June 30, 2015- In This Issue:


The Financial Needs of Banked and Unbanked Meet in Bitcoin

While billions of people around the world lack access to bank accounts and credit cards, those who have easy access to such services are choosing to give them up. Both segments of the population - the banked and the unbanked - are increasingly experiencing fewer benefits from banks, and more from technologies and services based on the blockchain.


Nicolas Cary, co-founder of Blockchain.info, said at MoneyConf, Belfast:


"I am a millennial. I can tell you that I do not expect to have a bank account soon. I already use bitcoin for everything. All the employees in my company are paid in bitcoin. It takes just minutes to process a payroll for our entire team. It is the future."


Millions of people with bank accounts are shifting to alternative payment systems, such as mobile payment platforms and bitcoin, resulting in a rapid increase of registered mobile payment accounts around the world, and in unbanked countries like India and Cameroon.


Sonny Singh, chief commercial officer at BitPay has talked about how Bitcoin has entered into a new phase, as people begin to explore its use-cases in different sectors. Singh stated:


"Bitcoin is now moving into its second phase. The first phase was merchant adoption and I think this is pretty much done now. The second phase is exploring bitcoin's use cases. For example, one area where companies could see huge benefits from bitcoin is in international payments. This could save them a lot of money."

The Greek Bank Run Is Real- Bitcoin An Option?

So, as it turns out, people are trying to get all of their money out of the banks in Greece. We suspected this might happen.


Everyone in the Bitcoin community is saying these people should convert to Bitcoin. Is that an option at this point? How can they get it if all they have is a currency that people increasingly do not want? There is a certain lack of fungibility in the Euro system; where it is obvious that a Euro was made for a certain country. This does not make it unusable in other countries, but if the whole country were to exit the Euro, then the Greek Euros might quickly become worthless anywhere. Thus, would people want to accept these particular Euros in exchange for Bitcoin they can't get back? Seems a risky proposition.


So when people suggest that the Greeks should switch to Bitcoin, they have to consider the methods that the Greeks could use at this point. Most of them would involve using their banks, which seem to become just about functionally useless soon. People have been withdrawing their funds at an alarming rate in recent times, perhaps with the goal of getting their money into their hands. While this might be a good idea in the short term, as said earlier, if the Greek Euros were to be broken from the Euro system, then they would lose their value quickly. A new currency would have to be developed.

Goldman's Survey of Millennials is Good News for Bitcoin

The big news on the Bitcoin front this week is about Greece, but I had my say on that subject a couple of weeks ago, when I suggested that trading dynamics rather than direct buying from Greece would push the exchange rate for Bitcoin higher against major currencies. That dynamic is still in place and further gains are possible, but from a longer term and more existential perspective, there was some interesting news last week that probably didn't get the press it deserves.


Goldman Sachs published the results of a survey on the financial habits and tendencies of millennials. As one would expect the focus was on their spending patterns and investment strategies, the traditional areas of focus for a Wall Street bank. What makes this survey relevant to those in the Bitcoin community, however, is that they included a few questions on the subject of cryptocurrency, or more specifically, Bitcoin itself. Inevitably the Bitcoin focused news sites picked up on that, but the reporting of the results was, to me at least, somewhat strange.


What the survey showed was that 51 percent of respondents indicated that they had never used Bitcoin, nor did they intend to do so in the future. On the other side of the coin (if you'll forgive the pun) 22 percent said that they had used Bitcoin in the past and intended to do so again, and the same percentage indicated that they hadn't used Bitcoin but were open to doing so. 5 percent reported having used the digital currency, but not intending to do so again.

Seven Predictions for the Future of Finance

Innovative technology is reshaping financial services by putting pressure on traditional business models, says the World Economic Forum, and is set to cause profound changes to the structure of the banking, insurance and asset management industries.


In a 179-page report on the future of financial services released today, the Geneva-based organisation says that disruption in the sector will not be a "one-time event", but more a "continuous pressure to innovate" that will change the long-term structure of the finance industry.


The report predicts that financial institutions will come under attack in areas where the "greatest sources of customer friction meet the largest profit pools" and argues that while banking is likely to be the first to feel the impact of these innovations, the insurance sector is likely to be impacted the most.


The report is the product of a two-year research project that involved hundreds of interviews with industry participants from large institutions, new market entrants and academics. The steering committee included notable industry figures such as UBS's group chief information officer Oliver Bussmann, Markit chief executive and founder Lance Uggla and Barclays chief technology officer Michael Harte.


Westpac's VC Fund Invests in Bitcoin Company Coinbase

Australia's second-largest bank Westpac has directed its venture capital fund, Reinventure Group, to invest in Coinbase, a San Fransisco-based Bitcoin startup.


It is believed that the aforementioned vertical has joined the Coinbase's $75 million funding round, the same which received support from some of the biggest financial sharks, including New York Stock Exchange (NYSE) and Citigroup's former CEO Vikram Pandit. In the latest Series C funding, Reinventure Group was joined by renowned venture capitalists like Draper Fisher Jurvetson, Andreessen Horowitz, Robbot Capital and Union Square Ventures.


The companies however shied away from mentioning the amounts that were invested in the Series C round.


Experimenting with Bitcoin


Reinventure Group now plans to interconnect Coinbase services with Westpac to derive out a feasible solution to conduct cheaper global transactions, confirmed one of its representatives. In his statement to Financial Review, the said representative further acknowledged Coinbase for being serious about implanting next-generation security technologies on its platform and said:


"Coinbase's mission is to be the most trusted bitcoin company in the world and it is investing heavily in next generation security. Reinventure's investment will provide key insights into the use of digital currencies and associated technologies."