NetworkNewsWire Editorial Coverage
NetworkNewsWire presents CryptoCurrencyWire commentary: There is a massive, underserved target market out there for cryptocurrency – a market succinctly delineated by World Bank statistics that indicate 2 billion or more people worldwide are unbanked, as well as by FDIC data that shows more than 23 million Americans are either unbanked or underbanked.
Such data illustrates how cryptocurrency is poised to potentially disrupt the digital payments landscape by ensuring an alternative to traditional banking; and, of course, all merchants are eager to avoid transaction fees regardless of where they do business in the world, which is a primary driver of ongoing growth in merchant acceptance. The underlying potential and increasing acceptance of cryptocurrencies has sent many different kinds of demographics racing to find the “Bitcoin 2.0” killer coin. Contenders such as the community-centric SmartCash (Crypto: SMART) (SMART Profile ), with its self-replenishing SmartHive Project Treasury and ongoing innovation, are gaining more attention. Major market players in the crypto-asset movement like payment-focused Square, Inc. (NYSE:SQ), PayPal Holdings, Inc. (NASDAQ:PYPL) and Visa, Inc. (NYSE:V) are becoming increasingly aware of such attractive crypto-assets as SmartCash, and blockchain-focused juggernauts such as International Business Machines Corporation (NYSE:IBM) are lining up as well.
Crypto Can Serve as Superior Substitute for Outdated Payment Systems
Even before scalability issues in the Bitcoin (Crypto: BTC) blockchain are resolved (a situation that would help put BTC more center stage when it comes to consumer choice for buying everyday goods and services), the benefits of crypto for tasks such as value transfer are becoming increasingly apparent. Because crypto-assets leverage the power of blockchain technology to clear and quickly settle transfers without the need for an intermediary, comparatively antiquated banking networks are beginning to look like dinosaurs; particularly when it comes to cross-border payments. IMF Monetary and Capital Markets Department Deputy Director Dong He even recently asserted that the increasing prominence of crypto-assets stands to reduce demand for the fiat currencies issued by central banks themselves (http://www.ccw.fm/VAE1u).
True Innovators are the Long-term Darlings
The ever-growing interest among merchants to adopt immediate settlement-capable cryptocurrency tech that is also universal, decentralized and fraud-resistant is exciting news. It’s notable to mention that the addition of direct buying and selling of bitcoins in Square’s wildly popular Cash App has played a part in doubling the rate of downloads (http://www.ccw.fm/4vWMs). Needless to say, it is easily understandable why retailers across multiple industries would be pushing Square to accept bitcoins for transactions considering the benefits of using crypto instead of payment systems like credit cards.
European cryptocurrency payment gateway Coingate recently partnered with opensource ecommerce developer Prestashop, enabling 80,000 new merchants across Europe to accept crypto payments (http://www.ccw.fm/3Az2V). Merchant services provider BitPay’s CEO Stephen Pair recently touted the $40 million secured in a Series B round to expand services in Asia, where merchant adoption appears to be accelerating handily (http://www.ccw.fm/P8Heo). South Korean internet giant Kakao, which runs major cryptocurrency exchange UpBit, also recently announced crypto integration, opening payment acceptance to 12,000 merchants and 3 million-plus registered KakaoPay users (http://www.ccw.fm/hV75l).
SmartCash is Holding the “SmartCard”
Increasing the merchant adoption rate is one area where SmartCash (Crypto: SMART) really shines with a host of innovative features. A growing network of SmartNode servers, currently totaling more than 12,000, will enable SmartCash’s soon-to-be released feature InstantPay for real-time transactions (Bitcoin often takes 10 minutes or more). Achieving such a large, decentralized network of servers as this is a direct result of a significantly more community-focused approach by the SmartCash project. Notably, 70 percent of mined block rewards are set aside to help fund projects submitted by community members and bolster the SmartHive teams who maintain and promote the network. SmartNodes help to future-proof the SmartCash project as well, due to their inherent ability to add new services and bypass the kinds of performance and scalability issues that have plagued Bitcoin. Just last year there were many troubling reports of transactions that went dormant for days on end as a severe backlog left transactions unconfirmed and users furious.
A key element for merchant adoption of crypto is consumer confidence and receptivity to usage, because merchants want their customers to feel satisfied. SmartCash offers such user-friendly features as username-based addresses that make it easy to make any sort of transaction, including tipping and donating. Custom username-based addresses also do away with the complex and worrying addresses like those used by BTC, which often leave customers biting their nails at transaction time, wondering if they correctly entered the lengthy alphanumeric code and sent crypto to the correct party.
SmartCash also offers handy features like send-to-email that lets anyone with an email address receive SMART coins, even if they don’t have a wallet, making it very easy for experienced users to send payment to new users who have no experience with cryptocurrencies. SmartCash’s SmartRewards program also grants a reward to holders of 1,000 SMART or more in a wallet at a set time every month – a measure that was implemented to help reduce price volatility by reducing the amount of coins constantly traded, characteristically benefiting the whole community. Additionally, because transaction fees are less than a tenth of a penny ($0.001), SmartCash is very attractive to both merchants and buyers (http://www.ccw.fm/13WmG).
To further facilitate merchant adoption, the SmartCash project will release a physical card-ready platform called the SmartCard within several weeks that will work similarly to the way the company’s already-available SmartBand does today. The card format is familiar to consumers and allows them to skip taking out their phone to load up an app. In fact, no Internet connection is needed at all by the consumer, which means never having to worry about dead batteries or lack of signal in remote areas. SmartCard will also be usable in places where traditional banking services are only partially available, or even absent entirely. With SmartBand already accepted by some 2.5 million merchants in Brazil and an estimated 726 billion digital payments to be facilitated per year by payments processors of all types by 2020 (according to a recent study by Capgemini and BNP Paribas), the SmartCard system stands ready to gobble up significant market share.
SmartCash is a truly unique crypto project because of the heavy emphasis on being community-driven. This is a serious departure from most other cryptos and the individual SMART holders get to have a real voice. Furthermore, the self-funded SmartHive Project Treasury and accessibility of block mining to standard PCs means that anyone can support the network. The SmartHive governance portal approach does away with the traditional hierarchy and inefficiencies of a company structure and represents a management structure as distributed and decentralized as blockchain technology itself.
SmartCash seems to scratch all the right places where the digital payments market is ripest for disruption. And while some players have made noises about moving away from crypto altogether, focusing instead on enterprise-scale blockchain tech and standard fiat currencies to handle things like cross-border payments, the use of innovative crypto like SmartCash or Stellar’s Lumens (Crypto: XLM) could change all that. The payment-focused players could also be swayed by such rich feature sets, moving away from Bitcoin and into next-generation cryptos that threaten to become “Bitcoin killers” by offering a bevy of procedural advantages.
Square, Inc. (NYSE: SQ) has seen its share price soar by some 60 percent since the merchant services aggregator’s announcement about allowing bitcoins to be purchased via the Cash App (http://www.ccw.fm/Vq4Wm). And, notably, a recent Nomura (NYSE: NMR) survey reveals 60 percent of business owners using Square’s technology for rapid payment via smartphone would accept bitcoin as a form of payment (http://www.ccw.fm/3aUAm). Dan Dolev, a top analyst at Nomura’s independent equity trading arm, Instinet, put a $64 price target on Square this March, due in large part to the strength of the company’s crypto adoption. However, many analysts grow increasingly concerned about Bitcoin’s ability to fulfill the vital crypto role in this equation, given outstanding transaction time, price volatility and high transaction fees.
PayPal Holdings, Inc. (NASDAQ: PYPL) was in the news recently due to comments from ousted CEO Bill Harris, who downplayed merchant adoption rates of Bitcoin, citing some of the aforementioned concerns, even going so far as to call Bitcoin a scam. Little wonder he got his walking papers, given the pro-crypto attitude of PayPal co-founder Peter Thiel and more recent developments such as a patent application filing in March by the company for a system to speed up handling those long private keys used to transact BTC. The patent application details a means of creating secondary wallets with their own unique user keys for buyer and seller, practically eliminating the wait time payees currently experience when trying to ensure they will receive a given virtual currency payment.
Visa, Inc. (NYSE: V) former CEO of UK and Ireland operations Marc O’Brien recently joined Estonian crypto startup Crypterium, which raised $52 million last year via an initial coin offering. Crypterium is laser-focused on eliminating the difficulties associated with using crypto for everyday transactions and seeks to streamline the entire process, hoping to eventually partner with Visa to roll out crypto and/or virtual cards attached to proprietary wallets. This is an area that Visa already has considerable experience in, with offerings such as Virtual VISA credit cards. O’Brien was keen to highlight the potential here in a recent Business Insider interview, noting how Crypterium and Visa could provide a haven for consumers in high-inflation markets such as Argentina or Turkey.
International Business Machines Corp. (NYSE: IBM), whose new head of blockchain development recently acknowledged cryptocurrency talks with about 20 central banks from various countries (including G20 nations), is predicting that some will dare to toy with crypto, with the most potential shown by Sweden, North America and Asia (http://www.ccw.fm/2Mn0V). IBM’s crypto-friendly policies mark an evolution in the juggernaut’s rhetoric. The company is now doubling-down on its use of Lumens (XLM), and it has significant first-mover advantage in the space with the capacity to be a real king-maker for innovative cryptos.
On the Cusp of a Digital Sea Change
Any way you slice it, cryptocurrency is knocking on the door of the sprawling $3 trillion-plus global digital payments market (http://www.ccw.fm/0yd1W), demanding to be let in (if it doesn’t simply tear the door off). True innovators on the coin and blockchain ends of the market stand to be the biggest winners, with user-friendliness and merchant adoption in the driver’s seat.
For more information on SmartCash, please visit SmartCash (Crypto: SMART).
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Seven lessons from 2020
Rebeca Ehrnrooth, Equilibrium Capital and CEMS Alumni Association President
Attending a New Year’s luncheon on 31 December 2019, we played a game that involved predicting the world in 2020. Some of the questions included: would Uber become profitable? Would the three-decade bond rally finally come to an end? Would the US hit a recession?
Unlike any of our predictions based on a traditional approach to business and predicting, we now know that 2020 became the year where business, professional and personal plans were turned upside down, reshaped and put-on hold. The proverbial black swan had arrived.
As revealed in a new CEMS Guide to Leadership in a Post-COVID-19 World, to which I contributed, the COVID-19 pandemic has exposed deficiencies in the 20th Century vision of leadership, giving a rare opportunity to question the status quo.
So, what are the main lessons from 2020?
- Humans are enormously adaptive. This is not an extinction scenario. The world is getting used to dealing with global human disaster which may become a recurring event. Life continues guided by new parameters.
- No sector or country is immune to rapid change. Just as the leveraged finance and equity markets ground to a halt during the Global Financial Crisis, we have seen a disruption in the financial markets (including M&A) in 2020, including a significant redistribution of wealth between sectors; think tech vs airlines and the hospitality industry. When a market is disrupted it has secondary and tertiary effects such as less work for accountants, lawyers, financiers etc.
- Location is not as important anymore. The belief that finance staff need to be based in one of the financial capitals to be effective has been forever altered. Pursuing a career in finance from anywhere is becoming possible. However, it’s likely that over time, financial controls and human interaction will move the work model back towards the traditional office approach, as work is a critical sanctuary for people. While working from home may allow more time for family, chores and sports, it is mainly effective for people who already have their internal and external networks. For junior employees it presents a notable challenge as they may be forced to spend their formative years without a chance to really build their networks.
- Change is likely to be lasting. The opportunity for alternative finance and tech focused providers is enormous and 2020 will accelerate this shift. For example, many retail banks are providing rather poor customer service, blaming the pandemic. Even the most loyal customers will be heading elsewhere. For recent graduates and current students this is a major shift; future winners and key employers may not be names we are used to seeing in the headlines.
- There will be a spotlight on leaders with visionary strategy and understanding of the operations. 2020 showed many politicians and business leaders behaving like they were playing a game of snakes and ladders, rather than executing a thought-out strategy. The next wave of thoughtful leadership is urgently required.
- Collaboration leads to success. The definition of a pandemic is an infectious disease prevalent worldwide. A global problem requires a collaborative solution rather than each country and industry on their own. Quoting Steven Riley, professor of infectious disease dynamics at Imperial College London: “Once you have the knowledge and you share the knowledge, then you are able to take measures to push transmission much lower”. This principle is transferable to management education. In a world more complex than ever, investing in a degree is hard currency. Combined with the full global alumni network, corporate partners and schools, CEMS is capital that doesn’t depreciate.
- Resilience has become a watch word. Saint-Exupéry’s quote resonates with me: “If you want to build a ship, don’t drum up people to collect wood and don’t assign them tasks and work, but rather teach them to long for the endless immensity of the sea.” We are in a new paradigm – so prepare for the next change. For COVID-19, while we hope that the vaccine will soon upon us, the broader long-term positive challenge remains.
Data after Brexit: How does the end of the transition affect GDPR?
By John Flynn, Principal Security Consultant at Conosco
The UK has officially left the European Union now that the transition period has ended on January 1st 2021. But this could raise issues with one of the biggest bugbears for many companies – the international transfer of personal data.
Businesses can relax, somewhat – GDPR, which took businesses months to get their heads around, is not being replaced. It will continue as the UK GDPR 2018, and will still be based on the criteria of the Data Protection Act of 2018. However, the UK will retain the right to change the UK GDPR as it sees fit in the future.
The main changes apply to those who receive data coming into the UK from Europe. Transfers from the UK to other countries can continue under existing arrangements.
We know it can be difficult to cut through the legal jargon, so we have simplified what you need to know to protect yourself and your data:
1 – Update your privacy notice
Most businesses do not have the correct clauses in place ahead of January 1st, potentially exposing their liability, should something happen to their data. All company privacy notices online will need to be updated to specifically state ‘UK GDPR’, as opposed to ‘EU GDPR’. You will also need standard contractual clauses in place, which cover both parties – those transferring and those receiving the data.
The Information Commissioner’s Office (ICO) has a list of what needs to be included in the standard contractual clause here. The ICO will remain the UK regulator for data protection, regularly liaising with each EU member state.
This also applies to Multi Corporate Groups who operate in multiple countries, who need to update their documentation and privacy notice to expressly cover the data transfers. The UK has applied for an adequacy assessment, which would negate the need for contractual clauses, however this has not yet been approved by the EU.
2 – Data privacy assessments
Any company which runs applications and software should always perform a Data Privacy Impact Assessment. This was also in the guidelines before, but these assessments are now more important for those who outsource their IT operations internationally.
For example, when using a service such as a cloud-based system, the company must be sure that its service provider adheres to UK GDPR and stores the data within the European Economic Area (EEA), or has a binding corporate agreement with the company, where data is stored outside of the EEA. You should also, as mentioned above, make sure that a contractual clause is in place.
3 – Review local legislation
Contracts should now have contractual clauses that specify the responsibilities of the data controller and the data processor. If you are receiving personal data from a country territory or sector covered by a European Commission adequacy decision, the sender of the data will need to consider how to comply with its local laws on international transfers. You should check local legislation and guidance in this case.
4 – Cyber Security health check
The ICO is increasing its capacity and efforts to crack down on data breaches, post-Brexit. Now is a great time for all companies to have a health check to understand their Information Security posture and GDPR compliance. Nobody wants to be caught handling data improperly and fined when it could have been prevented with education and training.
A gap analysis performed by an expert is money well-spent. It’s also a fact that companies that have cybersecurity and Information Security controls are not only able to better defend against attacks but are also far better placed to recover from an attack.
It’s important that all businesses – large and small – are properly preparing their data storage and transferring for the 1st January. ICO has been busy setting examples by fining large, high-profile companies for failing to keep millions of customers’ personal data safe.
It will continue to come down hard on the data breaches of personal identifiable information and special categories of data. The saying ‘prevention is better than a cure’ rings truer than ever this year, and you will thank yourself if you make the efforts to properly store your data now, and not when it’s too late.
2020 reflections and 2021 outlook
By John Hunter, Head of Banking and Fiduciaries, Finance Isle of Man
Reflections on the most surreal year
The Covid-19 pandemic has completely changed the world as we knew it, resulting in catastrophic loss of life and fears of a downturn hang over global economies like a sword of Damocles. In the UK, the new strain has further exacerbated the situation. As I am sure many have already said we are living in what could be called the most surreal times. People have been trying to cope with this “new normal”, by changing their lifestyles and evolving behaviours.
The Isle of Man responded swiftly to the pandemic by closing its borders and enforcing social restrictions which everyone respected and adhered to. Socially and culturally the Island demonstrated all the good things that come from living on a relatively small Island where community still means so much.
The Isle of Man’s financial services sector adapted quickly, seamlessly transitioning to working from home. The banks too adopted flexible remote working practices and continued to support clients around the world helping them navigate the challenging situation and making the most of any opportunities that arose.
Although there is no substitute for face-to-face interactions, we all embraced web-conferencing platforms like Microsoft Teams and Zoom to stay connected with contacts around the world and build and nurture business relationships, whether it was with financial services firms or high net worth individuals looking to relocate to the Island.
Furthermore, a priority for the Isle of Man has been to reinvigorate the business and cultural ties with South Africa. In a normal world, we would have travelled to the country, held in-person meetings with businesses and industry representatives and talked about building on our wonderful historic ties. However, because of the scale and breadth of disruption we had to change all our plans! We hosted a virtual roadshow which comprised a series of webinars exploring why it has never been more important for South African businesses and individuals to choose the right jurisdiction for long term financial planning.
Looking ahead to the future
We are all hoping that the global rollout of vaccines will provide the pathway to some form of return to normality and all the things people are missing will be back. Like amidst all periods of immense turmoil, interesting, new possibilities have emerged such as the revolution in work culture and a renewed importance of being close to nature and green spaces is. And these possibilities can help reshape society for the better.
The global economic recovery and rebuild might seem further away in the current environment especially amidst the new lockdowns. But we are confident in the resilience of economies and are hopeful that different industrial sectors and governments working together would result in green shoots.
The financial services industry has an important role to play in getting the world economy back on its feet. It is a core component of the solution to continue facilitating the financing of corporates, as well as to develop sustainable finance and nurture digital technologies which have proven to be vital during the pandemic. The sector should continue its cooperation and collaboration with governments and regulators to ensure efficient capital flows and financial stability for businesses and individuals.
Banks too have a crucial role to play as they are instrumental to the effective transmission of monetary policies and stimulus packages. As mentioned in a report by EY: “Financial insecurity in the wake of COVID-19 will require banks to boost consumer confidence and help build a more resilient working world.”
We expect the Isle of Man’s financial services sector and banks to continue navigating the situation with resilience as they have been doing thus far and contributing to the global recovery process. Also, we truly hope this will be our busiest year ever (subject to our ability to travel), with an extensive global schedule of planned activity to promote the Island as an international financial centre of excellence and innovation. Personally, I had planned to be in South Africa for the British & Irish Lions tour, but regrettably, it might not take place and as such we will look forward to catching up with friends there as and when we can.
No doubt, there are significant challenges for the world ahead but as Albert Einstein said: “in the midst of every crisis lies great opportunity”. And it is this opportunity that we all need to work together to identify and make the most of. We are confident that in 2021 the Isle of Man will continue to support financial services businesses help their clients, employees, and the wider society through these surreal times. We are all in this together.
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