Reading between the lines of a conference

Notes to self @ Istanbul Fintech Week ‘24

Fisekhane was home for the Istanbul Fintech Week on April 16th and 17th. The compact location rendered itself well for shuffling between parallel sessions as well as networking. Crypto and blockchain were the focus topics of day one and banking and payments filled up the agenda for day two. There were engaging panel discussions on a large set of topics, which can not be conveyed in this blog. Below you can find the limited number of notes that “I” find interesting for my benefit.

Crypto & Blockchain

• The conference was a testament to the presence of a strong and vibrant crypto fintech ecosystem in Turkey. This is no surprise since financial technology players have always been very active in the country from banks to payments players to insurance companies to solution providers. Given this fact the stakeholders had the chance to make the case to the regulators present at the conference the dire need for regulation. No news or specific calendar has been heard from the authorities who were present on site during the two days.
• On MiCA: the EU law allows for crypto companies to open bank accounts at central banks as well as commercial banks. Yet, the ECB may resist to this.
• It appears governments in the US and EU are underpaying staffers for crypto regulation. A peculiar fact if correct. Given that crypto regulation has so much catching up to do, one would expect the opposite.
• On countries toying with Crypto: El Salvador makes BTC legal tender on September 15th, 2021. A US institutional player sells a billion USD worth of BTC the same day, bringing the price down by 22%.
• We may think JP Morgan is anti-crypto. In fact they have 1600 employees managing crytpo. They also had more than 70 staffers as early as 2013, writing external articles about crypto, guiding the public opinion.
• Gold ETFs are not backed by the asset 1–1. One may call they are bankrupt. Will it be the same for crypto ETFs in the future?
• The US funnels retirement savings to crypto ETFs. Asians do not have similar retirement accounts. They directly purchase crypto from the exchanges as opposed to through fund managers. Thus, the crypto ETFs in Hong Kong may not create as large a demand as the US ETFs.
• Demand for gold is increasing; both institutionally and individually. Since the USD is losing its reserve currency status (due to debasing), central banks elsewhere are buying gold. The individual investor example is from Costco in the US, where the retailer has recently outsold its gold supply.
• UAE is building a massive data center to mine and store ctypto. The country has the geographical reach advantage for fossil and solar energy resources.
• UAE mandates all government agencies to implement blockchain.
• Central Bank of Turkey is building its CDBC, the digital Lira. The project also has asset tokenization within its scope. Real estate, security and intellectual property tokenization are examples provided by the authority.

Banking & Payments

• Bankers talked about invisible banking; with examples of embedding banking features in to automobile dashboards or instnat delivery apps.
• Recent news about FAST, Turkey’s instant payment solution has been shared. There are currently 37 participants in the system including e-money players. The alias directory service KOLAS has 23 million registered users. The system is supported by value added services such as fraud protection and payment request.
• The open banking gateway that is operated by BKM gets 10 million API calls a day.
• Bankers are happy about the remote KYC regulation.
• Per advisors, it appears a neobank needs to reach 1.5 million active clients to breakeven.