Tag Archives: cryptocurrency

Breaking: SEC Will Review Decision of Winklevoss Bitcoin ETF Rejection

Breaking: SEC Will Review Decision of Winklevoss Bitcoin ETF Rejection

The securities and exchange commission has granted a request by the Bats BZX Exchange, Inc. to review its decision of disapproving the bitcoin ETF back in March this year. According to a document signed by Eduardo A. Aleman, Assistant Secretary at the SEC:

“The petition of BZX for review of the Division’s action to disapprove the proposed rule change by delegated authority be GRANTED; and It is further ORDERED that any party or other people may file a statement in support of or in opposition to the action made pursuant to delegated authority on or before May 15, 2017.”

Aleman is the person who, through delegated authority, made the decision on March the 10th which some in the bitcoin community saw as an intentional slap. In a fairly angry article back then, I wrote

“How can one man have so much power? We were told there will be a vote, but apparently, the SEC commissioners didn’t think this decision was important, delegating it to Aleman. Then, what’s the point of the commissioners?… Delegating this decision to a faceless bureaucrat is an insult. For them to hide behind an Assistant Secretary, not even a Secretary, is an intentional slap.

The decision document mentions a specific date, data analyzed by the 28th of February. That’s almost two weeks ago. Could he have not released the decision then? Did he have to allow so much speculation? Was it an intentional insult to the entire bitcoin community for this clearly already long ago made decision to be released at the very last hour? Who knew of the decision before it was released? Did any of them trade the market?”

Aleman’s reasons for rejecting the ETF was because he wanted a surveillance sharing agreement between exchanges and because he said much of the trading was carried out in unregulated Chinese bitcoin exchanges.

The latter part was out of date even at the time of the decision. PBoC has moved in, laying out some red lines for Chinese exchanges. Aleman further said Gemini lacks liquidity, but that’s mainly because traders naturally go to exchanges with futures and margins, two necessary facilities that CFTC continues to deny to regulated American exchanges such as Gemini and Coinbase.

It is surprising, however, that the decision is now to be reviewed. Even more so because the person who rejected the ETF, Aleman, has approved the review of his own decision. It is still too early to say how this review will be carried out, but one thing I hope we can say for sure is that Aleman will have no further part in any of it.

That’s for obvious reasons which do not even need to be stated. One can’t review their own decision in an institutional context. It’s like carrying a judicial appeal in front of the same judge who clearly has already reached a decision against you.

This review should be carried out at the commissioners’ level. To them, I say what I said just a day before Aleman’s decision, a day when I thought it was the commissioners who were to decide, specifically the acting chairman of the SEC:

“Dr. Piwowar, open the doors for business. Welcome innovation. And not by default approval. Stand in front of the world and show that America has two parties, show that this administration means free market capitalism, hail the geniuses who bring new things to this world, lift the spirits of this great nation.”

Chris Corey CMO MarketHive Inc

Andrew Quentson on 25/04/2017

 

Alan Zibluk Market Hive Founding Member

Arbitrage – What it is and how it works

Arbitrage refers to the process of instantly trading one or more pairs of currencies or odds for a nigh risk-free profit.

Usually, this involves two exchanges (this is then called a two-legged arbitrage); although more are, of course, possible.

crypto currency arbitrage

There are several steps when executing an arbitrage:

Find a suitable opportunity
Execute trades
Rebalance accounts

Step 1: Find a suitable opportunity

This step is relatively easy. Simply check the order books of as many exchanges as you like, compare bids vs asks, and check if you can find a negative spread.

A small discourse into what a spread is

I will assume you're familiar with bids, asks and what an order book is – if not, you should definitely look up those first. As for the negative spread, I'll elaborate a bit more on that. The spread is what is used to refer to the difference between bids and asks – lowest ask – highest bid = spread. This should be (and typically is) a positive value, since the best bid at an exchange must be lower than the lowest ask of an exchange – otherwise the matching engine of the exchange would settle these orders automatically.

In a perfect world, all markets and all market participants would have the same information, hence all top bids and all top asks of all exchanges would be the exact same, after fees were applied.

If you've seen the recent US elections, however, you're probably aware that the world isn't perfect, though. Hence, not all participants of a market know the same thing as the others, resulting in bids at exchanges which are higher than the asks at other exchanges – and this is what is called a negative spread.

Step 2: Execute trades

Let's assume you've found an amazing opportunity at exchange A and exchange B – a negative spread of 100$!

Exchange A: Ask 1BTC@450$
Exchange B: Bid 1BTC@550$

Luckily, you have proper funding at both to match these instantly – but how do you go about doing that? Easy! Just place an order on the opposite side at each exchange with the quote's prices!

Exchange A: Place Bid of 1BTC@450$
Exchange B: Place Ask of 1BTC@550$

Since your placed order match an order on the opposite side of the book, the trading engine matches them and the trade is settled, leaving you with a theoretical profit of a smooth 100$! Why theoretically, you ask? I'll get to that point further below.

Step 3: Rebalance Accounts

Unfortunately, you were only able to trade once today, but hey! Tomorrow's another day – but in order to be able to properly trade, you need to even out your balances. Right now, your accounts look like this:

Exchange A: 2 BTC | 50$
Exchange B: 0 BTC | 1050$

Hence, you go about and send 1 BTC from Exchange A to Exchange B, and 550$ dollars to Exchange A from Exchange B. No magic here – all accounts are re-balanced and you're ready to make a fortune again, tomorrow.

Exchange A: 1 BTC | 550$
Exchange B: 1 BTC | 550$ 

Arbitrage – Why everyone's not doing it

This all sounded wonderful? That's exactly what I thought when I first set out with my own arbitrage bot. However, there a some technical aspects that can really turn a sunny day into a poopy rain on your parade.

Caveats and risks

1. It needs to be as close to real-time as possible

This is possibly one of the hardest things to get right, and also the most underestimated aspect of arbitrage in crypto currency. The markets, compared to ForEx trading, are ridiculously slow – at busy exchanges, there may be a couple of dozen trades executed. Which gives the illusion, that polling data for bots via the most common API type, RESTful, is enough to trade risk-free. This is a misconception. Maybe for today this may appear to be enough – but what if markets picked up the pace? just 1 trade (or simply a placed order) within one second can change your opportunity from profit to loss.

2. Always trade limits, never market orders

Under the aspect of being the fastest, it might seem like a good idea to use market orders in order to be settled asap – you'd be terribly wrong. As discussed above, your data could be as old as 1 second (with above mentioned one order messing up your opportunity) – perhaps someone cleared the entire top level and all you're left with is a bid for twice the price you intended. Yikes.

3. REST API call rates make your life hard

Many exchanges employ a API call rate limit – that is, you're allowed to query data at the exchange X times every Y seconds. The differences are wide and nearly every exchange does its own little thing when it comes to limits. The problem with them is, they severely limit your actions. If you don't constantly keep an eye on how often you send a request, you might run into the limit when it seriously counts – for example when you have to cancel an order, because you couldn't place its counter part at another exchange. Unfortunately, websocket APIs are still rare and their brother on steroids, FIX sockets, even rarer – leaving you stuck with the turtle of programmable interfaces.

4. Integration with APIs can be a nightmare

There is no unified, standard definition for what an exchange API can do, or what data it returns. Which technically wouldn't be a problem, if they were documented properly. Incidentally, the exchanges with seemingly many opportunities also have the worst documentation (take btc-e.com's Documentation for example – heresy!). Of course, also the opposite is true – GDAX, Kraken, Bitfinex all have excellent documentation. But nonetheless you have to dig through them to understand how they work, what their rates are, how they handle data types, authentication and so forth. That is, if they even mention anything about that.

5. Fees will minimize, if not eliminate your profits

In my above step-by-step guide, I purposely omitted fees of all kind. But of course, they're essential to successfully arbitraging. The most commonly known fees, are trade commission fees – these range anywhere from 0.1% to 0.6% and need to be considered in Step 1: Find a suitable Opportunity. On top come fees for deposits and withdrawals during Step 3: Rebalancing Accounts. Depending on your preferred pair, these may range from feasible (transferring crypto currencies usually is cheap enough) to quite steep. For example, a deposit / withdrawal at Bitfinex entails the following fees:

Bank wire withdrawal & Deposit: 0.1% of amount deposited/withdrawn, 20$ minimum
And this does not include processing fees of your house bank – for me, for example, that's an additional 10€ for deposits, plus a 1% conversion fee. If you do the math you'll quickly realize that you don't even have to bother starting to trade at Bitfinex, unless you have a really big stack to trade with.

But this does not just apply to BTC-Fiat pairs. Alt-coins suffer a similar fate. In order to make arbitraging worthwhile, you will have to have enough funds at as many exchanges to make trades AND re-balancing worthwhile. And this quickly gets to a point where you realize your last month's savings aren't equipped to get the job done.

To give you a further example on how fees affect your profits, let's take a look back at the example from step 2, this time factoring in all fees. I'll walk you through it. For the argument's sake, we'll pretend to be a european trading BTCUSD at Bitfinex (Exchange A) and Kraken (Exchange B).

Bitfinex: Ask 1BTC@450$
Kraken: Bid 1BTC@550$ These prices are raw- they do not include trade commission fees, not transaction fees. Let's add those….

We'll define a taker fee of 0.25% at both exchange – the taker fee applies whenever you remove liquidity from the order book. Next, let's add deposit & withdrawal fees to the mix. At Bitfinex, we pay a minimum of 20$ for each fiat withdrawal & deposit, or 0.1% of the moved amount (if its more than 500$). At Kraken, we pay 0.09€ per fiat withdrawal, deposits are free. In addition, btc withdrawals cost 0.0005 BTC at kraken, while Bitfinex charges no fees for this. Deposits cost nothing at both exchanges. Furthermore, we can't transfer fiat directly from exchange to exchange – an additional 10€ fee per sent out transaction needs to be facotred in, as well as 1% conversion fee whenever we receive or send fiat from our bank account (2 times total).

Let's list these fees to try and maintain an overview

  1. Profit from arbitrage (bid – fee – ask + fee )
  2. Withdrawal Fee Bitfinex (20$)
  3. Deposit Fee Kraken (0.0$)
  4. Miner Fee for withdrawal at Kraken (0.0005BTC)
  5. Transaction Cost of our house bank (10€) (Bank to Bitfinex)
  6. Conversion Fee of our house Bank (1% of transfer amount x 2)

Let's put some numbers to these:

  1. (550 – 550*0.0025) – (450 + 450 * 0.0025) = 97.5$
  2. Move ~497$ to House bank = 20$
  3. 0.0$
  4. 0.0005BTC * 500$ = 0.25$ # Assuming this is the end of day price of the coin
  5. 10€ * 1.05 = 10.05$
  6. (497 * 0.02) = 9.94$

Which brings us to net profit of: 57.26$ This translates to 42.74% reduction of your originally seen profit.

This is neither a worst, nor a best case scenario – it's merely designed to show you how many hidden fees are involved in an arbitrage. Also, keep in mind that a 22% arbitrage opportunity is practically non-existant.

As a matter of fact, had the spread been anything less than 40$, the fixed fees of our house bank and Bitfinex alone would have made our supposed arbirtrage opportunity a loss.

6. Volatility of coins is your enemy

"No matter where the market goes, arbitrage makes a profit anyway!"

This is true – if your currencies don't tend to drop or rise by 50% within 24 hours. Ideally, both currencies you trade in should be relatively stable, while still showing a certain volatility – no volatility would mean the chart is a flat line, resulting in no opportunities for you.

The problem with pure crypto currency arbitrage (LTCBTC), however, is that Alt-coins can go completely fubar – as opposed to a fiat-based crypto arbitrage (i.e. BTCUSD). A personal anecdote:

When ZEC launched, I was instantly fascinated at the terrible market efficiency and arbitrage opportunities of almost 5% regularly. Hence, I bought in at 1ZEC@1.2BTC, thinking this is probably where market will stay at (at least it's not as bad as the guy who bought a ZEC for 3k BTC). I started arbitraging and immediately increased the amount of ZEC I was holding – completely oblivious to the fact that since I started trading, the price had fallen to 1ZEC@0.1BTC. My ZEC was worth 90% less, and I lost almost half a bitcoin worth of money.

Some volatility is great for arbitrage – too much volatility isn't.

7. Exchanges aren't as technically robust as they ought to be

Most of the time, you will find that smaller exchanges offer opportunities more often than big exchanges. This is in part due to the previously mentioned slow movement of information, but also their (often significantly lower) trading volume. Initially, this may appear like a steal – but there's usually a reason that particular exchange only has the low volume it currently does.

In a time where any one in the world can open up an exchange running on his raspberrypi and Ethereum, trading on the more alternative exchanges can be a serious risk to your investment.

From things like DDOS attacks and overloaded matching engines not matching your orders, to more serious issues like stuck withdrawals due to too low miner fees, or even theft – and the latter is a very omnipresent issue not exclusively affecting small exchanges, as the Bitfinex Heist has shown this summer; the list of potential technical failures is long and you should be aware of these at all times.

Conclusion

I'm aware this answer is overtly negative – this was intentional. Arbitrage, as well as crypto currency in general, is not the quick buck everyone on forums and dubious sites advertising trading bots make you believe. While its inner mechanisms and workings are still quite cryptic* to even the most professional traders (sorry for the pun), even the fabled cryptographic adheres to some basic principles, afterall. The 'quick way to wealth' usually will just end up quickly making you wealthless.

Start by opening up some of the well known exchanges … do not use ones such as localbitcoins .. far too risky. A good one is OKCoin.com as they have a good verification system.

(*) Another great myth is that the chinese dictate the BTCUSD market. There is no empirical proven correlation between chinese and american markets. The only defacto correlation that has been found was that of google searches for bitcoin to btc trading volume – but whether this was positive or negative was inclusive.

If you believe that my message is worth spreading, please use the share buttons if they show on this page.

Stephen Hodgkiss
Chief Engineer at MarketHive

markethive.com


Alan Zibluk Market Hive Founding Member

Trade Coin Club Reviews – Is It A Scam Or A Legitimate Opportunity?

Trade Coin Club Reviews – Is It A Scam Or A Legitimate Opportunity?

 

Trade Coin Club

I found out about this company called Trade Coin Club as I was surfing the web. This company is a fresh new company and as always, I have decided to have a detailed look at their business.

I am sure if you are like me, many of you would also like to know more about this new venture. Even more so, those of you, who are looking to invest in this web MLM business.

To help you guys, I have spent some time researching and prepared this Trade Coin Club Review. I have divided this into company profile, products, compensation plan and finally my thoughts.

Let’s check what I dug up about them!

What Is Trade Coin Club? 

Trade Coin Club may very well be the newest of the online bitCoin based MLM business. As for the domain registration, this company just started its operation in November 2016. I am not scared of being involved in a company in its infancy because if it is a good company I can get a head start. 

Like most of the online businesses similar to this one, this company does not have any information about the company owners, stakeholders or management teams., however, they are licensed as a legitimate trading platform. Another point to note they offer all trades to be logged and viewed in the back office. 

They have registered their domain name for 10 years. 

Products Trade Coin Club Offers

Trade Coin Club does not have any physical or digital products to sell or rent.

After becoming an affiliate member, members can sell or promote memberships of Trade Coin Club. Each member is set up with a trading platform that allows them to have their cryptocurrency ie "Bitcoin" traded against the top ten cryptocurrencies. I like this because of the aligator tooth (the up and down price of Bitcoin) this allows members to not really be concerned about the lack of knowledge of trading because it trades on auto-pilot and they choose the level of risk. High, medium, low. More on this later in the study.

The Trade Coin Club Compensation Plan

You can join Trade Coin Club by signing on for one of 3 available investment plans.

  • Apprentice – Invest 0.25 to 0.99 BTC and receive a 0.35% daily ROI for 8 months
  • Trader – Invest 1 to 4.99 BTC and receive a 0.4% daily ROI for 12 months
  • Senior Trader – Invest 5 BTC or more and receive a 0.45% daily ROI for 12 months

However, you have to pay a 25% fee on your earned ROI every four months. So basically, you are actually earning 75% of their promised ROI.

Affiliate members can also earn referral commission on unilevel structure up to level eight. Your unilevel positions can be filled by both your directly sponsored members and their own sponsored members.

  • Apprentice – 10% on level 1, 3% on level 2, 2% on level 3 and 1% on level 4
  • Trader – 10% on level 1, 3% on level 2, 2% on level 3 and 1% on levels 4 to 6
  • Senior Trader – 10% on level 1, 3% on level 2, 2% on level 3 and 1% on levels 4 to 8

When you advance in affiliate ranks you receive rank advancement bonus.

  • Trader Level 3 – Earn 10 BTC or more in monthly binary commissions and receive a Montblanc pen
  • Trader Level 4 – Earn 50 BTC or more in monthly binary commissions and receive a cruise
  • Trader Level 5 – Earn 100 BTC or more in monthly binary commissions and receive an “international Caribbean travel” cruise
  • Trader Level 6 – Earn 200 BTC or more in monthly binary commissions and receive a Rolex watch
  • Trader Level 7 – Earn 500 BTC or more in monthly binary commissions and receive a Toyota Corolla car
  • Trader Level 8 – Earn 750 BTC or more in monthly binary commissions and receive a BMW 320 car
  • Trader Level 9 – Earn 1500 BTC or more in monthly binary commissions and receive a BMW Z4 car
  • Trader Level 10 – Earn 5000 BTC or more in monthly binary commissions and receive a BMW 18 car
  • Trader Level 11 – Earn 10,000 BTC or more in monthly binary commissions and receive a Lamborghini Huracan car

They also provide residual commissions on binary compensation structure.

Your downline investment volume will be counted every day on both sides of the binary team and you will be paid commissions on the weaker side of your leg. The amount will be dependent on your rank.

  • Apprentice – 8% (capped at 2 BTC a day)
  • Trader – 9% (capped at 10 BTC a day)
  • Senior Trader – 10% (capped at 15 BTC a day)

Additionally, members can earn recruitment commissions through a 3×12 matrix. When an affiliate fills a matrix position they are paid 0.003 BTC a month, as long as each member continues to pay their monthly fee.

So I have researched results from other existing members. A member that I had talked with has earned a documented 174 Bitcoin since December 24, 2016. They were nice enough to show me in their back office and that they have received full withdrawal after the trade period was over. So I do know at this point this is a real trading platform.

To see the company presentation and to make your own decision Click Here

Chris Corey CMO MarketHive Inc

 

Alan Zibluk Market Hive Founding Member

This Is Worth Watching.

The following is a link to April 13, 2017 ( Thursdays ) Bitqyck Webinar. 
Webinars start at about frame 8:03 min.  http://hive.pe/uf  or the link that follows:

bitqyck LIVE STREAM from Dallas, TX

#bitqyck LIVE STREAM from Dallas, TX. We're changing the face of #cryptocurrency, #dailydeals, #B2B and #directsales through our new technology called #bitqyck and #bitqy. We're embedding 1/10th of a share of bitqyck, Inc common stock in every coin. Pay attention folks, your ability to purchase packages of bitqy ends on May 1st. Currently we're only 2 cents per coin!

Публикувахте от Bitqyck в 13 април 2017 г.

————

Remember there is no cost to join as an affiliate. There are no monthly fees, no autoship requirements and there is no cost to any merchant that join. 
 

But, the company does have a Firstmover/founder opportunity that will end May 1, 2017. 

This gives an affiliate the opportunity to own a nice amount of Bitqy Coins and company Stock.

BITQYCK Optional -The FirstMover/Founder Option Is As Follows: 
Pkg# 1 $199 = 10,000 Bitqy Coins
Pkg# 2 $349 = 20,000 Bitqy Coins
Pkg# 3 $499 = 30,000 Bitqy Coins
Pkg# 4 $1000 = 66,700 Bitqy Coins With Revenue Sharing From Partner Companies.
** Bitqyck $1000 Founding Packages are Running out **
All FirstMover / Founder Packages end May 1, 2017 

The $1000 Pkg are no longer available. 

Again it is Free to join. Email or Call me if you have any questions. 

You can take action now at my link that follows: http://hive.pe/ua

Ven Dance
worldcommere@gmail.com

626-277-8424

Alan Zibluk Market Hive Founding Member

90% of Altcoins Wont Make it But Bitcoin Will Sustain

 

Altcoins are springing up on a daily basis, you might have noticed that they appear pretty regularly in the lists of CoinMarketCap. However, Ethereum Classic's Charles Hoskinson predicts that as much as 90 percent of altcoin will probably die out in the near future.

Speaking to Cointelegraph about the sustainability of cryptocurrencies, Hoskinson, who was with Ethereum before crossing the carpet to ETC, outlined what makes a digital currency thick.

"As for most cryptocurrencies, I agree completely they will likely die out," Hoskinson related. "As 90 percent of businesses usually fail in the first few years, there is no reason to believe that coins are any different."

Treasury Mechanic system

To ensure sustainability of cryptocurrency he is convinced Treasury Mechanic measures should be explored and taken seriously:

"I think all cryptocurrencies should strongly consider a treasury mechanic. It creates long-term sustainability if it's correctly implemented. We are going to look closely at our own treasury for ETC."

Recently some altcoins have come under scrutiny for employing pump and dump tactics to swindle its holders. Case in point is CageCoin, that recently rose by 31,000 percentage point but fell miserably within 24 hours.

It is very imperative that community members undertake the necessary due diligence when they are investing in any coin. This is very crucial at a stage where digital currency is scaling and convincing sceptics, it is not a nine-day wonder but has really come to stay.

Bitcoin is sustainable

On the contrary, Hoskinson holds the view that Bitcoin is not in the category of the unsustainable coins and the strength of every currency is in its communities, not its technology per se.

He elaborates:

"Technology can incentivize more community to come but it cannot replace it. Bitcoin has the strongest community of all cryptocurrencies and also the most resilient. It has survived over a billion dollars of theft, dozens of death declarations and exchange failures alongside many so called leaders trying to hijack to project and the founder leaving. It's absolutely stunning that Bitcoin has survived and thrived. I don't think Bitcoin is going to die. Rather the better question is where does it stop."

Truly, that is the only thing for all currencies including the US Dollar. It is merely strong because people accept it for goods and services. Imagine if they suddenly stopped, the dollar would be in trouble

 

Bitcoin won't die

"I don't think Bitcoin is going to die. Rather the better question is where does it stop?" Hoskinson queries. He articulates it will either become a universal payment system or simply a digital gold standard that stores value.

With the standard of measurement improving swiftly with infrastructures like ATMs, debit cards, hundreds of thousands of merchants, it is hard to dispute Charles Hoskinson on this.

"Many contractors in Eastern Europe do dev work for Bitcoin – it is very popular in Ukraine, for example," Hoskinson remarked. If you would like to earn and have Bitcoin traded for you automatically? 

Thomas Prendergast and I are putting together a team in Trade Coin Club and you can join us Here https://office.tradecoinclub.com/register/ICOREY

 

Chris Corey CMO Markethive Inc

 

BY: Frisco d'Anconia

Alan Zibluk Market Hive Founding Member

Why a New Small Business Blockchain is Actually a Big Deal

Efforts to apply blockchain in the supply chain took an interesting turn last week.

blockchain for small business

I'm speaking, of course, about a piece of news that at first seemed pretty ordinary: a group of European banks announced they would band together to develop a blockchain-based trade finance solution.

This one, though, is unusual.

Rather than tackle large-scale global transactions that cross oceans, the project focuses on intra-European trade, and, more importantly, between small- and medium-sized enterprises (SMEs).

Why is this interesting? It's not because SMEs make up the vast majority of the world's businesses (although that certainly does make for a compelling use case). Rather, it's because of what it says about the evolving nature of trade finance.

We have seen many blockchain projects take a run at the subject, and the application seems obvious. Transactions across borders generally involve significant documentation, a process that itself generates numerous errors and gross inefficiencies.

Reducing the burden associated with getting goods from one place to another has to be a good thing, right?

Let's take a look.

Starting smaller

Most of the projects to date have focused on large international corporations, which is understandable, given that over two-thirds of world trade originates with global enterprises.

Where both the pain and potential promise are most acutely felt, however, is not in conglomerates, but in SMEs. In part, it's because of their sheer number, but mainly, it's due to financial trends.

Approximately 80% of global trade is now conducted through open account transactions, not via traditional channels using letters of credit. This means that there is no bank guarantee of payment.

The buyer pays when it's time to pay – usually well after the product has been delivered.

For many large corporations, this shift reflects tighter restrictions many banks are facing on lending and guarantees, as well as a desire to improve working capital and reduce administration and financing costs.

For most SMEs, open account is their only option, since over half of SME trade finance applications are declined.

Win-win situation

In open account transactions, trust becomes a huge factor. This is an issue when initiating a new commercial relationship, especially for SMEs with patchy or non-existent credit histories.

Without going into the details of how the new platform will work, the ability to see, in real-time, the status of the transaction at each step should make trust more transparent. Accelerating the process from order to settlement will increase liquidity.

The incorporation of the management of the respective banking functions (payment, factoring, etc) aims to facilitate the procedure even further, and could increase margins for both the banks and their participating clients.

Seen from the exporting SME's point of view, the project could be a way to overcome obstacles created by the shifting sands of finance and politics. And from the banks’ point of view, not only will it help to retain and support SME customers, it is also an effective way for banks to re-intermediate themselves into the trade finance process.

Starting within the relatively "safe" confines of the European Union gives the project a chance to test the process of cross-border trade before venturing into more complicated territory.

What's next

If things go according to plan, we shouldn’t have to wait long to see how the project fares with target users. It is already a working proof-of-concept, developed last year by Belgian bank KBC.

Opening it up to six other European institutions is an obvious step toward scalability, presenting a way to test cross-border relationships within a manageable group before it's global.

The team will start to seek regulatory approval within the next few months, with a view to going "live" before the year's end.

Looking forward, the compelling advantage of lower transaction costs and stronger commercial relationships could help to partially offset the uncertainty and potential price of rising interest rates and shifting trade barriers.

It's not hard to see how projects like this could help to prepare businesses around the world for the changes ahead, and to adapt to not only current trends, but future ones as well.

If you believe that my message is worth spreading, please use the share buttons if they show on this page.

Stephen Hodgkiss
Chief Engineer at MarketHive

markethive.com


Alan Zibluk Market Hive Founding Member