Banking

Hong Kong set to receive its first Bitcoin ATM

The ATM may be ready by the end of the month, but Taiwan’s Financial Supervisory Commission says it won’t allow Bitcoin ATMs on the island.

Bloomberg News

January 06, 2014

Robocoin Technologies, the company that opened the world’s first Bitcoin ATM, won’t need regulatory approval from the Hong Kong Monetary Authority to provide the machines in the Chinese city.

An ATM for the virtual currency may be ready in Hong Kong by the end of this month, the South China Morning Post reported yesterday, citing Robocoin chief executive Jordan Kelley.

“It appears that the proposed machine is another channel for acquiring Bitcoin or a vending machine,” the regulator said in an email reply, noting that there is limited information available. “Bitcoin is not regulated by the HKMA. Bitcoin is not a currency but a virtual commodity.”

Robocoin opened the first Bitcoin ATM in Vancouver in October, allowing users to exchange cash for Bitcoins or vice versa, according to the company’s website. Zynga became the latest merchant to accept Bitcoins, testing it as a virtual currency for some of its online games.

Hong Kong’s laws impose punishment on the illegal act of theft, fraud and money laundering involving Bitcoin, the HKMA said. The regulator said Bitcoin doesn’t have any backing and doesn’t meet the criteria of a means of payment or an electronic currency.

Taiwan’s Financial Supervisory Commission won’t allow Bitcoin ATMs on the island, Tseng Ming-Chung, the minister at the commission, said in Taipei. Bitcoin isn’t a real currency and is a highly speculative virtual product, Taiwan’s central bank and FSC said in a joint statement last month.

Robocoin may seek to have such machines in Taiwan, TechCrunch.com reported last week, without citing anybody.

Hong Kong Monetary Authority said it is monitoring Bitcoin’s usage and regulatory developments elsewhere to consider the need for follow-up action.

Introduced five years ago by a programmer or group of programmers going under the name of Satoshi Nakamoto, Bitcoins exist as software and can potentially reduce banking transaction fees, making it an attractive option for trading via the web or in stores. Bitcoins are being used to pay for everything from Gummi bears and digital cameras to Tesla electric cars on the web, with more than 12 million in circulation.

business@thenational.ae

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

COMPANY PROFILE

Name: Lamsa

Founder: Badr Ward

Launched: 2014

Employees: 60

Based: Abu Dhabi

Sector: EdTech

Funding to date: $15 million