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LIBRA Analysis or Facebook entry in Exchange Traded Fund business with massive potential consumer base


The structure of Libra is analogous to the popular Exchange Traded Fund (ETF) model, where unit holders are entitled to the financial returns of a basket of financial assets. The units are tradable on exchanges and a select group of authorised participants are able to create and redeem units using the underlying assets.

As we pointed out in our February 2019 piece, the ETF industry has enjoyed considerable growth in the last decade or so, in particular in the area of fixed income (See figure 1 below). In June 2019, in a bombshell moment for the ETF industry and challenge for the established players such as Blackrock and Vanguard, social media and internet conglomerate Facebook, entered the game. In a direct challenge to Blackrocks’s “iShares Core U.S. Aggregate Bond ETF” (AGG), Facebook announced plans to launch a new ETF, the “Libra ETF”, also focused on fixed income and government bonds.

Figure 1 – Size of the Top Bond ETFs Targeting US Investors – US$ Billion

(Source: BitMEX Research, Bloomberg)

(Note: The chart represents the sum of the market capitalisations of the following bond ETFs: iShares Core U.S. Aggregate Bond ETF, Vanguard Total Bond Market ETF, iShares iBoxx $ Investment Grade Corporate Bond ETF, Vanguard Short-Term Corporate Bond ETF, Vanguard Short-Term Bond ETF, Vanguard Intermediate-Term Corporate Bond ETF, iShares J.P. Morgan USD Emerging Markets Bond ETF, Vanguard Total International Bond ETF, iShares MBS Bond ETF, iShares iBoxx $ High Yield Corporate Bond ETF, PIMCO Enhanced Short Maturity Strategy Fund, Vanguard Intermediate-Term Bond ETF, iShares Short-Term Corporate Bond ETF, SPDR Barclays High Yield Bond ETF, iShares Short Maturity Bond ETF)

Comparing the new ETF structure with the traditional space

In figure 2 below, we have analysed and compared the new innovative Libra ETF to a traditional ETF, Blackrock’s iShares Core US Aggregate Bond ETF (AGG). Our analysis shows that, although the Libra product is new, much of the relevant information, such as transparency of the holdings and frequency of the  publication of the NAV, has not yet been disclosed.

The analysis also highlights that Libra may suffer from unnecessary complexity with respect to portfolio management. The fund appears to be managed by the Libra Association, which consists of many entities in multiple industries across the globe. These same entities are responsible for issuing the ETF and the list of companies is set to expand further. At the same time, the investment mandate is unclear. In contrast Blackrock’s fixed income ETF product has a clear investment mandate, to track the Bloomberg Barclays U.S. Aggregate Bond Index, which is managed independently of the ETF issuer.

Perhaps the most significant disadvantage of the Libra product, is that unit holders do not appear to be entitled to receive the investment income. This contrasts unfavourably with Blackrock’s product, which focuses on an almost identical asset class and has an investment yield of around 2.6%. Defenders of Libra could point out that the expenses need to be covered from somewhere and that the Libra’s expense fee is not yet disclosed. However, the ETF industry is already highly competitive, with Blackrock charging an expense fee of just 0.05%. This expense fee is far lower than the expected investment yield of the product, at around 2.6% and therefore the Libra ETF may not be price competitive, a key potential disadvantage for potential investors.

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NYT Reporter: Facebook Seeking $1 Bln in Venture Capital for Crypto Project

Facebook is reportedly seeking support from various venture capital (VC) firms to develop its supposed digital token, New York Times (NYT) tech reporter Nathaniel Popper tweeted on April 8.
Citing sources familiar with the matter, Popper states that Facebook is seeking a $1 billion sum to develop its cryptocurrency project. He states that seeking outside investment could keep the project more in line with the crypto community’s decentralized ethos:
“Given that one of the big allures of blockchain projects is the decentralization, getting outside investors could help Facebook present the project as more decentralized and less controlled by Facebook.”
Popper added that the reported project is a stablecoin that would be pegged to a basket of foreign currencies held in bank accounts.
Rumors of a “Facebook Coin” surfaced last December in a report from Bloomberg. The publication then reported that the token would be used for money transfers made within the WhatsApp messenger service, and would focus on the remittances market in India.
In February 2019, NYT reported that the token would be usable across the Facebook Messenger App, WhatsApp and Instagram, which would give it exposure to some 2.7 billion users each month. Anonymous sources told NYT that Facebook employed over 50 engineers to develop its cryptocurrency. Additionally, Facebook has reportedly started shopping the “Facebook Coin” around to unnamed crypto exchanges.

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The Western Union Company – Wallet Holders to Receive Western Union Money Transfers

one of the Philippines’ leading e-wallet providers, and The Western Union Company (NYSE: WU), a leader in cross-border, cross-currency money movement, today announced a collaboration to enable more than five million customers to receive international and domestic money transfers directly into their wallets in the Philippines.

The unique integration of the blockchain-enabled platform and Western Union’s cross-border platform allows Filipinos to receive and hold international money transfers initiated from Western Union’s digital network in more than 60 countries and retail network in more 200 countries and territories.

“There are many overseas Filipino workers who send money back home regularly and are always looking for additional remittance options that will make it most convenient for their loved ones to receive money,” said Ron Hose, co-founder and CEO. “By pairing’s payments technology with Western Union’s expansive global network, we are giving Filipinos a seamless choice to receive money digitally, on the go.”

“There are an estimated 10 million1 Filipinos working or residing overseas. With this collaboration, we are proud to serve their families back home with even easier access to our suite of services and maximize positive impact on communities in the country,” added Hose.

With over five million wallet holders in the Philippines, the agreement signals the continued efforts of both companies to offer millions of Filipinos quick and convenient access to remittances, in urban and remote underserved areas.

“Over the years, Western Union has fueled innovation centered around the needs of customers, giving them their choice of channels, currencies, access and opportunities to connect with family and friends around the globe,” said Molly Shea, Senior Vice President & General Manager, Global Money Transfer, Asia Pacific, Western Union. “With this collaboration with, we are delighted to offer customers in the Philippines with an unmatched depth of services and capabilities, and convenience right at their fingertips.”

Remittances are crucial for millions of Filipinos. According to the World Bank’s Migration and Remittances Brief 302, the Philippines is one of the top remittance receiving countries in the world. Western Union has been providing money transfer services in the Philippines since 1990 and has more than 12,000 Agent locations3 in the country.

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PayPal Backs Digital Identity Startup Cambridge Blockchain – Coinjournal

PayPal has joined Cambridge Blockchain’s Series A funding round, marking the US payment giant’s first blockchain investment.

Cambridge Blockchain, a startup developing digital identity management software for financial institutions, initially closed its Series A in May 2018 after raising US$7 million from Foxconn’s HCM Capital, Partech Partners, Future\Perfect Ventures and Digital Currency Group, but according to documents filed with the US Securities and Exchange Commission (SEC), the startup has raised a further US$3.5 million from a number of other investors including Omidyar Network and Flourish over the last nine months.

With the investment, PayPal and Cambridge Blockchain said they will “explore potential collaboration to leverage blockchain.”

Cambridge Blockchain provides financial institutions with blockchain-based digital identities solutions geared towards both protecting identities and streamlining know-your-customer (KYC) compliance, all the while allowing them to be compliant with rules such as the General Data Protection Regulation (GDPR) and PSD2, a European payments directive.

The startup plans to use the new capital on new hires as well as research and development.

A spokesperson for PayPal told CoinDesk in an email:

“We made an investment in Cambridge Blockchain because it is applying blockchain for digital identity in a way that we believe could benefit financial services companies including PayPal. Our investment will allow us to explore potential collaborations to leverage blockchain technology.”

Matthew Commons, CEO of Cambridge Blockchain, said PayPal has been involved with the startup for the past year or so.

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Eyes On Banks: Swedbank Fires CEO in $151 Billion Money Laundering Scandal

In recent years, government agencies across the world have vamped up their efforts to crackdown on money laundering involving cryptocurrencies like bitcoin.

Yet, money laundering scandals involving some of the largest banks in the world dwarf any cryptocurrency-related incidents.


On Thursday, the board of Swedbank fired Birgitte Bonnesen from her position as the CEO at the bank, recognizing the seriousness of its $151 billion money laundering case and the pressure it placed on the company.

“The developments during the past days have created an enormous pressure for the bank. Therefore, the board has decided to dismiss Birgitte Bonnesen from her position,” Swedbank chairman Lars Idermark said.

The problem with the Swedbank money laundering scandal is that it is the second multi-billion dollar case to be unraveled in the Nordic region, following Danske Bank’s $224 billion money laundering incident in November.

It is the second case of a scandal in the tune of hundreds of billions of dollars to emerge within a span of five months in the same region, raising questions on the complacency of financial regulators in dealing with major banks.

In November 2018, Reuters reported that the European Union’s banking supervisor criticized Denmark’s financial watchdog for trusting the bank too much.

“Denmark’s financial watchdog faces an inquiry by the European Union’s banking supervisor, and the Danish business minister has criticized the regulator for not being critical enough toward the bank and for trusting it too much,” a Reuters report read.

The size of money laundering scandals involving banks and bitcoin businesses is vastly different and the scale is on an unprecedented level

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You Can Now Purchase Bitcoin With Cash in over 1,300 Stores in Australia

The crypto exchange Binance has launched a new platform that makes it possible to buy bitcoin with cash in over 1300 stores.

Binance Lite Australia – 1300 supported stores

The new service became known Tuesday this week and is called Binance Lite Australia. Simply explained, this is an exchange service set up by the crypto exchange, which offers Australians to buy bitcoin for Australian dollars.

Users register online via a verification process; after this, they can place purchase orders for bitcoin. Then this is paid in cash in one of the listed stores, and the bitcoin is received within minutes. Binance charges a 5% fee for the service.

Will open for more cryptocurrencies and new countries

Wei Zhou, CFO of Binance, says the new platform will provide for increased adoption of cryptocurrency by simplifying the buying process. The cryptic exchange will in future expand the offer to several common currencies and cryptocurrencies. The service will also be introduced in several places around the world.

More global services

Over the past year, Binance has taken several measures to spread cryptocurrency globally. In January, they opened a “fiat-to-crypto” exchange, which made it possible to trade bitcoin and ethereum through pounds and euros. A similar stock exchange was opened in Uganda in June last year.

The Crypto Exchange and its official Crypto Wallet, Trust Wallet, recently opened for a service that enables the purchase of cryptocurrency by credit card. This through a collaboration with the Israeli payment service Simplex.
— Citește pe

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2019 the year of blockchain

On the first day of this year’s DC Blockchain Summit in Washington, D.C., concern that a heavy-handed approach from the federal government may stifle blockchain innovation within the u. s. was lessened by the regulators themselves, who told attendees that they often support permitting the technology to flourish.

That message was bolstered on day 2 of the conference, when U.S. Representative Tom emmer (R-Minnesota), a lawmaker who has taken on blockchain as a difficulty on capitol hill. Emmer, who co-chairs the legislative assembly Blockchain Caucus, expected that 2019 “stands to be the year of blockchain, the year we separate hype from reality, and begin harnessing blockchain in the right-use cases to lower costs and increase efficiency,” he told attendees on March seven.
But he conjointly stressed the requirement for coordinated government oversight. “Congress has a clear role: we must insure that regulation is simple and precise,” Emmer said. “If a patchwork of regulations emerges, the industry will suffer, and prove government to be ineffective. This confusion will beyond question result in a lot of regulation, which is able to solely stifle the innovation and potential application of the technology.”

The financial stakes were highlighted throughout the conference once it absolutely was noted that there’s $130 billion in price presently being keep in public blockchain networks, and that ten percent of the world’s gross domestic product is predicted to be stored by 2025.

Emmer counseled the Chamber of Digital Commerce for releasing its National Action plan for Blockchain, that necessitate a pro-growth restrictive approach to developing blockchain technology within the U.S. The document specifically mentions however the technology is already being applied in supply chain networks for following food safety.

“The National Action plan also provides a required need clear regulation before enforcement. although regulators of blockchain and cryptocurrency have been considerably restrained and have allowed innovation during this area to flourish, we’re presently operating beneath ‘regulation by enforcement.’ Regulators should offer clear rules of the road to make sure that even the tiniest start-up with a superb plan will become a serious enterprise.”

Emmer said he’s doing his half to hurry the expansion of blockchain within the U.S. through his Blockchain regulatory Certainty Act, a bill he introduced in January. The legislation ensures that blockchain developers that never take charge of client funds don’t have to register as a cash transmitter within the states in which they operate.

“Money transmitter laws were enacted to ensure the protection of the buyer entrusting another entity with their funds so as to transmit them. If no funds are being entrusted to a different, it ought to make sure that these rules don’t apply,” he said

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US Retail Giant Overstock to Use Bitcoin to Pay Its Taxes in Ohio

United States retailer has announced it will pay part of its business taxes in the state of Ohio using Bitcoin (BTC), according to an announcement on its website Jan. 3.
Overstock will cover commercial activity taxes (CAT) with Bitcoin starting February, using the recently launched cryptocurrency taxpayer platform,
The company’s CEO and founder Patrick Byrne — a longtime crypto enthusiast — said in the announcement that governmental adoption of cryptocurrencies and other emerging technologies, accompanied by friendly legislation, is “the best way to ensure the U.S. does not lose our place at the forefront of the ever-advancing global economy.”
As Cointelegraph previously reported, Ohio became the first U.S. state to accept Bitcoin as a payment method for taxes in November. The service is currently available only for businesses, with reported plans to extend the option to individual filers in future.
Ohio State Treasurer Josh Mandel told Cointelegraph that the state could go beyond Bitcoin and start accepting other cryptocurrencies in an interview following the news.
In a recent interview with business magazine Fortune, Mandel reiterated this stance, also revealing that Ohio plans to introduce crypto payments for all taxpayers by 2020.
Back in 2014, Overstock became the first major company to accept Bitcoin following a partnership with crypto exchange Coinbase.
Most recently, Byrne announced he would sell the retail arm of Overstock to focus on blockchain by February 2019. Prior to that, the entrepreneur had already sold 10 percent of his shares — totalling more than $20 million — to invest them in Overstock’s blockchain-focused subsidiary, Medici Ventures.

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Facebook Is Said to Develop Stablecoin for WhatsApp Transfers – Bloomberg

Facebook Inc. is working on making a cryptocurrency that will let users transfer money on its WhatsApp messaging app, focusing first on the remittances market in India, according to people familiar with the matter.
— Citește pe

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UN Partnership to Roll Out Blockchain-Based Telemedicine, Telepsychology in East Africa

The United Nations Office on Drugs and Crime (UNODC) will reportedly partner with blockchain-based telemedicine and telepsychology firm to expand free basic healthcare services across Eastern Africa. News of the partnership was shared with Cointelegraph in an email on Dec. 26.
In an officially sealed letter signed on Dec. 20 by Amado Philip de Andres, Regional Representative for UNODC’s Regional Office for Eastern Africa (ROEA), de Andres wrote that the organization is “willing to cooperate […] in a new partnership.” is a tech firm that offers blockchain-based 24/7 telemedicine and telepsychology platforms, allowing users to tokenize their personal data and sell it in return for access to the services.
Via the UN partnership, the company now reportedly plans to roll out both its platforms to the African market by the second quarter of 2019.
Up until now, the company has reportedly operated in 20 countries, most recently opening an office in the United States. Its data and healthcare service ecosystem uses an ERC20-compatible token dubbed “MTC,” which is currently tradable on several crypto exchanges, such as Singapore-based Coinbene and Kucoin.
According to statistics on the company website, over 130,000 users have to date used its telemedicine services and almost 70,000 have used its, “Emotions,” telepsychology platform. also reportedly plans this year to expand its services across a wider range of U.S. states, to launch its tokenized telemedicine service in the United Kingdom by March 2019, and to branch out to the Asian market, starting with India, by the end of 2019.