xlm

Money is Moving Faster. Time for you to Understand.

Posted on by Rand Preston
Image: CHUTTERSNAP

As the world move closer to widespread adoption of ISO 20022, the future standard for international transactions, what can we expect from the cryptocurrency world? For one, it is unlikely that major cryptocurrencies such as Bitcoin (BTC) will be used for conducting cross-border transactions. Not only is Bitcoin built on a proof-or-work consensus, but its transaction time is exceedingly slow compared to other projects in the fintech space. Bitcoin is also not currently an ISO 20022 compliant digital asset.

Of the thousands of cryptocurrencies in existence, the following currently comply with the ISO 20022 standard: (courtesy cryptopolitan.com)

One only needs to visit the ISO 20022 website to dive deeply in the guts of the project. Here, you can explore the many members of the standards committees across the five domains that the standard will address. The business domains are: payments, securities, cards and related retail financial services, foreign exchange, and trade services.

As far as the ISO standard’s syntax, the most widely used is eXtensible Mark-up Language (XML). This is not to be confused with the digital asset minted by Steller, the Lumen (XLM). The reason for using this syntax is simple, it is the most widely used method for encoding documents electronically.

Real Time Gross Settlement processing (RTGS) is speeding up the movement of money. It facilitates the electronic movement of money from bank to bank in seconds, settling out with near immediacy. This enhancement of transaction speed creates new levels of liquidity by freeing up funds that would otherwise be used as nostro/vostro or delayed settlement through old messaging systems, such as SWIFT MT. Follow this link to see a timeline of the adoption for ISO 20022 and RTGS across the globe.

Image Source: Compact

The ISO 20022 project is over a decade old and quickly approaching unilateral adoption across the global monetary system. Referring back to the five business practices gives you a good understanding of the impact that the world of finance will experience in the coming months. While many cryptocurrency projects are left seemingly unaffected, watch for the legal outcome of one particular company engaged in the global payment remittances sector, Ripple. While the US Securities Exchange Commission is trying to convince the legal system that the cryptocurrency XRP was sold as an unregistered security, the digital asset XRP does comply with the ISO 20022 standard and the company Ripple is on the ISO 20022 Payment Standards Evaluation Board as an expert for one of the five business practices: payments.

Best,

Rand

This is not investment advice. I am not an investment advisor. This is for entertainment and informational purposes. Consult a licensed financial advisor before trading.

ISO 20022 and Crypto

Posted on by Rand Preston

Monumental changes are on the very near horizon in the Finserv sector. As early as August 2022 (next week), financial institutions will be able to opt-in to the ISO 20022 standard through the SWIFT community. By November 2022, the option will be generally available.

Let’s look at some of the details. ISO 20022 is the standard for electronic data interchange between financial institutions. It will be the standard messaging system for financial institutions around the globe to track and monitor payments. This means that the way money moves globally is changing. The SWIFT network is the standard method used to move money around the globe and has been the legacy system in use since the 1970s. Technology is now available and being deployed that will allow the exchanges payments messages to be transformed under the ISO 20022 standard. This change will produce efficiencies on a massive scale.

How does this relate to crypto? Currently, there are seven (7) ISO 20022 compliant cryptocurrencies. They are XLM, HBAR, MIOTA, XDC, XRP, ALGO, and QNT. These currencies represent different transaction systems, but have made their business use case compliant with the standard that is quickly becoming the way money moves around the globe.

Furthermore, both Ripple and Stellar are members of the ISO 20022 Standards Body. Each company has minted a native cryptocurrency that run on their digital ledger technology and they are XRP and XLM, respectively.

Cheers,

Rand

All opinions are my own and should not be considered investment advice. I am doing this to provide entertainment.

#crypto #xrp #xlm #algo #hbar #miota #qnt #xdc #iso20022 #cryptocurrency #money #futureofmoney

How Fast is Money?

Posted on by Rand Preston

This will be a short one and really a question, at that. How fast is money? Why does that matter? What does it mean if it moves faster?

Money is an interesting idea. I think we can agree to that when we really stop and think about it. Over the centuries, it has taken on many forms: minted currencies, animal hides, jewelry, gold and silver, to good old “faith and credit.” It really boils down to a psychological acceptance of something that holds a value to receive something else in exchange.

That said, we believe in money. The United States has its dollar, the British kept their pound (says something about their feelings regarding the Euro), the Japanese have the Yen, and so on.

Money moves at a pace. Sometimes, longer than others. Likely for a reason that the average retail trader or average person doesn’t understand. It takes 3-5 business days for money to clear in a personal checking account. This is 2021 folks. We are purchasing tickets to fly Space X rockets and we have to wait 3-5 business days to get $100 in our checking account? I doubt the duration is the same for large institutions to move money from one to the other. Credit cards instantly record your spending, so why the delay in other applications? Money moves at different speeds.

Why does the speed of money movement matter? In the case of the retail end user, it matters the same as it does for the multi-national institution moving millions or billions of dollars. You want your money when you want it. The difference is, your $100 does not impact the economy the way $100 billion impacts the economy. We know that money can move at different speeds. It can post to your account instantly, but not clear immediately. It can be spent immediately at a store, or to pay a bill. It moves at different speeds when accounts are directly linked, you use a wire transfer, or deposit a paper check. Automation speeds up the movement of money. Digitalization facilitates faster than pen and paper.

If money moves faster, everything from your $100 check to a $100 billion transfer between banks, will effect global economies. If money, and I mean global money, in the realm of trillions in value can move and be utilized in seconds, rather than weeks, days, or even minutes, what kind of profound effect will that have? The United States has been issuing stimulus money over the course of the last year. (Disclosure: This is an exercise in the speed of moving money, not the politics of stimulus money.) We know that many people spend it as soon as it’s received. Reducing the time it takes to issue that money would effectively allow that money to be spent sooner, which in turn keeps money moving through the economy earlier than it did. This could be a game changer for a business that may close its doors if not enough customers came through their doors, or a mortgage payment was delayed because someone lost their job and was a month away from foreclosure.

All that said, if global money moved faster across all spectrums, what problems would that solve? How much does liquidity impact the different people, both linear and vertical in terms of value, across the financial spectrum? Does reducing the time it takes to move money from days or weeks to a matter of seconds mean something to you? I believe it does.

One such proponent of increasing liquidity is currently in a legal battle with the SEC. the outcome may be telling of which way finance is headed.

– Rand

All opinions are my own and should not be considered investment advice. I am doing this to provide entertainment.

Surrounded by the Buzz of Bitcoin.

Posted on by Rand Preston

Bitcoin is the catch-all buzzword when it comes to most people talking about digital assets, and perhaps it deserves to be. It was the first one out of the gate to make huge headway in a new asset class. However, just as a copy is a copy and Xerox is a company that makes copy machines, though many people say, “make a Xerox,” we need to separate Bitcoin from being the all-encompassing digital asset.

Entry into this era of digital assets is a matter of timing, and that timing is left to you, the individual investor. My style of investing prefers to wait until investment vehicles, security, and regulatory actions are in place or close to becoming in place. It is a game of wait and see, hopefully having intelligently deduced what the final result will be that satisfies my objective.

I have been watching the regulatory environment, filed any crypto holdings or trades I had with my tax returns (because the IRS requires it), and heard from my bank that they “do not typically release funds to Coinbase.” Though they do eventually release the funds.

The average investor that wants to get in the digital asset market before the possible onslaught of major banking firms open the doors can look inside the United States.

For starters, Coinbase (San Francisco, CA), Uphold (Headquartered in Charleston, SC), Evercoin (Silicon Valley), and Bittrex (Seattle, WA) are US based firms that provide different investment vehicles and options for the digital asset investor.

Coinbase

A major digital currency exchange that allows for the deposit of $USD (fiat) from your bank account to a USD account within the Coinbase platform, or directly purchase Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), and Litecoin (LTC). The platform has been in the news recently as the Securities and Exchange Commission (SEC) and Wall Street have been gearing up for the digital asset revolution.

Uphold (Welcome to Uphold. The Internet of Money)

Feels more like a brick and mortar institution, in my opinion, for the digital currency space. To me, that is comforting. Here, you can buy and sell over 30 different assets that you can hold, exchange, or sell around the world. Currencies available for bank transfers include: US Dollar ($), Euro (€), British Pound (£), and Chinese Yuan (¥).
Uphold has also achieved the distinction of supplying a Cryptionary (like a dictionary) for users to facilitate an understanding of the language and buzzwords in the digital asset environment. This is an excellent tool and I suggest that you look at it to better familiarize yourself with the industry.

Evercoin

An exchange. Here, you can exchange currencies from one to another. For example, you want to exchange Litecoin from your Coinbase account to XRP that you hold in a digital or hard wallet, you can do it through Evercoin. Select the amount of one coin that you want to exchange for another and the application automatically sets the amount of the other coin you will receive. The exchange rate already includes all fees, so what you see is what you get. Very easy to use.

Bittrex

Has the look and feel of a professional trading platform and may be a bit scary for newcomers to the digital asset investment world. They are based in Seattle, WA and was founded by previous Microsoft security professionals. They host a massive number of cryptocurrencies with over 190 available.

Wallets: Hot and Cold

Hot wallets store your crypto on an internet enabled device. You also have the option of storing your assets directly on the exchange you are using, and should research the level of security, past breaches, and insurance coverage provided should a hack occur.
Cold wallets store your crypto offline. Currently, this is arguably the most secure way to store your digital assets. There are different manufactures of these devices and each device may NOT store the different digital assets that you are interested in purchasing. DO YOUR RESEARCH to learn which cold wallet will perform for your investment needs.

Examples:
Think of it like this:

HOT WALLET= connected to the internet (MultiBit, Armory (desktop wallets) MyCelium, CoPay (mobile wallets)
COLD WALLET= NOT connected to the internet (Trezor, Keepkey, Ledger Nano S)

All of the examples above; the exchanges, platforms, apps, and wallets have different user features, fees and account set up requirements. Be prepared to offer your personal identifying information in order the financial and banking regulatory rules be adhered to. These verifications vary from a copy of your driver’s license, to possibly more if you are a big investor. Do your own research and understand the risks associated, the assets you are interested in, and other details such as purchase and withdraw limits.

This post is meant to wrap your head around entering the digital asset investing world. There are many questions and regulations that need to be ironed out, and time will establish the system. My point is this; I believe that the digital asset is here to stay and where it took Amazon 20 years to reach its share price, the digital asset world will move more quickly. Technology and the digital world has become not only comfortable and familiar, but necessary. This is the next extension of the digital evolution.
I am not a financial advisor and you should perform your own research, due diligence, and obey tax and regulatory laws.

Best,

Rand

NOTE: As the domain name of this site suggests, the content my blog posts are opinion and not investment advice of any kind. Do your own research before making any decisions to invest (or not to invest). I am not a financial advisor. I am simply sharing information I gather from across the web, news, and media outlets and drawing my own possible conclusions.