Saturday, November 18, 2017

Cato Institute Monetary Conference - Speakers Lament "Opportunity Missed"

The Cato Institute held its 35th Monetary Conference recently in Washington DC. There was a strong list of speakers including Dr. Judy Shelton. This Reuters article however notes that the mood at the Conference was more along the lines of an "opportunity missed" to get some true monetary system reform. Below are some excerpts and then a few added comments.

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"The Cato Institute’s annual monetary policy conference on Thursday could have been a celebration of President Donald Trump making good on his 2016 campaign promise to shake the pillars of official Washington, including the Federal Reserve.

Instead, the event at the libertarian think tank became a eulogy of sorts for the idea that Republican control of the White House and Congress would significantly change how the U.S. central bank operates, and an acknowledgement that the political center is holding firm in some key ways."


. . . .


“It is a bit demoralizing to realize that after delivering the same message for decades - that the world needs a rules-based monetary system - we have made virtually no progress,” Trump economic adviser Judy Shelton said to the crowd gathered in the Cato Institute’s F.A. Hayek auditorium in Washington.


“I have not been able to make the case ... I have not convinced lawmakers on the Hill, let alone a sitting president, that it is time for the U.S. to initiate reform.”


. . . . 


“I don’t expect to see invitations going out next week for a new Bretton Woods conference at Mar-a-Lago,” she (Dr. Shelton) said, referring to the conference that established post-World War II monetary arrangements and institutions like the International Monetary Fund.


“I do think we will see more language out of the Treasury emphasizing the importance of stable exchange rates,” she said. “People are willing to talk about this in a way they have not been before.”


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My added comments: Here we have more evidence that it is not likely we are going to see the kind of major monetary system changes we watch for here unless some kind of significant new crisis forces change to take place. 

When I started this blog in January 2014, it truly seemed as if we were on the verge of some kind of major monetary system change. It is why I started this blog and why I have continued to monitor events for all this time. Instead, what has actually happened is that the prospects for any kind of sudden dramatic change have been reduced in favor of enormous efforts to just try and maintain the status quo. 

This is what we have been reporting here for some time in an effort to try and publish the most accurate assessment of the situation we can as we see it. Without a doubt, there are never ending articles, websites, etc. constantly predicting that some kind of major shakeup to the existing system is on the immediate horizon. I am sure articles here seem somewhat boring in contrast to many I see that predict major change is coming right away.

By no means am I criticizing the idea that there are all kinds of potential triggers for that kind of major change out there. I fully agree there are and that a new major crisis could arrive really at almost any time that does start the process into motion. 

Based on years now of following all this pretty closely. I think at least some reasons why that has not happened yet are:

- the 2008 financial crisis scared the existing banking and central banking system nearly to death. They have been in somewhat of a survival mode ever since just trying to keep the existing monetary system we have afloat. While there are many reasons why good and positive reforms might help the present system, trying to implement them in an environment of near systemic collapse was not appealing to those running the present system because there is no way to predict who the public will blame if things go wrong

- while there are all kinds of people (and nations) who would love to see the US dollar dethroned as the worlds global reserve currency, the age old problem of reality tends to assert itself. You can't suddenly replace the US dollar unless you have something viable in place that can take over that role without major disruption to world commerce. The power of the so called "petro dollar" has been overwhelming and everyone around the world is so tied to it that changing that dynamic is not easy to do. Also, there is no consensus around what the replacement should be. Some like another currency like the Yuan, some like gold, some like a new version of the SDR, some like all kinds of combinations of these alternatives. To have a universal standard, YOU MUST HAVE UNIVERSAL CONSENSUS OF AGREEMENT. So the US dollar wins by default because it is already in place in that role and there is NOT universal consensus on what to replace it with or on the mechanics of how to actually do that in the real world

- the enormous political divide in the world (and especially in the US) makes obtaining a broad consensus for change very hard to do for anything, much less changing the system that impacts the money people will use and how to administer it. Trust in governments, officials, etc. is so low that it is virtually impossible to get a solid majority of people to trust anything now (and its hard to blame them when almost every day a new example of scandal in leaders emerges).

I have tried very hard to report what is actually happening here on this blog as best I can with the information I have. I don't push an agenda on purpose because I am not an expert myself (so any agenda I might have would not be worth any more than one my readers may have) and because I truly believe that what really matters for the average person like myself is WHAT ACTUALLY HAPPENS, not what any one analyst or group of people thinks will happen or should happen.

To make intelligent personal financial decisions, it is critical to base them on what is actually happening. Sometimes what is actually happening may seem somewhat boring compared to exciting headlines that declare something dramatic will happen any day now. But I would prefer to be boring and present accurate information even if that means far less reader interest. If I attract readers with some kind of hyped headline and then report bad information, I am not serving or helping anyone.

Right now it appears that the most likely path for systemic change is for the new Fintech technologies to gradually prompt change over time so that is what I have focused on lately.

I will continue to monitor events at least until mid 2018. By then I feel it will be clearer if something dramatic leading to the kind of major change I watch for here is coming soon or not. If something does arise and I am aware of it, I will surely report it here. 

Meanwhile, I feel the best service I can provide readers is to present the most accurate information I can find from what I feel are highly credible sources so that people can hopefully use that information to better inform their opinions on monetary system issues. These really are important issues and if some day something does prompt calls for major change, the better informed we are, the better off we will be. That is my view on it here and the goal of this blog.
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Added note: I just got back the answers by email for a really great Q&A style interview from Glint CEO Jason Cozens. I plan to publish the interview next Monday after Glint launches their new global currency product. I think readers will really enjoy this interview which describes some really cool new technology that I think can potentially impact the global gold market. 

Thursday, November 16, 2017

IMF: Fintech and Cross Border Payments

We have covered quite a bit of fintech news lately because that topic has emerged as the most likely to impact the overall monetary system whether because of private virtual currencies challenging the various legal tender currencies around the world or because a number of central banks are looking at implementing some kind of central bank digitial currency (CBDC).



The IMF has made it clear that they are also following all this closely to see where things may be headed. Here we have a recent speech by IMF Deputy Director Dong He on the topic of Fintech and Cross Border Payments. Below are a few excerpts.

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"It’s a pleasure to join you here today, at Ripple’s “Central Bank Summit,” as we explore some of the key issues facing central banks raised by the current acceleration of progress in “fintech.”
The IMF has been carefully studying the trends in fintech, and my colleagues and I have gathered some initial thoughts about the way that the financial realm is likely to change. We’ve also been weighing how financial regulation and central banking will need to respond."
. . . . 
"In my remarks here today—focusing on implications of fintech for cross-border payments, I'll explore three broad areas:
  • First, a sketch of the economic framework on how fintech applications will affect financial services and the market structure.
  • Second, the current landscape of cross-border payments, and the possible evolution of cross-border payment systems; and
  • Third, the role of central banks, themselves, and the possible reasons for them to issue their own digital currencies."
..........
Central Bank Digital Currencies
"Let me now turn to a second possible avenue for DLT application to be used as a means of payment: Central banks could offer their own digital currencies.
A “Central Bank Digital Currency—let’s call it, in shorthand, a “CBDC”—would not be a parallel currency. It would merely be a digital form of central bank money that can be exchanged in a decentralized manner. In other words, it can be transferred or exchanged peer-to-peer, directly from payer to payee without the need for an intermediary.
Such a CBDC would be exchanged at par with the central bank’s other liabilities (its cash and reserves)—either through banks or directly at the central bank."
Why Issue a Central Bank Digital Currency?
. . . . . . 
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My added comments: I publish this kind of information not only to give readers a look at what the IMF and others are saying on these issues, but also to try and illustrate how these changes are unfolding very gradually and the outcome is by no means certain or predetermined. I see a lot of speculation that "China is about to replace the US dollar with a gold backed yuan" or "China will endorse a gold backed SDR to replace the US dollar" all the time. Many articles suggest that these kinds of major changes to the existing monetary system are about to happen any time now. 
Of course, I can't possibly know for sure what is going to happen in the future or when something major might change in the global monetary system. We have listed many potential triggers for that kind of change that really do exist and are pretty much present all the time despite the fact that no such changes have taken place so far. 
Also, there is no doubt that both Russia and China (and probably a number of other nations) are working towards the day when the US dollar does not hold its place at the primary global reserve currency. We see obvious proof of this all the time in both statements of officials and actions taken by those officials in those nations.
However, if you take the time to read what the various central banks, the IMF, and the BIS have released publicly on all this, you do not see any indication at all that they are moving rapidly to towards any major changes in the current monetary system dominated by the US dollar as global reserve currency. 
There is a lot of talk, a lot of studies, and a lot of various new technologies being introduced and tested that could lead to some big changes, but none of them appear to be leading towards a major global change in the near future as best I can tell. It feels like a universal technology standard formed by consensus (of the banks and central banks) needs to emerge first and we seem to be in the process of working through that now with a variety of concepts being tested. I view it as somewhat like the old BetaMax vs. VHS battle for standard universal adoption for video players back in the day (more on that in an article next week).
It appears that a slow and steady gradual movement towards change is underway driven by innovative new technologies. But the process will probably take some time to unfold at the current pace without some kind of major trigger (like a global crisis that took out the current monetary system). The best evidence I have from what I consider to be excellent and very high credibility sources is that we might expect to see a few central banks test out a central bank digital currency by next year. If that goes well, then others may follow and some of the bigger central banks might be tempted to test that out as well. If it does not go well, expect major central banks to be very cautious about making any big changes. My guess is that the IMF will sit back and watch all this to see how things turn out and which technology gains consensus widescale adoption in the banking system (or if any of the new technologies are able to obtain that status).
While I can't be sure what China and/or Russia might do of course, I don't expect them to try and force some kind major change to the existing global monetary system before all parties who would have to be involved in that are ready to agree on that. I don't find any public evidence that anything like that is anywhere on the near horizon despite articles I see constantly that speculate along those lines. The US seems to view efforts to undermine the US dollar globally somewhat along the same lines as a declaration of war (here is an alternative media view on that idea). I always remain open to evidence to the contrary should it arise.
As always, an unexpected crisis event can change things quickly. The most probable known event that could be in that category would be if the US is unable to resolve its problems with North Korea without a major shooting war taking place (Jim Rickards latest analysis is still 70% chance for war). The could certainly be a trigger for a major disruption of the current monetary system so we will continue to monitor that situation until it is resolved one way or another. (added note - see Jim Rickards Twitter comment on North Korea here)
By mid 2018, I feel like it will be pretty clear if any of this will lead to the kind of major monetary system change we watch for here and if further regular articles are really needed. It may be that I can just go into "monitor" mode and only produce an article if something that is significant in terms of monetary change surfaces. 

Wednesday, November 15, 2017

News from the Singapore Fintech Festival

We have previously noted here that Singapore desires to be a global leader in pushing forward new Fintech technologies. This week the MAS (central bank of Singapore) made some announcements in regards to some things we have talked about here that could lead to the first central bank digital currency by next year. Here is a link to the article and below is an excerpt from it (bold underline emphasis is mine).

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"SINGAPORE plans to work with partners in Hong Kong and Canada in developing the use of blockchain technology, the Monetary Authority of Singapore (MAS) announced on Tuesday.
The MAS will set up a cross-border platform with the Hong Kong Monetary Authority to boost trade finance using distributed ledger technology. This will enable the seamless transfer of digital documents and data across the Singapore-Hong Kong trade corridor. This is expected to go live in early 2019.
Speaking to participants of the Singapore Fintech Festival 2017, MAS managing director Ravi Menon said that blockchain technology offers good promise to make trade finance safer and more efficient. He said that today, trade finance is largely paper-based. This is not only inefficient, but increases risks such as fraud and duplicate invoicing, he added.
The MAS also plans to collaborate with the Bank of Canada to link both of their payments system that test the use of distributed ledger technology for cross-border payments."
Please click here to read the full article

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Added notes: Later this month I will try to provide a bit of an update of where things seem to stand in regards to the potential for monetary system change from the new Fintech technologies that continue to move forward around the world. Some things that will or could happen on the near horizon include:

- the launch of GlintPay based in London (I plan to cover that launch)
- perhaps some further news later this year from Singapore on progress towards a central bank digital currency
- the Cato Institute conference/discussion on the need for a rules based monetary system
- an interesting video interview from 2014 that readers may enjoy

Tuesday, November 14, 2017

One Graph of All the Money in the World

I like to take a look at this graph every time it is updated. It provides an interesting perspective on the world's money and debt situation. A few interesting facts on this latest update:


- Bitcoin has hit the $100 Billion mark

- All of the above ground silver in the world is worth only $17 Billion at the current price of silver. This simply cannot continue as the world's silver mines are already starting to decline in production even as the demand for silver continue to increase (solar power, medical uses, etc). 

- While we often hear talk about a coming "cashless society", this reports states the total global value of coins and notes in circulation is about $7.6 Trillion

- this reports says global total global debt is now $215 Trillion (325% of GDP)

- about 1/3 of all this debt ($70 Trillion) was added in just the last decade alone

- the total notional value of all global derivatives is estimated at somewhere between $544 Trillion on the low end and $1.2 Quadrillion on the high end. No one knows for sure what the true number is since many derivatives contracts are not transparent

The graphic includes this interesting quote from Jeff Greene:

"If there were not derivatives, there would be no bank loans at all today, because people want to get fixed-rate 30-year loans, but banks don't want to keep 30-year loans on their books."





Saturday, November 11, 2017

Denmark Central Bank Governor Speaks Against CBDC

We have been covering the ongoing discussion/debate over whether central banks will issue so called central bank digital currencies for some time now. We have noted that central banks around the world are looking into this idea while still moving very gradually on any actual implementation. 



Now we have this speech by Denmark National Bank Governor Per Callesen. He speaks against the idea of central banks issuing central bank digital currencies to private citizens for reasons we have pointed out here before. Below is the relevant excerpt from his speech on this issue (added underline is mine).

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. . . . . 

"For very different reasons it is neither to be recommended that central banks change their entire business model from being the banks of banks to issuing digital currency to the general public, say by opening an account for every citizen and company (including foreigners?). For a start it would not create something which is not already offered by private banks. It would not be a substitute to notes and coins but to private bank accounts. 

It would therefore rather open a highway to bank runs, challenging financial stability, unless the amount allowed would be limited to an extent where it could not serve useful transactions purposes. It would add competitive distortions at the expense of private institutions and very substantial costs in terms of IT, staff and regulatory compliance. In addition, piling up large deposits from the general public in central banks would raise the question if central banks should also engage in centralised and perhaps politically motivated lending activities.       . . . . 


Monday, November 6, 2017

CNBC: Singapore to Finish Cryptocurrency Trial in 2018

Earlier this year we mentioned that we might see the first central bank digital currency arrive by next year. We also speculated it might come from Singapore. CNBC confirms in this article that Singapore intends to finish up its testing for such a currency in 2018. Below are a few excerpts from the article.

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"Singapore will conclude its experiment with blockchain technology and its own digital currency next year before deciding whether to commercialize the trial, the country's regulator has told CNBC.
In 2016, the Monetary Authority of Singapore (MAS) announced "Project Ubin," an exploration of blockchain or distributed ledger technology.
The project is split into five phases. The first, which looked at establishing a proof-of-concept design to conduct inter-bank payments using blockchain technology, was completed earlier this year. The second phase, which finished earlier this month, saw the development of three different models for inter-bank payments using blockchain.
Now, the MAS trial is looking at    . . . . . . "      click here to read the full CNBC article
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My added comments: Here we have confirmation of something we have been reporting here for some time. At this point, it is too early to tell if Singapore will issue the first central bank digital currency since other countries (like China) are also looking at the idea. However, it is clear that Singapore has established itself as a leader in exploring innovative Fintech solutions and is moving towards some kind of decision in 2018.
One thing to note here is how slowly these things move. This is why when I see articles proclaiming that some kind of new central bank digital currency is "imminent", I take it with a grain of salt. There is no doubt that many central banks around the world are thinking about the idea. However, when you look at what they have said publicly, they tend to hedge on whether or not they will really move forward with it. I suspect that many central banks want to wait and see how the first early adopter central bank digital currencies work in the real world before moving ahead. This is why what happens in Singapore may be a good indicator for how the idea is accepted more globally.
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Added note: Singapore also continues to struggle with how to deal with private digital currencies like Bitcoin. This article talks about that.

Wednesday, November 1, 2017

Robert Pringle - Ten Year Retrospective (Part II)

Recently we featured a series of three articles by Robert Pringle on The MoneyTrap blog that take a look at what lessons might be learned from the last great financial crisis. That crisis prompted central banks around the world to experiment with policies never tried before and shook the trust of the general public in the existing monetary system.


Robert has finished up the series with an additional six articles for a total of nine lessons he feels could be learned looking back over the last ten years. Below are the links to Lessons 4-9 and a brief excerpt from each. 







4. The people will have revenge


"The countries worst affected by the financial crisis, the United States and especially the United Kingdom, have since experienced severe political turbulence. I believe this can be directly traced back to the financial crisis and the way it was dealt with by governments, central banks and the financial elite.

Essentially, the general public came to the view that the elites’ first priority in the crisis was to look after each other. They were the first to get into the lifeboats."  . . .  click here to read in full


"This is another unavoidable lesson. Banking has not been reformed by actions taken by the state, central banks or regulators since the crisis. Indeed they have set back the prospects for improvement."

. . .

"Banking industry leaders have resisted all efforts to reform. That shows that in the current state of society, banking can be regulated – raising costs to society – but not restructured."

. . . 

"Public officials can never, ever understand how business works. Either financial services are nationalised and run by boards of civil servants or they are set free.  Given a truly competitive environment in which executives are personally liable for mistakes and in which institutions (including the largest)  can and do fail – then we will have at least have one of the anchors of a sound system of money."          . . . .   click here to read in full


6. Expect more bad bankers and bad banks

"How has the state punished the financial industry for its crimes,  corruption and anti-social behaviour?

By showering it with subsidies, privileges,  perks and by offering it protection from an angry public. And by reducing its profitability and capacity to change by piling new regulatory layers and requirements."                 . . . .   click here to read in full


“The global financial system has evolved in such a way as to distort incentives of the players, corrupt the relationship between states and markets, and impose unacceptable collateral damage on the real economy”           . . . . .   click here to read Lessons 7,8, and 9 in full 


8.….. of ethics……

"The system, I said in 2012, was grossly unethical: “because of this, it was storing up political trouble”. I warned that while people had shown great patience, the public “could not be expected to put up year after year with inequitable outcomes, where rewards bore no elation to effort, skill or common sense”.


9…and of a credible anchor



"To sum up, our system continues to lack the key elements that gave the classical system of international finance such strength and durability: a credible anchor for money, fixed exchange rates and a set of ethical rules of good behaviour."



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My added comments: I encourage readers to take time to explore all nine lessons in this series. These lessons are important because they come not from a long time outside critic of central banks and the global banking system, but rather someone with decades of experience working within the system. 

Indeed, Mr. Pringle offers these comments in Lesson 6:

"Right up to the late 1970s, banking was populated by proud names – great institutions with marvellous histories – names to celebrate. Names like Citibank, Chase Manhattan, JP Morgan, Wells Fargo, HSBC, Barclays, Lloyds, Deutsche, Standard Chartered, UBS, Credit Suisse and the rest.

I personally knew the top executives of all these banks. It was my job as the Editor of The Banker from 1971 to 1979.  They were not all the most cultured of people; many had not even been to university. They were, often, creatures of convention. They followed rules. But they were totally honest. They watched their peers like hawks. They were shrewd and usually very able people.

The reputation of these institutions – and others –  has been badly tarnished.   True, many bankers are trying hard to restore public respect for their profession.  New bodies have been set up to fight corruption.

But they are battling what in many institutions is a rotten – “we can get away with it” – culture at the top. For example, remuneration committees routinely rubber stamp the most outrageous recommendations on appropriate salaries for top executives that come from so-called renumeration consultants. They invariably  use comparablity criteria that result in large upgrades for the nonentity who happens to filling the CEO slot.

Their predecessors – the men I knew – would be profoundly shocked and horrified."

Reading through these lessons, it becomes clear that Robert Pringle wants to do what he can to try and shed light on bad practices that have led to substantial public distrust with the banking system (both the big global banks and central banks).

It remains to be seen if these lessons will result in reforms that improve the existing banking system or if public trust will continue to erode to the point where the current system is no longer viable and is replaced one way or another. It may be that the rise of Bitcoin and other private currencies is one kind of pubic response to the issues raised here by Robert Pringle.

Whatever happens, I think we would be wise to hear the warnings Mr. Pringle issues in this series of lessons and view them as an opportunity to be informed from someone who truly knows the existing system from the inside.

Monday, October 30, 2017

David Lipton (IMF) - The Challenges to Sustaining the Global Recovery

In this recent speech, IMF Deputy Managing Director David Lipton talks about a variety of issues that will impact the financial landscape in the future. Below is an excerpt from this speech in regards to how Fintech may impact things.

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. . . . 
Digital Finance
"All of which leads us directly to the third area of change: the broader universe of digital finance, which you will be discussing this afternoon. This is playing out right now before our eyes in the online payments platforms like PayPal and China’s Ali-Pay. In only a few years, many people in China’s cities have stopped using cash altogether. In East Africa, the online banking pioneered by M-Pesa has benefited millions of people who previously lived outside the financial system.
These success stories show how Fintech can be a force for inclusion and development.
But Fintech also presents a serious challenge to traditional banking models. And as online platforms develop lending and investment products, effectively acting like banks, every regulator and supervisor must be concerned with whether the current regulatory framework is adequately encompassing these businesses. Here, too, work is underway, with Fintech firms interacting with regulatory authorities on a range of possible solutions.
But we are still talking about a business that fits broadly within our frame of reference for financial services. A case can be made that next level of this digital transformation—the emergence of crypto-currencies, and new transaction and settlement technologies—is moving well beyond familiar boundaries.
The so-called distributed ledger technology is dispensing with the backroom and moving to instantaneous transactions outside the reach of governments—and that includes the scope of monetary policy. We now see central bankers starting to talk about issuing their own virtual currencies and considering ways of regulating the bitcoins and others.
Here, too, the implications are enormous. National regulators and international standard-setters need to move quickly to define a regulatory setting that can address the issues that will emerge almost before we know it. At the same time, we cannot “throw out the baby with the bathwater” by imposing a regime that stifles innovation.
The Fund has just begun to address these issues within its mandate. Like cyber-threats, there is a great deal of work to do to understand the potential macroeconomic impact."
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Added note: The speech also mentions how debt continues to grow globally. This article in Reuters points out the problem with some big numbers.

Saturday, October 28, 2017

CNBC: China Has Grand Ambitions to Dethrone the Dollar

There have been a number of news articles about the recently announced plan by China to try and get oil contracts priced in yuan (petro-yuan). CNBC runs this new article that also says China is working hard towards that goal. But this article suggests it may not be easy and may take longer than some would think. Below are a couple of excerpts.

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"China is looking to make a major move against the dollar's global dominance, and it may come as early as this year.


The new strategy is to enlist the energy markets' help: Beijing may introduce a new way to price oil in coming months — but unlike the contracts based on the U.S. dollar that currently dominate global markets, this benchmark would use China's own currency. If there's widespread adoption, as the Chinese hope, then that will mark a step toward challenging the greenback's status as the world's most powerful currency."

. . . . .

"The plan is to price oil in yuan using a gold-backed futures contract in Shanghai, but the road will be long and arduous."

Please click here to read the full article on CNBC


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Thursday, October 26, 2017

US Dollar in the News

Suddenly we have numerous articles appearing suggesting once again the US dollar's days as global reserve currency may be shortening. We have seen this predicted many times over the years, but this time the news that China is promoting the pricing of oil in yuan is adding some impetus to those looking for the role of the US dollar to diminish. Below are links to a couple of articles along these lines.

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CNBC - China will compel Saudi Arabia to trade oil in Yuan

"China will "compel" Saudi Arabia to trade oil in yuan and, when this happens, the rest of the oil market will follow suit and abandon the U.S. dollar as the world's reserve currency, a leading economist told CNBC on Monday.

Carl Weinberg, chief economist and managing director at High Frequency Economics, said Beijing stands to become the most dominant global player in oil demand since China usurped the U.S. as the "biggest oil importer on the planet."

CNBC - World Could be Turning its back on the US Dollar

"A combination of geopolitical pressures could spark the end of the U.S. dollar as the world's reserve currency, according to the head of FX strategy at Saxo Bank.

In a quarterly outlook note titled "The world is turning its back on the almighty dollar," John Hardy claimed the U.S. currency was "increasingly dysfunctional" and there was an urgent need to replace it."
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Added note: A variety of analysts in the alternative media realm are also touting this move by China as being significant. As an example. Hugo Salinas Price wrote this article recently on the topic. Jim Rickards also talks a bit about it in this recent article and this article which also looks at Jim's view of the prospects for gold in the coming months.

Monday, October 23, 2017

What is KlickEx Up to These Days?

Long time readers may recall a company we featured here awhile back that is viewed as up and coming in the Fintech space. KlickEx is headquartered in New Zealand under the leadership of CEO Robert Bell. KlickEx caught our attention due to an innovative concept for a potential asset backed cryptocurrency they presented at FinovateAsia in 2013.


This blog is always on the watch for any news related to events that might lead to major changes in our existing monetary system. Since KlickEx is engaged in financial services that could impact how money is used around the world now and in the future, we have continued to keep an eye on them as they continue to move forward. This page about the company history for KlickEx gives you a feel for what they do and their desire to tackle the challenges that exist to make it easier and less costly for the world to transfer money across borders.

It's been a while since we checked in with KlickEx, but as you can see from the link above, they have been keeping quite busy. Here are a few highlights from the past few years:

- launched the first web based money transfer system in the South Pacific in 2010

- ranked the lowest cost remittance service in the South Pacific by The World Bank 

- won best global payments initiative at the Financial World Innovation Awards in London

- named top Fintech company of the year (2013) by SWIFT & won the Innotribe Award

- CEO Robert Bell named New Zealand High Tech Young Achiever in 2013

- presentation to the South African Community Development Central Banks (2014)

- named by central banks in the Pacific as key agent of change (2015)

- CEO Robert Bell presents the concerns of the Pacific's financial institutions at the G20 conference in China (2016)


This year it appears that KlickEx is ready to expand further by working on projects that may start the process of changing how the world uses and moves money. The goal has always been to improve transaction speed, allow cross border payments, and reduce costs to the end users. Now KlickEx appears to be ready to move forward and form partnerships that can help make their vision become reality as IBM releases this news about its new partnership with KlickEx and Stellar which we covered earlier on the blog here. Robert Bell of KlickEx helped present the new concept at Sibos in Toronto, Canada alongside partners from IBM and Stellar.








Looking at this news recently released on the KlickEx web site, it appears that the news from IBM is just the start of a process intended to have an expanding global reach. Here are some key points from that news release:

Next Steps for APFII: 

Beyond facilitating the trend of reducing the price of remittances, now at a cost plateau of possibility because de-risking remains pervasive, APFII is now moving to address financial inclusion in additional ways.

- In October 2017, KlickEx, a systemically important APFII member, extended its clearing systems to process increasing amounts of regional transactions on IBMs Blockchain transaction service. In partnership with IBM, the Pacific is now the world's only multi-country blockchain backed payment infrastructure.

- To resolve de-risking and return electronic payment volumes to 80% of all transactions. Currently, this has fallen by half, to 40% due to lack of infrastructure in the sending markets, such as Australia, NZ, and the US. 

Actions:
   
--- APFII is planning to invest $300m next year to build out the financial platforms in partnership with IBM, local Pension Funds, and local/strategic Central Banks (*several NGOs and non-member FIs have expressed interest to co-participate) to implement this.

--- $100m of the above will also be committed to resolving de-risking outside the Pacific, with the participation of three National Payment System expansions already underway in five observer markets including HK (Hong Kong), the UK and the US. 

--- When successful, APFII Members will consist of nearly 3,000 staff, and two million monthly customers, covering 25 countries. There will be real time payment and trade finance facilities to over 110 countries.



KlickEx CEO Robert Bell had this to say about these big steps forward that KlickEx is now taking:


"The South Pacific Region was the perfect choice for IBM to launch the initiative – outside the major currency trading corridors, across a mix of both emerging and mature economies, and with relatively low transaction volumes – and of course, the ability to leverage KlickEx’s trusted system and infrastructure.

KlickEx is a pioneer in leading technological innovation and sees the potential for blockchain in emerging economies.  This is the first time it is working at scale to create seamless and borderless payments across the Pacific.

I’m delighted that KlickEx is working in collaboration with the IBM Blockchain payments solution and alongside Stellar on this exciting world first – and seeing New Zealand and the Pacific continue to lead the way in payments innovation."






Robert Bell, CEO KlickEx