We have all heard about FinTech and how it is rapidly changing the backbone of finance. With the transaction value in the FinTech market set to reach a total of over $3.3trn globally this year, now is the perfect time to get up to speed and be at the forefront of learning about the FinTech space.
“Most finance professionals have heard of FinTech, but where do you go if you want to understand what’s happening? Guided by four lecturers from major European and Asian universities, plus 16 FinTech CEOs and heads of innovation, participants will have a global view of FinTech and learn from those who are building Finance 2.0.”
Huy Nguyen Trieu, Co-founder, CFTE
The Market Mogul has partnered with The Centre for Finance and Technology Entrepreneurship to bring you ‘Around FinTech in 8 hours.’ Taking an online course, you will have the most knowledgeable people helping you demystify all aspects of FinTech, from investing in the industry to cryptocurrencies, all in the comfort of your office or living room.
Some of the experts walking you through the course include:
- Huy Nguyen Trieu, Co-founder of CFTE & CEO of TDG
- Ericson Chan, Head of Ping An Technology, the Chinese insurer that announced a $1bn FinTech fund.
- Ronit Ghose, Global Head of Bank Research at Citi
- Christophe Chazot, Global Head of Innovation at HSBC
- Aurelien Menant, CEO of Hong Kong-based cryptocurrency exchange Gatecoin
- Claire Calmejane, Director of Innovation and head of the Digital Centre of Excellence at Lloyds Banking Group
The course is priced at £299 but, as a reader of The Market Mogul, you will get an exclusive 10% off using the code MOGUL when you sign up.
You will be up to speed on the following topics:
- What is FinTech (4 modules): Covering the changes happening in finance, and examples of the latest innovation in the space.
- Overview of technologies (4 modules): Covers the importance of technology in finance, the mobile revolution, cloud computing and blockchain.
- Deep dive (4 modules): From challenger banks to ICOs and cryptocurrencies
- Who’s behind FinTech (4 modules): Covering FinTech startups, incumbent innovation, investing in FinTech and much more.
See the full list of modules here.
Save 10% and get your exclusive place
Register at http://aroundfintech.cfte.education/, using the code MOGUL to get 10% off the course. Make sure to do so before December 10th, as places are limited.
South Korea Bitcoin Regulation on The Horizon
South Korea’s government held an emergency meeting to discuss the impact of cryptocurrency speculation last Wednesday. Banning minors from investing and introducing capital gains tax on cryptocurrency were suggested as means of protecting citizens, reports say.
The meeting was a response to talk of cryptocurrencies being in an asset bubble and the impact investing is having on younger generations. New measures to tackle this problem could be announced by the end of the week, according to Reuters.
Why It’s Important
South Korean exchange Bithumb – the worlds busiest – has hit it off with students. The ease of opening an account and the option to invest small amounts has caught the attention of many young people.
This group’s obsession with the digital assets prompted the emergency meeting. President Moon recently expressed his fear of students joining the trend and becoming obsessed with the rapid price changes of cryptocurrency prices. He labelled this a “serious pathological phenomenon.”
“Some even abandoned their studies and part-time jobs as they believed they could make much more money by investing in bitcoin,” said Reuter Correspondent Dahee Kim. The trend appears to be causing social problems in the country.
The country banned initial coin offerings back in September.
Indian Tax Authorities Swoop in on Bitcoin Exchanges
Indian tax officials are investigating transactions at Bitcoin Exchanges across the country on suspicion of alleged tax evasion, official sources have said.
The Income Tax department is conducting surveys in cities such as Mumbai, Delhi, Bengaluru, Hyderabad and Gurgaon. The aim of the survey is to gather evidence to establish the identity of investors and traders, their transactions and the bank accounts used.
The Indian tax authority is not the only one to be looking into cryptocurrencies. The famous US tax authority, the Internal Revenue Service (IRS), has recently asked Coinbase for information on users who had more than $20,000 in annual transactions between 2013 and 2015. This is because they realised that the number of tax returns claiming gains from virtual currencies didn’t coincide with the increasing popularity of them.
Bitcoin’s value has surged more than 17-fold since January, mostly driven by high demand. However, virtual currencies do not have a legal status in India and are not regulated. The Reserve Bank of India (RBI) has recently cautioned citizens about buying or transacting them.
In a statement on 5 December, it warned people of the “potential economic, financial, operational, legal, customer protection and security related risks associated in dealing with such virtual currencies”. Earlier on this year, the RBI also clarified that it had not given authorisation to any company or entity to deal with virtual currencies.
SALT – A Technology Bringing New Opportunities?
One goes to a bank, asks to take out a loan, but is denied – Bitcoin is not accepted as collateral. Given its price fluctuations, it seems natural that a bank declines such a request. Then comes SALT (Secure Automated Lending Technology) – the “first asset-backed lending platform to give blockchain asset holders access to liquidity without them having to sell their tokens”. Where the banks are not willing to get their hands dirty, cryptocurrencies seek to find an opportunity; lenders and borrowers are brought together with blockchain assets. Yet could this platform shake the foundations of a stable economy?
How SALT Works
A SALT coin is purchased for $25, which grants the user one-year access to a loan of up to $10,000. The more SALT coins one has, the larger the loan capacity. An amount of cryptocurrency is given as collateral, where the user pays periodic instalments for the loan. This framework creates a base demand for the coin, which can be defined as the underlying driver for its price.
This sounds very convenient for the blockchain asset holder, yet there is one catch: if the value of the crypto falls below the margin requirement, the borrower receives a margin call, and if not fulfilled, the asset is liquidated to cover the remaining part of the loan. If a payment is missed, a portion of the collateral is liquidated.
Everything appears to be in order. Yet when one considers that many investing in cryptocurrencies devote their entire savings – where they would also be inclined to leverage their position – SALT paints a scary picture.
No Credit Checks
Another attribute – or perhaps shortcoming – of SALT is that it requires no credit checks. So anyone can take out a loan; SALT has the collateral, where the lender can liquidate to cover its unpaid loan. The problem affecting society does not arise from a structural weakness of such a system, but from the borrower’s final state.
Stories of Past Misery
As it was observed in recent crises such as the housing market bubble, society fails to learn from its mistakes when it comes to leveraging and investing. This risk of a bubble is exacerbated when combined with a boom in credit.
As former Federal Reserve Chairman Alan Greenspan stated:
“All of us knew there was a bubble. But a bubble in and of itself doesn’t give you a crisis… It’s turning out to be bubbles with leverage”.
The Great Recession happened at the hands of the informed investors. Even though the financially innovative products used at the time were vague, they were created and traded by those informed investors, where the credit ratings of those products were given by well-respected organizations.
Today, when we gaze at the cryptocurrency peninsula, they are either lagging behind, declaring their lack of interest or outright calling everyone to avoid them. Wounds still fresh from the crisis, the average citizen is inclined to ignore their statements, if not completely stand against them. All of these factors brew the pot for a bubble enforced with leverage.
A Scary Tale
Although the market capitalization of all cryptocurrencies is a mere drop in the sea of investible assets, as the penetration of cryptocurrencies deepens, so will the risks along with it. As of now, no one knows how far the price of bitcoin or any other cryptocurrency can rise. But as long as they do, people will be attracted to the idea of depositing bitcoins for a loan to enable them to buy more, and to cover the loan along the way. As for when the bubble bursts, this is a tale with a well-known end.
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