The Weekend Read: Mar 27

  1. Bitcoin Bull Corner

As price continues to chop sideways in the broad $200-300 area, a few more positive news stories hit the wires. Noble Markets announced a deal to use Nasdaq's X-stream trading system to power their exchange. Some took this as Noble being de facto regulated but the deal is purely a tech white label, and CEO John Betts equivocated when asked about the prospects of launching a fully regulated exchange. In other somewhat positive news, Barry Silbert's Bitcoin Investment Trust "received formal approval for listing on OTC Markets Group’s OTCQX exchange. The fund is listed under the symbol GBTC, and trading is expected to begin early next week."

2. Bitcoin Bear Corner

Megan McArdle of Bloomberg shared her mostly bearish take on bitcoin's potential as both a speculative asset and payment system: "the primary risk I see is simply that the allure of bitcoins as money will wear off -- and that when it does, bitcoin as payment system will also stop working very well." Izabella Kaminska continues her assault on bitcoin libertarian shibboleths in her post Bitcoin's lein problem:

"Indeed, given the high volume of fraud and default in the bitcoin network, chances are most bitcoins have competing claims over them by now. Put another way, there are probably more people with legitimate claims over bitcoins than there are bitcoins. And if they can prove the trail, they can make a legal case for reclamation."

And if your eyes aren't watering already, check out this twitter debate, with both sides fully armed with loaded handbags.

3. The Future of Fintech and Banking

Accenture released a very interesting (and graphic heavy!) report on how digital disruption could impact banking. It is worth a read in full:

"Possibly the biggest opportunity from taking an open approach to innovation is in the area of the Blockchain, the protocol that underpins the distributed architecture of the Bitcoin cryptocurrency. It is early days for cryptocurrencies, and it is unclear what the long-term effects of their adoption will be on the financial services industry. However, it is clear that if established players are going to benefit from this revolutionary approach to finance, they will have to engage with a much wider range of technical specialists and developers outside their own organisations."

The report spends quite a bit of time discussing the risk of banks not doing enough to keep up with the pace of innovation, but if this graphic is any guide, they are starting to try harder (or spend more):


...but perhaps some should be worried about legacy systems, namely Bank of England, which this week released an independent Deloitte report on the recent RTGS outage (with some bits redacted). The Bank has only paid out about £4k in damages, even though close to £300bn of payments were impacted. Now that is a low cost transaction fee network...