3iQ Research Group consolidates the top five cryptoasset stories of interest to investment advisors and our investors.
Bank of Canada Could Launch a Digital Currency to Replace Cash
October 15 – The Bank of Canada is considering launching a digital currency that would help it combat the “direct threat” of cryptocurrencies and collect more information on how people spend their money. An internal Bank of Canada presentation prepared for the Governor Stephen Poloz and the central bank’s board of directors revealed that a proprietary digital coin could be widely available for Canadians and initially coexist with money already in circulation. The digital currency would provide “all the benefits” of a central bank-backed asset, the presentation says, and “all the convenience and security of wireless, electronic payments”. The presentation, titled “Central Bank Money: The Next Generation”, was prepared by Stephen Murchison, an advisor to Governor Stephen Poloz, as part of a two-year research project on whether or not the Bank of Canada should pursue its own digital currency. “An additional payment method could make the payment system more robust,” said the presentation. “We need to innovate to stay in the game.”
Read the full article from Financial Post here.
Fidelity Investments Launches Crypto Custody Service
October 19 – Fidelity Investments has officially launched its crypto custody service, Fidelity Digital Assets Services, after a year-long preparation. Abigail Johnson, the CEO of Fidelity Investments, revealed to the Financial Times on October 18 that the firm is ready to roll-out its crypto custody service to hedge funds, family offices, and financial advisors. When asked about Coinbase’s crypto custody solution, Johnson argued that Coinbase “is still a company that most people had never heard of, and they don’t have the existing relationships with the independent advisers.” Kathleen Murphy, the personal investing president of Fidelity Investments, noted that the firm will not offer cryptocurrencies on its retail trading platforms yet in efforts to protect its clients. “You know, we’re really careful about that. So while we embrace crypto in terms of trying to understand it and be innovative and thoughtful… We’re also very careful about where we offer those types of things, so they’re not offered broadly on the retail platform. We want to be very careful about making sure that investors who really aren’t institutional investors […] don’t make a mistake with cryptocurrency,” said Murphy.
Read the full article from CoinTelegraph here.
Facebook Could Issue Individual Currency-Pegged Stablecoins for Libra
October 21 – After facing scrutiny from lawmakers, Facebook has announced that its Libra digital currency may pivot away from using a basket of international currencies and treasury bonds to price its stablecoin. David Marcus, the co-creator of Libra, announced in a recent banking seminar that the firm may drop its “synthetic” stablecoin and replace it with several individual stablecoins pegged to national fiat currencies. While the individual stablecoins were not Libra’s desired option, Marcus notes that having individually-backed stablecoins may allow the project to be more “agile” as the firm fights with several international lawmakers. Pushback from lawmakers has largely stemmed from concerns relating to financial stability and existing monetary policy, and the potential for financial crimes. “We could definitely approach this with having a multitude of stablecoins that represent national currencies in a tokenized digital form. That is one of the options that should be considered,” said Marcus.
Read the full article from CoinDesk here.
Poloniex Spins-Off from Parent Company, Circle
October 10 – Poloniex, a leading cryptocurrency exchange and trading platform, has announced that it will be spinning off from its parent company, Circle, in efforts to innovate exclusively for a global clientele. The exchange explained in a series of tweets that its US clients will no longer be able to trade on its platform starting from November 1, giving the clients until December 15 to withdraw all their assets. Poloniex stated that the spinoff will result in a new exchange, called Polo Digital Assets Ltd., which will be backed by an “investment group that plans to spend more than $100M developing the exchange to offer new features, services and assets to global customers.” Circle acquired Poloniex back in 2018 for approximately $400 million USD, in an acquisition which was seen as a potential “Wall Street financial giant”. It remains uncertain why Poloniex is shutting the doors on its US clients; however, the CEO of Circle Jeremy Allaire did relocate the firm’s headquarters to Bermuda earlier this year, where laws surrounding cryptocurrencies and exchanges are more lax.
Read the full article from Decrypt here.
World’s Largest Automakers Team-Up to Develop Blockchain IDs for Vehicles
October 6 – Five of the world’s largest automakers have teamed-up to develop a vehicle identification system which utilizes the blockchain. The automakers have formed a partnership called the Mobility Open Blockchain Initiative (MOBI), which includes Renault, BMW, General Motors, Honda, and Ford. The system is expected to assign digital IDs to individual vehicles, allowing for information and service histories to be stored and covered for the lifetime of the vehicle. The data would allow the vehicle to be recognized on the road and be potentially connected with other vehicles. For electric vehicles, the group plans to utilize the blockchain-based system to allow tolls, maintenance, and rest-stop snacks to be recorded on the vehicle, then be paid in a one-time transaction when the vehicle is plugged into a charging station.
Read the full article from the Nikkei Asian Review here.
3iQ Bitcoin Trust (Class A) : NAV as at October 18, 2019
Underlying cryptoasset prices sourced from Bloomberg.View charts and more fund data at https://www.theglobeandmail.com/investing/markets/funds/FBCBT.CF/performance/
3iQ Global Cryptoasset Fund (Class A): NAV as at October 18, 2019
Underlying cryptoasset prices sourced from Bloomberg.View charts and more fund data at https://www.theglobeandmail.com/investing/markets/funds/TIQ101.CF/performance/
3iQ Corp. (“3iQ”) is the first Canadian investment fund manager to agree to terms and conditions with the Canadian securities regulatory authorities which permit 3iQ to manage a multi-cryptoasset investment fund available to Canadian accredited investors. 3iQ provides accredited investors with exposure to bitcoin, ether, and litecoin through its 3iQ Global Cryptoasset Fund.