Report: Bank of China’s CIO has revealed the company’s plan to increase investments for technological development, including in blockchain
The Philippines government is building Crypto Valley of Asia, a cryptocurrency and fintech hub similar to the one in the canton of Zug, Switzerland. The estate will be built at the Cagayan Special Economic Zone and Freeport in partnership with private property developer Northern Star Gaming & Resorts Inc. The zone is already set to accommodate 25 crypto firms that will operate within the area.
Building Crypto Valley of Asia
The Philippines government-owned Cagayan Economic Zone Authority (CEZA) has partnered with Northern Star Gaming & Resorts Inc. to develop a crypto and fintech hub called Crypto Valley of Asia (CVA).
This is “part of the government’s bid to foster a fintech ecosystem [to] attract international blockchain companies to set up shop in the country,” e27 reported Monday.
The publication elaborated:
The CVA will consist of a 25-shop housing development inside the cyberpark developed in compliance with the strict security requirements for licensed overseas virtual exchanges (OVEs) located in CEZA. It will include co-working and living spaces, business incubation and acceleration hubs as well as back offices of OVEs and service providers to the global crypto space.
CEZA administrator and CEO Raul L. Lambino commented in an official press statement that this infrastructure “will serve to attract more foreign investors and global fintech players to CEZA and the Philippines.” It will help the country “become one of the major offshoring destinations for fintech and blockchain related work.”
Recently, the authority announced that it has granted two licenses to cryptocurrency firms. Seventeen companies in the crypto space have already paid in full and the authority is expected to generate $68 million from licensing 25 crypto and fintech firms.
Generating Economic Boom
“The goal is for the CVA to generate an economic boom that will allow more Filipinos to pursue careers in technology,” e27 conveyed, adding that third-party business providers (BPOs) will bring employment to the area.
Northern Star has committed to investing $100 million over the next 10 years and has already secured funds from several international and regional companies that will be located within the CVA, the news outlet noted. Chairman Enrique Gonzalez commented:
Crypto Valley of Asia and CEZA will put the Philippines on the global map of fintech and blockchain. Similar to other progressive jurisdictions such as Zug of Switzerland, we will create an environment that fosters innovation, entrepreneurship and critical skills development thru education and BPO training.
He reiterated, “with strong global partners that have confirmed entry into our master-planned development, we are confident in the continued momentum in positioning the Philippines as the leading destination for blockchain offshoring.”
What do you think of the Philippines building Crypto Valley of Asia? Let us know in the comments section below.
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Another Swiss private bank has announced in a statement that it’s open to on-board cryptocurrencies. Maerki Baumann private bank in Zurich is open to accepting assets that were generated with cryptocurrencies, “under the condition that strict regulatory and legal requirements are fully complied with,” Managing Director Stephan Zwahlen told news.Bitcoin.com.
“Switzerland Knows How to Protect Assets”
Assets raised from cryptocurrency transactions are usually rejected by most Swiss banks, but there are a few exceptions. Maerki Baumann has reportedly followed Falcon and officially accepted handling such assets, but it does not offer asset management solutions in cryptocurrencies nor accounts in crypto, the Managing Director of the bank told news.Bitcoin.com. Funds raised from speculative crypto transactions, payments for services rendered, or from mining successes are increasingly growing, together with the popularity of cryptocurrencies. But these assets reportedly often meet rejection from Swiss banks.
Vontobel, another Swiss private bank, together with Falcon, stands among the lenders that are agreeing to handle cryptocurrency-based investments on behalf of their clients.
The Swiss Contradiction
One of the contradictions about Switzerland which is aiming to become a “crypto nation” is that despite having hundreds of the most famous crypto companies worldwide based in Zug, hardly any of them have a Swiss bank account. The main reasons for that is the fear of black money that has tainted some of the major Swiss banks throughout history, Marc Bernegger, a Swiss Fintech and crypto entrepreneur, told news.Bitcoin.com in an interview in Zurich.
Bernegger has been a fintech entrepreneur for close to 20 years, and said he read Satoshi’s whitepaper in 2012. He then immediately felt that Bitcoin had a lot of potential. “I understood from day one the impact that the technology was going to have. Back in the old days, hardly anybody in the traditional financial services industry was even hearing about Bitcoin,” he said.
“Nowadays, when it comes to cryptocurrencies, there is an understanding of financial services that reminds [me of] the old banking privacy,” Bernegger said. “It isn’t about replicating that again, but I think Switzerland has a strong reputation and knowledge about protecting assets.”
However, the Swiss entrepreneur noted that one of the issues in Switzerland is that, officially, there are hardly any banks doing crypto. “Everyone goes to Bank Frick, a tiny bank in Liechtenstein, one hour away from Zurich,” Bernegger explained, but this is slowly changing, he observed. Bernegger, who is also a board member at Crypto Finance Group, is part of a task force led by Switzerland’s Finance Minister, Ueli Maurer, and Economy and Education Minister, Johann Schneider-Ammann, including federal and local officials, as well as members of various startups and legal representatives. “The initiative is aiming to create a more crypto friendly environment for companies,” Bernegger explained, “the names of the banks [involved] are not public but there are a few major [Swiss] banks and several other Swiss banks which will soon on-board crypto clients,” he revealed. “I personally think that six months from now, it will be quite common to open accounts as a corporate client doing crypto business in Switzerland.”
Finance Minister Invites Banking Association and National Bank to Discuss
“Federal Councillor Ueli Maurer recently took the initiative to invite the Swiss Banking Association (SBA), the Swiss National Bank (SNB), and the Finma Banking Supervisory Authority for a round table to discuss the issue of the banking accounts of crypto companies. As a result of this round table, SBA has formed a working group to tackle the issue and is in the lead,” Peter Minder, the head of communication of the Swiss Federal Department of Finance, told news.Bitcoin.com in an email.
Swissquote Group, the Swiss online bank, reported a profit of 25.7 million CHF (~$26.1million USD) from the first half of this year, which represents an increase of 44 percent over the same period of the previous year since it started accepting crypto, news.Bitcoin.com reported earlier this month. From a turnover perspective, Swissquote is reportedly one of the Swiss companies with the highest revenue out of all crypto businesses in Switzerland.
Hypothekarbank Lenzburg, a Swiss legacy bank, also opened the door to crypto and blockchain firms in June of this year. Its CEO Marianne Wildi, who trained as a computer programmer, argued that Switzerland should adopt a crypto Swiss franc. The bank also evaluated potential compliance risks before deciding to open up to blockchain and crypto firms, and also informed Finma of its decision.
Swiss Crypto Companies Target Banking Licenses
Swiss crypto companies are also actively trying to acquire banking licenses with Finma, the nation’s financial market supervisory authority, and may soon operate just like banks. It’s a matter of time, some say.
The main problem for Finma is that many of the cryptocurrency tokens are considered securities, and in order to handle securities as a broker in Switzerland, a company needs to get a broker’s licence, which seemingly no one in Switzerland within the crypto industry has at this stage. “Finma differentiates payment tokens, utility tokens, and asset-backed tokens. The payment and utility tokens aren’t considered securities,” Yassine Ben Hamida, a former Swiss banker now fully involved in crypto projects, told news.Bitcoin.com during a phone interview in Switzerland. “The problem is that you need to have a broker/dealer’s license in order to handle the tokens that are considered securities,” he confirmed.
Crypto Broker, which belongs to Crypto Finance AG, was not granted the security dealer’s license from Finma, as the company isn’t trading security tokens at the moment, its CEO said in an email. However the company is in the process of obtaining the license, it was confirmed to news.Bitcoin.com.
Crypto Fund, an asset manager also part of Crypto Finance Group, is the first company in Switzerland which is able to distribute foreign funds to “qualified investors” or so-called high net worth individuals. But they aren’t the only ones, sources involved in the Swiss crypto world say, for there are allegedly many Swiss independent companies that have launched certificates in order to invest in crypto. “This is one of our first milestones, because we are now ultimately moving to become a fully licensed Asset Manager and Broker. Crypto Finance Group is aiming at becoming the most advanced and secure investment and technology provider globally,” Mark Bernegger, who also serves as a board member at Crypto Finance Group, told news.Bitcoin.com in a statement.
Custody: How Crypto Assets Can Be Kept in Banks
Mainstream media recently reported that Goldman Sachs is considering a plan to offer custody for crypto funds, without citing any solid source. Japan’s Nomura, Bank of New York Mellon, JP Morgan Chase, and Northern Trust are all reportedly thought to be working on or exploring custody offerings. In Switzerland, there aren’t any banks at the moment offering deposit services of those securities. However, this is a market that will develop quickly, according to a former UBS executive and also a former Julius Baer executive in Switzerland.
Gazprombank Switzerland Ltd., a state-owned Russian bank, and third largest in the country by assets, is also looking into cryptocurrency asset custody service and working with auditors and with Finma, according to sources close to the matter. However, the bank couldn’t make any official statement on the topic at this stage, a spokeswoman told news.Bitcoin.com.
What do you think of Swiss crypto companies aiming to operate just like banks? Let us know in the comments section below.
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How close are Wall Street institutions to entering crypto markets? JP Morgan, Goldman Sachs, Blackrock and Morgan Stanley on their way.
The Research Institute of Tsinghua University has recently partnered with China Internet Nationwide Financial Services to establish a blockchain research center
A major new report from the U.S. Treasury Department has called for a more agile and conducive regulatory approach to innovations in the fintech sector
A Letter of Intent has been signed between Billon and FIS to implement blockchain tech into the global financial market
The Philippines government-owned Cagayan Economic Zone Authority (Ceza) is in the process of issuing more crypto licenses. Interest for the license by offshore companies “surpassed all our expectations,” Ceza administrator said. Seventeen firms have already paid in full; 19 more are in the pipeline. Ceza expects to earn about $68 million from crypto licensing.
17 Companies Paid in Full
Ceza previously announced that it will issue 25 Financial Technology Solutions and Offshore Virtual Currency (Ftsovc) licenses. The permits allow licensees “to establish a financial tech, crypto, and blockchain office” at the zone, Bitpinas news outlet described.
According to the Philippines News Agency, Ceza administrator and chief executive officer Raul Lambino revealed last week:
17 fintech and offshore virtual currency firms have already paid in full the application and license fees for the digital coin trading under Ceza … 19 companies are in the pipeline to pay their application and license fees to Ceza.
Last week, Ceza awarded a license to Liannet Technology Ltd., a subsidiary of the Apsaras Group. It was the second license Ceza has issued; the first went to Hong Kong company Golden Millennial Quickplay Inc. in June.
The Philippines Daily Inquirer cited Lambino, revealing:
Other firms that had already paid fees to operate in Ceza were Formosa Financial Holdings, Sino-Phil Economic Zone Agency Development and Management Corp., Asia-Pacific International Ltd., Hong Kong Yuen Shing-Hong Ltd., Tanzer Inc. and Rare Earth.
Boosting Revenues with Crypto License Fees
Lambino said in a press statement Friday that the income from Ftsovc application and license fees “exceeded 2017 revenue by more than 50 percent,” the news outlet detailed. The interest expressed by offshore companies to operate in Ceza “surpassed all our expectations,” he added, noting that fintech operations are expected to create an initial 20,000 jobs.
Ceza “has earned more than P200 million [~$3.7 million] from offshore financial technology firms to raise its total revenues to at least P340 million [~$6.4 million] by the end of the second quarter of the year,” the publication described, elaborating:
Ceza expects to earn some PHP3.6 billion (~US$68 million) from the issuance of Ftsovc licenses, on top of the 0.1 percent share for every transaction value of registered digital coin exchanges.
Recently, there have also been reports that Ceza is launching its own cryptocurrency. However, Ceza staff told Bitpinas last week that this is not the case.
What do you think of all these crypto firms wanting to operate in Ceza? Let us know in the comments section below.
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Following last week’s “40 under 40,” Fortune has created a crypto-focused version of its prestigious honor roll for impressive young innovators at the intersection finance and tech
Following a bureaucratic overhaul, Japanese financial regulator the FSA has created a bureau to deal with fintech-related issues, including cryptocurrencies
The Large Credit Union Coalition, comprising of CIOs of the 16 largest credit unions in Canada, has joined blockchain consortium R3 to explore and develop its Corda platform
Japan’s internet services giant GMO Internet has today launched a new Internet banking business that will implement blockchain as a key part of its technological arsenal
CFA Institute, with over 150,000 members, is adding cryptocurrency topics to its curriculum for the first time. The course material will be released in August. A record 227,031 people in 91 countries and territories reportedly registered to take CFA exams this year.
Crypto Added to CFA Curriculum
The world’s largest association of investment professionals, CFA Institute, “is adding topics on cryptocurrencies and blockchain to its Level I and II curriculums for the first time next year,” Bloomberg reported.
A global, not-for-profit organization, CFA Institute offers a range of education and career resources including the Chartered Financial Analyst (CFA) and the Certificate in Investment Performance Measurement (CIPM) designations. Its membership stood at 156,800 at the end of FY2017.
Citing that a majority of the candidates came from Asia, the news outlet elaborated:
A record 227,031 people in 91 countries and territories registered to take CFA exams in June…Material for the 2019 exams will be released in August, giving candidates their first opportunity to start logging a recommended 300 hours of study time.
Crypto – ‘Not a Passing Fad’
The CFA curriculum is organized into three levels. Level I tests “knowledge of the ethical and professional standards.” Level II tests how these standards are applied to situations analysts face. Level III tests how they are applied “in a portfolio management and compliance context.”
Each level currently consists of 10 topics such as quantitative methods, economics, corporate finance, equity management, fixed income, derivatives, and alternative investments.
The crypto addition is part of a new reading called Fintech in Investment Management, Bloomberg conveyed. The institute decided to include it “after industry participants showed surging interest in surveys and focus groups.”
Stephen Horan, the institute’s managing director for general education and curriculum in Charlottesville, Virginia, explained that “the CFA material on crypto and blockchain will appear alongside other fintech subjects including artificial intelligence, machine learning, big data and automated trading.” Citing that “more crypto topics, such as the intersection of virtual currencies and economics, may eventually be added to the curriculum,” he asserted:
We saw the field advancing more quickly than other fields and we also saw it as more durable…This is not a passing fad.
A 27-year-old financial economics student at Columbia University who took the CFA Level I exam in June, Kayden Lee, was quoted by the news outlet saying that “it will be beneficial for us since there’s been a huge expansion and adoption of crypto in our investment universe.”
What do you think of CFA Institute adding crypto topics to its curriculum? Let us know in the comments section below.
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Government of Bermuda introduces ICO regulations that require issuers to provide detailed data to conduct an ICO
The Berlin-based Banking-as-a-Platform (BaaP) institution Solarisbank has recently announced the launch of their new banking service plan that’s focused on clients from the blockchain and digital currency industry. The newly featured resource called the ‘Blockchain Factory,’ will offer financial management services to companies whose business operations deal directly and indirectly with cryptocurrency solutions and blockchain technology.
This German Bank Plans to Provide Special Bank Accounts for Cryptocurrency and Blockchain Companies
Over the past few years as cryptocurrencies have gained in popularity a few companies like exchanges and brokerage services that deal with digital currencies have had issues with their banking providers. Banks and other financial management services have ceased their partnerships with cryptocurrency firms and have closed business accounts making it very difficult for blockchain companies to establish reliable banking partners. Now the German financial tech company, Solarisbank, plans to offer a service called the ‘Blockchain Factory.’ Companies who deal with cryptocurrencies will now have a solid banking colleague who understands the technology.
“The Blockchain Factory will be used by Solarisbank to offer banking services to companies whose business is directly or indirectly based on cryptocurrencies and blockchain technology — One example of these services is the ‘Blockchain Company Account’ for the banking business of blockchain companies,” Solarisbank explains.
Furthermore, services for global cryptocurrency marketplaces will be made available to make it easier to buy and sell fiat currencies; such as the Solarisbank ‘Automated Trust Account’, an automated escrow account for cryptocurrency marketplaces.
High Demand from the Blockchain World for a Licensed Banking Partner
Solarisbank has done well since the bank’s inception in March of 2016, and entered a strategic partnership with Mastercard the following October with plans to build new banking modules. Last March, Solarisbank raised $70Mn USD in a Series B funding round from firms such as ABN Amro, SBI Group, Visa, BBVA, and Lakestar.
“There is high demand from the blockchain world for a licensed partner that forms the technological and regulatory bridge to traditional banking — as a technology company with a banking license, we are the natural partner,” Roland Folz, the CEO of Solarisbank details.
A Hybrid Future
The financial tech company has started its first partnership with another firm called VPE Bank and the two have plans to provide cryptocurrencies to institutional traders. Moreover, the firm will establish partnerships with cryptocurrency companies that deal with banking and debit cards within their business model.
“The fiat world is not about to dissolve. We are moving towards a hybrid future, in which the blockchain world still has to prove itself,” the CTO of Solarisbank, Peter Grosskopf explains.
However, we see the disruptive power of these business models and we want to help shape the future of this industry.
What do you think about Solarisbank’s new Blockchain Factory banking services? Do you think companies who deal with cryptocurrencies need better banking providers? Let us know your thoughts on this subject in the comment section below.
Images via Shutterstock, and Solarisbank.
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The authority of the Filipino government-owned economic zone is drafting regulations for cryptocurrencies and planning to limit the number of licenses it issues to 25. Other rules include the requirement for each crypto exchange to invest at least US$1 million within 2 years. The authority has reportedly received about 60 applications from crypto companies so far.
Drafting Crypto Regulations
Philippines’ Cagayan Economic Zone Authority (CEZA) is “crafting rules to safeguard cryptocurrency investors,” according to the Philippine News Agency, the government’s newswire service.
CEZA is the government-owned and controlled corporation tasked to manage the development of the Cagayan Special Economic Zone and Freeport. “CEZA is eyeing to become a hub for financial technology (fintech) investments,” the news service wrote.
According to CEO and Administrator Raul Lambino, CEZA “is in the process of crafting regulations that will protect those investing in cryptocurrency.” He said in a statement this week that the authority “will remain stringent in checking the probity and integrity of companies eyeing to launch their initial coin offering (ICO) in the country. These companies shall be registered with CEZA.”
25 Licenses Only
Originally, CEZA announced that it will allow 10 crypto firms to take advantage of its tax advantages while generating employment.
“We are about to license 10 platforms for cryptocurrency exchange. They are Japanese, Hong Kong, Malaysians, Koreans,” Lambino told Reuters. “They can go into cryptocurrency mining, initial coin offerings, or they can go into exchange.” He elaborated, “the exchange of fiat money into virtual currency, and vice versa, should be done offshore to avoid infringing Philippine regulations,” the news outlet conveyed.
However, during the Global Blockchain Summit last week, Lambino revised that number, stating that CEZA will limit its crypto license issuance to 25. He detailed:
Each crypto exchange will be required to invest at least USD1 million or around PHP53 million within two years and it must have a back office in the Philippines. Firms must also be registered with the Securities and Exchange Commission.
“Although CEZA will only issue 25 licenses, each exchange will have 20 to 30 sub-licenses for traders and brokers,” Lambino clarified. According to reports, CEZA has already received more than 60 applications.
Lambino emphasized that the regulations will not allow Ponzi schemes. He explained that, for any companies with an ICO, “we will have to find [out] if their ICO is asset-backed,” citing “there are many scammers.” He noted that some ICOs “may be able to convince 50 unsuspecting investors and promise them the sun and the moon,” adding:
There are many operating scammers who set up an exchange with very little capital and they are victimizing investors…We do not want the Philippines to be a haven for scammers even if these scams are happening abroad. That’s why through our probity and integrity check we can determine if their transactions are just designed to entice unsuspecting people to invest in bitcoin or whatever crypto coin that is a fraud.
What do you think of CEZA drafting crypto regulations and licensing 25 exchanges? Let us know in the comments section below.
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Germany’s solarisBank launches new service to conduct business with blockchain and crypto companies in the European Economic Area
What blockchain can do for the financial sector and whether Swiss crypto-francs are a good idea, interview with PwC’s Strategy&’s Daniel Diemers
The Uruguayan chamber of fintech is forming a committee that will develop the country’s crypto regulation framework