La reputazione Internazionale dell’ITALIA sempre più simile a quella della Grecia e per alcune questioni (mafia,debito,burocrazia) anche peggio

La reputazione Internazionale dell’ITALIA sempre più simile a quella della Grecia e per alcune questioni (mafia,debito,burocrazia) anche peggio

Italia è ormai da tempo un paese dove è diventato istituzionale fottere il prossimo, non aspettare a lungo perchè (più) prima (che) poi toccherà anche a te

I flussi di capitali e di teste in uscita dall’Italia sono davvero spaventosi, distribuite il vostro rischio come persone,famiglia,asset, impresa, competenze su altri paesi…ma non seguite il gregge

Maltaway vi offre soluzioni pratiche che potete valutare ed iniziare ad implementare in pochi giorni

Italy’s organised crime groups have demonstrated devious ingenuity in everything from drug trafficking and prostitution to extortion and counterfeiting.
Now they have found a new source of illicit profits: the migration crisis that has seen thousands of asylum-seekers land on Italian shores after crossing the Mediterranean Sea from north Africa.

The care and feeding of such migrants may end up costing the Italian government as much as €800m per year, with it offering private individuals, companies and non-profit organisations up to €35 a day per person to host them. That includes a daily pocket money allowance of €2.50 that hosts are supposed to pay directly to the refugees.
Those funds have proven irresistible to the Mafia, according to Italian prosecutors and watchdog groups, who say criminal groups have succeeded at rigging the awarding of the contracts for the management of migrant reception centres in several high-profile cases.
“This is a very widespread problem. Welcoming migrants has become a big business,” says Gabriella Stramaccioni, who is charge of social policy at Libera, an anti-Mafia organisation. “We believe many centres are involved, in several cities,” she adds.
In one intercepted phone call released by Italian police last year, Salvatore Buzzi, a leftwing social activist who served time in jail for murder in the 1980s, remarked: “Do you have any idea how much I earn on immigrants? Drugs are less profitable.” Mr Buzzi, who was arrested, denies any wrongdoing.
This week brought a grim reminder of the human toll of the refugee crisis, after as many as 40 people drowned about 30 miles off the north African coast when their inflatable dinghy flooded.
Those who reach land safely face huge obstacles to rebuild their lives in Europe. Criminal involvement in their lodging and care has only darkened their plight since it can often lead to reduced services for the refugees.
It has also provided fodder for anti-immigrant groups seeking to block any form of public assistance to the new arrivals. “We must stop the departures and the landings, and block all the contracts,” Matteo Salvini, leader of the anti-immigrant Northern League, wrote last month on Facebook.
According to Italian officials, the criminal enterprise that has come to dominate the business of lodging asylum seekers is a group based in Rome — known as Mafia Capitale — that has made public corruption one of its main sources of revenue.
Traditional Mafia groups such as Sicily’s Cosa Nostra, the Calabrian ‘Ndrangheta or the Neapolitan Camorra — have also been linked to the migrant trade, but have so far been less active.

The Roman organisation was unearthed by Italian prosecutors last December. Its top brass allegedly colluded with local politicians and government officials to have the migrant centres run by “co-operatives”, or charity groups, that could serve their interests. Mr Buzzi is alleged to have had close ties to such groups.
Giovanni Salvi, the former chief prosecutor of Catania, in Sicily, the first Italian destination for many migrants, says organised crime gained a foothold in the migrant business because the flood of arrivals — some 170,000 people last year and as many expected this year — have left public officials scrambling each day to find accommodations, often with little oversight.
But Mr Salvi, who became prosecutor-general of Rome this month, says the “new element that shook the Italian political tissue and public opinion” was that some NGOs were involved in the “exploitation”.
“Government officials had people who seemed full of values as their interlocutors and it lowered their defences,” he said. “But then it emerged that this network was simply a way of making money.”
Ignazio Marino, the mayor of Rome, this week highlighted the criminal infiltration at a Vatican event on climate change and slavery attended by many of his counterparts from around the world.
“We’re working to restore legality and transparency. In recent years corrupt politicians and officials have taken advantage of the migrant drama,” Mr Marino said. “Instead of serving the poor, these officials made use of the poor.”


Greek Capital Controls To Remain For Months As Germany Pushes For Bail-In Of Large Greek Depositors….Italian debt is exploding what’s about the Italian Depositors?

Greek Capital Controls To Remain For Months As Germany Pushes For Bail-In Of Large Greek Depositors….Italian debt is exploding what’s about the Italian Depositors? (in Italy bail in scheme has been already approved)

Two weeks ago we explained why Greek banks, which Greece no longer has any direct control over having handed over the keys to their operations to the ECB as part of Bailout #3’s terms, are a “strong sell” at any price: due to the collapse of the local economy as a result of the velocity of money plunging to zero thanks to capital controls which just had their 1 month anniversary, bank Non-Performing Loans, already at €100 billion (out of a total of €210 billion in loans), are rising at a pace as high as €1 billion per day (this was confirmed when the IMF boosted Greece’s liquidity needs by €25 billion in just two weeks), are rising at a pace unseen at any time in modern history.

Which means that any substantial attempt to bailout Greek banks would require a massive, new capital injection to restore confidence; however as we reported, a recapitalization of the Greek banks will hit at least shareholders and certain bondholders under a new set of European regulations—the Bank Recovery and Resolution Directive—enacted at the beginning of the year. And since Greek banks are woefully undercapitalized and there is already a danger of depositor bail-ins, all securities that are below the depositor claim in the cap structure will have to be impaired, as in wiped out.

Now, Europe and the ECB are both well aware just how insolvent Greek banks are, and realize that a new recap would need as little as €25 billion and as much as €50 billion to be credible (an amount that would immediately wipe out all existing stakeholders), and would also result in a dramatic push back from local taxpayers. This explains why Europe is no rush to recapitalize Greece – doing so would reveal just how massive the funding hole is.

However, with every passing day that Greece maintains its capital controls, the already dire funding situations is getting even worse, as Greek bank NPLs are rising with every day in which there is no normal flow of credit within the economy.

This has led to a massive bank funding catch-22: the longer capital controls persist, the less confidence in local banks there is, the longer the bank run (capped by the ECB’s weekly ELA allotment), the greater the ultimate bail out cost, and the greater the haircut of not only equity and debt stakeholders but also depositors.

To be sure, we have explained this dynamic consistently over the past several months. Now it is Reuters’ turn, which reports this morning that, far from an imminent end to capital controls, Greeks will be unable to access their full funds for months, if not years:

Greek banks are set to keep broad cash controls in place for months, until fresh money arrives from Europe and with it a sweeping restructuring, officials believe.

But as explained previously, new money will only arrive if and when the same banks suffer a confidence crushing stakeholder and/or a depositor bail in:

Rehabilitating the country’s banks poses a difficult question. Should the euro zone take a stake in the lenders, first requiring bondholders and even big depositors to shoulder a loss, or should the bill for fixing the banks instead be added to Greece’s debt mountain?

And here is Reuters’ realization of how our readers have known for months is a huge feedback loop dynamic:

Answering this could hold up agreement on a third bailout deal for Greece that negotiators want to conclude within weeks. The longer it takes, the more critical the banks’ condition becomes as a 420 euro ($460) weekly limit on cash withdrawals chokes the economy and borrowers’ ability to repay loans.


The banks are in deep freeze but the economy is getting weaker,” said one official, pointing to a steady rise in loans that are not being repaid.

Also last week Fitch calculated a Greek NPL number which we first suggested was accurate to much disagreement by the mainstream: it is now accepeted that more than half of all Greek loans are likely to be non-performing.

Fitch noted that the total amount proposed of 25 billion euros for the Greek bank recap is sufficient unless deferred tax assets stop being considered as core capital. According to Fitch, 45 percent of the four systemic lenders’ core capital consists of deferred tax assets. The agency estimated the capital requirements at 11.2 billion euros on the condition thatnonperforming loans amount to 52 percent of loan portfolios, while the adverse scenario seeing bad loans at 60 percent would entail capital needs of 15.9 billion euros.

A 60% NPLs on €210 billion in loans would mean that up to 30% of Greek deposits of about €120 billion currently would be wiped out, or “bailed-in.”

And that is the optimistic scenario. The likelihood is that the Greek economy has collapsed to a level where nobody is paying their loan interest or maturity. As such as an even greater NPL percentage is now quite probable. But one thing is certain: with every passing day in which Greece does not have a viable resolution of its banks, the NPLs will keep rising, and the ultimate deposit haircut will be that much greater.

As a result Germany is already demaning a bail-in of large depositors, those holding over the “insured” threshold of €100,000 with Greek banks, in a repeat of the Cyprus depositor bail-in template.

“We want, if possible, an initial amount to be ready for the first needs of the banks,” said one official at the Greek finance ministry, who spoke on condition of anonymity. “That should be about 10 billion euros.”


Others, including Germany, however, are lukewarm and could push for losses for large depositors with more than 100,000 euros on their accounts, or bondholders.

The amount of large depositors in Greece is about €20 billion according to Reuters calculations (far greater than the €3 billion in bonds issues which will certainly be wiped out in any major recap), which suggests that if a bail-in takes place, then some depositors with savings of less than €100,000 will also have to be impaired.

Furthermore, as we also explained a month ago, unlike in Cyprus where the biggest depositors were Russian billionaire oligarchs, who had zero leverage and even less sympathy with Europe’s depositors, in Greece the situation could not be more different especially since the local shipping magnates keep the bulk of their cash overseas:

Imposing a loss, something the Greek government has repeatedly denied any planning for, would be controversial, not least because much of this money is held by small Greek companies rather than wealthy individuals.


“This is not like Cyprus where you can say these are just Russian oligarchs,” said an insolvency lawyer familiar with Greece. “It’s the very community everyone is hoping will resuscitate Greece, namely the corporates. You’ll end up depriving them of their cash.”

None of this should be a surprise either: recall in June 2013 we explained that “Europe Make Cyprus “Bail-In” Regime Continental Template.” But while the French member of the ECB, Christian Noyer, is against depositor bail-ins, Germany is all for it:

The tone in Berlin is different, where some advocate not only that bank creditors foot the bill but also that the ESM steer clear of any direct stake, lumbering Athens with the banks’ clean-up.


“The recapitalization will have to be done by the Greek government so that means more money in the third program,” said Marcel Fratzscher, president of the Berlin-based German Institute for Economic Research. “It’s a loan they have to repay but there is no risk-sharing on the European side. They will have to bail in the private creditors. I can’t see how this could not happen.”

The most likely outcome for the Greek banks is a wholesale bailout by the ESM. That, however, comes with major strings attached:

One option, according to euro zone officials, is the direct recapitalization of Greece’s banks by the euro zone’s rescue fund, the European Stability Mechanism (ESM).


This could grant the Luxembourg-based authority a direct stake in the banks and greater control over their future.


That, however, would take Greece closer to the Cyprus model. Any such direct ESM aid requires that losses first be imposed on some of the banks’ bondholders and even large depositors.

So Greece is damned if it does, and damned if it doesn’t.

And here is why we made such a big deal of Greece handing over controls of its banks to the ECB as we reported in mid July:

To avoid such orders, Athens is battling to keep autonomy in deciding the fate of its banks. Ceding further control could cost it dearly. Bondholders are nervous.

Alas, Greece already ceded control, remember: that was one of the main conditions for the Third Greek bailout, all of which we explained on July 13 in “Greece Just Lost Control Of Its Banks, And Why Deposit Haircuts Are Imminent.”

At this point the only leverage Greece may have, having squandered all of its true leverage when it decided not to pursue a “parallel-currency” system after the Referendum, is mere empathy with the rest of Europe’s population; however with its ruling socialists backtracking on all their promises and in fact pushing Greece into an austerity program harsher than anything seen yet, not even the leftist parties in Europe care any more if Tsipras’ government survives.

Indeed, Reuters summarizes the situation quite well when it says that “with its economy starved of cash and the threat of its departure from the euro zone hanging over talks, Athens’ room for maneuver is limited. One euro zone official summarized the mood: “Whatever sympathy there was for Greece has evaporated.

Which is indeed the truth, and this time, Greece only has itself to blame.

Lending needs? Convince an algo

Small businesses today no longer need to convince a bank to get a loan. They can very well convince an algorithm that will assess their credibility based on a diverse parameters rather than a conventional credit check.This captures the essence of an emerging alternative source of financing – the big data driven online lending platform. When the financial crisis dried up credit to most small businesses, a number of digital players, such as OnDeck, Kabbage and Funding Circle to name a few, willingly stepped into the gap. Amazon joined their ranks when three years ago, it launched the Amazon Lending program to offer quick – but at around 14 percent not that cheap –  working capital to its star merchants in the United States. While it was done without fanfare, Amazon being what it is, the launch ratcheted up predictions of the imminent disruption of small business lending. In fact, the market for online lending (consumer and business) is expected to grow to a trillion dollars in volumes lent out, by 2025. A very significant number.

Quick and dirty

What Amazon Lending and similar propositions offer is a convenient and extremely fast financing option.  There’s none of the procedural labor pain of a big bank loan, and the money is in the bank within minutes – 7 in the case of Kabbage, and a comparatively sedate 60 when it comes to iwoca.  What makes this possible is the platforms’ extensive big data resources and expertise in social underwriting, enabling them to quickly profile a borrower’s creditworthiness in novel ways. Rather than performing a conventional credit check, online lenders rely on analytics of hundreds of variables and several thousand data points – ranging from cash flow, credit history and legal track record to shipment frequency, repeat business revenue and public online ratings – to do the job, and thereby circumvent the need for weeks of offline due diligence. That being said, lenders are quick to point out that no single formula fits them all.

Amazon for instance, lends only to high performers. A business must sell a certain volume of goods on the Amazon storefront before it can receive an offer of a loan. Not just that, it must also sport the right credentials, such as a reputation for customer focus. Hence the more favourable the customer reviews, the better the chances of securing a loan.  Once a loan application is approved, the money is advanced to the merchant’s Amazon Seller Account in about 5 business days at the most and thereafter disbursed to
their bank account. Amazon recovers monthly payments from the borrower’s Amazon Seller Account, but there is also the option to prepay. In return for providing such convenience Amazon commands enviable interest rates from a captive base of prime borrowers to enjoy what has to be a very profitable, low risk, side business.

On the brink of disruption

The speed and simplicity of this process is adding fuel to the already fiery debate on banking disintermediation. In consumer surveys, banking has been named the industry most vulnerable to disruption at the hands of nimble, technology-led, innovative non-bank players. On the small business loans front, incumbent banks haven’t done themselves any favors by pulling out of a rough market characterized by high origination costs, regulation and low profitability. Worse, in markets like the United States, traditional banks are coming off second best when it comes to “ease of doing business”, a key driver of satisfaction among business banking customers.

Given these circumstances, it seems almost inevitable that online lending platforms will go on to disrupt their niche of the business. The numbers say so too. In its few years of existence, Kabbage, the leader in this space, has provided about US$ 4 billion in funding to more than 100,000 businesses, which, although not a large amount in itself,
is not to be sneezed at. As online platforms hone their ability to analyze big data into accurate credit risk assessments, they will certainly aim for bigger things.

In prime position

Ecommerce supergiants like Amazon and Alibaba are especially well positioned to take a sizeable share of this opportunity: They are sitting on a pile of cash. (Alibaba also has a massive cash float that comes from holding buyers’ money in escrow until it is given the green light for payment). They have a huge captive base of prospective loan customers in their empanelled merchants. They have a clear line of sight to their borrowers’ financial status. As storefront, payment processor, and fulfillment partner, they wield significant influence over their debtors’ businesses. And they own all the data they need for evaluation. Ironically, these strengths can also go against them on occasion –
cost of interest and potential penalties apart, Amazon loan refuseniks cite fears of becoming even more dependent on the Amazon ecosystem, while all but closing the door on other distribution channels, as one of the biggest reasons for declining their offer. They would rather approach their bank or credit union, difficulty and delay notwithstanding.

But this is quite likely a minority opinion. Indeed, in some countries online lending platforms even have the government on their side, which sees an opportunity to alleviate the funding shortage in the small business segment. For instance, a few months ago, the U.K. Government announced that it would legislate to incorporate a mandatory provision in the Small Business, Enterprise and Employment Bill whereby small and medium enterprises that had been refused financing by the country’s largest lenders would be connected with alternative lending sources. At around the same time, the Australian Federal Government’s Financial System Inquiry recommended the creation of an SME finance database to be shared with existing lenders and new entrants.

Adding to their advantage is an arguably superior underwriting model than banks. Online lenders, leverage Big Data obtained from multiple sources including social network usage, phone usage, utility payments and online bank account usage to assess borrower risk. They are also using Machine Learning to improve their lending models over time by analyzing the performance of loans till date. These capabilities have
helped them keep default rates down, despite having a significant proportion of subprime
borrowers in their customer base. For example, Lending Club and Prosper in the US have default rates of about 4% & 3% respectively, which are close to average bank loan default rate of 3%.

What can banks do ?

Banks need to recognize the growing importance of digital in people’s lives, and need to enable end-to-end digital experiences even in lending. This would need significant investments in setting up appropriate platforms in place, which could help make their operations agile to respond to future changes in consumer preferences. Some banks have tried to ‘buy’ a solution rather than ‘build’ one in the banking space, like BBVA, which acquired the digital-only bank Simple in 2014. Perhaps such an approach can be considered by banks in the lending space too.

Banks and P2P lenders could also co-exist as part of the larger lending ecosystem. Santander Bank in the UK has a partnership with Funding Circle, a P2P lender for small businesses, through which Santander can refer small business borrowers to Funding Circle. Also, Funding Circle can refer its customers to Santander for other services like banking support, cash management, international transactions etc.

Banks today, are under massive pressure to lend more, to get the economy started. In such times, a seamless digital experience and a state of the art  risk model is what banks need, to ensure that they lend more without lowering their lending standards.

The growth of online lending highlights gaps in the customer experience provided by traditional players like banks. These social platforms are poised for rapid growth in the coming years, as customer habits become increasingly digital. Banks need to act now to counter the disruptive threat by focusing on improving digital experiences and streamlining their operations.

Up and away

Meanwhile, online lending platforms are riding the tailwind. In the first half of 2014, Kabbage topped a record US$ 270 million credit facility with US$ 50 million in venture capital funding. In July, PayPal announced that it would take PayPal Working Capital, its small business lending program global, starting with the United Kingdom and Australia. A few weeks later, Amazon hired a senior executive from a major credit card company to spearhead its “global expansion into the lending industry.”  In December 2014, Lending Club outdid them all by making a grand stock market debut and becoming the 14th largest bank in America by market valuation.

Online lending platforms may be eyeing small business loans, but their dreams are as big as their data.

Rebuild Trust takes time: Portugal rebirth started from a disruption of the old lobbies, model and mentality to be attractive again for qualified people and capital

Will Stocks surge 43% over the next two quarters ?

Fundstrat’s Tom Lee has found yet another reason to be bullish on stocks right now.

“The S&P 500 did something in the first half of 2015 that it has not done since 1904 — the S&P 500 posted two consecutive (back to back) quarters of 0% gains,” Lee said. “In fact, this has happened only one other time in the past 125 years, for either the Dow and the S&P 500.”

The last time this happened, it was the Dow that stood still for six months in 1904. But then something else happened: Stocks surged 43% over the next two quarters.

While Lee isn’t explicitly saying that he thinks stocks will follow the trajectory of 1904, he says that this should reinforce the old saying that investors should “never short a dull market.”

“There are certainly differences versus today — notably, the US was exiting a recession at that time,” Lee wrote. “However, the key takeaway for us, is that history suggests we could see strong gains in 2H.”

cotd tom lee stocks 1904


Blockchain Enable Banking without disruption

Freed from bitcoin, could the blockchain, or blockchain lite, become the underlying infrastructure behind better banking?The banks have figured out that there is a lot of value in the blockchain, and I think this is about the methodology: the distributed confirmation and security of the blockchain and its applicability in the settlement of transactions within capital markets. And that can be done without bitcoin.

“I absolutely detest the word disrupt—it is a fundamentally negative word which has become trendy with technology start-ups, but if you look at some of the big boys, such as Google, Apple, eBay and Amazon, you never see that word mentioned next to their name,” opines Nasir Zubairi, who has worked for fifteen years in the financial services sector and whose CV includes FinLeap, Level39, Currency Cloud and RBS.

Hardly a day goes by without news of how cryptocurrency technology will disrupt banking as both Bitcoin start-ups and banks themselves look into the potential of an almost costless means of making payments around the globe. “The banks have figured out that there is a lot of value in the blockchain,” says Zubairi, “and I think this is about the methodology: the distributed confirmation and security of the blockchain and its applicability in the settlement of transactions within capital markets. And that can be done without bitcoin.”

Blockchain refers to the public ledger of transactions for digital currency, which is verified and updated by computers solving complex algorithms. But it is this method of communication and confirmation that holds real potential for banks, rather than the adoption of a cryptocurrency.

“Technologies like bitcoin were built to offer an alternative solution—a single, global digital currency for the whole world to adopt,” explains Ripple Labs CEO and co-founder Chris Larsen. “The true innovation behind bitcoin was creating a system to move money between networks without a central operator. However, bitcoin has two key limitations as a new financial system: It either requires the whole world to adopt bitcoin as a global currency, or it requires users to trade in and out of fiat currencies—resulting in the same currency risk that exists today. So while bitcoin carved out an early path to interoperability, it remains more suited for consumers and merchants than financial institutions.

Sticking with the rail analogy, Zubairi views bitcoin as a train that sits upon the track—which is the blockchain: “but the track can add value in itself as a mechanism for transportation.”

Zubairi, FinLeap: The banks have figured out that there is a lot of value in the blockchain.
Ripple Labs’ namesake solution is based on blockchain technology and is designed to modernize existing payments infrastructure by enabling interoperability between banks and payment networks on a global scale.

The Ripple network is a shared public ledger—basically a database—administered collectively by a network of servers. This ledger tracks the accounts and balances of Ripple users. Within the Ripple network, all transactions are authorized and settled through a process called consensus. This process entails a supermajority of Ripple servers mutually agreeing that a transaction within the network is valid before updating the ledger.

Ripple servers use public/private key cryptography to verify whether transactions are valid or not. Each transaction that gets submitted has its own unique digital signature, and Ripple servers mathematically verify that the correct signature appears—the signature of the owner of the funds—before including transactions in a new ledger.

With Ripple, the challenge of moving money across country networks is eliminated. “The Internet is well suited to moving information, allowing users to send communications or data anywhere in the world instantly and for free. The movement of money requires a central operator for settlement—typically central banks or clearing houses—to prevent double-spend and other problems. The world’s payment systems were built country-by-country, and they still lack interoperability.”

Each of these individual clearing and settlement systems is very efficient at moving money within its own network, but it’s still inefficient to transfer money between systems, Larsen notes. “Whenever money has to leave one company or country network and travel to another, it introduces time and money friction that translates into delays and expense. These additional fees, time delays and risk occur because there is still no global rail for cross-border payments.”

Ripple is a distributed payments technology that uses consensus to complete secure, real-time transactions in any currency. The Ripple protocol provides the backbone and market makers on Ripple’s distributed exchange facilitate the transaction. Users settle via “gateways,” which are the bank or FI that provided the currency for the transaction.

“Using Ripple for direct, point-to-point transactions with no reserve funding, these [banks and payments providers] can expand both the volume and reach of their business, saving time and money while remaining fully compliant with existing banking regulations,” states Larsen.

Larsen insists that Ripple is an enabling technology that complements SWIFT and ACH. “Ripple is the payments rail connecting networks for real-time settlement in any currency; it does not replace existing messaging systems or payment networks. Ripple can easily be used alongside SWIFT’s global messaging services or in combination with ACH’s same-day payments to enable faster, cheaper and fully compliant transactions across borders and currency.”

There is a global march toward real-time payments under way, and growing awareness that blockchain technologies can help accelerate this movement. “Banks and other financial institutions are supporters of this broader effort,” continues Larsen. Last May, Germany’s Fidor became the first bank to integrate Ripple’s protocol into its payments infrastructure, with two US banks, CBW Bank and Cross River Bank, following suit months later. Three of Australia’s largest banks—the Commonwealth Bank of Australia, Westpac Banking Corporation and the Australia and New Zealand Banking Group—have all began piloting Ripple, and Western Union will soon follow.

Larsen, Ripple Labs: The world’s payment systems were built country-by-country, and they still lack interoperability.
Although technologies like the blockchain have the potential to transform financial infrastructure, this ability to transact in real time, in any currency, anywhere in the world can lead to a truly global and more inclusive economy. In the short term, it means dramatically faster and cheaper ways of doing business for banks and corporations, with the possibility of expanding their business and growing new lines of revenue. In the long term, real-time payments can vastly increase transaction volume. And for end consumers, while the points of interaction might remain the same, the use of these new infrastructure technologies by their financial providers will lead to significantly better, faster and cheaper services.

Ecuador is leading the way in making use of such technologies as a means to better serve its poorest citizens. It recently became the first country to adopt its own digital currency, and local banks have been ordered to adopt a home-grown digital dollar, called the Electronic Money System, in an effort to serve the country’s unbanked citizens, who will be able to receive and send payments with their mobile phones. EMS is similar to M-Pesa and other nontraditional digital payment services widely adopted in African nations.

For the global banking industry, blockchain adds an additional layer of security with relative simplicity and low cost, so it has potential value for any transaction that involves a confirmation layer within capital markets as a whole—across different asset classes. “No wonder the banks are interested in it,” concludes Zubairi.