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JP Morgan is rolling out the first US bank-backed cryptocurrency to transform payments business

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CNBC | Hugh Son | Feb 14, 2019

The first cryptocurrency created by a major U.S. bank is here — and it's from J.P. Morgan Chase.

  • Engineers at the lender have created the "JPM Coin," a digital token that will be used to instantly settle transactions between clients of its wholesale payments business.
  • Only a tiny fraction of payments will initially be transmitted using the cryptocurrency, but the trial represents the first real-world use of a digital coin by a major U.S. bank.
  • While J.P. Morgan's Jamie Dimon has bashed bitcoin as a "fraud," the bank chief and his managers have consistently said blockchain and regulated digital currencies held promise.

The lender moves more than $6 trillion around the world every day for corporations in its massive wholesale payments business. In trials set to start in a few months, a tiny fraction of that will happen over something called "JPM Coin," the digital token created by engineers at the New York-based bank to instantly settle payments between clients.

See:  Do Banks Even Want to Go Blockchain?

J.P. Morgan is preparing for a future in which parts of the essential underpinning of global capitalism, from cross-border payments to corporate debt issuance, move to the blockchain. That's the database technology made famous by its first application, bitcoin. But in order for that future to happen, the bank needed a way to transfer money at the dizzying speed that those smart contracts closed, rather than relying on old technology like wire transfers.

"So anything that currently exists in the world, as that moves onto the blockchain, this would be the payment leg for that transaction," said Umar Farooq, head of J.P. Morgan's blockchain projects. "The applications are frankly quite endless; anything where you have a distributed ledger which involves corporations or institutions can use this."

For some, J.P. Morgan's new currency may come as an unexpected development for a technology that rose from the wreckage of the financial crisis and was supposed to disrupt the established banking world.

When the international payments are tested, it will be one of the first real-world applications for a cryptocurrency in banking. The industry has mostly shunned the asset class as too risky. Last year, J.P. Morgan and two other lenders banned the purchase of bitcoins by credit card customers. And Goldman Sachs reportedly shelved plans to create a bitcoin trading desk after exploring the idea.

Dimon bashed bitcoin

Though holders of digital currencies may seize on the news that a major financial institution is issuing its own crypto as bullish for the asset class, retail investors will probably never get to own a JPM Coin. Unlike bitcoin, only big institutional clients of J.P. Morgan that have undergone regulatory checks, like corporations, banks and broker-dealers can use the tokens.

See:  Bitcoin price LIVE: BTC to SOAR as survey finds one in five banks warming to crypto

There are other key differences between the bank's crypto and bitcoin, which J.P. Morgan CEO Jamie Dimon has bashed as a fraud that won't end well for its investors. (To be clear, he and his managers have consistently said that blockchain, as well as digital currencies that were regulated, hold promise.)

Each JPM Coin is redeemable for a single U.S. dollar, so its value shouldn't fluctuate, similar in concept to so-called stablecoins. Clients will be issued the coins after depositing dollars at the bank; after using the tokens for a payment or security purchase on the blockchain, the bank destroys the coins and gives clients back a commensurate number of dollars.

Real-time settlement

There are three early applications for the JPM Coin, according to Farooq.

The first is for international payments for large corporate clients, which now typically happens using wire transfers between financial institutions on decades-old networks like Swift. Instead of sometimes taking more than a day to settle because institutions have cut-off times for transactions and countries operate on different systems, the payments will settle in real time, and at any time of day, he said.

The second is for securities transactions. In April, J.P. Morgan tested a debt issuance on the blockchain, creating a virtual simulation of a $150 million certificate of deposit for a Canadian bank. Rather than relying on wires to buy the issuance — resulting in a time gap between settling the transaction and being paid for it — institutional investors can use the J.P. Morgan token, resulting in instant settlements.

The final use would be for huge corporations that use J.P Morgan's treasury services business to replace the dollars they hold in subsidiaries across the world. Unseen by retail customers, the business handles a significant chunk of the world's regulated money flows for companies from Honeywell International to Facebook, moving dollars for activities like employee and supplier payments. It generated $9 billion in revenue last year for the bank.

"Money sloshes back and forth all over the world in a large enterprise," Farooq said. "Is there a way to ensure that a subsidiary can represent cash on the balance sheet without having to actually wire it to the unit? That way, they can consolidate their money and probably get better rates for it."

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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org


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FINTECH FRIDAY$ (EP24-Feb 8): Re-imagining Philanthropy with Daryl Hatton, Founder and CEO of ConnectionPoint/FundRazr

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NCFA Canada | Feb 8, 2019

Ep24-Feb 8:  Re-imagining Philanthropy with Daryl Hatton

About this episode:  On this Episode of the Fintech Friday's Podcast, our host Manseeb Khan sits down with Daryl Hatton the CEO of Connection Point. They chatted about microprojects, saving little girls and puppies and how to get hooked on Philanthropy. Enjoy!

  • Focus on value and avoid the complicated terminology when growing new innovative markets
  • Branding customer segment-focused funding products, white labeling collaborative uses cases
  • Crowdfunding for good at the intersection of technology, people and impact

Host: Manseeb Khan, NCFA, Fintech Fridays show host

Guest: DARYL HATTON, Founder and CEO, ConnectionPoint / FundRazr (linkedin)

BIO:  Daryl Hatton, CEO of award winning international crowdfunding company FundRazr and of the innovative sponsored crowdfunding company Sponsifi has founded multiple start-ups and helped bring one to a successful NASDAQ IPO in 1999. He actively serves as board member or advisor to handfuls of other hot companies in Canada. In addition, he is a Director and Crowdfunding Ambassador for the National Crowdfunding Association of Canada. As a social media guy and frequent public speaker, his Twitter tagline includes words like “#KingOfGastown, entrepreneur, cardiac survivor, foodie, whisky nut, philosopher, mentor, father and friend.”

* Senior Business and Technology Executive
* Proven Corporate / Product Development Execution
* Collaborative Leader / Corporate Strategist
* Experienced in Tech Mergers and Acquisitions
* IPO (OPTO) on NASDAQ 1999
* Successful sale of OPTO to EPAY April 2008
* Successful sale of Backstage Technologies to Real Networks 2010
* Multiple private buy/sell transactions while at Optio
* IPO (Modatech) on TSXV 1987
* Multiple successful software startups with Angel / Private Funding
* Mentor / advisor / board member of multiple startups
* Successful, deep partnerships with PayPal, Facebook, Twitter, Google

Subscribe and tune in each Friday to check out the latest movers and shakers in fintech.

Listen to more Fintech Fridays podcasts: Season 1 | Season 2


Transcription of Interview

Intro: Welcome fintech Friday's a weekly podcast brought to you by the National Crowdfunding and Fintech Association of Canada and partners.Covering all things fintech block chain be AI and alternative finance.

Manseeb Khan: Daryl thanks so much for sitting down with me today. I mean I'm super excited to jump right into it.

Daryl Hatton: Happy to be here. We're going to have some fun.

Manseeb Khan: Awesome. So, could you just for the audience give us a little bit of who you are and essentially who and what Connection Point?

Is sure  well I'm Daryl Hatton founder and CEO companies call connection point. We're best known for FundRazr which our  enterprise crowdfunding platform is. I'm a serial entrepreneur, startup company took a public on Nasdaq way back in nineteen ninety-nine and we had one of the fastest growing companies in the U.S. that year. Fast forward a bunch of years and I left that and said gee do I want to do business again. And I started Connection Point six months in the day after I left the other company. And along the way we started to do fundraising. We learned a whole lot about the market. And here we are.

Manseeb Khan: Awesome. So, what made you kind of switch. Like so why crowdfunding ? Like this was I'm assuming this is early 2000s, right? Like you said you were essentially one of the OG's entrepreneurs out here. Yeah. Why crowdfunding ?

Daryl Hatton: It was actually 2008 and one of the things that we were looking to do is like I want to start this new business but because I was under an intellectual property rights deal with my previous company actually couldn't think about it really. And being careful about it didn't want to think about it while I was with the other company. So, six months in a day I now get free and out and I said OK what can I do. And it took from about September of that year until January to really figure out that I wanted to get into the social funding space. And the reason I was doing it was I was coaching a lacrosse team and I was looking for ways to get paid and to raise money for my team. So, I collect some fees and take some donations because we had a 50/50 turnouts and all that kind of stuff. And I had a little epiphany. I was trying to also get the guys out to practice and I was sending out emails. Nobody was showing up, but I started a Facebook group and posted the date, time of practice and I had a 100 percent attendance. The first time I did that, and a light bulb went on and said Hey can I get them to pay their fee like that. And FundRazr was born. So, it really was all about trying to scratch my own itch and in the early days as we developed the idea of paying the fees really didn't take off very well. But the idea of collecting donations went nuts and that's what we built the company around.

Manseeb Khan: Awesome. So, could you still sticking on the early days I know on our call before we  even started the episode you compare like the early days of crowdfunding and how it's very parallel to now the early days of crypto and Block chain. Could you just go a little bit more detailed about that?

Daryl Hatton: Oh, for sure yeah. I mean when we started crowdfunding no one knew what to call it. And I even had the opportunity to buy crowdfunding dot.com as a domain name and was given some advice by a bunch of people in the industry going I never nobody ever wanted to call it that. Yeah right.  Oops. So, you know the interesting things that happened at that time, but we were really struggling in the beginning to try and talk about this intersection of social media and of finance technology and of marketing technology all into one platform that becomes a crowdfunding campaign. So, we used the word crowdfunding a whole lot. And if you went to the crowdfunding conferences everyone was talking crowdfunding and to the people who were not in the industry, they would come in they hear us and they're going. What the hell are you guys talking about. Like you're not making sense. All you're doing is dropping these buzzwords all the time and one of the things that I hear going on now at crypto conferences and block chain and the whole area of the new innovation and fintech around this is the same thing. There's a ton of terminology. Ask an entrepreneur what they do. And they'll have you know they'll talk about how they've got this unique twist on what they do with block chain to do Dut, Da Dut, Da. One of the lessons we learned from the crowdfunding world is can you explain what you do without ever using your buzzword. Can you explain the value of your business to somebody and have them get it? Why it's important. And why you're going to win without ever using the words. So, for any crowdfunding or any sorry crypto or block chain entrepreneur right now can you tell me why your business will be successful without ever using the words crypto or block chain or any of the terminology around it. What's the business value that you're delivering to the customer. And why is that really important. It may be a technical function that you're delivering but there's a business reason and they're not just a technology reason. And the companies that win are the ones that figure out how to communicate that business reason and build the technology to solve it. Big learning what we had over that time is just you know kind of buzzwords are cool and let make you feel like you're in the crowd but stop it. Start talking about your business and the value and the customers may see a little bit more boring. But it's got a way better higher chance of success.

Manseeb Khan: No, I absolutely agree with you. And I guess I mean like you took a misstep and you said crowdfunding. I think crowdfunding is still in that same conversation. Now you want to be able to kind of give the elevator pitch with like your industry jargon. Right. You want to be able to like to go to like roll up to any random person at Starbucks and kind of like hey this is actually my business does sound like a good idea right.

Daryl Hatton: Yeah. And you know it's easy to stumble into. I mean as I just did it you know it's a shortcut for us to try and take a set of concepts that we have in our head and communicate more easily to other people who also have similar concepts. And it’s just good practice to try and do it without that. Yeah. Absolutely. It's  kind of fun once you get into it because you get to laugh at yourself a lot. Keep taking a shortcut.

Manseeb Khan: Yeah. I can absolutely see that see that. So, you guys focus on an enterprise crowdfunding could you just explain a little bit like why is that different than the Kickstarter's and the Indigo's goes out there.

Daryl Hatton: Well yeah it might help to kind of hear the path we've got to with that. And so, let me give you a little bit of background. When we started our crowdfunding platform, we were all about personal funding. Helping people raise money because they had cancer, they had a tragedy, they had a car accident something happened in their lives and they needed emergency funds. And the best way to do that was to talk to the friends and family and get them to the money to help because those are the people, we're most invested in helping you. And it worked, it saved babies and it helped people recover from car accidents and then help people deal with medical bills especially in the United States and along the way. You know we one of the ways we had to communicate was to use Facebook to share and as we were doing that some non-profits came along, and they said you know we love this kind of toolset but it's kind of weird to use it as a person. So, could we use it under the name of our organization. So, we start. Or the name of our charity. So, we added features in to make it so that you could do a personal campaign or charitable campaign. And that ended up you know giving us a whole new set of requirements but a whole new set of customers. And then Kickstarter the time was doing a good job and Indiegogo was starting to do more in funding of entrepreneurial style projects or creative projects. And we ended up getting asked hey can we find our project with you because you guys seem to be really good at social sharing. So now we've got three constituent groups of customers personal, nonprofit and now entrepreneurial or creative and over the period of time as we built out all the features for all of those it started to become what we call an enterprise crowdfunding platform. And the reason for that is that we're solving a lot of the problems for those customers at a much more deep level about things like team` communications around running your crowdfunding campaign. Can you have a lot of people on your team both as managers. Which is pretty easy for most apps to think about but then also as things like promoters. Can you hire somebody on to the team whose job it is to go in and promote you to influencers in the industry and track the results and help figure out whether or not they're helping you raise money for your campaign. So, we call it an enterprise crowdfunding platform right now because the basics of what a crowdfunding campaign are have morphed into. In our case over 10 different ways to do campaigns and some of them are very charitable focused. Some of them are very personal focused and some of them are very much a business focus.

Manseeb Khan: I LOVE THAT! I kind of want you to tell the story that you told me over the phone of that father reaching out to you about as a little girl and like how the example that you use like some people create a business to create a business. Some people kind of fall into the business. Can you can you tell that story a little because I loved it so much.

Daryl Hatton: Yeah. You know one of the things people look at us with FundRazr and there is we've got the different brands we'll talk about this a little bit as well is that there's different ways to do crowdfunding. And when people look at our technology, they get confused by it. So, we actually give it different brand names to help separate the customers apart from each other. Funny enough. But the story that you're referring to when we first launched in it, we kind of have to do a relaunch of the platform in July of 2010 after surviving a near-death experience with Facebook kicking the chair out from underneath us and we'll talk about that maybe too. But basically. So, when we started the campaign and we're focused on these personal donations and my goal in starting this was to build a business. I wasn't trying to go save the world. I wasn't trying to raise money for charitable causes and that was because it was a good thing to do for the planet. I was trying to build a business and we were really struggling. Trying to help ourselves understand why customers were using this and what they were really trying to do. And it feels now like we were just so totally naive about what was going on. But so, we launched in July of 2010 and we're going along we're watching this incredible growth happening. All these people are using these campaigns and we're really focused on how we help them raise more money but not really thinking about why they're raising more money. And then we got a Christmas card, the Christmas card was from a family that had been living off the grid in Hawaii. I think there was maybe people living on the beach kind of thing. He got out of the U.S. military they'd hooked up as a couple they'd had a little girl and you know so they didn't have. They were kind of dropped out a little bit to the system. I think they didn't have health insurance that kind of thing. And they discovered that their little girl had been diagnosed with childhood leukemia. So, in the race to try and figure out how to save her again no health insurance in the US there for that. They found out that the military hospital in San Diego would take her because he'd been in the military, but they had to get the girl there A.S.A.P. because childhood leukemia is a very fast-moving disease. So, they put up a campaign or a FundRazr and they raised that I think it was thirty-five hundred dollars. They needed to get the flights. Like you know right now and given the low accommodation when they hit San Diego and they took a couple of days and they got her there and when they got her there the doctor said if you hadn't got her here today or tomorrow, she probably would have died. And so, they sent us a thank you card saying thanks for helping save our daughter's life. We didn't I mean that just smacked us hard. We had no idea that really that was kind of an end result if you will. The business value of what we delivered wasn't raising money. It was helping save somebody's life or helping save a puppy dog or helping someone recover from an accident. Those are the things the real value we're delivering it wasn't collecting money in a social environment. And so that epiphany just really changed how we looked at the business. And you know we still are a profit-making business, really low on the profit side because we're trying to scale it and it's a harder market than people might think. But it is you know there is that nice benefit that we actually have this big business value. That's a very personal value in a very charitable value in the background and that's a fantastic way to come to work every morning and think about what you do for the day is you help people save probably dogs and little girls.

Manseeb Khan: Yeah, I mean that's probably the best customer testimonial I've probably ever heard possibly ever if not in a very long time. You did briefly before you jumped in the store you talked about how you broke down your business in to different kind of brands could you talk a little bit more about that and how that ties it to you guys scaling because like you said you guys are not as quote unquote profitable because you're trying to scale. Could you talk a little bit more of the challenges scaling and being a crowdfunding service?

Daryl Hatton: Started connection point and we knew that. I don't know. I just had this hunch that the technology that we were going to build would have more than one use case in the marketplace because really,  it's a marketing system. And so what kind of problem are you trying to solve with it as a marketing system was a personal? Was it corporate? Was it charitable? So we started a FundRazr with the idea that it was the general-purpose platform for crowdfunding using a donations or a rewards type model. So, donations model being your traditional charitable thing. GoFundMe is a good example of that. The rewards model is the Kickstarter or Indiegogo model where you're doing an all or nothing campaign and you're giving the donor some reward back. So that was really it took the majority of our focus and energy and as a result we tended to lump more customers into that pile than we may should have because you know it was just more convenient just as kind of keep them focused on the one brand for a while. But over the last couple of years we've really noticed that a couple of different use cases are showing up that are worth separating them out from the main stream. So, it's all the same technology with a different skin on it and sometimes a little bit of a tweak to the feature set an example that is one of our brands we call CoCoPay. CoCoPay stands for collaborative community payments and it's designed to be used by businesses to allow or enable their customers to use crowdfunding to help them finance the purchase of the product or service. That's a big one mouthful but if you imagine I don't know if you remember. I don't know if we had this chat but there's the company in the States called in Enchroma and they do glasses that you can put on and if you're colorblind it'll help show you colors for about 80 percent of the people who are colorblind that put them on. It's really emotional to not have seen color. And now to see it. I mean this world is full of color, but the glasses are you know mildly expensive there between if you do it right, you're probably going to get two pairs of them they're going to be between five hundred  to one thousand dollars and some people can't afford that. So if you go to the Enchroma web site there's a spot on their site where you can use our technology to start a crowdfunding campaign that will with a  Enchroma branding tell the story using  Enchroma glasses and help you communicate that to your friends and family and co-workers and others in your social network and help you buy the glasses. Now it might be for you but one of the most common use cases is to buy them as a gift for somebody else. So, a classroom we'll get together buy them for their teacher and then or someone will buy them for a military vet they had that happen. Not quite sure how they got there with colored blind, but they did. So that was really cool. And then you know they'll buy them for Grandpa because Grandpa has never had it always took care of the kids, got them go to college, got the grandkids going  never really took the time to figure it out for himself or was it didn't have anything available. So, the family gets together buys Grandpa glasses that let him see color for the first time and the incredible folks tell you how to do it right to capture your YouTube moment. They say take a whole bunch of colorful balloons and take him outside somewhere and don't tell him what it's all about it just ask them to put all these cool looking sunglasses and they look cool stylish glasses and usually what happens is the glasses go on the glasses come off. The glasses go on glasses come off and whoever it is crying. And they because you know it's that it's a super emotionally, I get it and there's some guys that have just gone off on the oh god, Oh my God they're so funny. But the point is that by allowing the community to work together to buy something it may not seem like it's big a use case. But if you get into a lot of medical devices that are maybe ten thousand dollars because you need special Walker you need something that gives someone mobility. They may not be able to afford it right away but their friends and their family and their social networks would go let's fix that for them. Their good person we'll fix that for them and CoCoPay lets them you know safely raise the money and pay it to the company as opposed to paying it into the individual so that you don't have to worry about fraud and it's all or nothing so that if you don't raise enough money nobody's out you know you don't get halfway towards buying one of these things and now what do you do with all the money and refund it to everybody and take a few gets the payment companies you know you're kind of in a net loss for trying to do something good. So, it takes all the best of the crowdfunding technologies of all or nothing social sharing teamwork collaboration in our case you know branding of the company and puts it all together in a package that somebody can use to crowd finance a purchase. Is some idea of where it's the same technology? But if we're going to sell it to a company, they don't want to come to our Web site and see that we're raising, we're saving puppy dogs and little girls they're going how does this affect our business. Why am I doing that? And so, there's a dedicated site to CoCoPay to talk about its business value. But ninety-nine-point eight percent of the technology is the same as FundRazr.

Manseeb Khan: Mm hmm. I mean this does bleed into I guess my next question of corporate good right and how you're seeing. You've mentioned that in the phone call we have that how corporations are now not for the sake of oh hey we're going to go and plant trees just for the sake of planting trees. Now we're going to go and pick an issue that our customers or clients are very passionate about and then try to spearhead it and like the best example I can think of would be when Adidas and Nike decided to take all like ocean pollution plastic and remake it into sneakers because ocean pollution was something that both companies audiences were very passionate about. So, they created a sneaker behind it and that started this whole renewable shoe movement. Right. So why is or how is corporate got like corporate good better or better than the government initiatives that are going on or the charity initiatives or it is, or should we see it as more as like a tag on.

Daryl Hatton: One of the things I didn't say in the beginning. If you actually look at mission of what we have with Connection Point we're trying to well, we are We're reimagining philanthropy. And one of the reasons that we want to do that is that the hypothesis is that we can get causes, corporations and consumers to all work together to solve world funding problems because that everyone can have a win in that and the collective group of all of them also gets a win. So, for example you know you said it very well that consumers are now wanting to have their companies do more than just supply them the product. You know in the case  of the shoe companies they saw an opportunity to not only sell shoes but to solve an environmental problem at the same time. And they knew through research that their consumers would really like that. That's got a kind of a social impact space. You talk about multiple bottom lines you know the bottom line I get a great pair of shoes from a brand that I love the story behind the shoes is fascinating and fantastic. You know these used to be junk in the ocean and they've turned it into look at these things these are amazing. And that at the same time that's reducing pollution in the ocean. So, the consumer there is driving that behavior because they are demanding more from their partners and the partners are interested in doing this because it builds loyalty with their customers. Their ability to go in and use the best things of what corporations can do which is communication at massive scale and the ability to actually execute on programs to change social problems and in some cases though they need to have something like a charity partner actually do some of that work for them especially when it gets into softer skills. So if you've got a company that's not about saving plastic but maybe helping with mental health or maybe helping with child poverty or food distribution or food  safety quality for lower income families all sorts of things like that the corporation might want a partner with a charity for the charity deliver the work in the field but then be able to use the fact that they're supporting that charity as a story for their consumers saying hey you know we all care about this together. Why don't you buy our products? We work with this company and there's a trading of value that goes on in that system where they get money to the charity to do the work the consumer feels great because they know this charity is doing the work. And they may end up establishing a better relationship with the charity and they're more loyal to the company for buying that product. So, it I think it's one of the changes we're going to see in society in the next few years. Is this is going to become the standard way to do it. Because it takes advantage of the strengths of all three parties and we built a product around that that we call Sponsifi and Sponsifi designed to do the place where the company can even make an offer of to the donors or the contributors on how they might want to further support the cause. So again, getting that branding out there that says we're supporting this cause and helping the company get better value for the money that they can spend on it and a more measure of resolve. So that was a lot of words in there, but you know if you can take out the idea that basically cost corporation consumers are going to work together because they already are. We just want to make it easier to do and less expensive for the companies particularly. And I think we're going to see something else transform society.

Manseeb Khan: Yes. No absolutely that's kind of what crowdfunding is what one of the missions of crowdfunding is  to make the world make it a better place right. If it's be that you're saving a little girl or you're saving a little puppy or cleaning the oceans right like though the of the whole part is especially with I mean millennials like me. We love to see that like corporations’ charities governments are taking more of an initiative to actually go after these social causes because these social causes are so near and dear to our heart. And now that companies are kind of using that  maybe some  could be as a marketing ploy some could because they actually truly believe in the said cause it's. Yeah. Crowdfunding. It's going to be very exciting in the years to come. So, with that what is the future of crowdfunding look like. And essentially what are you excited about in the space right. Are you excited that maybe in the future you might have like this block chain integration? I excited that you can start tokenization a lot of donations?

Daryl Hatton: There's lots in there. Let's just before we go there let's think about one thing around. You know I talked a lot about causes and what's going on there and a lot of entrepreneurs that might be listening to this are going here. But what has that applied to me. I don't know I'm just trying to startup and I want to get this product out there and I'm having trouble with funding it. So, one of the benefits of crowdfunding in here is also the fact that because it enables communities to work together to solve a funding problem that's basically the bottom line and what it does. Let's not worry about whether it's charitable or corporate or whatever but if we all can work together and help us work together on that. One of the side effect benefits of this is that businesses that need not have been able to start before because of lack of capital can take a community of interested customers/prospects and we'll be customers and use the model to help them preorder enough product that they can go through the R&D phase the initial production run and get the product into the hands of consumers who really want it. That's a social benefit because now we have a company that was created out of thin air literally and it's providing income and it's providing satisfaction to consumers and it's providing opportunity for people that live out some of their dreams and maybe change the world because they've got a better widget in some form. It's more efficient it's more friendly it's easier to use, it goes faster whatever the real benefit in there is those things are helping our society as well. And a lot of the entrepreneurs that are starting up campaigns right now are small companies are realizing that they have to have that kind of social responsibility aspect baked into their company for two reasons one to attract their customers. And I think this is actually way more important doesn't get enough press to attract their employees. If you want to work for nameless soulless company, you know big office tower why I am here every day. This sucks you know I don't enjoy my work I don't really feel like I'm making an impact or by the way we work for the company we're really clear the part of what we do is to help with this social problem or you know 10 percent of the proceeds of the profits from our company go to support the producers families who are helping us build this neat new eco backpack you know I don't know make up a story there but basically that feeling of going to work and having purpose which we discovered by accident is one of the key motivators for digital natives, millennials and gen Z to want to go to work and they will work really a ton of harder and put more of their life into their work when they feel like that work has got an impact on the planet. So, you can use crowdfunding as a way to help fund the idea. And for all entrepreneurs that are looking to start up a business there. It's a great way to get revenue into your company without having to give up ownership you know equity and securities. Crowdfunding is great but you are giving up. It's the most expensive money you'll ever get because it costs you a big chunk of your company in the future. But sometimes that's all you can do. So, you do it. But if you can fund it with some of these others and have that social tie in you can not only launch your product but build a company where people want to work and where you can have some real satisfaction to work home at the end of the day. So, I think there's a lot in there and that's one of the things I'm very excited about. You know that's part of future is now because it's just not evenly distributed. Well who is it. Who said that the future is has arrived it's not just evenly spread out? We can do that now and then to answer your question about some of the other technology you know what I think of crypto and block chain and much of that industry about is how we make things more transparent and make it easy for us to see kind of our thread that ties through the financial story of the organization.  So, in the charitable world we look at this and say if you made a contribution to a cause to build wells in Africa. Which well in Africa did my money go to build in crypto being mechanism for kind of tracking where the value is with block chain being where did it deploy. What's the ledger of it seems like it's going to be a very interesting topic because when people make a donation they really want to know what good they did? And I can see some technology in there helping make that happen at the moment it's a bit of a geeky love because consumers aren't necessarily demanding that level of transparency, but it could be really cool once we have it because then they might start demanding it more once they know they can get it. So, I think there's lots of things will happen in our financial world because of this distributed ledger capability.

Manseeb Khan: And I think you'd like to harp on more of the transparency aspect. At some point I think people would be pretty excited to see that like oh hey I like that little girl that I donated 30 bucks to. You can kind of track it like how you track like your orders on Amazon right. At some point we'll probably get to like that level of transparency. really. Oh cool. They actually hit this goal or the next milestones that's like that's something to kind of look forward to and it's like it's maybe not gamifying it but like it's you know it just like fueling the fire of  doing good.

Daryl Hatton:  Your right on with that we actually do that now in FundRazr. We have a concept called micro project and we've been leading the industry and trying to talk about this transition from don't fund. I'll give me a really concrete example of this.

Manseeb Khan: No please do!

Manseeb Khan: There's a cause called One Girl Can that helps girls in Eastern Africa get an education because the founders of this cause were very successful in business and  the couple he continued to run the business and she decided to run her foundation on the side of it and the foundation was about helping these girls get an education because they knew that the change in the quality of the life for them and even more so for the members of their community was so huge. So, what they were doing is they're building schools in Eastern Africa. And last year we said to them you know that's a major project to build the school. What if we broke it down into a whole series of micro projects? Let's talk about each of the girls that needs to go through these schools and what would be their life like if they were able to go. What are their hopes and dreams and aspirations and let's get people to fund them individually because in aggregate you're going to get enough money to do your funding for the school? And so, we call that micro projects dividing a major project down into the hundreds or thousands of small little projects and our technology is designed to make that really efficient. But now the interesting thing the stories that can come out of this imagine that you know you sign up to help  Purdy one of the girls and she wants to be an engineer because we know that you signed up to fund just Purdy. We can send you updates on what's happening with just Purdy and her journey going through school. So, giving you that same kind of ongoing view into your social investment different you know you put in money but if you're looking for a social payback and not a financial payback. Letting you track Purdy progress we said our you know dream story here is that Purdy adds to her campaign because she's an adult she can do that a young adult but she gets out to her story saying guys I'm really nervous I'm going in for my final here. I really appreciate all the support you've given me to get to this point. M.M. You have an audience in North America around the world waited with bated breath and a little while later you get a thing going. I passed and happiness is going over North America. Because together they made a difference right. Yeah. So, it's that we're doing it now without having to have that level of transparency in the block chain you know to do that but maybe block chain help make it a little bit more precise a little more guaranteed.  That you know what really happened. Somebody just didn't read a verdict. You know the janitor there you want to know that you actually get the good work. Yeah. It brings up other stuff like how do we find overhead? But that a different problem to solve.

Manseeb Khan:  I love the fact that how. Like your example really solidifies the. It takes a village to raise a child. You're going to like hopefully in the future you're going to see like actual like villages or like  digital villages helping raise children like in Africa or like Syria or when they have you only got like following that story it's kind of like its kind of like a vlog.

Daryl Hatton: So, it's well you know I think one of the other projects we're looking at is to fund portable solar powered charging stations in for villages in Africa. And would people be willing to donate to help make that happen if they can hear the stories of the villagers lives that have been transformed. Because when they have power they can study. The kids in the village and study at night without having to burn kerosene in their homes which is so hard on their health and is expensive. So, if they could end up having light that will let them on their laptop or their phone or their board the tablet, they're starting to get some technology but they don't even have power yet. Giving them a way to have power, would consumers around the world be willing to support some of that and in you know in exchange for the stories that are going to come out of that village and the impact it's going to create. And if you take a kind of an interesting view of philanthropy as a form of entertainment it's a discretionary spend like it's we just choose to spend it. But some people are willing to spend small amounts of money to see that that result happen more than wanting to go to a movie or wanted to go up for you know a lot of people say hey I'll give up a cup of coffee discretionary spend element  every day for a month just to make sure Purdy gets through example right. That's philanthropy as entertainment. And I think that's one area we're heading to as well.

Manseeb Khan: I love it. Philanthropy is entertainment. I can.

Daryl Hatton: We're reimagining philanthropy. We've got to do that. You know you have basically all of this it is brain chemicals where you're buying endorphins and oxytocin when you make a contribution. That's how warm lovely feeling you get when you feel like you've helped somebody is oxytocin. It's the brain hormone and funnily enough it you know if you give lots of little gifts you get way more of it than if you give one big gift. So, in some ways I mean we're brain drug pushers. We're trying to get you hooked on philanthropy and crowdfunding is your gateway drug. So just be careful.

Manseeb Khan: I'm definitely using on the podcast description of crowdfunding is your gateway drug to philanthropy.

Daryl Hatton: Philanthropy is entertainment. God this story is writing itself right.

Manseeb Khan: Oh yeah. It really is. It really it really is. So too.

Manseeb Khan: I mean hey do you have any additional things you want to throw in like any anything that the audience should be aware of either. Things that you guys are doing at your company or thing other things that are going on in the crowdfunding space.

Daryl Hatton: I think one of the things that I would love more entrepreneurs to know in this is that if we're in the crowdfunding world together you know I talked a lot about how it takes community and I think first startup community in especially in FinTech space and others it is really important for us to think about how we help each other as opposed to how we're just always in competitive mode or selfish mode because it's amazing the amount of help that we've had on the way and the amount of help that now I can help muster for other startup companies. I'm currently advising 20 different startups and you know I've got a nice network that I've built up over the years that they can count on to help them. This working together thing which we learn through doing our crowdfunding business is one of the keys to actually making your business successful. And I really encourage a lot of the entrepreneurs to think about that that when they're thinking about how they ask for help. Also ask how they can help, and it changes the conversation dramatically. And you know you get much better results much faster.

Manseeb Khan: So, to wrap this up will be the best way for the audience to either contact you personally and or Connection Point. Do we snap you? Do we tweet you? do we e-mail you? Smoke signal? What we'll be the best way to contact you guys?

Daryl Hatton: Best way to hit me find me on LinkedIn. Daryl Hatton mention the show or else I might ignore you because so many sales guy is trying to hit me up that way and you can FundRazr.com.

Manseeb Khan: Awesome Darryl. Thank you so much for sitting down today. I mean and thank you for opening our minds to crowdfunding and making the world a much better place.

Daryl Hatton: Thanks for having me talk soon.

Outro : you've been listening to fintech Fridays brought to you by NCFA and partners. Tune in weekly for the latest fintech Friday podcast by subscribing to this channel. The National crowdfunding and FinTech Association of Canada is a non-profit actively engaged with social and investment fintech sectors around the globe and provide education research industry stewardship services and networking opportunities to thousands of members and subscribers. For more information please visit and see if a Canada dot org. Oh yea.

 

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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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Modern Consensus | Leo Jakobson, February 4, 2019 Move is latest series of steps by regulator to bring clarity and less confrontational approach to regulations enforcement The U.S. Securities and Exchange Commission wants to know if the technology to help it monitor major cryptocurrency blockchains for risk and regulatory compliance issues exists. The SEC is not looking to buy big data analytics tools at this time, but characterizes its interest as “conducting market research to determine the availability and technical capability,” of the tools presently available on the market, it announced in a notice on Jan. 31 What the SEC wants to know about is the “ability to provide the requested data but also an overview of the processes used to extract the data, convert the data into a reviewable format, and the verification steps to ensure there is no loss in data completeness and accuracy due to the data transformation tools and processes applied.” The software it wants would also make the data easy for SEC staff to read and understand on an ongoing basis, and would provide insights about that data—notably identifying who the data belongs to—as well as a way of ensuring the data is accurate and ...
Read More
SEC wants big data tools for monitoring and enforcing cryptocurrency market compliance
NCFA Canada | Feb 8, 2019 Ep24-Feb 8:  Re-imagining Philanthropy with Daryl Hatton About this episode:  On this Episode of the Fintech Friday's Podcast, our host Manseeb Khan sits down with Daryl Hatton the CEO of Connection Point. They chatted about microprojects, saving little girls and puppies and how to get hooked on Philanthropy. Enjoy! Focus on value and avoid the complicated terminology when growing new innovative markets Branding customer segment-focused funding products, white labeling collaborative uses cases Crowdfunding for good at the intersection of technology, people and impact Host: Manseeb Khan, NCFA, Fintech Fridays show host Guest: DARYL HATTON, Founder and CEO, ConnectionPoint / FundRazr (linkedin) BIO:  Daryl Hatton, CEO of award winning international crowdfunding company FundRazr and of the innovative sponsored crowdfunding company Sponsifi has founded multiple start-ups and helped bring one to a successful NASDAQ IPO in 1999. He actively serves as board member or advisor to handfuls of other hot companies in Canada. In addition, he is a Director and Crowdfunding Ambassador for the National Crowdfunding Association of Canada. As a social media guy and frequent public speaker, his Twitter tagline includes words like “#KingOfGastown, entrepreneur, cardiac survivor, foodie, whisky nut, philosopher, mentor, father and friend.” * Senior Business and Technology ...
Read More
FINTECH FRIDAY$ (EP24-Feb 8):  Re-imagining Philanthropy with Daryl Hatton, Founder and CEO of ConnectionPoint/FundRazr
Forbes | Michael del Castillo | Feb 4, 2019 It’s a balmy 80 degrees on a mid-December day in Singapore, and something is puzzling Allen Day, a 41-year-old data scientist. Using the tools he has developed at Google, he can see a mysterious concerted usage of artificial intelligence on the blockchain for Ethereum. Ether is the world’s third-largest cryptocurrency (after bitcoin and XRP), and it still sports a market cap of some $11 billion despite losing 83% of its value in 2018. Peering into its blockchain—the distributed database of transactions underpinning the cryptocurrency—Day detects a “whole bunch” of “autonomous agents” moving funds around “in an automated fashion.” While he doesn’t yet know who has created the AI, he suspects they could be the agents of cryptocurrency exchanges trading among themselves in order to artificially inflate ether’s price. “It’s not really just single agents doing things on their own,” Day says from Google’s Asia-Pacific headquarters. “They’re forming with other agents to have some larger group effect.” Day’s official title is senior developer advocate for Google Cloud, but he describes his role as “customer zero” for the company’s cloud computing efforts. As such it’s his job to anticipate demand before a product ...
Read More
Navigating Bitcoin, Ethereum, XRP: How Google Is Quietly Making Blockchains Searchable
Bloomberg | Doug Alexander | Feb 4, 2019 Without digital keys, clients lose access to coins, funds Board said last week that it was seeking creditor protection Digital-asset exchange Quadriga CX has a $200 million problem with no obvious solution -- just the latest cautionary tale in the unregulated world of cryptocurrencies. The online startup can’t retrieve about C$190 million ($145 million) in Bitcoin, Litecoin, Ether and other digital tokens held for its customers, according to court documents filed Jan. 31 in Halifax, Nova Scotia. Nor can Vancouver-based Quadriga CX pay the C$70 million in cash they’re owed. Access to Quadriga CX’s digital “wallets” -- an application that stores the keys to send and receive cryptocurrencies -- appears to have been lost with the passing of Quadriga CX Chief Executive Officer Gerald Cotten, who died Dec. 9 in India from complications of Crohn’s disease. He was 30. Cotten was always conscious about security -- the laptop, email addresses and messaging system he used to run the 5-year-old business were encrypted, according to an affidavit from his widow, Jennifer Robertson. He took sole responsibility for the handling of funds and coins and the banking and accounting side of the business and, ...
Read More
Crypto CEO Dies Holding Only Passwords That Can Unlock Millions in Customer Coins
Forbes | Jeff Kauflin | Feb 4, 2019 This article was updated on 2/4/19 to include Ripple, the fourth-most valuable private fintech company in the U.S.  Financial technology startups continue to attract a growing amount of attention and capital. In 2018, valuations of the biggest private companies bulged, and at least six new fintech unicorns were minted in the U.S. U.S. fintechs raised $12.4 billion in funding, or 43% more than 2017, reports CB Insights. That growth outpaced the 30% increase in venture investments across the entire U.S. market. And fintechs will need those dollars—they tend to burn about two to three times as much cash compared with other startups, according to an analysis by Brex, likely due to factors like regulatory hurdles. Here are the 10 most valuable private, venture-backed fintechs in the U.S.: 1. Stripe, $22.5 billion Originally a service to help small online sellers process payments, today Stripe serves tech giants like Microsoft and Amazon, too. In 2018 the company announced three new high-profile products, including credit card issuing technology, point-of-sale software and a billing platform for subscription businesses. Cofounders: CEO Patrick Collison, 30, and president John Collison, 28. Irish-born brothers, dropouts from MIT (Patrick) and Harvard (John) ...
Read More
The 11 Biggest Fintech Companies In America 2019

 

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The 11 Biggest Fintech Companies In America 2019

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Forbes | | Feb 4, 2019

This article was updated on 2/4/19 to include Ripple, the fourth-most valuable private fintech company in the U.S. 

Financial technology startups continue to attract a growing amount of attention and capital. In 2018, valuations of the biggest private companies bulged, and at least six new fintech unicorns were minted in the U.S.

U.S. fintechs raised $12.4 billion in funding, or 43% more than 2017, reports CB Insights. That growth outpaced the 30% increase in venture investments across the entire U.S. market. And fintechs will need those dollars—they tend to burn about two to three times as much cash compared with other startups, according to an analysis by Brex, likely due to factors like regulatory hurdles.

Here are the 10 most valuable private, venture-backed fintechs in the U.S.:

1. Stripe, $22.5 billion

Originally a service to help small online sellers process payments, today Stripe serves tech giants like Microsoft and Amazon, too. In 2018 the company announced three new high-profile products, including credit card issuing technology, point-of-sale software and a billing platform for subscription businesses.

Cofounders: CEO Patrick Collison, 30, and president John Collison, 28. Irish-born brothers, dropouts from MIT (Patrick) and Harvard (John) launched Stripe in 2011

See:  Experts predict the five big fintech trends of 2019

2. Coinbase, $8 billion

Coinbase CEO Brian Armstrong. Photo credit: Bloomberg Finance LPMichael Short/Bloomberg

Expanding beyond its roots as a bitcoin wallet and retail exchange, Coinbase now offers cryptocurrency custody and professional and institutional trading platforms. Last year bought Earn.com, a service where users pay in bitcoin to contact experts via email, for a reported $100 million.

Cofounder & CEO: Brian Armstrong, 36, whose Coinbase holdings make him a billionaire

3. Robinhood, $5.6 billion

Broker offers commission-free trading of stocks, ETFs, cryptocurrencies and options through a mobile app. Robinhood Gold subscription service, starting at $6 per month, gives investors access to margin trading. Later this year the firm will take on the checking and savings market with a new cash management program.

Cofounders and co-CEOs: Stanford grads Baiju Bhatt, 34, a second-generation American with Indian parents, and Bulgarian-born Vlad Tenev, 32

4. Ripple, $5 billion

Its blockchain-based global settlements network aims to replace SWIFT, the interbank messaging platform that has long connected nearly every bank in the world. Also has a service that lets companies make cross-border payments in XRP, the cryptocurrency created by Ripple’s founders.

Cofounders: Jed McCaleb, 43; Chris Larsen, 58; and Arthur Britto

CEO: Brad Garlinghouse, 48, former AOL president

See:  Fintech Frenzy: Hype or Reality? A Closer Look at 6 Key Sectors

5. SoFi, $4.4 billion*

SoFi CEO Anthony Noto. Photo credit: Bloomberg Finance LPDavid Paul Morris/Bloomberg

Founded in 2011, SoFi started with online student loan refinancing and later branched into other services for affluent Millennials, including mortgages, robo-investing advice and life insurance.

CEO: Anthony Noto, 50, former Twitter COO

6. Credit Karma, $4 billion

Credit Karma cofounders (from left) Kenneth Lin, Nichole Mustard and Ryan Graciano. Photo credit: ForbesForbes

Offers its 85 million-plus “members” a growing suite of free services, including credit scores, tax-prep software, help fixing credit-report errors and alerts of new accounts opened in a user’s name. Credit Karma earns referral fees when users bite on the personalized offers for credit cards and loans it shows them.

Cofounders: CEO Kenneth Lin, 43; chief revenue officer Nichole Mustard, 45; CTO Ryan Graciano, 37

Continue to the full article --> here


The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org


Crowdfund Insider | Helena Murphy | Feb 20, 2019 The world of business equity raising is still dominated by men. Melinda Gates wrote in ReCode back in 2017:  “We like to think that venture capital is driven by the power of good ideas. But by the numbers, it’s men who have the keys.”  Gates argued that this was “more to do with historical inequalities than it does with innate ability.” At the time of Gates’ comments, a U.S. analysis found that just 2% of venture capital finance went to start-ups founded by women, and with women comprising just 9% of the decision-makers at U.S. venture capital firms, the lack of female VC representation seemed a compelling reason as to why. The situation a year on shows no sign of improving. Recently, a UK VC & Female Founders report for the Treasury discovered that for every £1 of VC investment, all-female founder teams get less than 1p. Chief Secretary to the Treasury, Liz Truss said it was “incredible” that in 2019 men had a “virtual monopoly on venture capital.” See:  Meet the women who are making sure blockchain is inclusive Even within the more disruptive, and arguably progressive, realms of crowdfunding, women are underrepresented – Crowdcube found ...
Read More
Gender Bias Contributes to Blocking Female Founders Out of Investment & Venture Capital. We Need to Fix This.
NCFA Canada | Feb 15, 2019 EP25-Feb 15:  Unlock the World with Kate Guimbellot and Jason Sosnowski About this episode:   On this episode of the Fintech Friday's Podcast our host, Manseeb Khan sits down with Kate Guimbellot and Jason Sosnowski from the TravelCoin Foundation. They chat about bringing Free Wi-Fi to the world, blockchain in medicine and how their ICO is different from the rest. Enjoy! Host: Manseeb Khan, NCFA, Fintech Fridays show host Guests: KATE GUIMBELLOT, Executive Director, TravelCoin Foundation (LinkedIn) JASON SOSNOWSKI, CTO, TravelCoin Foundation (view) BIOGRAPHIES: Kate Guimbellot has enjoyed 20+ years as a successful top executive by blending her business acumen, vision and passion to build inspired teams and deliver exceptional results. Having served as an Executive Administrator, Vice President and Chief Operations Officer in a variety of industries, she possesses the skills to inspire continued growth in fundraising, stakeholder engagement and brand awareness. As an organizer, speaker and lifelong philanthropist, Kate believes that our purpose in life is to leave behind a deposit, not a withdrawal. Building TravelCoin Foundation since the Spring of 2017 has led to the phenomenal success of TravelCoin, a revolutionary ICO offering that goes public at the end of 2019. The ...
Read More
FINTECH FRIDAY$ (EP25-Feb 15):  Unlocking the World with Kate Guimbellot and Jason Sosnowski of TravelCoin Foundation
CNBC | Hugh Son | Feb 14, 2019 The first cryptocurrency created by a major U.S. bank is here — and it's from J.P. Morgan Chase. Engineers at the lender have created the "JPM Coin," a digital token that will be used to instantly settle transactions between clients of its wholesale payments business. Only a tiny fraction of payments will initially be transmitted using the cryptocurrency, but the trial represents the first real-world use of a digital coin by a major U.S. bank. While J.P. Morgan's Jamie Dimon has bashed bitcoin as a "fraud," the bank chief and his managers have consistently said blockchain and regulated digital currencies held promise. The lender moves more than $6 trillion around the world every day for corporations in its massive wholesale payments business. In trials set to start in a few months, a tiny fraction of that will happen over something called "JPM Coin," the digital token created by engineers at the New York-based bank to instantly settle payments between clients. See:  Do Banks Even Want to Go Blockchain? J.P. Morgan is preparing for a future in which parts of the essential underpinning of global capitalism, from cross-border payments to corporate debt issuance, ...
Read More
JP Morgan is rolling out the first US bank-backed cryptocurrency to transform payments business
Forbes | Alejandro Cremades | Aug 2018 Is debt or equity fundraising smarter for startups? There is more than one way to fund a new business venture and fuel its growth. For almost all, it is going to require bringing in outside money at some point. Even if that is only to multiply what is working or to create a source of emergency capital. The two primary options are to either leverage business debt financing or fundraise for equity investors. Each method can carry its own pros and cons. It is vital for entrepreneurs not to blindly follow the herd just “because everyone else is doing it.” Discover which is best for you, at your stage in business, and stack the most advantages in your corner. Once you have decided the course of action and have a lead investor covering at least 20% of your financing round you would typically also include in the pitch deck the form of financing in which you are raising the capital. I recently covered the pitch deck template that was created by Silicon Valley legend, Peter Thiel (see it here) where the most critical slides are highlighted. Debt Financing We’re all familiar with debt. At ...
Read More
Debt vs. Equity Financing: Pros And Cons For Entrepreneurs
Financial Post | James McLeod | Feb 9, 2019 The Innovation, Science and Economic Development Minister gives the Financial Post an early look at Ottawa’s report card on innovation that will be released next week Navdeep Bains wants Canadians to know that things are happening. Lots of things. The Innovation, Science and Economic Development Minister has a big job on his hands, hauling Canada’s economy into the 21st century by embracing artificial intelligence and a panoply of digital technologies to boost productivity and keep us globally competitive. But the federal government’s innovation agenda is still very much a work in progress. One of its pillars, the five marquee superclusters spaced evenly across the country, is mostly just an idea at this point, although $950 million in funding is beginning to flow. Does Canada feel more innovative than it did four years ago? Are we future-proofing our economy and seizing the jobs of tomorrow? Bains certainly thinks so and that belief will probably be part of the Liberal’s pitch to voters when the country goes to the polls later this year. Next week, he will release a 100-page government report called Building a Nation of Innovators that mostly serves as a ...
Read More
The race to future-proof the economy: Navdeep Bains on the state of innovation in Canada
Modern Consensus | Leo Jakobson, February 4, 2019 Move is latest series of steps by regulator to bring clarity and less confrontational approach to regulations enforcement The U.S. Securities and Exchange Commission wants to know if the technology to help it monitor major cryptocurrency blockchains for risk and regulatory compliance issues exists. The SEC is not looking to buy big data analytics tools at this time, but characterizes its interest as “conducting market research to determine the availability and technical capability,” of the tools presently available on the market, it announced in a notice on Jan. 31 What the SEC wants to know about is the “ability to provide the requested data but also an overview of the processes used to extract the data, convert the data into a reviewable format, and the verification steps to ensure there is no loss in data completeness and accuracy due to the data transformation tools and processes applied.” The software it wants would also make the data easy for SEC staff to read and understand on an ongoing basis, and would provide insights about that data—notably identifying who the data belongs to—as well as a way of ensuring the data is accurate and ...
Read More
SEC wants big data tools for monitoring and enforcing cryptocurrency market compliance
NCFA Canada | Feb 8, 2019 Ep24-Feb 8:  Re-imagining Philanthropy with Daryl Hatton About this episode:  On this Episode of the Fintech Friday's Podcast, our host Manseeb Khan sits down with Daryl Hatton the CEO of Connection Point. They chatted about microprojects, saving little girls and puppies and how to get hooked on Philanthropy. Enjoy! Focus on value and avoid the complicated terminology when growing new innovative markets Branding customer segment-focused funding products, white labeling collaborative uses cases Crowdfunding for good at the intersection of technology, people and impact Host: Manseeb Khan, NCFA, Fintech Fridays show host Guest: DARYL HATTON, Founder and CEO, ConnectionPoint / FundRazr (linkedin) BIO:  Daryl Hatton, CEO of award winning international crowdfunding company FundRazr and of the innovative sponsored crowdfunding company Sponsifi has founded multiple start-ups and helped bring one to a successful NASDAQ IPO in 1999. He actively serves as board member or advisor to handfuls of other hot companies in Canada. In addition, he is a Director and Crowdfunding Ambassador for the National Crowdfunding Association of Canada. As a social media guy and frequent public speaker, his Twitter tagline includes words like “#KingOfGastown, entrepreneur, cardiac survivor, foodie, whisky nut, philosopher, mentor, father and friend.” * Senior Business and Technology ...
Read More
FINTECH FRIDAY$ (EP24-Feb 8):  Re-imagining Philanthropy with Daryl Hatton, Founder and CEO of ConnectionPoint/FundRazr
Forbes | Michael del Castillo | Feb 4, 2019 It’s a balmy 80 degrees on a mid-December day in Singapore, and something is puzzling Allen Day, a 41-year-old data scientist. Using the tools he has developed at Google, he can see a mysterious concerted usage of artificial intelligence on the blockchain for Ethereum. Ether is the world’s third-largest cryptocurrency (after bitcoin and XRP), and it still sports a market cap of some $11 billion despite losing 83% of its value in 2018. Peering into its blockchain—the distributed database of transactions underpinning the cryptocurrency—Day detects a “whole bunch” of “autonomous agents” moving funds around “in an automated fashion.” While he doesn’t yet know who has created the AI, he suspects they could be the agents of cryptocurrency exchanges trading among themselves in order to artificially inflate ether’s price. “It’s not really just single agents doing things on their own,” Day says from Google’s Asia-Pacific headquarters. “They’re forming with other agents to have some larger group effect.” Day’s official title is senior developer advocate for Google Cloud, but he describes his role as “customer zero” for the company’s cloud computing efforts. As such it’s his job to anticipate demand before a product ...
Read More
Navigating Bitcoin, Ethereum, XRP: How Google Is Quietly Making Blockchains Searchable
Bloomberg | Doug Alexander | Feb 4, 2019 Without digital keys, clients lose access to coins, funds Board said last week that it was seeking creditor protection Digital-asset exchange Quadriga CX has a $200 million problem with no obvious solution -- just the latest cautionary tale in the unregulated world of cryptocurrencies. The online startup can’t retrieve about C$190 million ($145 million) in Bitcoin, Litecoin, Ether and other digital tokens held for its customers, according to court documents filed Jan. 31 in Halifax, Nova Scotia. Nor can Vancouver-based Quadriga CX pay the C$70 million in cash they’re owed. Access to Quadriga CX’s digital “wallets” -- an application that stores the keys to send and receive cryptocurrencies -- appears to have been lost with the passing of Quadriga CX Chief Executive Officer Gerald Cotten, who died Dec. 9 in India from complications of Crohn’s disease. He was 30. Cotten was always conscious about security -- the laptop, email addresses and messaging system he used to run the 5-year-old business were encrypted, according to an affidavit from his widow, Jennifer Robertson. He took sole responsibility for the handling of funds and coins and the banking and accounting side of the business and, ...
Read More
Crypto CEO Dies Holding Only Passwords That Can Unlock Millions in Customer Coins
Forbes | Jeff Kauflin | Feb 4, 2019 This article was updated on 2/4/19 to include Ripple, the fourth-most valuable private fintech company in the U.S.  Financial technology startups continue to attract a growing amount of attention and capital. In 2018, valuations of the biggest private companies bulged, and at least six new fintech unicorns were minted in the U.S. U.S. fintechs raised $12.4 billion in funding, or 43% more than 2017, reports CB Insights. That growth outpaced the 30% increase in venture investments across the entire U.S. market. And fintechs will need those dollars—they tend to burn about two to three times as much cash compared with other startups, according to an analysis by Brex, likely due to factors like regulatory hurdles. Here are the 10 most valuable private, venture-backed fintechs in the U.S.: 1. Stripe, $22.5 billion Originally a service to help small online sellers process payments, today Stripe serves tech giants like Microsoft and Amazon, too. In 2018 the company announced three new high-profile products, including credit card issuing technology, point-of-sale software and a billing platform for subscription businesses. Cofounders: CEO Patrick Collison, 30, and president John Collison, 28. Irish-born brothers, dropouts from MIT (Patrick) and Harvard (John) ...
Read More
The 11 Biggest Fintech Companies In America 2019

 

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Europe’s fintech companies are preparing for a no-deal Brexit

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CNBC | Elizabeth Schulze | Jan 31, 2019

  • Navigating the uncertainties of Brexit is proving to be a tough task for newcomers in the financial services sector.
  • Fintech firms are proactively applying for licenses in EU countries ahead of the Brexit deadline.
  • So far Brexit uncertainty hasn't dented investment into London's thriving fintech market.

Europe's fintech companies are getting serious about the possibility of a no-deal Brexit.

As uncertainty looms over the U.K.'s split from the EU, the industry gathered this week at the Paris Fintech Forum. Payments providers, cryptocurrency exchanges and digital banks all said they were taking steps to prepare for the worst-case scenario.

But navigating the uncertainties of Brexit is proving to be a tough task for newcomers in the financial services sector who are luring in users with borderless, frictionless payment and banking solutions.

"It is obvious the bigger the market is, the better it is for fintechs, the faster it is they can start, the more opportunities they have," Wim Mijs, CEO of the European Banking Federation, told CNBC on Wednesday. "If you cut off that market, you're hurting yourself, which is Brexit in one word."

See:  Who’s afraid of Brexit? Here’s why Canadian fintechs are flocking to London

Securing licenses

N26 is a Berlin-based digital bank that was recently named one of Europe's largest fintech start-ups. Co-founder and CFO Maximilian Tayenthal told CNBC on Tuesday the company is taking precautions to prepare for a no-deal Brexit.

"Unfortunately no one knows how hard Brexit will be when it comes to banks licenses," Tayenthal said. "One of the options is we need bank license quite soon, so we have a team working on that."

Under current EU rules, British financial institutions can operate throughout the bloc with a domestic banking license. That is likely to change once the U.K. leaves the EU.

The result: fintech firms and banks are proactively applying for licenses in EU countries ahead of the deadline. That will allow them to continue to operate across all markets even if the U.K. fails to reach a deal with the EU.

"We have to have some options, and we have to think about our future," said Serkan Zubari, director of London-based cryptocurrency exchange Gobaba that applied for an Estonian license two months ago.

Earlier this month, London-based tech unicorn TransferWise applied for a money-transfer license in Brussels, while fintech firm Revolut obtained a European banking license in December. Both companies cited Brexit as a factor affecting their decisions.

Meanwhile more traditional banks like RBS and Lloyd's have already secured licenses in various EU countries.

See:  Why Open Banking Represents a Seismic Shift for Fintech

Some financial services companies are banking on a so-called transition period between the Brexit deadline and the official departure from the EU to iron out their operations. But that transition period might not happen if U.K. and EU regulators don't reach a deal, a scenario that worries bank regulators.

"The ECB and national supervisors, therefore, expect banks to continue to prepare for all possible contingencies, including a no-deal scenario leading to a hard Brexit with no transition," the European Central Bank (ECB) says on its website.

 

Securing funding

So far Brexit uncertainty hasn't dented investment into London's thriving fintech market. Consultancy KPMG estimated $16 billion was invested in fintech companies in the U.K. in the first half of 2018, the highest of any region in the world.

That could change if more fintech companies start to move operations out of the city.

Continue to the full article --> here


The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org


Crowdfund Insider | Helena Murphy | Feb 20, 2019 The world of business equity raising is still dominated by men. Melinda Gates wrote in ReCode back in 2017:  “We like to think that venture capital is driven by the power of good ideas. But by the numbers, it’s men who have the keys.”  Gates argued that this was “more to do with historical inequalities than it does with innate ability.” At the time of Gates’ comments, a U.S. analysis found that just 2% of venture capital finance went to start-ups founded by women, and with women comprising just 9% of the decision-makers at U.S. venture capital firms, the lack of female VC representation seemed a compelling reason as to why. The situation a year on shows no sign of improving. Recently, a UK VC & Female Founders report for the Treasury discovered that for every £1 of VC investment, all-female founder teams get less than 1p. Chief Secretary to the Treasury, Liz Truss said it was “incredible” that in 2019 men had a “virtual monopoly on venture capital.” See:  Meet the women who are making sure blockchain is inclusive Even within the more disruptive, and arguably progressive, realms of crowdfunding, women are underrepresented – Crowdcube found ...
Read More
Gender Bias Contributes to Blocking Female Founders Out of Investment & Venture Capital. We Need to Fix This.
NCFA Canada | Feb 15, 2019 EP25-Feb 15:  Unlock the World with Kate Guimbellot and Jason Sosnowski About this episode:   On this episode of the Fintech Friday's Podcast our host, Manseeb Khan sits down with Kate Guimbellot and Jason Sosnowski from the TravelCoin Foundation. They chat about bringing Free Wi-Fi to the world, blockchain in medicine and how their ICO is different from the rest. Enjoy! Host: Manseeb Khan, NCFA, Fintech Fridays show host Guests: KATE GUIMBELLOT, Executive Director, TravelCoin Foundation (LinkedIn) JASON SOSNOWSKI, CTO, TravelCoin Foundation (view) BIOGRAPHIES: Kate Guimbellot has enjoyed 20+ years as a successful top executive by blending her business acumen, vision and passion to build inspired teams and deliver exceptional results. Having served as an Executive Administrator, Vice President and Chief Operations Officer in a variety of industries, she possesses the skills to inspire continued growth in fundraising, stakeholder engagement and brand awareness. As an organizer, speaker and lifelong philanthropist, Kate believes that our purpose in life is to leave behind a deposit, not a withdrawal. Building TravelCoin Foundation since the Spring of 2017 has led to the phenomenal success of TravelCoin, a revolutionary ICO offering that goes public at the end of 2019. The ...
Read More
FINTECH FRIDAY$ (EP25-Feb 15):  Unlocking the World with Kate Guimbellot and Jason Sosnowski of TravelCoin Foundation
CNBC | Hugh Son | Feb 14, 2019 The first cryptocurrency created by a major U.S. bank is here — and it's from J.P. Morgan Chase. Engineers at the lender have created the "JPM Coin," a digital token that will be used to instantly settle transactions between clients of its wholesale payments business. Only a tiny fraction of payments will initially be transmitted using the cryptocurrency, but the trial represents the first real-world use of a digital coin by a major U.S. bank. While J.P. Morgan's Jamie Dimon has bashed bitcoin as a "fraud," the bank chief and his managers have consistently said blockchain and regulated digital currencies held promise. The lender moves more than $6 trillion around the world every day for corporations in its massive wholesale payments business. In trials set to start in a few months, a tiny fraction of that will happen over something called "JPM Coin," the digital token created by engineers at the New York-based bank to instantly settle payments between clients. See:  Do Banks Even Want to Go Blockchain? J.P. Morgan is preparing for a future in which parts of the essential underpinning of global capitalism, from cross-border payments to corporate debt issuance, ...
Read More
JP Morgan is rolling out the first US bank-backed cryptocurrency to transform payments business
Forbes | Alejandro Cremades | Aug 2018 Is debt or equity fundraising smarter for startups? There is more than one way to fund a new business venture and fuel its growth. For almost all, it is going to require bringing in outside money at some point. Even if that is only to multiply what is working or to create a source of emergency capital. The two primary options are to either leverage business debt financing or fundraise for equity investors. Each method can carry its own pros and cons. It is vital for entrepreneurs not to blindly follow the herd just “because everyone else is doing it.” Discover which is best for you, at your stage in business, and stack the most advantages in your corner. Once you have decided the course of action and have a lead investor covering at least 20% of your financing round you would typically also include in the pitch deck the form of financing in which you are raising the capital. I recently covered the pitch deck template that was created by Silicon Valley legend, Peter Thiel (see it here) where the most critical slides are highlighted. Debt Financing We’re all familiar with debt. At ...
Read More
Debt vs. Equity Financing: Pros And Cons For Entrepreneurs
Financial Post | James McLeod | Feb 9, 2019 The Innovation, Science and Economic Development Minister gives the Financial Post an early look at Ottawa’s report card on innovation that will be released next week Navdeep Bains wants Canadians to know that things are happening. Lots of things. The Innovation, Science and Economic Development Minister has a big job on his hands, hauling Canada’s economy into the 21st century by embracing artificial intelligence and a panoply of digital technologies to boost productivity and keep us globally competitive. But the federal government’s innovation agenda is still very much a work in progress. One of its pillars, the five marquee superclusters spaced evenly across the country, is mostly just an idea at this point, although $950 million in funding is beginning to flow. Does Canada feel more innovative than it did four years ago? Are we future-proofing our economy and seizing the jobs of tomorrow? Bains certainly thinks so and that belief will probably be part of the Liberal’s pitch to voters when the country goes to the polls later this year. Next week, he will release a 100-page government report called Building a Nation of Innovators that mostly serves as a ...
Read More
The race to future-proof the economy: Navdeep Bains on the state of innovation in Canada
Modern Consensus | Leo Jakobson, February 4, 2019 Move is latest series of steps by regulator to bring clarity and less confrontational approach to regulations enforcement The U.S. Securities and Exchange Commission wants to know if the technology to help it monitor major cryptocurrency blockchains for risk and regulatory compliance issues exists. The SEC is not looking to buy big data analytics tools at this time, but characterizes its interest as “conducting market research to determine the availability and technical capability,” of the tools presently available on the market, it announced in a notice on Jan. 31 What the SEC wants to know about is the “ability to provide the requested data but also an overview of the processes used to extract the data, convert the data into a reviewable format, and the verification steps to ensure there is no loss in data completeness and accuracy due to the data transformation tools and processes applied.” The software it wants would also make the data easy for SEC staff to read and understand on an ongoing basis, and would provide insights about that data—notably identifying who the data belongs to—as well as a way of ensuring the data is accurate and ...
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NCFA Canada | Feb 8, 2019 Ep24-Feb 8:  Re-imagining Philanthropy with Daryl Hatton About this episode:  On this Episode of the Fintech Friday's Podcast, our host Manseeb Khan sits down with Daryl Hatton the CEO of Connection Point. They chatted about microprojects, saving little girls and puppies and how to get hooked on Philanthropy. Enjoy! Focus on value and avoid the complicated terminology when growing new innovative markets Branding customer segment-focused funding products, white labeling collaborative uses cases Crowdfunding for good at the intersection of technology, people and impact Host: Manseeb Khan, NCFA, Fintech Fridays show host Guest: DARYL HATTON, Founder and CEO, ConnectionPoint / FundRazr (linkedin) BIO:  Daryl Hatton, CEO of award winning international crowdfunding company FundRazr and of the innovative sponsored crowdfunding company Sponsifi has founded multiple start-ups and helped bring one to a successful NASDAQ IPO in 1999. He actively serves as board member or advisor to handfuls of other hot companies in Canada. In addition, he is a Director and Crowdfunding Ambassador for the National Crowdfunding Association of Canada. As a social media guy and frequent public speaker, his Twitter tagline includes words like “#KingOfGastown, entrepreneur, cardiac survivor, foodie, whisky nut, philosopher, mentor, father and friend.” * Senior Business and Technology ...
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Forbes | Michael del Castillo | Feb 4, 2019 It’s a balmy 80 degrees on a mid-December day in Singapore, and something is puzzling Allen Day, a 41-year-old data scientist. Using the tools he has developed at Google, he can see a mysterious concerted usage of artificial intelligence on the blockchain for Ethereum. Ether is the world’s third-largest cryptocurrency (after bitcoin and XRP), and it still sports a market cap of some $11 billion despite losing 83% of its value in 2018. Peering into its blockchain—the distributed database of transactions underpinning the cryptocurrency—Day detects a “whole bunch” of “autonomous agents” moving funds around “in an automated fashion.” While he doesn’t yet know who has created the AI, he suspects they could be the agents of cryptocurrency exchanges trading among themselves in order to artificially inflate ether’s price. “It’s not really just single agents doing things on their own,” Day says from Google’s Asia-Pacific headquarters. “They’re forming with other agents to have some larger group effect.” Day’s official title is senior developer advocate for Google Cloud, but he describes his role as “customer zero” for the company’s cloud computing efforts. As such it’s his job to anticipate demand before a product ...
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Navigating Bitcoin, Ethereum, XRP: How Google Is Quietly Making Blockchains Searchable
Bloomberg | Doug Alexander | Feb 4, 2019 Without digital keys, clients lose access to coins, funds Board said last week that it was seeking creditor protection Digital-asset exchange Quadriga CX has a $200 million problem with no obvious solution -- just the latest cautionary tale in the unregulated world of cryptocurrencies. The online startup can’t retrieve about C$190 million ($145 million) in Bitcoin, Litecoin, Ether and other digital tokens held for its customers, according to court documents filed Jan. 31 in Halifax, Nova Scotia. Nor can Vancouver-based Quadriga CX pay the C$70 million in cash they’re owed. Access to Quadriga CX’s digital “wallets” -- an application that stores the keys to send and receive cryptocurrencies -- appears to have been lost with the passing of Quadriga CX Chief Executive Officer Gerald Cotten, who died Dec. 9 in India from complications of Crohn’s disease. He was 30. Cotten was always conscious about security -- the laptop, email addresses and messaging system he used to run the 5-year-old business were encrypted, according to an affidavit from his widow, Jennifer Robertson. He took sole responsibility for the handling of funds and coins and the banking and accounting side of the business and, ...
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Crypto CEO Dies Holding Only Passwords That Can Unlock Millions in Customer Coins
Forbes | Jeff Kauflin | Feb 4, 2019 This article was updated on 2/4/19 to include Ripple, the fourth-most valuable private fintech company in the U.S.  Financial technology startups continue to attract a growing amount of attention and capital. In 2018, valuations of the biggest private companies bulged, and at least six new fintech unicorns were minted in the U.S. U.S. fintechs raised $12.4 billion in funding, or 43% more than 2017, reports CB Insights. That growth outpaced the 30% increase in venture investments across the entire U.S. market. And fintechs will need those dollars—they tend to burn about two to three times as much cash compared with other startups, according to an analysis by Brex, likely due to factors like regulatory hurdles. Here are the 10 most valuable private, venture-backed fintechs in the U.S.: 1. Stripe, $22.5 billion Originally a service to help small online sellers process payments, today Stripe serves tech giants like Microsoft and Amazon, too. In 2018 the company announced three new high-profile products, including credit card issuing technology, point-of-sale software and a billing platform for subscription businesses. Cofounders: CEO Patrick Collison, 30, and president John Collison, 28. Irish-born brothers, dropouts from MIT (Patrick) and Harvard (John) ...
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The 11 Biggest Fintech Companies In America 2019

 

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Report: State of Regulation Crowdfunding Says No Gold Rush But an Undeniable Job Creator

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Crowdfund Insider | | Feb 1, 2019

Regulation Crowdfunding (or Reg CF), created by Title III of the JOBS Act, has been available for several years now. While not without its shortcomings, Reg CF has been leveraged by hundreds of issuers, typically smaller firms, raising over $100 million since May 2016.

This past week, Crowdfund Capital Advisors (CCA) published a report on Reg CF entitled “2018 State of Regulation Crowdfunding,” providing a snap-shot of the securities exemption and its overall performance.

Crowdfund Insider communicated with CCA principle Sherwood “Woodie” Neiss regarding the report. Neiss told CI the promise of Reg CF as a jobs creator and economic engine is starting to prove true:

“Back in 2012, the promise of Regulation Crowdfunding was jobs, a local economic generator, and an industry revitalizer. With the close of the 3rd calendar year of Reg CF we can see that those promises are holding true. Reg CF is proving to be a jobs engine (creating on average 2.9 jobs per issuer), economic generator (pumping over $289 million of revenues into local economies) and industry supporter (enabling 82 unique industries in regions across the USA).”

See:  Prominent Group of Fintech Leaders Send Letter to SEC Chair Jay Clayton Demanding an Increase in Regulation Crowdfunding to $20 Million

According to their research, proceeds for campaigns that closed in 2018 increased 154% from $71.2 million in 2017 to $109.3 million in 2018. Total proceeds since inception by the end of 2018 was $194 million.

The number of successful offerings increased 189% from 221 in 2017 to 417 in 2018. The average success rate of a campaign jumped from 58.9% in 2017 to 63.9% in 2018.

The average raise by an issuer is $271,000.

The total number of investors in successful offerings increased 190% from 77,558 in 2017 to 147,448 in 2018.

Unlike the hubris of the initial coin offering world, Reg CF offerings have experienced slower, more sustainable growth, according to CCA.

“Yes there has been no Gold Rush into Reg CF,” says Neiss. “We consider that a good thing. Reg CF issuers tend to be early stage, high risk firms. Investors need to take care when deciding if and how much they want to invest in these enterprises. A slow and methodical growth of the industry now will help the industry in the future.”

While the hope was for online capital formation to provide access to funding beyond established innovation hubs, that hasn’t happened:

“The data shows the entrepreneurial hubs like New York, San Francisco, Los Angeles, Chicago and Austin are popular locations for Reg CF companies. Other cities and states around the USA that are interested in promoting jobs and supporting industries in which they have a core competency, should look at these cities/states and copy their success,” explains Neiss.

See:  $5 million Equity crowdfunding extended to private companies in Australia

CCA believes that Reg CF has been good but it could be even better. Notably, Reg CF could be “poised for serious growth if the SEC would increase the issuer cap from $1,070,000 to $20,000,000:”

Continue to the full article --> here


The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org


Crowdfund Insider | Helena Murphy | Feb 20, 2019 The world of business equity raising is still dominated by men. Melinda Gates wrote in ReCode back in 2017:  “We like to think that venture capital is driven by the power of good ideas. But by the numbers, it’s men who have the keys.”  Gates argued that this was “more to do with historical inequalities than it does with innate ability.” At the time of Gates’ comments, a U.S. analysis found that just 2% of venture capital finance went to start-ups founded by women, and with women comprising just 9% of the decision-makers at U.S. venture capital firms, the lack of female VC representation seemed a compelling reason as to why. The situation a year on shows no sign of improving. Recently, a UK VC & Female Founders report for the Treasury discovered that for every £1 of VC investment, all-female founder teams get less than 1p. Chief Secretary to the Treasury, Liz Truss said it was “incredible” that in 2019 men had a “virtual monopoly on venture capital.” See:  Meet the women who are making sure blockchain is inclusive Even within the more disruptive, and arguably progressive, realms of crowdfunding, women are underrepresented – Crowdcube found ...
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CNBC | Hugh Son | Feb 14, 2019 The first cryptocurrency created by a major U.S. bank is here — and it's from J.P. Morgan Chase. Engineers at the lender have created the "JPM Coin," a digital token that will be used to instantly settle transactions between clients of its wholesale payments business. Only a tiny fraction of payments will initially be transmitted using the cryptocurrency, but the trial represents the first real-world use of a digital coin by a major U.S. bank. While J.P. Morgan's Jamie Dimon has bashed bitcoin as a "fraud," the bank chief and his managers have consistently said blockchain and regulated digital currencies held promise. The lender moves more than $6 trillion around the world every day for corporations in its massive wholesale payments business. In trials set to start in a few months, a tiny fraction of that will happen over something called "JPM Coin," the digital token created by engineers at the New York-based bank to instantly settle payments between clients. See:  Do Banks Even Want to Go Blockchain? J.P. Morgan is preparing for a future in which parts of the essential underpinning of global capitalism, from cross-border payments to corporate debt issuance, ...
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Forbes | Alejandro Cremades | Aug 2018 Is debt or equity fundraising smarter for startups? There is more than one way to fund a new business venture and fuel its growth. For almost all, it is going to require bringing in outside money at some point. Even if that is only to multiply what is working or to create a source of emergency capital. The two primary options are to either leverage business debt financing or fundraise for equity investors. Each method can carry its own pros and cons. It is vital for entrepreneurs not to blindly follow the herd just “because everyone else is doing it.” Discover which is best for you, at your stage in business, and stack the most advantages in your corner. Once you have decided the course of action and have a lead investor covering at least 20% of your financing round you would typically also include in the pitch deck the form of financing in which you are raising the capital. I recently covered the pitch deck template that was created by Silicon Valley legend, Peter Thiel (see it here) where the most critical slides are highlighted. Debt Financing We’re all familiar with debt. At ...
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Financial Post | James McLeod | Feb 9, 2019 The Innovation, Science and Economic Development Minister gives the Financial Post an early look at Ottawa’s report card on innovation that will be released next week Navdeep Bains wants Canadians to know that things are happening. Lots of things. The Innovation, Science and Economic Development Minister has a big job on his hands, hauling Canada’s economy into the 21st century by embracing artificial intelligence and a panoply of digital technologies to boost productivity and keep us globally competitive. But the federal government’s innovation agenda is still very much a work in progress. One of its pillars, the five marquee superclusters spaced evenly across the country, is mostly just an idea at this point, although $950 million in funding is beginning to flow. Does Canada feel more innovative than it did four years ago? Are we future-proofing our economy and seizing the jobs of tomorrow? Bains certainly thinks so and that belief will probably be part of the Liberal’s pitch to voters when the country goes to the polls later this year. Next week, he will release a 100-page government report called Building a Nation of Innovators that mostly serves as a ...
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Modern Consensus | Leo Jakobson, February 4, 2019 Move is latest series of steps by regulator to bring clarity and less confrontational approach to regulations enforcement The U.S. Securities and Exchange Commission wants to know if the technology to help it monitor major cryptocurrency blockchains for risk and regulatory compliance issues exists. The SEC is not looking to buy big data analytics tools at this time, but characterizes its interest as “conducting market research to determine the availability and technical capability,” of the tools presently available on the market, it announced in a notice on Jan. 31 What the SEC wants to know about is the “ability to provide the requested data but also an overview of the processes used to extract the data, convert the data into a reviewable format, and the verification steps to ensure there is no loss in data completeness and accuracy due to the data transformation tools and processes applied.” The software it wants would also make the data easy for SEC staff to read and understand on an ongoing basis, and would provide insights about that data—notably identifying who the data belongs to—as well as a way of ensuring the data is accurate and ...
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NCFA Canada | Feb 8, 2019 Ep24-Feb 8:  Re-imagining Philanthropy with Daryl Hatton About this episode:  On this Episode of the Fintech Friday's Podcast, our host Manseeb Khan sits down with Daryl Hatton the CEO of Connection Point. They chatted about microprojects, saving little girls and puppies and how to get hooked on Philanthropy. Enjoy! Focus on value and avoid the complicated terminology when growing new innovative markets Branding customer segment-focused funding products, white labeling collaborative uses cases Crowdfunding for good at the intersection of technology, people and impact Host: Manseeb Khan, NCFA, Fintech Fridays show host Guest: DARYL HATTON, Founder and CEO, ConnectionPoint / FundRazr (linkedin) BIO:  Daryl Hatton, CEO of award winning international crowdfunding company FundRazr and of the innovative sponsored crowdfunding company Sponsifi has founded multiple start-ups and helped bring one to a successful NASDAQ IPO in 1999. He actively serves as board member or advisor to handfuls of other hot companies in Canada. In addition, he is a Director and Crowdfunding Ambassador for the National Crowdfunding Association of Canada. As a social media guy and frequent public speaker, his Twitter tagline includes words like “#KingOfGastown, entrepreneur, cardiac survivor, foodie, whisky nut, philosopher, mentor, father and friend.” * Senior Business and Technology ...
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FINTECH FRIDAY$ (EP24-Feb 8):  Re-imagining Philanthropy with Daryl Hatton, Founder and CEO of ConnectionPoint/FundRazr
Forbes | Michael del Castillo | Feb 4, 2019 It’s a balmy 80 degrees on a mid-December day in Singapore, and something is puzzling Allen Day, a 41-year-old data scientist. Using the tools he has developed at Google, he can see a mysterious concerted usage of artificial intelligence on the blockchain for Ethereum. Ether is the world’s third-largest cryptocurrency (after bitcoin and XRP), and it still sports a market cap of some $11 billion despite losing 83% of its value in 2018. Peering into its blockchain—the distributed database of transactions underpinning the cryptocurrency—Day detects a “whole bunch” of “autonomous agents” moving funds around “in an automated fashion.” While he doesn’t yet know who has created the AI, he suspects they could be the agents of cryptocurrency exchanges trading among themselves in order to artificially inflate ether’s price. “It’s not really just single agents doing things on their own,” Day says from Google’s Asia-Pacific headquarters. “They’re forming with other agents to have some larger group effect.” Day’s official title is senior developer advocate for Google Cloud, but he describes his role as “customer zero” for the company’s cloud computing efforts. As such it’s his job to anticipate demand before a product ...
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Bloomberg | Doug Alexander | Feb 4, 2019 Without digital keys, clients lose access to coins, funds Board said last week that it was seeking creditor protection Digital-asset exchange Quadriga CX has a $200 million problem with no obvious solution -- just the latest cautionary tale in the unregulated world of cryptocurrencies. The online startup can’t retrieve about C$190 million ($145 million) in Bitcoin, Litecoin, Ether and other digital tokens held for its customers, according to court documents filed Jan. 31 in Halifax, Nova Scotia. Nor can Vancouver-based Quadriga CX pay the C$70 million in cash they’re owed. Access to Quadriga CX’s digital “wallets” -- an application that stores the keys to send and receive cryptocurrencies -- appears to have been lost with the passing of Quadriga CX Chief Executive Officer Gerald Cotten, who died Dec. 9 in India from complications of Crohn’s disease. He was 30. Cotten was always conscious about security -- the laptop, email addresses and messaging system he used to run the 5-year-old business were encrypted, according to an affidavit from his widow, Jennifer Robertson. He took sole responsibility for the handling of funds and coins and the banking and accounting side of the business and, ...
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Forbes | Jeff Kauflin | Feb 4, 2019 This article was updated on 2/4/19 to include Ripple, the fourth-most valuable private fintech company in the U.S.  Financial technology startups continue to attract a growing amount of attention and capital. In 2018, valuations of the biggest private companies bulged, and at least six new fintech unicorns were minted in the U.S. U.S. fintechs raised $12.4 billion in funding, or 43% more than 2017, reports CB Insights. That growth outpaced the 30% increase in venture investments across the entire U.S. market. And fintechs will need those dollars—they tend to burn about two to three times as much cash compared with other startups, according to an analysis by Brex, likely due to factors like regulatory hurdles. Here are the 10 most valuable private, venture-backed fintechs in the U.S.: 1. Stripe, $22.5 billion Originally a service to help small online sellers process payments, today Stripe serves tech giants like Microsoft and Amazon, too. In 2018 the company announced three new high-profile products, including credit card issuing technology, point-of-sale software and a billing platform for subscription businesses. Cofounders: CEO Patrick Collison, 30, and president John Collison, 28. Irish-born brothers, dropouts from MIT (Patrick) and Harvard (John) ...
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The 11 Biggest Fintech Companies In America 2019

 

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Machine Learning in Finance – Present and Future Applications

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Emerge | Daniel Faggella | Jan 30, 2019

Machine learning has had fruitful applications in finance well before the advent of mobile banking apps, proficient chatbots, or search engines. Given the high volume, accurate historical records, and quantitative nature of the finance world, few industries are better suited for artificial intelligence. There are more uses cases of machine learning in finance than ever before, a trend perpetuated by more accessible computing power and more accessible machine learning tools (such as Google’s Tensorflow).

Today, machine learning has come to play an integral role in many phases of the financial ecosystem, from approving loanscredit scores, to managing assets, to assessing risks. Yet, few technically-savvy professionals have an accurate view of just how many ways machine learning finds its way into their daily financial lives.

At Emerj, we’re fortunate enough to speak with hundreds of AI and machine learning executives and researchers in order to accumulate a more informed lay-of-the-land for current uses and applications.

See:  Using AI to Enrich the Customer Experience

In this particular article, we’ll explore in the following order:

  • Current applications of artificial intelligence in finance, banking, and insurance
  • Potential future applications of artificial intelligence in finance
  • Noteworthy companies operating at the intersection of AI and finance
  • Related Emerj executive interviews

Note that this article is intended as an executive overview rather than a granular look at all applications in this field. I’ve done my best to distill some of the most used and most promising use cases, with reference for your additional investigation.

We’ll begin by looking at present applications:

Machine Learning in Finance – Current Applications

Below are examples of machine learning being put to use actively today. Bear in mind that some of these applications leverage multiple AI approaches – not exclusively machine learning.

Portfolio Management

The term “robo-advisor” was essentially unheard-of just five years ago, but it is now commonplace in the financial landscape. The term is misleading and doesn’t involve robots at all. Rather, robo-advisors (companies such as Betterment, Wealthfront, and others) are algorithms built to calibrate a financial portfolio to the goals and risk tolerance of the user.

Users enter their goals (for example, retiring at age 65 with $250,000.00 in savings), age, income, and current financial assets. The advisor (which would more accurately be referred to as an “allocator”) then spreads investments across asset classes and financial instruments in order to reach the user’s goals.

See:  Differences Between AI and Machine Learning and Why it Matters

The system then calibrates to changes in the user’s goals and to real-time changes in the market, aiming always to find the best fit for the user’s original goals. Robo-advisors have gained significant traction with millennial consumers who don’t need a physical advisor to feel comfortable investing, and who are less able to validate the fees paid to human advisors.

Algorithmic Trading

With origins going back to the 1970’s, algorithmic trading (sometimes called “Automated Trading Systems,” which is arguably a more accurate description) involves the use of complex AI systems to make extremely fast trading decisions.

Algorithmic systems often making thousands or millions of trades in a day, hence the term “high-frequency trading” (HFT), which is considered to be a subset of algorithmic trading. Most hedge funds and financial institutions do not openly disclose their AI approaches to trading (for good reason), but it is believed that machine learning and deep learning are playing an increasingly important role in calibrating trading decisions in real time.

There some noted limitations to the exclusive use of machine learning in trading stocks, currencies (ForEx) and commodities, see this Quora thread for a good background on machine learning’s role in HFT today.

Fraud Detection

Combine more accessible computing power, internet becoming more commonly used, and an increasing amount of valuable company data being stored online, and you have a “perfect storm” for data security risk. While previous financial fraud detection systems depended heavily on complex and robust sets of rules, modern fraud detection goes beyond following a checklist of risk factors – it actively learns and calibrates to new potential (or real) security threats.

See:  Crowdfunding still thriving in AI and fintech despite risks

This is the place of machine learning in finance for fraud – but the same principles hold true for other data security problems. Using machine learning, systems can detect unique activities or behaviors (“anomalies”) and flag them for security teams. The challenge for these systems is to avoid false-positives – situations where “risks” are flagged that were never risks in the first place. Here at Emerj we’ve interviewed half a dozen fraud and security AI executives, all of whom seem convinced that given the incalculably high number of ways that security can be breached, genuinely “learning” systems will be a necessity in the five to ten years ahead.

Loan/Insurance Underwriting

Underwriting could be described as a perfect job for machine learning in finance, and indeed there is a great deal of worry in the industry that machines will replace a large swath of the underwriting positions that exist today (see page 2 of this Ernst & Young executive brief).

Especially at large companies (big banks and publicly traded insurance firms), machine learning algorithms can be trained on millions of examples of consumer data (age, job, marital status) and financial lending or insurance results, such as whether or not a person defaulted or paid back their loans on time.

The underlying trends that can be assessed with algorithms, and continuously analyzed to detect trends that might influence lending and ensuring into the future (are more and more young people in a certain state getting in car accidents? Are there increasing rates of default among a specific demographic population over the last 15 years)?

These results have a tremendous tangible yield for companies – but at present are primarily reserved for larger companies with the resources to hire data scientists and the massive volumes of past and present data to train their algorithms.

We’ve compared the AI investments of insurance giants like State Farm, Liberty Mutual, and others – in our complete article on AI insurance applications.

See:  Global Financial Innovation Network (GFIN) – Regulators Launch Global Sandbox Pilot

Future Value of Machine Learning in Finance

The applications below are those that we consider promising. Some have relatively active applications today (though not as active as the more established use cases listed above), and others are still relatively nascent.

Customer Service

Chat bots and conversational interfaces are a rapidly expanding area of venture investment and customer service budget (our 2016 AI executive consensus ranked them as the most promising short-term AI consumer application). Companies like Kasisto are already building finance-specific chatbots to help customers ask questions via chat such as “How much did I spend on groceries last month?” and “What was the balance of my personal savings account 60 days ago?”

These assistants have had to be built with robust natural language processing engines as well as reams of finance-specific customer interactions. Banks and financial institutions that allow for such swift querying and interaction might pick up customers from stodgy banks that require people to log onto a traditional online banking portal and do the digging themselves.

This kind of chat (or in the future – voice) experience is not the norm today in banking or finance, but may be a viable option for millions in the coming five years. This application goes beyond machine learning in finance, and is likely to manifest itself as specialized chat bots in a variety of fields and industries.

Security 2.0

Usernames, passwords, and security questions may no longer be the norm for user security in five years. User security in banking and finance is a particularly high stakes game (you’d probably rather your Facebook login to the world than release your bank account information to a small group of strangers, and for good reason). In addition to anomaly-detection applications like those currently being developed and used in fraud, future security measures might require facial recognition, voice recognition, or other biometric data.

See:  A Tech CFO on Three Disruptive Technologies Transforming Finance

Sentiment/News Analysis

Hedge funds hold their cards tight to their chest, and we can expect to hear very little by way of how sentiment analysis is being used specifically. However, it is supposed that much of the future applications of machine learning will be in understanding social media, news trends, and other data sources, not just stock prices and trades.

Continue to the full article --> here

 


The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org


Crowdfund Insider | Helena Murphy | Feb 20, 2019 The world of business equity raising is still dominated by men. Melinda Gates wrote in ReCode back in 2017:  “We like to think that venture capital is driven by the power of good ideas. But by the numbers, it’s men who have the keys.”  Gates argued that this was “more to do with historical inequalities than it does with innate ability.” At the time of Gates’ comments, a U.S. analysis found that just 2% of venture capital finance went to start-ups founded by women, and with women comprising just 9% of the decision-makers at U.S. venture capital firms, the lack of female VC representation seemed a compelling reason as to why. The situation a year on shows no sign of improving. Recently, a UK VC & Female Founders report for the Treasury discovered that for every £1 of VC investment, all-female founder teams get less than 1p. Chief Secretary to the Treasury, Liz Truss said it was “incredible” that in 2019 men had a “virtual monopoly on venture capital.” See:  Meet the women who are making sure blockchain is inclusive Even within the more disruptive, and arguably progressive, realms of crowdfunding, women are underrepresented – Crowdcube found ...
Read More
Gender Bias Contributes to Blocking Female Founders Out of Investment & Venture Capital. We Need to Fix This.
NCFA Canada | Feb 15, 2019 EP25-Feb 15:  Unlock the World with Kate Guimbellot and Jason Sosnowski About this episode:   On this episode of the Fintech Friday's Podcast our host, Manseeb Khan sits down with Kate Guimbellot and Jason Sosnowski from the TravelCoin Foundation. They chat about bringing Free Wi-Fi to the world, blockchain in medicine and how their ICO is different from the rest. Enjoy! Host: Manseeb Khan, NCFA, Fintech Fridays show host Guests: KATE GUIMBELLOT, Executive Director, TravelCoin Foundation (LinkedIn) JASON SOSNOWSKI, CTO, TravelCoin Foundation (view) BIOGRAPHIES: Kate Guimbellot has enjoyed 20+ years as a successful top executive by blending her business acumen, vision and passion to build inspired teams and deliver exceptional results. Having served as an Executive Administrator, Vice President and Chief Operations Officer in a variety of industries, she possesses the skills to inspire continued growth in fundraising, stakeholder engagement and brand awareness. As an organizer, speaker and lifelong philanthropist, Kate believes that our purpose in life is to leave behind a deposit, not a withdrawal. Building TravelCoin Foundation since the Spring of 2017 has led to the phenomenal success of TravelCoin, a revolutionary ICO offering that goes public at the end of 2019. The ...
Read More
FINTECH FRIDAY$ (EP25-Feb 15):  Unlocking the World with Kate Guimbellot and Jason Sosnowski of TravelCoin Foundation
CNBC | Hugh Son | Feb 14, 2019 The first cryptocurrency created by a major U.S. bank is here — and it's from J.P. Morgan Chase. Engineers at the lender have created the "JPM Coin," a digital token that will be used to instantly settle transactions between clients of its wholesale payments business. Only a tiny fraction of payments will initially be transmitted using the cryptocurrency, but the trial represents the first real-world use of a digital coin by a major U.S. bank. While J.P. Morgan's Jamie Dimon has bashed bitcoin as a "fraud," the bank chief and his managers have consistently said blockchain and regulated digital currencies held promise. The lender moves more than $6 trillion around the world every day for corporations in its massive wholesale payments business. In trials set to start in a few months, a tiny fraction of that will happen over something called "JPM Coin," the digital token created by engineers at the New York-based bank to instantly settle payments between clients. See:  Do Banks Even Want to Go Blockchain? J.P. Morgan is preparing for a future in which parts of the essential underpinning of global capitalism, from cross-border payments to corporate debt issuance, ...
Read More
JP Morgan is rolling out the first US bank-backed cryptocurrency to transform payments business
Forbes | Alejandro Cremades | Aug 2018 Is debt or equity fundraising smarter for startups? There is more than one way to fund a new business venture and fuel its growth. For almost all, it is going to require bringing in outside money at some point. Even if that is only to multiply what is working or to create a source of emergency capital. The two primary options are to either leverage business debt financing or fundraise for equity investors. Each method can carry its own pros and cons. It is vital for entrepreneurs not to blindly follow the herd just “because everyone else is doing it.” Discover which is best for you, at your stage in business, and stack the most advantages in your corner. Once you have decided the course of action and have a lead investor covering at least 20% of your financing round you would typically also include in the pitch deck the form of financing in which you are raising the capital. I recently covered the pitch deck template that was created by Silicon Valley legend, Peter Thiel (see it here) where the most critical slides are highlighted. Debt Financing We’re all familiar with debt. At ...
Read More
Debt vs. Equity Financing: Pros And Cons For Entrepreneurs
Financial Post | James McLeod | Feb 9, 2019 The Innovation, Science and Economic Development Minister gives the Financial Post an early look at Ottawa’s report card on innovation that will be released next week Navdeep Bains wants Canadians to know that things are happening. Lots of things. The Innovation, Science and Economic Development Minister has a big job on his hands, hauling Canada’s economy into the 21st century by embracing artificial intelligence and a panoply of digital technologies to boost productivity and keep us globally competitive. But the federal government’s innovation agenda is still very much a work in progress. One of its pillars, the five marquee superclusters spaced evenly across the country, is mostly just an idea at this point, although $950 million in funding is beginning to flow. Does Canada feel more innovative than it did four years ago? Are we future-proofing our economy and seizing the jobs of tomorrow? Bains certainly thinks so and that belief will probably be part of the Liberal’s pitch to voters when the country goes to the polls later this year. Next week, he will release a 100-page government report called Building a Nation of Innovators that mostly serves as a ...
Read More
The race to future-proof the economy: Navdeep Bains on the state of innovation in Canada
Modern Consensus | Leo Jakobson, February 4, 2019 Move is latest series of steps by regulator to bring clarity and less confrontational approach to regulations enforcement The U.S. Securities and Exchange Commission wants to know if the technology to help it monitor major cryptocurrency blockchains for risk and regulatory compliance issues exists. The SEC is not looking to buy big data analytics tools at this time, but characterizes its interest as “conducting market research to determine the availability and technical capability,” of the tools presently available on the market, it announced in a notice on Jan. 31 What the SEC wants to know about is the “ability to provide the requested data but also an overview of the processes used to extract the data, convert the data into a reviewable format, and the verification steps to ensure there is no loss in data completeness and accuracy due to the data transformation tools and processes applied.” The software it wants would also make the data easy for SEC staff to read and understand on an ongoing basis, and would provide insights about that data—notably identifying who the data belongs to—as well as a way of ensuring the data is accurate and ...
Read More
SEC wants big data tools for monitoring and enforcing cryptocurrency market compliance
NCFA Canada | Feb 8, 2019 Ep24-Feb 8:  Re-imagining Philanthropy with Daryl Hatton About this episode:  On this Episode of the Fintech Friday's Podcast, our host Manseeb Khan sits down with Daryl Hatton the CEO of Connection Point. They chatted about microprojects, saving little girls and puppies and how to get hooked on Philanthropy. Enjoy! Focus on value and avoid the complicated terminology when growing new innovative markets Branding customer segment-focused funding products, white labeling collaborative uses cases Crowdfunding for good at the intersection of technology, people and impact Host: Manseeb Khan, NCFA, Fintech Fridays show host Guest: DARYL HATTON, Founder and CEO, ConnectionPoint / FundRazr (linkedin) BIO:  Daryl Hatton, CEO of award winning international crowdfunding company FundRazr and of the innovative sponsored crowdfunding company Sponsifi has founded multiple start-ups and helped bring one to a successful NASDAQ IPO in 1999. He actively serves as board member or advisor to handfuls of other hot companies in Canada. In addition, he is a Director and Crowdfunding Ambassador for the National Crowdfunding Association of Canada. As a social media guy and frequent public speaker, his Twitter tagline includes words like “#KingOfGastown, entrepreneur, cardiac survivor, foodie, whisky nut, philosopher, mentor, father and friend.” * Senior Business and Technology ...
Read More
FINTECH FRIDAY$ (EP24-Feb 8):  Re-imagining Philanthropy with Daryl Hatton, Founder and CEO of ConnectionPoint/FundRazr
Forbes | Michael del Castillo | Feb 4, 2019 It’s a balmy 80 degrees on a mid-December day in Singapore, and something is puzzling Allen Day, a 41-year-old data scientist. Using the tools he has developed at Google, he can see a mysterious concerted usage of artificial intelligence on the blockchain for Ethereum. Ether is the world’s third-largest cryptocurrency (after bitcoin and XRP), and it still sports a market cap of some $11 billion despite losing 83% of its value in 2018. Peering into its blockchain—the distributed database of transactions underpinning the cryptocurrency—Day detects a “whole bunch” of “autonomous agents” moving funds around “in an automated fashion.” While he doesn’t yet know who has created the AI, he suspects they could be the agents of cryptocurrency exchanges trading among themselves in order to artificially inflate ether’s price. “It’s not really just single agents doing things on their own,” Day says from Google’s Asia-Pacific headquarters. “They’re forming with other agents to have some larger group effect.” Day’s official title is senior developer advocate for Google Cloud, but he describes his role as “customer zero” for the company’s cloud computing efforts. As such it’s his job to anticipate demand before a product ...
Read More
Navigating Bitcoin, Ethereum, XRP: How Google Is Quietly Making Blockchains Searchable
Bloomberg | Doug Alexander | Feb 4, 2019 Without digital keys, clients lose access to coins, funds Board said last week that it was seeking creditor protection Digital-asset exchange Quadriga CX has a $200 million problem with no obvious solution -- just the latest cautionary tale in the unregulated world of cryptocurrencies. The online startup can’t retrieve about C$190 million ($145 million) in Bitcoin, Litecoin, Ether and other digital tokens held for its customers, according to court documents filed Jan. 31 in Halifax, Nova Scotia. Nor can Vancouver-based Quadriga CX pay the C$70 million in cash they’re owed. Access to Quadriga CX’s digital “wallets” -- an application that stores the keys to send and receive cryptocurrencies -- appears to have been lost with the passing of Quadriga CX Chief Executive Officer Gerald Cotten, who died Dec. 9 in India from complications of Crohn’s disease. He was 30. Cotten was always conscious about security -- the laptop, email addresses and messaging system he used to run the 5-year-old business were encrypted, according to an affidavit from his widow, Jennifer Robertson. He took sole responsibility for the handling of funds and coins and the banking and accounting side of the business and, ...
Read More
Crypto CEO Dies Holding Only Passwords That Can Unlock Millions in Customer Coins
Forbes | Jeff Kauflin | Feb 4, 2019 This article was updated on 2/4/19 to include Ripple, the fourth-most valuable private fintech company in the U.S.  Financial technology startups continue to attract a growing amount of attention and capital. In 2018, valuations of the biggest private companies bulged, and at least six new fintech unicorns were minted in the U.S. U.S. fintechs raised $12.4 billion in funding, or 43% more than 2017, reports CB Insights. That growth outpaced the 30% increase in venture investments across the entire U.S. market. And fintechs will need those dollars—they tend to burn about two to three times as much cash compared with other startups, according to an analysis by Brex, likely due to factors like regulatory hurdles. Here are the 10 most valuable private, venture-backed fintechs in the U.S.: 1. Stripe, $22.5 billion Originally a service to help small online sellers process payments, today Stripe serves tech giants like Microsoft and Amazon, too. In 2018 the company announced three new high-profile products, including credit card issuing technology, point-of-sale software and a billing platform for subscription businesses. Cofounders: CEO Patrick Collison, 30, and president John Collison, 28. Irish-born brothers, dropouts from MIT (Patrick) and Harvard (John) ...
Read More
The 11 Biggest Fintech Companies In America 2019

 

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Global Financial Innovation Network (GFIN) – Regulators Launch Global Sandbox Pilot

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FCA and GFIN Members | Jan 31, 2019

The Global Financial Innovation Network (GFIN) was formally launched in January 2019 by an international group of financial regulators and related organisations, including the FCA. This built on the FCA’s early 2018 proposal to create a global sandbox.

The GFIN is a network of 29 organisations committed to supporting financial innovation in the interests of consumers.

The GFIN seeks to provide a more efficient way for innovative firms to interact with regulators, helping them navigate between countries as they look to scale new ideas. This includes a pilot for firms wishing to test innovative products, services or business models across more than one jurisdiction.

It also aims to create a new framework for co-operation between financial services regulators on innovation related topics, sharing different experiences and approaches.

Confirming the GFIN’s functions

The GFIN was proposed in a consultation paper in August 2018. The GFIN received 99 responses from 26 jurisdictions in response to the consultation paper. The response from industry and other international regulators was overwhelmingly positive in favour of establishing the GFIN to facilitate a new practical method of regulatory collaboration on innovation and creating an environment for cross-border testing.

Following this consultation, the GFIN has finalised terms of reference for governance and membership of the group and confirmed 3 primary functions:

  • To act as a network of regulators to collaborate and share experience of innovation in respective markets, including emerging technologies and business models, and to provide accessible regulatory contact information for firms.
  • To provide a forum for joint RegTech work and collaborative knowledge sharing/lessons learned.
  • To provide firms with an environment in which to trial cross-border solutions.

Since the end of the consultation, the GFIN has discussed further development of our core functions and next steps of the network. Alongside discussions on the sharing of experience, regulators involved agreed to launch a pilot phase of cross-border testing (for firms) and to formalise the membership and governance structure for regulators and international organisations interested in joining the Network.

See: 

 

Following the consultation feedback, the GFIN has:

  • Opened a 1-month application period for a pilot phase of cross-border testing. Interested firms are asked to submit applications to relevant participating regulators by 28 February 2019.
  • As part of the finalised terms of reference for governance and membership, expanding from the founding 12 members, the group now includes 29 organisations. Financial regulators and related organisations with a commitment to supporting innovation in the interest of consumers are invited to join.

Cross-border testing applications – pilot phase for firms

Consultation feedback indicated widespread support for creating an environment that allowed firms to simultaneously trial and scale new technologies in multiple jurisdictions, gaining real-time insight into how a product or service might operate in the market.

To support the development of cross border testing we have opened a 1-month application window for firms interested in joining a pilot cohort for cross-border testing.

Firms wishing to participate in this pilot phase must meet the application requirements of all the jurisdictions in which they would like to test. For example, a firm wishing to test in the UK, Australia and Hong Kong must independently meet the eligibility criteria, and/or other relevant standards, of the regulators in those jurisdictions.

Interested firms should note whether a particular regulator is the relevant authority for the proposed activity before applying to test in their jurisdiction.

Each regulator will decide whether a proposed test meets its individual screening criteria, areas of interest, and ability to support the activity. Each regulator will also make sure that appropriate safeguards for their jurisdiction are in place. Regulators are only responsible for tests in their jurisdictions and should consider the associated risks. We believe this is important to maintain high standards of consumer protection and market integrity in regulators’ respective jurisdictions.

Pilot tests will run for a 6-month period, unless regulators agree to extend them. We expect the pilots will run from Q2 2019.

This pilot is as much a trial for GFIN members as it will be for firms. We are looking for firms who can be flexible and agile in their participation, and can provide GFIN regulators with feedback on their experience. Firms will benefit from the opportunity to test and compete in the regulated space, and their tests will help inform the future work of the network. Over time, trials could inform regulatory authorities about potential areas of regulatory convergence (eg streamlined applications), although we stress this is a longer-term opportunity.

Since GFIN cannot override national legislation, a separate application is required to each regulator firms would like to test with. GFIN members will then coordinate with each other around the application. The deadline for testing applications is 28 February 2019.

Submit an FCA application.

Continue to the full article  --> here


The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org


Crowdfund Insider | Helena Murphy | Feb 20, 2019 The world of business equity raising is still dominated by men. Melinda Gates wrote in ReCode back in 2017:  “We like to think that venture capital is driven by the power of good ideas. But by the numbers, it’s men who have the keys.”  Gates argued that this was “more to do with historical inequalities than it does with innate ability.” At the time of Gates’ comments, a U.S. analysis found that just 2% of venture capital finance went to start-ups founded by women, and with women comprising just 9% of the decision-makers at U.S. venture capital firms, the lack of female VC representation seemed a compelling reason as to why. The situation a year on shows no sign of improving. Recently, a UK VC & Female Founders report for the Treasury discovered that for every £1 of VC investment, all-female founder teams get less than 1p. Chief Secretary to the Treasury, Liz Truss said it was “incredible” that in 2019 men had a “virtual monopoly on venture capital.” See:  Meet the women who are making sure blockchain is inclusive Even within the more disruptive, and arguably progressive, realms of crowdfunding, women are underrepresented – Crowdcube found ...
Read More
Gender Bias Contributes to Blocking Female Founders Out of Investment & Venture Capital. We Need to Fix This.
NCFA Canada | Feb 15, 2019 EP25-Feb 15:  Unlock the World with Kate Guimbellot and Jason Sosnowski About this episode:   On this episode of the Fintech Friday's Podcast our host, Manseeb Khan sits down with Kate Guimbellot and Jason Sosnowski from the TravelCoin Foundation. They chat about bringing Free Wi-Fi to the world, blockchain in medicine and how their ICO is different from the rest. Enjoy! Host: Manseeb Khan, NCFA, Fintech Fridays show host Guests: KATE GUIMBELLOT, Executive Director, TravelCoin Foundation (LinkedIn) JASON SOSNOWSKI, CTO, TravelCoin Foundation (view) BIOGRAPHIES: Kate Guimbellot has enjoyed 20+ years as a successful top executive by blending her business acumen, vision and passion to build inspired teams and deliver exceptional results. Having served as an Executive Administrator, Vice President and Chief Operations Officer in a variety of industries, she possesses the skills to inspire continued growth in fundraising, stakeholder engagement and brand awareness. As an organizer, speaker and lifelong philanthropist, Kate believes that our purpose in life is to leave behind a deposit, not a withdrawal. Building TravelCoin Foundation since the Spring of 2017 has led to the phenomenal success of TravelCoin, a revolutionary ICO offering that goes public at the end of 2019. The ...
Read More
FINTECH FRIDAY$ (EP25-Feb 15):  Unlocking the World with Kate Guimbellot and Jason Sosnowski of TravelCoin Foundation
CNBC | Hugh Son | Feb 14, 2019 The first cryptocurrency created by a major U.S. bank is here — and it's from J.P. Morgan Chase. Engineers at the lender have created the "JPM Coin," a digital token that will be used to instantly settle transactions between clients of its wholesale payments business. Only a tiny fraction of payments will initially be transmitted using the cryptocurrency, but the trial represents the first real-world use of a digital coin by a major U.S. bank. While J.P. Morgan's Jamie Dimon has bashed bitcoin as a "fraud," the bank chief and his managers have consistently said blockchain and regulated digital currencies held promise. The lender moves more than $6 trillion around the world every day for corporations in its massive wholesale payments business. In trials set to start in a few months, a tiny fraction of that will happen over something called "JPM Coin," the digital token created by engineers at the New York-based bank to instantly settle payments between clients. See:  Do Banks Even Want to Go Blockchain? J.P. Morgan is preparing for a future in which parts of the essential underpinning of global capitalism, from cross-border payments to corporate debt issuance, ...
Read More
JP Morgan is rolling out the first US bank-backed cryptocurrency to transform payments business
Forbes | Alejandro Cremades | Aug 2018 Is debt or equity fundraising smarter for startups? There is more than one way to fund a new business venture and fuel its growth. For almost all, it is going to require bringing in outside money at some point. Even if that is only to multiply what is working or to create a source of emergency capital. The two primary options are to either leverage business debt financing or fundraise for equity investors. Each method can carry its own pros and cons. It is vital for entrepreneurs not to blindly follow the herd just “because everyone else is doing it.” Discover which is best for you, at your stage in business, and stack the most advantages in your corner. Once you have decided the course of action and have a lead investor covering at least 20% of your financing round you would typically also include in the pitch deck the form of financing in which you are raising the capital. I recently covered the pitch deck template that was created by Silicon Valley legend, Peter Thiel (see it here) where the most critical slides are highlighted. Debt Financing We’re all familiar with debt. At ...
Read More
Debt vs. Equity Financing: Pros And Cons For Entrepreneurs
Financial Post | James McLeod | Feb 9, 2019 The Innovation, Science and Economic Development Minister gives the Financial Post an early look at Ottawa’s report card on innovation that will be released next week Navdeep Bains wants Canadians to know that things are happening. Lots of things. The Innovation, Science and Economic Development Minister has a big job on his hands, hauling Canada’s economy into the 21st century by embracing artificial intelligence and a panoply of digital technologies to boost productivity and keep us globally competitive. But the federal government’s innovation agenda is still very much a work in progress. One of its pillars, the five marquee superclusters spaced evenly across the country, is mostly just an idea at this point, although $950 million in funding is beginning to flow. Does Canada feel more innovative than it did four years ago? Are we future-proofing our economy and seizing the jobs of tomorrow? Bains certainly thinks so and that belief will probably be part of the Liberal’s pitch to voters when the country goes to the polls later this year. Next week, he will release a 100-page government report called Building a Nation of Innovators that mostly serves as a ...
Read More
The race to future-proof the economy: Navdeep Bains on the state of innovation in Canada
Modern Consensus | Leo Jakobson, February 4, 2019 Move is latest series of steps by regulator to bring clarity and less confrontational approach to regulations enforcement The U.S. Securities and Exchange Commission wants to know if the technology to help it monitor major cryptocurrency blockchains for risk and regulatory compliance issues exists. The SEC is not looking to buy big data analytics tools at this time, but characterizes its interest as “conducting market research to determine the availability and technical capability,” of the tools presently available on the market, it announced in a notice on Jan. 31 What the SEC wants to know about is the “ability to provide the requested data but also an overview of the processes used to extract the data, convert the data into a reviewable format, and the verification steps to ensure there is no loss in data completeness and accuracy due to the data transformation tools and processes applied.” The software it wants would also make the data easy for SEC staff to read and understand on an ongoing basis, and would provide insights about that data—notably identifying who the data belongs to—as well as a way of ensuring the data is accurate and ...
Read More
SEC wants big data tools for monitoring and enforcing cryptocurrency market compliance
NCFA Canada | Feb 8, 2019 Ep24-Feb 8:  Re-imagining Philanthropy with Daryl Hatton About this episode:  On this Episode of the Fintech Friday's Podcast, our host Manseeb Khan sits down with Daryl Hatton the CEO of Connection Point. They chatted about microprojects, saving little girls and puppies and how to get hooked on Philanthropy. Enjoy! Focus on value and avoid the complicated terminology when growing new innovative markets Branding customer segment-focused funding products, white labeling collaborative uses cases Crowdfunding for good at the intersection of technology, people and impact Host: Manseeb Khan, NCFA, Fintech Fridays show host Guest: DARYL HATTON, Founder and CEO, ConnectionPoint / FundRazr (linkedin) BIO:  Daryl Hatton, CEO of award winning international crowdfunding company FundRazr and of the innovative sponsored crowdfunding company Sponsifi has founded multiple start-ups and helped bring one to a successful NASDAQ IPO in 1999. He actively serves as board member or advisor to handfuls of other hot companies in Canada. In addition, he is a Director and Crowdfunding Ambassador for the National Crowdfunding Association of Canada. As a social media guy and frequent public speaker, his Twitter tagline includes words like “#KingOfGastown, entrepreneur, cardiac survivor, foodie, whisky nut, philosopher, mentor, father and friend.” * Senior Business and Technology ...
Read More
FINTECH FRIDAY$ (EP24-Feb 8):  Re-imagining Philanthropy with Daryl Hatton, Founder and CEO of ConnectionPoint/FundRazr
Forbes | Michael del Castillo | Feb 4, 2019 It’s a balmy 80 degrees on a mid-December day in Singapore, and something is puzzling Allen Day, a 41-year-old data scientist. Using the tools he has developed at Google, he can see a mysterious concerted usage of artificial intelligence on the blockchain for Ethereum. Ether is the world’s third-largest cryptocurrency (after bitcoin and XRP), and it still sports a market cap of some $11 billion despite losing 83% of its value in 2018. Peering into its blockchain—the distributed database of transactions underpinning the cryptocurrency—Day detects a “whole bunch” of “autonomous agents” moving funds around “in an automated fashion.” While he doesn’t yet know who has created the AI, he suspects they could be the agents of cryptocurrency exchanges trading among themselves in order to artificially inflate ether’s price. “It’s not really just single agents doing things on their own,” Day says from Google’s Asia-Pacific headquarters. “They’re forming with other agents to have some larger group effect.” Day’s official title is senior developer advocate for Google Cloud, but he describes his role as “customer zero” for the company’s cloud computing efforts. As such it’s his job to anticipate demand before a product ...
Read More
Navigating Bitcoin, Ethereum, XRP: How Google Is Quietly Making Blockchains Searchable
Bloomberg | Doug Alexander | Feb 4, 2019 Without digital keys, clients lose access to coins, funds Board said last week that it was seeking creditor protection Digital-asset exchange Quadriga CX has a $200 million problem with no obvious solution -- just the latest cautionary tale in the unregulated world of cryptocurrencies. The online startup can’t retrieve about C$190 million ($145 million) in Bitcoin, Litecoin, Ether and other digital tokens held for its customers, according to court documents filed Jan. 31 in Halifax, Nova Scotia. Nor can Vancouver-based Quadriga CX pay the C$70 million in cash they’re owed. Access to Quadriga CX’s digital “wallets” -- an application that stores the keys to send and receive cryptocurrencies -- appears to have been lost with the passing of Quadriga CX Chief Executive Officer Gerald Cotten, who died Dec. 9 in India from complications of Crohn’s disease. He was 30. Cotten was always conscious about security -- the laptop, email addresses and messaging system he used to run the 5-year-old business were encrypted, according to an affidavit from his widow, Jennifer Robertson. He took sole responsibility for the handling of funds and coins and the banking and accounting side of the business and, ...
Read More
Crypto CEO Dies Holding Only Passwords That Can Unlock Millions in Customer Coins
Forbes | Jeff Kauflin | Feb 4, 2019 This article was updated on 2/4/19 to include Ripple, the fourth-most valuable private fintech company in the U.S.  Financial technology startups continue to attract a growing amount of attention and capital. In 2018, valuations of the biggest private companies bulged, and at least six new fintech unicorns were minted in the U.S. U.S. fintechs raised $12.4 billion in funding, or 43% more than 2017, reports CB Insights. That growth outpaced the 30% increase in venture investments across the entire U.S. market. And fintechs will need those dollars—they tend to burn about two to three times as much cash compared with other startups, according to an analysis by Brex, likely due to factors like regulatory hurdles. Here are the 10 most valuable private, venture-backed fintechs in the U.S.: 1. Stripe, $22.5 billion Originally a service to help small online sellers process payments, today Stripe serves tech giants like Microsoft and Amazon, too. In 2018 the company announced three new high-profile products, including credit card issuing technology, point-of-sale software and a billing platform for subscription businesses. Cofounders: CEO Patrick Collison, 30, and president John Collison, 28. Irish-born brothers, dropouts from MIT (Patrick) and Harvard (John) ...
Read More
The 11 Biggest Fintech Companies In America 2019

 

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