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China: WeiyangX Fintech Review

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CBIRC: Increasing Efforts to Crack Down on New Types of Illegal Commercial Insurance Activities

Recently, the Anti-Illegal Financial Activities Bureau of China Banking and Insurance Regulatory Commission (CBIRC) published an article entitled “Analysis of Illegal Commercial Insurance Activities and Regulatory Suggestions” in “Observation of Insurance Risk”.

As noted in the article, with the advancement of internet technology and third-party payment in recent years, the technical threshold for the establishment of related websites and APP platforms has been greatly reduced. This has led to the rapid development of illegal commercial insurance, and many third-party network platforms of information technology intermediary services are engaged in illegal insurance intermediary businesses. Therefore, in order to better protect the consumers, the article called for clarifying the regulatory body and regulatory standards for these new types of illegal online businesses in the future. (Source: Observation of Insurance Risk)

China’s Digital Economy Reaches ¥35.8 Trillion in 2019

On September 10th, the Cyberspace Administration of China released the “Report of Digital China Development (2019)”.

According to the report, China’s digital economy registered ¥35.8 trillion ($5.07 trillion) in 2019, accounting for 36.2% of China’s GDP and 67.7% of GDP growth.

The structure of the digital economy continues to be optimized and upgraded, and the added value of industrial digitalization accounts for 80.2% of the digital economy. (Source: Cyberspace Administration of China)

Jniu Technology Completes ¥35 million Pre-A Round of Financing

On September 11th, smart insurance brokerage service provider, Jniu Technology, was reported to have secured a ¥35 million Pre-A round of financing. The investment was provided by Sequoia Capital China and Eminence Ventures.

Established in 2019, Jniu empowers traditional life insurance companies’ personal insurance and insurance intermediary markets through agent operations, and help establish digital operating systems, distribution systems and supply-chain capabilities. (Source: ebrun)

Lithuania Plans to Establish Bilateral Fintech Cooperation with Hainan Province

On September 9th, an academic seminar themed “China-Europe Digital Securities and Open Finance” was held in Hainan Resort Software Community (RSC). Officers from Hainan RSC introduced the development of the park and related policies of Hainan Free Trade Port.

The Hainan FTP will offer zero tariffs, low tax rates, simplified taxation and other policy supports for trade, investment, cross-border capital flows, transportation, and safe and orderly flow of data.

Sankauskas Andrius, Senior Commercial Counselor of the Republic of Lithuania in China, said that this is in line with the EU’s policy and the cooperation between the two sides will have a more consistent policy environment.

In April 2021, Lithuania will lead global fintech companies to come to Hainan to participate in the “Hainan Fintech Week”, and plan to establish a bilateral fintech cooperation relationship between Lithuania and Hainan. (Source: Hainan Daily)

The above is a weekly synopsis of the biggest stories on Fintech in China provided by WeiyangX, part of Tsinghua University, in partnership with Crowdfund Insider.

WeiyangX is the most influential website focusing on Fintech in China. The site covers the latest news, industry data analysis, business practices, and in-depth Fintech cases in Fintech. WeiyangX is incubated by Fintech Lab. Founded by Tsinghua University’s People’s Bank of China (PBC) School of Finance in 2012, the Fintech Lab is the first and leading research entity dedicated to leading best practices, promoting interdisciplinary innovation, and encouraging entrepreneurship in the field of fintech through scientific research and innovative project incubation.

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Binance Coin (BNB) and OKEx’s (OKB) Exchange Tokens are Undervalued, while KuCoin (KSC) and Bitfinex (LEO) are Overvalued: Report

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The Token Insight team notes that in the crypto-asset sector, it’s always challenging to accurately provide realistic valuations for digital assets. At present, there’s no consistent or uniform industry-standard or reliable valuation method that would allow us to discover the real value of cryptocurrencies, the Token Insight team states.

Many digital currency exchanges have issued their own platform tokens which are supposed to directly relate to the performance of their platform or overall business. Exchange tokens are a “unique” category of crypto-assets and may be “fairly evaluated,” because of their inherent properties of “stable currency flow,” according to a report from Token Insight.

The report states:

“We have found that the transaction [volume] on exchanges is highly correlated to the market, directly affecting the [revenue] of each specific exchange.”

The Token Insight team has created a quantitative method which allows them to “construct the valuation of exchange tokens structure,” so that they can perform standardized analysis for exchange tokens based on the exchange’s activities, and then be able to determine the “actual value behind each exchange.”

The report notes that Binance Coin (BNB) has had “a very strong positive correlation with the majority of exchange tokens in Q2 2020, but the rolling 30 Day correlation with other exchange tokens has dropped significantly.” Meanwhile, HitBTC’s HBC is exhibiting “an extremely negative correlation with the majority of others in Q2, [and] the rolling 30 Day has changed to almost all strong positive correlation intervals.”

Huobi Token (HT), FTX exchange (FTT), HitBTC (HBC), and Bitfinex’s (LEO) have “a relatively high rolling 30 Day correlation.”

Based on these findings, the report claims that Binance’s BNB token and OKEx’s OKB token are undervalued. Huobi’s HT and FTX exchange’s FTT are also currently undervalued, according to the report’s analysis.

HBC is valued at around what it should be, the report claims. Meanwhile, KuCoin’s exchange token, KCS is overvalued. BitMart’s BMX token is valued at approximately the price which it should be, given current market conditions, the report noted. It added that Bitfinex’s LEO token is overvalued.

These exchange based cryptocurrencies aim to serve mainly as utility tokens, meaning that they may be used to qualify for special discounts while conducting transactions on digital asset trading platforms. They’re really meant to encourage users to trade more, because investors are “rewarded” with exclusive offers that are not available to others who may not hold these exchange tokens.

Binance Coin or BNB is by far the most successful exchange token. It currently has a market cap of over $3 billion and is accepted in many other places or platforms, besides just Binance. It can be argued that BNB has emerged as one of the most widely-accepted cryptocurrencies.

While BNB has been successful, like many of Binance’s other initiatives, the exchange continues to offer services in multiple jurisdictions without authorization.

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DeFi Token Synthetix (SYNTH) Briefly Surges Past $1 Billion Market Cap Before Strong Correction of Decentralized Finance Markets

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Synthetix, a “decentralized” asset management protocol that offers non-custodial mimetic trading, had briefly surpassed the $1 billion mark (according to DeFi Pulse data). However, the decentralized finance (DeFi) market has experienced a somewhat strong correction, as around $1 billion in value has been lost almost as fast as it was added.

During the past 24 hours, the highly risky and volatile DeFi market hit the $9 billion mark, but has now fallen below $8 billion, at the time of writing. However, Synthetix’s SNX token’s price has surged dramatically during 2020, like most other major DeFi protocols such as Aave, Compound, MakerDAO, among many others.

On August 15, 2020, the SNX token reached an all-time high of $7.32. It had rallied over 400% year-to-date.

Most of the altcoin (alternative coin) hype this year has been around “decentralized” lending platforms, digital asset liquidity providers, and yield farming. But Synthetix also aims to offer services that are somewhat similar to those provided by more traditional finance platforms.

Synthetix provides a decentralized or non-custodial crypto exchange (DEX) that has been developed using the Ethereum protocol and blockchain. Like most other DeFi services, Synthetix uses several smart contracts (programmable business logic).

But Synthetix does not support trading between crypto-assets. like many ERC-20 compliant tokens or stablecoins, which are currencies pegged or backed 1-to-1 with major world currencies like the US dollar or commodities like gold. Instead, Synthetix enables trading between “Synths” or synthetic assets.

Synths are digital or tokenized representations of real-world assets. They can be used to keep track of the price of virtual tokens that are basically traditional assets that investors are already familiar with.  Commodities and traditional stocks may be traded via the Synthetix DEX. For instance, it’s possible to trade major fiat currencies, in the form of sUSD (synthetic US dollar) or sEUR (synthetic Euro).

Decentralized cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) also have their synthetic representations that may be traded via Synthetic’s exchange. The DeFi protocol may also be used to issue and trade Synth tokens that are used to track the price of assets inversely, like the iUSD and iETH.

Last month, digital asset exchange OKEx introduced daily options trading for cryptocurrencies, and added support for Synthetix (SNX).

As reported in June 2019, a trader on Synthetix took advantage of a price feed (oracle) glitch governing smart contracts on the platform to mint $37 million in synthetic ethers.

Synthetix launched a synthetic Bitcoin on the Ethereum blockchain known as synthetic Bitcoin (sBTC) back in February 2019. The product was introduced after the platform rebranded from Haven to Synthetix (in December 2018).

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