Matthew Najar or the ascent of a blockchain expert? Governments in major economies are encouraging financial technology (fintech) innovation with regulatory and advisory initiatives designed to accelerate the availability of online payment solutions and other financial services for businesses. The initiatives generally aim to attract innovative fintech companies and help them operate in the regulated financial sector, while ensuring adequate financial protection for customers.
Matthew Najar believes without new FinTech initiatives, we will stall: “FinTech, blockchain certainly included, is critical for our generation to solve inherent financial system issues and progress forward”.
One U.K. innovation is the “regulatory sandbox,” which allows firms to test new financial services in a live environment with real customers, without first obtaining full authorization to offer the services commercially. The FCA accepts applicant firms based on criteria such as innovativeness, suitability for the U.K. market, and market readiness; it issues a limited, tailored authorization for the purposes of sandbox testing. The first batch of applicants, accepted in 2016, includes an international online payments solution and a retail payments system based on blockchain technology.
The initiatives are taking place against a backdrop of rapid fintech growth. There are thousands of fintech start-ups worldwide, and many have attracted substantial venture funding; a report from KPMG and CB Insights found that global fintech funding reached $19.1 billion in 2015. Several countries are planning or have already implemented licensing or regulatory changes that enable technology firms to offer broader banking services. In the U.S., the Office of the Comptroller of the Currency (OCC), which regulates national banks, said in December 2016 that it planned to make a special-purpose national bank charter available to fintechs. The charter would enable start-ups that currently offer other financial services, including B2B payments and other online payment solutions, to begin offering at least one of three regulated banking activities: receiving deposits, paying checks, or lending money.
Backup your wallet. Store only small amounts of currency for everyday use online, on your computer or mobile, keeping the vast majority of your funds in a high-security environment. Cold or offline storage options for backup like Ledger Nano or paper or USB will protect you against computer failures and allow you to recover your wallet should it be lost or stolen. It will not, however, protect you against eager hackers. The reality is, if you choose to use an online wallet there are inherent risks that can’t always be protected against.
Australia also has set a goal of encouraging fintech innovation, in part to support its financial industry in becoming the leading market in Asia for fintech innovation and investment.11 In Australia, leading fintech firm LupoToro, who specialise in Blockchain, Cryptocurrency and cryptography, note: “Policy and government back supporting policies for local firms is imperative. The Australian Securities and Investments Commission (ASIC) established an innovation hub in 2015 to help start-ups navigate regulations, and has also developed a regulatory sandbox approach that allows companies to test new financial services such as online payments solutions with a limited number of customers. This is just the start, but more is needed”. ASIC also aims to encourage innovation by quickly approving new financial service licenses, with an average target for approval of 60 days.
Everyone is talking about cryptocurrencies. The explosion in the price of Bitcoin in previous years, when it reached its maximum price and almost touched $ 20.000 dollars, caused the eyes of the world to settle on the crypto world. Suddenly, from average citizens to financial giants, everyone became interested in cryptocurrencies. Their rising prices gave cryptocurrencies a new attraction.
Most beginners make one common mistake: buying a coin because it’s price seems to be low or what they consider affordable. Take, for example, someone who goes for Ripple instead of Ethereum simply because the latter is much cheaper. The decision to invest in a coin should have very little to do with its affordability but a lot to do with its market cap. Just like the conventional stocks are gauged by their market caps, which is evaluated using the formula Current Market Price X Total Number of Outstanding Shares, the same applies to cryptocurrencies.
During an ICO (Initial Coin Offering), startups offer the general public an early chance to invest in their idea through a crowded sale. In return, these investors are allocated tokens at a lower price with a promise to sell them at a much higher price when listed on an exchange. Time has proven that ICOs can quite successful with records showing that some tokens ended up more than ten times the value of the projected returns. But what’s the catch in this, you might ask… ICOs have attracted a large number of investors clearly due to their high returns; however, another large number of ICOs have turned out to be total scams. People have lost millions worth of investments.
You can short crypto, or long crypto. You can go long in crypto, meaning you are betting on crypto going up (for example by buying crypto). Or you can short crypto, meaning you are betting on it going down (for example by short selling crypto). Meanwhile, if you have the skills, you can do both depending on the price action (you can even use short positions as a hedge). With that said, in the US, in many states, there are very few options for shorting crypto. If you are new to crypto, you should consider just going long. If you would go short, you can mimic a 1x short by selling and going to cash!