Blockchain for Everything
Tags: April 2018, blockchain, CFTC, cryptocurrencies, Deutsche Bank, digital transformations, DTCC, iTreasurer
Blockchain is the “it” tech of late. And while it still has a way to go for corporations, there is a lot of excitement about its prospects: for supply chain, for cross-border payments, for smart contracts, for accounting and audit, and for inventory. It’s a revolutionary technology for which the opportunities seem endless.
But on page 1 of this month's iTreasurer we take a look at its possibility as a hedging tool. There have been a few blockchain derivative trading platforms but the latest, from swap execution facility trueEX, is a regulated derivatives marketplace for digital assets, which is aimed at bringing confidence and transparency to a market that institutional investors have mostly sidestepped. One hurdle is liquidity.
“Institutional investors and commercial partners are ready for a regulated and liquid marketplace to gain exposure to and hedge these increasingly important digital currencies and commodities,” says Sunil Hirani, founder of trueDigital Holdings, an affiliate of trueEX, in a release announcing the launch. “But the marketplace is sorely lacking the necessary foundation, infrastructure and platforms that institutional investors have come to expect in other important markets.”
So while it’s likely not ready for prime time, the foundations are being poured and treasury should keep an eye on it.
In our “Anticipated Exposures” section on pages 4-5, iTreasurer discusses why treasurers should stay away from Venezuela’s recent cryptocurrency offering, the "petro." There’s also a look at SWIFT’s gpi initiative, which claims to reduce crossborder payments to a few minutes. Finally, according to NeuGroup research, repatriated cash will more likely go to paying down debt rather than the stock buybacks that seem to get all the headlines.
On page 6, we look at how the first-year chairman of the Commodity Futures Trading Commission, J. Christopher Giancarlo, is changing the way the agency performs its job of monitoring the markets and implementing new rules and regulations. One initiative will focus on identifying areas where regulations can be simpler, more coherent and more understandable.
This month’s NeuGroup peer group meeting brief provides a peek at what was discussed at the Technology Group of Twenty gathering, which was held in San Francisco and sponsored by BNP Paribas. During the meeting, members held several thought-provoking discussions on topics that included treasury transformation, constructing an FX risk policy, treasury’s sometimes complicated relationship with the tax team, acquisition finance, hurdle rates and credit ratings.
On page 12, we take a look at how fintech companies have become key forces in the digital transformations sweeping through banks and corporate treasury departments across the globe. In this story, iTreasurer examines how Deutsche Bank is partnering with fintechs to develop solutions that will help treasury and finance while the bank also helps fintech clients like Payoneer and Hyperwallet revolutionize the cross-border payments business.
Finally on page 15, we examine how the Depository Trust & Clearing Corp. (DTCC) will now permit nonfinancial lenders to borrow via the repo market. This could potentially provide corporates with a way to diversify short-term funding sources.
For over 20 years, iTreasurer has delivered intelligence for treasurers. Based on exclusive access to senior treasury executives who are members of The NeuGroup Network of treasury peer groups, iTreasurer takes their real-world experience to produce articles, case studies and reports that are specifically meaningful to treasury best practice. www.iTreasurer.com.