Fintech Daily Digest

Since ICOs and STOs are clearly here to stay it is worthwhile to take a look at what regulators in Asia are doing in response to this.

Payments giant Western Union (WU) is partnering with Stellar (XLM) collaborator Thunes to enable WU clients to transfer funds directly to mobile wallets globally.

The rise in on-chain transactions per day has been due in large part to VeriBlock (VBK), which secures other blockchains through the "Proof of Proof" (PoP) consensus mechanism.

Coinbase has announced that it is giving away 1 billion Stellar Lumens (XLM) (about $106m) to users that are willing to study the Stellar protocol.

Hong Kong has issued its first batch of digital banking licences, giving a mix of traditional financial institutions and Chinese companies a chance to compete for a $15bn pot of retail banking business in the city.

Bitwise research has found evidence that around 95% of all Bitcoin trading volume has been faked by exchanges. Data from 71 of 81 exchanges exhibited patterns that reflected artificial trading volume.

As Japan moves to shorten its settlement window for cash equities, dealers are hoping that distributed ledger technology can reduce the probability of failed trades between domestic and foreign investors.

"Singapore-based exchange DragonEx says it has been hacked for an undisclosed amount in a number of cryptocurrencies."

What happened with Canadian crypto exchange QuadrigaCX would not have happened if it had been licensed under the Bermuda Monetary Authority, because it has rules regarding the custody of master keys and making sure they're not held by a particular individual.

"To provide continued transparency about USD Coin (USDC), we wanted to highlight some data about redemptions and provide some clarity about why making redemptions seamless is an essential element of USDC's success."

"We aim to achieve a number of objectives: to introduce, identify and organize all relevant and meaningful metrics of cryptoasset market share calculation; to develop associations between metrics, and to explain their meaning, application, and limitations so that it becomes obvious in which context metrics can be useful or not, and what the potential caveats are; and to present rich, curated, and vetted data to illustrate metrics and their use in measuring cryptoasset shares in their respective markets. The result is comprehensive guidance into the size of the crypto-economy."

"U.S. Securities and Exchange Commission ("SEC") staff has recognized that blockchains, or distributed ledger technology, could be used to issue and transfer ownership of "Digital Assets" that are securities ("Digital Asset Securities"), depending on the facts and circumstances. The goal of this Q&A is to propose answers to the Division of Trading and Markets' frequently asked questions of interpretation with respect to how broker-dealers may comply with the possession or control requirements of the Customer Protection Rule when carrying fully-paid Digital Asset Securities for the account of customers."

The NY Fed included crypto-related questions in its May 2018 Survey of Consumer Expectations. The survey reveals that a very high fraction of respondents are aware of cryptos and that they hold a wide variety of views on the topic. For example, younger respondents seem to have a more positive view of cryptos than their older counterparts.

Many stablecoin backers artificially inflate their market caps and trading volumes, creating misleading data on crypto-tracking sites. One dubious tactic is to give discounts to investors who agree to lock up their funds for a set timeframe, and another is encouraging wash trading.

Using data for the most prominent cryptocurrencies, we find evidence of a significant long-run relationship between prices and fundamentals like the computing power expended on creating their blockchains and the adoption levels of their respective blockchains, even after accounting for the returns of Bitcoin and cryptocurrency price momentum.

"The JCBA says there is a need to clarify whether security tokens, which are subject to the Financial Instruments and Exchange Act, fall under "Article 2 (1) Securities" or "Article 2 (2) Securities," and suggested the exclusion of security tokens from the Payment Services Act, in order to avoid duplicating regulatory requirements imposed by the Financial Instruments and Exchange Act and the Payment Services Act."

The Swiss Federal Council has initiated a consultation on the adaptation of federal law to developments in distributed ledger technology. It wants to increase legal certainty, remove hurdles for DLT-based applications and limit risks of misuse. The consultation will last until the end of June 2019.

"The Federal Reserve Bank of New York today launched the Fintech Advisory Group to provide Bank leaders with a high-level platform to establish clear points of contact with senior representatives and thought leaders from the financial technology industry and consumer organizations. The group's first meeting will be April 1, 2019."

The BIS continues to sound warnings about CBDC. Aside from the run risk, they warn that CBDC could impact monetary policy implementation by changing the demand for base money and its composition in unpredictable ways, and possibly modifying the sensitivity of the demand for money to changes in interest rates. Also, CBDC could lead to a larger central bank balance sheet, which may require it to purchase additional assets, which could interfere with key markets functioning or dry up liquidity.