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Commentary

Fri 30 Nov 2018 / Global

Tokenisation unlocks illiquid markets

The promise of tokenisation lies in substantially reducing remaining illiquidity discounts by creating tokens that represent partial ownership rights to underlying illiquid assets. This is particularly encouraging in the commercial and residential real estate sectors, where frictions and barriers to investment, including minimum capital requirements, can be high. Once the rules of this market are written, tokenisation could change the nature of liquidity in the investment universe, unlocking the global potential of previously illiquid properties.

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Thu 20 Sep 2018 / Global

A regulatory approach to fintech

On the one hand, regulators must protect consumers and investors against fraud and combat tax evasion, money laundering and the financing of terrorism. They must also protect the integrity and stability of the financial system. On the other, they must beware of stifling innovation that benefits the public. By engaging with market participants at the centre of financial innovation, regulators can stay abreast of the benefits of new technologies. Developing a forward-looking regulatory framework calls for flexibility and new expertise.

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Tue 11 Sep 2018 / Global

Robotics' existential impact on labour

Robots are becoming more reliable, proficient and cheap, which incentivises companies to automate processes, despite the risk of major disruption to traditional labour markets. Today's pace of innovation is becoming exponential. Labour markets will find it increasingly difficult to identify new jobs and reduce slack over the medium term. Technological progress may make a society more prosperous in aggregate, but not everyone will benefit. Inequality will increase in the absence of political and regulatory intervention.

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Thu 6 Sep 2018 / Global

'Tokenisation' of infrastructure assets

A large funding gap exists in the infrastructure space. Available funding covers only 10% of sanctioned projects, while 90% of financing for Asian infrastructure projects comes from the public sector. Private sector participation has been prescribed as a remedy for the funding shortfall – but this solution demands a supportive framework to make the assets more tradable and palatable to investors. The 'tokenisation' of assets through blockchain technology can play an important role in developing this structure.

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Wed 20 Jun 2018 / North America,Europe

Hazards of initial coin offerings

Initial coin offerings, a fund-raising method for cryptocurrency ventures, provide an alternative source of venture capital for start-ups and encourage innovation in how digital tokens can be used. In contrast to initial public offerings on stock exchanges, ICO issuers do not sacrifice equity for financing. ICOs also allow for borderless online sales with fewer points of friction. However, there is a lack of market security; 81% of ICOs are fraudulent, and only 8% of all cryptocurrencies make it on to exchanges.

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Tue 1 May 2018 / Asia Pacific,North America,Europe

Gold beats untested cryptocurrencies

Some commentators claim cryptocurrencies could replace gold as an asset class. These digital assets may develop into an established part of the financial system, but they are no replacement for gold, a dependable investment tool. Gold is highly liquid and trades in an established regulatory framework. There is no clear two-way cryptocurrency market, sales are costly and time-consuming, and trading volumes are low. Trade in gold is widely authorised and regulated, while most countries have yet to approve cryptocurrencies.

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Wed 25 Apr 2018 / Asia Pacific,North America,Europe

UK leads global fintech regulation

Fintech is, by its very nature, global. Regulators must adapt to mitigate risks to consumers and financial stability, while ensuring they don't stifle innovation. The UK is the leader in developing regulatory standards specifically for fintech. It is creating a global sandbox – a testing ground for new business models not protected by existing regulation or supervised by agencies. The government has also established a number of bilateral fintech bridges, which facilitate the entry of start-ups into each country's sandbox.

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Tue 17 Apr 2018 / Asia Pacific,North America,Europe

Diversity through fintech education

Developments in financial technology offer enormous opportunities, but fintech can only thrive if a specialised workforce supports it. Technological literacy is crucial, but to have a successful career, professionals must become lifelong learners. This form of learning and continued education can greatly help women to infiltrate male-dominated financial services. Putting more emphasis on imparting knowledge to individuals from varied backgrounds and ensuring equal opportunity for both men and women are essential if the financial sector hopes to promote greater diversity.

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Thu 29 Mar 2018 / North America,Europe

Central banks must adapt to blockchain

Blockchain technology is in its first generation. The proliferation of cryptocurrencies, and the need to create a taxonomy and regulatory standards for these new digital assets, pose challenges for central bank policy-makers and regulators. For central banks, one of the most obvious applications of blockchain is for payments and settlement systems. Central banks must weigh the implications for financial stability and monetary policy of issuing their own digital currencies, as they play a crucial role as regulators and should mitigate risks while encouraging innovation.

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Fri 23 Mar 2018 / Asia Pacific,North America,Latin America Caribbean,Middle East,Africa,Europe

G20 debates 'hot' cryptocurrencies

The G20 meeting of finance ministers and central bank governors in Buenos Aires was good for cryptocurrencies. Representatives commented that they were a 'hot topic', but that governments were 'far behind' when it comes to understanding them. Care was taken to label cryptocurrencies as crypto-assets to make sure there is no mix-up with fiat currencies. Central banks are accustomed to having the right to issue sovereign currencies that are the sole legal tender in their countries and several appeared highly defensive of their privileges.

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