Their shareholdings in tech firms and other private companies are soaring
Opening Up Financial Services
Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Voices
Technology Due Diligence Process and Cyber Risks for Fintech Start-ups
Forward Security Inc. | Farshad Abasi | Nov 17, 2021
Picture this. You are the CEO of a large financial services company and are looking to acquire a smaller fintech company to expand your business. Everything within the company’s infrastructure looks normal.
Turns out, technology and security of the company wasn’t thoroughly tested, and after acquiring the company, you inherit a major security breach along with it, costing you millions of dollars. Believe it or not, this is exactly what happened to Paypal, when it acquired TIO Networks and they are not alone.
Paypal’s example proves the importance of incorporating thorough technology due diligence into the acquisition process of a company.
What Does the Due Diligence Process Entail?
To gauge what the due diligence process entails, let’s consider the example of a VC or a CEO of a fintech company who is interested in preparing their company for acquisition. After taking the first step to hire an investment banker to show the company to investors, there are three main stages of the Due Diligence Process. The first round of bids includes a high-level company evaluation, addressing the condition of the business, financials, and management team. A handful of bids progress to the second round of bids, which takes a deeper dive into the business. The interested party then submits a Letter of Intent (LOI) to indicate interest in acquiring the company.
See: OFSI Publishes Draft Guidelines on Technology and Cyber Risk Management
At the LOI stage, things could go awry if issues are found while evaluating the health of a company during the due diligence process (including legal diligence, accounting diligence, customer diligence, and technology/cybersecurity due diligence). After the LOI stage, if the investor is still interested in the company, the deal moves to the closing stage.
Why is Security Important in the Due Diligence Process?
In any investment, buyers are clearly looking for no problems with the company, as this could cost them millions in the future.
A buyer’s priority is to minimize risks and solve for sustainability and scalability through assessing three aspects of the company: people, process, and technology. Risks surrounding people could involve code development and knowledge distribution, while risks around the process typically entail sustainability and scalability. Risks surrounding technology often involve security issues and documentation surrounding open-source code. If you think your company will need to embark on the due diligence process in the next 6-12 months, it’s crucial to be thorough with documentation regarding all aspects of due diligence.
See: Crypto scams, DeFi hacks, and rug pulls: Why the crypto industry needs insurtech
To prove that a company doesn’t have issues, it’s important to provide the correct documentation and engage security from the beginning of the development process and have it ready for the due diligence process. Engaging security from the start leads to strong foundations in governance and policy as well as in the applications themselves. Consistent and diligent documentation from the start of the process also strengthens the validity of the company’s security posture.
Regarding the technology and security aspect of due diligence, it’s important to note that doing a risk assessment shows buyers that a company is truly worth the investment. It’s also crucial to know where your security issues lie by having a 3rd party look at the code to find loopholes. It assesses business impact and how likely a security breach is to occur, making it more valuable than security gaps or vulnerabilities. If any security issues are found, it’s key to have a plan of action for the investor or show progress on the issues that were found. Where open-source software is used, keeping thorough documentation on what is used will help tell the company’s story while preventing it from being put on the defensive.
Going forward, sellers should expect more scrutiny for technology and security aspects of the company. Therefore, any preparation on this front would be valuable. Buyers are also becoming more aware of what breaches exist and will ask sellers how they’ve prepared themselves. Buyers need to be able to ensure these breaches aren’t impacting them, as they don’t want to inherit liabilities.
What Are the Next Steps?
In short, add security early in the development process and document your controls to cover your bases. Apply security best practices while building your company and applications. Though it may seem more efficient in the short run, refrain from cutting corners, and get professionals to support you during the due diligence process. Spending money on a 3rd party assessment to find potential security loopholes is valuable, as this could save millions in transaction value. Remember, investing in security initially to ensure a strong security posture will only save millions of dollars in the long-term.
See: Fintech & Cybersecurity: Key Risks and Solutions
If you’re looking to learn more about what to do to secure your company including your products and infrastructure, check out the Security 4 Startups (S4S) framework: https://www.security4startups.com/. S4S was designed by a group of investors and small, mid, and large-corporation CISOs to help startups combat their biggest security risks in a balanced manner. If you’re looking for an in-depth security consultation, Forward Security and RiskAware are always here to help, so get in touch: contactus@fwdsec.com.
Authored by:
Farshad Abasi, Founder, Chief Security Officer at Forward Security Inc.
At Forward Security we are all about doing application, cloud, and information security better. Our team tackles security using a systematic approach, leveraging standards based and repeatable processes. We are incredibly passionate about delivering the best security solutions, and are driven to help our clients achieve the highest level of security to enable business growth. https://forwardsecurity.com/
Michael Castro, Founder, Risk Executive at RiskAware
RiskAware was incorporated in 2018 to help address the gap with organizations utilizing part-time or fractional CISO and to offer executive leadership services. We serve organizations of all sizes and specialize in small and mid-size businesses (SMBs) in all verticals, including Not-For-Profits and Startups. https://riskaware.io/
This article is featured in NCFA's digital magazine, Fintech Confidential (Issue 4 Oct 2021). Click to read the latest thought leadership, insights and trends about Fintech in Canada:
Checkout NCFA's digital magazine, Fintech Confidential (Issue 4) --> 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
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China’s Communist authorities are reinventing state capitalism
The Economist | Hong Kong | Nov 14, 2021
Their shareholdings in tech firms and other private companies are soaring
IT MIGHT BE confused for one of the world’s savviest tech investors. The portfolio of China Internet Investment Fund (CIIF) is the envy of venture capitalists everywhere. It owns part of ByteDance, the Beijing-based parent of social media group TikTok, and Weibo, the Twitter-like platform. It has a stake in SenseTime, one of China’s most advanced artificial intelligence (AI) groups, and Kuaishou, a popular Chinese short-video service. The firm’s investment list reads like a who’s who of the industry.
More stunning are the terms of these investment deals. CIIF’s 1% stake in a ByteDance subsidary gives it the power to appoint one of three board members in a unit that holds key licences for operating its domestic short-video business. A similar bargain has been struck with Weibo, which is listed in New York, with CIIF picking up 1% at a cost of just 10.7m yuan ($1.5m). These companies hardly need more capital. Nor is CIIF , armed with plans for a 100bn yuan fund—enough to rival a major Silicon Valley venture-capital firm—overly concerned with the outsize returns its investments will almost certainly deliver.
See: Jack Ma’s Double-Whammy Marks the End of China Tech’s Golden Age
That is because the outfit, founded a mere five years ago, is no typical investor. CIIF is itself mostly owned by the Cyberspace Administration of China (CAC), a powerful internet watchdog. The arrangement is akin to America’s Federal Communications Commission taking discounted stakes in tech groups such as Facebook and Twitter, appointing board members and then steering them in the direction it sees fit.
Bringing the commanding heights of the modern economy to heel might be expected from what is, after all, a communist regime. Nor is state investment in private companies anything new: “guidance funds”, massive state vehicles that direct money towards semiconductors and other favoured areas, have become a fixture of China’s investment landscape. But the extent of such activity over the past two decades has risen sharply.
The jump in private companies invested in by the state since 2000 has accounted for nearly all of China’s increase in new registered capital. Public investments in private-sector companies surged from $9.4bn in 2016 to $125bn in 2020, though looks set to fall this year, according to data from Dealogic, a research firm (see chart 2).
See: China’s ‘splinternet’ will create a state-controlled alternative cyberspace
This means the growth of business in the country is inextricably linked to the state. The tech industry has been a notable focus. Regulation has long hemmed in the sector, as has the occasional bringing down of a tycoon by one or two notches. This is now considered insufficient to ensure entrepreneurs are kept in line.
Government “golden shares”, tiny investments that give a high degree of control over companies, have been rumoured for years
Thus extending the government’s reach directly into more private companies via financial interests is emerging as a mechanism to control them. Government “golden shares”, tiny investments that give a high degree of control over companies, have been rumoured for years; only recently have they been disclosed in the likes of Weibo and ByteDance. It is likely this feature of state investment will expand, says Nana Li of the Asian Corporate Governance Association, an investor interest group.
Unwittingly tagging along for the ride have been global investors who had once spent freely to gain a foothold in the booming Chinese market. Americans and others are unlikely to be comfortable with the new arrangements. More might get snared: CAC, the ultimate power behind the state investments in tech, was recently given the authority to vet the overseas share listings of large Chinese tech groups.
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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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Views from the Market: Midmarket M&A and Private Equity Podcast
Stikeman Elliot | Mario Nigro | Oct 27, 2021
Please join us – at your convenience – for a new series of podcasts on private equity and midmarket M&A, with a focus on Canada. In these concise 15-minute segments, a wide range of industry participants discuss the deal market trends that they’ve been seeing. The host and originator of the series is Mario Nigro, M&A partner at Stikeman Elliott in Toronto.
See: Tiger vs. SoftBank: Inside the investing playbooks that upended Silicon Valley
| Episode 21: What is Driving Today’s High Valuations and Can It Continue? Dr. Howard Johnson, Canadian Market Leader at Duff & Phelps |
Mario’s guest is Howard Johnson, Canadian Market Leader at Duff & Phelps and managing director in its M&A Advisory practice. A veteran of the Canadian midmarket and a valuation expert, Howard believes that today’s high valuations and (often) double-digit multiples are likely to persist since many public companies and PE firms are cash-rich and eager to invest. Tax reform and the uncertainty of pandemic-era earnings analysis may emerge as complicating factors, however. | Spotify | Apple Podcasts (iTunes) | SoundCloud |
| Episode 20: What Does A Tech-focused U.S. Private Equity Firm See In Canada? Doyl Burkett, Managing Partner, Integrity Growth Partners |
Doyl Burkett, Managing Partner of Los Angeles-based Integrity Growth Partners, joins Mario Nigro to discuss PE investments in the software and tech-enabled business services space. Integrity typically invests $10-40m in founder-owned-and-operated businesses, often taking non-controlling positions. Doyl’s strategic focus on “underserved geographies” has generated many opportunities across Canada. | Spotify | Apple Podcasts (iTunes) | SoundCloud |
| Episode 19: Scaling Canada’s Smaller Successful Companies: A New Solution to an Old Challenge George Rossolatos, CEO of Canadian Business Growth Fund |
Joining Mario Nigro is George Rossolatos, CEO of Toronto-based Canadian Business Growth Fund (CBGF), a private equity investor that takes minority stakes in Canadian companies, typically those in the $10-25m revenue range, working with them to promote long-term growth. CBGF was created in 2018, with George as Founding CEO, in response to concerns that Canada needs to get better at growing its successful startups into strong midmarket players. | Spotify | Apple Podcasts (iTunes) | SoundCloud |
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
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How Decentralized Technologies are Transforming Platform Economics
bloxMove | Harry Behrens | Nov 11, 2021
Decentralized peer-to-peer networks and platform economics
Blockchain, Distributed Ledger Technologies (DLT) as well as other decentralized technologies, such as Decentralized Identifiers (DID) provide technical mechanisms which lend themselves very well to building fully automated transaction platforms which can manage financial transactions from contract signing all the way to financial settlement without the need for intermediaries. The underlying peer-to-peer (P2P) principles, in which all participants are equal peers and operate identical nodes provide a technical analogue to a “commons” technical infrastructure which provides the transaction execution layer to those wishing to conduct decentralized commerce. Decentralized platform economics are revolutionizing the way services and delivered, consumed, and settled.
See: Tokenizing Assets and Unlocking Value on the Blockchain
Blockchain-powered cryptographic networks (‘Cryptonetworks’) lend themselves very well to peer-to-peer governance models in which a common resource - the Cryptonetwork - is community-governed. A major leap between the world-wide web as we know it, is that cryptonetworks have a secure and trusted mechanism for incentivization and value transfer known as ‘token-economics’. Token payouts are calculated as part of the smart contract layer and securely transferred as part of the Blockchain’s essential function, namely securing consensus. There is no need for an intermediary to manage and enforce terms and conditions, invoicing, payment and settlement.
bloXmove: a decentralized platform for Mobility as a Service (MaaS)
As an example of how this can be applied to real-world applications, take the market for urban mobility. The “product” or rather “service” urban mobility offers, is neither this car nor that scooter, but rather seamless travel through a city – mobility as a service. Users should be able to roam across services delivered by different operators. This means they only register their identity and credentials once and these verified credentials serve to unlock any service provided by any service provider in the ecosystem – this being the paradigm of “roaming”. By using decentralized technologies such as Decentralized Identifiers (DID) and Blockchain technologies the complete service lifecycle can be orchestrated, executed and settled through a common decentralized infrastructure: bloXmove.
Cryptonetworks are digital communities of self-sovereign peers
According to the International Cooperative Alliance a cooperative is:
“…an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly owned and democratically-controlled enterprise.”
“In a cooperative ecosystem, companies interact with each other based on a digital trust infrastructure. The members can network their services and thus temporarily access resources of competitors. The bottom line is that they can better meet the customer needs. At the same time, all players retain their independence, their data sovereignty and have the same market opportunities.”, Thomas Müller, evan.network
Cooperatives have a long history. In their formalized and legal form, they appear in the 19th century.
See: Can Blockchain Solutions Unlock Capital to Fix Our Planet?
“These legal entities have a range of social characteristics. Membership is open, meaning that anyone who satisfies certain non-discriminatory conditions may join. Economic benefits are distributed proportionally to each member's level of participation in the cooperative…(Wikipedia)”.
Prominent examples of cooperative business networks are:
- VISA, the well-known ubiquitous credit card, which in its pre-IPO form was a cooperative of banks who cooperated to create a new interoperable, customer-facing financial product.
- Star Alliance, which is not a cooperative in the legal sense of the word but rather an “alliance” of cooperating airlines.
See:
How blockchain and cryptocurrencies can help build a greener future
CB Insights report features over 50 sectors Blockchain is transforming (beyond just banking)
Cooperative organisations are jointly governed by those who use or consume the cooperative’s services, hence:
- All members have an interest to grow the cooperative and make it profitable.
- The cooperative is built to provide services which enable the businesses of each community member and therefore provides direct benefit to each and all.
- The revenues of the cooperative originate from fees by the cooperative members.
- The revenues of the cooperatives belong to the members of the cooperative.
- Customer relationships and therefore access to demand and liquidity stays with the individual members.
This creates a self-reinforcing loop of checks & balances. Members of a cooperative are incentivized to fund the cooperative with their fees while at the same time being in control to keep those fees within a range sustainable to their individual core business.
A common infrastructure with the goal of achieving net-zero carbon emission
Here I quote what to me has become a manifest and gave me the inspiration for the name of the company I have the privilege of co-founding: Power & Mobility Ltd.:
“Making the EU the world’s first climate-neutral economy will require more than just an energy transition. To cut CO2 emissions by 2050, many sectors will need to make far-reaching changes. Two sectors that play a key role in society have the leverage needed to do this: power and mobility.”
See: 9 digital assets powering the DeFi revolution?
By creating a common infrastructure across these two sectors – sector coupling Power & Mobility – balancing of renewable power grids using vehicle-to-grid (V2G) technologies has become possible. By the economical and regulatory standards of Europe it should be obvious that such a platform can, may and should not be a centralized platform at the mercy of one centralized, profit-maximizing hyper-aggregator. Rather, such a platform needs to be thought of, built and operated along cooperative mechanisms. Decentralized technologies lend themselves beautifully to this!
Conclusion: Decentralized networks provide a commons for commerce to digital cooperatives
The last twenty years have shown us how software indeed is eating the world and have brought powerful new actors to the world of international commerce. Software platforms, have now entered a phase where they constitute a similar danger to competition and market balance as Standard Oil did in the early 1900s. Politicians and regulators are recognizing this and are addressing it with the means at their disposal.
See: What’s possible with Non Fungible Tokens (NFTs)
Blockchain and other decentralized technologies have emerged over the last ten years and provide a paradigm by which new cooperative platforms can be built, combining the advantages platforms offer; but with a more sustainable balance of power among market participants. Tokens provide a mechanism to program the flow of money into community operated and highly secure commercial platforms. Combining the technical advantages of decentralization with the purpose and incentives of cooperatives, can create a powerful counterbalance to centralized platforms. As well as unleash new business models in which power does not necessarily accrue to centralized market makers but is jointly held by a community of equal cooperative members.
Authored by:
Harry Behrens, Chairman and CTO of Power & Mobility, bloXmove.com, founded and headed the Daimler Mobility Blockchain Factory until May 2021. He is a veteran Blockchain evangelist since 2012. In 2016 he co-founded the DFS Blockchain swarm and initiated the development of the smartVIN® Blockchain platform. Before starting his new position as “Mr. Blockchain” for DMO AG, he was Head of IT for Mobility and Digital Finance for MBAFC (DFS China). Harry has a Master (Diplom) in Computer Science from the TU Muenchen, with a thesis on Neural Networks, and a PhD in Information Engineering from the University of Tokyo with a thesis on Distributed Artificial Intelligence. He speaks six languages fluently and is trying to learn Mandarin Chinese. In his private time he enjoys practicing languages and reading about history.
This article is featured in NCFA's digital magazine, Fintech Confidential (Issue 4 Oct 2021). Click to read the latest thought leadership, insights and trends about Fintech in Canada:
Checkout NCFA's digital magazine, Fintech Confidential (Issue 4) --> 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
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GBBC: International Blockchain Law Journal
Global Blockchain Business Council | Nov 2021
The GBBC's Legal & Regulatory Group is pleased to announce the release of Volume I of the International Journal of Blockchain Law (IJBL). IJBL is an open access online journal of blockchain law, written and edited by lawyers, and designed to help business and non-legal communities better understand blockchain and digital assets.
The inaugural volume of the IJBL includes an article by U.S. Securities and Exchange (SEC) Commissioner Caroline Crenshaw on "DeFi Risk, Regulations, and Opportunities," as well as articles on the viability of crypto securities in the U.S., legal disputes involving Decentralized Autonomous Organizations (DAOs), Non-Fungible Tokens (NFTs), and smart contracts.
See: Can Blockchain Solutions Unlock Capital to Fix Our Planet?
GBBC would like to extend a special thank you the international team of editors behind IJBL:
- Editor-in-Chief: Dr. Matthias Artzt, Senior Legal Counsel, Deutsche Bank AG; Editor and Co-Author of the ‘Handbook of Blockchain Law’
- Professor Locknie Hsu, Professor of Law, Singapore Management University
- Stephen Palley, Partner, Anderson Kill
- Andrea Tinianow, Chief Legal Officer, IOV Labs
- Thiago Luís Sombra, Partner, Mattos Filho
- Jake van der Laan, Chief Information Officer and Director, IT & Regulatory Informatics, Financial and Consumer Services Commission, New Brunswick, Canada (FCNB); Co-Author of ‘Handbook of Blockchain Law’
- Gary D. Weingarden, Assistant Vice President, Data Protection Officer, Notarize, Inc.
Download the 40 page PDF journal --> 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
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9 digital assets powering the DeFi revolution?
Forkast | Alex Tapscott | Nov 8, 2021
Financial services, foundational to all industry and economic activity, is going through the greatest upheaval since the invention of double-entry bookkeeping in the Middle Ages. Every aspect of the industry is about to change, from how we move and store value to how we access credit, invest, trade, transact and insure against risk. But this upheaval is about more than changes to existing industries like banking or insurance. It’s about enabling new business models and organizational capabilities that will transform existing industries, redefine the architecture of the firm and other institutions, change profoundly how we interact online with companies and with each other, alter the fabric of daily life, reimagine the nature of work and more.
See: Want to launch an ecosystem? Consider Tokenization
Blockchains are tamper-resistant ledgers of transactions distributed across a network maintained by many parties. These shared ledgers serve as common sources of the truth. In effect, they supplant the records of banks, governments, corporations and the large technology companies that intermediate much of the digital economy. Blockchains are the first digital medium for value, just as the internet was the first digital medium for information.
In this brave new world, we can move, store, manage, organize, govern, create, fragment and direct anything and everything of value to whatever end we desire, peer to peer.
Financial services are no longer centralized within an industry; they are decentralized across blockchain networks such as Bitcoin, Ethereum, Solana, Terra Luna, Avalanche and Cosmos. Decentralized finance (DeFi) is shaking the windows and rattling the walls of Wall Street banks, government agencies and global institutions. Call it the DeFi Revolution. Like many revolutions, it holds great promise and great peril. Critics malign its chaotic and seemingly uncoordinated growth and its potential to displace jobs and accuse it of undermining the monetary sovereignty of governments, exacerbating inequality and warming the planet.
See: Barclay’s Rise report: Decrypting Crypto November 2021
To be clear, DeFi is not fintech. Fintech applications, while important, still require banks and other intermediaries to establish trust between parties, verify account balances and perform the business logic — clearing, settling, contracting and so forth — that makes the system work. And in the end, most fintech innovation is digital wallpaper — a sleek user interface that conceals the old system beneath. Instead of slapping on a fresh coat of paint, DeFi reimagines finance from a networked point of view with digitally native assets, or tokens.
Our token taxonomy has grown to nine assets:
Non–fungible tokens (NFTs): NFTs are unique, provably scarce digital assets; they provide a means to verify the scarcity, provenance and ownership of these assets. They can also represent physical assets, such as sports memorabilia and luxury goods. Today they are primarily used for art, collectibles and digital assets inside games. Ultimately, they can be used as identities, to represent intellectual property and express ownership of many other kinds of virtual goods. NFTs have exploded in popularity. OpenSea, one single NFT site, recorded over US$3.4 billion in transaction volume in a single month in August 2021.
See: WEF Insight Report: Digital Assets, Distributed Ledger Technology, and the Future of Capital Markets
Stablecoins: Stablecoins are cryptoassets — such as USDT, USDC, DAI and UST — with stable value pegged typically to the U.S. dollar. Now with a total market value that exceeds US$130 billion, stablecoins use different methods to stabilize their value. Centralized stablecoins are backed by deposits of cash and equivalents inside financial institutions like banks. Decentralized stablecoins are typically collateralized by cryptoassets held in smart contracts.
Governance tokens: Governance tokens such as Uniswap’s UNI, Aave’s AAVE, Compound’s COMP and Yearn Finance’s YFI give holders say in the governance, specifically the allocation of resources from a common wallet of decentralized autonomous organizations (DAOs) and decentralized applications, or dApps. As dApps take in more assets and users, their governance tokens often appreciate as the economic value they control increases, and their fees increase. For example, the value of UNI, native token to the Uniswap decentralized exchange, is over US$11 billion.
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
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Open banking continues to evolve — what’s next?
Sifted | Steph Bailey | Nov 3, 2021
Opening Up Financial Services
Investors are still betting big on open banking: in the past three months, TrueLayer announced a $130m funding round led by Tiger Global, Visa bought rival Tink for $2bn, Yapily announced its $51m Series B raise and Mastercard doubled down by acquiring Aiia — a Danish startup that will allow Mastercard to do credit scoring.
So why are investors flashing the cash when open banking is still in its nascency? Back in April, Yapily founder Stefano Vaccino told Sifted that VCs are less concerned with monetisation and more with the market’s raw opportunity.
See: Digital Banking / Analytics / Infrastructure companies in Canada
“Investors aren’t looking at revenue multipliers, but the size of the market… This is a space that for the next 10 to 15 years will continue to grow, and there’s an opportunity to build a company that is $100bn,” Vaccino said.
One of the opportunities in open banking is the payments market, where fintechs are using the vast network of bank connectivity to fuel a new era of account to account (A2A) transactions. That’s allowing consumers to pay directly into merchants’ bank accounts rather than using a card.
Early open banking players like Tink, Plaid, Bankin’ and TrueLayer — who all began by offering data connectivity — have now started branching into the payments space. They’ve recently been joined by new players including Vyne, BOPP, Trilo and Banked.
“There’s an amazing thing in fintech generally called coopetition, where there’s an acceptance that you can’t be good at everything,” he says. “Most fintechs and people in the industry now consider the competition as part of what is needed to deliver the solutions you need.”
See: Privacy Implications of an Open Banking System in Canada
A key piece of European payments legislation called PSD2 came into effect in 2018 and boosted the open banking sector by forcing UK banks to open up their data (albeit to varying quality levels). McDougall now says similar legislation is needed in other countries.
“What we’re going to need over the years ahead is the availability of equivalent regulatory frameworks in these other jurisdictions,” he says. “So that European open banking works seamlessly with North American open banking etc.”
The UK is now nearing four million open banking customers, which is behind predictions, but with the right regulation and products, 40m people could have accessed open banking services by 2025. However, surveys suggest some customers still have concerns over protecting their data.
But Greenwood says there are 58 countries currently rolling out their own version of open banking. While the UK was among the first to adopt it, he says other countries can learn from it.
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
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