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BMO, Pension Plan Pilot Blockchain for Fixed Income Issuance

Canadian financial firm BMO Capital Markets is working with the Ontario Teachers’ Pension Plan on a new blockchain pilot.

The trial sees the two firms register a fixed income issuance on a blockchain platform in an effort to assess the viability of using the technology for this purpose.

“The transaction included Bank of Montreal as the issuer and Ontario Teachers’ as the buyer of a CDN $250 [million] 1-year floating rate Deposit Note, making it the first Canadian dollar fixed income issuance demonstrating the viability of blockchain platform,” BMO said in a statement.

The prototype allows participants to view the transaction and verify the accuracy of the term sheet and payment amounts before the security reaches maturity. The solution is aimed at reducing the costs associated with compliance and financial reporting, among other areas.

Ontario Teachers’ is a notable partner, given the demographic it covers. The organization is a single-profession pension plan serving around 323,000 working and retired teachers in the province of Ontario, with $189.5 billion in net assets as of December 31, 2017.

“Ontario Teachers’ is committed to exploring technology and innovations that might improve our ability to serve our members,” Audrey Gaspar, a managing director for Ontario Teachers’, said in a statement. “We are pleased to partner with Bank of Montreal in this pilot blockchain initiative.”

Image Credit: Cut For Good Photo / Shutterstock.com

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Tether Hires Former Bank Analyst as Chief Compliance Officer

Tether, the company behind the controversial, dollar-tied “stablecoin” known as USDT, has hired a chief compliance officer from the eighth-largest bank in North America.

Leonard Real is a former anti-money laundering (AML) analyst for the Bank of Montreal, where he worked for four years in three different positions.

The hiring announcement comes less than a month after Tether released the results of a review by Freeh Sporkin & Sullivan, LLP which stated the law firm was “confident” the USDT token is fully backed by dollar reserves.

That review, which itself came months after the relationship between Tether and auditing firm Friedman “dissolved,” largely failed to assuage critics, who assert that the token isn’t fully backed and has been used as a tool to inflate cryptocurrency prices.

In a statement, Real said that he looks forward to “helping showcase Tether’s commitment to transparency and regulatory compliance within the blockchain and cryptocurrency space.”

“As a longtime advocate of blockchain technology and the integration of cryptocurrencies into the mainstream, I am looking forward to putting my experience in AML and regulatory compliance in traditional financial institutions to use, to ensure that the Tether project can continue its work disrupting traditional industries,” he went on to say.

Tether has overlapping management and ownership with the cryptocurrency exchange Bitfinex, which earlier this year tapped a former Bank of Montreal executive to serve as its chief compliance officer.

As reported at the time by Crowdfund Insider, Bitfinex hired former BMO director of AML Peter Warrack in May.

Bank of Montreal image via Shutterstock

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Bank of Montreal Expands Crypto Purchase Ban

Canada’s Bank of Montreal (BMO) will no longer allow customers to buy cryptocurrency using Interac debit cards.

A spokesperson for the bank confirmed the move in an email to CoinDesk Tuesday, without giving an explanation. The Interac ban follows reports that the bank barred crypto purchases through Mastercard debit and credit cards weeks ago.

In the email, the spokesperson said:

“I can confirm that we no longer allow the purchase of cryptocurrencies via Interac Online Payments or by using a retail consumer Mastercard-branded credit or debit card.”

Rumors of the move surfaced last week on Reddit, when a user claiming to work for the bank shared what he or she described as a “companywide” email, dated March 28. The user photographed a computer monitor displaying the email and included the pic in the Reddit post.

According to that email:

“This decision was made due to the volatile nature of cryptocurrencies, and so to better protect the security of our clients and the bank.”

Transactions would be blocked outright for Mastercard products, while a temporary charge will be placed for customers using an Interac card to purchase cryptocurrency. However, Interac transactions will ultimately be blocked as well, according to the document.

The news came the same week as Danske Bank, the largest bank in Denmark, published a document stating it was “negative” overall towards cryptocurrencies for three main reasons: a lack of customer protection, high volatility and lack of regulatory oversight.

While Danske Bank will continue to allow its customers to purchase cryptocurrencies with credit cards, it said it will halt the purchasing of cryptocurrency-related derivative products or exchange traded notes.

Earlier this year, U.S. banks JPMorgan Chase and Bank of America banned crypto purchases with their credit cards.

Bank of Montreal image via ajbatac/Wikimedia Commons

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.