ICOs: Two birds One stone

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The digitization of financial services means that we are at the very early stages of tackling two significant social impact topics (Jason Bates says “Digital Banking is only 1% done”):

Financial inclusion – mainly in the “Rest”

Tokenization of the economy – on a global basis

Since the tokenization of our economies is really nascent, we are at risk of thinking of different aspects when we hear the term. We are even at risk of dismissal altogether of this emerging reality, from those that see this as fraud, exuberance, a fad. Jamie Dimon, a Greek immigrant that made it on the billionaire list, being one of them. Others, look at the thousands of tokens that have been issued (over 6,000 and growing as we speak) and the ever-increasing ICO rounds (over $250mil lately) and are naturally, worried about this young market.

There is room for all these concerns but the market will grow and advance with or without our opinions, thoughts, and concerns. The reality (including stumbles and crashes) will be exactly as Richard Olsen, co-founder and CEO of Lykke describes it and as David Siegel, CEO of 20|30 and the Pillar Project, quotes in the opening of his in-progress e-book The Token Handbook:

There won’t be millions of tokens. There will be millions of kinds of tokens. Richard Olsen

Today we are mostly focused on the thousands of fundraising tokens with a just a few functionalities, like tokens that represent ownership, or some rights, or rewards, or incentives.

Tokens are not only alternative fundraising (crowdfunding) weapons that make VCs stay up at night because of fear of extinction; as some like to believe.

Tokens will enable network effects and the creation of ecosystems, we cant imagine with the current business processes. These are the “other kind” of tokens that Richard Olsen is referring to, I believe. So, stay tuned.

The Zurich ICO summit organized by Smart Valor

For now, we mostly see crowdfunding kind of tokens and most of them can’t answer the question “Why this token?” without admitting that it is a quick, techie way to crowdfund and “acquire users” or it is an existing app that is tokenizing its self. Actually, in many cases, ICOs look more like Initial User Acquisition Events – IUAs. In some cases, like Civic which already had an app, the ICO was a cheaper way to KYC and onboard users and at the same time finance their growth (Civic can answer clearly the Why question).

What is important to keep in mind is that the technology of ERC20 tokens that has clearly facilitated the explosion of ICOs, isn’t going to help in building a community (be it developers or users) and therefore, there is no magic way in building “Network effects”.

A token sale can be a financing tool and a user acquisition tool! But it is not panacea for network effects.

Smart Valor, founded by Olga Feldmeier (ex-Xapo), organized the first ICO summit in Zurich with an amazing lineup of speakers from around the world. I was able to watch part of the conference which was streamed live. From the opening speech of William Mougayar and then some of the topics and angles during a few panel sessions.

Smart Valor is a blockchain venture that is focused on the tokenization of all kinds of alternative investments (real estate, funds, private equity etc.) on a decentralized platform that can make them accessible to Emerging markets. In other words, private banking kind of financial services for EM. You can hear more about the value proposition in this interview.

William Mougayar, the keynote speaker, reminded us that June 2017 was the first month that ICO funding ($600) surpassed the total seed-angel fundraising ($500mil). He shared his insight that on Sep 1. the market cap of cryptos was around $172billion and the amount from ICO crowdfunding was $1.7bil. This shows that ICOs were 1% of the total market cap. So clearly, there was simply a shift (diversification maybe) of 1% from cryptos into ICOs.

He reminded us that Ethereum ICO’d in the summer of 2014 and Ether started trading only one year later (summer 2015) when the network went live. Will this be one aspect of the self-regulatory standards that ICOs adopt going forward?

Here is my collection of self-regulatory standards to be considered. A few inspired from the panel discussions and a few additions of my own.

  • No more white papers, unless they are exceptional highly computational academic breakthroughs
  • No more token trading before the protocol or the app is live
  • More Smart tokens that release funds as milestones are achieved
  • Allocation of tokens with the whitelist technique (i.e. KYC users-signup and guarantee a minimum token allocation) so that communities are built and whales don’t dominate.
  • Avoid Slack and Telegram for pre-ICO community building because they are vulnerable to phishing (Chainalaysis reports $250mil have been hacked to date).
  • Ventures that can answer the “Why the token?” question with a vengeance, join the IGF.

Miko Matsamura from Pantera Capital (a San Fran. $100M ICO-only fund) highlighted a new self-regulatory effort the ICO Governance Foundation (IGF) which is an international organization and Swiss Foundation whose mission is to protect global ICO investors and facilitate capital formation for ICOs. It aims to create something like S-1 filling for ICOs. The Crypto Valley Association (CVA) also issued recently a code of conduct around ICOs.

Panel participants here. Source of original image

Efi Pylarinou is a Fintech thought-leader, consultant and investor. 

Get fresh daily insights from an amazing team of Fintech thought leaders around the world. Ride the Fintech wave by reading us daily in your email.

Blockchain Bitcoin & Crypto Weekly CXO Briefing for week starting 18th September 2017

The Blockchain Bitcoin & Crypto Weekly CXO Briefing is all you need to know, each week, jargon free for CXO level business leaders and investors who will use this technology to change the world. Each week we select the 3 news items that matter and explain why and link to one expert opinion.

For the intro to this weekly series, please go here.

News Item 1: Bitcoin at crossroads after shedding more than $27 billion in value

Decrypted: Announcements over the past couple of weeks have set off Bitcoin’s price tumble. After its all-time high in the beginning of the month, China notified local Bitcoin exchanges to cease and desist. China ordered Bitcoin exchanges to shutdown, because they operate in the country without an official license

The shutdown of the exchanges coupled with the pressure that was created another announcement by China’s central bank earlier in the month, to ban Initial Coin Offerings (ICO), triggered huge price drops to the entire crypto market.

Our take: Chinese regulators have dealt a huge blow to the cryptocurrency market. These announcements have sent the cryptocurrency markets into a free fall. Early in the month the total value of cryptocurrencies was over $170 billion, while all this news caused panic and pushed it below $100 billion.

One of China’s largest Bitcoin exchanges, BTC China, announced that it will shutdown its operations at the end of the month, after considering the announcement made by Chinese regulators in early September. The BTCChina announcement was followed by OkCoin and Huobi that said they were shutting down their yuan-based trading operations by Oct. 31.

Investors in China have been using Bitcoin as a way to protect themselves should the yuan fall in value. Trading their yuan in for Bitcoin can allow Chinese investors to move funds outside of the country. Traditionally, China’s government has set a $50,000 annual limit on how much its citizens can move outside of the country. Buying Bitcoin was a way to bypass those rules.

The news has sent Bitcoin’s price plummeting. Last Thursday, the cryptocurrency dropped about 9% trading just below $3,500. That’s a significant drop from its all-time high of $5,013.91 on September 2. Along with Bitcoin, all crypto’s were affected. Ether dropped by 11% to around $240, Bitcoin Cash crashed by 17% to $417, Ripple fell 10%, Litecoin dipped to $46, while Dash and Monero each fell about 10%. So far, Bitcoin has lost more than 20% of its value since the Chinese regulators announced the ban on ICOs on September 4.

It is likely that panic-driven traders in China, South Korea, US and Japan caused the sell-off and the sudden price drop. But, I think its important to note that the ultimate plan of the PBoC and Chinese regulators is to provide and offer a licensing program for exchanges, not ban trading platforms. China’s central bank has been testing a prototype digital currency with mock transactions between it and some of the country’s commercial banks. China is seriously exploring the technical, logistical, and economic challenges involved in deploying digital money, something that could ultimately have broad implications for its economy and for the global financial system.

A ban on crypto exchanges won’t necessarily mean the end of trading in digital currencies. Major Chinese exchanges could make significant changes to their trading and offer peer-to-peer trading, instead of centralized exchange services.

Even though Bitcoin’s prices sharply dropped this week, Bitcoin has climbed more than 250% year to date, outpacing many other assets. Also over the weekend the price was relatively stable and rebounding to around $3,580.

News Item 2: Broken Hash Crash? IOTA’s Price Keeps Dropping on Tech Critique

Decrypted: IOTA’s price fell by double-digits due to cryptographic vulnerabilities found by researchers at Boston University and MIT.

Specifically, the researchers claim they were able to break the homegrown hash function “Curl” that IOTA was using as part of its digital signature scheme to secure user funds. The researchers were able to demonstrate how an attacker could forge a user’s digital signature and use it to steal funds.

IOTA in a blog post did not deny its Curl hash function was breakable, and the company has already issued a patch to the cryptocurrency’s code.

Our takeIOTA is a revolutionary new transactional settlement and data integrity layer for the Internet of Things. Its a new cryptocurrency that is focused on Machine-2-Machine (M2M) transactions. The main purpose of IOTA is to serve the machine economy by enabling M2M payments without fees.

The technology behind IOTA is based on a new distributed ledger architecture called the Tangle, which overcomes the inefficiencies of current Blockchain designs and introduces a new way of reaching consensus in a decentralized peer-to-peer system. For the first time ever, through IOTA people can transfer money without any fees. This means that even infinitesimally small nano-payments can be made through IOTA.

Currently IOTA with a market cap of approximately $1.4 billion, counts among its partners VW, Bosch, Innogy and Microsoft, has ambitions of becoming a standardized protocol that becomes embedded into the everyday life activities of users. IOTA also recently made its way into the cryptocurrency casino arena, with BitDice choosing IOTA’s Tangle for its platform.

But IOTA’s price suffered a heavy blow, after Boston University and MIT researchers claimed to have found vulnerabilities to IOTA’s proprietary hash function. DCI Director Neha Narula explained the findings in a post on Medium. She says the DCI reviewed the IOTA source code in July and were concerned when they found that IOTA developers had invented their own hash function:

“We found that IOTA’s custom hash function Curl is vulnerable to a well-known technique for breaking hash functions called differential cryptanalysis, which we then used to generate practical collisions. We used our technique to produce two payments in IOTA (they call them “bundles”) which are different, but hash to the same value, and thus have the same signature. Using our techniques, a bad actor could have destroyed users’ funds, or possibly, stolen user funds.”

The IOTA developers had written their own hash function, Curl, and it produced collisions, when different inputs hash to the same output. Cryptographic hash functions are important for cryptocurrencies because usually a transaction is hashed before it’s signed. If you can break a hash function, you can potentially break signatures as well, meaning that the mechanism used to determine if a transaction is a valid and authorized spend is broken. The mathematical integrity that cryptocurrencies provide hinges on this relationship being secure.

The cryptocurrency is still new, making it vulnerable, and creating price volatility especially when news like this break. But despite the price drop, on a monthly basis, it is still up 16%. Considering that the error was detected and reported by reputable researchers, and the flexibility and speed the IOTA team shown in fixing the bug, will eventually boost confidence. In the long run, robust and useful technologies will emerge from the use of IOTA.

News Item 3: Bitcoin in the Browser: Google, Apple and More Adopting Crypto-Compatible API

Decrypted: Initially conceived in 2013, the World Wide Web Consortium (W3C) has been working with Microsoft, Google, Facebook, Apple and Mozilla, to create a currency-agnostic web payment standard.

The new browser crypto API will allow browsers to easily support cryptocurrencies directly in the browser.

Our take: These days the majority of online shopping is happening on mobile devices and more than 66% are through mobile browsers, not native apps. This is a pain for most users, because each web site has its own flow, and most require users to manually type in their information (addresses, contact information, and payment credentials) over and over again. In most cases, people don’t complete their purchases, and conversion rates on mobile are much lower when compared to desktop purchases. Also, on the development side, its difficult and time-consuming to create and maintain checkout pages that support various payment methods.

With W3C’s Payment Request API, online merchants will be able to use simple standard ‘in-browser API’ to initiate payments from their checkout pages, regardless of what payment method consumers may prefer to use from their side. This exciting browser innovation clearly simplifies merchant-side integration requirements, but at the same time, it completely changes the dynamics on the consumer side as well. W3C’s Payment Request API streamlines the checkout process, making the experience consistent and faster for users.

How does it work? Its pretty simple. The browser saves the user’s personal information, billing address, shipping address and payment information in a safe way. When a shop requests the data the user gets prompted to allow transfer of data. This is done on the client side, meaning there is no communication to third-party providers needed and the data , once approved by the user , is just passed from the browser to the site. A website using Web Payments can request the user’s stored data, provide a list of accepted payment methods, process that data and send it to its server , entirely  skipping the checkout.

The new payment API supports several currencies and browsers. On the currency side it will support Bitcoin, fiat digital currencies and other cryptocurrencies, and for browsers all the big ones: Google Chrome, Microsoft Edge, Apple Webkit, Mozilla Firefox, Samsung Internet Browser and Facebook in-app browser.

The long term potential of this API is exciting, because it will eventually allow users to ditch card numbers, for new, secure and open payment methods. It drastically decreases the steps from adding products to the basket to confirmation of the purchase. In the best case the user only has to grant access to the data, and in the worst case, when no data is stored yet, the user needs to be entered it  once, just the first time, and then never again.

OpinionJamie Dimon: Bitcoin Is a ‘Fraud’

“Frenemy” is an oxymoron of “friend” and “enemy”. It refers to someone that combines the characteristics of a friend and an enemy. Someone with whom we are friendly and at the same time we dislike or rival. The term is used to describe personal, geopolitical and commercial relationships both among individuals and groups or institutions. 

For banks, Bitcoin and other cryptocurrencies are frenemies. On one end banks and governments are exploring and experimenting with cryptocurrencies and blockchain, because they see the innovation and disruptive transformation they bring to the table, but on the other end they see them as a huge rival that can jeopardize their core businesses.

So here comes the head honcho of a major bank, that basically said Bitcoin is a fraud, not a real currency, and that he would fire any employee trading Bitcoin for being “stupid.” Jamie Dimon, JPMorgan’s CEO, has been a long time critic of Bitcoin, dismissing the digital currency’s survival, back in November 2015.

Not long ago, in February this year, JP Morgan Chase, joined a group of 30 big banks, tech giants, and other organizations to create a group, called the Enterprise Ethereum Alliance to demonstrate a pilot of the financial technology and show off a spot trade on the foreign exchange market for global currencies, using an adaptation of Ethereum as the settlement layer.

Banks seem to be far more interested in blockchain, the technology behind Bitcoin. The reason they are so interested in distributed ledger technology, is because they think its a way to respond to the competitive threat that Bitcoin poses to traditional money. Banks and the governments that regulate fiat currencies, recognize that cryptocurrency is one of the few innovations that can securely and efficiently create and handle money, far beyond their control.

Banks want to adopt the efficiencies without the decentralization, the global nature and the low cost without loosing control. But you can’t have Bitcoin’s revolutionary nature, while removing all the things that make it innovative. I think Andreas Antonopoulos explains it best when he talks about why you can’t separate Bitcoin from blockchain:

“The big invention behind Bitcoin is not the currency, but it’s also not the blockchain. The blockchain, as a hash-chain set of blocks, is really not that novel and not that interesting. What is really interesting is the combination of all four things together, and the important thing we haven’t mentioned is the Nakamoto Consensus. The Nakamoto Consensus being the ability to agree on a set of consensus validation rules for transactions and blocks that are then implemented through a competition using proof of work”.

The belief that you can separate Bitcoin and blockchain is flawed. If you remove Bitcoin (reward) and the Nakamoto consensus mechanism, what you have left is a slow database that needs central control and oversight to work. So how is this different from what is in place today? Sounds to me like an existing centralized system, where you need to trust someone, because they say you should trust them, and not the math (known as a proof-of-work calculation).

Sometimes it’s hard to tell true innovation from fraud. In 1903, the president of Michigan Savings Bank told Horace Rackham, an early stockholder in Ford, that the “the horse is here to stay but the automobile is only a novelty.”

The Internet has forever changed the world, and continues to transform our lives. Bitcoin and blockchain will restructure finance, even though most banks today see it as a big threat that can wipe out how they make money. Banks want to transform their industry, but in reality they can’t imagine disruption that changes the fundamental principles of what they do. Those that embrace change instead of fighting and calling it a fraud, will be the one’s that thrive in the new and emerging financial system.

Ilias Louis Hatzis is a Blockchain entrepreneur who writes the Blockchain Bitcoin & Crypto (BBC) Weekly CXO Briefing each Monday.

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Wrap of Week #36: ICOs, Bancor, Kickico, Square, ET index, Zhong An, MoneyOnMobile

From Coins to environmental investing; from bans to full stack insurance, from MoneyOnMobile to Square!

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First the Rest Then West – the MoneyOnMobile ($MOMT) leapfrog story in India


A major theme on Daily Fintech is “first the Rest then the West” (for example in this post).

Countries such as China and India (and the rest of Asia, Latin America and Africa, together the “Rest Of the World”) used to be considered tech deserts that at best copied innovation. They are now the locus of innovation for a simple reason – leapfrogging. Unencumbered by legacy technologies, huge populations that are starved of services that we take for granted in the West are more open to innovation. This accelerates as their economies grow and productivity is prized by their people; something that used to take hours is no longer acceptable when “time is money”.

One place where we see this playing out is India, which is why India is the country to watch in Fintech.

We have profiled companies such as Paytm in India that have taken in huge amounts of Venture Capital. Today we look at MoneyOnMobile, a low profile mobile money in India venture, with a more capital efficient model, that is traded on the OTC market in America. Rather than compete with physical retailers,  MoneyOnMobile works through physical retailers as a distribution channel. That explains their capital efficiency.

We have also often written about M-Pesa. This is a Fintech venture within Vodafone that is dominant in Kenya. M-Pesa is not a pure play Fintech stock, because it is controlled by a Telecom operator. A country such as India that has a highly competitive Telecoms sector, with brutal price competition driving adoption, does not want a single Telecoms company also having huge influence over financial services. So although M-Pesa is available in India, we do not see it having the dominance that it enjoys in Kenya. One way to look at MobileOnMoney is as a comparable to M-Pesa except for one crucial difference – they do not compete with Telecom operators.

Disclosure: MoneyOnMobile is a client of Daily Fintech Advisers. I am not a financial adviser, please do your own diligence before investing.

Made in India, listed in America

MoneyOnMobile is an unusual company. All their business is in India and they are proudly “made in India”. Yet the company also lists a Headquarters in Dallas, Texas and you can buy their stock on the US Over The Counter (OTC) market with the stock symbol MOMT.

AFAIK, this is the only pure play Fintech focussed 100% on India traded in the US.

We also like to track publicly traded Fintech companies (for example here). One publicly traded Fintech that we admire and that investors clearly like is Square. Their stock has been on a tear and the company is valued at nearly $11 billion as I write. MoneyOnMobile is a micro cap with a tiny valuation (less than $20m as I write). Yet one of Square’s founders, Jim McKelvey is on the board and in this video explains why he is excited by MoneyOnMobile Money.

India Macro View

China and India share characteristics as big growth markets. The India macro story is not as well known as the China story, yet it may be more interesting. The data is available from many sources (including here from OECD). The TL;DR summary:

  • big population
  • high GDP growth
  • youth demographic (supporting high growth in future)
  • weak infrastructure (gradually getting better)
  • problems with corruption (which the Modi government is laser focussed on)
  • services and software economy in contast to manufacturing in China
  • a growth spurt that started later than China
  • a messy democracy (maybe better in long run but slows pace at which change happens)
  • English as a major language
  • rule of law like UK (but slow and inefficient).

The macro part to highlight is the youth of the population. This is what will fuel future growth.

Foreign capital (including Chinese and Japanese) has flowed into India. This illustrates how open the Indian economy is to foreign capital, which we will explore in more detail later.

One reason that so much Chinese capital is flowing into India is that, in addition to understanding the macro view on India, they also understand the micro view about cash and payments in India.

Flipkart and the Cash On Delivery model

For a long time entrepreneurs tried creating the Amazon of (name your country). That fast follower strategy worked for while in other developed markets such as Europe that like the US had high Credit Card penetration rates. Eventually Amazon tends to crush these local rivals, but a copy cat geographic approach worked well for a while.

However it did not work well in countries such as India. The market there evolved differently through 3 iterations:

  1. Blind copy of Amazon. This did not last long – most consumers don’t have Credit Cards and the delivery infrastructure is terrible.
  2. Flipkart figured out how to make Cash On Delivery logistics work.
  3. Paytm and others  figured out that the cash could be digital in a mobile wallet.

Today the big mobile money ventures all want to be like Amazon and Alibaba. It is no coincidence that Alibaba is the biggest investor in Paytm. This is a bet on e-commerce replacing physical stores. This is a high risk, capital intensive moonshot strategy.

The high risk, capital intensive moonshot e-commerce strategy

The phrase “Amazon of India” may have been replaced by the “Alibaba of India” tag, but the strategy is the same – to replace physical stores with e-commerce and leverage payments innovation to do that.

This is a high risk, capital intensive moonshot strategy. Huge success may go to the winner, but huge amounts of capital are put at risk to achieve that goal.

Some smart commentators are seeing that there is a gap between the 30,000 foot view (huge market for mobile money and e-commerce) and the on-the-ground execution realities of creating a profitable business. For example, see this article entitled Blood and Sand: The Moment-of -Truth for Mobile Wallets in Asia. Or see this article in Times of India entitled: digital wallets may soon run out of cash.

The reality is that cash remains alive and well in India. A big surprise from demonetisation was that most of the black money cash found it’s way back into the banking system. Another ground reality is the brutal price competition between mobile phone operators. This is great for consumers and drives the Modi government “digital India” agenda. However it squeezes the margins of e-wallet ventures which got started with mobile recharge.

This has led to some of the high profile e-wallet ventures diversifying (pivoting in venture speak). For example, Paytm has moved to become a small finance bank, and has started selling gold and Mobikwik has moved into insurance. This strategy requires a lot of capital and makes partnering harder.

When the easy money macro times end (as we all know they will even if we cannot know when) the race to deploy a lot of capital to get to scale even at the expense of profitability may give way to a focus on M&A, strategic partnerships and capital efficiency.

Mobile payments clearly is a scale game, dominated by network effects and data. Sub-optimal scale is the “kiss of death”. The question is how efficiently is that scale acquired. Not everybody can be like Amazon. For example, more investors are questioning whether Uber can really grow into that high valuation. At some point old fashioned metrics around customer acquisition costs and capital efficiency will be more highly rewarded. In that sort of market, investors will be paying more attention to Money On Mobile, which has some impressive traction statistics achieved in a short time with small amounts of capital.

Capital efficient scaling at MoneyOnMobile

  • ​200​ ​million​ Unique​ ​Phone​ ​Numbers (more than 15% of the 1.3 billion mobile phones in India) within 5 years.
  • 1+ million domestic money transfer transactions processed in August 2017; this is for a line of service introduced only 20 months ago.
  • 335,000 retail locations.

One reason that MoneyOnMobile is growing so fast is that they do not rely on smartphones, which only has 27% penetration in India compared to 70% in China.The other 73% use feature phones and MoneyOnMobile also works on feature phones.


One part of the MoneyOnMobile (MOM) business that is scaling fast is a mobile ATM service. This keys into the reality that, despite what pundits have been saying, physical paper cash is alive and well in India.

Conceptually the MOM ATM is like the cash out services that Retailers in the West offer consumers at checkout. The Retailer gets cash in their account without loading up the cash truck to take to the bank (an expensive service because robbery is a real risk) and the customer gets a service that saves a trip to the ATM. Now translate that to India where 95%+ of transactions are still in physical cash and the ATM is a long way away (and maybe broken and/or out of cash) and you can see why the MOM ATM service is so popular with both consumers and retailers.

One number says it all – ATM density is less than 20 (per 100,000 users) in India vs 100 or more in America and Europe.

That is possible for a simple reason – MoneyOnMobile views physical retailers as partners/distribution, compared to the more high profile e-wallet vendors who view physical retailers as roadkill in front of the e-commerce truck. MOM ATM is one more service to the retailer. This is classic cross selling. Once MoneyOnMobile acquires a retailer, the revenue per retailer goes up as the retailer starts  to use new services.

5 enablers for the Fintech revolution in India

– Aadhaar. This is biometrics based digital ID at massive scale – over 1 billion issued in 5.5 years, making it the fastest digital service growth in history. (Android hit 1 billion in 5.8 years; WhatsApp took 7 years.) This is transformative for millions of people.It is hard to overstate the importance of this. Without this, all the other enablers would only impact the urban middle class. Aardhaar really brings the power of digital to 1 billion people. It is an incredible achievement combining vision, tech smarts and drive.

– Mobile leapfrogging. There are 900 million mobile connections and Indians spend 45% of their incomes on mobile technologies and platforms (Americans only spend 11%), because mobile is the main point-of-entry to the Internet (PC penetration is 5% vs 75% for mobile).

– Immediate Payment Service (IMPS). This is a real-time inter-bank payment system through mobile phones that is a) net payment (unlike RTGS) and b) works 24/7. It was launched by the National Payments Corporation of India (non-profit, Government funded) in 2010.

– Payment Bank licenses. This enables entrepreneurs to deliver regulated payment services without becoming deposit taking banks.

– Unified Payments Interface. This enables Mobile wallet interoperability (read this post for why this is so critical).

This shows how positive change can come from the right mix of public policy, new technology and entrepreneurial drive.

The XXX Of India is XXX

It is common to refer to the Facebook of China or the Google of China or the WhatsApp of China. This is quite different in India where the Facebook of India is Facebook, the Google of India is Google and the WhatsApp of India is WhatsApp.  In short, India is open for business. This reflects two realities in India. One is the Modi government Digital India strategy; digital adoption by the masses is more important than who owns a digital service. The other is the relatively weak capital markets in India; this may change, but for now the welcome mat is laid out for foreign investors.

Square for the Rest of the World

As Jim McKelvey explains in this video, MoneyOnMobile is payments for retailers where credit card penetration is weak. This is true in India, where Money On Mobile operates today but there are many other big growth markets with the same characteristics.

Publicly traded pure play Fintech with an inexpensive valuation

MoneyOnMobile is a pure play publicly traded Fintech focussed on India with a historically low profile and thus an inexpensive valuation today.

Image Source.

Bernard Lunn is a Fintech deal-maker, author, investor and thought-leader.

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Carbon risk management: Engaged Tracking (ET) Index sets gold standard

The Paris climate accord has brought carbon risk management under the limelight more than ever before. Nations are gearing up to provide better transparency around their carbon emissions, which in turn will put pressure on businesses to do so.

The world is on a fast track (and I would like to think so), to economy-wide decarbonisation. The G7 nations have committed to phasing out fossil-fuel subsidies by 2025 and renewable energy has arrived at scale. So, how can investors catch up?


Image Source

Engaged Tracking (ET) Index Research is a London based organisation whose mission is to help investors and corporates identify, understand and manage climate and carbon related risks. They offer solutions for investors who would like to reduce their carbon risks without compromising on performance.

In the past, businesses declared their carbon risks based on direct emissions from their own operational activities. However, as per ET Index research, direct emissions (termed as Scope 1 and 2), make up only 25% of a business’ carbon footprint. In order to get the full view of a business’ carbon efficiency, its essential to analyse the value chain of the business (termed as Scope 3).


The ET Carbon Rankings calculate the carbon emissions of the world’s largest 2000 listed companies including scope 3 emissions – from transportation of raw materials to the use of the products they sell. Scope 3 emissions are critical because they typically make up 75% of companies’ carbon footprints and therefore reveal their exposure to increased costs across their value chain.

The top 2000 companies account for approximately $45 trillion in market capitalization and approximately 9.5 billion tonnes of CO2 indirect emissions. That exceeds the combined total emissions of the United States, Canada and the European Union

The ET Index Series reduce individual investor exposure to carbon risk by shifting capital away from high-carbon companies, while closely tracking the market. They reduce aggregate exposure to carbon and climate risk by indicating to the largest listed companies that they must decarbonise in order to move up the Rankings to gain weighting within the Index.

A higher weighting in the Index would give companies a larger share of invested capital. It also provides investors visibility on firms that are consciously moving up the rankings.

In March 2017, ET Index became a member of the Social Stock Exchange (SSX), which is the world’s first regulated exchange, dedicated to businesses and investors seeking to achieve positive social and environmental impact.

It is good to see that the low carbon transition is underway, with carbon intensity falling globally. As a result, investors will be/should be increasingly asking companies to disclose the risks and opportunities arising from climate change.

Thanks to ET Index, carbon footprint reporting will now include Scope 1, 2 and 3 emissions. Better reporting by companies is a must if markets are to identify and price climate risk and direct capital to low carbon opportunities. The US coal sector is in decline and the European power utilities face an existential crisis. It is clear that businesses that ignore the rapidity of the shift to a low-carbon economy will suffer financially. Good times ahead!

Arunkumar Krishnakumar is a Fintech thought leader and an investor. 

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RTGS Segwit red Lightning Network Procesamiento fuera de cadena y el futuro de BCH y de la Mineria


What follows is a translation into Spanish of an article that appeared on Saturday. The translation is by Enrique Melero, a Crypto Finance Consultant based n Geneva.

Daily Fintech is branching out from its English roots by getting more translation into other languages. So far we have done some in German, Chinese and now Spanish. We would like to do more in those languages and add other languages (such as French).


Este título parece popurrí SEO de términos técnicos. Perdón – lo desglosaré para aquellos que no viven en el mundo digital. Títulos alternativos podrían haber sido:

  • ●  Puedes vender tus BCH porque pronto podrás pagar el un café con BTC.
  • ●  Bitcoin será pronto de uso corriente, elevando todavía más su precio.
  • ●  Por qué puedes olvidarte de aquello que “Bitcoin está condenado a causa de su consumo de energía”
  • ●  Los mineros Bitcoin seguirán haciendo dinero pero ya no controlarán el ecosistema.

    Para tener una explicación de las tecnologías que Bitcoin necesita para escalar puedes ir a este artículo y aprender lo que es Segwit, Lightning Network, procesamiento fuera de la cadena etc.

    Para empezar, propongo una explicación para los que viven en el cyber espacio desde la vieja sala de máquinas de los pagos internacionales.

    SLBTR es el procesamiento fuera de la cadena

    Allá en la era de los dinosaurios, los bancos globales procesaban pagos internacionales a través de los bancos centrales usando un mecanismo llamado Sistema de Liquidación Bruta en Tiempo Real (a partir de ahora usaremos sus siglas en inglés, RTGS). Hoy todavía siguen haciéndolo de la misma forma. Permíteme que un dinosaurio como yo, te explique sus principios básicos y por qué es relevante para Bitcoin.

    RTGS es la forma en que los bancos centrales liquidan pagos entre ellos – es en tiempo real, pero solo los Bancos Centrales tienen acceso al sistema. Es rápido, cerrado a unos pocos y para grandes

cantidades. Piensa en RTGS como procesamiento dentro de la cadena de bloques. A partir de aquí los pagos entran el sistema de pagos nacional y los libros de cuentas de los bancos cambian y Pepito Pérez recibe y paga dinero usando mensajes que funcionan usando la red SWIFT. Este sistema nacional es lento, semi-abierto (cualquier miembro de SWIFT puede participar) y puede usarse para pequeñas cantidades. Piensa en ello como proceso fuera de la cadena de bloques.

Esta es la forma en la que funcionan los pagos internacionales hoy.

El mundo Bitcoin hacia el que nos dirigimos se parece a esto mismo, pero mejor. Las transacciones más grandes se harán en la cadena mientras que las pequeñas se harán fuera de la cadena. Ahí terminan las similitudes.

Este es el modelo de pagos internacionales que va a emerger con la red Lightning (gracias a Segwit):

  • ●  Rápidos: Para pequeñas transacciones fuera de cadena será quasi en tiempo real (algunos segundos). Los sistemas de pago nacionales (que tardan desde unos pocos días hasta unas pocas horas) serán irrelevantes porque los usuarios no entenderán por qué debe llevar más tiempo que un mensaje o una actualización en Facebook.
  • ●  Abiertos: será posible elegir si se quieres hacer un pago en la cadena o fuera de cadena. Todo el mundo podrá convertirse en banco central simplemente montando el equipo de minado y cualquiera con una cartera bitcoin tendrá los mismos privilegios que tienen hoy los participantes de SWIFT.

Nota: aquellos a los que les asusta la centralización que supone el procesamiento fuera de la cadena deben de estar tranquilos. Es como el email. Todos pueden o podrían poner en marcha un servidor de email, pero elegimos usar el de otros. De la misma forma podrías montar tu propia infraestructura de minado que sería el equivalente a un Banco Central, pero la mayoría elegimos no hacerlo.

Puedes vender tus BCH porque podrás pronto comprar café con BTC.

Si recibiste BCH después del hard fork podrías estar tentado a guardarlos porque BCH es más rápido y más barato para pequeños pagos lo que hará que suba su precio. BCH podría tener sentido hoy en día porque los pagos pequeños en BTC son lentos y caros. Pero eso será irrelevante cuando Bitcoin se integre con la red Lightning y el procesamiento fuera de la cadena.

¿Todavía te sientes a gusto guardando BCH? ¿o a lo mejor tiene más sentido venderlos mientras siga habiendo posibilidad de hacerlo antes de que la red Lightning y el procesamiento fuera de la cadena sean de uso corriente?

Bitcoin será pronto moneda de uso corriente, impulsando su precio.

La idea que que el precio de Bitcoin se sostiene gracias a que es oro digital no tiene ningún sentido. Es presentarlo como un taburete cojo e incita a pensar en él como algo inestable que terminará cayendo. El Bitcoin necesita otra pata para sostenerse. Necesita ser tanto una moneda como una reserva de valor. El oro es teóricamente una moneda además de ser reserva de valor, pero realmente es cuestionable su uso como moneda con las

dificultades de transporte que ofrece. Bitcoin puede que también lo sea, pero no tanto.

Un Bitcoin con esas dos patas – reserva de riqueza y moneda – puede ofrecer un valor creciente y que sea sostenible en el tiempo.

Una vez que la red Lightning y el procesamiento fuera de la cadena sean de uso corriente, volveremos a examinar la salud del ecosistema bitcoin y los números deberían ser diferentes.

Puedes olvidarte de aquello de que “Bitcoin está condenado a causa de su consumo de energía”

La web Motherboard hizo un gran trabajo sobre esto y sus argumentos son innegables: La mayoría de la energía eléctrica viene de combustibles fósiles y un consumo creciente de estos recursos es lo último que queremos para el planeta. La conclusión a la que llega Motherboard es que Bitcoin es malo.

Tendremos la oportunidad de ver aparecer muchos artículos de investigación sobre este tema en los próximos años. Hay demasiado dinero en juego gracias a Bitcoin con el que podrán pagarse (junto a otros muchos investigadores que honestamente creen que Bitcoin es malo porque consume mucha energia).

Imagínate un mundo en el que la red Lightning y el procesamiento fuera de la cadena se conviertan en uso corriente. Muchas menos transacciones grandes se hacen en la cadena y la mayoría de las pequeñas se hacen fuera de la cadena que consume probablemente tanta electricidad como poner al día tu estado de Facebook.

Los mineros Bitcoin seguirán haciendo dinero pero ya no controlarán el ecosistema.

Tiene todo el sentido del mundo que los mineros de Bitcoin se resistan a Segwit. Saben que con Segwit lo siguiente es la red Lightning y el uso corriente de transacciones fuera de la cadena. Actualmente los mineros se llevan lo mejor de los dos mundos. Procesan las transacciones grandes via BTC y las pequeñas como el pago de un café con BCH. Todo esto lo perderán cuando la red Lightning y el proceso de transacciones offline se establezcan en el procesamiento de BCH. Seguirán encargándose de las transacciones grandes, donde la seguridad de las transacciones en la cadena es crítica. El volumen de transacciones grandes via BTC se incrementará para poder liquidar todas esas transacciones fuera de la cadena. Los mineros seguirán estando bien. No controlarán el ecosistema Bitcoin pero todavía podrán contar con unos beneficios adecuados.



red carpetWhat follows is a Chinese translation of today’s InsurTech post on Daily Fintech by Stephen Goldstein, with translation by Zarc from InsurView. This article will also appear in Chinese on the InsurView site. To read more Fintech content in Chinese, you can scan the following QR code by Wechat and subscribe to InsurView’s Wechat account.

以下是今日DailyFintech发布的由Stephen Goldstein撰写的InsurTech文章的中文翻译,由InsurView的Zarc进行翻译。 本文也将在InsurView网站上以中文显示。 要阅读更多Fintech的中文内容,您可以扫描以下二维码,并订阅InsurView的微信公众号。

InsurView QR code


CB Insights也对众安进行了详细的分析。

于2013年由平安、腾讯和阿里巴巴联合成立的众安,是中国的第一家互联网保险公司。CB Insights在其分析文章中指出,众安以运费险起家,如今其保险产品已经多达240余种。在2016年,众安卖出了72亿份保单,为4.92亿用户提供了服务,并且获得了将近5亿美元的保费收入。

Daily Fintech此前已经多次撰文分析过众安的相关消息,具体文章请点击文章一文章二


  • 这意味着保险科技公司也可以为客户提供全套保险服务;
  • 中国让亚洲成为了顶级的保险科技市场;
  • 阿里巴巴已经出手了,亚马逊会是下一个入局保险科技的巨头吗?















我们衷心地希望众安IPO能够大获成功,也希望众安不会重蹈网景以及Lending Club的覆辙。(上述两家公司都是互联网企业,在上市后股价暴涨,然而前者拉开了上个世纪末互联网泡沫的序幕,后者作为P2P借贷鼻祖在高开后一路低走,至今市值仅为上市初期巅峰的20%)