This Week in Fintech ending 16 July 2021.

This week our experts brought you the following insights based on their experience as investors, entrepreneurs & executives.

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 Is Bitcoin Worth the Risk?

Over the last few years, we’re transitioning from a process of redefining financial services, by altering the architecture that underpins our financial system. Fintech companies are becoming mainstream, but they’ve operated on the outskirts of the traditional financial system. Much of today’s payment infrastructure was built years ago to allow business-to-consumer payments, trade financing, and supply chain activities. Many of these payments use a common template, have a lot of manual overlays, and are typically costly. We can have a fundamental shift where we go from manual to automated with the growth of blockchain technology at scale. Central banks are trying to figure out how to make this new technology without having negative effects, as they try to find the best way to make it more effective. The growth trend in cryptocurrencies is expected to continue. Some, including myself, believe that cryptocurrencies will replace existing fiat currencies. One thing is certain, no one can remain blind to current events in the crypto world and its growing importance for the financial system.

Editor note: Fintech and crypto have both come a long way but are only getting started with a much bigger journey ahead. 

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Tuesday Bernard Lunn, CEO of Daily Fintech and author of The Blockchain Economy wrote: 4 part series on Lightning Network Part 2: Eeyore says nice theory, shame about the traction

Eeyore usually gets negative audience reaction at the Pooh Corner Tech Debates as his pessimistic worldview contrasts with the optimistic enthusiasm of most tech conference attendees. He started by – uncharacteristically –  pandering to his audience by telling people that Lightning Network was a centralised solution; this got a heckle “why does that bother a legacy finance guy like you?”

After that weak start Eeyore went on to ask who is actually using Lightning Network today and to point out two major weaknesses.

Editor note: If you think Bitcoin is a ponzi scheme heading to zero, this post will strengthen your belief.

Wednesday Alan Scott Managing Director EMEA at 24 Exchange @Alan_SmartMoney wrote his weekly roundup of Stablecoin news.

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Thursday

Rintu Patnaik, an Insurtech expert based in India, wrote: Cryptocurrency boom stokes insurer interest, Coincover funding the latest cue

The cryptocurrency industry has been on a roll, peaking at a market capitalization of $2.2 trillion this April.  Motivated by its growing popularity, major corporate investors evinced an interest. Tesla acquired $1.5 billion of bitcoin (BTC) in January 2021 while MicroStrategy stockpiled $2.2 billion of BTC. Insurers slow to enter the crypto world, are warily assessing risks ranging from cyber-attacks on exchanges and users to price volatility. Despite being a growing, multi-trillion dollar industry, crypto assets remain96% uninsured. But as crypto moves away from a HNW user base, insurers are making moves.

Editor note: Rintu looks at three ways that (re)insurers are helping to turn crypto from a store of value to a useful currency for day to day use.

Bernard Lunn, CEO of Daily Fintech and author of The Blockchain Economy wrote: Why we are replacing $GS with $RKT in the Fintech 50 Index today

Today is 3 months from when Coinbase went public and we released the first version of our Fintech 50 Index.

The most controversial entry in our Fintech 50 Index was Goldman Sachs (GS) which we classed as Fintech because Goldman Sachs is a Fin that is so smart about Tech that they are almost Fintech.

I believe convergence is real and that there is not a big difference, beyond naming, between a Tech that became a regulated bank and a bank that became totally tech driven.

That is why I chose to include GS in our Fintech 50 Index.

The problem is that other banks are also becoming equally smart and tech driven. If we include Goldman Sachs, why not JP Morgan, Bank of America or UBS?

I opted for a wide definition when building our Fintech 50 Index and included a) old Fintech like Visa and Mastercard b) Traditional Fintech ie selling tech to banks.  That wide definition remains in place, but as of today, by replacing GS with RKT in our Fintech 50 Index I am no longer including any legacy banks, no matter how tech smart and tech driven they are.

RKT (Rocket Companies, Inc)  is big enough to go into our Fintech 50 Index – at  today’s valuation  of over $33 billion it ranks 20 in our Index, which is just above Equifax and below MSCI Barra, but it is also plenty controversial

Editor note: By putting a company into our Fintech 50 Index we are NOT saying it is a good investment. Do. Your. Own. Diligence ( DYOD). Among other factors look at revenue momentum, valuation and debt risk.

Christian Dreyer @x3er, the Swiss based CFA who focusses on how XBRL changes our world wrote his weekly roundup of XBRL news.

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Friday Howard Tolman, a well-known banker, technologist and entrepreneur in London, wrote his weekly roundup of Alt Lending news.

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