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digital assets

Fidelity’s Tom Jessop says crypto has hit a ‘tipping point’

Executives at investment giant Fidelity are confident that cryptocurrency market momentum will continue for the foreseeable future.

Speaking to MarketWatch on April 8, Tom Jessop who heads the investment firm’s crypto division said that he believes crypto has opened a new chapter in traditional finance circles and things have reached a tipping point for the industry.

Jessop stated that the maturation and adoption of crypto assets as an investment class will continue at a rapid pace in the coming years. There are a number of reasons according to the finance manager, one of which is extremely low interest rates in traditional finance.

This, coupled with an environment stimulated by monetary policies, has driven momentum for crypto markets. The Fidelity executive said that this environment is unlikely to change any time soon:

“I think we’ve reached a tipping point. I think you’ve had the accumulated experience of now roughly 12 years of the Bitcoin blockchain being operative since the genesis block in early 2009. And the pandemic, quite frankly, was a catalyst for institutional adoption, and specifically Bitcoin and the narrative, or use-case, around digital gold,”

Jessop added the narrative has been exacerbated by the unprecedented monetary stimulus from central banks and governments in response to the pandemic.

Since the pandemic began, U.S. stimulus packages have topped $6 trillion with much of that money being freshly minted by the Federal Reserve.

Jessop is not the only finance executive to believe that Bitcoin and crypto has reached a tipping point. In early March, Galaxy Digital CEO Mike Novogratz used the same phrase while commenting on the CI Galaxy Bitcoin ETF on Bloomberg:

“Bitcoin adoption has hit a tipping point and investors don’t want to sit on the sidelines,”

On March 24, Fidelity filed paperwork with the U.S. Securities and Exchange Commission to list a new Bitcoin exchange traded fund (ETF). The Wise Origin Bitcoin Trust aims to track the asset’s daily performance using the Fidelity Bitcoin Index PR, an index derived from several price feeds.

Analyst at CFRA Research, VanEck, and Fidelity Investments, Todd Rosenbluth, opined that the SEC is likely to approve an ETF in the coming year or two.

Fidelity created the digital asset unit in 2019 and has been integrating digital assets into traditional investment portfolios ever since.

Fidelity’s Tom Jessop says crypto has hit a ‘tipping point’

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Digital Asset Custody Provider Hex Trust Finalizes $6M Round led by QBN Capital

Hong Kong-headquartered crypto-asset custody service provider Hex Trust reveals that it has secured $6 million in capital via a Series A round that was led by QBN Capital.

As part of its latest investment round, Hex Trust also received contributions from Cell Rising, Radiant Tech Ventures, Kenetic Capital, HashKey, MD Labs, Fenbushi Capital, Borderless Capital, Genesis Block Ventures and Henri Arslanian.

Hex Trust’s management noted that the funds raised would allow it to further scale its business operations while being able to recruit new talent to work at its Hong Kong and Singapore offices.

Hex Trust further noted that during 2021, they’ll make plans to  expand operations into the European market, where the company has teamed up with SIA, an established provider of banking tech infrastructure.

Hex Trust said the capital secured will also be directed towards making enhancements to its proprietary, bank-grade custody solution, called Hex Safe™. The technology-driven service provides a wide range of custody and treasury management solutions for digital assets, security tokens, and non-fungible tokens (NFTs) as well.

Alessio Quaglini, CEO and Co-founder at Hex Trust, stated:

“We are past the inflection point, as blockchain has established itself as the next financial markets infrastructure. Financial institutions are quickly making their moves, and the next 12 months will be critical to define the structure of the overall market. Hex Trust is now perfectly positioned to accelerate its growth and play a leading role in this space, enabling digital assets adoption for a broad range of regulated financial institutions. We are thrilled to be accompanied in this journey by such established investors.”

As noted by its management team, Hex Trust claims to be one of Asia’s leading digital asset custodians. The company says it’s “fully licensed, insured, and provides bank-grade custody for digital assets.”

Hex Trust is reportedly led by experienced banking technologists and “award-winning” financial markets. The company has developed a proprietary platform – Hex Safe™ – that “delivers a flexible custody solution for banks, financial institutions, asset managers, exchanges, and corporations to safely, securely, and efficiently operate in the digital asset ecosystem.”

As explained by Hex Trust:

‘”Through Hex Safe™, clients can access liquidity providers, exchanges and lending & staking platforms, enabling seamless access to services while assets are held in our highly-secure and regulated platform. Hex Trust has offices in Hong Kong and Singapore.”

As covered in April 2020, Hex Trust became the very first licensed crypto-asset custodian in Hong Kong to integrate its services with R3’s Corda platform.

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Former SEC chair Jay Clayton tips new Bitcoin regulations are coming

Former US Securities and Exchange Commission Chair Jay Clayton has stated that Bitcoin has not been classified as a security for a long time.

But speaking on CNBC’s Squawk Box on March 31, Clayton warned that its status as a non-security still does not protect it from the imposition of new regulations which, he warned, could be coming soon.

Host Andrew Ross Sorkin pointed out that under Clayton’s watch the SEC did not take a position on Bitcoin regulation. Clayton responded that was because the asset was declared not to be a security before he even took up his position as the head of the regulatory body.

“Bitcoin was decided to be not a security before the time I got to the SEC. Therefore, the SEC’s jurisdiction over Bitcoin was rather indirect.”

Clayton has remained in the industry following his departure from the SEC in December 2020 and currently advises One River Asset Management on cryptocurrencies.

Although he professes not to have any special insights into what new laws are coming from his time heading up the SEC, he believes the regulatory environment is due for a shake up.

“Where digital assets land at the end of the day […] will be driven in part by regulation—both domestic and international—and I expect, and I’m speaking as a citizen now, that regulation will come in this area both directly and indirectly whether it’s through how these are held at banks, security accounts, taxation and the like. We will see this regulatory environment evolve.”

Clayton’s comments come just a week after billionaire hedge fund manager Ray Dalio warned that the U.S. may ban Bitcoin outright just as they did with gold in the 1930s.

His comments about Bitcoin’s status as a non-security are also interesting in light of Ripple’s appeals to the SEC for documents from the agency to determine how exactly it came to the conclusion that Bitcoin and Ethereum were not securities.

The company and its backers have repeatedly argued that XRP is not a security however the SEC believes it is markedly different due to being morcentralized. Former SEC attorney Marc Powers told Cointelegraph that the agency is executing significant overreach in its case against Ripple and its executives.

Former SEC chair Jay Clayton tips new Bitcoin regulations are coming

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Ripple Acquires 40% Stake in Asian Payments Fintech Tranglo

Ripple has agreed to acquire a 40% stake in cross-border payments Fintech Tranglo, according to a public release. Tranglo, based in Malaysia but operates across Asia, reports 1300 partners having completed 20 million transactions at $4 billion in value. Tranglo claims to be one of Asia’s leading cross-border payment hubs that offer airtime top-ups as well also foreign remittance and business payments.

The company states that the partnership with Ripple will enable it to “meet growing customer demand in the region and expand the reach of On-Demand Liquidity (ODL), which uses the digital asset XRP to send money instantly and reduce working capital needs.”

Ripple expects to broaden its ODL footprint in the region and will allow customers using ODL to leverage Ripple’s Line of Credit to free up working capital and scale cross-border payments. Tranglo expects to continue to provide and expand its current payment services to make cross-border transactions faster and cheaper.

Ripple’s investment in Tranglo is described as a reflection of the company’s commitment to enriching the payments ecosystem in Southeast Asia.

Tranglo CEO Jacky Lee, stated:

“Tranglo has always prided itself on making cross-border transactions faster, cheaper and more secure. By partnering closely with Ripple and introducing On-Demand Liquidity to new markets, we aim to further that ambition to provide accessible and equitable financial services to the masses.”

Asheesh Birla, General Manager of RippleNet at Ripple said that Tranglo’s robust payments infrastructure coupled with their customer service and quality makes them an ideal partner to support their expansion of On-Demand Liquidity starting with the Southeast Asia region.

“We are excited to continue and carry out our shared mission to transform cross-border transactions to be faster, cheaper and more secure with blockchain technology and digital assets.”

Completion of the transaction is subject to regulatory approval and closing conditions and is expected to occur in 2021.

Upon completion, Amir Sarhangi, VP of Product and Delivery at Ripple, and Brooks Entwistle will join Tranglo’s board of directors. TNG Fintech Group will remain the majority shareholder in Tranglo and plans to work with Ripple to further expand Tranglo’s global remittances network.

Ripple previously announced Line of Credit, a service on RippleNet that allows customers using On-Demand Liquidity to source capital on-demand to initiate cross-border payments at scale using the digital asset XRP.

Ripple is currently in the midst of a legal battle with the US Securities and Exchange Commission that has filed an enforcement action alleging the issuance of unregistered securities.

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Reserve Bank of India Governor:Local Fintech Startups May Compete with to Offer Digital Financial Services

Digital payments in India are being increasingly adopted by businesses and individual consumers. Online lending platforms are also becoming more popular in the country that’s home to around 1.5 billion residents.

The Reserve Bank of India (RBI) has introduced several initiatives that are aimed at supporting the nation’s $3 trillion formal economy. The RBI, like other central banks across the globe, has been focused on addressing issues related to data privacy and security.

RBI Governor Shaktikanta Das has stated that Fintech firms that maintain active business operations may begin to challenge incumbents.

As first reported by MoneyControl.com, Das noted that the Fintech industry will be presenting a  challenge to traditional financial services and may experience “exponential” growth in the coming years. Financial technology solutions for improving customer services should also reduce operational costs and further expand the nation’s banking and non-banking sectors, Das added.

One of the major industry growth contributors will be digital payments and online lending, according to Indian officials.

Das added that many more digital platforms may emerge as key pieces across nearly all market segments in the Indian banking sector. He pointed out that all digital firms may provide their services directly to clients or via established banks serving as their “agents” or “associates.”

While commenting on the banks’ operations, Das said that large national service providers and smaller regional companies would benefit from modern IT systems. This innovative tech infrastructure should be developed to address the “exponential” increase in the number of digital transactions, Das noted.

In another report from local sources, earlier this month, it has been estimated that India’s Fintech sector may be valued as high as $160 billion within the next 4 years.

Major crypto firms have also announced plans to work with Indian players. Recently, digital asset marketplace Coinbase revealed that it will be hiring tech professionals in India. This, despite the nation’s authorities not having a clear stance on how they intend to regulate cryptocurrencies such as Bitcoin.

Coinbase isn’t the only foreign company to support India’s crypto initiatives. Leading digital assets firm Binance had acquired Indian virtual currency exchange WazirX, meanwhile, Block.one, a major blockchain firm, has invested millions of dollars into the operations of CoinDCX, a local Indian crypto exchange.

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