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Fintech A.M.: 13-12-17

The big banks make waves by adopting new tech and cryptocurrency is in the news again. 

Large banks

Dutch bank ING yesterday (December 12) launched its artificial intelligence bond trading tool called Katana. The trading room robot has been designed to help human traders on the trading floor by swiftly gathering and presenting information about better bond prices. ING’s press release said Katana is ‘designed to enhance cooperation between man and machine.’ ING has been a leader in 2017 in digital transformation with 250 experts in data analytics, machine learning and artificial intelligence across the bank. More information about ING’s agile approach to technology and adoption from McKinsey is here in a detailed interview.

In other news from big banks, Swiss bank UBS announced its blockchain-based platform for MiFIDII compliance. With less than a month until MiFIDII is implemented on January 3, the ethereum platform is called Madrec. The project was into the potentials blockchain was led by UBS in collaboration with the likes of Barclays, Credit Suisse and Thompson Reuters. The Massive Autonomous Distributed Reconciliation platform, shortened to Madrec, shares the requirements of MiFIDII regarding legal entity identifiers across participating banks.

Adoption of new technology such as AI and blockchain will help big banks remain competitive in the changing landscape of banking. Open banking transformations will continue to shock the system. In today’s temperamental climate, these banks have demonstrated the value of innovation.

Cryptocurrency

In the US, the Chairman of SEC said yesterday (12 December) that he has a ‘sharp focus’ on cryptocurrencies and compliance. The statement cited the reason being bitcoin’s ‘high level of volatility and risk.’ The full SEC press statement details what approach main street investors should take towards ICOs.

In an echo of the US, Hong Kong’s Securities and Futures Commission (SFC) is the latest government agency to weigh in on bitcoin and the legality of cryptocurrencies. The statement from the SFC reminded traders of bitcoin that cryptocurrencies are legally within the definition of a ‘futures contract’ in Hong Kong and that traders must comply the the associated regulations. The statement also highlights the substantial risk of trading ICOs.

This is not the first time we have reported on government statements on ICOs. In recent months, Japan, Singapore, Malaysia and Australia are among the countries who have released statements attempting to articulate how ICOs are legally defined. As such, Waves Platform, a Crypto-platform for asset/custom token issuance, transfer and trading on blockchain, is founding an independent, self-regulatory body to create international market standards. The association will be open to all crypto market leaders and will likely be registered in Switzerland.

ICOs and cryptocurrencies have proven a challenge for financial law. This shows us that there are times when the law cannot keep up with technology. The move from Waves Platform suggests that an international approach is possible. It might even benefit all involved.

By Grace Appleford, Research Analyst for Holland FinTech.

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