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Who’s the Bitcoin Bag-Carrying Man Leaving Deutsche Bank?

The Famous Bitcoin Bagholder

Yesterday, the Financial Times published a surprising image: a Bitcoin bag-carrying, nice suit-clad man purportedly leaving the London Deutsche Bank building.

While the story that accompanied was focused on the collapse of the massive institution, once one of the larger banks in global finance, many focused on the Bitcoin tote. Questions like “who’s the guy?” and “why is he carrying a bag sporting the enemy of central banks out of a bank?” were brought up.

Here are some answers.

Firstly, the guy is not a fired Deutsche Bank employee, despite the fact that he is sporting an extremely well-fitting suit. But, the tailor was leaving the building, leaving the building after finishing fitting an individual within the building.

His name is Alex Riley, and he works for Fielding & Nicholson, a London-based suit shop that has since put a Bitcoin address in its Twitter biography to appeal to the cryptocurrency community.

According to one of Riley’s friends, he is a tailor that has been a proponent of BTC for over two years, hence the bag. Riley states that he makes a point of bringing the Bitcoin bag, which is unfortunately sold out as of the time of writing this, to every meeting he has at large banks. Just look at the rather hilarious collage of photos, which shows him clearly trying to rub Bitcoin in the face of mainstream finance.

While this clarification reduces the power of this image, it is still quite the statement. For those who missed the memo, Deutsche Bank, a German multinational investment bank and financial services company, has been bleeding out for years now.

Its publicly-tradable stock has lost over 77% of its value in the past five years. This comes in spite of the fact that within the same time frame, the S&P 500 index gained around 50%, marking one of the greatest stock market bull runs in history.

The institution’s situation recently got worse, with it announcing plans to cut 18,000 global jobs as it shutters its equity business, hence the Financial Times report.

So in a sense, the “Bitcoin Bag Guy” making it to the front pages of some of the world’s financial media is quite the statement, this being that BTC is an alternative to fiat. In the eyes of most of cryptocurrency’s proponents, that statement is 100% correct.

European Union Recession?

Deutsche Bank’s unfortunate tumble into the abyss comes as many investors have begun to fear a recession in the European Union and potentially abroad too.

As explained in an extensive Twitter thread by Raoul Pal, the founder of crypto-friendly media outlet and investment research startup Real Vision, the European Union’s economic data is extremely harrowing.

European-centric banks are shedding profits at a crazy rate, which has materialized in mass layoffs; some sovereign bond yields have flipped negative; and inflation expectations have collapsed entirely. Pal points out that it now makes sense to purchase Bitcoin to hedge against risk.

Also, central banks have begun to impose inflationary fiscal policy to mitigate the risks of a downturn.

Photo by Armando Arauz on Unsplash

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Is Blockchain and Crypto The Reason For Massive Deutsche Bank Job Cuts?

Deutsche Bank Layoff Blockchain

The European investment financial institution,
Deutsche Bank, is exiting from its equity sales and trading businesses. This is
in a bid to increase profitability. Consequently, the bank is slashing 18,000
jobs as per a Bloomberg report.
The bank’s equities arm has posted a €2.8 billion Q2 2019 loss necessitating
the cut of its workforce by a fifth.

In the bank’s statement made on Sunday, Christian Sewing its Chief Executive Officer said:

“Today we have announced the most fundamental transformation of Deutsche Bank in decades. We are tackling what is necessary to unleash our true potential”.

The bank has consequently shelved the paying of
dividends in 2019 and 2020. Additionally, there will be a €4 billion investment
done to improve its controls by 2022 as part of its restructuring measures.

Blockchain and Crypto Solutions Can Make
Banks Profitable

The bank’s governance has largely been blamed for the tragic turn of events. The institution’s costs have been excessively high while its revenues have been low. Crypto analysts believe that the current turn of events at the Deutsche Bank could have been mitigated through the adoption of blockchain technology.

The bank is not new to cryptocurrencies and
blockchain technology. First, it is rooted in one of the largest crypto hubs in
Europe. Germans have always had a leading role when it comes to technology and
industry. They have not treated blockchain and digital assets any differently.

The German government is exceedingly supportive of digital currencies and has very friendly crypto tax regulations. The land of Oktoberfest is building up a comprehensive blockchain strategy for the future. The government has invited many FinTech startups to design blockchain solutions that can be used to strengthen the country’s economy.

Germany Is Europe’s Largest
Blockchain and Crypto Hub

Blockchain innovators in what is Europe’s largest
economy have already applied blockchain to the pharmaceutical companies,
energy, and the auto industry. The German Ministry of Finance has also
announced that it will not tax Bitcoin users. Consequently, the government
regards the digital asset as legal tender for tax purposes.

The government has, consequently, been viewed as the pacesetter for other EU economies when it comes to digital assets treatment and acceptance. The German youth is also very bullish for crypto. As an illustration, a survey done by Hesse and Saxony in 2018, shows that 28 percent of Germans in the 18 to 29 years range have an interest in the purchase of cryptocurrencies. 

Berlin is also home to over 170 tech hubs
researching on blockchain uses. The nation has therefore not just been a
success story in economics and industry but in blockchain development as well.

The one step, consequently that could change the fortunes of the Deutsche Bank could simply lie in blockchain solutions as Ripple. Examples can be drawn from SWIFT. To stay competitive, SWIFT is innovating and adopting blockchain.

SWIFT has for ages been burdened with a slow and expensive network, that would take days to settle payments.  Meanwhile, Ripple’s xRapid has assisted banks with on-demand liquidity when facilitating settlements.

Incorporating with any of Ripple’s financial solutions for banks in any of their wing, the beleaguered European investment bank would practically, as demonstrations have revealed, have higher revenues and fewer costs of operations. This would transform its working experience and give it competitiveness thereby preventing laying off staff.

The post Is Blockchain and Crypto The Reason For Massive Deutsche Bank Job Cuts? appeared first on Ethereum World News.

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Deutsche Bank: ‘Aggressive’ Central Banks Making Bitcoin More Attractive

Deutsche Bank lead strategist predicted that interest rate cut by the Fed will make cryptos more attractive as opposed to fiat.

The potential interest rate cut by the United States central bank is apparently one of the reasons for the recent surge of bitcoin (BTC), Deutsche Bank exec Jim Reid said in an interview with CNBC on June 26.

Reid, the head of global fundamental credit strategy at Deutsche Bank, stated:

“if central banks are gonna be this aggressive, then alternative currencies do start to become a bit more attractive.”

Reid referenced a recent speech by Fed’s chairman Jerome Powell, who said yesterday that the central bank is considering a cut of interest rates amidst the current economic uncertainty and inflation risks. As such, the U.S. dollar (USD) dropped versus major fiat currencies yesterday, recording a three-month low against euro (EUR), which was allegedly triggered by expectations of multiple interest rates decreases by the Fed.

Meanwhile, bitcoin has continued to hit new 2019 records of above $12,000, while its market cap surged above $220 billion with a dominance rate reached more than 60% for the first time since April 2017, as reported earlier today.

Reid also noted that the recent spike of crypto prices is partly caused by Facebook’s upcoming crypto project Libra, which white paper was released earlier on June 18. Since then, bitcoin has risen more than 30% from around $9,000 to $12,616 at press time, according to data from Coin360.

In the interview, Reid has reiterated his negative stance towards easing practices by central banks after previously claiming that the existing fiat-based currency system was unstable and nearing its end. Providing his remarks back in November 2017, in the wake of the bitcoin’s all-time high record of $20,000 in December 2017, Reid criticized continuous printing of money by banks, warning that this could lead to the end of paper money.

But the United States isn’t alone. In recent weeks, the European Central Bank President Mario Draghi also hinted at new interest rate cuts.

“Add in the May 2020 Bitcoin halving and you have the perfect storm,” tweeted Morgan Creek founder, Anthony Pompliano,” earlier this month. 

“Cut rates.

Print money.

Make BTC more scarce.”

Ironically, Deutsche Bank itself could be partially blamed for a weakening economy. The bank’s stock has been dropping to record lows over the past year.

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SWIFT, HSBC, Deutsche Bank to Conduct Blockchain-Based E-Voting PoC

Global financial messaging network SWIFT is carrying out a DLT-based shareholder e-voting proof-of-concept in the first half of this year.

Global financial messaging network, the Society for Worldwide Interbank Financial Telecommunication (SWIFT), is carrying out a blockchain-based shareholder e-voting proof-of-concept (PoC) with major financial institutions. SWIFT announced the news in a press release published on March 6.

Per the press release, the PoC will be jointly conducted in the Asia Pacific region with Deutsche Bank, DBS, HSBC, Standard Chartered Bank, securities software provider SLI and the Singapore Exchange (SGX). The test is meant to establish whether distributed ledger technology (DLT) can simplify the management of shareholder meetings.

More precisely, the test, which is set to run during the first half of 2019, is meant to accomplish four main goals, the press release explains. First of all, it is designed to test the deployment of a voting solution in collaboration with the issuers and a Central Securities Depository (CSD) while storing and managing data on a permissioned private blockchain.

Secondly, the PoC also seeks to demonstrate the viability of hybrid solutions “combining messaging and DLT to foster interoperability and avoid market fragmentation.”

The initiative will also test SWIFT’s capacity to host third-party applications in its DLT environment and reuse its security and interface stack.

Lastly, the PoC looks to confirm the use of a particular financial electronic data interchange standard — ISO 20022 — in the process.

While DBS and SGX will be both participants and issuers in the initiative, HSBC, Deutsche Bank, and the Standard Chartered Bank will be only participants. According to the release, the whole project will be facilitated by SWIFT’s DLT sandbox testing environment.

Additionally, the existing SWIFT network and infrastructure will be used to access, test and validate the applicability of the technology.

The press release quotes a SWIFT executive as saying:

“The emergence of blockchain technology is a new opportunity to look at improving these [current] processes. It is also an opportunity for SWIFT to offer flexibility in the adoption of this new technology through the re-use of ISO 20022 based solutions together with a high level of security and resilience that our industry requires.”

As Cointelegraph reported at the end of January, SWIFT has revealed that it plans to launch a PoC of a gateway — dubbed GPI Link — that will allow enterprise blockchain software firm R3 to link to GPI (Global Payments Innovation) payments from its platform.

Also at the end of January, reports surfaced that Iran was planning to unveil a state-backed cryptocurrency meant to skirt United States sanctions and the SWIFT system at the Electronic Banking and Payment Systems conference in Tehran that week, though the currency was not officially announced.

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Binance Driving Close To Nasdaq In Profit, Outperforms Deutsche Bank

It is surprising to see that Binance Q1 2018 profits is greater than Deutsche Bank’s with the exchange driving very close to that of Nasdaq’s. This is telling the world that cryptocurrency has come to stay.

Above is the summation of Dovey Wan, the managing director of DanHua Capital (DHVC) and an early investor in Dfinity, ZCash, Cosmos, Kyber and Handshake.

The cryptocurrency investor on Twitter compared Binance to Deutsche Bank and Nasdaq, claiming Binance outperformed the bank in Q1.

The crypto enthusiast used pictures to depict her comparisons. Going by her post, Deutsche Bank made a profit of $146 million after considering their operation cost and 100,000 employees’ salaries.

She said:  “Binance now has like 300ish employees, NO headquarter, NO central campus, even the founders are constantly on the move intercontinentally. The friction of communication has to be tiny in order to get things done in such fashion which is unbelievable for traditional corp structure”

After she was condemned for comparing Binance with Deutsche Bank, she made another comparison:

“Someone said it’s unfair to compare Binance with Deutsche Bank (Exchange vs Bank) so I made this Now it’s apple to apple I suppose?”

In the image, she pointed that Binance is just 8 months, and has 200 employees, but made $200M at Q1 of 2018, comparing it to 47 years old Nasdaq with 4500 employees and $209M profit. She posited that Nasdaq’s 2018 Q1 profit was just $9M ahead of Binance.

Exchanges Accused Of Imbalance

Many a number of exchanges have been accused of demanding tip before they accept some cryptocurrencies be listed. While Binance was also accused of the same, there is no evidence to back it.

Meanwhile, cryptocurrency pundit, John McAfee, had earlier called for total boycott of HitBTC and other exchanges which he said were behind market manipulations and having exorbitant buy-in that is greater than the poor’s monthly income.

McAfee tweeted: “The crypto exchanges have become the thing that we have originally fought against. Their power is immense. HitBTC, for example, has increased suffering for millions of poor people who cannot afford the minimum buy-in since it is greater than their monthly income. Boycott them.”

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Q1 2018 Binance Profits Surpass Deutsche Bank, Near Nasdaq

Binance Pulled In $200M In Q1, While Deutsche Bank Brought In $146M

To be frank, there isn’t too much of a comparison between the crypto industry and legacy capital markets, but on the exchange side of things, maybe this isn’t the case, with Binance’s Q1 2018 profits reportedly surpassing Deutsche Bank’s and nearing Nasdaq’s.

On Thursday, Dovey Wan, managing director of DanHua Capital and a crypto investor, took to Twitter to provide an interesting point of insight into the crypto industry, noting that Binance outperforming Deutsche Bank in Q1 of this year.

Backing this seemingly outrageous claim, Wan posted an image, which gave a short, yet sweet side-by-side comparison of the two firms. Deutsche Bank, which has been one of Europe’s foremost financial institutions for more than a century, pulled in a sizable profit of $146 million in Q1 2018 after giving salary to over 100,000 employees and fulfilling its operating costs. On the other hand, Binance, which was founded only in July 2017, raked in $200 million after its operational margin, topping Deutsche profits by 35%.

However, her comment’s quickly sparked some conflict within the Twitter thread, with some noting that this is more of an “apples to oranges” comparison, as both of the firms operate with an entirely different structure in separate industries.

Acknowledging this, the DanHua executive went on to make a better comparison, trying to make it more “apples to apples.” This time, she contrasted Binance and the Nasdaq capital markets exchange, revealing that Binance’s Q1 profits were ‘only’ $9 million shy of Nasdaq’s, even with the crypto exchange’s relatively small team.

While this by no means shows that crypto is surpassing traditional markets, Wan indicated that these statistics show that decentralized technologies and markets hold “disruptive potential,” writing:

Yes, there is nuance in compliance cost etc, the comparison mainly tries to illustrate an industry with exponential growth + disruptive potential. If AMZN can be accessible outside NASDAQ, why chinese investor has to pay super high P/E for local s***? Liquidity brings optionality.

Binance Rakes In Millions In Profit, Even Amidst A Bear Market

As per a previous Ethereum World News report, Binance’s CEO expects for his firm to pull in $1 billion in profits for all of 2018, even amidst a bearish market that has plagued investors since January’s all-time highs. This substantial profit figure could be attributed to the firm’s rapidly pudding user base, along with near-consistent volume levels on its over 100 trading pairs.

According to Zhao, his company has now supported over ten million customers, generating an average of $1.5 billion in trade volume each and every day. To give the user base figure a bit of perspective, Binance only had two million users at the start of 2017.

Some skeptics reasoned that the only reason why Binance could pull in such a profit is due to the suspected exorbitant listing fees requested by the exchange. As covered in early August, an ‘official’ email from Binance claimed that a fee of over $2 million should be paid for listing on the popular exchange. While this claim has since been rebutted by CEO Changpeng Zhao, many speculate that this could be the source of a good portion of the startup’s profits.

Regardless, Binance doesn’t seem to be the only firm ‘rolling in the dough’, even as the retail market all but dries up. With BitMEX, the world’s most popular Bitcoin mercantile exchange, recently ‘making it big’ with a move into one of the most expensive office towers in the world. As reported by Ethereum World News last week, the exchange, which has become well-known for offering margin trading, will pay over $570,000 a month in rent for just one of its offices, showing that the firm still has some cash to spend.

Photo by Jakub Gorajek on Unsplash
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IBM-Powered Blockchain Platform Completes First Live Trades Via Five Major Banks

European blockchain trading platform confirmed it had completed its first live operations today, July 3, involving twenty companies and five major banks.

The blockchain platform, which claims to provide a “more efficient and cost effective way” for banks and businesses to trade worldwide, uses IBM’s Blockchain Platform, powered by Hyperledger Fabric.

Part of various blockchain solutions currently under appraisal by the banking sector, the platform counts Deutsche Bank, HSBC, KBC, Natixis, Nordea, Rabobank, Santander, Société Générale and UniCredit as its founding members.

Together, according to Dutch institution Rabobank, the collaboration highlights the banks’ ability to “innovate.”

“These trade(s) represents a great example of traditional banks innovating to meet their clients’ needs by working with,” the bank’s chief digital transformation officer Bart Leurs commented in a press release.

Currently available in eleven European countries, the platform’s expansion plans appear to depend on further lenders coming on board.

Meanwhile, bank-sponsored blockchain platforms are becoming an increasingly crowded space both in Europe and beyond. Spain’s Santander became the first to offer blockchain settlements for retail customers using Ripple in April, while remittances also form the basis for a major project between banks in Asia, also involving technology from IBM.

At the same time, other plans appear to have fallen by the wayside, Rabobank remaining silent on its ‘Rabobit’ cryptocurrency wallet project since March.

As Cointelegraph reported in June, some sources fear banking demand for blockchain services is overrated, and the technology actually has less to offer to the sector than many assume.

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Deutsche Bank, Allianz, Auto1 Partner to Create Car Financing Blockchain Platform

German insurance group Allianz and Deutsche Bank have partnered with Berlin-based car exchange Auto1 to offer auto financing using blockchain technology, Cointelegraph auf Deutsch reported today, June 7. The three partners have created a new company called “Auto1 Fintech” of which they together own more than 50 percent.

The new venture will offer insurance products and loan refinancing for car dealerships that buy Auto1’s vehicles, said co-CEO Hakan Koc In an interview with Bloomberg. Auto1, which is backed by SoftBank Group Corp., is an online exchange for used cars that buys them from individuals and then resells them to dealerships.

The loan payment and refinancing confirmations will be recorded on a blockchain. The new process will ostensibly allow dealerships to immediately refinance their purchases, rather than using a paper-based process which can tie up their equity for over two weeks. Auto1 hopes that the new blockchain platform will help the company diversify its offerings and promote customer loyalty.  According to Koc:

“We are freeing capital and our customers are more liquid as a result. It’s a win-win.”

Auto1 is seeking to become the dominant internet platform for used cars. While they are already active in Germany, they company will expand into France and Poland later this year, according to Koc. Earlier this year SoftBank’s Vision Fund invested €460 million ($540 million) in Auto1, valuing the company at about €2.9 billion ($3.4 bln).

Other automotive companies around the world are testing blockchain technology applications ranging from simple financial transactions to autonomous driving support. In a pilot project, Daimler AG, the auto giant behind Mercedes-Benz, launched a blockchain based program to reward eco-friendly driving. Drivers who practice environmentally-friendly driving habits i.e. smooth and safe driving at low speeds, will receive MobiCoins, which they can then exchange for VIP tickets to events and other rewards.

In March, American automotive giant Ford Motors filed a patent for a vehicle-to-vehicle communication method that involves the exchange of crypto tokens to manage traffic flow. One example of a potential interaction would be if a driver were running late for an appointment, they could request to pass other vehicles for the next 10 minutes in exchange for a certain number of tokens.

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UBS Chairman: Cryptocurrencies Are ‘Highly Speculative Investment Vehicles’

UBS chairman Axel Weber has stated that Switzerland’s largest bank will not offer its customers trading in Bitcoin and other cryptocurrencies, reported Cointelegraph auf Deutsch May 3.  Weber called for stricter controls on cryptocurrencies, stating “[t]hey [cryptocurrencies] are often not transparent and, therefore, open to being abused,” in a speech in Basel Messe, Switzerland.

According to the chairman, virtual currencies are at best “highly speculative investment vehicles,” and at worst they “facilitate the financing of terror, money laundering, and other criminal activities.” In his view, cryptocurrencies do not have the characteristics of a currency at the moment, they are far too volatile, and are rarely used to make proper payments.

However, Weber admits that he sees opportunities in crypto’s underlying technology, blockchain: “[e]verything that makes processes simpler, faster and more secure is beneficial to all of us: client, shareholder or bank.”

Weber’s recent remarks about crypto was not the first time he criticized the technology. Last year, he told the Neue Zürcher Zeitung am Sonntag that Bitcoin was not money, stating:

“Because money has three functions to fulfill: it has to be a means of payment – as such, Bitcoin is not universally accepted. Second, money is a measure of value. But there are no prices that are written in Bitcoin. And third, it must be suitable as a store of value. Bitcoin does not fulfill this condition either since the price of Bitcoin is not stable. A fundamental disadvantage of Bitcoin is that the number of coins dispensed is limited.”

Weber is not alone in his criticism of cryptocurrencies. In November of last year, Deutsche Bank issued an official warning to its clients regarding investment in Bitcoin. In January of this year, Thomas Mayer, ex-chief economist at Deutsche Bank, described cryptocurrencies as a “bad bet” and speculative objects of unknown risk.

In January of this year, the North American Securities Administrators Association (NASAA) and the US Securities and Exchange Commission (SEC) warned Main Street investors against investing in cryptocurrencies and Initial Coin Offerings (ICO). One of the main reasons the NASAA cited for the warning was individual investors not being sufficiently informed about the products in which they were potentially investing.