April 29 – May 5, 2019 | Canadian Banks and Blockchain, Facebook Stablecoin & More Crypto News
3iQ Research Group consolidates the top five cryptoasset stories of interest
to investment advisors and our investors.
Investment Advisors Should Not be Apathetic to Cryptoassets
May 1 – While speaking at a panel during the ETF Summit Toronto on Wednesday May 1, Fred Pye of 3iQ Corp noted that advisors who are apathetic to cryptoassets could be at risk of failing to connect with the next generation of investors. Pye also noted that investors should consider holding cryptocurrencies in their “growth” portfolios, which could contain other thematic investments such as robotics or autonomous vehicles.
“The next generation of clients that are 35 and under, if you are not prepared to look at cryptoassets and the digital asset space, you are not going to be able to attract those clients because they want to be able to do everything online,” said Pye. “But their asset allocation is way out of control and is wrong. They need financial advisors to wheel them back. Advisors need to show them that cryptoassets are less than between -0.15 and +0.15 correlated to every other asset class we look at. As a standard hedge fund manager, you are looking for the ideal, perfect non-correlated asset class.”
Fidelity: Survey Finds Institutional Investors are Eyeing Crypto
May 1 – Fidelity investments and Greenwich Associates have conducted a survey on institutional investors’ views on digital assets such as cryptocurrencies. The survey was conducted on 441 institutional investors through November 2018 to March 2019. The survey found that 47% of institutional investors believe that digital assets are worth investing in. The same percentage of institutional investors also said that they believe digital assets are innovative investments, and are worth an allocation to their portfolio. 46% of these institutional investors also appreciated how these digital assets show a low correlation with other traditional asset classes. 72% percent also said that they would prefer to buy investment products that hold digital assets, and 57% percent said they prefer to buy them directly. “That’s interesting because I’d argue that no one owns dollars or euros in a fund,” said Tom Jessop, the president of Fidelity Digital Assets.
Bitbuy Completes a Proof of Reserve Audit, Launches a Trading Desk
May 2 – The Canadian crypto exchange Bitbuy has recently completed a “Proof of Reserve and Security” audit on its storage methodologies, asset segregation, security, and solvency. The company also included a “team risk test” on its management and staff. The audit stemmed from a forward-looking approach to internal controls after the scandal of the Canadian crypto exchange QuadrigaCX which cost Canadian investors around $193 million CAD. To conduct the audit, the exchange used the company CipherBlade, which provides blockchain forensics and other cybersecurity consulting for crypto companies. In addition to the audit, Bitbuy also launched their ‘Pro Trade’ platform, which offers more advanced trading features, such as crypto-to-crypto trading pairs and a low latency order matching system which is designed for high-frequency traders.
Facebook is Now Building its Cryptocurrency-based Payments System
May 2 – Facebook has released more details regarding its upcoming cryptocurrency-based payment system. The name of the project is Project Libra, and it will be a stablecoin that is backed by fiat currency. Facebook is currently recruiting “dozens of financial firms and online merchants” to help support the project. Facebook is also planning to link this cryptocurrency payments system to its core ads engine, so it can reward users for viewing advertisements on its platform. The introduction of a cryptocurrency-based payments system to some 2.5 billion users worldwide could help spur the adoption of cryptocurrencies significantly.
Five Canadian Banks Now Let Users Verify Identity Using the Blockchain
May 2 – Five major Canadian banks are now utilizing blockchain technology to verify client identities. These five banks include Canadian Imperial Bank of Commerce, Royal Bank of Canada, Bank of Nova Scotia, Toronto–Dominion Bank, and Desjardins Group. The banks have integrated with a mobile app, called Verified.Me, which is developed by SecureKey Technologies. SecureKey Technologies is built on the IBM Blockchain and is available for both Android and Apple iOS. “Security and trust are two expectations that consumers have when it comes to their personal information and digital identity. Creating seamless and convenient experiences that consumers have come to expect, based on these imperatives of security and trust, are fundamental to meeting their evolving digital needs,” said Peter Tilton, the senior vice-president of digital at RBC.
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