Dec 7, 2020

67% of millennials choose Bitcoin over gold, says deVere

Bitcoin
Cryptocurrency
Ethereum
deVere Group
William Girling
2 min
67% of millennials choose Bitcoin over gold, says deVere
Financial consultant deVere Group’s latest survey indicates that the majority of millennials now consider Bitcoin a safer investment than gold...

Financial consultant deVere Group’s latest survey indicates that the majority of millennials now consider Bitcoin a safer investment than gold.

Using a sample of over 700 millennial clients from around the world, 67% responded that the popular cryptocurrency, which reached a trading peak of US$19,864 last week, its highest ever, has supplanted the historically valuable metal in their estimations.

The answer, speculates deVere Group CEO and Founder Nigel Green, could be indicative of a significant generational shift, “our world is becoming increasingly tech-driven and cryptocurrencies are, of course, digital by their very nature.”

Seeking alternatives

It may seem extreme to posit that gold, which has acted as a store of value for over 4,000 years, could be replaced by a digital equivalent marked by a history of price volatility.

However, Green considers the eroding faith in fiat currencies as a result of central bank inflation to be a root cause. Global crises like the COVID-19 pandemic only serve to exacerbate this problem on a more pervasive level. 

“If you are flooding the market with extra money, then in fact you are devaluing traditional currencies – and this, and the threat of inflation, are legitimate concerns to a growing number of investors, who are seeking alternatives.”

Bitcoin, much like gold, is a finite resource with a pre-set limit on the amount in circulation at any one time. Combined with its decentralised and digital nature, the cryptocurrency, despite its flaws, does bring constancy where fiat currencies seemingly do not.

Gaining influence

It should be noted that cryptocurrencies are also gaining favour with some HNW investors and leading financial services companies. 

On 2 December, Visa announced its partnership with Circle Internet Financial on ‘US Dollar Coin’ (USDC), an Ethereum-based digital currency. 

Also, Mastercard revealed it had invested in a “massive trove” of cryptocurrency patents to ‘get ahead of the game’ of Central Bank Digital Currencies (CBDC), which it projects will become a real possibility. 

Long-term interest from these two parties appears to suggest that cryptocurrencies are only expected to gain prominence over time. Indeed, as Green notes, in a year which saw great financial turbulence, Bitcoin’s ability to nevertheless grow in value by 170% is surely indicative of something with long-lasting appeal.

“Bitcoin has been around a little more than a decade, but already accounts for more than three per cent of gold’s $9trn market cap.

“As the world continues to shift towards tech and as millennials become a more dominant part of the world economy, we should expect Bitcoin to also take an increasingly influential role in financial markets, especially in regard to being a ‘recession-proof’ asset.” 

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Jul 29, 2021

BIS and MAS publish blueprint for cross-border payment idea

Fintech
BIS
MAS
transfers
2 min
The Bank for International Settlements and the Monetary Authority of Singapore have published a blueprint for real-time payment systems across borders

The Bank for International Settlements and the Monetary Authority of Singapore (MAS) has published a proposed blueprint for the multilateral linking of domestic real-time payment systems across borders.

The blueprint, titled Project Nexus, outlines how countries can fully integrate their retail payment systems onto a single cross-border network, allowing customers to make cross-border transfers instantly and securely via their mobile phones or internet devices. 

The Nexus blueprint was developed through consultation with multiple central banks and financial institutions across the globe. It builds on the bilateral linkage between Singapore's PayNow and Thailand's PromptPay, launched in April 2021, and benefits from the experience of the National Payments Corporation of India's (NPCI) development and operation of the Unified Payments Interface (UPI) system.

The Nexus blueprint comprises two main elements: 

  • Nexus Gateways, to be developed and implemented by the operators of participating countries' national payment systems, will serve to coordinate compliance, foreign exchange conversion, message translation and the sequencing of payments among all participants. These gateways will be predicated on a common set of technical standards, functionalities and operational guidelines set out within the proposal. 
  • An overarching Nexus Scheme that sets out the governance framework and rulebook for participating retail payment systems, banks and payment service providers to coordinate and effect cross-border payments through the network. 

“To achieve significant cost-reduction in cross-border payment transfers, enhancements must be made on two fronts: direct connectivity between domestic faster payment systems, and frictionless foreign exchange on shared common wholesale settlement infrastructures. The BIS Innovation Hub Singapore Centre is working on both. The Nexus project maps out a much-needed set of standards to achieve seamless cross-border payment systems connectivity.” said Sopnendu Mohanty, Chief FinTech Officer, MAS.

 

How do cross-border payments work?

 

Cross-border payments are currency transactions between people or businesses that are in different countries. The sender will choose a front-end provider, such as a bank or a money transfer operator (e.g. Transferwise), to initiate the payment. The receiver then receives the payment via the medium specified by the sender. Traditionally, cross-border payments flow via the correspondent banking network (CBN) which most front-end providers use to settle the payment. But, in recent years, new back-end networks emerged to optimise cross-border payments and enable interoperability between payment methods and provide senders with more possibilities to reach the receiver.

The increased international mobility of goods, services, capital, and people have contributed to the growing economic importance of cross-border payments. The value of cross-border payments is estimated to increase from almost $150 trillion in 2017 to over $250 trillion by 2027, equating to a rise of over $100 trillion in just 10 years.

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