Topic: [ANN][NOTE]DNotes - Celebrating DNotes 3rd Birthday - Forum Now Open - page 32. (Read 814539 times)

This is potentially a great use case of blockchain technology, worth following.


Bitcoin Technology’s Next Big Test: Trillion-Dollar Repo Market
Blockchain, the virtual currency’s digital ledger application, to be tested on repo transactions

By
KATY BURNE and
 
TELIS DEMOS
Updated March 29, 2016 12:53 p.m. ET

Depository Trust & Clearing Corp., a firm at the center of Wall Street’s trading infrastructure, is about to give the technology behind bitcoin a big test: seeing whether it can be used to bolster the $2.6 trillion repo market.

DTCC said in a statement Tuesday that it will begin testing an application of blockchain, the digital ledger originally used to track ownership and payments of the cryptocurrency bitcoin, to help smooth over problems in the crucial but increasingly illiquid corner of short-term lending markets known as repurchase agreements, or “repos.”

Repos play a critical role in the financial system by keeping cash and securities circulating among hedge funds, investment banks and other financial firms.

DTCC, an industry-owned utility that helps settle trades in the repo market and elsewhere, wants to apply blockchain technology to the market, so that lenders and borrowers can keep track of securities and cash flowing between firms in real time.

To test blockchain’s ability to improve repo trading, DTCC has tapped Digital Asset Holdings LLC, a startup run by former J.P. Morgan Chase & Co. executive Blythe Masters. Earlier this year, DTCC invested in the firm focused on blockchain applications, along with a range of banks including J.P. Morgan, Goldman Sachs Group Inc., and others.

Typically in repos, money-market funds lend cash to brokers in exchange for bonds and an agreement to buy back the securities later at an agreed-upon rate. During the financial crisis however, problems in the repo markets were singled out for their role in the demise of Bear Stearns and Lehman Brothers Holdings Inc.

Now, big banks have been shying away from facilitating some repo trades due to new regulations that curtail the firms’ ability to take risks.

Murray Pozmanter, managing director and head of clearing services at DTCC, said in an interview the new arrangement with Digital Asset should help because the ledger would provide a way for all firms to agree on trade terms more quickly.

Currently, he said, traders have to process two legs of each trade separately: one for the borrower to deliver securities in exchange for cash, and the other in which DTCC unwinds the trade. While the trade is in motion but not yet completed, the banks involved can take on risk.

Using blockchain in the area is still at an early stage and may not be rolled out fully if regulators have concerns or if the banks don’t fully embrace the concept. Repo traders ultimately may be slow to embrace changes that they fear could be cumbersome or hurt their competitive position.

But some bankers have been eager to explore blockchain as a way to save money and to make it easier to meet capital rules that apply to the trades. Autonomous Research estimates that $120 billion worth of capital annually is tied up in transactions between Wall Street firms, and that blockchain could reduce that by $6 billion. Those billions could be returned to shareholders or used to fund more profitable activities.

DTCC officials say they may roll out blockchain technology to other markets outside of repos. Startups such as Digital Asset, Symbiont.io and itBit Trust Company LLC are competing with each other and with banks’ own internal efforts to launch new blockchain-based systems. Working with a utility such as DTCC could be a shortcut to becoming a default technology, says Ms. Masters of Digital Asset.

“Working with DTCC is much easier than going to talk to all the participants in the repo market separately and persuading them to adopt a new technology,” said Ms. Masters, who was appointed Digital Asset’s chief executive last year after a 27-year career at J.P. Morgan that included stints as head of global commodities and chief financial officer of the firm’s investment bank.

Even if blockchain does speed up repo trading by a few seconds, the market is grappling with other issues. The Wall Street Journal reported late last year that DTCC is seeking $50 billion in commitments from member banks and trading firms as a credit line to shore up the finances of its subsidiary, the Fixed Income Clearing Corp., which clears repos already between big banks and broker-dealers.

DTCC’s fixed-income unit is also considering expanding its membership to large investment firms and money-market funds.

Write to Katy Burne at [email protected] and Telis Demos [email protected]

Source: http://www.wsj.com/articles/bitcoin-technologys-next-big-test-trillion-dollar-repo-market-1459256400

Thanks kanus, I do have something in mind for sort of showing off the content you will find inside. Once we have some more content I will try a few things out.

Looking good guys, very professional. Excited to see what you have to offer. Recommend having a little bit of the content available prior to becoming a member.

It has been a lot of hard work but I am very happy with how things have been coming together, thanks to many from our community who have been giving me a great deal of help.

The book is a significant foundation block for DNotes. Once you get to read the DNotes Story - Chapter 15, as narrated by "TeeGee", you will get a much clearer picture of the DNotes' Vision and the amazing journal ahead. DNotes is a currency with a purpose. Our journal just began.

Thanks Chase.

Yep, the first year we will be building content and creating value.

It's getting really close now! This will help launch DNotes into the next phase of it's progression.

The new site looks fantastic!!

The membership fee for the entire first year is only $1 - awesome!

All that hard work is about to pay off. 

The new membership site is almost ready. Feel free to take a look and comment.

https://fourpillarsofbusinesssuccess.com/

http://dcebrief.com/increasing-regulation-is-it-a-threat-to-cryptocurrency/

"a confusing array of influences -- blah blah blah"

Hard to disagree, Mark. Our industry is reminding me of the proverbial
“too many cooks spoil the broth”

Satoshi had it perfect and now some of the stripped-down versions .... well ----  are beginning taste like spoiled broth.

That is quite an impressive number. Technically, every cash register can be an ATM, if regulatory compliance is not an issue. However, I am concern about the hidden fees and unfavorable exchange rates in certain cases, especially, if used as regular means of saving for retirement. As an example; you want to save $114 but only $100 is deposited into your account. (You purchased $100 worth of Bitcoin plus $14 in fees) It may be okay to get an account started but not too attractive on a regular basis.

"My advice is that companies should play very close attention to what is happening, because this will not go away," he said.  Layers of middlemen in payments systems face a creeping threat across the nexus of commerce, stockbroking, currency trading or derivatives. Many risk extinction over time."

http://www.telegraph.co.uk/business/2016/03/13/central-banks-beat-bitcoin-at-own-game-with-rival-supercurrency

My Bet is: a confusing array of influences -- blah blah blah -- will result in an interim phase of faster capital growth in non-free cryptos/blockchain projects. Then though . . . folks are gonna say, 'What? Cryptos that are a 'tool of state control'? Nah . . . let's try these 'free cryptos' that we've been hearing about!'

Mark (IndiaMikeZulu), Australia

The list of outlets for easy bitcoin purchasing seems to grow every day:


Buy bitcoin with cash at up to 633,000 outlets in over 40 countries

http://bravenewcoin.com/news/buy-bitcoin-with-cash-at-up-to-633000-outlets-in-over-40-countries/

Although the article below is about FinTech, it certainly applies to digital currency and the blockchain.

I like the concluding statements, "especially if you care about financial innovation, keep in mind that a solid foundation is the most important thing in building anything new and meaningful. Bridge or otherwise."

Fintech Lessons From a Troubled Bridge Over New York’s Waters
March 24, 2016 Gregg Schoenberg

(FinTech) Disruptor hubris. If we had a dollar for every time we’ve reheard the metaphor comparing banks to dinosaurs or to the taxi services being put out of business by Uber, we’d have enough to own a unicorn. Underpinning this attitude is the idea that fintech start-ups will somehow obliterate the incumbent financial services industry in the next few years. We think that this unlikely because fintech isn’t “another sector.” And while there will continue to be some “us against them” tension, the divisiveness is unwarranted; incumbents and start-ups are part of the same family. Fintech start-ups seek to satisfy the same needs as incumbent firms and while free from legacy encumbrances, many have too few customers, too much confidence and too little respect for the regulatory environment in which they operate. Over time, promising companies based on solid technologies could falter as a result.

·       Fintech is becoming too hyped in certain areas. Even though venture funding cooled in Q4, 2015, deal activity remains high, as do valuations, especially on the consumer side of fintech. Accelerators, incubators and now start-up factories have cropped-up to participate in the global fintech boom. Many of these initiatives are crucial, since they compensate for the lack of financial services innovation in the years leading up to the financial crisis. Unfortunately, half-baked business models, me-too companies and fintech “tourist” investors looking for a quick trade seem to be on the rise as well.

·       Some large incumbents are riding the fintech wave without a plan. Just as politicians, commissioners and contractors jumped on the Manhattan Bridge project over a century ago, it now seems that every major incumbent is getting fintechier. Although some large banks, payments companies, insurers and asset managers are making solid progress, others seem to be grasping. One reason may have to do with the boards overseeing large firms, which often consist of prominent financial and corporate executives whose last personal brush with technology involved a Commodore VIC-20. With some notable exceptions, you’d be challenged to find many large firms represented by directors who have more than a topical understanding of cloud computing, enterprise software or artificial intelligence, let alone how these innovations can reshape the financial services world. Would you want to ride across a bridge whose construction was overseen by non-engineers?

If you find yourself in lower Manhattan or Brooklyn this Spring, we encourage you to reflect upon the Manhattan Bridge in between your admiring gazes at that other bridge. And when you do, and especially if you care about financial innovation, keep in mind that a solid foundation is the most important thing in building anything new and meaningful. Bridge or otherwise.

Source: http://www.thefinancialrevolutionist.com/opinion/2016/3/24/fintech-lessons-from-a-troubled-bridge-over-new-yorks-waters

Yes indeed, totally correct but, people tend to only hear and see what catches their attention in this over busy world of ours. The news that makes the most noise is still the sensational/loud/in your face stuff. The stuff that sells commercial and ad space, that keeps inferior information outlets in business. We need to come up with a way for the good stuff to generate the same kind of interest. Not an easy task by any means but, I believe, doable in the long run.

Loved the article, he made some great points. Because of mt gox, perception is that is not secure, or because of silk road, perception is that is used for illegal activities. When in reality those are just individual cases.

"A couple of 'real-life' metaphors are also helpful to put these events in perspective: just like the Lehman Brothers bankruptcy that didn’t signal that 'USD is a scam, or USD is insecure', or that a recent $1bn drug bust in San Diego didn’t mean 'USD is only used by drug dealers', it’s important to realize that Silk Road and Mt Gox were also outlier events, and predominantly a function of the people involved rather than the ‘currency’ being used."

This is a pretty good article, worth the read, from Marcus Swanepoel is the CEO of BitX, Why Bitcoin’s Bad Reputation is in the Eye of the Beholder

As an industry insider, it is sometimes very hard to admit that bitcoin suffers from serious negative perception issues: that in the minds of many people bitcoin is still automatically linked to thoughts of drugs, terrorist financing and money laundering.

Needless to say, this has massive implications for all potential stakeholders: It slows down consumer adoption, it has regulators set the bar unreasonably high for bitcoin companies to operate and many banks still refuse to provide bitcoin companies with simple operating accounts.

All of this results in the stifling of innovation, the creation of an unfair competitive environment, and ultimately, a negative connotation for the consumer who is meant to reap the benefits of this new and useful technology.

We’ve spent enough time with all these stakeholders to reasonably assert that most of these concerns are driven by perception and emotion, rather than facts and data. Are there risks around bitcoin? Yes, of course – they exist in all financial systems.

[...]

PoloniEx updated their API, so I have updated the Accumulator bot accordingly, you may download here. Been working on the membership site for most of free time, hopefully I will have time to work on these bots a bit more shortly.

http://dcebrief.com/access-the-key-to-bitcoins-future/

Yesterday was an interesting day for DNotes. I hope most of the buying was for long term investment. DNotes has significant long term potential based on what we are working on. Near term - it's anyone's guess. The market is still highly volatile.

67   DNotes DNotes   $ 935,127   $ 0.008486   110,191,427 NOTE   $ 6,424   35.53 %

It's helpful not to run about in the rain every time the price lifts, but this rise has doubled the amount of crypto I have liquid for the Cryptopia effort. (Tee hee -- I have a strict 'exchange-risk protocol,' so I don't trade NOTE on Poloniex 'cause I trade other cryptos there, and those keep me 'at my limit' there.)

Mark (IndiaMikeZulu), Australia