Weekly Briefing No. 172 | NYSE’s Bitcoin Bet, No More Fintech Competition, and More

Welcome to The FR. We’re always seeking a reasonable rate of return.

In this edition:

  • Six to Watch at FinovateSpring

  • Crypto Creeps Closer to the Mainstream

  • RIP to Colorful Former Regulator Bart Chilton

  • Tesla Looks to Conquer Insurtech

  • Could Blockchain Solve Brexit?

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Six Fintechs to Watch at FinovateSpring

Finovate is upon us again, with FinovateSpring 2019 set to commence next week in San Francisco. What started more than a decade ago as a small gathering of start-ups in humble venues has grown up to be one of the premier events in the fintech community. It features established companies as well as those plucky start-ups that we love to root for along the way.

“Finovate has repeatedly proven to be the go-to event for growing fintech companies to launch and demo new technologies in a high-substance and time-efficient way,” says Alana Holbrook, marketing manager for Caliber Corporate Advisers, the official marketing and communications partner for Finovate.

Indeed, the event promises to be a celebration of all that is fintech. With that in mind, here are six companies we’re looking forward to seeing next week.

Crypto Creeps Closer to the Mainstream

Bitcoin, and the wider crypto industry, took a big step forward to mainstream acceptance this week when the owners of the New York Stock Exchange announced they had acquired a crypto custodian service called Digital Asset Custody Company. Atlanta-based Intercontinental Exchange (ICE), which owns the NYSE, also applied for its cryptocurrency subsidiary—known as Bakkt—to become a registered trust with the state of New York.

Both of these moves in concert signal the NYSE’s increasing efforts to offer Bitcoin futures contracts, which thus far have been stymied by the CFTC, the regulator having expressed concerns over the storage of Bitcoin.

The NYSE has long had big plans for Bitcoin; it launched Bakkt last fall to much fanfare. Whether it’s any closer now to bringing Bitcoin to mainstream markets remains to be seen.

RIP to Colorful Former Regulator Bart Chilton

The financial world started this week to the sad news that Bart Chilton, former commissioner of the Commodity Futures Trading Commission, died at the age of 58. Chilton was known for his folksy, homespun turns of phrase and initial criticism of high-frequency trading.

Chilton often referred to those who engage in HFT as “cheetahs” and “cyber cowboys” among other things, and frequently made the claim that high-frequency traders take advantage of retail investors. It should be noted that Chilton eventually went to work for an HFT lobbying group, the Modern Markets Initiative, but brushed off criticism by saying the group embraced many of the regulatory changes he had advocated for over the years.   

Chilton was also interested in Bitcoin and the wider cryptocurrency landscape. In 2017, he made the case that Bitcoin is not a “scam or a fraud” in rebuke to comments made by Jamie Dimon at the time. He also argued that proper regulations needed to be in place so sustainable and long-term growth could be achieved in the crypto industry.

Nominated to the CFTC by President George Bush, and renominated by President Obama, Chilton most recently hosted a financial show, Boom Bust, on RT America, part of the global Russian-owned news network RT. A Democrat, Chilton appears to have been well liked across the political spectrum, with Scott O’Malia, a Republican commissioner who served with Chilton, telling the Financial Times, “He cared passionately for the little guy.” That’s one thing, at least, that we can all agree on is needed more in the world of finance.

Tesla Looks to Conquer Insurtech

Last week, we covered how Elon Musk has set his sights on dominating the rideshare industry with his army of robot-powered cars. Well, now his flagship company aims to disrupt the insurance industry as well. Musk said during a Tesla earnings call recently that the company plans to create its own insurance product and launch it within a month. Specifically, Musk has taken umbrage with the much higher rates that Tesla drivers pay to insure their vehicles. That’s something Musk hopes to alleviate with his new insurance product, though no additional information was given. The increasing diversification of its core business has led some analysts to downgrade Tesla stock, arguing that the company is spreading itself thin and should focus on its core product. Overall, Tesla stock is down 25% for the year.

Could Blockchain Solve Brexit?

Who knows for sure, but it was an interesting question posed recently in the media as Britain grapples with how leaving the European Union and its single market will affect trade, travel, and other logistics. The underlying idea that blockchain is based on an unchangeable shared source of truth has led some to suggest, such as in the FinTech article linked above, that smart contracts could lead to frictionless trade across borders, and solve new issues arising over crossing borders. Of course, since its inception, blockchain technology has been touted as a panacea to any number of problems—including in the state of Vermont, which last year piloted the use of blockchain for real estate transactions. Blockchain may or may not make the U.K.’s complicated Brexit process any easier, but it’s good to see that people are exploring all possibilities.

Cat: Blockchain   Tags: Brexit, Vermont, U.K.  

Quote of the Week

“In tech communities, we consider disruption the way to lead to innovation.”

~ Ayanna Pressley