Connect with us

Blockchain

Financial Market Infrastructures Cite Progress, Concerns with Blockchain Technology

Published

on

Financial Market Infrastructures (FMIs), which include exchanges, central clearing houses and central securities depositories, are focusing on blockchain or distributed ledger technology (DLT) applications that create cost savings and efficiencies primarily, but some are also pursuing new opportunities, according to a World Federation of Exchanges (WFE) report.

FMIs, due to the youth of DLT technology, are not certain how fully the technology will fulfill what it promises. They also recognize risks including maintaining security standards across legal and regulatory uncertainty.

FMIs Favor Collaboration

FMIs currently favor collaborative engagement with regulators as the technology’s applicability to capital markets evolves.

WFE teamed with the International Organization of Securities Committees (IOSCO) and the Affiliate Members Consultative Committee in surveying post-trade infrastructures and exchanges, collectively known as FMIs.

The report is based on responses form 24 FMIs along with an interview with another exchange. The report does not represent the total industry as it is based on input from early movers in the DLT capital markets arena.

The report focused on DLT’s state of play and focus areas, regulatory and legal perspectives, and opportunities, risks and visions of a post-DLT world.

Interest Remains High

The majority of respondents are investigating DLT applicability to their environment or are actively exploring opportunities. Seven of the respondents have allocated budget for DLT initiatives while 13 said they expect to.

Some FMIs are also working with industry groups including the Post-Trade Distributed Ledger Group and The Linux Foundation Hyperledger Project. The first group focuses on grasping common industry standards and regulatory policy relating to the post-trade environment. The second group seeks to create an open source distributed ledger framework and code base to allow users to build industry specific applications to support transactions.

FMIs are examining the following use cases: clearing and settlement, trade matching and confirmation, corporate actions like dividend payments and voting rights, securities issuance, crowd funding, proxy voting, trade registration, regulatory transparency and reporting.

In the more bespoke area, respondents also seek the following DLT provisions: national anti-money laundering and know your client registries, trade finance facilities, asset registration facility, databases on agricultural receivables, and digital assets.

Further Progress Expected

Respondents highlighted efficiency enhancement, risk reduction and cost savings as main reasons for exploring DLT. The technology is seen as allowing for further process automation, reducing the need for authentication and manual reconciliation. It also reduces the time needed to finalize transactions and allows greater system resilience and data integrity.

Regarding settlement and clearing collateral management, respondents see these features bringing better capital efficiency and reducing capital requirements for market participants.
Some believe DLT investments can unlock revenue opportunities by giving access to new service offerings. Others think the efficiencies will impact organizational structure.

Expected Rollout Time Varies

Respondents varied in their expected time to introduce DLT use cases. One respondent has deployed a working blockchain application and is rolling out another. Others are at the proof-of-concept stage while some are in the design and evaluation stage.

Respondents had varying levels of concern about technical challenges and integrating DLT with existing infrastructure.

Respondents agreed on the need to ensure that DLT solutions align with legal and regulatory frameworks. There were several issues under this topic that need clarification, however. They included privacy laws, data governance issues, intellectual property rules, investor protection, and conflict of interest.

Respondents agreed that open dialog about the technology’s evolution is the most important point. All agreed on a collaborative approach.

Long-term, they felt IOSCO could play a role in establishing global standards and ensure the standards do not conflict with other standards, such as those relating to cyber security or data protection.

Barriers To Adoption Cited

Barriers to adoption include vested interest in protecting existing systems, lack of technical skills, uncertainty about the technology, and legal and regulatory issues.

Asked to name potential risks of DLT application to capital markets, respondents cited immaturity of the solution or uncertainty about application to existing processes, such as handling fraud and theft, and how to ensure non-blockchain transactions are reflected on the blockchain.

Most agreed it is possible and likely for non-financial players to take the lead in DLT development. They did not, however, agree non-financial firms are in a position to roll out DLT solutions in capital markets without existing players’ participation. Respondents felt it would happen in collaboration with existing players.

Respondents offered divergent views on whether DLT will fundamentally affect the structure of their industry.

Also read: Report shows banks concern for transaction confidentiality on distributed ledger technology

New Parties’ Roles Uncertain

Respondents also disagreed on the impact of DLT on trusted parties’ roles and the growth of new trusted parties. One respondent noted the process could require fewer intermediaries. Some saw the emergence of trusted third parties to handle the verification function.

Predictions are hard to make at the current time on the scope and scale of DLT’s impact on financial markets and market intermediaries, the report noted.

The number of FMIs exploring and deploying DLT proof of concepts and solutions will increase.

Where some FMIs approach DLT as a competitive advantage, the existing collaborative approach is expected to continue.

The collaboration will include regulators and policy makers that will encourage adoption of proper regulation that will minimize unintended consequences of policy formation. Some have adopted “regulatory sandboxes” for the fintech industry that can include DLT.

In areas where unregulated and non-financial entities lead DLT development, regulators will have to ensure equivalent protections exist.

New Standards Needed

To the extent that regulatory standards are needed, IOSCO can help develop standards.

Potential use cases will continue to evolve as FMIs and others explore beyond current processes for new opportunities.

WFE will continue to facilitate an open dialog between its members about the technology’s evolution.

Featured image from Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
0 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 5 (0 votes, average: 0.00 out of 5)
You need to be a registered member to rate this.
Loading...

3.9 stars on average, based on 8 rated postsLester Coleman is a veteran business journalist based in the United States. He has covered the payments industry for several years and is available for writing assignments.




Feedback or Requests?

Click to comment

You must be logged in to post a comment Login

Leave a Reply

Analysis

Has Ethereum Lost Its Cache?

Published

on

For all of us believers that asset prices are set by fundamentals rather than fantasy, these are perplexing times.  Crypto prices are not only way off their January highs, they are at the lowest level this year. Progress in addressing issues like scaling and security may be slow, but they are taking place.  The cooperation between crypto and government regulators is improving in big chunks.

Yet, while all this is going on crypto technicals look terrible. Everyday technical analysts use words like downtrend and overhead resistance.  When prices have rallied, the joy is short lived, lasting only for a day or two. Even on good days, the moves are weak on low volume.  This is never a good sign. Long gone are the kind of investor fears about missing out (FOMO) that we saw last year.

There are fundamental reasons for skepticism for long term believers, as the data has not been going in the right direction.  True, projects are progressing a slow pace. This maybe good for avoiding problems with security etc., but for investors who want immediate gratification, right now crypto isn’t ringing any bells.

But truth is, crypto markets appear to be unresponsive even to seemingly good news. Take for example this recent Cryptovest headline: Cardano (ADA) Releases New Version, Price Remains Stagnant.   Today, crypto exchange Coinbase announced it was increasing daily trading limits sevenfold, changing settlement times from days to instantaneous and finishing its beta before accepting Ethereum Classic.

At the time of this writing, Bitcoin had fallen over 8% in the previous 24 hours while ETH was off almost 10.5%.  This marks on of the worst days for crypto in quite a long time.

Drilling down a bit into ETH reveals some core softness.  Since virtually the entire crypto pricing stinks there is more than a single cause to Ethereum’s weakness, but here is a start.

Using DappRadar To Measure Ether Demand

According to Business Insider, there were over 930 ICOs last year that raised anywhere from $3-$5.7 billion depending on which resource you listen to.  In the first quarter of 2018, there were roundly another 200 raising over $6 billion. These numbers make for great headlines but there is one problem.  They have not translated into higher prices for Ether, or any other crypto either.

The Ethereum platform can claim that somewhere between 70%-80% of ICOs that have Dapps built on the ETH platform.  If logic were applied, this should result in greater demand for Ether. But as the truism goes, if everything were logical, men would ride sidesaddle!

One of the clues to unlock this contradiction may rest in the use cases for the most active Dapps.  What I an getting at is this: when the top five Dapps function as exchanges to buy and sell Ether or any other ERC-20 token, that is not a sign of mass adoption. Nor is it good when almost 75% of the activity in the top five is accounted by three Dapps and those are exchanges. And finally when volume on nine out of the top ten are trending down, it is not what investors want so see.

To keep some balance to these observations, there are some positive use cases.  Three of the ten most active Dapps are for gamers, and that is a use case worth it weight in any currency. Also, usage levels tend to be quite volatile from hour to hour so we may have checked on an atypical moment.  But what we want to see are use cases like marketplaces or even gambling where user demand trumps speculators and where activity is growing.

What Is Happening With Augur

And speaking of gambling, Ethereum big gun Augur, which allows users to create prediction markets for just about anything by buying shares and staking ETH in the outcome of an event.  When launched in early July nearly 1,200 were traded in a 24 hour period. At the time Augur appeared to be one of Ethereum’s most promising Dapps.

To be clear, 1,200 is just a benchmark and not proof of success or failure. However, when Augur, one of your most promising Dapps, is being used less than 100 a day with a huge valuation of over $300 million, that is a disappointing moment.

What Ethereum Needs

So what is missing here?  From the insights offered by DappRadar, the answer is that ETH, and for that matter crypto in general, is hungry for valid signs of a breakthrough in mass adoption. In other words, developments in the payments side of crypto could well provide the needed solution. There is no shortage of projects like Bitcoin Superstore and TenX.  And there is always the possibility that the critics of Augur are premature in claiming this potentially game changing Dapp is a disappointment. But so far all of the flashy new whitepapers and highly valued ICOs aren’t connecting with investors. It is time for proof that actual crypto users are getting into game.  And obviously, what is good for ETH is also needed by other players as well.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
6 votes, average: 4.00 out of 56 votes, average: 4.00 out of 56 votes, average: 4.00 out of 56 votes, average: 4.00 out of 56 votes, average: 4.00 out of 5 (6 votes, average: 4.00 out of 5)
You need to be a registered member to rate this.
Loading...

4.4 stars on average, based on 96 rated postsJames Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.




Feedback or Requests?

Continue Reading

Altcoins

MB Technology and GoChain Partner to Accelerate Innovation on the Blockchain

Published

on

MB Technology has recently announced that it is committed to bringing $500 million USD worth of ICOs to the GoChain platform. MB Technology is an expert ICO advisory firm that has advised blockchain projects with a combined valuation of over $2 billion in several industries. Some of the companies that they advised include Fantom, Origo, GoChain, QuarkChain, CoinSuper, Icon and other top ICOs.

The company is committing $500 million to GoChain because it has already launched it’s mainnet functioning at 100 times the speed of Ethereum while being 1,000 times more energy efficient. GoChain is fully compatible with existing Ethereum wallets, smart contracts, dApps, etc. Two companies have already chosen GoChain to launch their ICOs: Solaster Health and Etherprise with a combined value of $63 million.

GoChain has hit the ground running. While many blockchains are still trying to finish up their technical whitepaper or have yet to launch their mainnet, GoChain is way ahead of the curvey. Although blockchains are competing to deliver the fastest Transactions-Per-Second (TPS), they nothing without the dApps that build on them. While speed is important, most blockchains releasing now are more than capable of handling sufficient TPS for production dApps. The dApp ecosystem built on top of a blockchain is just as important, if not more, than the speed of the blockchain itself.

ICOs struggle to build on new blockchains as there are not many well-defined standards. GoChain’s codebase is 100% compatible with Ethereum so any dApp that can or has been built on top of it will easily port to GoChain. This makes it easy for existing Ethereum apps to move over to GoChain and immediately work 100 times faster. A few blockchains build amazingly fast transacting software yet have no use cases or a dApp ecosystem building strategy.

With MB Technology bringing half a billion dollars to GoChain, the coin is extremely undervalued. Compared to other projects on CoinMarketCap, GoChain should be at least in the $100 million market cap range. Competing blockchains talk about overtaking Ethereum, yet GoChain has a working mainnet with dApps being added at a blinding rate. GoChain is one of the most underestimated and undervalued blockchains at this time. Look for GoChain to grow to five to ten times in the next few months from its current market cap of $19.4 million. GoChain is currently only on Kucoin. Look for it to list on other exchanges as it gains daily trading volume.

MB Technology offers advisory services to bring specific solutions designed to boost a project’s outcomes. They also create global investor awareness through their network of partners, influencers, and media outlets.

Disclaimer: Writer does not own GoChain. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
1 vote, average: 5.00 out of 51 vote, average: 5.00 out of 51 vote, average: 5.00 out of 51 vote, average: 5.00 out of 51 vote, average: 5.00 out of 5 (1 votes, average: 5.00 out of 5)
You need to be a registered member to rate this.
Loading...

4.6 stars on average, based on 49 rated postsKent Hamilton - ICO Analyst on Hacked and Co-Founder of SpryOne - Loyalty Platform on the Blockchain




Feedback or Requests?

Continue Reading

Blockchain

Crypto Proxy Stocks Rise With Broader Market

Published

on

The cryptocurrency market’s sudden revival has triggered a large rally in crypto proxy stocks, a broad cluster of companies with direct and indirect exposure to blockchain technology. After a bumpy few months, blockchain-branded firms are once again rising in lockstep with bitcoin and the broader digital asset class.

Crypto Stocks Jump

Stocks tied to cryptocurrencies have traded sharply higher in recent days, with the likes of Riot Blockchain Inc. (RIOT), HIVE Blockchain Technologies (HIVE) and Marathon Patent Group Inc. (MARA) among the best performers.

Riot surged more than 20% on Tuesday en route to fresh two-month highs. Share prices surged 11.7% on Monday.

HIVE, the first publicly-listed blockchain infrastructure firm, jumped more than 11% Tuesday and is up more than 23% this week. The penny stock is proposing a business model that aims to bridge the gap between distributed ledger technology and capital markets.

Marathon’s share price rose 19% on Tuesday after gaining 9.2% in the previous session. Marathon was one the first miners to secure a listing on the Nasdaq.

Nvidia Corp (NVDA), an S&P 500 component, rose by as much as 2.2% Tuesday after falling in each of the last two sessions. The California-based chipmaker generated $289 million in sales to cryptocurrency miners during the first quarter, far exceeding forecasts of $200 million. The company has warned that mining sales are likely to fall sharply in the July quarter.

Bitcoin’s Comeback

The price of bitcoin is once again showing signs of life after blowing past $8,000 earlier in the day. The gain not only sparked a wider relief rally among cryptocurrencies, it put crypto proxy stocks on the fast track to bigger gains.

With the exception of Nvidia, which is far more diversified than some of its blockchain peers, many of Wall Street’s crypto players are small- and medium-sized firms that have struggled to make headway during the market downturn. Although blockchain companies for the foreseeable future will continue to be steered by cryptocurrency prices, their long-term trajectory is more favorable as distributed ledger technology gains wider acceptance.

Current market leaders in blockchain technology include Ripple, Chain, Coinbase and Bitmain. Over the next five years, market researchers expect the industry to grow manifold with the likes of Microsoft, IBM, Amazon and Deloitte entering the picture.

As Hacked reported July 9, China’s Bitmain has become the largest blockchain-focused company in the world following a series of strategic acquisitions. The company says it is open to the idea of an initial public offering (IPO) after rivals Ebang and Canaan Creative announced plans to go public.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
2 votes, average: 3.50 out of 52 votes, average: 3.50 out of 52 votes, average: 3.50 out of 52 votes, average: 3.50 out of 52 votes, average: 3.50 out of 5 (2 votes, average: 3.50 out of 5)
You need to be a registered member to rate this.
Loading...

4.6 stars on average, based on 547 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




Feedback or Requests?

Continue Reading

5 of 15 Seats Available

Learn more here.

Recent Comments

Recent Posts

A part of CCN

Hacked.com is Neutral and Unbiased

Hacked.com and its team members have pledged to reject any form of advertisement or sponsorships from 3rd parties. We will always be neutral and we strive towards a fully unbiased view on all topics. Whenever an author has a conflicting interest, that should be clearly stated in the post itself with a disclaimer. If you suspect that one of our team members are biased, please notify me immediately at jonas.borchgrevink(at)hacked.com.

Trending