WJWJhttps://williamje.com/es/c/blogs/find_entry?p_l_id=562024-03-28T13:29:19Z2024-03-28T13:29:19ZMy first boss: William Je, Hamilton Investment Management CEOTest Testhttps://williamje.com/es/c/blogs/find_entry?p_l_id=56&entryId=475242023-01-10T15:26:09Z2022-12-23T09:46:00Z<p>This article was published originally on <a
href="https://uk.finance.yahoo.com/news/william-je-hamilton-investment-management-ceo-094637398.html">Yahoo.com</a>
on December 23rd, 2022.</p>
<p> <strong>One of the most successful businessmen from Hong Kong,
William Je is CEO of Hamilton Investment Management, a global
fund manager with multi-billion assets under management, and
founder of global digital exchange Himalaya Exchange. He
currently employs over 200 staff.</strong></p>
<p> <strong>Now UK-based, Je was previously chairman of equity
capital markets, Greater China at Macquarie Banking Group
(</strong> <a data-rapid_p="7" data-v9y="1" data-ylk="slk:MGQ.AX"
href="https://uk.finance.yahoo.com/quote/MQG.AX"><strong>MGQ.AX</strong></a>
<strong>), a role he held for 10 years, as well as positions at
China Merchant Securities Hong Kong (</strong> <a data-rapid_p="8"
data-v9y="1" data-ylk="slk:6099.HK"
href="https://uk.finance.yahoo.com/quote/6099.HK"><strong>6099.HK</strong></a>
<strong>), Credit Agricole Indosuez (</strong> <a data-rapid_p="9"
data-v9y="1" data-ylk="slk:ACA.PA"
href="https://uk.finance.yahoo.com/quote/ACA.PA"><strong>ACA.PA</strong></a>
<strong>) and NatWest Markets (</strong> <a data-rapid_p="10"
data-v9y="1" data-ylk="slk:NWG.L"
href="https://uk.finance.yahoo.com/quote/NWG.L"><strong>NWG.L</strong></a> <strong>).</strong></p>
<p>There are different stages and different learnings but I first
learnt how to deal with doing business in China and its clients under
Liping Zhang.</p>
<p>He was my boss in investment banking at Dresdner Kleinwort
Wasserstein. I was there for four years and I was a director and head
of business development, while Liping later joined Blackstone (<a
data-rapid_p="11" data-v9y="1" data-ylk="slk:BX"
href="https://uk.finance.yahoo.com/quote/BX">BX</a>) where he is now
chairman, Greater China.</p>
<p>I was kind of a right hand man to him at Dresdner and I
understood the importance of being humble, no matter how good you are.</p>
<p>I learned many different styles of management and leadership with
Liping. Some bosses have been pushy or relaxed, while Liping would
always give guidance rather than order and any decisions you were made
to feel part of.</p>
<p>I found that very effective. When you buy into the idea, you will
do it from your heart and this has been my management style today.
None of my staff see me yelling, and I try to explain the reasons
behind each of the decisions so that they buy in and try their level
best to complete the mission.</p>
<figure> <p> <img data-caas-lazy-loading-init="1"
src="https://s.yimg.com/ny/api/res/1.2/sHwIMq6yBTCB.ZJEtHJ0pQ--/YXBwaWQ9aGlnaGxhbmRlcjt3PTk2MDtjZj13ZWJw/https://s.yimg.com/os/creatr-uploaded-images/2022-12/439c8e80-820e-11ed-bfee-1f2737b2f36a" /></p>
<figcaption> <p class="text-muted">Liping Zhang, pictured in 2020,
is now chairman of Greater China, Blackstone. Photo:
Blackstone/Twitter</p> </figcaption> </figure>
<p>If you are someone who isn’t approachable then people won’t try
to persuade you. As a friendly leader, people always want to
persuade you but Liping always held strong principles. I think this
is quite rare in the business world.</p>
<p>Although I worked with him over 20 years ago, he is someone you
remember for life.</p>
<p>As an investment banker and then fund manager, I have been
careful over the years while I’ve taken great interest in <a
data-rapid_p="14" data-v9y="0" data-ylk="slk:cryptocurrency"
href="https://uk.yahoo.com/topics/crypto/">cryptocurrency</a> from the
early days, while my younger brother is chairman of a blockchain
association in Hong Kong.</p>
<p>Four years ago I started to look into the details behind crypto
and we found something that will probably change the world's
financial systems. We made investments and set up a crypto exchange
(Himalaya Exchange)<strong> </strong>as well as blockchain payment
apps. It is still in its infancy and there are still the ups and
downs which are all very normal.</p>
<p> <a data-rapid_p="16" data-v9y="1"
data-ylk="slk:Like the FTX case;outcm:mb_qualified_link;_E:mb_qualified_link;ct:story;"
href="https://uk.finance.yahoo.com/news/ftx-co-founder-gary-wang-110235450.html">Like
the FTX case</a>, there will be more casualties coming but it’s good
for the development of the whole industry. The market will
consolidate, bad companies will disappear and stronger ones will form.
I’m really confident in the sector.</p>
<p>This is in contrast to the current China economy. For it to
develop, it has to go hand-in-hand with politics. At some point you
need to liberalise the politics, but right now it’s getting more tech controlled.</p>
<figure> <p> <img data-caas-lazy-loading-init="1"
src="https://s.yimg.com/ny/api/res/1.2/e86GE7pL3L9UbWY7Szru6A--/YXBwaWQ9aGlnaGxhbmRlcjt3PTk2MDtjZj13ZWJw/https://s.yimg.com/os/creatr-uploaded-images/2022-12/9421c0f0-8209-11ed-bb5d-d378f9726220" /></p>
<figcaption> <p class="text-muted">Chinese premier Li Keqiang raises
his hand to vote at the closing ceremony of the 20th National
Congress of China's ruling Communist Party at the Great Hall of
the People in Beijing. Photo: AP</p> </figcaption> </figure>
<p>I lived in Beijing for two years and visited over 200 cities in
China and so I’ve been keeping in contact with all the top businessmen
in China and there is rightly a concern. After all, what is the point
of investing more money if the next day their assets will be investigated?</p>
<p>The whole political environment is getting tighter and will
become more state controlled, with the government taking control of
more private companies. They will set up a party committee in
private and listed companies and effectively the control of the
whole listed company is with the party, not the board. This is very alarming.</p>
<p>My company is being attacked by China because we support
democracy. I have set up many advisory businesses, including a cyber
security company. I’ve set up a fund to help Hong Kong people study
and the exchanges are attractive to overseas Chinese. A lot of
people have similar objectives, in as much as freedom and democracy,
so this has upset a lot of people in China.</p>
<figure> <p> <img data-caas-lazy-loading-init="1"
src="https://s.yimg.com/ny/api/res/1.2/aDOreMid3HCjwWnAi61Tqg--/YXBwaWQ9aGlnaGxhbmRlcjt3PTk2MDtjZj13ZWJw/https://s.yimg.com/os/creatr-uploaded-images/2022-12/35006f00-820d-11ed-a3ff-96daaa59683a" /></p>
<figcaption> <p class="text-muted">Himilaya Exchange, founded by
William Je, believes in a new financial system 'that provides
freedom for all'. Photo: Himalaya Exchange</p> </figcaption> </figure>
<p>I’ve had to deal with 40 million DoS hacks in 30 minutes and my
cyber security team says this is purely a state-sponsored attack. I’m
lucky that none of them are successful. There are several incidents
with people watching my activities, while two people recently asked
for me with fake names. Luckily, I have a very good security team but
it’s something I am very familiar with. The infiltration is serious
but sad.</p>
<p>How do I stay positive amid these challenges? Well, I’m lucky in
that I have means to protect myself and set up companies. Not everyone
is in the same position, and that’s why I need to speak out through my
resources. At the end of the day, if everyone stopped talking then the
truth will not be revealed.</p>
<p>Winston Churchill said that ‘courage is rightly esteemed the
first of human qualities’. There are many smart people, many more
than me, but you may not be able to find someone with strong courage
to do something. That’s my mission. It is a blessing for me so why
not use it, as long as I’m still surviving.</p>
<p>I would hope that Liping sees me as someone who wants to do their
best and is happy to see me progressing well. I know he's been happy
for other people’s success and willing to help, which is a great
characteristic. It’s not always like that in business.</p>
<p> <strong> <em>William Je set up the charity </em></strong>
<a data-rapid_p="18" data-v9y="1"
data-ylk="slk:Hong Kong People Association"
href="https://hkpeople.org/" target="_blank"
rel="noopener noreferrer"><strong> <em>Hong Kong People
Association</em></strong></a> <strong> <em> which was founded to
provide help and guidance for newcomers to the UK.</em></strong></p>
<p>by <a data-rapid_p="6" data-v9y="1"
data-ylk="elm:author;slk:Rod Gilmour"
href="https://www.yahoo.com/author/rod-gilmour">Rod Gilmour</a>, Yahoo.</p>Test Test2022-12-23T09:46:00ZFinancier claims to be victim of Chinese 'dirty tricks' due to supporting democracyTest Testhttps://williamje.com/es/c/blogs/find_entry?p_l_id=56&entryId=474842022-12-28T12:59:33Z2022-10-08T23:49:00Z<p>This article was published originally on <a
href="https://www.telegraph.co.uk/news/2022/10/08/financier-claims-victim-dirty-tricks-china-due-supporting-democracy/">Telegraph.co.uk</a> on
October 8th, 2022.</p>
<p>A British-based multi-millionaire businessman claims to have been
targeted with a “dirty tricks” campaign of smears, cyber attacks and
harassment orchestrated by <a
href="https://www.telegraph.co.uk/world-news/2022/10/02/fbi-sent-pacific-us-australia-japan-stand-chinas-bullying/"
target="_blank" rel="noopener noreferrer">China</a> because of
his <a
href="https://www.telegraph.co.uk/news/2022/09/18/hong-kongers-queen-represents-what-have-lost-freedom/"
target="_blank" rel="noopener noreferrer">support for
democracy</a> in Hong Kong. </p>
<p>William Je, who set up his own finance company in the UK after
leaving Hong Kong, says it has suffered multiple state-backed <a
href="https://www.telegraph.co.uk/business/2022/09/05/tear-decades-old-law-save-britain-hackers-say-cyber-experts/"
target="_blank" rel="noopener noreferrer">cyber
attacks</a> including one that saw 40 million hits in the space of 30
seconds, the bulk emanating from China. </p>
<p>Mr Je, who also established a charity to help Hong Kongers escape
the Chinese authorities, claims he and his staff have been targeted
online with their names and photos circulated in posts on social media
platforms accompanied by both personal and professional abuse. </p>
<p>A dossier of the “dirty tricks” compiled by his legal and
security team also includes evidence of attempts to damage his
business by making false claims against it to regulators as he
sought to expand into new overseas markets. </p>
<p>Last year he was forced to call in police to investigate
incidents of vandalism and suspicious behaviour by men around his
house. He now employs a team of six security staff to provide 24/7
protection for him, his wife and two young children. </p>
<p>Mr Je, who once held a senior position as the member of an
advisory body to the Chinese Government before he left Hong Kong,
said: “It's doubly galling for them to see someone who was, as it
were, one of their own, now advocating freedom and democracy.” </p>
<p>He said he feared for his family still in Hong Kong. “There have
been many cases where they intimidate people by threats, arrests and
kidnap in order to exert pressure and hold someone to ransom or
persecute them,” he said.</p>
<figure> <img data-fileentryid="51804"
src="https://williamje.com/documents/d/guest/ezgif-1-53ee6a5f1b-jpg-1" /> <figcaption> <p
class="text-muted">Mr Je said he has suffered multiple
state-backed cyber attacks | CREDIT: Jeff Gilbert.</p>
</figcaption> </figure>
<p>“This is the way the Chinese Communist Party (CCP) works. Anyone
who stands up for human rights and freedom, who is from Hong Kong or
China, and does not follow the ideals of the CCP, are likely to be the
subject to false allegations, bullying, harassment and persecution.” </p>
<p>Former Tory leader Iain Duncan Smith, co-chair of the
inter-parliamentary alliance on China, said: “The Government must now
act on foreign powers who attack people within the UK. </p>
<p>“I say this as someone who has been sanctioned by the Chinese and
has been under attack myself from agents of the Chinese Government.
The UK Government must now get on and make it clear to the Chinese
that any such behaviour will lead to sanctions.” </p>
<p>Mr Duncan Smith disclosed he had fallen victim to a Chinese
so-called cyber “wolf warrior” who impersonated him in fake emails to
leading political figures around the world claiming that he had
changed his stance on China. </p>
<p>Mr Je, who graduated from the University of Wales and Manchester
Business School with a masters, worked at blue chip banks in Hong
Kong, including heading up equity capital markets for Macquarie
banking group for 10 years before deciding it was unsafe for his
family to remain amid kidnappings and arrests of lawyers and publishers. </p>
<p>He had been a member of the elite Chinese People’s Political
Consultative Conference, which advises the Chinese Government, but,
quoting a Chinese saying, he said: “The more you know them, the more
you would like to leave them.” </p>
<p>He came to Britain four years ago and, using his financial
expertise, launched Himalaya Exchange - a blockchain technology
service designed to give people financial freedom - on November 1
2021. He now employs 200 people in London, including 50 Hong Kongers,
and 100 more worldwide. </p>
<p>But two days after the launch, Himalaya’s website suffered two
huge cyber attacks, which his security team identified as being
sourced from China. The largest “denial of service” attack -
designed to overwhelm the website with fake traffic - generated
39.78 million requests over 30 minutes. </p>
<p>Mr Je claimed staff have been intimidated with their images and
personal details shared on twitter and labelled as “being part of a
criminal organisation.” Social media bots and pages have encouraged
people to make false complaints to regulators against the exchange,
even including instructional videos on how to do it. </p>
<p>He said it was a standard tactic by the Chinese Communist Party
to discredit and damage the reputation of companies - as was the
submission of “malicious” complaints to regulators. This started with
the regulator in British Columbia in Canada and was repeated in New
Zealand and the Bahamas. </p>
<p>“Normally if people complain, they complain first to the company,
then go to the regulators. Instead, these people go straight to the
regulator, who comes to ask us a lot of questions and then finds out
they are all fake complaints,” said Mr Je. </p>
<p>His most unsettling experience came after he gave an interview to
a TV station in March last year in which he criticised China’s
approach to <a
href="https://www.telegraph.co.uk/business/2022/08/23/risk-backing-china-corner-taiwan/"
target="_blank" rel="noopener noreferrer">Taiwan</a>. In the early
hours of the following morning, his house was vandalised and rotten
eggs thrown at its windows. </p>
<p>The following month a man was seen standing directly outside his
house on a quiet residential street, staring into his home. Both
incidents were investigated by police, but remain unsolved. They are
all the more unsettling because Mr Je came to Britain in search of
security and a free democracy. </p>
<p>“The reason why I moved to the UK is for the family. I didn’t
think Hong Kong was a safe place any more,” he said. Now, however,
he is braced for a sustained campaign. </p>
<p>“I have been given information from parties, whom I cannot name,
that the CCP intend to ramp up their attacks on me in a major way,” he said. </p>
<p> <a data-test="byline-link"
href="https://www.telegraph.co.uk/authors/c/cf-cj/charles-hymas/">By
Charles Hymas,</a> HOME AFFAIRS EDITOR, Telegraph UK</p>Test Test2022-10-08T23:49:00ZMore Regulation Needed For Crypto MarketsTest Testhttps://williamje.com/es/c/blogs/find_entry?p_l_id=56&entryId=475042022-12-28T13:00:12Z2022-07-27T15:54:00Z<p>This article was published originally on <a
href="https://www.wealthbriefing.com/html/article.php?id=195200#.Y6WWo3bP1Pb">WealthBriefing</a> on
July 27th, 2022.</p>
<p>The cryptoasset market must be more tightly regulated in light of
rising volatility, as seen in the gyrations in prices, the chief
executive of <a
href="https://www.wealthbriefing.com/html/section.php?keywords=Hamilton%20Investment%20Management"
target="_blank" rel="noopener noreferrer">Hamilton Investment
Management</a> said this week </p>
<p>Talking exclusively to WealthBriefing, William Je, a fund manager
for over 30 years, and well known in Hong Kong business circles, said
cryptos are high-risk assets. One reason why the market is so volatile
is because regulations are not clear, he said. To illustrate that
point, the Bank of England also recently called for enhanced
regulation to mitigate against potential risks. Meanwhile, the EU has
agreed on regulation for crypto assets which will come into force at
the end of 2023. </p>
<p>Je said different rules governing the crypto market are scattered
across member states and jurisdictions which is confusing. In the UK,
for instance, it takes about two years to apply for licences, which is
much longer than other countries such as Liechtenstein, he explained.
“France and Spain are also catching up,” he added. </p>
<p>The UK government has said that it wants to be more active in
technology and the crypto market but it needs to do more, he stressed.
He believes that there needs to be a new UK regulatory authority to
focus on the crypto market. He also believes that clearer, more
consistent rules are needed worldwide, with the introduction of a
global crypto regulatory framework. </p>
<p>Je sees a positive future for the crypto market, saying that it
will be used daily for trading purposes, complimenting national currencies. </p>
<p>Market events have made headlines. For example, in May, the Group
of Seven major industrialised nations has endorsed global moves to
examine whether the rise of crypto-assets such as bitcoin pose a
threat to the financial system, commenting in the wake of dramatic
falls in some entities. In the already-febrile atmosphere of global
markets, roiled by worries about rising inflation, supply-chain
disruptions and a return to higher interest rates, the wider
cryptocurrency market has suffered. Prices of bitcoin, for example,
have fallen. Two main stablecoins from the crypto project Terra
collapsed with some calling the incident a Ponzi scheme. Terra
dollar's sister token Luna fell dramatically. UST lost its dollar peg
when millions of investors sought to cash in on their tokens at the
same time. Investors learned that the UST reserve mechanism was flawed
– UST is an algorithmic stablecoin, backed by its sister asset Luna. </p>
<p>Corporation tax <br /> As markets recover globally from the
pandemic, he also said that recent plans from the UK Treasury to levy
more corporation tax from sovereign wealth funds would have an adverse
impact on the number of deals taking place. Now is not the time to
impose a tax, he stressed, especially with recession looming. </p>
<p>Under the move, which was outlined in a consultation this month,
the UK government has suggested making sovereign wealth funds pay
corporation tax on property and commercial enterprises. But some tax
experts believe that this could reduce foreign investment in Britain. </p>
<p>Je’s portfolio includes private equity investments in licensed
banks, crypto exchange, payment systems, fintech and blockchain
companies, social media projects, and multi-strategy algorithmic
trading funds. </p>
<p>Je is also founder of Himalaya Exchange, a global digital
exchange with a full ecosystem including a blockchain payment app, a
stable coin and a trading coin. </p>
<p> </p>
<p>Amanda Cheesley, </p>
<p>Deputy Editor, </p>
<p>27 July 2022 </p>Test Test2022-07-27T15:54:00ZState of the Markets: #150 William Je – Fintech InvestorTest Testhttps://williamje.com/es/c/blogs/find_entry?p_l_id=56&entryId=473532022-12-28T13:01:03Z2022-04-29T17:17:00Z<div class="d-flex justify-content-center"> <p> <iframe
allow="autoplay *; encrypted-media *; fullscreen *; clipboard-write"
frameborder="0" height="200"
src="https://embed.podcasts.apple.com/gb/podcast/150-william-je-fintech-investor/id1301360737?i=1000559101592"
width="400"></iframe></p> </div>
<p>William shared his thoughts about the development and regulation
of cryptocurrencies and its impact on democracy in China.</p>
<p> </p>
<p>Tim Price:</p>
<p>Director of Price Value Partners. It provides services that
include managing a global portfolio of Ben Graham-style specialist
value managers and value stocks. They also offer diversified
service, capital preservation and growth strategies in the form of
managed accounts.</p>
<p>Paul Rodriguez:</p>
<p>Paul Rodriguez formerly ran a highly popular evening programme at
London Universities on technical analysis before improving the course
for thinktrading.com. He has a reputation as running the best and most
enjoyable course in the City. Places are now limited to ensure maximum
class benefits. He is a frequent commentator on Bloomberg TV, CNBC,
Reuters TV and other high quality news and information channels.</p>Test Test2022-04-29T17:17:00ZEscaping China: What is it like relocating from Hong Kong to the UK?Test Testhttps://williamje.com/es/c/blogs/find_entry?p_l_id=56&entryId=473392022-12-28T13:03:01Z2022-04-12T17:11:00Z<p> <iframe
allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture"
allowfullscreen="" frameborder="0" height="371"
src="https://www.youtube.com/embed/9TKAbnVJTUs" width="100%"></iframe></p>
<p>What is it like relocating in Britain from somewhere like Hong Kong? </p>
<p>One of the most distinguished names in Hong Kong, esteemed
entrepreneur and philanthropist, William Je, has embarked upon a quest
to help some of the 5.4 million eligible Hong Kong citizens seeking to
relocate and set up residency in the UK. </p>
<p>In the first half of this year, a whopping 65,000 people from
Hong Kong applied for a special five-year visa to live in the United Kingdom.</p>
<p> </p>Test Test2022-04-12T17:11:00ZCryptocurrencies Can Offer A Lifeline To Some Of The World’s NeediestTest Testhttps://williamje.com/es/c/blogs/find_entry?p_l_id=56&entryId=473672022-12-28T12:57:18Z2022-03-23T09:56:00Z<p>As the devastating situation in Ukraine continues to unfold,
cryptocurrencies have emerged as a more significant theme than
expected in the conflict as crypto donations pour in to support the
Ukrainian people. According to CNBC, the crypto donations that have
come in the past week are valued at $54 million.</p>
<p>It is no exaggeration to say that cryptocurrencies have been the
easiest and perhaps only alternative means for donations to reach
Ukraine. Shortly after Russia’s invasion began last month, Ukraine’s
President Zelensky instituted martial law – suspending civil law and
extending military rule to civilians – thereby making it almost
impossible to send and receive fiat currencies.</p>
<p>It is symbolic of the broader potential of cryptocurrencies to
help the financially disenfranchised. As developing countries
struggle to deal with the economic impact of Covid, cryptocurrencies
are playing an increasingly important role in easing financial
burdens by helping those in rich nations wanting to make regular
transfers of money, known as remittances, to relatives in low-income
countries. Globally, annual remittance funds amount to hundreds of
billions of dollars and provide a lifeline for millions of people.</p>
<p>With growing efforts around the world to regulate
cryptocurrencies amid concerns over price volatility, financial
crime and the possible threat to monetary policy, their adoption as
a remittance vehicle highlights their economic utility and potential
as a decentralised, borderless currency, especially for people with
no bank accounts in regions like Africa, Asia and Latin America. As
of 2017, there were 1.7 billion unbanked adults globally, nearly
half of them living in developing world economies.</p>
<p>Recent survey research in the US by the online news service
PYMNTS.com reveals that 60 per cent of those in America who make
payments online to family and friends abroad increased their frequency
during the pandemic, 23 per cent of them – some 8 million adults –
using at least one kind of cryptocurrency. The research also found
that just over a tenth of respondents said cryptocurrencies were their
most used payment method for such cross-border transactions.</p>
<p>Indeed, Latin America has reportedly seen four-fold increases in
the value of monthly crypto-based remittances received from abroad
over the past couple of years and there are indications of a recent
rise in transactions in Africa. Nigeria is seemingly so concerned
about the use of digital coins for overseas payments that it is
incentivising Nigerians to opt for official money transfer operators.</p>
<p>Fox News Cameraman Killed In Ukraine<br /> Migrant workers or
immigrants in advanced countries have long relied on money transfer
services to send a proportion of their earnings back to families in
the Global South, a flow of funds estimated to be over $500 billion
annually. The regular flow of money buttresses recipients’ meagre
finances or serve as a principal source of income, preventing them
from falling into poverty. With Covid, these funds have assumed ever
greater importance, as lower-income countries will take longer to
recover from the pandemic, worsening inequality around the world.</p>
<p>For the most part, money transfer services have been the main
means of sending cash, but they are being increasingly rivalled by
cryptocurrencies, as delivering the latter is speedier and incurs
fewer costs. This is due in large part to the decentralised nature of
blockchain – the digital ledger that records cryptocurrency
transactions – which cuts out costly intermediaries involved in
conventional money transmission.</p>
<p>The other reason is that, although digital coins can be quite
volatile, especially Bitcoin, they are probably less prone to losing
their value than the very weak currencies of certain
remittance-receiving countries, such as Lebanon or Venezuela which
suffer chronic hyperinflation. There’s an even stronger argument for
their use in fragile, deeply unstable states like Afghanistan or
Zimbabwe, where many live in extreme poverty.</p>
<p>In all these jurisdictions, receiving money in and buying
cryptocurrencies preserves the value of remittances, earnings and
savings, which would otherwise be squeezed by hyperinflation or
currency devaluation. Moreover, cryptocurrencies become the only
viable option for transmitting money to such countries if
international sanctions or security crises cause international money
transfer organisations to suspend their operations.</p>
<p>Perhaps unsurprisingly, cryptocurrency adoption in emerging
markets is rising rapidly, with specialist remittance companies set
up to facilitate transfers of digital coins. One country, El
Salvador, even made Bitcoin legal tender in September last year.
And, within a month, there were reportedly more Salvadorans with
crypto wallets than bank accounts – about $2 million in remittances
sent daily by migrants via the government’s cryptocurrency app.</p>
<p>Yet a number of factors militate against broader take-up of
cryptocurrencies as a means of making remittance payments, principally
their volatility as well as creeping regulation and curbs on their use
in sending and receiving countries.</p>
<p>The wider adoption of stablecoins, pegged to fiat currencies,
could help address volatility issues. The growth of central bank
digital currencies (CBDCs), an electronic form of a country’s
national currency, may do so as well. CBDCs also offer states more
control over monetary policy, which some believe cryptocurrencies
can undermine. That might lessen the need to regulate them. Though
their exploitation by money launderers and financers of terrorism
does mean authorities have to remain vigilant, even as criminal
exploitation of digital coins falls.</p>
<p>Clearly, cryptocurrencies have great potential as a way of making
remittance payments, in doing so advancing financial inclusion around
the world. There are challenges that need to be overcome, notably
certain authorities’ scepticism towards, and opposition to, their
widespread utilisation. But with advanced countries likely to recover
from the pandemic at a faster pace that developing ones, leaders of
both would do well to recognise the contribution cryptocurrencies can
make to help some of the world’s neediest.</p>Test Test2022-03-23T09:56:00ZWhat’s next for Crypto Regulation?Test Testhttps://williamje.com/es/c/blogs/find_entry?p_l_id=56&entryId=473842022-12-28T13:03:54Z2022-03-16T10:02:00Z<p>Over the course of the past 12 months, public interest in
cryptocurrencies has continued to skyrocket. According to a
study published by the Financial Conduct Authority (FCA), public
awareness and estimated ownership of digital currencies in the UK was
up to around 2.3 million in 2021, an increase from around 1.9 million
from the previous year – and 78% of adults in the UK have now heard of cryptocurrencies.</p>
<p>Despite these encouraging figures on the level of interest, the
level of understanding of cryptocurrencies do not necessarily
correlate, meaning that an increasing proportion of crypto investors
may not fully understand what they are buying into. On 18th January
the UK Treasury stated that the UK’s financial regulator will start
overseeing crypto ads, until now outside the Financial Conduct
Authority’s promotions regime.</p>
<p>The challenge for regulators will be to crackdown on scams and
the use of crypto platforms to commit financial crime, whilst
recognising the opportunities afforded by blockchain technology and
encouraging the extraordinary innovation being conducted in this
space across the global financial sector, including by central banks.</p>
<p>If effectively implemented and appropriately regulated, this
technology has the potential to empower individuals with greater
financial freedom, act as a hedge against creeping inflation, and
provide individuals with digital property rights. Financial freedom
means the ability to act in accordance with one’s financial
preferences, with the remit of the law, and without the need for to
permission from or payment to a third party. Crucially, crypto is not
a replacement for the fiat system, but a complement to it.</p>
<p>Central to the success of digital assets and blockchain will be
robust regulations that crack down on illicit activities, from scams
and theft to money laundering and sanctions evasion. In turn, greater
oversight and an appropriately regulated crypto sphere will help
provide confidence to consumers looking to engage with
cryptocurrencies and the opportunities they offer.</p>
<p>As such, governments and regulators must work with industry
experts, including crypto companies and trade associations, to
collaboratively design regulations that accelerate innovation while
tackling economic crime and boosting consumer protection. Open
dialogue between the crypto sphere and politicians in particular will
be fundamental in ensuring fair, transparent, and effective
regulations can be introduced to support the expansion of the industry.</p>
<p>The FCA recently published a consultation outlining plans to
toughen up existing rules on advertising high risk investments,
including crypto, to protect customers. Some countries have already
recognised the importance of this. In the UK, the All-Party
Parliamentary Group (APPG) on Crypto and Digital
Assets, established on 29 December 2021, provides a forum for
parliamentarians to discuss the challenges and opportunities relating
to the growth and competitiveness of the crypto sector and to explore
the need for future regulation.</p>
<p>This follows the establishment of the UK’s Cryptoassets Taskforce
which was announced in March 2018 by the Chancellor of the Exchequer,
as part of the government’s FinTech Sector Strategy. The Taskforce
published a report emphasising the importance of maintaining the UK’s
international reputation as a safe and transparent place to do
business in the financial services sector, as well as ensuring high
regulatory standards and protecting consumers by responding to the
risks of cryptoassets with sufficient regulations.</p>
<p>Trade associations like CryptoUK are also helping to promote
higher standards of conduct in the industry as well as educating
stakeholders about the opportunities that crypto holds. Blockchain
for Europe and the Blockchain Association are highly active in
advocating the benefits of blockchain and crypto in the EU and the
US respectively. These organisations have their finger on the pulse
of the industry while effectively advocating on behalf of crypto to policymakers.</p>
<p>However, given the international nature of crypto and blockchain,
there must be greater cross-border collaboration to address
technological and regulatory issues. The IMF <a
href="https://blogs.imf.org/2021/12/09/global-crypto-regulation-should-be-comprehensive-consistent-and-coordinated/">notes</a> that
as countries are taking very different strategies to address these
challenges, existing national laws and regulations may not be
sufficient to comprehensively cover such concerns.</p>
<p>I am passionate that crypto can create a world where people have
greater control over their money, data and destinies; where the
individual is empowered with financial freedom, which might also be
called financial liberty. While greater regulation of the crypto
sphere and education of relevant stakeholders will be important for
its future success, it will also be necessary to strike a balance
between the promise of financial liberty and social and economy security.</p>
<p>Fair restrictions, based on consultations with industry leaders
and using high-tech technology, can help to build a better
international regulatory system for crypto and accelerate its
growth. I believe that technology with such potential should be made
more accessible for consumers to democratise finance.</p>
<p>Cryptocurrencies can provide opportunities for financial
inclusion for the billions of people who remain unbanked across the
globe, a cause worth fighting for. One of the ultimate goals of
crypto should be to make the ownership and trading of digital assets
less costly, simpler and more intuitive for all.</p>
<p>We know that crypto is here to stay. Looking ahead, regulatory
oversight and education will be critical to the success of expanding
the use of digital assets among the wider public. However, such
measures must be established by policymakers who work with industry
experts. This will ensure that regulations are fair and effective. If
effectively regulated, crypto will continue to revolutionise the
financial sector. In the long-term, what is at stake is nothing less
than the prospect of financial freedom for all.</p>Test Test2022-03-16T10:02:00ZThe Evolution and Challenges of Crypto RegulationTest Testhttps://williamje.com/es/c/blogs/find_entry?p_l_id=56&entryId=474342022-12-28T13:04:30Z2022-03-07T20:00:00Z<p>According to William Je Founder & CEO, Hamilton Investment
Management Ltd, this has warranted the introduction of a more
stringent level of due diligence by additional bodies to introduce
preventative measures.</p>
<p>William Je Founder & CEO, Hamilton Investment Management Ltd
explains: “The past ten years have seen several structural changes in
Know Your Customer (KYC) and anti-money laundering (AML) regulations
in both Europe and across the world. High-profile money laundering
cases and the penetration of illegal monies into global markets have
caught the attention of regulators.</p>
<p>“As regulators improve their understanding of these criminal
practices, AML requirements have also been improved. However, these
improvements have been a reactive process.”<br /> To address the
challenges of the blockchain ecosystem, the European Union has started
to introduce financial regulations that further bolster the regulatory
system in order to improve licensing models. Many member states are
regulating crypto-assets individually, and Germany is leading the way
in being the first to regulate.</p>
<p>Je continues: “These national driven regulations clearly point to
a future pathway for crypto companies, outlining the requirements
for obtaining and maintaining a financial license from the regulator.</p>
<p>“Compliance, however, is to my mind essential as it not only
boosts investor confidence but adds a necessary layer of protection
to investors.”</p>
<p>As crypto evolves, so have regulatory bodies’ efforts to monitor,
address and enforce restrictions. The most prominent is the Financial
Action Task Force (FATF), which details guidance and determines best
practices in anti-money-laundering practices and combating the
financing of terrorism.</p>
<p>FATF Recommendations number 16, better known as the ‘travel
rule’, which requires businesses to collect and store the personal
data of the originators and the beneficiaries in blockchain
transactions, is the most notable.</p>
<p>Je concludes: “What does this mean? In theory, access to this
data will enable authorities to have better oversight and
enforcement of crypto market regulations. In other words, they’ll
know exactly who is doing exactly what.</p>
<p>As we have always argued – transparency is key. We need to
regulate crypto as an asset class with efficacy, which necessitates
legislation that is applicable specifically to digital assets and
does not hinder the market.</p>
<p>The criminal financial trade which arguably encompasses money
laundering, illegal weapons sales, human trafficking, is also
international. Thus, cracking down on it is, out of necessity, an
international effort.</p>
<p>The decentralised nature of blockchain, which runs contrary to
the central-server standard we know and use nearly everywhere,
presents a formidable challenge here. Rules and regulations for
traditional financial institutions are being implemented wholescale
into the crypto sector. We believe that this is arguably
wrong-footed as it ignores the innovation and uniqueness this asset
class and its underlying technology entails.</p>
<p>Traditional forms of regulation from the fiat world do not
reciprocally apply to every aspect of crypto nor to the fundamental
nature of blockchain technology. However well-intentioned they may be,
because these imposed regulations are built on an old system, they
must be adapted and modified.”</p>
<p>(Credited by Zoya Malik)</p>Test Test2022-03-07T20:00:00ZIs Cryptocurrency The New ‘Digital Gold?’Test Testhttps://williamje.com/es/c/blogs/find_entry?p_l_id=56&entryId=474202022-12-30T15:28:29Z2022-03-07T17:52:00Z<p>This isn’t surprising considering that throughout the course of
recent history cryptocurrencies went from being regarded as a channel
for money laundering to becoming a serious proposition for investors
very quickly. It now is not just for the opportune amateur investors
that’ve got caught up in the media hype as even big businesses and
knowledgeable entrepreneurs including Elon Musk have their eyes on the
digital currency and many consider it as a genuine form of payment as
a result.</p>
<p>Now, we can see major banks testing the crypto waters as they’re
simultaneously entering the race to set up their crypto-related
operations. Amongst these are the likes of Morgan Stanley and Bank of
America launching their own crypto-focused research divisions. State
Street revealed their dedicated digital finance division to the
public, and following this, JP Morgan and Goldman Sachs have started
rolling out their own crypto trading assistances and services.</p>
<p>Our traditional understanding of an asset in finance terms is
generally anything of worth to an individual or company, or more
specifically it can be regarded as a resource ‘of value’ that can be,
in turn, converted into cash. Typically, an asset can often generate
cashflows. For instance, stocks can provide dividends, bonds can
provide coupons, loans can provide interest, etc.</p>
<p>However, there are assets in existence that don’t tend to produce
cashflows, but they’re still regarded as an important asset class. For
instance, this can include assets such as gold, wine, and even art.
Gold is widely considered to be an important asset class by many. This
is the case considering it has limited industrial use that doesn’t
generate cashflows. The collective thought is that gold is valuable,
and this is what provides the value to the asset; an inflated
artificial value that we give to a shiny lump of metal.</p>
<p>This can in turn apply to any fiat currency as money is only a
credit that a currency’s user gives to the issuer. Thereby, for a
currency to prosper, belief and confidence is the most important
factor for its success. The issuers of fiat currencies are sovereign
entities that are deemed to be the most trustworthy. If an economic
crisis occurs that leads to governmental distrust, the value of the
fiat currency has the potential to drop substantially.</p>
<p>In the past, financial institutions and investors have primarily
recognised only “traditional” asset classes. They regard cash and
equivalents, bonds, and stocks as the big three. However, since the
rise of cryptocurrency (a decentralised means of digital currency) in
our society, many have questioned whether they should also be regarded
as an asset class. This debate is more important now than ever before,
especially as legislators and policymakers have continued to ponder
upon taxing cryptocurrency in line with other assets.</p>
<p>Professionals must now begin to change their outlook on
cryptocurrency and adapt processes to enable investors to deal with
cryptocurrency more effectively. Gone are the days of solely dealing
with traditional assets.</p>
<p>There is a broad consensus that Bitcoin is the most valued—and
thereby appealing—cryptocurrency on the market. Experts have largely
accredited this to its scarcity, Bitcoin in particular benefits from
investor confidence because of its snowballing popularity. Just as
people in society believe in the value of diamonds because others
believe in it, Bitcoin shares this artificial value.</p>
<p>Bitcoin was the first scarce digital asset ever created.
Societies have always based the price of a currency on this concept
of scarcity, which is why precious metals have been the pillar of
many economies for centuries. Bitcoin supply had low inflation
built-in from day one. To ensure that the issuing of Bitcoin would
eventually cease completely, its creator Satoshi Nakamoto encoded a
way to halve Bitcoin’s mining reward roughly every four years; the
Bitcoin supply will thereby never exceed 21 million coins.</p>
<p>But what is driving that faith? And what is underpinning the huge
increases in the value of cryptocurrencies? This is more to do with
its ability to store worth relative to other asset classes. Widespread
social adoption, together with their privacy, security, and
transferability, make cryptocurrencies a significant asset class to
store values.</p>
<p>Cryptocurrencies do not follow the same rules as fiat currencies,
or even secured assets; instead, matters tend to get
complicated. Given that a cryptocurrency does not generate or support
cash flow, it needs to be valued against potential and
—critically—future prices. That then opens the door to several
different valuation methods and guess what—our old friend gold is
back. Amongst the differing valuation models now available—the
stock-to-flow method, institutional participation method, and
high-net-worth participation method—we find the gold valuation method.</p>
<p>But let’s not forget this is a new asset class, so we would
expect investors will consider a range of valuation methodologies to
estimate future value. This is, however, not risk-free. It is a new
asset class and one that does not exist physically. It is not gold,
as we have repeatedly said. Risks do exist and they are well known,
and some would argue, substantial. We are therefore firm believers
that the financial industry needs to address—and support—government
initiatives around regulation.</p>
<p>The key questions remain: Should institutional investors dive in,
and is this in fact a dedicated new asset class?</p>
<p>El Salvador became the first country in the world to adopt
Bitcoin as its national currency, allowing people to use a digital
wallet to pay for everyday goods. Many countries are considering
issuing their own central bank digital currencies. All these
developments tell of cryptocurrencies’ future potential in line with
an asset class.</p>
<p>The primary reason why some do not regard cryptocurrency as an
asset class is because of its unclear regulatory environment and high
volatility. However, more and more institutional investors use
cryptocurrencies to hedge against inflation and currency debasement
and to diversify their portfolios in the pursuit of higher
risk-adjusted returns.</p>
<p>This is, without doubt, a new asset class and one that will
increasingly gain acceptance and the participation of institutional
investors as time goes on.</p>Test Test2022-03-07T17:52:00ZCrypto Regulations Must Have International Focus in 2022 and BeyondTest Testhttps://williamje.com/es/c/blogs/find_entry?p_l_id=56&entryId=474062022-12-28T12:56:57Z2022-03-07T10:14:00Z<p>Cryptocurrency regulations are evolving quickly around the globe as
authorities respond to the growing risks posed by criminals exploiting
the latest payment methods to mask and launder the profits from their crimes.</p>
<p>According to William Je, founder and CEO of <a
href="https://www.hamilton-im.com/" target="_blank"
rel="noopener noreferrer">Hamilton Investment Management</a>, this
growth has warranted the introduction of a more stringent level of due
diligence by additional bodies who will bring in additional protection..</p>
<p>“As regulators improve their understanding of these criminal
practices, AML requirements have also been improved. However, these
improvements have been a reactive process.”</p>
<p>The European Union has started to introduce financial regulations
that further bolster the regulatory system in order to improve
licensing models. Many member states are regulating crypto-assets
individually, and Germany is leading the way in being the first to
regulate. Je believes these actions and their expressed requirements
provide a path companies can take to obtain licensing from regulators.</p>
<p>As crypto evolves, so have regulatory bodies’ efforts to monitor,
address and enforce restrictions. The most prominent is the Financial
Action Task Force (FATF), which details guidance and determines best
practices in anti-money-laundering practices and combating the
financing of terrorism.</p>
<p>FATF Recommendations number 16, better known as the “travel
rule”, which requires businesses to collect and store the personal
data of the originators and the beneficiaries in blockchain
transactions, is the most notable.</p>
<p>“In theory, access to this data will enable authorities to have
better oversight and enforcement of crypto market regulations. In
other words, they’ll know exactly who is doing exactly what.”</p>
<p>“As we have always argued – transparency is key. We need to
regulate crypto as an asset class with efficacy, which necessitates
legislation that is applicable specifically to digital assets and does
not hinder the market.”</p>
<p>Because the criminals exploiting cryptocurrencies are
international, so must be the efforts to stop them, Je said. But
blockchain’s decentralized nature makes this hard to accomplish. Rules
and regulations for traditional financial institutions are being
implemented wholescale into the crypto sector. He believes this is
arguably wrong-footed as it ignores the innovation and uniqueness this
asset class and its underlying technology entails.</p>
<p> </p>
<p>(Credited by Tony Zerucha)</p>Test Test2022-03-07T10:14:00ZCryptocurrency and RegulationTest Testhttps://williamje.com/es/c/blogs/find_entry?p_l_id=56&entryId=473952022-12-30T15:29:15Z2022-03-07T10:03:00Z<p>Cryptocurrency regularly features in the news, and historically has
been perceived as risky and a bit of an “unknown”. Crypto is evolving
and for it to be seen as an asset class with efficacy, then
transparency is key.</p>
<p>Around the world, regional authorities have become aware that
they need to respond to developing risks by criminals who are
exploiting these new payment methods as money laundering devices to
mask the profits from their crimes. Regulation is essential and
there needs to be further levels of due diligence around
cryptocurrency to introduce preventative measures.</p>
<p>William Je Founder and CEO, Hamilton Investment Management Ltd
explains: “The past ten years have seen several structural changes in
Know Your Customer (KYC) and anti-money laundering (AML) regulations
in both Europe and across the world. High-profile money laundering
cases and the penetration of illegal monies into global markets have
caught the attention of regulators. As regulators improve their
understanding of these criminal practices, AML requirements have also
been improved. However, these improvements have been a reactive process.”</p>
<p>The EU has made a start on tightening up regulations in this area
by introducing financial regulations that further strengthen the
regulatory system to improve licensing models. Germany has been
leading the way by becoming the first country in the EU to introduce
regulations in this area.</p>
<p>One of the prominent regulatory bodies is the Financial Action
Task Force (FATF) which provides guidance and determines best
practices in AML and combating the financing of terrorism. The most
significant guidance is in recommendation number 16 which requires
businesses to collect and store the personal data of the originators
and the beneficiaries in blockchain transactions.</p>
<p>Je goes on to say, “The criminal financial trade which arguably
encompasses money laundering, illegal weapons sales, human
trafficking, is also international. Thus, cracking down on it is, out
of necessity, an international effort.</p>
<p>The decentralised nature of blockchain, which runs contrary to
the central-server standard we know and use nearly everywhere,
presents a formidable challenge here. Rules and regulations for
traditional financial institutions are being implemented wholescale
into the crypto sector. We believe that this is arguably wrong
footed as it ignores the innovation and uniqueness of this asset
class and that which its underlying technology entails.</p>
<p>Traditional forms of regulation from the fiat world do not
reciprocally apply to every aspect of crypto nor to the fundamental
nature of blockchain technology. However well-intentioned they may be,
because these imposed regulations are built on an old system, they
must be adapted and modified.”</p>
<p>(Credited by Accountingcpd)</p>Test Test2022-03-07T10:03:00ZCryptocurrency the Asset Class of the FutureTest Testhttps://williamje.com/es/c/blogs/find_entry?p_l_id=56&entryId=474482022-12-30T15:31:16Z2022-03-04T17:58:00Z<p>It is a safe statement to make that many financial institutions have
in recent years, been torn as to whether cryptocurrencies are an asset
class. Analysts are polarised. This is unsurprising as, over time,
cryptocurrency went from being widely seen as a conduit for money
laundering into a serious proposition for investors. And it’s not just
the novices that’ve hopped on board with the cryptocurrency hype, even
large, established companies, including the likes of PayPal, which
have in turn dabbled with the digital currency as a genuine form of payment.</p>
<p>Major banks have also been rushing to set up crypto-related
operations recently, with Morgan Stanley and Bank of America
establishing a crypto-focused research division. State Street
announced the launch of a dedicated digital finance division. JP
Morgan and Goldman Sachs are also rolling out crypto trading services.</p>
<p>An asset is anything of value or a resource of value that can be
converted into cash. Traditionally, an asset can often generate
cashflows: stocks provide dividends, bonds provide coupons, loans
provide interests. However, there are assets that do not really
produce cashflows but still being considered as an important asset class.</p>
<p>Gold has long been considered to be an important asset class. It
has very limited industrial usage and does not really generate
cashflows. It is only collective thinking that gold is valuable that
makes it so. In fact, this also applies to any fiat currency. After
all, money is only a credit that a currency’s user gives to the
issuer. For a currency to thrive, trust is the most important factor.
The issuer of fiat currencies are sovereign entities which are deemed
to be the most trustworthy. If there is a currency or economic crisis
that the people do not trust the government, the value of the fiat
currency will drop significantly.</p>
<p>So, an asset’s value will depend on the collective believe and
trust of the people dealing with it. It is still at an early stage to
conclude that investors believe and trust in the value of
cryptocurrency, but the trend is definitively positive.</p>
<p>Throughout the course of history, we have become accustomed to
recognising ‘traditional’ asset classes. Many investors regard cash
and equivalents, bonds, and stocks as conventional financial
investing’s big three. However, ever since the rise to prominence of
cryptocurrency – a decentralised means of digital currency – many have
started to question, should cryptocurrency be regarded as an asset
class? This debate is as important as ever, considering that
legislators and policymakers ponder upon taxing crypto in line with
other assets in the midst of a tax war we’re witnessing. Currently in
the US Congress, rules on tax on constructive and wash sales are being
debated. Presently, only traditional asset classes such as bonds are
stocks are subject to these rules, but there has been controversy
about whether commodities, and digital assets should be considered.</p>
<p>In recent times, society has done a tremendous job of selling us
on the idea that replacing our hard-earned cash with virtual
currency is a good idea, and for good reason too. It does not take
too much research to see that SMEs, family run businesses,
corporates, asset managers and more are all investing in the crypto
market. There is, however, a hurdle of learning new terminologies
and understanding a new process.</p>
<p>As a result, many people shy away from dealing with it. This can
seem daunting and is certainly a barrier to entry for some. However,
it isn’t a reason to ignore what could potentially be an immensely
fruitful asset pot. Professionals must now start to change their
perspective on cryptocurrency, particularly in relation to what
institutional investors consider to be an asset class and adapt
processes to enable us to deal with cryptocurrency more effectively.
Gone are the days of solely dealing with traditional assets. We all
know that there are an enormous number of crypto assets now available
and certainly the pandemic appears to have played a key role in
driving increasing demand from both retail and institutional investors.</p>
<p>It’s not a secret that Bitcoin is the most valued – and thereby
attractive – cryptocurrency on the market. Experts have largely
accredited this by way of its scarcity, drastically leveraging its
general understanding as an asset class. Bitcoin in particular
benefits from investor confidence because of its snowballing
popularity. Just as people in society believe in the value of diamonds
because others believe in it, cryptocurrency shares this artificial value.</p>
<p>This further accentuates the power of supply and demand to
dictate price. As hype is artificially created as a societal
construct, it causes people to blindly jump on the bandwagon. When
combining this with our excessive need to want what we can’t have;
the forbidden fruit principle, it’s only to be expected that the
price of Bitcoin is so high.</p>
<p>Bitcoin was the first scarce digital asset ever created. Imagine
that – a digital product with a fixed total supply of 21 million
coins. For new coins to come into circulation its new supply is cut in
half every four years through a “halving” mechanism, until all 21
million coins are mined. As a result, it is estimated that only 18
million coins have been mined to date. Of those some believe that 5
million are technically lost, 10 million stored in long-term cold
storage, and close to 3 million on exchanges. Mankind has always based
the value of a currency on this concept of scarcity – that is why
precious metals have been the backbone of many economies for centuries.</p>
<p>The growth in the number of cryptocurrencies is changing all of
this and the faith put in them by investors is driving confidence in
them as an asset class. If investors continue to believe in the value
of gold because others believe in it, it will remain an asset. The
difference with cryptocurrencies today, and gold of the past is
therefore minimal.</p>
<p>But what is driving that faith, and what is underpinning the huge
increases in the value of cryptocurrencies? Well maybe it has less to
do with the currency itself and more to do with its ability to store
value in relation to other asset classes. Widespread social adoption
together with its privacy, security and transferability make
cryptocurrencies an important asset class to store values. Maybe it’s
time for a bit of a backward glance and look to recent history to
explain this. Since 2008 and the unleashing of quantitative easing,
there has been an undoubted period of price inflation. And yet if you
look to the balance sheets of many central banks one thing stands out
– global currencies have depreciated.</p>
<p>Cryptocurrencies don’t follow the same rules as fiat currencies,
or even secured assets, instead things tend to get complicated.
Given a cryptocurrency does not generate or support cashflow, it
needs to be valued against potential – and critically – future
prices. That then opens the door to several different valuation
methods and guess what – our old friend gold is back. Amongst the
differing valuation models now available – the stock-to-flow method,
institutional participation method, and high-net worth participation
method – we find the gold valuation method. But let’s not forget
this is a new asset class so we would expect investors will consider
a range of valuation methodologies to estimate future value. This
is, however, not risk free. It is a new asset class, and one that
does not exist physically. It is not gold as we are repeatedly
saying. Risks do exist and they are well known, and some would argue
substantial. We are firm believers that the industry needs to face
into – and support – government initiatives around regulation.</p>
<p>But this is not the only risk associated with cryptocurrencies.
Swings in the wider macroeconomic environment, risk associated with
the technology backbone – everything from electricity supply to bad
faith actors, and even an ever-more vocal and powerful economic,
social, and corporate governance framework – ESG as it is known. All
of which add to the potential risk for crypto as an asset class in its
own right.</p>
<p>El Salvador became the first country in the world to adopt
bitcoin as its national currency, allowing people to use a digital
wallet to pay for everyday goods. Many countries are considering to
issue their own central bank digital currencies. All these have been
telling of cryptocurrencies’ future potential in line with an asset class.</p>
<p>The key question remains; should institutional investors dive in
and is it in fact a dedicated new asset class?</p>
<p>The primary reason why some don’t regard cryptocurrency as an
asset class is because it’s unclear regulatory environment and high
volatility. However, more and more institutional investors use
cryptocurrencies to hedge against inflation and currency debasement,
and to diversify their portfolios in the pursuit of higher
risk-adjusted returns. Over time, institutional investors have been
more inclined to consider cryptocurrency as new asset class</p>
<p>Bitcoin is the most famous, most written about and most volatile
of the many cryptocurrencies now on the market. Given the number of
methodologies available to value not only it, but all digital assets,
if anything, institutional interest is only just beginning.</p>
<p>This is without doubt, a new asset class and one that will
increasingly gain acceptance and participation of institutional
investors as time goes on.</p>
<p>It may not be physical gold, but it could very well be digital gold.</p>Test Test2022-03-04T17:58:00ZCryptocurrency and Financial FreedomTest Testhttps://williamje.com/es/c/blogs/find_entry?p_l_id=56&entryId=474622022-12-30T15:27:31Z2022-03-04T17:00:00Z<p>The world is undergoing a financial revolution, with the advent of
blockchain technology and cryptocurrency establishing a new monetary
paradigm from which there is no turning back. This revolution has
profound implications for the relationship between individuals and
financial institutions & states. If effectively implemented and
appropriately regulated, this technology has the potential to empower
individuals with true financial freedom.</p>
<p>True financial freedom, which might also be called financial
liberty, not only involves having few restrictions on one’s spending,
owning considerable liquid assets, and being cash-rich, but on top of
this denotes the liberty from oversight or interference by
intermediaries, whether central banks or governments.</p>
<p> <strong>The Building Blocks of the Future</strong></p>
<p>The invention of Bitcoin was the breakthrough step in this
journey. The first technology to successfully solve the
‘double-spend’ problem, enabling peer-to-peer transactions without
the involvement of a financial institution, its fixed supply also
served to demonstrate that a hard form of money and digital
alternative to the gold standard could be instantiated outside the
remit of a government or central bank.</p>
<p>For libertarians, Bitcoin represents a return to sound money, the
path to a voluntary society, an opportunity to fight inflation,
curtail the debt from inflation and reduce the scope of government.</p>
<p>However – though still in a nascent stage – Bitcoin’s high
volatility and comparatively low transaction speed means it is falling
short across the three functions that money has traditionally
performed: acting as store of value, a medium of exchange, and a unit
of account.</p>
<p>Thankfully, Bitcoin’s underlying blockchain technology means that
cryptocurrency is not a zero-sum game, and countless coins are able to
compete in the free market in an effort to fulfil these functions to
best effect.</p>
<p>Blockchain technology is being used to create applications that
go beyond just enabling a digital currency. Launched in July 2015,
Ethereum is the largest and most well-established, open-ended
decentralized software platform built on blockchain technology.</p>
<p>Ethereum enables the deployment of smart contracts and
decentralized applications (dApps) to be built and run without any
downtime, fraud, control, or interference from a third party. The
Ethereum blockchain can even be utilized to build self-sufficient
financial ecosystems, through which trading coins, stable coins,
crypto exchanges, and payment applications are all made available on a
single platform, as in the case of the recently launched Himalaya
Exchange. In effect, such platforms provide a financial passport to
anybody with access to an internet connection and a mobile phone.</p>
<p> <strong>Financial Empowerment</strong></p>
<p>The ultimate purpose of this is financial empowerment – the first
step towards financial freedom – and not just for the rich elites with
existing access to banks, stock markets, and other financial
technologies. Crypto can empower the billions of people who remain
unbanked and represents a future in which the individual’s financial
status is not at the constant mercy of monetary mismanagement,
political seizure or state failure.</p>
<p>In a recent interview with CoinDesk, Garry Kasparov, the Russian
chess grandmaster, and anti-Putin activist stated that his excitement
about cryptocurrencies stems from his belief that “technology should
help people fight back against the power of the state”, going on to
explain that “governments [have] unlimited opportunities to print
money. And printing money is the most exquisite form of borrowing from
us and from future generations.”</p>
<p>Crypto is not about overthrowing the state but checking its
power. It is not a replacement for fiat, but an alternative. It can
help to hedge the against creeping inflation we are witnessing in
rich Western countries, but more importantly, crypto represents a
viable plan B to holding fiat money for citizens who cannot rely on
their country’s central planners to adopt responsible monetary policy.</p>
<p>In the economy of Venezuela, mired by hyperinflation and hemmed
in by sanctions, where the majority of monthly salaries do not even
pay for a day’s groceries, citizens are using their pesos to buy
cryptocurrencies which reliably store the value of their earnings and
appreciate in value over time.</p>
<p>In war-torn countries such as Afghanistan, which has recently
undergone a nationwide cash shortage, closed borders, a plunging
currency, rapidly rising prices of basic goods, whose Central Bank is
unable even to print cash, and where The Western Union has suspended
all services including the centuries-old “hawala” system which
facilitates cross-border transaction crypto represents the last
available safeguard of an individual’s savings and only financial
connection with the outside world.</p>
<p>Even in economically advanced parts of the world, having a
commercial bank account is not a sufficient condition for financial
freedom. Evidence shows that Hong Kong’s pro-Beijing administration is
using its control over the city’s financial system to penalize
dissidents, with pro-democracy protesters losing access to their bank accounts.</p>
<p> <strong>The Regulatory Challenge</strong></p>
<p>Though cryptocurrencies have only been around for 12 years, they
already empower millions, and their rate of adoption is growing faster
than that of the internet in its early years. Money is the ultimate
“network good,” which means that its value and usability increases
with every user joining, and every user has the incentive to encourage
others to take up their cryptocurrency of choice since it benefits
them directly.</p>
<p>It is against this backdrop of unprecedented opportunity that we
must rise to the regulatory challenges that cryptocurrencies
undoubtedly give rise to, the most prominent of which are the need to
clamp down on its use for funding criminal activity, online fraud,
money laundering, sanctions evasion and even terrorism. These are
challenges for the regulation of all financial assets, whether
physical or digital, and cryptocurrency is no different.</p>
<p>The heavy-handed approaches taken in recent months by the Chinese
and Indian governments are case studies in what not to do, and
represent tragedies for their people, stripping them of the
opportunity to partake in the greatest technological revolution since
the advent of the internet.</p>
<p>Regulators should work with market participants to conceptualize,
curate, and promote ideas for technological progress and regulatory
frameworks that work symbiotically to the mutual benefit of each.
Regulation must serve technology and creativity, rather than the other
way around. The proper regulation of cryptocurrency represents the
final frontier on the journey towards financial freedom.</p>
<p> <strong>William Je Founder & CEO, Hamilton Investment
Management Ltd</strong></p>
<p>Mr. JE is the Chief Executive Officer of Hamilton Investment
Management Ltd, a global fund manager with multi-billion assets under
management. His portfolio includes private equity investments in
licensed banks, crypto exchange, payment systems, Fintech &
blockchain companies, social media projects, and multi-strategy
algorithmic trading funds.</p>
<p>Prior to that, Mr. Je was the Chairman of Equity Capital Markets,
Greater China at the Macquarie Banking Group for 10 years, managing
its Greater China capital markets and principal investment activities.
Prior to Macquarie, Mr. Je served as the joint venture partner and
managing director of China Merchant Securities (Hong Kong) Limited,
help building its business in Hong Kong from scratch. Mr. Je also
served as an Executive Director at Credit Agricole Indosuez and a
Board member of its securities arm, Indosuez W.I. CarrSecurities;
Director & Head of Business Development at Dresdner Kleinwort
Wasserstein and a Vice President at NatWest Markets</p>Test Test2022-03-04T17:00:00Z