Tag Archives: #Digital Assets

Digital Identity – Wallets are the key?

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A few months ago, I wrote about trust and digital identity – the issue of who “owns” our identity, and why the concept of “self-sovereign digital identity” can help resolve problems of data security and data privacy.

The topic was aired at a recent presentation made by FinTech advisor, David Birch (hosted at Novatti) to an audience of Australian FinTech, Blockchain and identity experts.

David’s main thesis is that digital wallets will sit at the centre of the metaverse – linking web3 with digital assets and their owners. Wallets will not only be the “key” to transacting with digital assets (tokens), but proving “identity” will confirm “ownership” (or “control”) of wallets and their holdings.

The audience felt that in Australia, we face several challenges to the adoption of digital identity (and by extension, digital wallets):

1. Lack of common technical standards and lack of interoperability

2. Poor experience of government services (the nightmare that is myGov…)

3. Private sector complacency and the protected incumbency of oligopolies

4. Absence of incentives and overwhelming inertia (i.e., why move ahead of any government mandate?)

The example was given of a local company that has built digital identity solutions for consumer applications – but apparently, can’t attract any interest from local banks.

A logical conclusion from the discussion is that we will maintain multiple digital identities (profiles) and numerous digital wallets (applications), for different purposes. I don’t see a problem with this as long as individuals get to decide who, where, when and for how long third parties get to access our personal data, and for what specific purposes.

Next week: Defunct apps and tech projects

 

 

The Crypto Conversation

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A short post this week – mainly to give a shout out to my colleague, Andy Pickering, and the rest of the team at Brave New Coin. Andy kindly invited me to help celebrate the 250th edition of The Crypto Conversation, his regular podcast that has featured a pantheon of leading characters from the crypto and blockchain industry. On this recent edition, we talk about my journey into crypto, the highs (and lows) after six years in the industry, some aspects of “trust”, the usual Crypto Conversation “Hot Takes” and of course, a slightly contentious discussion on science fiction. Enjoy.

Listen here:

Spotify

Apple

Libsyn

Next week: The bells, the bells….

 

Ask an expert…

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I’m often approached for advice about the work I do. Many of these enquiries come via LinkedIn connection requests, but generally they are thinly-veiled attempts to sell me something, or to gain access to my network, or to get free consulting. So I have developed a number of techniques to flush out the bona fide from the free-loaders.

In principle, I like to pay it forward when I can, where I believe I can add value, without any immediate expectation of material reward. But there are only so many hours in a day, and there’s only so many connection requests I can handle.

On the positive side, recently I’ve been receiving more genuine approaches, where specific expertise is being sought, rather than someone wanting to “connect” or “buy me a coffee”.

A great example is the call I received from a prospective client through my work at Brave New Coin. Dr Michael Kollo is the CEO of Clanz, a new on-line community for crypto traders. Following this initial chat, Michael invited me to be a guest on his podcast, to discuss my personal journey into crypto over the past 6 years with Brave New Coin and Techemy.

The result was a very enjoyable (but hopefully informative) conversation about my views on the crypto industry, based on my particular perspective in market data and indexing. I hope you enjoy it too:

https://blog.clanz.com/crypto-cappuccino-s01e01-rory-manchee-brave-new-coin

Next week: Vinyl on the brain

Is crypto finally going mainstream?

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Just as my last blog on crypto regulation went to press, news broke that CBA (one of Australia’s “four pillar” banks) will be adding crypto assets to its mobile banking app. Add that to the launch of a crypto equities ETF by BetaShares, and further media coverage of local digital asset fund manager Apollo Capital, and you may start to believe that crypto is finally going mainstream in Australia.

But, before anyone gets too excited, a few caveats are in order.

First, the recent flurry of announcements from the Australian Senate, ASIC and AUSTRAC are simply the latest stages in a long-running debate about how crypto assets should be regulated, serviced and distributed. Despite these positive noises, there is still some way to go before crypto reaches critical mass (even though data for Australia shows we have one of the higher rates of market adoption).

Second, there is a lot of noise out there, and not all of it here in Australia. The SEC, FATF, ISDA, Cboe and SGX are just a few of the institutional voices making announcements on crypto and digital assets in recent weeks. On top of that, of course, there is the President of El Salvador (and the Mayor-Elect of New York) weighing in on behalf of the politicians. Some of this commentary is mere posturing; some is about being seen to be doing something; and a large part is just the legacy markets trying to catch up (and hoping to take control?).

Third, a closer look at CBA, BetaShares and Apollo Capital reveal some significant limitations in terms of what their products actually offer:

The CBA is planning to launch a trial among a small sample of their mobile banking users (although, no doubt, if things go well, it will be rolled out more extensively). But it does not mean the app becomes a fully-fledged crypto wallet: customers will only be able to buy/sell crypto within the app, and they won’t be able to send crypto to third parties. Plus, only a small set of crypto assets will be available.

The BetaShares ETF is not offering direct exposure to Bitcoin or other crypto assets. Instead, the fund is designed to invest in companies (mainly crypto exchanges, miners and technology providers) that are significant or strategic industry players. While that may mitigate the market volatility (and price fluctuation) that crypto experiences, it doesn’t necessarily make for higher returns.

The Apollo Capital fund is only available to wholesale or accredited investors – not retail customers. And while Apollo has done a reasonable job of growing its AUM, I don’t believe there are any major allocations from Industry Super Funds (which manage 27% of Australians’ retirement savings), Retail Funds (21%) or Public Sector Funds (18%). And despite anecdotal evidence that Self-Managed Super Funds (SMSF) are more active in crypto assets (along with Family Offices and HNWIs), recent data from the ATO suggests crypto assets held within SMSF are not much more than $200m.

Having worked in this industry since 2016, it’s always been apparent from an institutional perspective that few want to go first, but nobody wants to be last, when it comes to launching crypto products and services. Of the three Australian stories this week, the most significant is probably the CBA; it certainly got a lot of attention at the recent State of Play presentation by Blockchain Australia, in large part due to the industry implications, and how it will help bring crypto to an even wider audience.

Next week: Summing Up (and Signing Off)