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Wednesday, 7 July 2021

Report: Fintech's Growing Popularity a Threat to Profitability of Nigerian Banks


Financial technology companies (fintechs) are now among the biggest threats to the overall profitability of Nigerian banks, analysts from the country’s Coronation Merchant Bank (CMB) have warned.

The Efficiency of Fintech

As a report carried by local media explains, this threat from fintech services stems from their growing popularity with “tech-literate” customers. According to CMB analysts, such customers prefer using the more efficient services offered by fintechs to visiting physical branches of conventional banks.

Although Nigerian conventional banks are “apparently not concerned” about this threat, the media report, however, quotes Guy Czartoryski, head of research at CMB, explaining why the findings of his bank’s study must be taken seriously. Using internet banks such as Kuda, Carbon and Rubies as examples of fintech services that pose a threat to banks, Czartoryski explained:

These banking platforms are attractive to millennials and other tech-literate customers and require little or no physical banking presence. The obvious advantage they have over conventional commercial banks is low cost.

Banks Already Competing With Fintechs

Meanwhile, the same report also quotes Czartoryski explaining why banks are seemingly indifferent to this threat. According to Czartoryski, banks are not overly concerned because they “see themselves as partners with internet banks, offering customers cash withdrawals and supplying them with clearing service.”

In addition, conventional banks “also offer their own USSD-based offerings.” This, therefore, suggests that conventional banks are competing with internet banks in some areas. Still, Czartoryski concludes that only “time will tell whether the conventional banks are justified in their confidence, or merely complacent.”

Do you agree that fintechs are a threat to the long-term profitability of Nigerian banks? Tell us what you think in the comments section below.

Crypto Derivatives Exchange Bybit to Introduce Stringent KYC Policy


The British Virgin Islands-based Bybit Fintech Limited has announced the cryptocurrency derivatives exchange is introducing an updated know-your-customer (KYC) policy on July 12. Bybit notes that it already had certain KYC requirements implemented, but the new system reform is meant to “improve security compliance for all traders.”

Bybit Says Companies and Individual Clients Mandated to Complete Systematic KYC Policy by July 12

The cryptocurrency derivatives exchange Bybit plans to introduce a systematic KYC element to the platform by July 12. The exchange is letting customers know in various terms of service (ToS) updates. The firm will be applying the update next week and it applies to individual traders and companies as well.

“If your company wants to withdraw more than 2 BTC a day, you’ll need to complete KYC verification,” Bybit’s ToS update published on July 5 details.

Documents show that Bybit Fintech Limited is headquartered in Road Town, Tortola, British Virgin Islands. The company is regulated by the British Virgin Islands’ finance and insurance sector. According to Bybit’s company profile on Dun & Bradstreet, the crypto derivatives exchange has over 100 employees and generates $3.42 million in sales.

Bybit’s recently added KYC updates for companies and individuals, follow the warning that the Financial Conduct Authority (FCA) issued against Binance Markets Limited last week. Regulators have been cracking down on virtual currency service providers (VASPs) worldwide in order to comply with the crypto recommendations drafted by the Financial Action Task Force (FATF).

Real Name, Proof of Residency, Photo ID, and Facial Recognition Screening Required

The crypto derivatives exchange Bybit also notes that “all token withdrawal limits shall follow BTC index price equivalent value,” which means 2 BTC equivalent withdrawals need to pass KYC. Bybit’s website further notes that after July 12, KYC requirements will mandate the need for a document issued by the country of origin (passport/ID), full name, date of birth, a front and back official document photo, and the user will need to pass “facial recognition screening” as well.

Similar to the FCA’s recent warning to Binance, Bybit got a warning from Japan’s top financial watchdog on May 28, 2021. The Japanese government’s Financial Services Agency (FSA) had claimed at the time, the crypto exchange Bybit allowed residents of Japan access to the exchange. A report published in August 2020, indicates Bybit “added support for the Japanese yen and South Korean won.”

Bybit also faced a hearing on June 21, with Canada’s Ontario Securities Commission when the regulator alleged that Bybit was “accountable for disregarding Ontario securities law and to signal that crypto asset trading platforms flouting Ontario securities law will face regulatory action.”

Bybit’s recent regulatory compliance update notes that once KYC documents are verified customers can then “withdraw up to 100 BTC a day.” The KYC process can take up to fifteen minutes or in more complex situations “KYC verification may take up to 48 hours,” Bybit details.

What do you think about the cryptocurrency derivatives exchange Bybit introducing a systematic KYC element to the trading platform? Let us know what you think about this subject in the comments section below.

US SEC Commissioner Says Bitcoin ETF Approval Long Overdue


SEC Commissioner Hester Peirce says that the regulator should have approved a bitcoin exchange-traded fund (ETF) in the U.S. a long time ago. She emphasized that it is not the SEC’s job to approve or reject applications based on the merits of the underlying investment itself. “People should make their own decisions” whether to buy bitcoin, said the commissioner.

SEC Commissioner Wants Bitcoin ETF Approved

A commissioner with the U.S. Securities and Exchange Commission (SEC), Hester Peirce, talked about the prospects of the SEC approving a bitcoin exchange-traded fund (ETF) in an interview with CNBC on Thursday. Peirce is also known in the crypto circle as “crypto mom.”

The SEC has yet to approve a bitcoin ETF. However, the industry is hopeful that things will change this year since the SEC has a new chairman, Gary Gensler, who taught crypto and blockchain courses at the Massachusetts Institute of Technology (MIT). Commissioner Peirce described:

I thought that if we had applied our standards as we have applied them to other products, we would already have approved one or more of them. With each passing day, the rationale that we have used in the past for not approving seems to grow weaker.

The commissioner has previously stated that she sees a double standard at the SEC when it comes to bitcoin products. She explained that the SEC is asking exchanges and would-be bitcoin ETF sponsors for more assurances than what it asks for traditional, equity-based products.

“People of a regulatory mindset, when they encounter something new like this, say, ‘Oh, wait a minute: The market for bitcoin looks a bit different than the markets we’re used to,'” Peirce opined. She disagreed with the SEC’s decision to reject a bitcoin ETF application by the Winklevoss twins back in 2018.

Noting that the bitcoin market now looks more like an established market that has more participation from institutional and mainstream retail investors, Peirce remarked:

I think the markets have matured quite a bit.

In May, Peirce said, “We’re seeing more interest coming from institutional quarters than we have in the past. I think that will continue … as people are looking to diversify their portfolios, I think people are also likely to look more to the crypto space.”

Peirce is not alone. Investment banks and fund managers are seeing the same trend and a growing number of them have begun investing in bitcoin or offering crypto services to clients, including Goldman SachsMorgan Stanley, and Citigroup.

The commissioner emphasized that it is not the SEC’s job to approve or reject applications based on the merits of the underlying investment itself, especially if exchanges are meeting statutory requirements for protecting investors from fraud.

Pointing out that “Bitcoin now is so decentralized. The number of nodes that are involved in Bitcoin is large, and the number of people who have an interest in keeping that work decentralized is very large,” Commissioner Peirce concluded:

People should make their own decisions: If people don’t want to buy bitcoin because they think it’s manipulated, they shouldn’t buy bitcoin.

Do you think the SEC will finally approve a bitcoin ETF this year? Let us know in the comments section below.

Tuesday, 6 July 2021

BNM provides additional allocation for SMEs


PETALING JAYA - Bank Negara Malaysia (BNM) has provided an additional allocation for the Targeted Assistance and Rehabilitation Facility (TRRF) of RM2 billion to increase the total facilities to RM6 billion.

According to the central bank, TRRF aims to provide assistance and support for the recovery of SMEs in the services sector.

In addition, an allocation for All Economic Sector Facilities (AES) of RM2 billion was also implemented and this increased the total facility allocation to RM6.5 billion.

"The AES facility is open to SMEs from all sectors of the economy and it aims to increase SMEs' access to financing and support growth," he said in a statement issued yesterday.

Meanwhile, BNM informed that the TRRF and Generator Tourism Financing (PTF) facilities have been improved to enable SMEs to use part of the financing to repay existing business loans (ie refinancing).

According to him, the maximum amount that can be used for refinancing is up to 30 per cent of the financing approved for the TRRF facility while up to 50 per cent of the financing approved for the PTF facility.

In addition, recipients of Special Relief Facility and Generator SME Financing are now eligible to apply for PTF (up to RM300,000 per SME).

PTF aims to support SMEs in the tourism sector by helping them maintain capacity and make adjustments as well as remain viable after a pandemic.

'Fool's Gold' Actually Contains a Newly Discovered Type of Real Gold, Scientists Find


'Fool's Gold' Actually Contains a Newly Discovered Type of Real Gold, Scientists Find

DENIS FOUGEROUSE, THE CONVERSATION

28 JUNE 2021

The mineral pyrite was historically nicknamed fool's gold because of its deceptive resemblance to the precious metal.

The term was often used during the California gold rush in the 1840s because inexperienced prospectors would claim discoveries of gold, but in reality it would be pyrite, composed of worthless iron disulfide (FeS₂).

Ironically, pyrite crystals can contain small amounts of real gold, although it is notoriously hard to extract. Gold hiding within pyrite is sometimes referred to as "invisible gold", because it is not observable with standard microscopes, but instead requires sophisticated scientific instruments.

It wasn't until the 1980s when researchers discovered that gold in pyrite can come in different forms – either as particles of gold, or as an alloy, in which the pyrite and gold are finely mixed.

In our new research, published in Geology, my colleagues and I discovered a third, previously unrecognized way that gold can lurk inside pyrite. When the pyrite crystal is forming under extreme temperature or pressure, it can develop tiny imperfections in its crystal structure that can be "decorated" with gold atoms.

What are these 'crystal defects'?

The atoms within a crystal are arranged in a characteristic pattern called an atomic lattice. But when a mineral crystal such as pyrite is growing inside a rock, this lattice pattern can develop imperfections.

Like many minerals, pyrite is tough and hard at Earth's surface, but can become more twisty and stretchy when forming deep in the Earth, which is also where gold deposits form.

When crystals stretch or twist, the bonds between neighboring atoms are broken and remade, forming billions of tiny imperfections called "dislocations", each roughly 100,000 times smaller than the width of a human hair, or 100 times smaller than a virus particle.

The chemistry of these atomic-scale imperfections is notoriously difficult to study because they are so small, so any impurities are present in absolutely minuscule quantities. Detecting them requires a specialized instrument called an atom probe.

An atom probe can analyze materials at extremely high resolution, but its main advantage over other methods is that it allows us to build a 3D map showing the precise locations of impurities within a crystal — something that was never possible before.

Our research reveals that dislocations within pyrite crystals can be "decorated" with gold atoms. This is particularly common where the crystals have been twisted during their history; here, gold can be present at concentrations several times higher than in the rest of the crystal.

A potential goldmine

Why should anyone care about something so tiny? Well, it gives interesting insights into how mineral deposits form, and is also a potential boon for the gold mining industry.

Previously, it was suspected that gold in anomalously rich pyrite crystals was in fact made of gold particles formed during a multi-step process, suggesting the pyrite and gold crystallized at different times and then became clumped together.

But our discovery that gold can decorate these crystal imperfections suggests that even pyrite crystals with relatively high gold content can form in a single process.

Our discovery may also help gold miners more efficiently extract gold from pyrite, potentially reducing greenhouse emissions. To extract the gold, the mineral is usually oxidized in large reactors, which uses considerable amounts of energy.

Dislocation sites within crystals could potentially offer an enhanced partial leaching or a target for bacteria to attack and break down the crystal, releasing the gold in a process known as "bio-leaching", thus potentially reducing energy consumption necessary for extraction. This idea is still untested, but definitely merits investigation.

If it helps pave the way for more sustainable gold-mining methods, then perhaps fool's gold isn't so foolish after all.

Perhaps pyrite still lives up to its historic reputation of "fool's gold" until better, more environmentally sustainable ore processing techniques are developed.

Denis Fougerouse, Research Fellow, School of Earth and Planetary Sciences, Curtin University.

This article is republished from The Conversation under a Creative Commons license. Read the original article.