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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


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

 

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NCFA Letter to Ontario Economic Development on Burden (Jan 2019)

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NCFA | Regulatory Burden Reduction, Steering Committee | Jan 31, 2019

27 Jan 2019

Minister of Economic Development, Job Creation and Trade

College Park 18th Flr, 777 Bay St, Toronto, ON M7A 1S5

 

Dear Minister

Regulatory Burden on Innovation and Start-ups

The Ontario Premier the Hon Doug Ford has invited submissions on regulatory burden. We wholeheartedly support this initiative. The National Crowdfunding & Fintech Association of Canada appreciates the opportunity essentially to summarize submissions it has already made to the Ontario Securities Commission and the Ontario Ministry of Finance in 2017.

As the lead Minister on reducing regulatory burden, we understand that we should send these submissions to you – https://news.ontario.ca/medg/en/2018/12/ontarios-government-for-the-people-cutting-red-tape-to-help-create-jobs.html.

We are aware of the OSC’s recent request for input on regulatory burden; we are preparing a detailed submission for them that updates and adds to our earlier submissions. We will copy your office.

The NCFA submissions to the OSC (Aug 2017) and the Minister of Finance (Oct 2017) are attached. So far as we know, none of our recommendations has been accepted.

Our key takeaways continue to be:

  1. Compared to Canada’s global competitors, equity and debt crowdfunding is being stifled by a combination of regulatory burden (not just in the capital markets sector) and lack of coordinated government support (financial and otherwise). Our 2000 members tell us that many start-ups are leaving Ontario and Canada and seeking capital elsewhere, while many fail even to get off the ground. Alternatively, to scale up, innovators are often (in effect) forced to sell to larger companies usually established elsewhere. In the result, Canada continues to be a branch plant economy, and we are falling further behind.
  2. The crowdfunding and fintech sectors urgently need:
  • Harmonized offering memorandum exemptions across provincial and territorial jurisdictions;
  • Harmonized start up exemptions with higher caps – the OSC exemption has not been used;
  • Proportionate, risk based, outcomes focused regulation (and supervision) with an end to prescriptive regulatory requirements that are not justified by ongoing cost benefit analyses;
  • More education for stakeholders, and the research/data needed by regulators, governments, and the industry: to keep up-to-date with very quickly changing markets, to make better decisions, and to more quickly correct roadblocks to success;
  • Government support equivalent to that provided in jurisdictions like the UK and Singapore.

 

You will be well aware that SMEs and their entrepreneurial spirit are the backbone of the economy, employing millions of Canadians. But there is a well-documented funding gap, especially for innovators, and female, First Nations and rural founders.

We know that small business is struggling in Ontario. We know that very little use is being made of the crowdfunding exemption. We know that companies are generally short of capital, especially when compared to their US counterparts. And we need more data than are presently available.

See:

Ontario needs to make it easier for SMEs to start up, grow and flourish by making it easier for them to access finance and support. Innovative capital raising options for early stage ventures (in many cases not suitable for an IPO) are more important than ever.  And it should be easier for small investors to invest in the higher risk small businesses that matter to them.

There are significant economic and social benefits to be won.

We would welcome a meeting to discuss this and other issues and opportunities in the alternative finance and fintech sectors in Ontario.

 

Sincerely

 

NCFA

Regulatory Burden Reduction, Steering Committee

 

Cc:      Premier of Ontario [Legislative Building, Queen's Park, Toronto ON M7A 1A1]

Minister of Finance [Frost Bldg S 7th Flr, 7 Queen's Park Cres, Toronto, ON M7A 1Y7]

Cabinet Office (Att: Steve Orsini)

Ontario Securities Commission

 

Download the PDF version --> 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


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
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 ...
Read More
Europe's fintech companies are preparing for a no-deal Brexit
Crowdfund Insider | JD Alois | 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 ...
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Report: State of Regulation Crowdfunding Says No Gold Rush But an Undeniable Job Creator

 

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Five Trends in Blockchain To Be Excited About in The New Year

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FintruX Network | Conrad Lin | Jan, 2019

In the past year, we have seen a lot of interest and careful, calculated advances being made in blockchain applications across industries. Blockchain today is proving to be a viable technology aimed at decentralizing every industry resulting in better efficiency and security.

Blockchain was born as the digital framework for cryptocurrency transactions, but many fintech enthusiasts prioritized the speculation of trading cryptocurrencies versus the technology that powered it. With the markets experiencing a downturn, we have the opportunity to shift our focus to innovative use cases of the technology.

What is Blockchain?

Blockchain technology is a digital database where its information is stored across computers linked to one another. It is decentralized and distributed which makes it nearly impossible to alter without detection. An example of distributed ledger technology, blockchain technology ensures transparency and security of data, empowering peer-to-peer transactions.

Outlook for Blockchain Technology in 2019

According to a recent Forrester research article, there is a real risk of experiencing a ‘blockchain winter’ in 2019 as many promised and groundbreaking applications of blockchain technology have not yet reached the masses. In addition, the bear market has always caused many retail investors to lose faith in the technology as a whole. However, cryptocurrency is only part of the picture, and in my opinion, a considerably small part of the equation.

The technology is powerful. There is a lot of push towards using this ubiquitous technology to develop sustainable and scalable solutions across industries which will surely be worth the wait.

Here’s what we can look out for in 2019:

  • Payments: Cross border payments using blockchain is an innovation that is bound to change the way we carry out financial transactions across the globe. The current process of initiating and setting up international payments involve multiple steps, intermediaries, multiple currencies and is subject to high transaction fees and regulatory constraints. Blockchain technology speeds up and simplifies this process, cutting out many of the traditional middlemen and at the same time, making payment transfers more affordable. Companies like Ripple are working with Japanese banks on an application based on blockchain to create efficient, instant cash transfers around the clock. Payment innovations using blockchain are also being taken up by credit card companies like Mastercard, Visa and American Express and financial institutions like the Bank of America which has taken out 43 patents on blockchain technology.

See:  Experts predict the five big fintech trends of 2019

  • Unlocking Liquidity: Decentralized lending based on the blockchain have opened an alternative financing mode for both individuals and small and medium enterprises. With limited access to credit and credit scores, blockchain based lending can make the whole process seamless and efficient. Borrowers can access competitive financing from any part of the globe, while lenders can use smart contracts to validate transactions. This model of financing though, is still in its infancy, and one must be cautious of scrupulous organizations that are acting as rogue banks. FintruX Network is currently building a transparent financing ecosystem where transparency, risk reduction, and efficiency is maximized, and all participants win. According to a Transparency Market Research report, the global peer to peer lending market will aim to cater to not just small business loans but also consumer credit loans, student loans and real estate loans in the near future.
  • Privacy: With the growing prevalence of data breaches and in the massively interconnected world we live in, blockchain technology will be a game changer as it provides a robust, incorruptible and encrypted recordkeeping that can be easily verified. The hashing feature of blockchain technology is one of the underlying qualities that make it suitable for privacy and security. Public ledgers and smart contracts can help iron out security and privacy issues in industries ranging from healthcare to education and can also be effectively utilized by the government. Estonia is a country that has initiated e-residency allowing their citizens to record data on the blockchain.
  • Artificial Intelligence: The trustworthiness and security of blockchains infinitely increases the effectiveness of AI as it is granted more accurate data, models and actions. There is also an increase in accessibility to data as the information is available in public domain. The powerful trifecta of Big Data, AI and Blockchain technology will help in building better AI models which can then be effectively utilized for applications in industries like retail, healthcare and pharma, gaming, manufacturing, customer service, automotive and even agriculture.
  • Internet of Things: Blockchain provides a secure and scalable framework for communication between the growing number of connected devices in our homes and offices. Due to its distributed nature, blockchain can also allow smart devices to make automated micro-transactions with cryptocurrency or token technology by leveraging smart contracts. Some companies working on this technology include SatoshiPay and IOTA.

See:  The Future of Government… in a Digital Age

Blockchain adoption and use cases are growing daily, and possibilities for innovation are endless. This technology will stimulate new solutions, enabling businesses to rethink their processes to maximize the benefits of utilizing distributed ledgers. I look forward to successful implementation of the technology in the year to come.

 

About Conrad Lin:

Conrad Lin is a young and dynamic entrepreneur, public speaker, and influencer with a background in Neuroscience and Psychology from the University of Toronto. He is a proven expert in business analysis, social media growth, global marketing strategy, project management, and product development with a specialty in DLT (distributed ledger technologies). Conrad excels at managing teams and delivering phenomenal results in a short amount of time, often fulfilling multiple roles in an organization. Conrad dedicates his efforts towards initiatives that impact the world positively and benefits the global community. He is often invited to speak at key fintech events around the world to share his innovative ideas and achievements with industry professionals.  Official Twitter: @cryptolin;  Linkedin: https://www.linkedin.com/in/conradlin

 


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


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 ...
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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 ...
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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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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 ...
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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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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
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 ...
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Europe's fintech companies are preparing for a no-deal Brexit
Crowdfund Insider | JD Alois | 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 ...
Read More
Report: State of Regulation Crowdfunding Says No Gold Rush But an Undeniable Job Creator

 

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Pop-up Magazine: NCFA Blockchain Fintech Confidential (Vol 1. Issue 1)

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Fineqia Signs Up Fintech Firm Nivaura for Crypto Asset Bond UK Regulatory Test

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Fineqia Release | Bundeep Singh | Jan 9, 2019

LONDON, Jan. 9, 2019 /CNW/ - Fineqia International Inc. (the "Company" or "Fineqia") (CSE: FNQ) (OTC: FNQQF) (Frankfurt: FNQA) is pleased to announce its subsidiary Fineqia Limited, ("Fineqia Ltd") has partnered with Nivaura Limited ("Nivaura") to use its white-label capital markets platform to perform a fully automated tokenised bond issuance and administration, registered and cleared on a public Ethereum blockchain, to conduct its test for issuing crypto asset backed bonds.

Fineqia Ltd's test is required as part of its acceptance into the U.K. Financial Conduct Authority's ('FCA') Sandbox Regulatory Program announced in July 2018. It was amongst 29 companies accepted out of 69 applicants that met the FCA Sandbox eligibility criteria. The test is set to take place in Q1 of 2019, with results also to be obtained in the first quarter.

It will enable owners of crypto currencies such as Bitcoin and Ethereum to borrow fiat funds via the issuance of crypto asset backed bonds. The product has found appeal among institutional owners of crypto assets, such as miners, funds and exchanges, seeking liquidity but not keen on selling their crypto currencies. Fineqia's partnership with Nivaura allows for such institutional asset owners to offer transferable fiat denominated bonds to investors for fixed durations and coupons.

"Nivaura's advanced technology is an enabler of financial transaction lifecycle efficiency and is why we chose to invest in the company last year," said Fineqia CEO, Bundeep Singh Rangar. "It gives the Fineqia platform a simple transaction management workflow with a seamless blockchain-based asset registration and clearing solution."

Fineqia had invested in Nivaura in Jan. 2018, alongside New York-based Digital Currency Group (DCG) and London-based international law firm Allen & Overy, for minority equity interests in Nivaura.

See:  FCA Regulatory sandbox participants – Cohort 4

Fineqia Ltd will deploy a fully automated bond issuance and administration platform utilising Nivaura's technology, which enables managing the end-to-end instrument lifecycle at significantly lower cost than existing channels and ensures full compliance with relevant arranging and custody regulations. Issuers will be able to structure, execute and administer legally enforceable bond contracts using public blockchain or traditional clearing infrastructure.

Fineqia Ltd can enable the issuance of asset backed bonds using traditional depository and clearing infrastructure too, using the same

Nivaura technology, if required.

About Fineqia International

Fineqia International is a listed entity in Canada (CSE: FNQ), the US (OTC: FNQQF) and Europe (Frankfurt: FNQA). Fineqia International outlines the Company's corporate governance, culture, processes and relations by which the Company and its subsidiaries are controlled, directed and governed. It oversees and ensures the overall success, planning and growth of the Company and all of its subsidiaries and investments, including those propagating blockchain technologies. For more information visit: https://investors.fineqia.com/news.

View:  release


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


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) ...
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The 11 Biggest Fintech Companies In America 2019
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MoF Consultation (Deadline Feb 11): Department of Finance Canada Launches Consultations on Open Banking

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Department of Finance Canada, Ottawa | Jan 11, 2019

Note from NCFA:  the department of Finance is seeking consultations on the merits and risks on the prospect of Open Banking in Canada.  The UK and Australia are already piling ahead.  We encourage key stakeholders to either submit inputs to NCFA for aggregation to info@ncfacanada.org by Jan 31, 2019 and/or submit directly to the submission details that can be found below.

 

January 11, 2019 – Ottawa, Ontario – Department of Finance Canada

Canadians deserve a financial sector that is globally competitive and promotes consumer choice, while also delivering financial stability and economic growth. They must also have confidence that it operates with the highest regard for privacy and security.

To this end, the Department of Finance Canada today released a consultation paper on the merits of open banking. The release of the paper and the launch of public consultations marks the next step in the Government's review of open banking, following the appointment of the Advisory Committee on Open Banking in September 2018.

Open banking has the potential to offer a secure way for Canadian consumers—including small businesses—to consent to sharing their financial transaction data with financial service providers, allowing them to benefit from a broader range of financial products and services. This could better serve consumers and grow businesses and markets, contributing to the growth of the Canadian economy.

Through its consultations, the Government seeks to learn more about Canadians' views on open banking, specifically:

  • Would open banking provide meaningful benefits to and improve outcomes for Canadians? In what ways?
  • In order for Canadians to feel confident in an open banking system, how should risks related to consumer protection, privacy, cyber security and financial stability be managed?
  • If you are of the view that Canada should move forward with implementing an open banking system, what role and steps are appropriate for the federal government to take in the implementation of open banking?

Upon conclusion of this consultation, the Committee will deliver a report assessing the merits of open banking for Canada, with a strong focus on protecting consumer privacy, ensuring the security of financial transactions and maintaining the stability of the financial sector. The Committee will consider implementation opportunities and challenges later in the year.

Interested individuals and organizations are invited to review the consultation paper at the link below and submit their views by February 11, 2019, via email to fin.OBBO.fin@canada.ca or to:

The Advisory Committee to the Open Banking Review/Financial Institutions Division
The Financial Sector Policy Branch
Department of Finance Canada
90 Elgin Street
Ottawa, Ontario, K1A 0G5

Quick Facts

  • Open banking empowers consumers (including small businesses) to share their financial data with a broader range of financial service providers through secure online channels, in order to access new, innovative, consumer-centric financial services.
  • In open banking,
    • Consumers can opt in to securely share their financial transaction data with financial technology companies (fintechs) and other financial service providers, with the ability to opt out at any time.
    • Fintechs and other financial service providers can use that data to develop innovative products and services that are more tailored to consumer needs and preferences, leading to a more globally competitive sector.
  • For consumers and small businesses, open banking offers the potential to use their own information to better understand and manage their finances. This could include applications that compare financial products, the ability to change accounts more easily, and financial services customized to individual needs.
  • The Advisory Committee on Open Banking was established by the Minister of Finance on September 26, 2018.
  • In Budget 2018, the Government announced a review of the merits of open banking in order to assess whether open banking would deliver positive results for Canadians.

Related products

Associated Links

Media may contact:

Pierre-Olivier Herbert
Press Secretary
Office of the Minister of Finance
pierre-olivier.herbert@canada.ca
613-369-5696

Media Relations
Department of Finance Canada
fin.media-media.fin@canada.ca
613-369-4000

General Enquiries

Phone: 613-369-3710
Facsimile: 613-369-4065
TTY: 613-369-3230
E-mail: fin.financepublic-financepublique.fin@canada.ca


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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Ep20-Jan 11: Bitcoin Backed Loans and 2x Credit – Putting Your Crypto to Work

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NCFA Canada | Jan 11, 2019

JOIN US ON A STORYTELLING JOURNEY EVERY FRIDAY.

Ep20-Jan 11:  Bitcoin Backed Loans and 2x Credit - Putting Your Crypto to Work

About this episode:  To kick off Season 2, NCFA Fintech Fridays show host Manseeb Khan sits down with the CSO of Ledn Inc.. Mauricio Di Bartolomeo. They chatted about what crypto backed loans are, going global and saving the world. Enjoy!

  • Experiencing the dismantling of the Venezuelan economy; a broken financial system
  • The use case and value of collateralizing digital assets
  • Libertarian aspects of bitcoin and how it is benefiting the people outside of North America or in tyrannical regimes

Host: Manseeb Khan, NCFA, Fintech Fridays show host

Guest: MAURICIO DI BARTOLOMEO, Co-Founder and CSO (Ledn Inc.  |  LinkedIn  |  mauricio@ledn.io)

Bio:  Mauricio Di Bartolomeo is the Co-Founder & Chief Strategy Officer of Ledn Inc., a financial services company built for Bitcoin & digital assets. The company underwrote Canada's first-ever Bitcoin-backed loan in 2018 and has since been lending to Bitcoin holders across Canada. Mauricio has been involved in Bitcoin since 2014 - when in Venezuela he learned that friends were using it earn an income by mining it & protecting their wealth by converting it into a censorship-resistance currency. Now residing in Canada, he has been working on Bitcoin full-time since then, developing technology to make it easier to hold and use.

Mauricio understands the use-case for crypto-currencies in authoritarian regimes and the life-changing liberating effect that it can provide to its users. He is also well-versed in the limitations of the current solutions and what can be done to improve usage/adoption. Ledn, which has grown to a team of 10+ professionals, is tackling these issues by making Bitcoin easier to hold with products such as fiat-loans, cryptocurrency savings accounts and credit cards.

Mauricio is also an active member of the Canadian Blockchain developer community with strong ties to professional working groups, contributing research and opinion pieces to active University PhD teams. He holds MBA and HBA degrees from the Richard Ivey School of Business.

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

Listen to more podcasts here:  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: Hey everybody Manseeb Khan here and you are tuning into Fintech Fridays brought to you by the NCFA Canada's leading fintech and crowdfunding association. Hey you know what. Welcome back. You're turning the season two of the podcast. I highly recommend listening to last year's season one. We got 19 amazing episodes, so I hope you're having a really great New Year. Hope your resolutions are doing good. I'm killing mine so far. I don't mean to humble brag, but you know I'm just saying I'm just saying it's all OK. So today to kick off season 2 of the podcast I've got the CEO of Ledn Mauricio.

Mauricio Di Bartolomeo: Yes.

Manseeb Khan: Thanks so much for sitting down with me today. This has been a pleasure. You actually were kind enough to actually  lets us record out of your office in beautiful downtown Toronto. So, this means this means the world. Thanks so much.

Mauricio Di Bartolomeo: No problem. Thank you, guys, so much for having us. Just a small correction. The CEO officially is my co-founder Adam. So, I call myself president and CSO, but it works because you know we're basically equally involved. So, it's been it's been a real great.

Manseeb Khan: Okay. Hey no, problem so the CSO.

Mauricio Di Bartolomeo: Okay actually. But no, I really appreciate you guys having us on love the work that you guys are doing on the podcast. And you know shining the light on the Toronto startups and getting the word out. So, I look forward to this episode. We've been  excited to record it.

Manseeb Khan: Yeah. Hey, I'm super excited to just jump right in. So, for a brief second as the CSO of Ledn. Could you just give us a little bit more of essentially who you are and a little bit more of what the company is and does?

Mauricio Di Bartolomeo: Yeah. So, I'll tell you a little bit about myself first because it does tie up to a tie into how or why we started Ledn. So, I am originally from a small town called Barquisimeto. It's about four hours southeast of Caracas in Venezuela and that's where I grew up. You know it's a really great experience. You have an upbringing in Venezuela and right around high school time when I was approaching high school, a new president entered called Hugo Chavez. And at the time people that kind of you know had a suspicion of what this could lead to were already thinking or setting their sights outside of the country and thinking of potentially moving out. So, I was encouraged by my family and I really wanted to go out and study abroad myself, so I came to Canada in my university here. I went to the Richard Ivey Business School at Weston which is where I met Adam and we stayed in touch back and forth after a university I worked in Canada for a few years.

Then I went back to Venezuela for a few years to work on my father and a couple of projects. And during that time, you know with Chavez in power. I could basically  witness this entire dismantling of the economy. And it wasn't until Chavez passed away when oil started dropping in price where the entire system just started collapsing on its own. And so, you know banking basically became useless. It was very difficult to transact or do anything. People were not wanting to hold bolivar converting out of them any way they could for flour, sugar, dollars. And so, once the system the financial system breaks, people started getting trapped in Venezuela holding dollars is illegal. So even if you wanted to emigrate and you couldn't afford a ticket you could be riding your bus down to Colombia and you get pulled over National Guard takes away all your dollars and you get to Colombia and you have nothing.

And so around 2015 as this was happening kind of simultaneously, I discovered Bitcoin through my younger brother actually who was using it to mine. And the second I basically started peeling the layers and I'm like OK well this isn't just a computer game. This is actually a censorship resistant currency.

And there's a tremendous potential to build an entire financial system around this new asset and  that's when I started getting really excited about what we could build on it. And then you know talking to Adam because obviously we couldn't really fund a company there or grow something out of Venezuela. We knew the problem. We knew the use case, but we needed to basically have it have a world class platform to emerge this company out of. And so, we both have really strong networks in Toronto and we knew you know the workings of the financial system well. And so, we said OK let's try to start this with the basic most useful product which is Bitcoin backed loans essentially.

Nobody at the time was treating bitcoin as an asset worthy of being posted as collateral. And so, we saw it as a mistake because there was a sufficiently liquid market for bitcoin despite the volatility really the bigger risk is really just realizing your counterparty in the trade. So, we created a call it a setup or a system whereby we could ensure investors that they weren't going to lose money. And that's when we raise the seed round on the on the premise that we were going to start with the first product.

Bitcoin backed loans and so Ledn is a play on Hodl which is that the first idea is to make Holding bitcoin easier right. We know my investors, businesses, everybody inevitably faces the point in time where they might get into a liquidity need and they have to face that decision. Do I sell my bitcoin, or do I hold it? And you know over the long run that has proven to be a bad decision to sell it and rebuy depending rightly. you can try to time the market but all that to be said for all that being said you know we want to help people not be put in their corner. if you need liquidity you can post your bitcoin as collateral use the liquidity you need pay back and get your bitcoin back. No transaction fees.

Manseeb Khan: That's incredible. I'm glad a service out there is actually there and that's going to be helping. Just give crypto if not bitcoin but any other like alternative coins later in the future just a little bit more credibility and viability in the actual market. Hopefully right. So just before the audience could you just explain a little bit more on bitcoin back and crypto back loans just like. Like could I pay my mortgage off this thing? Could I pay my car?  could you give us like a more of a real-life example of somebody using bitcoin backed or a crypto backed loan.

Mauricio Di Bartolomeo: Well yeah sure. So, I'll give you a few use cases and some of the newer. Or call it more creative use cases we're very excited about the first use case that I would say is you know you're a Bitcoin investor. You've held Bitcoin from you know call it earlier on. So, you're sitting on a potential capital tax gain. So, let's say you bought bitcoin when it was a thousand dollars right. And it's sitting today. I'd call it five and change. And you know you rode it all the way up and rode it all the way down. You didn't sell it but you're still sitting on a couple of gain right. You have a credit card bill that you need to pay, or you have rent that you need to pay, or you have X expenses you need to pay. And you know you've held bitcoin for so long. You have a very positive long-term view on it. Do you really want to sell it five thousand dollars? So, use case one is essential. OK. I'll put my two bitcoins for collateral. I'd take a fine doesn't all alone that I need because I can borrow 50 percent of the value of the bitcoin and you pay down the card or whatever it is, and you need to pay down. And if your expectation is a bitcoin was going to have a good year and potentially have a call its 20 percent rally. Well then when that rally does happen you can choose to pay down your loan and you can also choose to put on your loan with the collateral itself that you can choose. We can convert the collateral for you to pay it down. So essentially the idea is here that you could be paying down the loan with potentially your profits right. If you have if you have a long enough view its things play out the way you think. So, we have a long-term positive view on the price of bitcoin. So, we believe that we are helping our clients by not making them sell it.

Manseeb Khan: So, this is a great way for crypto to work for you. This is like investing 101 make your money work for you. But in this case making crypto work for you is right.

Mauricio Di Bartolomeo: Yeah. In essence I mean you have to be responsible with leverage. You don't want to be you know entering into things that perhaps you're going to throw away your financial plan. But that being said I think leverage is an amazing tool in that it allows you when you see a good enough opportunity to take advantage of it without selling, sacrificing the asset itself.  Right. Just the same reason people get into a cash need they don't run and sell their home. Right they'll try to get a home equity line of credit. So, it's a similar idea You know you're holding this great long-term asset and you don't want to sacrifice it to meet a short-term need. Mm hmm.

Manseeb Khan: So, what some of the challenges are facing getting into an Ethereum and I guess like dogecoin for I guess for lack of a better example.

Mauricio Di Bartolomeo: The thought process that we go that we take an asset through to decide whether or not we're going to work with it. As far as collateral it really comes down to risk management right. There are people had concerns at the very early days. People would say Oh what about the price of bitcoin is so volatile. Oh, what about you know how you handle that really fast drops in price right. And so, we can mitigate those by a setting up partnerships with the exchanges that work in our jurisdiction. whose liquidity is having actually been improving, the Canadian exchange liquidity has actually been getting deeper.

As far as far as a daily trading volume so that's one way. Like we have partnerships and we monitor the order books of all our exchanges just to make sure that we can realize the trades and what that would look like as far as slippage. So, the real crux of what we're trying to solve is just to ensure that a we're going to be able to sell the bitcoin if we need to when we need to and that the counterparty that is buying that bitcoin is you know has a low risk of default.

And so, with bitcoin we feel very, very confident that we can process those two things because it is the deepest liquidity pool it is the call it you know safe haven asset within the digital assets space. Bitcoin was the only one that we were comfortable working with at the beginning. Now obviously things have changed in the past you know call it seven months in crypto markets. There's been quite a bit of a journey, but I think as the dust is beginning to settle there are risks to us as a company to start considering an asset like an Ethereum in its risk profile has improved.

In our view just because it held through a really substantial drop, and it is still very liquid. It's just trades really well. Toronto in particular in Canada has call it an above average participation rate. And I guess fanbase as far as in Ethereum because it is a Toronto based project. So, I do think that is something important and something that made a big difference. So, the challenge really is to ensure that we would be able to process the trade and to that we are confident and I guess sufficiently confident with the capacity of the counterparty realizing to trade. So that's something that we are actively working  into and do and know we should expect hopefully something out of us for Ethereum soon.

Manseeb Khan: I can't wait for you guys to start issuing out Ethereum back loans and just a slowly getting into like more like alternative market because it's just again proof of concept of like hey like this is this works you can pay off your credit card, mortgage, house or what have you. With these kinds of loans if you're just sitting on it right making it up to work for you more or. What are the challenges going internationally? Because you definitely have an interest of getting to Venezuela as soon as possible and then slowly start branching out to other countries.

Mauricio Di Bartolomeo: Yeah that's a great question really. Most jurisdictions are welcoming of liquidity right. If you are a company and you are bringing in funds that are going to be lent out to a community and that community is going to put that money to work. To create and expand their business, to build a bigger home, to do something else that actually spurs economic activity. So, the concern most jurisdictions have when you're a company that's coming in to provide liquidity is around consumer protection right. They just want to make sure that you're not coming in and hosing there their clients are exploiting the rules or the niceness of the receiving jurisdiction.

So, one of the biggest reasons and one of the things we love very much about being a Canadian company is that as a Canadian company we are held to some of the highest standards in the world as far as banking regulations go. That was by design. So, we knew that it was going to be a long process and we know that was really what we drove headfirst into because we knew that once we could get things done and been fully compliant and everything on the exact right side of the law in Canada.

Then that A we would have an easier time doing this in a different jurisdiction and B we would be better received by these jurisdictions because we are coming from a much more credible country. Exactly. It's a place that acts I guess rightfully or correctly and so that that is  a lot. That you know that helps when people are getting the story. Where is this company? Who are these people? where are they? What's the story?

So really the main concern when you're entering a new country is the consumer protection in their jurisdictions and again those are more geared towards protecting them from you know very aggressive lenders. There's been some news around about payday lending and what that can do to a community. So that's really the intent of those rules. We actually have the entirely opposite. Call it goal than payday lenders. Our goal is to bring institutional price that North American rates to places that never had access to this debt to begin with. And the reason was they never had an asset to collateralized yeah that nobody up here felt comfortable enough lending against.

But now there's this internationally liquid asset and it's this you might Venezuelan bitcoin is the same as your Canadian Bitcoin. So why do I get a different interest rate? So, there's this big opportunity right now to standardize. Call it the collateral that's getting posted. Right. And benefit from rates that other countries can issue. You couldn't get in your broken jurisdiction.

Manseeb Khan:  That's incredible that's you. You don't make a really good point. Why. Like my Canadian Bitcoin or Venezuela Bitcoin is the exact same thing. So, kind of makes sense that like you're taking loans out against that. So, you did briefly touch on credit. Right. So, when you think of loans, I guess to stick with the banking terms that we've kept for continuity sake. How does the digitization of savings and credit look like to you guys?

Mauricio Di Bartolomeo: But that is there is a really great question. So, you know the natural thought process when you're creating a financial services company is you know how we help people reach the financial goals better. What is in our what is kind of like the suite of products that we could offer that you know holders or people or investors that make their lives easier. So, if you look, I'd call it a traditional banking suite you know.

Yes, you have credit, you have loans that you can take out to build a home you know you could take out a loan to buy a house you have credit cards. So, like more flexible credit products savings accounts which is somewhere you can put your money to just park it  when you were having direct use for it and yield on it. So those would be you know obviously there's other things there's an investment and more. Call it sophisticated tools but the call it plain vanilla tools would be your long-term credit, your asset backed credit, your recurring short-term credit like your credit card unsecured and then you have your savings products.

Right. So, would Ledn our first product was Bitcoin back loans. So, we want to be able to let people that hold bitcoin and need dollars get them without having to sell it. So that was a natural first product for us to offer then also we had been in a situation many times that I had run mining businesses in the past and other bitcoin businesses where we constantly face this whole you have to sell it immediately and then you want to buy it again. And that just created a  bad type of terrible experience customer buying and again at a higher price. And so, as this was happening you became very real that this was needed.

So, our first product was hey let's get people liquidity without making them sacrifice for bitcoin. That was a very we got a great reception and people you know loved the product today that their very next product is we said OK well same way you go to a mortgage to get a bank to get pre-approved for a mortgage. Yeah before you go buy a home. Right. You know if you are looking to buy a home cash then you're looking at you know and you're sitting on a hundred thousand dollars and then you say OK well I can only afford a home that's a hundred thousand dollars right. If you or someone else has the expectation that the house value is stable enough and is going to go up in price they may come in and say hey why don't I get you 50.

So that way you can, or I get you another hundred, so you can get a two hundred thousand home right. And that's what the bank does and they pre-approved for a mortgage. So, you don't go buy a home with your cash balance. You go to the bank you say here's what I can get for down deposit. What is the most you can get me. And then you use that total amount to go buy the home of your dreams. Right.

So, the next product that we're working on is we want to basically instead of giving you the loan right after you own the bitcoin, we want to basically provide credit for you to buy the bitcoin. So, if you are a person that has one hundred dollars and you want to make a bitcoin investment, but you feel very bullish and where the prices today run you wish you could invest more. You can come to Ledn and then will say hey guess what. You will have you had a hundred dollars will approve you an additional hundred so that you can buy a two-hundred-dollar position and you take a loan with us for that additional hundred. So, you lock up your two hundred dollars’ worth of bitcoin in our vault and when it goes up or down and when you want to unwind your position you can basically close it down and get your Bitcoin back.

So, this idea of buy 2X credit is something that we're very excited to do basically and we're actively exploring and working on and so it is something that we feel is going to add value to Bitcoin investors and then the additional piece on that is the last piece of that is OK. Well now you have your bitcoin back loans. Now you have your buy 2x credit. I have my bitcoin. I want to put it somewhere where it can generate a return for me. Where do I go? Right.

So, we do realize there is a big need in the market for that right. It takes infrastructure to realize a return on the deposit at a reasonable level of risk because you have to put that underlying asset to work. So that's the mechanics. And that's another process that we're working through right now. But we will get there because we understand that this is very needed product. And so that is really the call it three-pronged approach of how you digitize. If you would. Traditional banking services today. And then you bring them to you know the digital asset realm that we're working on now.

Manseeb Khan: So, speaking of savings and your three-pronged approach of digitizing assets and credit and what have you. I can definitely see you guys partnering up with either a challenger bank or even maybe even morphing into a challenger bank. Is that being that something that we can expect from Ledn that you guys would be possibly either going with the challenger bank or considering becoming one?

Mauricio Di Bartolomeo: That's a very good question. Banking relationships are very important for our business. Being a financial services company, we have very good relationships with banks in Canada. That's largely a part of our AML and KYC processes. We are fully compliant. We have a person in charge of it and the team has been from its genesis built on the idea that we had to be fully compliant from the beginning.

So as far as our banking relationships today they have been really great. You know we've been very pleased with how everybody's treated us so far is it in our roadmap right now to become or morph into a challenger bank. I don't think it's in the immediate goals, but I won't discard that as potentially something that we will look into in the future as we grow into more of a bigger financial services company and more and more clients start demanding different types of products and services.

So, to the extent that there will be a benefit or value to the client in merging the two experiences then yes that would definitely something that we can consider. Right now our real focus is to create a full suite of services around these digital assets because I think the really big impact that crypto and Bitcoin are having is just a liberating impact around the tyrannical and authoritarian regimes around the world that are essentially you know their banking system is hijacked from them and  they can't save, they can't borrow. They can't even buy a censorship resistant or they can't buy dollars.

Bitcoin is becoming more and more an option that all of these people. There's over four billion people living and authoritarian regimes in the world today. And so, the you know more so than the dollar signs. I think the most what excites me the most about these services and this technology is that it materially changes the life of people, of smart people in these countries to be able to earn a bounty reward in bitcoin and have no one come and take it from you and save so you can buy a ticket to go to New York one day or do something else. Like it actually you become a member of the world economy right where before you were sequestered from it by your local currency.

So, I do think that this has the potential to snowball into this massive opportunity for four billion people to now have access to banking service traditional bank services. It's a long road to get there. And education is a very, very big piece of that because from Venezuela I can say that although we have a large number of people that are in this situation and sometimes a lot some of them have a phone but sometimes having a phone and being in the situation is not enough right. Yeah. It takes a lot. It takes education it takes time to let people know that this is the right way.

The volatility in pricing hasn't helped. I'll say that you know very upfront because you talk to people in Venezuela about bitcoin and yes sure it's better of then bolivar. A lot of them are still happy that they have it. Other believers would they prefer that it had stayed steady and maybe not going up to 20 and coming down everyone. Absolutely. So, there is a bit of a you know learning curve that people have to go through. They have to understand that you know  it's also in its early stages so it's not going to be everything we want it to be. Course at once. Yeah. But yeah. Just to tie back to you know I think the biggest impact is. I think where this can have the biggest impact is including or incorporating new members that are perhaps not in Canada rather than creating a bigger bank or a better experience for Canadian clients which is something that's definitely, we want to do. But I think our big focus right now is to build this product suite around digital assets and make them available to people that are not available to it today.

Manseeb Khan: Of course. So, to help later better I'd like the world economy like you've mentioned before. Right. So, I'm going to throw this to you. OK. Aside from saving the world.  what else are you very much excited about in the crypto, FinTech space in 2019.

Mauricio Di Bartolomeo: Crypto fintech in 2019. Let's see. I think there's some really good work being done by the Human Rights Foundation and they're really shining the light on the libertarian aspects of bitcoin and how this is benefiting the people outside of North America or in tyrannical regimes. I. Am excited for some of the noise to get out of the industry. I'm excited to see the good projects find their footing and start making what they've all been making great progress. But the price has been a temper that hasn't really.

People haven't really seen past the price moves and the kind of peel layers and see what companies like us are doing behind the scenes getting ready for this cycle to turn again. Mm hmm. So, I'm just excited to see the cycle turn right. I do feel you know again it's not financial advice and by no means is this what I what I think is going to happen whatever. I have a feeling that 2019 is going to be a year where we finish this bottoming process and we start you know when we turn the corner to do it. Call it a new lead wave. We focus a wave of price moves and I think I don't I don't expect them to be astronomical in fact I almost don't want them to be. I would like them to be slow and steady but so long as the corner has been turned and we stop dropping people's mindset start turning with it. And so that's going to be exciting just to see people wake up. Yeah. Let's see what happens. Well it wasn't a fad it was a hype Yeah.

Mauricio Di Bartolomeo: Yeah. So that got them excited about that idea about the resurgence. Call it.

Manseeb Khan: I'm excited to see that on 2019 that's bitcoin and just crypto in general. I'm going to just start to I guess osmosis out of the actual like bubble and then start going it's a little bit more of having a real-life scenario instead of just to the niche thousand that really know about it. Right. Right. And having like I mean again like being able to take out a loan against the crypto that I currently have in my wallet that I'm not using. Right. That could pay off my credit card is fantastic. I can write off my house. That's amazing. Right. Right. And then sooner or later like some way down the line I can actually buy a  house with the assets I bought 15 20 years ago. Right. I'm super excited for what you guys are going to do and I'm just excited. So just the journey ahead for you guys. So, Mauricio the best way to contact you. Do we email you do we Snapchat you do I tweet you like we'll be the best way to you to get contact with you and the CEO Adam?

Mauricio Di Bartolomeo: Yeah. I mean you can reach us and we're very active on Twitter. My Twitter handle is cryptonomista. Oh, so you can you can Google that or not you can search it. You can search my name on Google. Mauricio Ledn in you probably hit what I won't bother taking you through my spelling of my last name. So, if you can if you just want to google Ledn Inc or  Mauricio Ledn Inc.  Ledn.io is our official Web site so you can always contact us through there. I'm actually on the chat on the Web site so you can go in and just literally write me right there . That's awesome. So yeah. The Web site is a great way Twitter @hodlwithLedn is our Twitter handle and you can always e-mail us at loans@ledn.io. So yeah that's you know I'd love to talk to anybody that has any questions or even the insights or comments. I'm very open to that.

Manseeb Khan: Yeah. Hey, I can't I can't wait with the feedback from this episode. so, on behalf of the NCFA Canada's leading fintech and crowdfunding association. I wish you an amazing Fintech Friday and weekend.

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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