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To: Glenn Petersen who wrote (140)10/12/2020 6:50:21 AM
From: Glenn Petersen
   of 196
China hands out $1.5 million of its digital currency in one of the country’s biggest public tests

Arjun Kharpal


-- Last week, the government in Shenzhen carried out a lottery to give away a total of 10 million yuan (about $1.5 million) worth of the digital currency.

-- The winners can now download a digital renminbi app to receive the digital yuan and spend it at over 3,000 merchants in a particular district of Shenzhen.

-- The digital yuan is not a cryptocurrency like bitcoin. Instead, it is issued and controlled by the People’s Bank of China, the country’s central bank.

GUANGZHOU, China — China has started one of the biggest real-world trials for its digital currency as it pushes closer toward creating a cashless future.

Last week, the government in Shenzhen carried out a lottery to give away a total of 10 million yuan (about $1.5 million) worth of the digital currency. Nearly 2 million people applied and 50,000 people actually won.

The winners can now download a digital renminbi app to receive the digital yuan and spend it at over 3,000 merchants in a particular district of Shenzhen. The south China technology hub is home to some of the country’s biggest tech giants including Huawei and Tencent.

Local supermarkets and pharmacies are among the participating merchants as well as Walmart, according to a post by the Shenzhen government messaging app WeChat.

China has been pushing toward a cashless society.

The digital yuan is not a cryptocurrency like bitcoin. Instead, it is issued and controlled by the People’s Bank of China, the country’s central bank. It is not looking to replace digital wallets like Alipay or WeChat Pay. It will likely work together with them and other banks.

In comparison, Bitcoin is decentralized, which means it’s not owned and controlled by one entity, and it is not distributed by a central bank.

China’s digital yuan has been in the works for the past few years and there have been just a handful of small trials across the country. The Shenzhen pilot appears to be the biggest so far.

Central banks around the world are exploring the idea of issuing digital currencies. Last week, the Bank for International Settlements and seven central banks published a framework for central bank digital currencies, or CBDCs.

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From: Glenn Petersen10/18/2020 10:29:52 AM
   of 196
A 32-Year-Old Trader Is Driving 21,000 Amateur Stock Investors

EToro has gained a devoted following in Europe and is now looking to the U.S.

By Edward Robinson and Justina Lee
October 1, 2020, 11:01 PM CDT
Updated on October 2, 2020, 9:05 AM CDT

Jay Smith isn’t a professional money manager. He’s just a 32-year-old living in southern England who spends his days playing the stock market.

But Smith, better known online as Jaynemesis, drives the investment decisions of more than 21,000 people with $40 million in assets who copy his trades on a digital platform called eToro. When he loads up on shares of FedEx, so do they, and when he shorts the Nasdaq index, they do that, too.

All of this is taking place on EToro, which calls its service copytrading. While the feature has played a key role in attracting more than 15 million users to the Israeli-British company — which is around the same level as online trading powerhouse Robinhood — the practice has yet to take root in the U.S. That might be about to change.

EToro plans to expand into the U.S. equities brokerage game in early 2021 and challenge Robinhood for the hearts and wallets of rookie investors who’ve embraced stockpicking big time this year. It’s hook: providing a “social trading” network that lets millions of customers around the world share their market exploits and opinions, and replicate the bets of the best performers on the system. Think Facebook meets eTrade.

The company’s biggest difference with rivals is this notion of copytrading. With the tap of a button, a customer can automatically duplicate the trades of dozens of other customers that eToro has designated Popular Investors. They perform like de facto money managers. Smith regularly communicates on the ups and downs of the market with his followers. When stocks skidded in early September he reassured them: “Perhaps you copied yesterday or today and you’re sitting down 4% already and you’re hovering over the uncopy button,” he wrote. “STOP – DON’T PANIC. You don’t need everyday to be in the green.”

Jay Smith
Photographer: Luke MacGregor/Bloomberg
EToro pays Popular Investors up to 2.5% of the assets that follow them. Smith, as the No. 1 copytrader on the site, is pocketing $1 million. With his portfolio up 62% in 2020, he’s been attracting droves of recruits. “Hi Jaynemesis, newbie copier here!” one recently posted on his social media feed on eToro’s site. “I have no real idea on stocks but it seems like you do.”

Consumer-protection advocates decry how eToro and its ilk are turning the market into something that looks like a game. And while retail investors have picked some of the biggest winners during this year's rally in stocks, study after study has shown that beating the market with an actively managed portfolio is almost impossible over the long term.

There’s also been controversy. In June, a 20-year-old Robinhood customer killed himself after believing he’d lost about $730,000 on options trades, a tragedy that raised questions from lawmakers about the wisdom of letting inexperienced investors use tools normally deployed by professionals. A spokesman for Robinhood said the company is constantly working to improve its products and communications with customers.

As for eToro, it has long used a derivative called a contract-for-difference to let retail traders easily apply leverage and execute short positions on securities, commodities, and cryptocurrencies. In 2019, the U.K. Financial Conduct Authority imposed new restrictions on the sale of these instruments, including guaranteeing customers’ losses don’t exceed the funds in their accounts. The U.S. prohibits contracts-for-difference.

In making it easier than ever to copy amateurs, sell short, and use borrowed money — eToro’s limit for stocks is 5 to 1 — the platforms are magnifying risk and fueling speculation, says Rainer Lenz, the former chairman of Finance Watch, a Brussels-based organization.

“You should not be selling these products and tactics to retail investors,” says Lenz, a professor of finance at Germany’s Bielefeld University of Applied Sciences. “It just promotes gambling.”

Yoni Assia, the 39-year-old co-founder of Tel-Aviv-based eToro, counters that the site isn’t rife with reckless trading behavior and the company urges its customers to exercise caution in the markets. It's just a new model.

Yoni Assia
Photographer: Chris Ratcliffe/Bloomberg

“Traditional financial institutions don’t really offer a relevant experience for our generation,” said Yoni Assia, the 39-year-old co-founder and chief executive officer of eToro. “We expect everything to be in real time, to be mobile, and to be social. That’s what differentiates our platform.”

In any event, he may have a tough time bringing its CopyTrading product into the U.S., at least in its current form. While there’s no law barring the practice, securities lawyers say firms may face liability if traders on their books aren’t registered investment advisers. Sharing opinions about stocks on eToro’s social media feed and influencing how customers invest could constitute recommendations as defined by the Financial Industry Regulatory Authority, said Adam Gana, a securities attorney with Gana Weinstein in Chicago.

EToro, which already provides copytrading for cryptocurrencies in the U.S., says it’s planning to introduce the same offering for equities after it irons out the details. Ads promoting the practice starring comic actor Alec Baldwin rapping about stocks and cryptocurrencies are already live on YouTube in other markets. Chances are the move will open a new legal frontier in retail investing.

“This is going to be scrutinized by regulators,” said Amber Allen, general counsel for Fairview Investment Services, a North Carolina firm that advises and manages legal compliance matters for investment companies. “At the moment, there’s not much in this space to address this model.”

For young consumers hungry for new ways to play the market, eToro may be the next step in the evolution of personal investing. It has ambitions to be more than brokerage and is preparing to issue a debit card just like Robinhood does. And eToro’s customers can copy more than other traders — the firm produces its own version of mutual funds called CopyPortfolios. They assemble securities under a theme — its InTheGame offering, for instance, comprises stocks of companies connected to the gaming industry. Another offering mimics the trades of legendary investor Warren Buffett.

“EToro could potentially carve out a niche but it would be going after the same young clients as Robinhood,” said Michael Wong, an analyst with Morningstar who covers the brokerage industry. “Then again, many people, including me, didn’t believe Robinhood would make a dent, so maybe eToro’s social networking will make a difference in a changing market.”

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From: Julius Wong10/21/2020 9:16:05 AM
2 Recommendations   of 196
Bitcoin continues surge as PayPal launches crypto service in run at Square

In competition with Square's service that allows users to buy and hold Bitcoin ( BTC-USD), PayPal Holdings (NASDAQ: PYPL) introduces a new service that enables customers to buy, hold, and sell cryptocurrency directly from their PayPal account.

In addition, PayPal signals plans to increase crypto's utility by making it available as a funding source for purchases at its 26M merchants.

PayPal jumps 3.7% in premarket trading. As for Bitcoin, it's continuing its big rally, up another 4.6% today $12.4K. That's the highest level in two months and closing in the strongest since early 2018. GBTC +4.7% premarket.

PayPal has been granted the first conditional Bitlicense ever issued by the New York State Department of Financial Services.

The company is introducing the ability to buy, hold and sell select cryptocurrencies, initially featuring Bitcoin, Ethereum, Bitcoin Cash and Litecoin, directly within the PayPal digital wallet. The service will be available to PayPal accountholders in the U.S. in the coming weeks. It plans to expand the features to Venmo and select international markets in H1 2021.

There are no service fees when buying or selling cryptocurrency through Dec. 31, 2020, and there are no fees for holding cryptocurrency in a PayPal account.

Beginning in early 2021, PayPal customers will be able to use their cryptocurrency holdings as a funding source to pay at PayPal's 26M merchants worldwide.

Square (NYSE: SQ) slips 0.7% in premarket trading on the same day when JPMorgan and Visa also introduce services in competition with the fintech.

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From: Glenn Petersen10/22/2020 3:47:58 PM
   of 196
Central Bank of Bahamas Launches Landmark ‘Sand Dollar’ Digital Currency

Oct 21, 2020 at 08:51 UTC
Updated Oct 21, 2020 at 13:50 UTC

Sand dollar (Laura Summers/Unsplash)

The Central Bank of the Bahamas has officially launched its national digital currency.

The first of its kind in the world to have been fully deployed, the sand dollar is a digital version of the Bahamian dollar.

Issued by the country’s monetary authority as a central bank digital currency (CBDC), the announcement of the launch came via a tweet on Wednesday.

The project is designed to bring more “inclusive access to regulated payments and other financial services,” per the central bank’s FAQ.

CBDCs have been a hot topic this year; China, for instance, appears to be close to launching its digital yuan, which in recent days has seen its biggest public trial. Others, like the U.S., Russia and the European Union are looking into their respective CBDC launches.

As reported by CoinDesk, the first phase of the Bahamas rollout sees private-sector players such as banks and credit unions readying compliance checks for personal and enterprise wallets to support the sand dollar.

The digital wallets will be secured with multi-factor authentication security and will be mobile-based, servicing the 90% of the population with smartphones.

Underserved communities of the Caribbean nation are the primary target of the initiative, which the bank said would reduce financial service delivery costs and boost transactional efficiency. The country is an archipelago with hundreds of islands, placing limits on traditional infrastructure.

The Sand Dollar is backed 1:1 to the Bahamian dollar (BSD), which, in turn, is pegged to the U.S. dollar.

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To: Glenn Petersen who wrote (141)10/24/2020 10:00:56 PM
From: Following-Mr.Pink
   of 196
state-backed digital currencies just seems like such a natural event. but I'm sure only China is able to pull this off considering how much treasuries they have and their tight capital controls for their currency

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To: Following-Mr.Pink who wrote (145)10/24/2020 11:18:59 PM
From: Glenn Petersen
   of 196
Yes digital currencies are inevitable and China certainly has a good head start on the rest of the world. The U.S. is still in the starting gates.

Asia is the cutting edge for fintech.

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To: Glenn Petersen who wrote (146)10/27/2020 7:36:11 PM
From: Following-Mr.Pink
   of 196
Helps that they're like a closed ecosystem... it's like we're handicapped by the credit card.

Because China's in a p2p system, they can do micropayments and merchants can see directly who the customer is. Additionally, Asia also seems to be the fertile ground for social and consumer applications as well; the monetization of groupchats and video platforms seems to be where we're heading here in the US with all the FaceBook properties (Instagram / Messenger / etc.) and Snapchat.

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From: Julius Wong11/2/2020 9:39:43 AM
   of 196
Lufax Proposes Terms For $2.2 Billion U.S. IPO


* Lufax has filed to raise $2.2 billion in a U.S. IPO.

* The firm has developed an online portal that provides credit facilitation and wealth management services in China.

* LU has performed admirably during the COVID-19 pandemic and the IPO is worth a close look.

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To: Julius Wong who wrote (148)11/2/2020 10:57:42 AM
From: Glenn Petersen
   of 196
Chinese fintech giant Lufax plans international push as $2.36 billion U.S. IPO gets off to a rocky start

Arjun Kharpal


-- Chinese fintech giant Lufax is laying the groundwork for international expansion over the next five years, following a cash injection from its U.S. IPO, the company’s chief executive told CNBC.

-- Lufax started trading on the New York Stock Exchange on Friday raising around $2.36 billion.

-- Lufax CEO Greg Gibb said countries in Southeast Asia could be “a great long-term opportunity.”

SHANGHAI — Chinese fintech giant Lufax is laying the groundwork for international expansion over the next five years, following a cash injection from its U.S. IPO, the company’s chief executive told CNBC.

Lufax started trading on the New York Stock Exchange on Friday raising around $2.36 billion. The stock fell as much as 14.3% on debut but pared some of those losses to close at $12.85 per share, around 4.8% lower than the $13.50 offering price. U.S. stock markets sold off last week.

The company, which partners with financial institutions to offer small business loans and wealth management products via its platform, is starting to weigh a bigger overseas push after a small initial foray.

“The way we look at the international side, particularly South East Asia, is a great long-term opportunity. In many of the markets in Southeast Asia, you add it up, it’s still smaller than a province in China, so our immediate priority for the next three of four years in terms of growth is clearly the domestic market,” Greg Gibb, CEO of Lufax, told CNBC in an interview that aired Monday.

“But if you think about the changes going around Hong Kong, Greater Bay, opening up those links there, we think it’s the right time to start to put some preparation in place for what, five years out, could be quite interesting.”

The Greater Bay Area is a plan by China to connect Hong Kong and Macau and major cities in South China.

In 2017, Lufax launched a wealth management platform in Singapore. It has also launched services in Indonesia and Hong Kong. But income from international operations are “not yet material” to the business, according to the IPO prospectus.
Gibb said that the push overseas will involve partnering with local brands but with Lufax technology behind the product. The company touts its ability to use data and artificial intelligence to help effectively match customers to the right financial product.

U.S. listing

Lufax went public in New York despite the tensions between the U.S. and China. Lawmakers in Washington are pushing for greater scrutiny of Chinese companies through proposed legislation that threatens to delist some firms in the U.S.

Other Chinese firms have increasingly looked to markets in Shanghai and Hong Kong for IPOs or secondary offerings. For example, Alibaba, and NetEase, three companies listed in the U.S., carried out secondary listings in Hong Kong.

Ant Group meanwhile will carry out a dual listing in Hong Kong and Shanghai on Thursday in what is expected to be the world’s biggest IPO.

But Lufax is not alone in listing in the U.S. Chinese carmakers Xpeng Motors and Li Auto both went public on Wall Street earlier this year.

“Our view is that we are a Chinese company that has a lot of transparency that actually welcomes being on a global stage. We think that… New York is a great place for us to start, it gives us the access to the right investors, to the right analyst coverage,” Gibb told CNBC in response to a question about listing in New York.

“As you know, over the longer term, you have many options as to what you can do. But for now we think this is the good first step.”

When asked if the company had discussed a secondary listing in Shanghai or Hong Kong, Gibb said it’s “not something that we immediately plan” for but “if we had to pull the trigger it’s reasonably straightforward.”

Regulatory risk

Lufax was once a peer-to-peer lending giant in China. But tougher regulations on the sector from Chinese authorities forced the company to scale back on that business. In 2019, Lufax exited peer-to-peer lending.

Regulatory risks are certainly high for fintech companies in China where the rules sometimes struggle to catch up with the technology.

Gibb said that Lufax is well-equipped to deal with any changes from regulators down the road.

“One of the things which is true about China in general is it changes very quickly. The market changes very quickly, the regulations are changing to keep up with the market, one of our marks of success, the reason that we’ve actually brought the company public now, is because we think the regulatory framework has improved a lot over the last couple of years,” Gibb told CNBC.

“If you went back five years ago one of the issues with fintech in China was there wasn’t much regulation and that led to its own set of problems for others. But we think actually the goalposts are increasingly clear. The regulatory risk are declining. There will always be change. But one of our key strengths that we have developed over this period is the ability to pivot when you need to and always have a plan B.”

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From: Glenn Petersen11/21/2020 5:10:56 PM
   of 196
Lagarde Says Her ‘Hunch’ Is That ECB Will Adopt Digital Currency

Alexander Weber

(Bloomberg) -- European Central Bank President Christine Lagarde signaled that her institution could create a digital currency within years in what would be a dramatic change to the euro zone’s financial sector.

“My hunch is that it will come,” Lagarde said Thursday during a virtual panel discussion hosted by the ECB. “If it’s cheaper, faster, more secure for the users then we should explore it. If it’s going to contribute to a better monetary sovereignty, a better autonomy for the euro area, I think we should explore it.”
The president said it might be two to four years before the project could be launched as it addresses concerns over money laundering, privacy, and the technology involved.

That’s still fast compared to its peers. On the same panel, Federal Reserve Chair Jerome Powell and Bank of England Governor Andrew Bailey reiterated their caution. Powell said the Fed will “carefully and thoughtfully” review the issue, and Bailey said there’s a “lot of hard work to think through the implications.”

The ECB took a major step last month by launching a public consultation that runs until the middle of January. Policy makers intend to decide around mid-2021 whether to initiate a full-fledged project and prepare for a possible launch.

China is also advance with plans for a central-bank digital currency.

“We’re not racing to be first,” Lagarde said. “We are moving ahead diligently, not incautiously. We will be prudent.”

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