Connect with us

Wealth Management

FROM EFFICIENCY TO NEW INVESTMENTS – WHY BLOCKCHAIN IS MORE THAN MEETS THE EYE

Published

on

Thomas Borrel, chief product officer at Polymath

 

Blockchain has been an extremely hot topic in 2021. With companies and financial institutions internationally having to adapt to an increasingly digital world, the true potential of blockchain is becoming increasingly clear. We have seen hospitals using the technology to track vaccine distributions, major blue-chip companies floating digital assets or ‘stablecoins’, even progress made by central banks in piloting and adopting digital currencies

When it comes to the world of finance, much of the attention has focussed on the booming price of Bitcoin, and there has been much excitement around using cryptocurrencies as an alternative investment. However, the real potential of blockchain technology stretches far into traditional finance and beyond.

 

Improving access to investment options

Security tokens created and issued on the blockchain are already being used to improve efficiency in a variety of more traditional asset classes, ranging from real estate to green bonds. The Sustainable Digital Finance Alliance (SDFA) and HSBC Center of Sustainable Finance recently joined forces to highlight how security tokens for green bonds can reduce management costs and increase operational efficiency by up to ten times. And in early 2020, RedSwan CRE Marketplace tokenised $2.2B in commercial real estate, making it one of the biggest tokenisations we’ve seen so far.

Thomas Borrel

However, the potential of tokenisation does not only stand to improve the process of trading traditional assets; blockchain can also open up the pool of investors able to participate. To date, the focus has been on how fractionalisation brings benefits to retail investors by lowering the bar to entry. However, the retail regulations are still very stringent, which is important to protect non-professionals from disproportionate losses.

Tokenisation can be used to enable large institutional investors to buy into smaller projects. Referred to as aggregation, this process can be used to bind assets together so that they meet an institution’s minimum investment threshold. Because of the transparency of blockchain, the investor is still able to inspect each individual offering and ensure each element meets their quality and risk requirements, but by packaging it into one larger token, an institution can diversify with assets that would have otherwise flown under its radar.

 

Optimising efficiency and minimising risk

Risk management and operational efficiency are usually at the core of any financial institution’s wider strategy. However, no matter how much firms optimise their own processes, there are a range of financial instruments that are still very prone to issues in these areas, especially those that are traded ‘over the counter’ (OTC). The best example of this is likely the bonds market – a multi trillion-dollar market, where OTC trades are still common practice.

When an OTC trade is conducted, it is often so over the telephone – one person calling another to make a deal. This introduces significant information risk with securities operations teams reporting error rates as high as 40%. When instructions for the trade are passed on to the custodians, they will spot the discrepancy. They then have to investigate and find out what has gone wrong, often resulting in very long delays to settlement times.

Blockchains go a long way to solving this problem, providing transparent access to trade and clearing information so that operational issues can be caught earlier and help mitigate settlement risk (i.e. settlement failure). For example, on Polymesh settlement instructions must be affirmed prior to settlement, in a case where an OTC trade has been improperly captured by one counterparty, the counterparty which has affirmed the instruction can see that the other counterparty has not affirmed the instruction within a defined period. In this way, the affirming counterparty can reach out proactively prior to the settlement date to rectify the situation and avoid settlement failure.

Trading on blockchain also generates an easily accessible, secure ledger of trading information. When it comes to reporting in traditional asset classes, the process is highly manual and often expensive. But, with a blockchain solution, reporting is built into the ecosystem from the ground up. There are no significant additional costs or resources required to extract this data and share it where necessary, and the number and complexity of the steps required to complete reconciliations between different entities are reduced and simplified.

 

Is tokenisation a ‘cover all’ solution?

Fundamentally, certain traditional asset classes are not right for the blockchain yet. Instruments with well-established frameworks, like publicly traded stocks, already have very well-formed, rigorous rails in place, and so transferring to a blockchain could cause disruption and incur unnecessary costs.

It is very common to hear blockchain advocates claiming that blockchain technology should be introduced into every corner of the finance space, which is misguided. Blockchain should be introduced where it brings value to investors or institutions. It should be about augmenting and supplementing the marketplace – not overhauling it, or at least not until the incumbent systems no longer keep up with demand.

The costs and infrastructure associated with capital markets have made some assets – like green bonds or real estate – too expensive to bring to market and service, or too difficult to invest in. These use-cases are examples of where tokenisation can really shine.

Blockchain is an extremely powerful tool, with a range of exciting applications and potential benefits for businesses and financial institutions, ranging from risk management and efficiency through to enabling new investments. However, as with any product, it isn’t the answer to all problems, and must be treated as a powerful enabler – not as an agitator.

 

Top 10

TIPS FOR GETTING STARTED WITH CRYPTOCURRENCY

Published

on

By

Cryptocurrency has taken the world by storm in recent years. After years of operating under the radar, it has exploded into the mainstream and captured the imagination of millions across the world. If you are new to the world of cryptocurrency, it can be impossible to know where to begin. By following these handy tips and tricks, you can find out everything you need to know about trading cryptocurrency and prevent yourself from getting caught up in the hype and making a number of mistakes that can cost you time and money in the long run.

 

Pick a strategy

The process of getting involved with cryptocurrency can be stressful. There are a number of steps you can take early on to ensure you are putting your best foot forward and protecting yourself and your assets at all times. Before you dive in and get lost in the sheer volume of cryptocurrencies available to the everyday trader, you must first choose a strategy. This will provide you with a basic framework to guide you from start to finish. It can also mitigate the financial risk involved with trading cryptocurrency by making a series of decisions for you on your behalf. A strategy is not required but it is recommended. It can allow you to respond accordingly and bounce back in the event of a sudden market crash. There is no universal correct answer when it comes to selecting the right one for you. It will usually include asset classes, setups, tools, and triggers. You can also use your strategy to set out how and when you will trade. By establishing a personalised schedule ahead of time, you can inject some structure and routine into your trading strategy. There are plenty of strategies out there, including DeFi Yield investing, which allows you to earn interest on crypto that you hold and stake it against other coins. Check out a reputable DeFi Yield platform such as Unagii, to see if this is the right option for you.

 

Pick an exchange

Before you invest in cryptocurrency, you must research which companies offer exchange services. A cryptocurrency exchange, or digital currency exchange, is a business that allows you to trade cryptocurrencies for assets or money. This can influence where you trade, how you trade, and the community within which you will trade. These are all important factors that must be considered before you embark on your cryptocurrency journey. As you gradually familiarise yourself with the ins and outs of trading, it may benefit you to stick to reputable, well-known sources and purchase your cryptocurrency from reliable exchanges. You may end up spending a bit more than you intended to, but you are less likely to be ripped off. By knowing how to spot fraudsters from afar, you can prevent yourself from losing time and money and earn high yield staking rewards on your assets. Once you complete a transaction, all sales are final. There is no way to retrieve your cash, and banks will be unwilling to help. If it seems too good to be true, it probably is.

 

Automate your trading

Cryptocurrency is a 24/7 global market. It never sleeps. It is impossible to keep up to date with each minor or major development that may affect your assets. The constant desire to track each cryptocurrency can lead to burnout, dependence and even addiction over time. To prevent this from happening, you may benefit from automating your trading strategy. There are a number of tools and platforms out there designed to help you monitor your cryptocurrency without becoming exhausted. They work by tapping into a series of algorithms and processes to trade based on asset price, technical indicators and the proportion of value within your portfolio. Modern automated cryptocurrency trading platforms may also operate on the blockchain. This can be a great option for those new to the world of cryptocurrency trading or with a little less time to spare. Shop around to find the right trading bot to suit you and your lifestyle.

 

Build a portfolio

A solid cryptocurrency portfolio can stand the test of time. There are several factors you must consider when deciding which cryptocurrencies to invest in to build on your existing portfolio. Putting all of your eggs into one basket is never a good idea. By diversifying your assets, you can provide a sense of stability and dependability within such a volatile and destructive market. You can also reduce the risk of financial ruin in the event of a market crash. When it comes to establishing a portfolio and welcoming a brand-new addition, you must evaluate market cap, circulation supply, and total supply. Investing in a single asset can be a recipe for disaster. Distribute risk to a number of different coins and manage your portfolio by making small changes or adjustments over time.

 

Be patient

Patience may not be the first thing that springs to mind when you think of trading cryptocurrency, but it should be. Those looking to make a quick buck are often disheartened to learn that it takes time and patience to make a solid return on investment on cryptocurrency. The market may be volatile, but your net worth is unlikely to skyrocket overnight. Take the time to implement the right strategy and ensure it is working for you. Investing in cryptocurrency is a learning curve. Without the right training and guidance, you will make mistakes along the way. However, this equips you to deal with any future problems and allows you to overcome and adapt as necessary. By surrendering to your inexperience and trusting the process, you can learn the ropes and master your strategy over time.

 

Ask for help

There is no shame in admitting defeat or asking for help. Whether you have blown your savings or have a burning question regarding a prospective investment opportunity, it can be easy to try to keep up with the excitement only to find yourself getting lost in the hype. But do not fear; help is out there. Fellow traders were in your position at one point or another. Most people will be willing to help out and provide you with wisdom and advice to help send you on your way. Those involved in cryptocurrency trading are determined to see others succeed and will encourage you to overcome obstacles and keep going in any way that they can. There are countless cryptocurrency trading communities out there. You can interact with others that share the same passions and interests as you and receive help and advice whenever and wherever you may need it. Communities may be established around assets, strategies, beginner guides, universal adoption of cryptocurrencies, or trading platforms. Trading is a personal journey. Joining a cryptocurrency community may provide you with a number of benefits, but you must remember not to become a victim to the hive mentality.

Cryptocurrency can be a minefield. When it comes to investing, it can be difficult to know where to begin. With so much to learn, mistakes are almost unavoidable. By following these handy tips and tricks, you can enter the world of cryptocurrency trading equipped with all of the tools and information required to make an informed decision. Once you have picked a suitable strategy, selected a reputable exchange, automated your trading, and built a portfolio, the fun can begin. You must also remember to be patient and ask for help if and when necessary.

 

Continue Reading

Wealth Management

MOST ESSENTIAL TRADING SKILLS FOR GAINING SUCCESS

Published

on

By

Traders who have certain trading skills can get success easily. But, if you think, you can make money easily, you are wrong. You have to practice more and more to become successful. So, if you’re a lazy person, then, trading is not a suitable profession for you. As trading is a challenging task, you’ve to always go through the continuous learning process. Because, without learning about the new facts of the market, it’s not possible to make a wise decision. But, most of the traders are not properly aware of the situation of the market. For this reason, they make many mistakes.

In this post, we’ll discuss the most essential trading skills which are important for gaining success. So, let’s know about these.

 

Work under pressure

If you can’t deal with the difficulties of the market, it would become difficult for you to make the right decision. Bear in mind, trading puts huge pressure. So, you’ve to take the preparation such a way so that you can do better. But, many traders, due to huge pressure, leave the market for good. However, being a retail trader, if you know the correct strategy, it might be easy for you to do better. Otherwise, you’ll make the constantly wrong decision. For which, you might suffer a lot.

 

Can play the mental game

Without being mentally strong, it’s not possible to be in the game. Traders should increase their mental stamina. Some traders think, they just need to focus on developing technical skills, and risk management skills, but it’s not true. If you can’t control your emotions, you might face trouble. So, being a trader, it’s necessary to do meditation which might aid you to get mental peace.

Sometimes, the situation becomes worst. And so, the traders can’t deal with it. During this situation, if they lose their hope, they might fail to go ahead. However, after trading for a long time, some traders lose their motivation. But, to trade smoothly, it’s important to get back the motivation. Many traders prefer to go on a family trip to relax.

However, being a newcomer, you can also take a break after trading sometimes. As a result, you may also reduce your pressure and thus perform better. Don’t try to trade always. If you do so, it would be stressful for you to take the right steps. Never forget the fact, options trading is all about precision. Unless you are emotionally stable, you should not take any trade regardless of the size of your investment.

 

Have a good knowledge

Newcomers should focus on gaining knowledge about the market. Some traders avoid fundamental knowledge. For this reason, they fail to predict the right thing. If you just observe the graph, you can’t make the right decision. You need to understand the meaning behind this. However, learn to analyze the news properly which might aid you to understand what you need to do. Always keep in mind, technical analysis and fundamental analysis both are important for understanding the market properly. So, give equal importance to the analysis. However, nowadays, traders don’t need to struggle to know about the market. They can easily get the information by searching online.

 

Independent thinker

Always remember, as a trader, you’ve to take your decision. But, some traders can’t act independently. They depend on others. For this reason, they face trouble. However, if they can learn to think by themselves, they might get the success. Bear in mind, without taking responsibility, you can’t reach the peak of the market. So, you should develop the courage level which might aid you to do better.

So, as a trader, if you can develop the mentioned skills, you may make your dream come true. That’s why, start working from now so that you can develop the certain skills, and enhance the knowledge. However, always keep the hope, you’ll achieve your target.

 

Continue Reading

Magazine

Trending

Top 1031 mins ago

TIPS FOR GETTING STARTED WITH CRYPTOCURRENCY

Cryptocurrency has taken the world by storm in recent years. After years of operating under the radar, it has exploded...

Wealth Management47 mins ago

MOST ESSENTIAL TRADING SKILLS FOR GAINING SUCCESS

Traders who have certain trading skills can get success easily. But, if you think, you can make money easily, you...

Business1 day ago

STREAMLINE YOUR BUSINESS FINANCES AND SIGNIFICANTLY INCREASE PROFITABILITY

Every successful and professional business owner knows and truly understands that there is nothing more important and worthy of investing...

News2 days ago

3 AREAS TO INVEST IN WAREHOUSE EFFICIENCY

The logistics industry is entering exciting times. Warehouses, long a relatively static area, now host multiple converging technologies poised to...

Technology2 days ago

WHAT TO KNOW ABOUT ENHANCING THE ORDER-TO-CASH PROCESS WITH ARTIFICIAL INTELLIGENCE

Mark Sheldon, Chief Technology Officer, Sidetrade   The global pandemic has meant companies everywhere have woken up to the fact...

News2 days ago

WHAT’S THE BIGGEST COST-CUTTING MISTAKE IT LEADERS MAKE?

Alastair Pooley, CIO at Snow Software:    The biggest mistake is making short term changes which, in the long run,...

Finance2 days ago

HOW AI IS HELPING FINANCIAL ADVISORS ENHANCE GO-TO-MARKET ACTIVITIES

By Andy Baillie, Vice President, Seismic   Financial services have been utilising artificial intelligence (AI) for a range of services...

Finance2 days ago

HOW RISING CUSTOMER EXPECTATIONS HAVE BECOME A CATALYST FOR CHANGE IN THE FINANCE FUNCTION

Ashish Kwatra, Vice President of Finance & Accounting Solutions at Teleperformance India, discusses what the new generation of customers expect...

Finance2 days ago

ELIMINATING FINANCIAL LEAKS ACROSS YOUR BUSINESS

By: Ray Welsh, Head of Product Marketing, FISCAL Technologies   All businesses are vulnerable to financial leaks, whether your business...

Business2 days ago

HOW SMEs CAN EMBRACE CONTACTLESS, WITHOUT DITCHING CASH

By Tsuyoshi Notani, Managing Director, JCB International (Europe) Ltd.   Already popular, the past year has accelerated the usage of...

Business2 days ago

HOW TO STREAMLINE YOUR HR DEPARTMENT IN 2021

Modernising your HR department through automation is a small step that can make life easier for team members and managers...

News2 days ago

STICPAY ANNOUNCES LOCAL BANK WIRE SERVICE IN HONG KONG

Offers the ability to transfer funds as if you are a local Leading global e-wallet payment provider, STICPAY, has today announced...

News2 days ago

OPEN PAYMENTS GROWTH: TOKEN’S CHANNEL-FOCUSED STRATEGY DRIVING MARKET EXPANSION

Market share statistics from CMA9 banks indicate that Token is driving adoption of open banking payments in the UK Leading...

Finance6 days ago

WHY PEOPLE ANALYTICS WILL PLAY A PIVOTAL ROLE IN SOLVING THE FINANCIAL SERVICES INDUSTRY’S SKILLS CRISIS

Daniel Mason, Vice President EMEA, Visier   Successfully guiding teams of employees through the post-pandemic landscape will not be easy...

Business6 days ago

BECOMING THE CEO: THIS IS HOW CFOS CAN SECURE THE TOP JOB

Mark Freebairn, Partner and Head of the Board and CFO Practices at Odgers Berndtson, explains what CFOs need to do...

Finance6 days ago

AS SAAS GROWS, FINANCIAL SERVICES MUST RETHINK THEIR SECURITY APPROACH

Ben Bulpett, Identity Platform Director, EMEA, SailPoint   The financial services industry is facing an increasing number of issues related...

Finance6 days ago

THE TECH “RENAISSANCE” OF THE FINANCE INDUSTRY – AND WHAT IT MEANS FOR RISK AND OPERATIONAL RESILIENCE

Stewart Griffiths is Co-Founder and CEO of Albany Group   Not unlike most industries, the finance sector went into something...

Business6 days ago

REDUCE CUSTOMER DISPUTES WITH DATA TRANSPARENCY

By Gabe McGloin, Head of Business Development EMEA at Verifi   The digitisation of commerce has escalated the need for...

Finance6 days ago

ATTENTION CFOs: HARNESS THE POWER OF FINANCE WITH DATA DRIVEN INSIGHTS

By Tim Wakeford, VP Product Strategy, Financials at Workday   From ensuring business continuity to mitigating risk – when it...

Business1 week ago

HOW NEW APPROACHES TO USER VERIFICATION CAN HELP BANKS TACKLE THE ISSUE OF FRIENDLY ACCOUNT TAKEOVER

By Richard da Silva, VP EMEA at Revelock   Banks and other financial institutions are battling hard behind the scenes...

Trending