San Francisco.Fractal Wealth has joined OTCXN. Fractal Wealth is a digital-asset proprietary trading and technology firm that uses algo strategies “to source and offer liquidity in unique ways”. OTCXN, as any regular reader will know, is a capital-markets infrastructure company that uses asset digitisation, proprietary blockchain technology, real-time collateral management and an array of institutional trading platforms to organize global liquidity and make it tradable via a single account at a custodian on the network. OTCXN has developed a technology platform that eliminates counterparty and settlement risk without the use of balance sheet and credit, and without becoming a counterparty to transactions. The significance of the tie-up with Fractal Wealth begins with, but isn’t limited to, liquidity. Rosario M Ingargiola, CEO and Founder of OTCXN, says: “Fractal Wealth represent a unique source of liquidity for our rapidly growing and diverse institutional client base. As an algorithmic trading firm, they will benefit from the ability to trade programmatically on OTCXN’s ECN, LiquiMatch.” OTCXN’s aggregated liquidity spans both native resting dark and lit orders, executable quote streams from major liquidity providers, plus institutional, as well as retail exchanges that have joined the network. All liquidity on the OTCXN network is actionable – or tradable – with Fractal Wealth holding a single collateral account at their custodian on the OTCXN network. Fractal Wealth specializes in cryptocurrency market-making across centralized exchanges, decentralized exchanges, and decentralized finance platforms. Additionally, Fractal Wealth offers trading tech solutions to institutional clients. OTCXN’s high-performance matching engine, LiquiMatch, launches in Q1 2019 as both a dark pool and lit central-limit order book hybrid ECN for cryptocurrencies. Clients on the network will be able to trade on liquidity across all OTCXN trading platforms, including the existing OTC block trading venue, via a single collateral account at their preferred custodian. In addition to handling native dark and lit orders, LiquiMatch aggregates market makers’ streaming executable quotes, as well as external exchange liquidity, all of which is tradable without a direct financial relationship with each counterparty or placing assets at the underlying exchanges. OTCXN is not a counterparty to any trade.
Pakistan. Telenor Microfinance Bank has launched a blockchain-based cross-border remittance service to operate between Malaysia and Pakistan. The objective is to eliminate intermediary costs. Users will also be able to track their remittances. Remittance traffic between Pakistan and Malaysia has an estimated value of USD20 billion per annum; the new service is based on technology developed by Alipay. A similar service already runs between Hong Kong and the Philippines.
Discussing the benefits of exposure to digital/crypto-currencies, Green continued: “There is demand for portfolio diversification and decent returns - but with reduced volatility.” The deVere Digital Asset Funds will invest “in a diversified portfolio of digital assets via algorithmic trading over different platforms – including crypto-currency exchanges and OTC markets - as well as arbitrage opportunities.” The Funds’ “ground-breaking algorithmic system” will identify arbitrage opportunities between platforms. Zachary Cefaratti, CEO, Dalma Capital, comments: “Crypto-asset markets abound with durable inefficiencies – creating opportunities for hedge funds to generate uncorrelated excess returns through systematic relative-value arbitrage, momentum trading and mean-reversion strategies. Crypto Markets have created opportunities that we have not seen in conventional markets for decades.” Cefaratti points out the prices of the top 25 crypto-assets vary across over 400 liquidity venues, adding: “The ability to trade long and short allows profit opportunities regardless of market direction.”
Las Vegas “Smart cities of the future, the smart governments of the future, will have to have blockchain as part of their leadership,” says Natalia Olson-Urtecho, co-founder and head of strategy and innovation at The Disruptive Factory. Las Vegas, Nevada, is taking on blockchain as part of its landscape. Large parts of downtown have been designated the “innovation district” – a test environment for public-private partnerships with the city.
Among the first projects, a joint initiative between AT&T and Ubicquia to introduce smart lighting. “This fits with the spirit of the community. We are working with partners to find the best application uses which will increase productivity and service delivery,” says Michael Lee Sherwood, director of innovation and technology, Las Vegas.
China. Regulations aimed at achieving the “healthy development” of blockchain technology have been set out by China’s Cyberspace Administration, and come into force on 19th February 2019. Blockchain companies will be required to maintain records of end-users and activity, and to release these to the authorities on request. “Real identity authentication” will be a requirement of operation, as will censorship of content.
South Korea. Decentralised peer-to-peer financial ecosystem ZPER is currently running a PoC of its ZPERobo portfolio investment service, which is projected for launch in first-half 2019. JB Kim, a chief executive officer of ZPER, says: “As a decentralised platform transparently opening transaction details of each P2P company and investor through a blockchain, we record each investment result in the platform thoroughly on the blockchain network. We will be able to build an open infrastructure of trust for investors.”
European Union. Regulation is coming. But slowly. In January 2019, The European Banking Authority published its Report with advice for the European Commission on crypto-assets. The Report said: “Due to the absence in most jurisdictions of specific reporting requirements for crypto-asset activities of institutions, some competent authorities are not well-equipped to monitor these activities and any risks arising and therefore are impeded in their capacity to take such supervisory actions as may be necessary.” The Report then promised: “In view of the challenges that competent authorities are facing, the EBA will develop in 2019 a common monitoring template which competent authorities can choose to issue to institutions, payment institutions and electronic money institutions (and, as appropriate, other financial institutions) to monitor the level and type of activity underway.”