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News on China cryptocurrency and more reforms

Schulte Research | Paul Shulte | Aug 21, 2019

China coin crypto - News on China cryptocurrency and more reformsChina is barreling forward on reforms and rolling out the crypto currency. It will be the first central bank to do so.  This will give added momentum to Libra.

Libra could become a new anchor market for global IPOs. Take this seriously. Join if you can.  I’m pretty sure I’m right that it has backing from the very top of the US govt.

1. Cryptocurrency — The China coin is due to be rolled out in November. I hear that the distribution of the coin will be limited to 7 players:

  • The big banks: CCB, ICBC, BOC, ABC.
  • Alibaba and Tencent.   Positive momentum,,,
  • Union Pay.   Interesting — to keep this alive.

All others will be secondary.  The PBOC head did on SUnday make an explicit reference to Libra. As I suspected, China rightly sees Libra as a challenge to China’s early commanding lead in e commerce and payments in all of Asia and through the Silk Road. It clearly is.   Interestingly, HSBC and Stan Chart are cut out. No foreign banks in the consortium.    No foreign firms in Libra (except, weirdly,  Mercato Libra from Arge).

2. China yesterday doubled the size of the free trade zone in Shanghai and has allowed partial capital account convertibility in Shanghai.  This is big and a challenge to HK.  It will also drop duties in Shanghai.

3. ALibaba has cancelled the secondary listing in HK until further notice due to the instability. Big negative for HK.

4. Singapore has suspended all university exchange programs between Singapore and Hong Kong for this year due to the instability.  SO, people are stuck in Singapore to finish programs.

Check out Paul Schulte's new book: AI & Quantum Computing for Finance & Insurance: PRC VS US. https://www.worldscientific.com/worldscibooks/10.1142/11371

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NCFA Jan 2018 resize - News on China cryptocurrency and more reforms 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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Investors, ‘starved for returns,’ flood private markets in search of high-growth opportunities

CNBC | Kate Rooney | Aug 12, 2019

  • unicorn - News on China cryptocurrency and more reforms
  • Money spent in venture capital and other alternative investments is surging as investors look for riskier, but higher-yielding investments.
  • The trend coincides with relatively low returns from more conventional Wall Street investments such as stocks and bonds, and a drop in the number of publicly traded companies.
  • “In a world where big institutional investors find themselves starved for returns, it’s not surprising that they have steadily increased allocations to private markets and you’ve seen capital continuing to flow into the asset class,” says McKinsey Partner Bryce Klempner.

Many global investors are turning toward Silicon Valley instead of Wall Street in search of returns.

The total invested in private markets hit all-time highs last year and continues to break multi-decade records this year. In the first half of the year, total investments in venture capital hit a 19-year high of $53.3 billion, according to data from Refinitiv published last week. That marked a 21% increase by total dollar amount compared to the first half of 2018.

The steady stream of funding comes alongside a drop in the number of publicly listed companies, rock-bottom global bond yields, and historically weak small-cap performance.

“The incentives for early exposure to rapidly growing, mature companies are still intact,”

PitchbBook senior manager Garrett James Black said in the firm’s 2019 “Unicorn Report” published Monday. “With those imperatives in place and current market conditions — despite concern about a supposed imminent recession— looking to persist, unicorns aren’t going away anytime soon.”

Analysts say the trend is largely the result of relatively lower expectations for Wall Street investments such as stocks or bonds. As the trade war between the U.S. and China escalates and economic indicators weaken, investors have fled to safer assets such as Treasurys. The 10-year Treasury note fell below 1.7% Monday.

‘Starved for returns’

Money managers for pensions and endowments are turning to alternative investments — private equity, venture capital or hedge funds – to “keep up with expectations that they set years ago with their stakeholders,” according to McKinsey Partner Bryce Klempner.

“In a world where big institutional investors find themselves starved for returns, it’s not surprising that they have steadily increased allocations to private markets and you’ve seen capital continuing to flow into the asset class,” Klempner told CNBC in a phone interview. “Private equity has, on average, managed to outperform public markets over the last couple of decades.”

Growth in smaller public companies has been significantly slower than their private-market counterparts. PitchBook looked at the valuations of late-stage, Series D funded companies compared to the small-cap benchmark Russell 2000. That index is in correction territory, trading nearly 14% below its 52-week intraday high in August of 2018. The S&P 500 is off by 4% from its high.series D growth - News on China cryptocurrency and more reforms

See:  Blockchain’s potential will continue to spur public and private investment

Meanwhile, there has also been a contraction in the total number of public companies. Part of that is due to mergers and consolidation, but Klempner said managers — not just investors — tend to prefer private ownership, too. They’re able to operate “outside of the quarterly spotlight or the glare of public markets,” and often take a longer-term view, he said.

“As a consequence, you’ve seen considerable management talent migrate to private equity portfolio companies,” Klempner said.

One factor allowing companies to stay private was a change in legislation. The 2012 JOBS Act raised the limit of private shareholders in a company from 500 to 2,000 – meaning companies can stay private until they reach that limit. And in many ways, companies don’t need to go public: They can raise money with ease from private investors and don’t need the cash injection that comes with an initial public offering.

Foreign buyers

Foreign investors are also looking for early entrance into quickly growing tech companies, which in the case of Uber and WeWork, stayed off of public stock exchanges for a decade. Last year, venture capital deals that included “tourist” investors soared to more than $45 billion over 102 investments. Halfway through 2019, the deal total was at 53.

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NCFA Jan 2018 resize - News on China cryptocurrency and more reforms 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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Fully automated decision making AI systems: the right to human intervention and other safeguards

Wired UK Gov | Information Commissioner's Office | Aug 12, 2019

Automated AI decisions - News on China cryptocurrency and more reformsReuben Binns, our Research Fellow in Artificial Intelligence (AI), and Valeria Gallo, Technology Policy Adviser, discuss some of the key safeguards organisations should implement when using solely automated AI systems to make decisions with significant impacts on data subjects.

This post is part of our ongoing Call for Input on developing the ICO framework for auditing AI. We encourage you to share your views by leaving a comment below or by emailing us at AIAuditingFramework@ico.org.uk.

The General Data Protection Regulation (GDPR) requires organisations to implement suitable safeguards when processing personal data to make solely automated decisions that have a legal or similarly significant impact on individuals. These safeguards include the right for data subjects:

  • to obtain human intervention;
  • to express their point of view; and
  • to contest the decision made about them.

See:  How Data-driven Strategies Can Improve Impact Investing Outcomes

These safeguards cannot be token gestures. Guidance published by the European Data Protection Board (EDPB) states that human intervention involve

a review of the decision, which “must be carried out by someone who has the appropriate authority and capability to change the decision”.  The review should include a “thorough assessment of all the relevant data, including any additional information provided by the data subject.”

In this respect, the conditions under which human intervention will qualify as meaningful are similar to those that apply to human oversight in ‘non-solely automated’ systems. However, a key difference is that in solely automated contexts, human intervention is only required on a case-by-case basis to safeguard the data subject’s rights.

Why is this a particular issue for AI systems?

The type and complexity of the systems involved in making solely automated decisions will affect the nature and severity of the risk to people’s data protection rights and will raise different considerations, as well as compliance and risk management challenges.

Basic systems, which automate a relatively small number of explicitly written rules (eg a set of clearly expressed ‘if-then’ rules to determine a customer’s eligibility for a product) are unlikely to be considered AI. It should also be relatively easy for a human reviewer to identify and rectify any mistake, if a decision is challenged by a data subject because of system’s high interpretability.

However other systems, such as those based on machine learning (ML), may be more complex and present more challenges for meaningful human review. ML systems make predictions or classifications about people based on data patterns. Even when they are highly accurate, they will occasionally reach the wrong decision in an individual case. Errors may not be easy for a human reviewer to identify, understand or fix.

While not every challenge on the part of data subject will be valid, organisations should expect that many could be. There are two particular reasons why this may be the case in ML systems:

  • The individual is an ‘outlier’, ie their circumstances are substantially different from those considered in the training data used to build the AI system. Because the ML model has not been trained on enough data about similar individuals, it can make incorrect predictions or classifications.
  • Assumptions in the AI design can be challenged, for example a continuous variable such as age, might have been broken up (‘binned’) into discrete age ranges, eg 20-39, as part of the modelling process. Finer-grained ‘bins’ may result in a different model with substantially different predictions for people of different ages. The validity of this data pre-processing and other design choices may only come into question as a result of an individual’s challenge.

See:  Innovative new law opens Guernsey up to Artificial Intelligence

What should organisations do?

Many of the controls required to ensure compliance with the GDPR’s provisions on solely automated systems are very similar to those necessary to ensure the meaningfulness of human reviews in non-solely automated AI systems.

Organisations should:

  • consider the system requirements necessary to support a meaningful human review from the design phase. Particularly, the interpretability requirements and effective user-interface design to support human reviews and interventions;
  • design and deliver appropriate training and support for human reviewers; and
  • give staff the appropriate authority, incentives and support to address or escalate data subjects’ concerns and, if necessary, override the AI system’s decision.

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NCFA Jan 2018 resize - News on China cryptocurrency and more reforms 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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Capital One data breach shows why it shouldn’t be a tech company that does banking

ComplianceX | The Compliance Exchange | Aug 8, 2019

digital rainfall - News on China cryptocurrency and more reformsOnce upon a time, any financial institution entrusted with your money and sensitive information would be housed in an imposing building made of granite. Its vault, often visible from the lobby, was formidable. And its managers would always be prudent, conservative types. Think Fidelity Fiduciary Bank, the fictional institution in the Mary Poppins movies, whose chairman in the original film sang: “Invest your tuppence wisely in the bank, safe and sound, soon that tuppence, safely invested in the bank, will compound.”

The idea was to convey a sense of security so that people would feel good about depositing their hard-earned cash and storing their prized possessions in safe deposit boxes. It spilled over to investors who saw bank stocks as prudent, though hardly spectacular, investments.

Nowadays, though, banks can’t do enough to shed the dowdy images, perhaps none more so than Virginia-based Capital One Financial Corp. During an earnings report this year, CEO Richard Fairbank all but said that he did not view his bank as, well, a bank:

“What we’re doing at Capital One is building a technology company that does banking, instead of a bank that just uses technology.”

Which brings us to the company’s announcement that a lone hacker — allegedly a troubled 33-year-old woman in Seattle — had managed to penetrate its firewall to acquire sensitive data on more than 100 million card customers and applicants.

The sad truth is that many modern banks don’t much care about people’s private information. The same apparently goes for companies that work with banks. On the same day the Capital One breach was reported, credit rating agency Equifax agreed to pay $700 million to settle a 2017 data breach.

Institutions might say they do care, but what really matters is how fast they can digitize everything about their company and migrate it to the cloud. By doing this they increase their profit margins and rates of growth, and become Wall Street darlings.

It’s not hard to see the financial pressure on banks. Since the Great Recession, their stock performance has been so-so, while tech companies have done extremely well. Anything that they could do to function more like tech companies that do finance, rather than vise versa, could make them hot properties.

See: 

Tech companies, however, are bad examples to follow. They collect data on people’s habits that allow advertisers, political operatives, hostile foreign powers and others to glean valuable insights. And banks hold even more sensitive information than do most tech outfits.

It’s one thing to be lax and self-interested with people’s web surfing histories or social media contacts. It’s quite another to be cavalier with account information, Social Security numbers and credit scores. These can be sold to people interested in taking out fraudulent loans, making fraudulent purchases and engaging in other forms of identity theft.

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NCFA Jan 2018 resize - News on China cryptocurrency and more reforms 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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Here’s The Case For A $100,000 Bitcoin Price By The End Of 2021

Forbes | Kyle Torpey | Aug 4, 2019

Julia chatterly interview with anthony pompliano - News on China cryptocurrency and more reformsThe Bitcoin price has been on a tremendous run in 2019, roughly tripling its price in U.S. dollars since the start of the year. That said, Morgan Creek Digital co-founder Anthony Pompliano thinks the party is just getting started.

Pompliano has predicted that the Bitcoin price will reach $100,000 by the end of 2021, and he was recently asked to explain his point of view during an interview with CNN’s Julia Chatterley.

Digital Gold and Loose Monetary Policy

In the past, Pompliano has described the trend towards loose monetary policy combined with Bitcoin’s upcoming halving event as the “perfect storm” for the rise of the digital asset. Pompliano explained this theory during his CNN interview.

See:  Check out the interview here on CNN with Julia Chatterly and Anthony Pompliano

“Whenever we get to a recessive period or kind of slowing growth, central banks have kind of two tools: They can cut interest rates, which they did yesterday, and they can print money (quantitative easing). And so, when they do both of those things, it usually takes anywhere between 6 to 18 months to feel the effect of those tools, and what it’s going to do is it’s going to coincide with the Bitcoin halving,” said Pompliano.

A halving event in Bitcoin is when the amount of Bitcoin that are generated by miners every ten minutes is cut in half. Bitcoin’s monetary policy was “set in stone” when the network went live back in 2009, and the scheduled issuance of new Bitcoin is halved roughly every four years.

Originally, 50 Bitcoin were created every ten minutes. Next year, the number of new Bitcoin created in each new block will drop from 12.5 to 6.25.

See:  Blockchain Technology and the UN: The Sustainable Development Goals

While gold has historically been viewed as a safe haven asset in times of monetary easing, Pompliano covered a couple of the benefits of Bitcoin over gold during his CNN interview.

“The difference is, between Bitcoin and gold, with Bitcoin, we know exactly how many is getting created, so 1,800 Bitcoin are going to be created today. The second thing is we know the total supply available, which is 21 million. So, it’s not: Hey I wonder how much is in the ground. We know exactly how much it is, and we can actually go and audit or verify the software code of the system,” said Pompliano.

Pompliano is Not Alone

It should be noted that, back in 2017, Pompliano also predicted a $100,000 Bitcoin price by 2019. However, he’s not exactly alone with his latest forecast for 2021.

Pantera CEO Dan Morehead has said there’s a “good shot” the Bitcoin price will hit $42,000 by the end of 2019, and the data used as the basis for his prediction is even more bullish than Pompliano’s $100,000 price point.

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NCFA Jan 2018 resize - News on China cryptocurrency and more reforms 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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Tech sector in limbo as UCP freezes investor tax credit program

Calgary Herald | Amanda Stephenson | Aug 2, 2019

Calgary - News on China cryptocurrency and more reformsEntrepreneurs say a decision by the Kenney government to freeze a tax credit program that helps small businesses access capital could derail the province's technology sector just as it is starting to take off.

Entrepreneurs say a decision by the Kenney government to freeze a tax credit program that helps small businesses access capital could derail Alberta’s technology sector just as it is starting to take off.

A government spokesman confirmed Thursday that applications for the Alberta investor tax credit — which offers a 30 per cent tax credit to private investors who put money into companies doing work in non-traditional sectors such as information technology, clean technology, health technology, interactive digital media and digital animation — are no longer being processed, in spite of the program’s website noting there is still $6.1 million in tax credits available for this year.

See:  Alberta wants to kickstart investment with tax credits (from 2016)

Justin Brattinga, press secretary for Economic Development Minister Tanya Fir, said the future of the investor tax credit — along with other business tax credits introduced by the NDP government, including the capital investment tax credit and the digital media credit — is uncertain. He added the government believes it has already taken steps to make Alberta more competitive for business and investment by cutting the corporate tax rate.

“We are reviewing these programs to ensure that they are an effective and responsible use of taxpayer dollars,” Brattinga said in an email.

However, proponents of the credit say it has proven to be an effective way of getting much-needed venture capital into the hands of new industries, in a province where investment dollars have typically gone to oil and gas. While the program — which was modelled after successful versions in other jurisdictions, including B.C. and Manitoba — encountered some bumps in its early stages, by the end of 2018, the $28.1 million in tax credits that had been approved had leveraged $94 million in investment for small and mid-sized businesses.

“It really encouraged a lot of investors that are traditionally energy investors or real estate investors to invest in technology,” said Adrian Camara, CEO of Calgary-based Athennian, which has developed a cloud software program for use in the legal profession.

Camara said his company, which used the investor tax credit to attract early-stage funding, has grown in just 3½ years to employ 20 full-time staff and now has customers around the globe. But he said he is fearful of what could happen to other startup companies if they no longer have access to the program.

“It’s going to be impossible to raise a seed round into a technology company in Calgary,” Camara said. “I’m very concerned for companies that are coming up behind us, the next stage of companies. I think there is a risk that they (the government) are going to totally deflate momentum in the technology community here.”

Art Smith, vice-president of corporate strategy and business development for Calgary-based startup Virtual Gurus, said the program was an innovative way to “de-risk” investing in Alberta’s tech sector. He said his company is currently in the middle of a funding round and reaching its goal will be more difficult without the tax credit.

“It just makes it more difficult to get investors to write cheques,” Smith said. “If you’re looking at driving investment into private industry here, the AITC was a great way to do it.”

See:  Gender Bias Contributes to Blocking Female Founders Out of Investment & Venture Capital. We Need to Fix This.

While the government may think its corporate tax cut is an appropriate replacement for the tax credit programs, Sandi Gilbert, CEO of Calgary-based InterGen and chair of the National Angel Capital Organization, said the reality is that seed-stage tech companies don’t need tax breaks.

“They’re not making any money, so they don’t pay taxes. It’s of no benefit to them,” Gilbert said. “This government campaigned on the fact that they wanted to increase investor confidence, and with this uncertainty (around the tax credit) they are doing the exact opposite.”

In addition to the tax credits, Brattinga said the UCP government has also placed a number of entrepreneur grant programs offered through Alberta Innovates under review.

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NCFA Jan 2018 resize - News on China cryptocurrency and more reforms 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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What Trump’s Bitcoin Tweet Changes

Coindesk |Michael J Casey | Jul 15, 2019

donald trump not a fan of bitcoin - News on China cryptocurrency and more reformsLet’s be clear: It was not the substance of Donald Trump’s tweet that made his critique of bitcoin and Libra so important last week.

It should be of no surprise that this US President would declare himself “not a fan” of “highly volatile” cryptocurrencies “based on thin air” that “facilitate unlawful behavior” or that he much prefers a “dependable and reliable” currency “called the United States Dollar!

(Anyone who assumed Trump would be a “drain-the-swamp” libertarian advocate for censorship-resistant money had an ill-informed view of a man whose government is stacked with former Wall Street execs, who opposes free trade and immigration, and takes a draconian approach to a variety of civil rights and social liberties.)

What matters is the very fact that a sitting president mentioned cryptocurrencies at all. Indeed, from a price perspective, Trump’s disparaging remarks are, on balance, positive for bitcoin. By Friday evening, the post-tweet price action reflected that.

See:  Fintech Fridays Episode 32: Rallying behind Bitcoin with Frederick T. Pye

More importantly, the tweet marks a symbolic milestone in the gradual but ever-expanding presence that cryptocurrency occupies in the public conversation around money and policy.

It also marks the starting point in a titanic battle over the shape of our global money system.

Publicity you can’t buy

Why is a Trump tweet-shame positive for bitcoin’s price? Well, bitcoin must stay relevant to succeed, and this was, at the very least, an acknowledgement from the halls of power of its relevance.

By simply giving it the time of day, Trump revealed that people within the high levels of the U.S. power structure are noticing the challenge that cryptocurrency technology poses to it.

Also important: the tweet came shortly after Federal Reserve Chairman Jerome Powell, one of the U.S. President’s favorite punching bags, had described bitcoin, in Senate testimony, not as a payments vehicle but as “an alternative to gold…a store of value…a speculative store of value.”

Powell wasn’t saying that he saw bitcoin as gold-like per se; it was a reference to how most bitcoin’s users currently treat it and, in that sense, he was simply stating a fact. Still, it gave some legitimacy to bitcoin’s claim to be the digital-era replacement of that ancient store of value.

And if we think of how gold has been used during the fiat currency era – as protection against the political risks inherent in national currencies – then this one-two punch could hardly be better for those arguing that bitcoin should play that role in the 21st century.

See:  Singapore topples United States as world’s most competitive economy

Think about it: they got the most powerful central banker in the world to describe bitcoin in such terms. Soon after, a self-interested politician who occupies the world’s most powerful government post demonstrated why you might want such protection.

Amplifying the Narrative

All of this comes within the context of the announcement last month of the Facebook-sponsored blockchain and cryptocurrency project, Libra.

As was inevitable when a powerful and contentious company launches a radical new idea, Libra’s arrival has massively amplified what I like to call the “narrative economy” in which cryptocurrencies thrive.

With its potential global clout drawing on Facebook’s 2.7 billion user base, Libra is forcing people – corporate leaders, bankers and, most importantly, government leaders – to think and talk about cryptocurrencies. It’s what prompted the question to Powell from Mike Chapo, Chairman of the Senate Committee on Banking, Housing and Urban Affairs, and it was the main focus of the Fed Chairman’s reply. And it’s clearly what inspired Trump to take to Twitter, given that his three-tweet post included a line saying that Libra “will have little standing or dependability” and would need to seek a banking charter if it is to operate.

Let’s not forget, either, that this comes right before next week’s hearings on Libra called by House Financial Services Committee, called by its Chair, Maxine Waters, who has warned that Facebook’s project cannot be allowed to compete with the dollar.

That there’s alignment between Trump and Waters on an issue is itself historic. But it also hints at the power battle at play. The mounting conversation is about the structure of our financial system and about the dominance of the intermediaries that manage that system: banks, deeply integrated as they are into our system of government, money and power.

As gatekeepers of the dominant fiat currency system, banks – and, by extension, the political leaders who determine how to regulate them – can make it harder for people to use both decentralized cryptocurrencies like bitcoin and corporate-backed private currencies such as Libra. Trump’s tweet, with a high degree of specificity, looked suspiciously as if it had been drafted by someone with interests in the banking sector.

See:  Blockstack wins first-ever SEC approval for a token offering under Reg A+ listing

But putting a lid on all this won’t be easy for governments. Most cryptocurrencies, whether bitcoin or Libra, are based on open-source software. Can those governments ban the software? Technically yes, but how will they globally coordinate around that effort, how would they stop it?

As it is, many central banks suddenly seem to be adopting the “if you can’t beat them, join them” strategy. The government-owned China Daily reported this week that China was accelerating its plans to produce a digital currency. That came a week after Agustin Carstens, chief of the Bank of International Settlements, said central banks would introduce digital currencies “sooner than we think.” It was a remarkable about-face from someone who had months earlier told cryptocurrency coders to “stop trying to create money,” and dismissed any value in central bank digital currencies.

Probably more important, right around the time of the Libra announcement last month, Bank of England governor Mark Carney dropped a bombshell, saying that the BOE would provide funds to tech companies, an apparent move to spearhead fintech development in London at a time when Brexit has threatened the banking industry. The opening poses a huge opportunity for Libra and other stablecoins to provide new “narrow banking” payment services.

Things are poised to get mighty confusing, in other words, with private corporate currencies, decentralized cryptocurrencies and government-run digital currencies all competing for primacy in the world of money. Thank to Libra – but really, thanks to bitcoin before it – the narrative economy around monetary innovation is getting seriously amplified.

See:  Facebook gets more official pushback on Libra

Communities of stories

As the noise level rises, more and more people will inquire and explore alternatives to mainstream currencies such as bitcoin. They’ll also grapple with the opportunities, risks and the disruptive challenges such a choice poses.

Essentially, a giant, collective storytelling exercise has been pushed into overdrive. Stories have always driven the adoption of new ideas, building the connective emotional tissue upon which social networks and communities are formed around them. And that, in turn – the development of a community around a shared idea – is ultimately what underpins a currency.

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NCFA Jan 2018 resize - News on China cryptocurrency and more reforms 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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