Rojin Nair, Advisor
June 1st, 2021
At Incyub8 Inc, Rojin is focusing on nurturing and guiding various national and international start-[...]
Category Archives: Personal Finance
Before receiving your salary in crypto you should consider these things
Carbert Waite LLP | Kevin Stenner and Mihai Beschea | Mar 30, 2022
If you have been following the word of sports, you have likely heard of many brand-name athletes taking a portion of their salary in a crypto currency. Another interesting recent example is the major of New York City, Eric Adams, who recently announced he would receive compensation in cryptocurrency. Although this type of compensation agreement is still unique and new in the workplace, it is becoming more mainstream and carries with it several advantages over fiat currency BUT you should consider these things first:
Minimum Wage and Cryptocurrency
First, in Alberta “an employer must pay an employee at a wage rate that is at least the minimum wage established by regulation.”This minimum wage is currently $15 per hour in Alberta. The problem is with the volatility. If the price of the crypto suddenly fell, there is a real risk that this will have caused the employer to have paid the employee less than minimum wage. This would put the employer off-side employment standards legislation and open them up to unnecessary risk.
See: Crypto Payments Report 2022: How digital currencies are revolutionizing commerce, corporates and culture
Crypto Earnings Must Be Paid in Canadian Dollars
Second, employers in Alberta must pay employees in Canadian dollars such as cash, cheque or bill of exchange. Since discretionary bonuses are not wages and so do not have to be paid in Canadian dollars. Accordingly, an employee can be paid a certain amount in Canadian dollars with a discretionary bonus paid in crypto. From an employee perspective, taking a portion of your salary in cryptocurrency, such as a bonus, may be the safest way to transition into this pay scheme.
Crypto Earnings Tax and Deductions
Third, just because an employee is being paid a portion of their compensation in crypto, neither they nor the employer are exempt from paying tax on that amount in Canadian dollars. Employers will still be responsible for all source deductions in Canadian dollars and employees will still be responsible for reporting employment income in Canadian dollars.
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CNBC | Goh Chiew Tong | Apr 11, 2022
Want to be paid in crypto? Here are the rewards — and the risks
There’s no denying that with the Great Resignation, workers are more empowered to seek what they want from their jobs. Other than flexibility and better benefits, a new workplace perk is gaining popularity — the option of being paid in digital currency.
According to a global poll by financial consultancy deVere Group, cryptocurrencies could become more commonplace in salary negotiations with younger workers.
More than a third of millennials (those aged between 26 and 42) and half of Generation Z (25 and below) would be happy to receive half their salary in bitcoin or other forms of cryptocurrencies, revealed the study.
See: Crypto-tax primer in Canada
Another survey, by SoFi at Work and Workplace Intelligence of 800 U.S. employees, showed that 42% of them would like to receive non-fungible tokens as performance rewards.
“Offering to pay your employees with Bitcoin can be a way to attract what we might call ‘future-thinking workers’, especially if you’re in certain industries, like FinTech,” he added.
In addition to the benefit of 'speedy payments' be careful for crypto price volatility (double-edged sword) and heightened cyber-risks.
When it comes to cryptocurrency tax laws, the country you’re working in matters. Some countries are “very lenient” in that regard, said Jarvis. For instance, Portugal is known as a crypto tax haven for its 0% tax on bitcoin. “When you consider how much these assets are increasing over time, they are significant gains to be made if you’re saving on that tax side of the equation,” Jarvis added.
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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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BIS Report: Can CBDCs be designed to help financial inclusion?
BIS | Raphael Auer, Holti Banka, Nana Yaa Boakye-Adjei, Ahmed Faragallah, Jon Frost, Harish Natarajan and Jermy Prenio | Apr 12, 2022
Overview
Central banks are considering how retail central bank digital currencies (CBDCs) may help support financial inclusion. While they are not a magic bullet, central banks see CBDC as a further tool to promote financial inclusion if this goal features prominently in the design from the get-go. In particular, central banks are considering design options around promoting innovation in the two-tiered financial system (eg allowing for novel non-bank payment service providers), offering a robust and low-cost public sector technological basis (with novel interfaces and offline payments), facilitating enrolment and education (via simplified due diligence and electronic know your customer) and fostering interoperability (both domestically and across borders). Together, these features can address a range of existing barriers to financial inclusion.
See: New UK report: Access to financial services: 1 in 7 people are financial excluded
This paper draws on interviews with nine central banks with advanced work on CBDCs and financial inclusion, as well as ongoing research and policy work at the BIS and World Bank. It gives concrete examples from the central banks' work and discusses challenges, risks and regulatory and legal implications. It aims to facilitate peer learning on a key set of issues around CBDCs and financial inclusion policy faced by societies around the world.
Summary
- Central banks are actively considering how retail central bank digital currencies (CBDCs) may fit with policy goals around financial inclusion.
- The interviewed central banks take the view that, while CBDC is not a panacea, it can represent a further tool to promote financial inclusion if designed with this goal.
- Barriers to financial inclusion differ across countries, but there were some common elements that came out in the interviews.
- Some central banks consider CBDCs as key to their mandate as a catalyst for innovation and economic development.
- Several central banks see CBDC more as a potential complement to existing financial inclusion initiatives.
See: BoC and MIT announce joint CBDC collaboration
Major challenges
- Obtaining buy-in from stakeholders and safeguarding data privacy were highlighted as two major challenges.
- BDC issuance may require new laws and regulations to be enacted, or existing laws to be revised.
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Download the 39 page PDF report --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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UK Embedded Finance (Fintech Infrastructure) Fidel API Bags $65 million Series B
TechCrunch | Mary Ann Azevedo | Apr 6, 2022
Financial infrastructure startup Fidel API has raised $65 million in a Series B funding round led by Bain Capital Ventures.
The London-based company provides identity, data and payments products that it says gives developers a way to capture consent permissions and “securely” connect payment cards to a service or application.
“With this infrastructure, developers are able to create highly contextualized and event-driven user experiences at the point of purchase,” it claims. Fidel API is industry agnostic, with customers ranging in the “hundreds,” from startups to giants such as Google, Royal Bank of Canada and British Airways. Developers use the company’s tools to power a range of features, including digital receipts, omnichannel attribution, loyalty and rewards, expense management and personal finance management.
See:
Canadien blooming. The fertile “Valley” for finance innovation FLOW: OB, CAN Trends, Beyond OB: BaaS + Embedded Finance, tunl
McKinsey Global Banking: Revenue pools moving to customer-ownership with embedded digital financial services
The raise is another example of how infrastructure companies in the fintech world continue to be resilient despite an apparent slowdown in global funding overall. The ability to empower other companies in the world of financial services is proving to be lucrative as well as attractive to investors. Just last week, Cross River Bank landed a $620 million investment that pushed its valuation to more than $3 billion. In February, blockchain infrastructure startup Alchemy announced that it had closed on a $200 million Series C1 equity round that valued the company at $10.2 billion.
In the case of Fidel API, Subrata says the company has built the infrastructure that can help developers create “programmable money.”
“Our role in the ecosystem is to enable other developers to build what we call programmable experiences on top of existing money flow that can be quite archaic,” Subrata said. “What we have done is build a modern connectivity layer that sits on top of the payment systems on the global net core networks. And then we expose that through a modern API for other developers to innovate on top of.”
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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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FDATA and Paytechs: Canadian Consumer and Small Business Attitudes Towards Financial Services and Open Banking
FDATA NA and Paytechs of Canada | Steve Boms and Alex Vronces | Apr 4, 2022
April 4, 2022, Toronto and Washington, DC: More than half of Canadians feel stress when interacting with Canada’s financial services sector and believe they would benefit from increased competition and transparency in the financial services market, according to a landmark survey commissioned by FDATA North America and Paytechs of Canada. The findings indicate this is especially true among women, young people, and new Canadians. Among the biggest sources of dissatisfaction are high fees and a lack of choice.
See: New Mastercard Study: Majority of Canadian Consumers Embrace Open Banking
The findings are derived from two surveys conducted by Pollara Strategic Insights. One was of a randomly-selected sample of 2,001 Canadians 18 years of age or older. The other was of a randomly-selected sample of 600 Canadian small business owners. In each, respondents were asked about their experiences with Canada’s financial services sector.
Key Findings:
- About half of Canadians (52%) and small business owners (51%) feel stress when interacting with the financial services sector. Those who operate larger small businesses (10+ employees) are significantly more stressed (72%). Moreover, the majority (54%) of these larger small business owners feel the amount of time they spend dealing with the financial services sector is getting in the way of them actually running and growing their business, twice the overall level among small business owners (26%). Immigrant small business owners are more likely to be stressed by their interactions with the sector.
- Over two-thirds of Canadians believe more competition in the financial services sector would lead to a greater choice in products (70%) and lower financial services fees (67%). Moreover, small business owners are over four times more likely to agree than disagree with the sentiment that Canadian small businesses would benefit from increased competition in the financial services sector (64% vs. 14%).
See: Ipsos Survey: Most Canadians Say (88%) We Need More Competition
- Among specific changes tested, Canadians are most likely to feel they would personally benefit from easier ways to “shop around” to get the best possible rate (75% would benefit), easier ways to transfer money quickly and securely (73%), and tools that help make personalized investment decisions (69%).
- Among specific changes tested, small business owners are most likely to feel they would benefit from easier ways to “shop around” to get the best possible rate (73% would benefit), better ways to transfer funds between different accounts (68%), and alternatives to credit cards with lower interchange fees for merchants (62%).
- There is widespread agreement among the users of Non-Bank FinTech Apps that they are easy to use (91%), have lower fees (82%), and help save money (73%).
Continue to the original release --> here
Download the 29 page PDF survey results --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Rich Turrin on EUs digital euro vision, U.S. eCash and China’s e-CNY + Shanghai Lockdown
Rich Turrin | Cashless | Apr 1, 2022
The EU's vision for a digital euro takes shape while the US looks at eCash
First, let me congratulate the EU for actually surveying citizens to get an idea of their concerns for the digital euro. The Fed should watch and learn from the European Central Bank (ECB)!
The most shocking thing we learned is that privacy is, amazingly enough, not "top of mind" for most users, many of whom feel that much of their purchasing is already tracked. That was a real shocker for me and apparently for the ECB. Still, it shows the sad state of digital privacy.
Interestingly, free and immediate contactless payment seemed to be a hit, provided it was universal. Users don't want to worry about whether or not it would be accepted. They have had their fill of being told: "Sorry, we accept Visa, not Mastercard." The good news is that universal acceptance is precisely the experience a CBDC national currency can deliver. More on the ECB digital euro user survey
See: Will The ECASH Act be the Answer to Privacy and Virtual Currency in the U.S.?
What makes this so interesting is that in the same week that the EU launched these results, US Senators from the Financial Services Committee published a draft law proposing privacy-protecting eCash!
ECash is tokenized money that does not get transported on a network. It is not a CBDC! ECash is a token on your phone or offline card and can be used as we do cash with no risk of being tracked. I think it's a great idea and may just compliment a CBDC. CBDCs would cover higher value transactions and eCash lower day-to-day expenses. This looks almost exactly like the e-CNY's anonymous payment for low value (RMB 2000 max) transactions.
eCash is designed for privacy. Lack of AML/KYC is its "Achilles heel."
eCash is not without flaws. Suppose you lose your digital wallet; it's gone, just like cash. The biggest issue is that eCash requires no KYC or AML. I don't see this as a flaw, in fact, I love it! Still, I am sure this will cause a battle with regulators who will deem eCash unacceptable. Still, I think it advances the digital dollar discussion. More about the eCash act and PDF of the full act in this post here.
Fintech Fridays Podcast: Special guest, Richard Turrin, Author of Innovation Lab Excellence
What makes this so interesting is that the US is investigating a privacy-protecting eCash system, while the ECB is getting actual survey results saying that privacy is not the number one concern. I find the divergence interesting. It makes me wonder if the nation addicted to privacy vampire Facebook is as concerned about privacy as a vocal minority makes them out to be? In the EU, we now know that this is not a primary concern. Sadly, for the US, we have no idea.
The Digital Yuan is used for far more than buying coffee and has potential for reserve currency
I back this statement up with a post earlier in the week that shows how the e-CNY is being used for transactions over US$ 100,000 in trials in China. The PBOC is clearly signaling that e-CNY will be used to carry large sums of money that WeChat and Alipay were never designed to move. Moreover, it proves that the e-CNY can do far more than buy coffee.
Rich Turrin at FFCON20: AI Implementation in China: A Day in the Life in Shanghai
This is a big question but has to be asked. While the yuan certainly has many flaws, is it "good enough?" The US dollar was once considered "risk-free," but it now has real questions surrounding its usability following widespread global sanctions. Can you use it if sanctions hit? This is why as a "risk management exercise," many nations are looking for dollar replacements, and the yuan just might be "good enough." It's not a question of loving the yuan, so much as that there are few alternatives, and most countries import goods from China. So why wouldn't they convert some of these purchases to yuan to reduce dollar dependence?
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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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Are millions of NFT gamers in for an unpleasant surprise this tax season?
Protocol | Hirsh Chitkara | Nov 6, 2021
NFT games are fun but filing taxes afterward is a nightmare.
In a matter of months, NFT gaming became a multibillion-dollar industry by combining two things people already loved: video games and getting rich from crypto. But it turns out the play-to-earn model also has the incredibly inconvenient side effect of turning even minor actions taken in a video game into taxable events.
See: Licensed Formula 1 Ethereum Game is Shutting Down – What Happens to NFT holders?
Did you sell your cute digital creature on Axie Infinity? That's a taxable event. Did you sell it less than a year after you bought it? (The answer is almost certainly "yes," given the timing of the play-to-earn boom.) Well, then it's a short-term capital gain. If you converted your NFT into a cryptocurrency before cashing out, that counts as two separate investment transactions. Even seemingly trivial in-game item swaps can have tax implications.
Making matters worse, NFT games don't typically keep track of all your transactions for tax documentation purposes. So while there are plenty of services designed to assist with crypto tax filings, it can be difficult to get the raw data that feeds into those products. By contrast, mainstream crypto-trading platforms like Coinbase prepare customer trade data for tax services either in the form of CSVs or direct software integrations.
See: Crypto-tax primer in Canada
Kim also pointed to the added complexity that comes with the "scholarship" model employed within play-to-earn gaming. While the name suggests an altruistic support system, scholarships are all about making money. Thousands of "scholars'' in places like the Philippines and Venezuela play games on behalf of NFT owners ("managers") in exchange for a share of the resultant earnings.
Scholarship managers therefore operate business partnerships within NFT games. That triggers business tax requirements rather than capital gains. It also likely adds overseas tax implications, since many managers live in developed nations and lend to scholars in developing nations. By some estimates, around 40% of players on Axie Infinity are now based in the Philippines.
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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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Why Apple Acquired An ‘Open Banking’ Fintech
Forbes | Ron Shevlin | Mar 27, 2022
The Apple-oids in Cupertino must eat this stuff up. Every time Apple makes an acquisition, the technology world—and increasingly now, the fintechaverse—goes into hyper speculation mode, trying to figure out why the company made the purchase and what it plans to do with the acquired firm.
See: Financial Consumer Agency of Canada publishes BNPL pilot study
What does Credit Kudos do?
via their Website: “Credit Kudos’ intelligent products enable businesses to leverage Open Banking to enhance affordability and risk assessments. Our predictive insights are built by combining transaction and loan outcome data. Our products help lenders streamline underwriting, improve accuracy in decision-making, and support customers after acquisition through our engagement tools.”
Why Apple Wants Credit Kudos
BNPL acquisitions have been occurring faster than Ben Affleck finds new girlfriends:
- Block, nee Square, acquired AfterPay for somewhere between $15 million and $29 million (the valuation was at the higher amount when the deal was announced, but Block’s stock price fell by ~50% by the time the deal closed).
See: UK Research: How consumers use savings apps
- PayPal purchased BNPL company Paidy in 2021 for $2.7 billion.
- Zip acquired New York-based Quadpay in 2020 for nearly $300 million, and is now looking to purchase Sezzle.
It would be a real coup for Apple to acquire a BNPL capability for just $150 million.
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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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