Project sandbox is a go, more meetings with investors, and a ton of tech questions about TAM, STOs and more. Here’s our summary of last week’s “This Week in Crypto” episode and live Q&A with our CEO and crypto guru, Kevin Murcko.
Dive in or y skip the reading by watching the full episode here.
CoinMetro Funding Updates
Kevin traveled to London last Monday for another meeting with a potential large ticket. There is also some good news coming from Brazil, which ties into the CSD and CoinMetro as a front-facing MTF. This deal is nearly in the bag, and Kevin predicts that it will be closed within the next week.
The Montenegro CMA was also sent a “memorandum” that describes how CoinMetro thinks the sandbox should be created, adding more funding potential to the mix of opportunities available.
Crypto Market News Highlights
1) German’s 2 biggest political parties forming an alliance to launch “Digital Euro”
The ECB is going to have an issue with this. They had an issue with the EST coin and have an issue with Libra, so a “Digital Euro” will definitely cause a stir. The digital Euro already exists. All over Europe, we have legislation under MiFID II called EMI Electronic Money Institutions, and guess what they issue: digital euros.
2) Ethereum 2.0 Well On Its Way: Serenity Phase Zero Spec Finalized
They’re starting to lose their edge on the smart contract market. Obviously, they need to focus on scalability. Hopefully, they’ll be able to get to a point where they at least can compete.
3) More Tether ‘Reflective’ of Real Dollars Coming Into Bitcoin, Says Kraken CEO
The fact that Tether is printing new Tether out of thin air doesn’t necessarily mean new money is coming in. That’s what it would mean if we could trust Tether. Raise your hand if you trust Tether. I don’t see any hands.
4) Binance announces future trading platform with up to 20x leverage
This product is highly regulated everywhere in the world, including, places where other financial instruments aren’t regulated. In fact, even if you have a utility token or something that’s unregulated, and you create a future out of it, it becomes a regulated product in just about every country in the world. What I would say is that they’re raising their profile to every single major regulator in the world.
5) Deloitte: China Looking to Use Blockchain as a ‘Strategic Weapon’
It could be weaponized by holding people’s data hostage. We’ll see if that actually comes to fruition, though. Just because you throw a lot of money behind something, especially in the first days that it exists, doesn’t mean you actually become the place that’s in control of development.
Ask Me Anything (AMA) Questions
1) When new listings?
The LHV risk committee has been off for three weeks. We expect an update by this Friday since they’re now back in the office.
2) Are we getting an MTF license in Brazil as well?
They’re interested in the CSD. CoinMetro will be co-developing the CSD, so that any fundraising on the platform will touch CoinMetro. I may even talk to a key stakeholder influential for this deal later today or tomorrow. But next week we’ll probably have more news.
3) What is currently being worked on or in development?
The GUI and the actual backend is being worked on for TAM. Margin Posting is also in the works. Our new website is on the way and you guys already saw the login-less access that’s already been deployed.
Streamlining continues to go on with the margin platform, trade platform, and intermediate platform. Soon we’ll be looking at merging trade and intermediate to a certain extent, where we’ll take the benefits we see from the intermediate platform as well. On the CSD side, we’re in the exploratory phase to make sure that we map out the system as it needs to be, but very shortly we will be going into development phase on that as well.
4) So you’re making a CSD in both Montenegro and Brazil?
If we can do multiple pilots then we can prove it works in multiple scenarios, so having one pilot in Montenegro and one in Brazil (and possibly one in Europe as well) is what we want to do.
There are sandboxes available in Europe, we have on in the UK, but for CSD it’s a tougher fit. Estonia is looking at sandboxing and are working with the PwC to design something right now, but it may not be ready until 2020.
5) When will the wallets be sorted so we get a market cap and burn the correct amount from ICO?
Wallets have been sorted, we have one final thing we’re going to do I think, which is one final segregation, which will happen maybe over the weekend, so probably early next week.
6) When will you fix so XCM is used for fees and gets burned?
It is a priority but will be done when the time is right. There would not be a huge sum getting burned based on the current volume. We want to get a good product suite out since we’re fundraising and it provides more revenue. That also includes our “IEO”-type listings, which will be coming in the next month or so.
7) If you could list STOs does that mean you can also list any existing crypto, not only utility coins/tokens?
An MTF would allow us to list pretty much anything we wanted without the need for a bank to say okay because it wouldn’t need to worry about compliance. We would be a regulated entity in Europe, and as one we’d probably focus on specific assets that we feel define the best avenues for tokenized securities, whether that would be bond issuance, a tokenized fund, types of fundraising, so some type of traditional “STO”.
8) Are you planning, or in talks, with big Airports (for example, in London) to advertise like in Tallinn?
No, absolutely not in talks right now. It’s extremely expensive in places like London or Singapore. We’re talking about commitments of millions to get that done. Tallinn is our hometown, so it makes sense. It’s not so much for advertising as it is for brand recognition.
9) Can you give some insight into how user growth is looking?
We’re seeing exponential growth. We’re obviously small, so initially, that exponential growth in terms of real numbers may not be that shocking or surprising, but in terms of growth as a metric, it’s actually above what we expected. The same goes for profitability per client. It’s small, but it’s above what we thought it would be.
10) Once you release the APIs and the algo traders come in, how much volume do you expect them to bring?
That’s completely speculative. Algos don’t necessarily bring in more volume. They may bring in spikes of volume, but the more you trade faster you can lose money as well. Most algos lose money just as much as most people lose money, meaning that you may see spikes in volume but you will also see more client churn. It should increase the volumes by at least 5x. It would be available in the first three months of launching a fully tested FIX API. The combination of that with a TAM style system will add an additional growth factor.
11) Would you rather increase XCM price to get some profit or grow the exchange volume and extract profits from the fees?
We’d much rather do the latter, which is to boost revenue to fund the company rather than sell tokens we would rather hold. Focusing on exchange volume and actually making money there, induces higher prices as well.
12) Can you go into more detail on how the new TAM system works and how it’s different from the whitepaper?
The main difference is the “tokenization aspect”. If we allow one portfolio to be tokenized and someone buys into that portfolio, it becomes very similar to what would be a Collective Investment Scheme, which would require AIFM licensing. That’s fine, we can apply for that license, it’s not even that difficult to get.
The problem is that every single manager would have to be umbrellaed under a different AIFM, which comes with a cost of a few thousand Euros. Basically, every manager that we put on the platform would require us to spend thousands of Euros and take a few months to get the right licensing.
The tokenized aspect will happen under our own AIFM license, and we will probably employ managers and do the tokenization aspect in the future. You will basically create a mirror wallet of the guy who’s running the portfolio, who then has access to individually customize your wallet. This makes it an individual portfolio but not a CIS.
“Kevin Explains Crypto” Term: Darksend
A darksend is an automatic or autonomous decentralized mixing “button” that makes it possible to send assets or coins anonymously on the blockchain. Still confused? Kevin goes into more detail in the video below.
Listen to Last Week’s TWiC on the Go
Get the complete scoop by tuning in to our audio version of last week’s TWiC on SoundCloud. Happy listening!
Well, that’s it for this week’s AMA with CoinMetro Founder Kevin Murcko! Please join us next week on CoinMetro’s Facebook and YouTube Channels at 14:00 UTC for another round and make sure you submit your questions to the CoinMetro subReddit!
As always, we’re available to answer any questions you may have on our Telegram Group 24/7.