23 May 2017

44975

Retired Member

2,621Posts 9,019,862Views 2,769Comments
Finextra community

Disruption in Retail Banking

Growth in internet and mobile technologies has transformed many industries and economies. The market forces and competitive landscape has completely changed in many sectors. iTunes has fundamentally changed music industry, Amazon has driven most big brick and mortar book sellers out of business, Expedia is one of the worlds' biggest travel company….. the list goes on. Internet and mobile technologies are big disrupters for most industries. What started (and tapered a bit!) with the dot com boom of 2000 has become a lethal threat to most business models today. Powered by mass adoption in mobiles phones, proliferation of smart phones and cheaper band-width, internet and mobile technology have changed many industries. The banking industry in has been dominated by a handful of big global or regional banks for 100s of years. While the credit crisis has shaken this industry, the core market forces for the industry have not changed. Will Innovation in Internet and Mobile technologies disrupt retail banking? Will there be 5 new names in global top 10 retail banks in 2020?

Bitcoin ETF Bites the Dust, Needs More Security

23 April 2017  |  4968 views  |  0

When the SEC, last month, announced the proposal from Winklevoss Bitcoin Trust was declined, they made a clear statement to the cryptocurrency community: more security is needed.

In their terms, they did not "find the proposal to be consistent with Section 6(b)(5) of the Exchange Act, which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest."

Of course, that sent investors into a tizzy, serving up a 15% loss and sending Bitcoin down to $1050 from its recent high of nearly $1300. It lived to see a new day, of course, and since, the price of Bitcoin has recovered rather nicely. As of this writing, it sits at $1237. I wanted to give it some time before putting together a reaction on the news simply because Bitcoin, and cryptocurrencies in general, are highly volatile. Pricing isn’t strictly subject to scarcity, and demand tends to lean towards the fickle. An SEC decision sends investors on a rollercoaster ride, and many, seeing the immediate bottom, jumped back on board to nail down a nice short-term profit. In this way, Bitcoin is both volatile and resilient.

Cryptocurrencies will not die based on bad news out of the SEC. It is international in a way which transcends a single agency, even when that agency is the SEC. The threat to cryptocurrency is not external organizations, though such organizations, based on their acceptance, could certainly help it mainstream. The real threat to cryptocurrency is what’s behind the rejection. The real threat is the lack of preparedness for external cybercrime. In order for Bitcoin, or other cryptocurrencies, to gain mainstream traction and transform the way the world transacts, outside of its niche community, the movement will need to find a way to lessen the exposure to external risk.

Winklevoss has been working on this proposal for several years, and along the way, they continue to restructure it. They, and others, will continue to work to gain approval for an ETF, and the best way to help their cause is to address the structural challenges associated with the concept. Until they do so, it is likely we will see more failed attempts. Such attempts shouldn’t be taken as a reason to dump the currency. It should be taken in the context in which it exists: government agencies need more proof, more security, and more upside to mainstream a groundbreaking, innovative disrupter.

TagsRisk & regulationInnovation

Comments: (0)

Comment on this story (membership required)

Latest posts from

Retired's profile

job title
location
member since 2014
Summary profile See full profile »

Retired's expertise

Member since 2009
2613 posts2,769 comments
What Retired reads

Who's commenting on Retired's posts

Ketharaman Swaminathan
Deepthi Rajan
Melvin Haskins
Urs Meier
Steven Hatton
Ahmed Saleh
Tayloe Draughon
João Bohner
Kunal Patel
Graham Seel
Melba Foggo
Nikhil Thadani