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Japan proposes guidelines to legalize ICOs

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Digital cryptocurrencies, Bitcoin, Ripple, Ethernum, Dash, Monero and Litecoin.

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Digital cryptocurrencies, Bitcoin, Ripple, Ethernum, Dash, Monero and Litecoin.

Japan unveiled proposed guidelines for the legalization of a controversial means of raising money in the cryptocurrency space.

A government-backed research group has put forward rules that would see initial coin offerings (ICOs) given regulatory definition and approval. An ICO is a means of raising capital by issuing and selling new crypto tokens in exchange for cryptocurrencies like bitcoin and ethereum.

Proposed guidelines include identifying investors to prevent money laundering, protecting existing shareholders and debt holders, restricting unfair trade practices like insider trading and ramping up cybersecurity efforts.

The proposals come as China and South Korea toughen up on cryptocurrencies with their own regulations to rein in speculation in the nascent market. Last year, both countries banned ICOs due to concerns of illegal activity and speculative investing in the space.

Japan was host to a cryptocurrency heist that saw more than $500 million worth of digital tokens stolen earlier this year. Coincheck, the virtual exchange hit by the cyberattack, said it would refund customers following the theft. It is thought to be the biggest theft of cryptocurrencies, surpassing the $400 million in bitcoin lost by cryptocurrency exchange Mt. Gox in 2014.

The collapse of Mt. Gox was seen as a test for bitcoin, which roared to a record high near $20,000 last year but has pulled back significantly since.

On Monday, the U.S. Securities and Exchange Commission (SEC) charged two founders of a cryptocurrency company that was endorsed by boxer Floyd Mayweather with carrying out a fraudulent ICO. The SEC has increased regulatory scrutiny of ICOs over concerns of fraudulent behavior associated with the practice.

Meanwhile, messaging service Telegram is holding what is thought to be the largest ever ICO. Telegram, which secures messages via end-to-end encryption, is itself used by many cryptocurrency investors as a means of communication. The firm is looking to raise $2 billion from the fund raise.

A CNBC investigation last month revealed that more than 1,000 investors were swindled by an ICO project called Giza. The people behind the project made more than $2 million from the scam.

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Wise launches investing feature

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The Wise logo displayed on a smartphone screen.

Pavlo Gonchar | SOPA Images | LightRocket via Getty Images

LONDON — British financial technology firm Wise debuted an investments feature Tuesday that lets users invest in stocks through multiple currencies and spend their holdings.

The new feature, called Assets, allows customers to invest in BlackRock’s iShares World Equity Index Fund, which tracks a basket of 1,557 of the world’s biggest public companies. The fund’s holdings include Apple, Amazon and Alphabet.

Users will also be able to instantly spend up to 97% of the invested money in their accounts with a Wise debit card, or send funds overseas. The idea is that customers can hold their funds in stocks, but also still spend and send the money in real time.

“Holding money in various currencies can be hard to manage efficiently,” said Kristo Käärmann, Wise’s CEO and co-founder.

“Assets is seeking to solve that problem, by providing an opportunity for customers to earn a return on their money with us, in a host of different currencies, all in one place.”

Wise says it is holding back 3% of users’ invested cash as a “buffer” in case of any large market fluctuations, to prevent customers’ balances from dipping into negative territory.

The company is initially launching Assets for personal and business customers in the U.K. but plans to roll out the product in Europe at a later date.

Formerly known as TransferWise, Wise began life as a platform offering cheaper currency exchange. It has since expanded its range of products to include multi-currency accounts linked to a debit card.

Now, Wise is rolling out investment accounts after having secured authorization from U.K. regulators last year.

The company says its customers now hold a total of £4.3 billion ($5.9 billion) in their balances globally.

Retail investor boom

Wise’s investing feature is different to that of other fintech platforms like Robinhood and Revolut, which let users trade a variety of different stocks, often without paying commission fees.

With Assets, Wise users will get exposure to hundreds of stocks and can use their holdings to pay for goods or send money abroad in a number of different currencies.

Wise charges an annualized 0.55% service fee and a 0.15% fund fee on the value of a user’s assets, which is taken monthly in arrears.

The launch of Assets comes after a surge in retail investors participating in the stock market, as consumers searched for alternative ways to earn a return on their savings.

Earlier this year, amateur traders inspired by a Reddit forum flocked to GameStop, the video game retailer, helping to fuel wild swings in its stock price.

It’s the first major product update since Wise went public in London earlier this year. Rather than raising money in an initial public offering, the firm’s employees and investors sold their shares directly to the public.

The debut was viewed as a big win for the U.K., where the government is looking to reform London’s listing regime to make it more attractive for tech companies following Brexit.

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Covid is officially America’s deadliest pandemic as U.S. fatalities surpass 1918 flu estimates

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A woman and child walk through a field of white flags on the Mall near the Washington Monument in Washington, DC on September 16, 2021.

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Covid-19 is officially the most deadly outbreak in recent American history, surpassing the estimated U.S. fatalities from the 1918 influenza pandemic, according to data compiled by Johns Hopkins University.

Reported U.S. deaths due to Covid crossed 675,000 on Monday, and are rising at an average of more than 1,900 fatalities per day, Johns Hopkins data shows. The nation is currently experiencing yet another wave of new infections, fueled by the fast-spreading delta variant.

The 1918 flu – which came in three waves, occurring in the spring of 1918, the fall of 1918; and the winter and spring of 1919 – killed an estimated 675,000 Americans, according to the Centers for the Disease Control and Prevention. It was considered America’s most lethal pandemic in recent history up until now.

“I think we are now pretty well done with historical comparisons,” said Dr. Howard Markel, a physician and medical historian at the University of Michigan. He added it is time to stop looking back to 1918 as a guide for how to act in the present and to start thinking forward from 2021.

A personal note is seen on a white flag at the ‘In America: Remember’ public art installation near the Washington Monument on September 18, 2021 in Washington, DC.

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“This is the pandemic I will be studying and teaching to the next generation of doctors and public-health students,” he said.

To be sure, a direct side-by-side comparison of raw numbers for each pandemic doesn’t provide all of the contexts, considering the vast technological, medical, social and cultural advances over the past century, Markel and other health experts say.

It’s important to consider population when talking about outbreaks or disasters, health experts and statisticians say.

In 1918, for example, the U.S. population was less than a third of today’s with an estimated 103 million people living in America just before the roaring 1920s. Today, there are nearly 330 million people living in the U.S. That means the 1918 flu killed about 1 in every 150 Americans, compared with 1 in 500 who have died from Covid so far.

The 1918 virus also tended to kill differently than Covid, experts say. With World War I, there was a massive movement of men across all of America and Europe. While the coronavirus can be especially severe for the elderly and those with underlying health conditions, the 1918 virus was unusual in that it killed many young adults.

Globally, the 1918 flu killed more people, an estimated 20 million to 50 million, according to the World Health Organization. Covid has taken the lives of approximately 4.7 million people worldwide so far, according to Johns Hopkins data.

Members of the Red Cross Motor Corps, all wearing masks against the further spread of the influenza epidemic, carry a patient on a stretcher into their ambulance, Saint Louis, Missouri, October 1918.

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Unlike today, there was no vaccine for the 1918 flu. There was also no CDC or national public health department. The Food and Drug Administration existed but consisted of a very small group of people. Additionally, there were no antibiotics, intensive care units, ventilators or IV fluids.

Scientists hadn’t even seen a virus under a microscope. They didn’t have the technology and they knew almost nothing of virology, which was considered a nascent science because viruses are physically smaller under a microscope and more difficult to identify than bacterial infections.

“Obviously, we have much better advantages now, 100 years later,” Dr. Paul Offit, who advises the FDA on Covid vaccines, said, adding he is “frustrated.”

The U.S. is worse off now than it was a year ago as a large portion of the nation’s population remains unvaccinated, he added.

“I can tell you that we see a lot of children hospitalized as well, who have high-risk conditions and the problem is not that they didn’t get their third dose. The problem is that they are unvaccinated,” said Offit, also director of the Vaccine Education Center at Children’s Hospital of Philadelphia.

Markel agreed that the U.S. has made advancements, saying, “the reality is we have no historical precedent for the moment we’re in now.”

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Goldman Sachs on stock markets, start-ups and IPO

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Investors have been pouring money into India’s stock market, and it could grow to more than $5 trillion to become the fifth largest in the world within three years, according to Goldman Sachs.

Indian start-ups have raised $10 billion through IPOs so far this year — more money than was raised in the last three years, the investment bank said in a report dated Sept. 19.

And the pipeline for future public listings is expected to remain robust over the next two years, Goldman analysts said. Based on Goldman’s analysis, as many as 150 private firms could potentially list on the stock market over the next 36 months.

“We estimate nearly US$400bn of market cap could be added from new IPOs over the next 2-3 years,” Goldman analysts wrote.

They explained that could drive India’s aggregate stock market value to increase from $3.5 trillion currently to over $5 trillion by 2024. That’s likely to make the South Asian country the fifth largest in the world by market capitalization, surpassing the U.K. and the Middle East.

A store advertises the use of the Paytm digital payment system and the Zomato food delivery app in Mumbai, India, on Saturday, July 17, 2021.

Dhiraj Singh | Bloomberg | Getty Images

Many of India’s largest technology start-ups have announced plans to go public, which some investors say will usher the beginning of a new era for the entire ecosystem.

Food delivery firm Zomato became the first of a slate of prominent names to be publicly listed. Others in the pipeline include payments giant Paytm, ride-hailing start-up Ola and e-commerce firm Flipkart.

“What we’re really flagging here is that as exciting as China was over the last decade, when you had this new China story — which is very, very profitable and successful for investors – we could see some sort of an analog of that beginning to take place in India,” Timothy Moe, co-head of Asia macro research at Goldman told CNBC’s “Street Signs Asia” on Monday. Moe was one of the report’s co-authors.

India’s digital economy

Looking forward, we think Indian equity indices could see a larger representation of the new-economy sectors over the next 2-3 years as the large digital IPOs get included in the index.

The number of so-called unicorns — start-ups valued at over $1 billion — surged in India in recent years. That’s due to the rapid growth in the internet ecosystem, combined with better availability of private capital and a favorable regulatory environment, Goldman said.

The bank estimated there are at least 67 private start-ups in India that fit the definition of a unicorn, and that 27 of them said they hit the $1 billion valuation mark in 2021. Most of them are focused on India’s digital economy.

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As those highly valued start-ups list in the public markets, Goldman predicted that it could potentially transform Indian capital markets and stock indexes over the next few years.

Capital market shifts

India’s share in the global stock market value is expected to rise from 2.8% currently to 3.7% over the next five years, according to the investment bank. That’s higher than Goldman’s prediction of 40 basis points increase in India’s share of global GDP over the next five years.

At home, Indian indexes like the Nifty could see bigger representation of the so-called new economy sectors as large floats from internet start-ups get included in the index. Currently, the indexes are dominated by financial stocks and companies belonging to the more traditional sectors like energy and information technology.

New economy is a term that refers to high-growth industries, which are underpinned by the latest technologies. They are thought to be the driving force of economic growth.

“The lack of fast growing new economy/digital stocks in the index has meant that India’s earnings have lagged the region while the internet-heavy China index, on the other hand, has delivered the best earnings over the past decade,” the analysts said.

Based on their calculations, Goldman’s analysts expect segments like e-commerce, internet, internet retail and media to have more weight on the indexes, through the consumer discretionary and communication services sectors. Other sectors such as commodity and software services would likely see their weightage shrink, the analysts predicted.

“Looking forward, we think Indian equity indices could see a larger representation of the new-economy sectors over the next 2-3 years as the large digital IPOs get included in the index,” Goldman said. “We see the new-economy sector weight could rise from the current 5% to 12%.”

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