Over One Third of Startups in Second Cohort of FCA’s Fintech Sandbox Are Building Blockchain Solutions

The UK’s financial regulator, the Financial Conduct Authority (FCA), has announced the second cohort of its fintech sandbox on June 15. Out of the 24 startups joining this year’s cohort, nine are developing solutions using blockchain technology, which is a testament to the potential that the FCA sees for this new technology to play a major role in the financial services sector of the future.

The FCA’s fintech sandbox allows startups to trial new financial products and services without “incurring the normal regulatory consequences.” The idea behind the fintech sandbox is to boost technological innovation as well as competition in the UK’s financial industry.

The FCA’s Executive Director of Strategy and Competition, Christopher Woolard, stated that the fintech sandbox is growing in popularity as more firms applied for this year’s cohort than for the one in the previous year.

“It is particularly encouraging that both the number of firms applying and accepted for testing has increased in cohort two. That means more innovative firms, trialing more innovative propositions to bring to the market. This is an important part of the FCA’s commitment to promoting innovation and competition in the markets we regulate,” Woolard stated.

77 submissions were received for this year’s cohort of which 31 applicants met the eligibility requirements. Out of the 31 eligible fintech startups, the 24 chosen ones were accepted into the fintech sandbox as they are ready for testing. Now that the second cohort has been finalized, the startups will start testing their new products and services shortly on a small-scale and short-term basis to safeguard consumers while still having enough leeway for innovation to thrive.

The selection of startups is very diverse. The sectors covered by the participating fintech startups include insurance, payments, retail banking, and lending, among others, while new technologies involved include artificial

New Zealand Slow to Adopt Cryptocurrencies

Bitcoin reached a new all-time high in June when it inched close to the $3,000 mark after an impressive six-month rally that saw the cryptocurrency triple in value. Unsurprisingly, bitcoin has been all over the media in the past few months as global adoption and the demand is increasing. However, adoption rates are faster in some countries, such as Japan, China, and India than others. One of the countries where bitcoin adoption is slower than expected is New Zealand.

According to a report by local news publication, bitcoin adoption has been slow in New Zealand because it is not that easy to actually buy bitcoin locally using the New Zealand dollar. Bitcoin buying options for New Zealanders are effectively limited to peer-to-peer exchanges such as LocalBitcoins and Paxful, where buy prices usually come with a high premium and the country only has a handful of local exchanges, such as NZBCX and Cryptopia.

There is also the bitcoin exchange Coined, which allows users to buy the cryptocurrency using online bank deposits but on its website, it states, “The [bitcoin order] queue has been full for six days, five hours. Coined’s current bitcoin reserves have been depleted due to high demand. Use the form below to receive notification when your order can be placed.” Also, according to news publication Stuff, there is a bitcoin ATM in an Auckland bar that has not really attracted many users.

The reason for the limited buying options in New Zealand is the challenges that both bitcoin startups and individual bitcoiners are facing when dealing with local banks. Unfortunately, this is not a new phenomenon in the Bitcoin economy and has also been a prevalent issue in the United Kingdom where banks have closed bank accounts of users who have purchased bitcoin using bank transfers and have

Consensus 2017 Draws Bright Leaders From Across Globe

Consensus 2017 attracted a thriving, ambitious crowd to New York City, with the attendance comprising of more than 2,700 people from all over the globe. Here are some the top headlines.

Rootstock Launches Smart Contract Test Net, Ginger

Rootstock Labs (RSK), a Blockchain startup from Buenos Aires opened its smart-contract test network, named Ginger. RSK announced at Consensus 2017 that it had received over $4 million in funding from a variety of sources and $3.5 million of that amount came to them in the past six months. They proudly received contributions from big league players in the crypto-community such as Bitfury, Bitmain, and Anthony Di lorio, CEO of Decentral and Jaxx to name a few.

Ginger aims to be available to the public to encourage an increase of users who build and improve their own smart contracts on the existing platform. More than 40 companies are testing Ginger, including banks and startups globally, Gabriel Kurman, co-founder of RSK, told CoinDesk.

RSK tokens are pegged to bitcoin, but with the added functionality of turing complete smart contracts, known broadly speaking as a ‘sidechain.’ It is also hoped that the RSK network could be used to scale bitcoin massively to a potential 2,000 transactions per second on-chain.

Bitcoin Agreement Between 58 Companies Means Hard Fork Within Six months

The Bitcoin scaling problem was focused on and an attempt to move forward, toward the fix via the original Segregated Witness proposal.  The deal, brokered by Digital Currency Group’s (DCG) Barry Silbert, was posted via DCG’s Medium blog, which read:

“We agree to immediately support the following parallel upgrades to the bitcoin protocol, which will be deployed simultaneously and based on the original Segwit2Mb proposal:

Activate Segregated Witness at an 80 percent threshold, signaling at bit 4 Activate a 2 MB hard

Bitcoin’s Banking Struggle is Real

It is no secret that banks love the blockchain but hate bitcoin. Despite the irony that one would not exist without the other, it is the threat that a decentralized global digital currency that allows anyone to be their own bank possess to the current banking system that causes the banking industry’s opposition to the world’s leading cryptocurrency.

The result of banks’ dislike of the cryptocurrency bitcoin is that bitcoin startups, as well as bitcoin users, are regularly faced with account closures and banking restrictions.

Wells Fargo vs. Bitfinex and Tether

The most recent example of a bank no longer wanting to bank bitcoin startups is the case of U.S. bank Wells Fargo and Hong Kong-based cryptocurrency startups Bitfinex and Tether.

As BTCManager reported on April 9, Bitfinex parent company, iFinex Inc., and Tether Ltd. filed a lawsuit against Wells Fargo stating that the bank is preventing their customers from accessing their funds worth around $180 million. The two firms alleged that Wells Fargo prevented money transfers from a number of Taiwanese banks holding accounts containing their customers’ funds. Wells Fargo’s move to block outgoing U.S. dollar transfers was conducted without notifying the two startups.

Both iFinex Inc. and Tether Ltd. later withdrew the lawsuit, most likely as they realized that banks have the power to block transactions at their discretion and that they would probably not succeed in the courts. A Bitfinex spokesperson, however, commented on the matter saying: “We voluntarily dismissed our case … and find that we’re best served focusing our efforts on existing and developing relationships.”

The case of Wells Fargo, Bitfinex and Tether was not an isolated case of a bank making life harder for bitcoin startups. In the United Kingdom, for example, there is a long history of banks not wanting to play ball

Funderbeam Report Shows Blockchain Funding Is Growing

Estonia-based “stock exchange for startups” Funderbeam released its Blockchain Report 2017, which includes details on blockchain startup funding such as total funding and individual funding rounds since 2012 as well as industry funding by region, industry co-relations, top investors, and the most funded startups.

Funderbeam, the world’s first primary and secondary marketplace for early-stage startup investments, uses the blockchain to secure all interactions sourced through it. To add to this unique value proposition, Funderbeam also provides free access to data covering over 180,000 startups and investors and publishes regular reports on startup funding trends.

Funderbeam’s internal data, as well as data from other sources, was used to compile the Blockchain Industry Report 2017. Social media profiles, such as Facebook, Twitter, and LinkedIn, of companies and investors, were used to source data as well as their web pages. Media outlets like TechCrunch, FinSMEs, and PE HUB also provided information that went into the report. In addition to the sources, Funderbeam partnered with CrunchBase and other regional partners across Europe.

According to the report, the blockchain industry began gaining traction in 2013. The industry has since then grown from funding of about $75 million with funding now totaling to $856 million. Although the total number of funding rounds have decreased, the funding has grown signaling a rise in funding amounts per round.

Regionally, North America was determined to be the leader in terms of funds raised. It also received the largest amount of startup funding though only 0.32 percent of the total funding in the region went to blockchain startups.

Europe had a funding peak in 2014 but saw a significant dip the following year. However, it is the region where the largest share of funds (about 1.25 percent) go to blockchain startups. In absolute terms, the United Kingdom leads Europe in

South Korea’s Hurdles In The Race Toward Blockchain Innovation

FinTech progress has come to a halt in South Korea as regulators carefully try to piece together new technology with existing privacy laws. In October 2016, Financial Services Commission (FSC) Chairman Yim Jong-Yong revealed South Korea’s plans for the acceptance and regulation of bitcoin. He announced in a public speech, “The government will push for the systemization of digital currency on a full scale in tandem with a global trend in the U.S., Japan, and other countries.” At the time, the top three Bitcoin exchanges in the country processed around $1.3 billion between January 2015 and October 2016, according to data from the FSC.

In December of 2016, the Korea Financial Investment Association launched its first blockchain consortium consisting of 21 financial investment companies and five blockchain tech firms to function as a leading blockchain think tank in the local capital market. Then, in January 2017, South Korea’s financial authorities revealed their plan to launch a full-scale pilot project for blockchain-powered financial services. The plan involved implementing blockchain technology as the core infrastructure for a sweeping financial services platform.

Progress continued in April 2017. Hongik University in Seoul and the Bank of Korea (BOK) released a research paper entitled, “Crowding out in a Dual Currency Regime? Digital versus Fiat Currency” which describes how cryptocurrencies and fiat monetary systems can exist side-by-side in the future in what is referred to in the paper as a “dual currency regime.” This research paper shows great interest from the BOK and Korea’s financial authorities in pursuing cryptocurrencies and blockchain tech in an effort to overhaul the traditional, less efficient methods of financial transaction. Also in April 2017, Seoul-based South Korean life insurance company, Kyobo Life Insurance, was officially selected by the government to trial the first real world implementation of blockchain technology for commercial

Why the EU is Investing $540,000 in Blockchain Development and Pilot Test

The European Union (EU) has decided to invest $540,000 in the formation of the EU Blockchain Observatory to formulate efficient regulations and policies for companies and startups leading blockchain development.

In an official statement released on April 18, the EU stated that the budget would be used to fund the EU Blockchain Observatory for two years. During that period, EU officials, researchers, and regulators will be tasked to study blockchain technology, its technical specifications, impact to the global financial ecosystem and most importantly, its applicability to the finance industry.

“It will have the ambition to become an EU expertise hub to discuss forward-looking topics on blockchain and develop use cases of interest at EU level. The purpose will be to inform and assist the European Commission in understanding what role – if any – European public authorities should play to encourage the development and uptake of these technologies and to formulate related policy recommendations,” the EU announced.

Particularly, the EU Blockchain Observatory plans to focus on the features of blockchain technology that could be utilized to run smart contracts, base infrastructure for large-scale commercial operations, governance and validation mechanisms. Most importantly, throughout the two years, researchers and regulators at the EU Blockchain Observatory will provide regular updates regarding the development of regulatory frameworks around blockchain.

“To that end, the Observatory is expected to provide an up to date overview of relevant initiatives relying on Blockchain or Distributed Ledger Technologies around the world and follow-up closely the developments of this technology and the related challenges and opportunities for European industry, citizens, and governments,” the statement read.

Overall, governments and authorities in Europe are making efforts in attempting to regulate both the cryptocurrency and blockchain markets. Some European countries such as Malta are specifically focusing on bitcoin innovation and development. The island

Spotify Acquires Blockchain Startup Mediachain to Improve Royalties Distribution

Digital music streaming service Spotify has acquired blockchain company Mediachain with a view to solving the problems associated with royalties attribution on its platform. New York-based Mediachain has been developing blockchain solutions to address the challenges faced by musicians and the creative industry when it comes to content attribution and revenue distribution.

Blockchain, Music, and Mediachain

Blockchain technology is what allows Bitcoin to operate without a central body to provide trust and to verify transactions. The blockchain allows for transactions to be recorded, verified and stored by all participants of the peer-to-peer network. The data processed on the blockchain is immutable, and any attempts to change the data is immediately recognized and resolved. It is what makes the blockchain an excellent tool for capturing and storing data of all forms in a secure and trustworthy manner, especially in today’s creative industry where content can easily be attributed to the wrong sources resulting in loss of revenue for the original content creators.

One of Mediachain’s co-founders, Jesse Walden, has extensive knowledge and understanding of the challenges that the music industry faces with regards to attribution due to his background in music management. Prior to his work at Brooklyn-based Mediachain Labs, he co-founded a music management firm Cool Managers where he worked with renowned artists such as Solange Knowles and Blood Orange. It was while running Cool Managers that Walden was first exposed to the many problems related to music data, such as determining the creators, owners, and other stakeholders to musical content.

In addition to the difficulties of crediting the right people, financially and otherwise, the music industry also has a massive problem with actually digging out the information as pertaining to music. “This is because that information doesn’t have a globally referenceable home. Instead, it is trapped in proprietary databases,

BitWage Provides an IBAN Number for Everybody: Freelancers Worldwide Receive their Salary with Bitcoin

With BitWage you can receive your wage in bitcoin instead of fiat money. The startup from California aims to strengthen its presence in Europe. To do so, it opened a new office in Paris and implemented the option to give every customer their own IBAN number. CEO Jonathan Chester explains why and tells of two classes of customers using BitWage.

The basic concept of BitWage is pretty easy to explain; you want to get your salary or your fee in bitcoin instead of fiat money like the dollar or euro, but your boss or customer does not want to touch such a thing like bitcoin. What do you do now? You register at BitWage, get a bank number of the startup, write this bank number on your invoice, and when the boss or customer pays, BitWage gets the fiat money and gives you bitcoin.

“First we helped companies to pay workers in bitcoin,” BitWage CEO Jonathan Chester says, “but there have been a lot of issues around that. Basically, the companies have been afraid of the technology.” In late 2014 BitWage introduced the option to “allow workers to receive wages in bitcoin without the company to sign up.” And since then the startup is on a growth path. As of today, BitWage has around 11,000 customers globally and an impressive monthly growth rate of five to 20 percent.

Since as little as ten to 15 percent of the payment volume of BitWage serves the European markets, the startup is currently trying to gain a bigger foothold on the continent. After receiving a grant from the French government, BitWage recently opened up an office in Paris. Besides expansion of their presence, the company wants to win new customers with a new and special product; every customer can get his own IBAN

Could Brexit Force Further Fintech and Cryptocurrency Innovation in the UK?

The United Kingdom has relied on its financial services industry to drive economic growth for decades. However, in light of the British population’s vote to leave the European Union and, thereby, potentially lose the access to the European Single Market, the UK’s status as Europe’s leading financial hub may wane. Is this for better or for worse regarding the crypto scene in the UK?

After surprising results of the ‘Brexit’ referendum in June 2016, several international London-based banks announced plans to move a significant part of their operations to mainland Europe to ensure future access to the European market.

Investment bank Goldman Sachs announced that in light of the uncertainty surrounding Britain leaving the European Union that it will move hundreds of staff to offices in Paris and Frankfurt as part of their Brexit contingency plans, which will now be executed as Article 50 was triggered by Prime Minister Theresa May on March 29. The American bank, however, is not the only financial institution that is relocating operations out of London.

London-headquartered HSBC intends to move 1,000 individuals from London to their Paris office within the next two years, while Swiss banking institutions UBS stated it could move as many as 5,000 employees to offices in Europe. US banks Morgan Stanley and Citigroup are also among the banks that will move staff out of London in light of the UK leaving the EU.

The primary reason for international banks relocating their key operations out of London and into the borders of the European Union is to prevent the banks from losing access to the Single European Market. The uncertainty stemming from the upcoming ‘Brexit” negotiations that will determine the terms of Britain’s exit from the European Union also includes uncertainty surrounding Britain’s future access to the Single European Market. Should