Financial asset

The Texas regulator has ordered state chartered banks to keep crypto and Bitcoin assets in their custody.

The process for recognizing crypto investments as legal digital currency under commercial law was passed in the state last month. Texas has seen exponential growth in crypto and bitcoin proceedings, which has accelerated the judgment of Texas banking authorities in legalizing crypto transactions as a legitimate and fair way to trade.

The Texas Department Thursday Posted a statement announcing that local banks have now been licensed to accept and provide Bitcoin services in the state.

Texas State Chartered Banks to Store Cryptocurrency Services

Texas regulatory authorities also mentioned that cryptocurrencies have no physical form, highlighting the possibility that the currency is stored as blockchain data. This blockchain will consist of a unique data code or private keys that will further grant access to the owner.

Authorities have clarified how banks will act as custodians of crypto services and help customers store digital currency on their behalf. Customers willing to submit their Bitcoin transactions to custody will be required to provide a copy of their private keys to banks or banks will also prepare new keys to track Bitcoin transactions.

Banks will provide full custodial access to crypto users by offering them various storage options separated in terms of security levels and accessibility to protect investors from any impending financial risk.

Texas Passes Crypto Services Legalization Bill Under Commercial Law

The notice emerged after the Texas regulator recently passed a new bill allowing recognition of the crypto procedure under state commercial law. Other states in the United States, such as Wyoming and Nebraska, have also been very outspoken about adopting bitcoin as a new digital revolution.

The federally chartered banks have also obtained the necessary authorization to provide crypto custody to their consumers and customers.

Banks will also confirm the acceptable level of coverage with the insurance company as an active estimate to protect existing crypto holdings in their custody. The agency further said it will provide custodial services to its clients after ensuring that banks have sufficient protocols in place to effectively handle growing crypto transactions and established government guidelines to minimize the risks involved. .

next Altcoin News, Bitcoin News, Cryptocurrency News, News

In an issue, published Friday evening, Roubini, long skeptical of digital instruments, was unequivocal.

Often described as “Dr. Doom” for his warnings before the 2008 financial crisis, he dismissed the idea that cryptos represent a new form of currency, arguing that they do not meet four criteria: serving as a unit of currency. account, means of payment, a stable store of value, and serving as a single currency, or benchmark for comparing the value of similar financial instruments. He repeated his joke that “Even the Flintstones had a more sophisticated system using seashells as a single currency to compare the price of different products. “

And according to Roubini, cryptos do not correspond to any kind of asset:

Assets have cash flow or utility that can be used to determine their fundamental value. A stock provides dividends which can be discounted to arrive at a valuation. Bonds provide a coupon, loans provide interest, and real estate provides rental or housing services. Raw materials like petroleum and copper can be used directly in different ways. And gold is used in industry, jewelry, and has always been a stable store of value against a variety of extreme risks, including inflation, currency depreciation, financial crisis, and political and geopolitical risks. Bitcoin and other cryptocurrencies have no income or utility, so there is no way to come up with a fundamental value.

For Roubini, the sharp rise in the price of cryptos in recent years has the characteristics of a stock market bubble.

“A bubble occurs when the price of something is well above its fundamental value. But we can’t even determine the fundamental value of these cryptocurrencies, and yet their prices have increased dramatically. In that sense, it looks like a bubble to me, ”he said.

The volatility of the crypto market was clearly manifested this weekend, with bitcoin 50% drop from its all-time high above $ 60,000 set earlier this year. In fact, the fall of bitcoin and the carnage of other digital instruments have been accused of adding to the volatility in financial markets, including stocks.

To see: “The future of the crypto market depends entirely on the stock market,” says digital asset mogul Barry Silbert

Bitcoin has increased by around 11% in the past 24 hours. Stocks were also on the rise, with the Dow Jones Industrial Average up just under 200 points, or 0.6%, while the S&P 500 rose 1.1% and the Nasdaq Composite rose 1.5%.

Should know: What future for bitcoin?

Roubini was decidedly in the minority among respondents presented by Goldman Sachs, which included leading crypto investors Michael Novogratz, CEO of Galaxy Digital Holdings and Michael Sonnenshein, CEO of Grayscale Investments, the world’s largest digital asset manager.

To verify: Why Mike Novogratz sees bitcoin hit $ 500,000 by 2024

FinTech startups offer innovative ways to manage assets. The Korean start-up Quantec has developed a Robo-advisor technology that allows you to analyze the value of assets and recommend suitable products.

Quantec The AI-based technology called “Q-Engine” helps users create a personalized asset management portfolio. The FinTech startup recently attracted a Series B investment of more than $ 6.6 million or 7.5 billion won. Quantec plans to accelerate the implementation of a hyper-personalized financial investment platform and the advancement of investment algorithms.

Advanced algorithms that provide real-time advice

Quantec was founded in 2016 with the aim of developing a “super personalized financial investment platform service based on AI algorithm development technology”. Quantec uses advanced algorithms and big data to provide clients with automated real-time portfolio design and personalized asset management through investment product recommendations.

Its main technology “Q-Engine” is a personalized asset management solution based on artificial intelligence (AI). Q-Engine includes propensity analysis, security selection, real-time asset allocation and risk management modules to deliver personalized portfolios in real time. The total amount of customer managed assets (AUM) operated by Quantec’s ‘Q-Engine’ solution in domestic financial institutions reached $ 97 million or 110 billion won in March, reaching $ 88 million or 100 billion of won in the shortest period among Robo-advisors. companies.

Quantec has the largest number of stock-like algorithms in Korea that have passed the Koscom Robo Advisor (RA) benchmark exam hosted by the Financial Services Commission. At the end of March 2021, more than a third of all test bed algorithms available to the sales department consisted of Quantec algorithms. In addition, the technology is highly recognized as it achieved an initial triple-digit efficiency of 102.67% based on one year of operability.

Optimization of investments and future plans

Based on “Q-Engine”, Quantec is set to launch tactless financial management solutions like “IRA” and “Q-OSK” which can be used by financial companies as well as asset management platforms. In addition, he plans to launch “MONEYPOT” for general customers. In recognition of “Q-Engine”, the startup was selected for “Shinhan Future’s Lab” by Shinhan Financial Group and “Dreamplus” by Hanhwa Life Insurance.

The latest investment for Quantec comes from three companies, including Orbitek and Shinhan Capital, which participated as lead investors. Quantec previously attracted around 3 billion won or $ 2.6 million of Series A investment in 2019 from Industrial Bank of Korea, Wonik Investment Partners, AG Investment and Shinhan Capital, and by Therefore, the cumulative investment exceeded 11 billion won or $ 9.7 million. .

With the latest investment, Quantec plans to accelerate its existing super personalized financial services. Since the Data 3 Law (Personal Information Protection Law, Information Communication Network Law and Credit Information Law) came into force in South Korea in August 2020, personalized financial services using My data has become possible. Quantec develops various personalized financial products based on “Q-Engine” and recently signed a memorandum of understanding with Kyobo Securities to provide a super personalized data-driven Robo-advisor asset management service.

Lee Sang-geun, CEO of Quantec, said in a press release, “I think this investment attraction is a case where Quantec’s technology and competitiveness in the B2B market has been rated positively. In the management market, we will focus on an ultra-personalized financial investment platform so that everyone can benefit from personalized asset management services without discrimination.

Learn more about FinTech startups in Korea,

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Mike Riddell, manager of the Allianz Strategic Bond fund, has successfully weathered recent bouts of volatility by taking a flexible approach to fixed income. In this interview, he tells us what the future might hold for the asset class and where he sees value (and risk).

The discussion revolves around some of the big issues facing bond investors. A more in-depth analysis of Mr. Riddell’s fund and his recent activity is available here.

Looking for more?

IC has written a wealth of content on many of the topics discussed by Dave and Mike. Subscribe today to get full access to all of the stories below.

“Hunt the natural rate”

The natural rate can be defined as the real interest rate at which output is at its potential level and inflation is stable. Right now, central banks want real rates to be lower than this rate, in order to stimulate output and increase inflation. Hence the question: what is the natural rate?

Click here to read the full story from Resident Economist Chris Dillow

Many investor portfolios should have an allocation to assets other than stocks for diversification. And with spot rates so low, bonds can be a useful item in income portfolios.

Click here to read IC’s selection of bonds in the Top 100 Funds

Malta is the first country in the world to create and implement a comprehensive legal and regulatory framework for cryptocurrency and blockchain technology. Malta’s stable system and forward-looking approach create the ideal framework for attracting new investment. In fact, Malta has attracted some of the largest cryptocurrency exchanges in the world that have moved or established offices on the island.

The Maltese legal framework consists of three main pieces of legislation, namely:

I. The Virtual Financial Assets Act (the “Act“);

ii. Maltese Authority for Digital Innovation Act; &

iii. The Innovative Technology Arrangements and Services Act.

The most important and relevant piece of legislation is the Law, which regulates, among others, Initial offerings of virtual financial assets, Virtual financial assets (“VFA“) and the provision of VFA services. By law, cryptocurrencies are classified as” virtual financial assets “.

In addition, Chapter 3 of the VFA Regulation is also very relevant in this regard, as it applies to VFA service providers seeking to obtain a VFA license and those who have already obtained a VFA license.

1. The test of financial instruments

In the Maltese framework, the starting point for any valuation is the financial instrument test, which is a test that determines the classification of the DLT asset as:

I. a virtual financial asset;

ii. a financial instrument;

iii. electronic money; or

iv. a virtual token (aka utility token).

This classification ultimately determines the applicable regulatory framework. Therefore, a person applying for a VFA license (the “Applicant“) must, before submitting the request, complete the financial instrument test, which must be signed by its directors and approved by its compliance officer. The DLT asset (s) must be classified as VFA for the VFA framework This is because the law defines a VFA exchange as a DLT exchange operating in or from Malta, on which only VFAs can be treated.

2. License requirements

The law states that no person shall provide, or purport to provide, a VFA service in Malta or from Malta unless that person is in possession of a valid license granted by law by the competent authority. , i.e. the Malta Financial Services Authority (“MFSA“).

Where the applicant is a natural person, that person must reside in Malta. On the other hand, when the Applicant is a legal person:

• I. it must be constituted either in Malta or in a recognized jurisdiction;
• ii. its purposes or objects must be limited to acting as the licensee and carrying out any activity incidental or ancillary to it, and must not include any purposes or objects which are not compatible with a licensee’s VFA services license; &
• iii. its actual activities are compatible and linked to the VFA services of a licensee.

The provision and operation of a VFA exchange will be subject to the requirement to obtain a Class 4 VFA license which applies to:

“Licensees authorized to provide any VFA service. Class 4 licensees may own or control customer money in conjunction with the provision of a VFA service. “

3. VFA agent requirement

An applicant wishing to obtain a license to operate an exchange must appoint a VFA agent registered with the MFSA. The applicant should ensure that all communications, meetings, notifications and / or submissions to the MFSA are made through their VFA agent.

Indeed, a VFA service license request can only be made through a VFA agent. However, once the application is submitted and the applicant is approved, the requirement to have a VFA agent in place no longer exists.

4. The VFA Service Provider Application Process

The application process consists of three phases:

(i) the preparatory phase;

(ii) the pre-license phase; and

(iii) the post-license / pre-start-up phase of the business.

Preparatory phase

The applicant must notify MFSA in writing, through their VFA agent, of their intention to apply for a VFA license. The declaration of intent must include:

• I. a complete written description of the proposed structure;
• ii. the VFA service for which a license is requested, by identifying the persons proposed to occupy key positions therein; and
• iii. a legal opinion indicating that the proposed activity does not fall within the scope of traditional financial services law.

The MFSA, upon receipt of the aforementioned declaration of intent, will schedule a preliminary meeting with the applicant. Following this meeting, the applicant has 60 days to submit a complete application package.

Pre-license phase

Once MFSA is satisfied with the information provided in the application and the completion of the suitability and suitability assessment, it will issue a “Approval in principle”, which is valid for a period of three months from the date of issue.

During these three months, applicants must finalize all outstanding issues raised during the application process and all license prerequisites as determined by the MFSA in the approval in principle. Once these requirements are met, a VFA Services license will be issued by the MFSA.

Post-license and pre-start of the commercial phase

Licensees may be required to complete a number of post-licensing questions, as determined by the MFSA, within defined timeframes, prior to the commencement of operations. The license holder must start their VFA services business within twelve months from the date of issue of the VFA services license.

5. Fitness and fitness

Applicants are required to meet the aptitude and aptitude requirements both during the application phase and continuously thereafter. To assess whether a person is fit and suitable, the MFSA requires that the following three criteria be met, namely integrity, competence and creditworthiness.

In addition, the assessment of suitability and suitability should be applicable to each:

• I. person who holds an eligible interest in the applicant;
• ii. beneficial owner;
• iii. member of the applicant’s Board of Directors;
• iv. senior;
• v. MLRO;
• vi. responsible for compliance;
• vii.r isk manager (if applicable); and
• viii. any other person who will effectively direct the applicant’s VFA activity.

6. Fees and capital required

The fees for a Class 4 VFA license are as follows:

• I. Application fees of € 24,000; &
• ii. Annual monitoring costs of € 50,000.

In addition, a holder of a class 4 VFA license must have a minimum share capital of € 730,000.

7. Key officials

The license holder is required to appoint and have in place at all times the following officials:

• I. Listener;
• ii. MLRO;
• iii. Compliance officer; &
• iv. Board of Directors.

Whereas the appointment of the following officials is optional:

• I. Systems auditor; &
• ii. Guardian

As mentioned above, a VFA agent should be appointed in order to assist with the license application process.

8. Current obligations

There are several ongoing obligations that the license holder must meet. These include organizational, governance, prudential and business conduct requirements.

Organizational requirements involve:

• I. the establishment of a board of directors which must be composed of at least two people responding to the “principle of double control”;
• ii. formulate governance policies;
• iii. have adequate and effective risk management and compliance policies and procedures in place;
• iv. have measures in place to protect customers’ money.

In addition, there are also prudential requirements that must be respected, relating to the requirements of own funds, liquidity, share capital and fixed overheads.

In addition, the license holder must have policies and procedures in place that address:

• I. Conflicts of interest;
• ii. Risk management;
• iii. Remuneration;
• iv. Record keeping;
• v. Registration criteria;
• vi. Keep;
• vii. Correspondence of orders;
• viii. Rules.