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Leap to Digital

Bank of Canada Lays Groundwork for Digital Currency and USA Congress to host a hearing on digital currencies in March.

Is it still a leap to consider a Digial Currency in 2020?

The global financial services industry faces a giant wave of disruption driven by the worldwide adoption of the new distributed ledger technologies, based on various approaches to the blockchain. Changes of this magnitude are rare, and as this new phenomenon takes the world by storm, traditional financial institutions must adapt and adjust to participate in this digitized finance industry.

Digital identity is one of the oldest and hardest problems on the Internet. There is still no way to use digital credentials to prove our online identity the same way we do in the offline world. This is finally changing. First, the World Wide Web Consortium is standardizing the format of digitally-signed credentials.

Secondly, public blockchains can provide decentralized registration and discovery of the public keys needed to verify digital signatures. These two steps pave the way to establish a global public utility for self-sovereign identity—lifetime portable digital identity that does not depend on any central authority and can never be taken away.

The Sovrin Network has been designed exclusively for this purpose, including governance (the Sovrin Foundation and the Sovrin Trust Framework), scalability (validator and observer nodes and state proofs), and accessibility (minimal cost and maximum availability). Most importantly, Sovrin implements Privacy by Design on a global scale, including pairwise pseudonymous identifiers, peer-to-peer private agents, and selective disclosure of personal data using zero-knowledge proof cryptography.

The emergence of this infrastructure can transform at least four major markets: identity and access management, cybersecurity, RegTech, and data integration.

To provide economic incentives for credential issuers, owners, and verifiers, the Sovrin protocol will incorporate a digital token designed expressly for privacy-preserving value exchange.

The Sovrin token should enable a global marketplace for digital credentials of all types and value levels together with ancillary markets for digital credential insurance and permissioned first party data (direct from the customer).

Success will go, first and most lastingly, to those that see that disruption as an opportunity to be exploited rather than as a storm to be weathered or ridden out.

Lions Gate Digital, Inc. is an early adopter of Sovrin protocols and subscribed to become a Trust Anchor and Digital Advocacy, to learn more visit Lions Gate Digital.

Central banks around the world are trying to get to grips with emerging payment technologies. Private-sector initiatives such as Facebook Inc.’s Libra are adding urgency to the debate over how digital currencies should be handled.

The Bank for International Settlements and the International Monetary Fund have called for central banks to at least study the possibility of as private sector firms experiment with competing units of exchange. A survey of 66 central banks by the Basel-based BIS showed that some 80% were engaged in the matter, up from 70% the year before. The proportion likely to issue a digital currency to the public in the 1-3 years doubled to 10%.

Digital Transformation of the Hong Kong Monetary Authority (HKMA)

Fintech has been one of the HKMA’s work priorities in recent years. Over the last few years, HKMA has introduced many new initiatives, including the widely known Faster Payment System and the virtual bank licensing regime, to encourage banks to apply new technologies in offering customers more quality and convenient services and, at the same time, to promote financial inclusion. Earlier this month, the HKMA published a report on the application of artificial intelligence (AI) technology in the banking industry. We find out that almost 90% of the retail banks have adopted or planned to adopt AI. This finding indicates that Hong Kong’s banking industry has gradually adapted to this digital era and is making good progress through the use of innovation and technologies.

While the banks are adopting new technologies, the HKMA has also been transforming to put technology and data science into better use. Indeed, the HKMA has always been using and analysing various types of data. Nonetheless, with substantial improvements in computing power and rapid reductions in data storage cost, many institutions have begun to explore ways to enhance efficiency by applying data science. The HKMA is no exception. They embarked on a series of studies last year on how to make use of new technologies. The studies mainly concern data collection from a variety of sources, followed by the use of advanced technology to analyse the data, with a view to strengthening the regulatory capability and improving the efficiency of daily operations. Through the exchanges with a number of central banks and regulators around the world, they all came to the conclusion that data science would be capable of providing analyses that could improve risk assessment and policy-making.

The HKMA’s digital transformation covers multiple functions, including banking supervision, anti-money laundering, financial stability surveillance, economic research, and reserves management. In the near future, the HKMA plans to introduce a number of new initiatives to implement the transformation. Take banking supervision for instance. The HKMA is collecting more granular data from banks so as to obtain a fuller and more up-to-date picture on the state of their businesses. They hope that, in the long run, the use of new technology will replace the current requirement for banks to submit template-based regulatory reports, thereby lessening their reporting burden. This will be a win-win outcome for the HKMA and the banking industry.

Hong Kong has a straight forward, legitimate, long existent low tax system with attractive, genuine open pension planning for international and local clientele who wish to have safe/reliable capital to draw on when they retire. While the effect of efficient pension planning is much lower taxes on your estate, this is not a scheme developed for tax avoidance. Instead, the Hong Kong pension regime will maximise the return on your wealth allowing for the efficient management of pension assets in order to benefit from double-taxation regulations, avoid overlapping taxes, and unnecessary fees through poor future planning and unawareness of taxation law.

A Trustee manages assets on behalf of the beneficiary of a trust, an estate or another party. A custodian is the entity that actually holds the assets in question for safekeeping.

Custodians physically secure assets, but don’t have the authority to make management decisions. Trustees have the authority to make management decisions, but don’t necessarily hold or secure assets.

Fiduciary responsibility and power of investment

The powers trustees have to invest are determined in part by statute, partly by the trust deed and partly by common law. In Hong Kong, trustee powers are regulated by the 1934 Trust Act, amended by 2013’s Trust Law (Amendment) Bill, as well as case law that "adheres closely to English and post-Commonwealth" case law.

Trustees typically have wide power of investment, along with a fiduciary duty to make investment decisions in the best interest of the beneficiaries.

By contrast, a custodian has to minimize the risk of their theft or loss, but the custodian does not have fiduciary responsibilities to the beneficiaries. Custodians act on instructions from the client or an authorized person like a trustee.

Authorization of trustees, selection of custodians

When a trust is first set up, its founding document is a trust deed. The trust deed names the trustee and confers on them authority over the trust assets. A trust deed is almost always a custom document, created for each trust depending on the purpose and scope of the trustee's powers. Trusts can be vested or non-vested, discretionary or non-discretionary; there are many options, and no such thing as a "standard" trust arrangement.

Subsequently, trustees select custodians, rather than the other way around. A trustee chooses the most appropriate custodian, and may move assets around from one custodian and another — for instance, by moving stocks and bonds between banks.

Conflicts of interest for trustees

It’s a fundamental principle of trust law that a trustee should never place themselves in a position where their personal interests conflict with their duties as a trustee. For instance, it couldn’t use money from a trust it controls to fund its own operations.

Typically, this is dealt with by maintaining two balance sheets, so that client money and the trustee's own money is not commingled, and by making suitable custodial arrangements.

While in some situations the trustee may also be the custodian — in the case of a trust company holding bearer instruments, for instance, there is no conflict of interest — in others, a third-party custodian can both make sure there is no conflict and deliver added value such as trade settlement.

Custodians are not responsible for conflicts of interest because they are appointed by the client or trustee and always act on their instructions, and have no other duties than to carry out transactions mandated by the client or an authorized person, and to keep assets securely.

Different types of trustee and custodian

Trustees can be individuals, companies, or any other entity that has the right to govern a trust. Trustees in Hong Kong are subject to the Anti-Money Laundering and Counter Terrorist Financing (Financial Institutions) Ordinance (AMLO), and to statutory due diligence and record-keeping requirements; recently a new licensing regime was introduced in Hong Kong, requiring registration at the registrar of Companies and a "fit and proper" test for individuals who control trust funds.

Custodians are usually depository banks and securities depositories, but are sometimes credit unions, or other organizations that keep money or financial instruments for their account holders. They are not affected by the new licensing regime: the selection of an appropriate custodian is a part of a trustee’s duty. However, a custodians in Hong Kong typically fall under the purview of the HKMA or the SFC, or when overseas, a similar regulatory body in equivalent jurisdiction, and thus be subject to regulations of their own.

Learn how you can invest offshore with a worldclass trust.

CupRoyale is a race around the world. Instead of city against city, it is country against country. The CupRoyale is the first ever, first annual powerboat race around the world, structured similar to a combination of the Volvo Ocean Race and Formula One Racing.

Nonstop racing around the world would be dangerous and boring. It would not make good live TV. That is why the CupRoyale is broken down into 30 smaller races, 15 ocean races and 15 harbor races. It is a four and a half month race with only one team per country. It is being structured to create a massive international TV audience. When you watch an NFL game you get both a pre-game show and the actual game. In the pre-game show they recount the last week’s events and then they have the game. Our pre-race show is about the ocean races and the live show is the harbor races.

Invest Offshore is endorsing and promoting Cup Royale please conact within for an investor pitch deck.

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