Mastercard/Visa Block Brokers, Crypto on Wall Street: Best of the Week

Catch up on last week's top stories.

Credit cards not accepted

Brokerages which operate from jurisdictions with partial, or no, jurisdiction will not be able to use Mastercard from Monday (15.10.18) and Visa from December, sources confirmed to Finance Magnates. The two card providers are taking a stand against foreign exchange trading, binary options, cryptocurrency, and ICOs.

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MasterCard classified these services as high risk in April, allowing customers to claim refunds up to 540 days after the date of a transaction.

The primary targets are firms without licences and those that operate in jurisdictions where licences are not necessary. Some businesses have already informed customers that they no longer accept credit cards.

Coinbase index fund draws no interest 

Coinbase, the American cryptocurrency exchange, is shutting down its index fund due to lack of interest.

Marketed as the cryptocurrency equivalent of the S&P 500 index, the fund was launched in June for accredited US investors only. Participation was set at a minimum of $250,000, and a maximum of $20 million.

A few weeks ago, the San Francisco-based company said that the index was receiving overwhelming interest after it had reduced the management fee by 50 percent.

Reportedly, Coinbase now wants to focus on a different service – the ‘Coinbase Bundle’, a basket of cryptocurrencies which can be purchased for as little as $25.

Singapore central bank sends a mixed message to cryptocurrency

The central bank of Singapore, which does not consider cryptocurrency to be legal tender, said that it is interested in helping cryptocurrency companies overcome their difficulties with local banks.

Banks in the city-state have a history of not accepting these businesses. MAS Managing Director Ravi Menon said: “I hope we can bring minds together on this so that we can get over this hurdle.”

Blockchain businesses are allowed to operate in Singapore as long as they do not break existing laws, and some major companies have opened offices there. However, Menon made it clear that the country has no intention of writing new laws to accommodate the industry, and is not interested in actively attracting it to its shores.

Friends in high places for cryptocurrency exchanges 

Numerous well-known Wall Street firms announced last week that they are now supporting a new cryptocurrency exchange, called ErisX. It is the reincarnation of a failed derivatives exchange called Eris Exchange.

It will be trading in futures based on Bitcoin, Ethereum, Litecoin, and Bitcoin Cash.

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Some are touting the new venue as a competitor of Bakkt, a cryptocurrency exchange which is backed by Intercontinental Exchange, which also owns the New York Stock Exchange.

In this analysis, Finance Magnates looks at these two companies in their race to become the principal venue for big-money investors in cryptocurrency.

Tokens, tokens everywhere, nor any drop to drink 

Some believe that the future of cryptocurrency is ‘tokenised assets’ – that is, a market backed by real-world items. A world where everything is recorded on a blockchain network, where paper contracts are replaced and business disagreements eradicated.

But is this really the future?

What if a tokenised asset is sold in the real world? The tokens would become worthless. So, this system can only work if it is the only system – and can we expect banks and financial institutions to completely replace all of their mechanisms?

Another issue is the verification of the asset – how can you be sure that you have really purchased a house in a faraway place when all is done digitally?

And is forcing customers to change their fiat currency into a tokens before buying something really a necessary step? And if they aren’t forced to make the change, what value are the tokens?

In this analysis, Finance Magnates looks at the weaknesses of the crypto-utopia.

More than 1,500 Dash-accepting merchants in Venezuela

Dash, a privacy-focused fork of Bitcoin with a market capitalisation of $1.3 billion, already has “about eight times the transaction capacity of Bitcoin”, according to the CEO of Dash Core, the development group behind the cryptocurrency.

Finance Magnates spoke to said CEO, Ryan Taylor, a former Wall Street analyst, in an exclusive interview last week. We talked about what drew him to the world of cryptocurrency, about the new developments planned for Dash, and why Dash is so popular in Venezuela.

“Our mantra has been for a long time, we want our clients to make money”

CMC Markets, a UK-based dealer in financial derivatives which created one of the first online trading platforms in the world, is headed by Peter Cruddas. Finance Magnates caught up with Cruddas for an exclusive interview.

Cruddas told us why he isn’t bothered about opening a new office in the EU, ‘Project Tuna’, and why he agrees with both Brexit and the new rules of the EU regulator.

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