This Week in Fintech ending 12 February 2021

This Week in Fintech ending 5th February 2021

The second week of February 2021 was a big news week in Fintech. As usual our job is to dig below the news to understand the underlying trends that you can use as investors, entrepreneurs & executives.

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Your Editor is Bernard Lunn. He is also the CEO of Daily Fintech and author of The Blockchain Economy and occasional opinion columnist.

Monday Ilias Hatzis our Greece-based crypto entrepreneur (Founder & CEO at  Kryptonio a “keyless” non-custodial bitcoin and cryptocurrency wallet, that lets users manage bitcoin and crypto, without private keys or passwords and Weekly Columnist at Daily Fintech) @iliashatzis wrote The Great Reset and Bitcoin

Last year was the year of pandemic. Facemasks and quarantines became the new normal and changed the world has forever. It was also an unforgettable year for bitcoin. During the lows of pandemic in the March it traded below $5,000. Then in the fall and into 2021 it surged. It hit $20,000 in December, around the peak of the last run in 2017, and then hit $30,000 and following that, $40,000 in January 2021. The bitcoin price has soared around 250% since October. Moving past the pandemic, the World Economic Forum (WEF) has come up with a plan called “The Great Reset”. Basically, it means a complete transformation of the global economy. The idea is that society must transform in response to economic turmoil triggered by the COVID-19 pandemic, in anticipation of further economic turmoil related to climate change. Some think it’s radical and ambitious. The WEF see it as an opportunity for recovery. However, it is already clear that these grand plans are in stark contrast to the principles of cryptocurrencies. Centralization is a big part of the Great Reset.

Editor note: Decentralization beats centralization on so many levels but it is a huge paradigm shift.

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Tuesday Bernard Lunn, CEO of Daily Fintech and author of The Blockchain Economy wrote: Part 2: What this reveals about the business model issues of free trading on RobinHood.

When RobinHood first appeared in 2015, DailyFintech wrote RobinHood Freemium could enable a lot of new Low Cost Active Alpha services. We focussed on the free part of the story and guessed at the business model as RobinHood was not being transparent about this. We guessed wrong although now that RobinHood’s business model is in the spotlight and they are in trouble, it might be that our a suggestion was a more sustainable business model than what they actually adopted.

Editor note: Read the post to understand the implications for real time settlement and security tokens.

Wednesday Alan Scott Managing Director EMEA at 24 Exchange @Alan_SmartMoney wrote Stablecoin News for the week ending Wednesday 10 February 2021.

This weekly snapshot is the news that matters in the Stablecoin market.

Bernard Lunn, CEO of Daily Fintech and author of The Blockchain Economy wrote: Switzerland as the jurisdiction for new blockchain based finance

February kicked off with news that Switzerland now lets tokenized securities trade on a blockchain with the same legal standing as traditional assets.

The significance is at two levels. The first level is simply legal certainty. Switzerland has long been officially a multi-currency county, because of an alternative currency called WIR.  The WIR was set up in 1934 by people wanting to create an alternative to a financial system that had failed so dramatically in 1929. Sound familiar? WIR accounts for a tiny % of Swiss GDP but it is legal. So the idea of adding another legal currency was not too big a stretch and you can (for example) pay taxes in Bitcoin and buy it at any railway station. The recent legal changes take this further by giving legal certainty to global investors in blockchain assets for large scale securities transactions.

Editor note: Switzerland obviously faces lots of jurisdictional competition, which is one reason why most countries will avoid being too heavy handed in banning cryptocurrencies/blockchain despite temptations to do so.

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Thursday

Rintu Patnaik, an Insurtech expert based in India, wrote: The Internet of (Insured) Things Part 1: Nascent But Potent

2020 brought about an inflection point in smart devices. The count of active IoT connections (e.g. connected cars, smart home devices, connected industrial equipment) overtook non-IoT connections (e.g. smartphones, laptops). From 21.7 billion active connected devices globally, estimates peg IoT-based at 54%. At current growth, 30+ billion IoT connections are expected as soon as 2025. With Covid-19, public interest for IoT dwindled 15%, with search volume remaining stable at the lower level since. IoT did not play as big a role as other topics (unemployment benefits, WFH, gaming) did. An analysis of 3000+ earnings calls showed a decline in the use of “IoT” in Q2/2020, but revived in Q3.

Editor note: Read this part 1 of a series on the megatrend driving the future of insurance.

Christian Dreyer @x3er, the Swiss based CFA who focusses on how XBRL changes our world wrote:XBRL News on ESEF postponement and xBRL-CSV, with ласкаво просимо to Ukraine!

Editor note: This weekly snapshot is the news that matters in the XBRL market.

Bernard Lunn, CEO of Daily Fintech and author of The Blockchain Economy wrote: Tesla and Bitcoin

Tesla (TSLA) announcing that it had invested $1.5bn in the cryptocurrency was an obvious boost to the BTC-USD price. The law of supply and demand is one constant we can rely upon.

The news is extra significant because Elon Musk of Tesla is now the third CEO to invest their treasury funds into Bitcoin, following Michael Saylor of Microstrategy and Jack Dorsey of Square

Editor note: There is enough solar energy for all our needs – bitcoin, cars, kettles, you name it. The problem is transporting solar energy. The beauty of a bitcoin mine powered by solar energy is that no transport is needed. All a sub saharan country (for example) needs is a bunch of servers connected to the Internet and to their solar energy farm (which gets cheaper by the day). I assume that story appeals to Elon Musk.

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Friday Howard Tolman, a well-known banker, technologist and entrepreneur in London, wrote: Alt Lending for week ended 12 February 2021.

Editor note: This weekly snapshot is the news that matters in the Alt Lending market.

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