c2c #47: Crypto retail, insurance fails, digital entrepreneurs, tech what is it good for?
I’m the author of Cowries to Crypto about the history of money, and the c2c newsletter is my personal take on innovation in finance and capital. In here you will find:
1.???Work from the Week: highlights from my day job covering fintech
2.???Talk of the Town: internet hot takes on tech and finance
3.???c2c: thoughts on innovation and related topics
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1. Work from the Week: Stories from DigFin: Crypto retail, insurance fails, digital entrepreneurs
ZA and HashKey look to retail for virtual assets: On the one hand, this is interesting. Hong Kong regulators are moving to extend their remit to retail investors dealing in crypto. I’ve written in DigFin that excluding them was not protection. It just left retail to the wolves. Now firms are starting to test this commitment by the regulators. ZA International has licenses for both a virtual insurer and a virtual bank in Hong Kong, and it wants to come up with blockchain-enabled services.
OK, fine, but why? So far, crypto has just been for speculating on self-referential digital tokens. So I kept asking the ZA and HashKey execs what customer problem they’re trying to solve. They couldn’t give me an answer. They’re still waiting for the regulators. Hm.
Insurers fall behind | Ben Quinlan | DigFin VOX Ep. 48: A fun conversation with consultant Ben Quinlan on insurance companies’ falling behind because they’re too afraid of angering their agents to properly digitize their businesses. It’s not a new topic. But the success of Hong Kong’s virtual insurers in selling premiums now makes the choices for insurance companies stark.
Southeast Asia’s secret sauce: digital entrepreneurs: A report sponsored by Monk’s Hill Ventures, a Singapore VC, and Bain makes the case for why digital entrepreneurs are so important to Southeast Asia’s future. Not the first time we’ve heard this, but the MHV/Bain paper argues that public policy deserves a lot of credit, for allowing challengers to flourish, even when they were disrupting state-owned companies or family conglomerates with powerful political connections.
2. Talk of the Town
?A mixed bag of insights from the Twitterati. First, living in Hong Kong, I have been amazed by the abrupt U-turn in China on Zero Covid. Not to mention extremely irritated by the local administration's refusal to end our various restrictions...but anyway, that's more for a moan at the pub. Kendra Schaefer, an excellent foreign source for what's happening in China, provides the best explanation I've seen for what is behind Beijing's ability to discard its health app requirements so easily.
Marko Papic has some good observations about why China will be able to reach many of its goals in semiconductors despite increasing US sanctions.
Some rare good news on the US-China front. The US threatened to kick out some 200+ Chinese companies from US exchanges because they couldn't get a proper audit of the parent companies. Beijing made a deal. It's still early days but the audit process seems to be genuine.
On the macro outlook, Bill Ackman sums up the Fed's dilemma on inflation. I'm always wary of the tweets of hedge fund managers because they talk their own book. Ackman for example has used Twitter to try to generate FUD about the Hong Kong dollar's USD peg. He's also used it to say nice things about SBF (pre-inditement). I'm not saying he's wrong to do so, just that I try to be cognizant of when media and journalists are getting spun, and wonder what angle he's playing when he speaks. Sorry, I digress – I agree with this sentiment about inflation. I'd add the Treasury will be happy to see the Fed accept moderately higher inflation...makes it easier to pay down the US government's debt.
Rising interest rates have, of course, changed the outlook for many tech and finance businesses. Little wonder that VC is feeling the brunt.
And a lot of 2020 and 2021 VC raises went to fintech, notably to crypto. Speaking of blood on the streets...
领英推荐
But who says innovation in crypto is dead?
3. c2c: Tech, what is it good for?
The past two weeks have given us some incredible headlines out of the world of technology.
Generative artificial intelligence took the world by storm this month. As people play with GPTChat, Mid-Journey, or other tools, we are learning what this technology can do. We are learning its limits. There is undeniably a hype cycle on the ascent. But we can appreciate its power. People are already adopting these services, for fun or as tools, from coding to marketing to business management.
I expect AI to become the hot topic for 2023, including in fintech and finance. Although institutions are still building blockchain-based services, to a surprising degree, the ongoing collapse of the cryptocurrency world will slow adoption in the licensed world too. FTX isn’t the nadir in the crypto meltdown. The next month or two will see more implosions. When Tether goes, the destruction will be complete. It will be hard to spin Web3-type yarns. But AI looks set to take up the slack. “The metaverse wasn’t about blockchain – ha, you thought we were serious! No, it’s about generative AI.”
I’ve also been reading incredible headlines in other fields. Biotech companies like Moderna and Big Pharma players like Merck are using mRNA techniques to roll out treatments for certain types of cancer. It’s possible that by the time I hit my sixties, there will be vaccines for whatever cancer lurks in my body.
Quantum computing continues to make strides. The New Yorker ran a piece this month looking at the race between US companies and China to develop quantum machines that can actually start to design molecules in chemicals, for fields from agriculture to epidemiology, from biodegradable plastics to carbon-free aviation fuel. Soon the technology could even unveil the deepest secrets of physics, and decrypt all of our security protocols.
Finally, the big one: researchers at the Lawrence Livermore lab in California triggered a nuclear fusion reaction that increased the amount of energy produced. Fusion is one of those sci-fi technologies that has more skeptics than believers. But now it’s proven it can work. We have a long way to go, probably decades, before the world can roll out large-scale fusion reactors. But we wouldn’t need that many. Small reactions can in theory generate enough energy to power towns and cities. And it’s carbon-free, and safe, avoiding the radioactive waste of a (fission) nuclear power plant.
These are all reasons to be optimistic about our future, even in the face of frightening climate change and the spread of zoonotic diseases. But this past month has also given us reasons for caution. The FTX collapse and Elon Musk’s bizarre handling of Twitter show how utopian visions turn to nightmares.
Crypto was supposed to liberate people from the corrupt nexus of politics and finance that created the 2008 Global Financial Crisis. But private digital money just ended up recreating the worst excesses of Wall Street, while delivering nothing to society in return; at least, behind the GFC, there were real mortgages attached to actual homes.
Twitter, Facebook and other giants of the internet have become toxic amplifiers of humanity’s worst impulses. Their algorithms feed off and encourage bile and tribalism. Musk has so badly managed Twitter, with such hypocrisy, that he even got booed at a Dave Chapelle standup. And it’s not like Chapelle’s crowd are woke snowflakes. Twitter was part of a wave of companies meant to deliver openness, dialogue, and learning, and sometimes it provides that too, but for the most part it feels like an experiment that has failed.
Looking to 2023 and beyond, then, our technology promises many bounties. But technology is a human endeavor. You can’t take the people out of the system. Whether we have the collective wisdom to learn from our mistakes and ensure the next generation of tools is put to use for the greater good is an open question.
For businesspeople, these are meta-level questions that don’t inform the day-to-day. But business requires optimism, and a sense that human progress is creating new ways to prosper. I think from a tech perspective that remains the case. The optimism is warranted and some of these ongoing developments are exciting.
I’ll leave it on this happy note. Cowries2Crypto will be off for a few weeks during the Christmas holidays. I wish everyone a great 2023.
See you next week year!
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About Jame
Jame DiBiasio is a book author, financial journalist, media entrepreneur, and a speaker/moderator. In 2015 he launched DigFin, an online media covering digital finance that is part of the digital arm of Hong Kong-based financial group AMTD. Jame is also a member of the board of the Hong Kong Fintech Association.
He is author of “Block Kong” (co-authored with Charles D’Haussy) profiling 21 blockchain entrepreneurs in Hong Kong; and “Cowries to Crypto: The History of Money, Currency and Wealth”. He is currently working on a book about the venture capital industry.
Jame has also written books about Asian history, including “Who Killed the King of Bagan?” and “The Story of Angkor”. He writes thrillers too. You can find all of Jame’s published books on Amazon.