succeed, it would become a case study for many emerging markets countries to follow. And it would be a stark warning to the global markets that an alternative capital market is born.

I really hope the anger from the crypto community is more with the HOW of this petro episode, rather than the WHAT and the WHY. If the fears of the sceptics are found to be baseless, this could be the best thing that could have happened to the world of Blockchain and Cryptos.


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: Cross-Industry expansion

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The Theme this week is cross-industry expansion. This indicates that insurance is getting a higher degree of integration with our lives.

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 cross-industry expansion:

Story 1: Credit Karma Makes Significant Move with New Insurance Experience

Extract, read more on Business Wire:

“Credit Karma today announced its expansion within insurance. Launching today in California and Texas, Credit Karma’s members will be able to see what they could be paying for auto insurance based on what members like them are paying for the same coverage.

This move will address the mis-pricing issue of Americans’ auto insurance policies and will soon arm its more than 80 million members with the information needed to make the best decision on their insurance policy, without the headache. Credit Karma estimates that Americans overspend on auto insurance by nearly $21 billion per year.”

Credit Karma is already providing auto-related services to its users such as loans and evaluation of their cars. This move into insurance is apt and can be effective.

Story 2: Flipkart forays into insurance space, teams up with Bajaj Allianz

Extract, read more on The Economic Times:

“E-commerce major Flipkart Sunday said it is foraying into the insurance segment after securing a corporate agent license. To begin with, Flipkart has partnered Bajaj Allianz General Insurance to offer customised insurance solutions to power its mobile phone protection programme for all leading mobile phone brands that are sold on its platform, Flipkart said in a statement.”

News from India that is globally significant because it is one more example of an e-commerce giant moving into insurance. Amazon from America and Alibaba from China are already making this move. India is a big market with it’s own local champions like Flipkart, but what makes India such an interesting market to watch is that it is a market that big global players, such as Amazon and Alibaba, are fighting over. India is a battleground market. If any of these e-commerce giants can make the user experience of Insurance as easy as the user experience of e-commerce, they will change the lives of billions and make fortunes.

Story 3: WeWork taps Lemonade to offer insurance to WeLive members

Extract, read more on Techcrunch:

“WeWork has partnered with Lemonade to provide renters insurance to WeLive members.

WeLive is the residential offering from WeWork, offering members a fully-furnished apartment, complete with amenities like housekeeping, mailroom, and on-site laundry, on a flexible rental schedule. In other words, bicoastal workers or generally nomadic individuals can rent a short-term living space without worrying about all the extras.”

This is a great example of two big innovative ventures innovating together to deliver unique customer value. It is a fine example of the art of the partner.  When your customers are almost from the same group, a partnership would be great to improve the quality of your service. That’s what Lemonade and WeWork are trying to accomplish. It is also another example of how Insurance is central to our lives and how if one makes what is essential but boring easy to buy and consume, then customers will buy.

Cross industry expansions can be actions like establishing a new business as well as building a partnership with players in other fields. Integration can amplify the value propositions for insurance industries. Tech giants like Amazons and Alibaba have done this in earlier times and I’m sure we will see more and more integrations between insurance and other industries.

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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.

Kiwi fintech FNZ lands deal with Al Gore’s investment fund

You’ve got to love the Kiwi entrepreneurs for just getting on with it, and quietly building billion dollar businesses from the middle of nowhere.

And it seems they have a penchant for financial services businesses. While Rod Drury and his team have built a billion dollar SaaS accounting behemoth in the form of Xero, from Wellington, another Kiwi, Adrian Durham is hot on his heels. And his billion dollar wealth management business just landed what is possibly the biggest fintech transaction of the year.

Canadian pension fund CDPQ and Generation Investment Management (Al Gore’s fund) have jointly acquired a stake in FNZ that values the company at £1.65 billion.

Since 2003, FNZ has acquired a stunning £330 billion in assets under administration. It is the caretaker of 5 million investors, courtesy of its partnerships with the likes of Santander, Lloyds Bank, UBS, Barclays and many more. The platforms reach extends across 60 financial institutions across the globe.

What is remarkable about the business – and possibly speaks to the fast-tracked success, which requires intense focus and energy – is that around 400 employees remain shareholders, and will continue to own about one third of the equity of the company going forward.

The platform has also taken on building out Vanguard’s direct-to-consumer platform, which is a significant coup, and something BlackRock will no doubt be watching closely.

Platforms are a big play, and wealth management is grappling with how to bridge the expensive, advisory driven world and the new digital, millennial driven AI advice space. The majority of platforms are still trying to find ways to accommodate the old model while re-skinning for the new.

The big question is can you do both? My intuition says no – at least not particularly well. Which means there is a huge opportunity for a digital wealth platform that doesn’t have to retro-fit to the old.

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.

In the EU Blockchain Resolution we Trust

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It was my name day on September 20th – a significant day for a Greek Orthodox – but I was by no means going to miss the “Blockchain: Building Trust in Society” event with Dimitrios Psarrakis, a Greek leading specialist in European regulatory policy. This was the first event in PwC Switzerland’s joint thought leadership series with the blockchain hub Trust Square. I was not disappointed; on the contrary, both the speech, the panel discussion with Daniel Gasteiger, Founder, Trust Square & Founder, Procivis, Doris Fiala, Chairwoman, Swiss Control/Parliamentary Oversight Committee & President, Swiss FDP Liberals Women, Guenther Dobrauz, Dimitrios Psarrakis; and the party; were unique.

Greeks built the principles of Democracy. Eva Kaili, is the Greek EU parliamentarian that is leading a team with a mission to raise awareness in the European Parliament on the revolutionary potential of Blockchain and how to grab the opportunity to lead in the 4th industrial revolution with relevant and powerful policies.

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At the opening of his speech, Dimitrios Psarrakis, spoke about their team work in the EU parliament to educate, raise awareness and understanding about blockchain. They slowly but surely managed to obtain nearly 750 votes in the parliament for the Blockchain Resolution, a long and detailed policy for the EU which is based on the principle that Blockchain holds the potential to build Trust in our society in a different and better way, at many levels.

Driven by the fact that the internet has been a technological development that has undoubtedly created more convenience and connectivity, but has fallen short in creating more fairness and trust; Blockchain presents an opportunity to build trust and fairness in a very different way.

Driven by the belief that Blockchain will restructure several sectors: energy, healthcare, capital markets, Intellectual property etc.; the EU wants to mobilize capital to fund this revolution – the 4th industrial revolution.

The Blockchain Resolution includes several articles and aims to be fully in place in 2019. It has no intention to regulate any instruments – like coins, tokens etc-. It will only regulate the use of them on the newly created platforms. The Blockchain Resolution sees these new digital assets as legitimate instruments and does not attempt to categorize them as securities or commodities. The Blockchain Resolution sees them as alternative investments or contractual arrangements. Therefore, applying the Regulation in the EU for alternative investments, which is fairly flexible, is appropriate. The due diligence process on the platforms should be similar to the due diligence process in crowdfunding.

In Europe there is no consensus on the definition of a Security. Europe has MIFID, without a standard definition of a Security.

The Blockchain Resolution sees digital assets as alternative investments and the regulatory framework that applies is fairly flexible. Europe, through the Blockchain Resolution, wants to create policies that will mobilize capital to fund the next wave of restructuring the way several markets / sectors function.

The view of the EU is to present regulatory principles that are Technology neutral, Business-model neutral, and pro-Innovation.

The main principle is to allow for Disintermediation Economics that build Trust. Such economics promise to (a) reduce transaction costs and create new efficiencies, (b) reduce operational frictions by increasing liquidity, (c) automate monitoring processes with limited informational asymmetries (e.g. agency frictions, moral hazard, adverse selection).

The Blockchain Resolution is brave enough to look into the promise of Blockchain for Public infrastructure. The view is to restructure (a) traditional public services like land registries, licenses, certificates etc. (b) ways to reduce tax evasion and fraud, (c) cross-border transactions, regulatory reporting, data transactions between European citizens via smart contracts.

The Blockchain Resolution just got support from the Strasbourg Plenary.

“Blockchain has united this House, as all the parties in the Committee on Industry, Research and Energy (ITRE) voted in favor of the resolution under the principle of being technology neutral and innovation-friendly in Europe.” “One of the core messages of our text was to signify that the European Union aspires to become the global leader in the fourth industrial revolution,” said Eva Kaili.

The European Commission will be next in November at the European Parliament Blockchain event. This will be followed by the Blockchain and international Trade Report. In December, the Crowdfunding Regulation will be updated.

Some of the recommendations that the resolution makes are[1]:

  1. For member States to establish non-profit “innovation hubs” to promote research, education and training among their citizens
  2. For the Commission and ECB to identify dangers for the public and incorporate cryptocurrencies into the European payment system.
  3. To develop technical standards for Distributed Ledger Technologies
  4. Conduct a clear analysis of legal enforceability of smart contracts among EU member States
  5. Decentralize the storage of EU citizens’ data in preventing the misuse of data
  6. Decentralize infrastructure to ensure no monopolies are held, for instance the storage of nodes and servers
  7. Use blockchain for tracking EU funding to achieve greater accountability
  8. Evaluate blockchain-based e-voting systems as a use case for the EU
  9. The creation of funding opportunities from the EIB, EIF and EFSI 2.0
  10. The creation of an Observatory for the Monitoring of ICOs and clarification of utility tokens and security tokens as unique asset classes
  11. For any regulations on blockchain to remove barriers and founded on principles of technology neutral and business model-neutral

In Q1 2019, the Blockchain Resolution will be seen and hopefully adopted by ESMA. Europe is leading the way.

We live a world in which Trust is lacking, Trust is being re-defined, Trust has to be re-built.

[1] Excerpts from EU Parliament Passes Blockchain Resolution

Efi Pylarinou is an independent trusted Fintech and Blockchain advisor

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