Page 6 - February 2018 Disruption Report Flip Book

CRYPTOCURRENCY
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• Profitable trading through semi-legal practices such as front running and naked shorting become eliminated.
• Securities lending, which powers short-selling and drives broker profits, will be disrupted.
• Brokers, market makers and other intermediaries will be disintermediated and transaction costs will drop by 90%; this intermediation is a big cash cow on Wall Street.
This is why the ICO market, despite its bubble characteristics and sketchy characters, shows the future, according to Lunn. (StrategicCoin.com, Josiah Wilmoth, 01/30/18; Daily Fintech, Bernard Lunn, 12/09/17; Daily Fintech, Bernard Lunn, 12/16/17; Daily Fintech, Bernard Lunn, 12/20/17)
Is it time to regulate cryptocurrencies?
In general, countries view cryptocurrencies through five “lenses”:
Countries with weak currencies and weak democracies. In countries such as Zimbabwe and Venezula, citizens don’t trust the Fiat currency as a store of value, so a stateless currency is a real alternative. In a weak democracy, it is easy for the government to simply ban whatever they don’t like, such as bitcoin. This becomes a vicious circle—less trust leads to more controls, which leads to less trust... If you face the prospect of hyperinflation, you would be prudent to seek alternative stores of value (whether that be gold or bitcoin or some tangible commodity).
Offshore Countries positioning as global hubs. Derided as tax havens in the past, countries such Isle of Man, Gibraltar, Cyprus and Malta are re-positioning to attract cryptocurrency entrepreneur and host crypto exchanges, mining and vaults.
Countries with a tendency towards freedom & innovation. Sweden, which ranks #1 in
the Global Innovation Index, serves as a hub for cryptocurrency innovation. The country also encourages the use of bitcoin, which can be used to pay local taxes and fines and purchase railway tickets. Japan is another country with a strong currency, strong democracy and a history of innovation that is very welcoming to bitcoin.
Countries that are confused and have competing agendas. Korea and India have competing agendas that geopolitical factors which impact their policies on cryptocurrencies. While Korea has a relatively strong currency, strong democracy and history of innovation, geopolitical concerns— specifically their erratic nuclear-armed neighbor to the left and near-by neighbors (China and Japan)—color their policies regarding cryptocurrencies. India is in the midst of transforming to a
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