by Fintech Express | Jun 20, 2023 | Blockchain
Key Points
- BNB Chain keeps growing with innovations, and now it’s welcoming a layer 2 testnet powered by Optimism
- The new L2 scaling solution will be called opBNB
BNB Chain has lived on to welcome innovations and increase its footprints in the crypto space. It’s now welcoming opBNB, an optimism-powered layer 2 scaling solution.
BnB Chain welcomes an Optimism powered layer 2 scaling solution
opBNB is set to help tackle the existing and growing scaling challenge facing BNB Chain as newer and more projects get built on the network. BNB Chain revealed this scaling solution on June 19, launching it as a testnet.
opBNB is based on the Optimism OP Stack, designed to add security and scalability to the Binance blockchain network. It is an Ethereum Virtual Machine (EVM) compatible layer 2 chain that works with Ethereum-based smart contracts, networks, and ERC-20 token standards.
Ethereum, in particular, has been plagued by congestion and high transactional fees due to the overloading of projects built on it. As such, they send in too many requests simultaneously, making the reciprocation much slower. This issue plagues most networks that allow applications to be built on. Since BNB Chain is one such network, it now seeks to treat the problem before it inevitably becomes a hindrance later.
BNB Chain claims around 2000 transactions per second with transaction costs of around $0.10. opBNB will increase support of up to 4000 transactions per second and an average cost of around $0.005.
Additionally, opBNB will allow for optimizing data accessibility, caching layer and adjusting the submission process algorithm to allow for simultaneous operation. In turn, it will allow the gas limit to 100 million per block from the 30 million that Optimism allows.
BNB Chain continued to note that the RPC (remote procedure call) service layer offered by opBNB simplifies the integration process by offering a user-friendly interface. As such, it allows developers to “focus on building applications without worrying about the complexities of Layer 2 scaling.”
Keep watching Fintech Express for updates on this and other fintech-related developments.
by Samuel Mbaki | Jun 20, 2023 | Finance
Key Points
- Weeks ago, Warren Buffett’s Berkshire Hathaway was offloading some of its stocks selling $13.3B worth of stocks in Q1 2023.
- Now, Berkshire Hathaway is going hard on Japanese stocks after its gamble in Japan’s markets raked in over $17B
Berkshire Hathaway seems pretty convinced by Japanese markets after bagging over $17B to add its stakes in five different Japanese trading firms. Berkshire Hathaway said on June 19 that its wholly-owned subsidiary National Indemnity Company had increased its stake in five Japanese trading firms to average more than 8.5%.
Berkshire Hathaway filling its bags again
Berkshire has confirmed that it’s upping its stakes in five Japanese companies: Itochu, Marubeni, Mitsubishi, Mitsui and Sumitomo. It said it intends to hold its Japanese investments long-term, with CEO Warren Buffett pledging that the company will only purchase up to 9.9% of any of the five firms.
This purchase was made by National Indemnity Company, a subsidiary of Berkshire Hathaway, with a drive to average the stakes in the five firms at 8.5%. The company said that the aggregate value of the five interests surpasses that of Berkshire-holed stocks in any country outside the U.S., making them highly promising.
As such, the company is looking at the investment long-term. Warren Buffett visited Japan in April 2023 and promised Berkshire Hathaway would boost its investments in various Japanese trading houses to 7.4%. It was then disclosed that he had hit this level in August 2022.
These five stocks almost tripled after Warren Buffett started investing in them. They have gained an average of 181% ever since his original disclosure. That led to an upshot from $6 billion to about $17 billion in the present day. Now, Japanese stocks rank as Berkshire’s largest position.
Keep watching Fintech Express for updates on investors like Warren Buffet and other Fintech-related developments.
by Samuel Mbaki | Jun 20, 2023 | Banking
Key Points
- It is a precarious situation worldwide as most economies face tough times necessitating action from Central Banks.
- Globally, different stances have been taken by respective Central Banks in June to cope with the rising inflation and recession fears.
Central Banks worldwide have showcased commitment to dealing with wild inflation and evading possible reversed GDP growth. These efforts are necessary as costs of living are increasing in the short term, and if no action gets taken, they could go wild in the future, crippling the basic functioning of the economies in question.
Central Banks keeping the fight against inflation alive
On Thursday last week, the European Central Bank increased interest rates while the U.S. Federal Reserve opted to pause it. These decisions came just days after China’s Central Bank lowered its key medium-term lending rates while Japan’s Central Bank left its ultra-loose policy unchanged.
From hawkish pauses to rate hikes and dovish tones, the world’s biggest Central Banks are taking different strides to deal with the almost ‘common’ economic threats. However, it doesn’t come without surprises or criticism as markets digest the new policies.
The hikes rates by the European Central Bank on June 14, 2023, surprised the markets with a worsening inflation outlook which led investors to consider even more rate hikes for the Eurozone.
This decision followed the federal reserve’s rates hike pause. It didn’t go without surprises and reactions from the market. Ruslan Lienkha, Chief of Markets at YouHodler, talked with Fintech Express and told us that Powell still has a long way to tame inflation rates and maintain market balance.
He added that while rates hike at later dates are not ruled out, the markets won’t be very happy with the tough decisions that must be made. In his words, he said:
“It is too early to say that Powell is winning the fight against inflation. I don’t think bringing inflation to 2% will be so smooth. The main concern is about the too-hot labor market at the moment. Therefore, the Fed can later decide to continue the rate increase or keep high rates for a significantly long time – such scenarios are quite possible and might disappoint financial markets in one or a few months.
As for crypto, the major cryptocurrencies will follow traditional markets. The only question is the degree of this correlation, which we still need time to figure out.”
In the Eurozone, inflation rates have plummeted, but it still is necessary to keep pushing as it’s far away from ECB’s target levels. This is also the same case in the U.K. BoE is expected to raise rates this Thursday as the country still has very strong labor data.
The markets are, however, different in Asia. China’s economy has lost the momentum hoped to be there for post-COVID-19 recovery. As such, it has stalled with falls n both external and domestic demand forcing policymakers to step up support measures to revive the growth momentum. These developments across the world show that there is still a lot to be done if Central Banks hope to regain control of economies and ease the costs of living.
Keep watching Fintech Express for updates on banking and other Fintech-related developments.
by Samuel Mbaki | Jun 19, 2023 | Finance
Key Points
- BlackRock iShares Spot Bitcoin ETF has caused a domino effect among TradFi institutions, with Fidelity wanting in
- Fidelity Investments is rumoured to want to file for a similar ETF with the U.S. SEC and or also look forward to submitting a bid for Grayscale, the largest digital assets manager.
Fidelity Investments is rumoured to be planning on filing for an iShares Bitcoin ETF on top of acquiring troubled digital assets manager Grayscale. The news comes at a time when the crypto space is anticipating the swarming of TradFi institutions into the crypto industry following an initial bold move by BlackRock.
BlackRock’s gravity pulls Fidelity into the crypto space
BlackRock’s June 15, 2023, move into the crypto space by applying for an iShares Bitcoin ETF might have caused a ripple effect in the traditional finance markets. As a result of the move, the third largest investment manager, Fidelity Investments ($4.3T in Assets Under Management), is reportedly planning on making a similar move.
However, Fidelity Investments could make a bigger shocker move by submitting a bid for troubled digital assets manager, Grayscale. Grayscale has been the largest digital assets manager in the world turmoil has rocked it lately owing to the ongoing bear market. As such, it could be available for sale, which is a move that could give Fidelity Investments an edge against other TradFi institutions that might enter the crypto market.
The news of the asset manager wanting to join the crypto industry hasn’t officially been confirmed, as Arch Public co-founder Andrew Parish broke it on Twitter. Parish claims an anonymous source presented it but does not go without expressing concern over the top TradFi institutions overbuying crypto assets as they have done with stock markets.
Keep watching Fintech Express for more updates on crypto, finance, and other Fintech-related developments.
by Samuel Mbaki | Jun 19, 2023 | Regulation
Key Points
- Binance faces more pain as its plan to get regulated in the U.K. following issues in the U.S. falls through
- The exchange has been on a rough patch lately, with several other nations expressing dissatisfaction with it, including Canada, Netherlands, and Australia.
Binance is set to endure more pain as its plan to get regulated in the United Kingdom as a replacement for the United States falls through. A report from its regional manager indicates that the exchange has had to de-register with the FCA but assured users that the process does not have an operational impact as it never did any regulated business in the U.K.
Regulators keep haunting Binance
Regulators keep going after the world’s largest exchange, Binance, for not complying with their set rules. On June 19, 2023, the exchange’s regional manager expressed that it had to de-register with the U.K. FCA. Binance Markets Limited is the exchange subsidiary forced to de-register with the Financial Conduct Authority (FCA) in the U.K. Following the de-registration, no Binance entity will be authorized to conduct any operations in the U.K. per information offered by the regulator on its official website.
According to the FCA, the operating license was canceled on May 30, with the exchange being required to leave. “Following the completion of the cancellation of licenses, the FCA no longer authorises the firm,” the regulator noted in an update on June 7.
However, Ilir Laro, Binance’s sub-regional manager for growth in the U.K. and Europe, has expressed that the exchange’s operations weren’t and won’t be impacted by the move as they never conducted any regulated business there.
“BML was successfully acquired back in 2020 by Binance Group, intended to launch a regulated business in the U.K. This attempt was not successful, however, and has since then remained dormant since its acquisition.”
Laro explained that Binance still holds five regulated entities in Europe in countries like France, Spain, Sweden, Poland, and Italy.
“As MiCA kicks into force in 2024/5, we are moving focus to getting ready which means some consolidating in order to passport throughout Europe,” he said.
Is it just FUD or a change of tides?
It is not the first time the exchange has landed on a rough patch with regulators. It has been forced to withdraw licenses in countries like the Netherlands, Nigeria, Holland, and Cyprus and stopped offering Australian Dollar services.
IlIr Laro has called out the FUD, saying it is nothing much to worry about as the company is bracing for changes in regulatory scope. He explained some of the developments saying they left Cyprus in anticipation of MiCA, left Holland due to not obtaining a license, and Nigeria is chasing away Binance Nigeria Limited, a company that is not owned or affiliated with Binance.
Keep watching Fintech Express for updates on this and other Fintech-related developments.
by Samuel Mbaki | Jun 19, 2023 | Banking
Key Points
- The Bank of England has researched with help from the Bank of International Settlements, finding out that digital Central Bank coins could make peer-to-peer payments faster.
- This research is a step closer to BoE’s launch of a CBDC named “Britcoin”.
Brits are set to receive Britcoin, a Central Bank Controlled Digital Currency (CBDC), as the Bank of England gets wowed by the potential of digital currencies. Following a successful trial study called Project Rosalind, BoE is more confident than ever in the functionality of Britcoin.
Brits to get “Britcoin” eventually
Project Rosalind is a study concluded by the BoE and the Bank of International Settlements that seeks to understand the place of a CBDC in a digital economy. It was used to evaluate how effective a CBDC would be in running the U.K. economy and assisting citizens in their usual day-to-day activities. It has been completed and achieved amazing results for the Bank of England.
Therefore, BoE plans to launch a CBDC of its own. This coin is to be named “Britcoin” after the words “British and coin”. This coin would not be the only one of its kind. China already uses a digital Yuan, with the U.S. and Russia researching theirs.
In addition to how Britcoin could be used by citizens digitally, the Rosalind Study also dived into the concept of “programmability” That means the U.K. government will get to program the coin to behave in a certain way when given conditions are met.
“The Rosalind experiment has advanced central bank innovation in two key areas: by exploring how an API layer could support a retail CBDC system and how it could facilitate safe and secure CBDC payments through a range of different use cases,” said Francesca Road, head of the BIS London Innovation Hub in a press release.
However, despite a successful study on Project Rosalind, BoE Deputy Governor Jon Cunliffe said that the decision on the introduction of a CBDC in the economy remains years away. This information is similar to the one offered regarding a digital dollar.
Last week, a treasury official expressed that it will take more than designing and using a digital dollar to harmonize the digital and traditional economies. The official said there are still some fears about things like the collapse of banks that keep the digital dollar launch decision years away though research will continue. Keep watching Fintech Express for updates on this and other Fintech-related developments.
by Samuel Mbaki | Jun 19, 2023 | Regulation, Follow up
Key Points
- Terra Ecosystem EX-CEO Do Kwon has denied the forgery of travel documents refuting any financial ties to Europe Now Party leader Milojko Spajic.
- Do Kwon told a Montenegro Court that he wasn’t aware that his traveling passport was fake, pinning the blame on a Chinese-named agency
Do Kwon, the former CEO of the collapsed crypto empire Terra Ecosystem has told a court in Montenegro that he is innocent of using forged documents. Kwon expressed that he was unaware of his travel documents being fake.
Do Kwon says he is innocent of forgery
Surprisingly, Terra Ecosystem Ex-CEO Do Kwon claims that he received his travel documents from third-party agencies and thus did not realize they had been faked. He said that a friend had recommended he reach out to the “agencies” to acquire a Costa Rican passport much faster.
“I received my Costa Rica passport after filling in the documents required by a Singaporean agency that was recommended to me by a friend. I received my Belgian passport through another agency.”
Kwon told the court that he had used the same traveling document for years to enter and leave Costa Rica; therefore, he did not see any issue. When asked for further details about the identity or functioning process of the “agencies” used to acquire the passport, Do Kwon said that he could not recall though the name was in Chinese.
In addition to denying the forgery of documents, Do Kwon expressed that he never made any financial donations to Montenegro’s former finance Minister Milojko Spajic who now serves as the Europe Now Party leader. Spajic also refuted the news of his ties with Do Kwon that had been spread heavily in Montenegro earlier.
Kwon now remains in extradition custody for up to six months as the local court considers the request for extradition to South Korea. Additionally, Judge Ivana Becici is set to rule on forgery claims against Do Kwon on June 19. Keep watching Fintech Express for updates on this and other Fintech-related developments.
by Samuel Mbaki | Jun 16, 2023 | Regulation
Key Points
- Binance has announced that it is leaving the Dutch market after failing to secure an operating license.
- The exchange said that its attempts to register with the Dutch Regulator as a VASP have failed.
Binance has assured investors and regulators worldwide that it’s working hard to comply with new regulations like MiCA after being forced to leave the Dutch market. It says that it’s working hard to ensure that its business is fully MiCA compliant; however, it is going to respect the will of regulators in the cases where it does not secure the legal rights to operate in a given location
No more Binance services for Dutch users
Binance is continually facing difficult situations as several of its licenses are being revoked or not given new ones at all. On June 16, 2023, the exchange said it had been forced to exit the Dutch market for not acquiring an operating license as a VASP (Virtual Assets Services Provider).
The exchange has, however, assured European customers that it is working hard to stay compliant with current rules, especially MiCA. An excerpt from its official blog reads
“We regret to announce that Binance is leaving the Dutch market. With immediate effect, no new users residing in the Netherlands will be accepted. Starting from 2023-07-17 at 00:00 UTC (2023-07-17 at 02:00 UTC+2), existing Dutch resident users will only be able to withdraw assets from the Binance platform. No further purchases, trades or deposits will be possible. We encourage users to take appropriate action by withdrawing assets from their Binance accounts.”
It added that the existing Dutch resident users are being sent emails with comprehensive information on the impacts that will be felt on their accounts and any assets they currently hold there, alongside steps to continue.
This news comes when Nigeria also asked the exchange to cease operating there. Additionally, its US platform is under investigation as a court battle with the SEC continues over allegations that it is operating as an unregistered securities broker in the country.
Keep watching Fintech Express for updates on this and other fintech-related developments.
by Samuel Mbaki | Jun 16, 2023 | Cryptocurrencies
Key Points
- BlackRock has applied with the SEC to offer a spot Bitcoin ETF.
- Other institutional investors like ARK and Grayscale are also waiting to hear from regulators about similar assets.
- The development has sparked controversy in the crypto community as they try to determine if it is a good or a bad thing for crypto, as BlackRock is the world’s largest investor and could lead to an ‘institutional Bitcoin grab’.
A BlackRock Bitcoin ETF has sparked controversy among the crypto community as they determine if the $10T asset manager is their savior or doom. BlackRock is known to own large amounts of shares in most public companies. As such, the crypto community is not sure whether the application for a Bitcoin ETF will propel mainstream adoption or urge for centralized control.
Is BlackRock Bitcoin ETF the best thing to happen to crypto?
If approved, the BlackRock Bitcoin ETF will hit the U.S. markets first before being available in other nations. Per a filing by the Nasdaq stock exchange with the U.S. Securities and Exchange Commission, Coinbase Custody Trust Company will be the custodian of the fund’s Bitcoin funds. At the same time, the Bank of New York Mellon will be the custodian of its fiat reserves.
The filing describes it as an iShares Bitcoin Trust that would be traded as Commodity-Based Trust Shares. An excerpt from the filling reads:
“The Shares have been designed to remove the obstacles represented by the complexities and operational burdens involved in a direct investment in bitcoin.”
The SEC has yet to approve a spot Bitcoin ETF despite numerous applications as it considers the asset highly unregulated. BlackRock reiterated this, saying:
“As such, the regulated market of significant size test does not require that the spot bitcoin market be regulated in order for the Commission to approve this proposal.”
Crypto community reacts to BlackRock Bitcoin ETF
The news of BlackRock Bitcoin ETF was received with mixed reactions by the crypto community, with individuals like Galaxy Digital CEO Mike Novogratz being among the ones over the moon with the news. However, some warned that it could be a start of a major institutional takeover.
In an interview on June 16, Mike Novogratz said that BlackRock Bitcoin ETF is “the best thing that could happen to BTC.”
“I say a Hail Mary every night that Larry Fink and BlackRock pull off a Bitoin ETF,” Novogratz added on the Fox News segment.
However, some people are against the introduction of the BlackRock Bitcoin ETF. Investor Scott Melker explained in a June 16 interview that approval would be a disservice to crypto-native innovators who built the industry.
“As good as this may be for institutional adoption of the space, it kind of violates the ethos, it is a bit of a dishonest push away from the people who built the industry in the United States.”
Cinneamhain Ventures partner and Ethereull bull Adam Cochran also believe that BlackRock could swoop in on retail investors’ highly discounted Bitcoin coins. This theory has also been widespread via social media, which many people believe could be bad. It creates a bad image for regulators contributing to “fudding” the industry.
Conversely, some analysts feel that it’s likely that Bitcoin will hit the $1M mark. This has been a market sentiment shared by the likes of Balaji. Steven Lubka, a meaning director at Swan Bitcoin, has shared a similar view saying that BTC will hit the $1M mark. Still, only a few retail investors will reap the rewards as a bulk of the coins will be owned by large institutional investors like BlackRock, Goldman Sachs, and others.
Following the news, the Fear and Greed Crypto Index increased by 6 points from 41 to 47-leaving the fear zone. However, it’s still being determined if the market will get further momentum as the SEC may or may not approve the ETF. Keep watching Fintech Express for updates on this and other fintech-related developments.
by Samuel Mbaki | Jun 15, 2023 | Technology
Key Points
- The US is investigating the impacts of a cyber attack that has hit several governmental agencies.
- The attack comes after popular cyber criminal groups sent a warning saying they had allied and would attack the country.
The US government is investigating the impacts of a massive countrywide cyber attack that has targeted several of its official agencies. The US Cybersecurity and Infrastructure Security Agency says it is supporting several federal agencies that have experienced intrusions affecting their MOVEit applications.
Hackers go after US government agencies shortly after sending a warning
According to Eric Goldstein, the Executive Assistant Director for Cyber Security at US Cybersecurity and Infrastructure Security Agency, several federal agencies currently require their support. In a statement to CNN, Goldstein said that the impacted software is MOVEit.
“We are working urgently to understand impacts and ensure timely remediation.” He said.
Groups responsible for the attack are not yet identified though they had issued a warning earlier in the day speaking Russian. They claimed credit for numerous big hacks as part of their hacking campaign.
The news comes when cyber attacks in the country are increasing. Several hacking sprees against US government officials and entities have been noticed, with universities and State governments adding to the tally.
John Hopkins University, Baltimore, and its renowned health system said earlier this week that “sensitive personal and financial information,” like health billing records, may have been stolen in the hack. Additionally, Georgi’a’s state-wide university system that spans the 40,000 student University of Georgia and other state colleges confirmed to be investigating a hack.
As this becomes all too common, it is still yet to be known what the real intentions or motives behind the attacks are. However, the US government is working on investigations and looking for a remedy to deal with the attacks. Keep watching Fintech Express for updates on this and other technology stories.
