Coinbase addresses Ripple rumors, says it has made no decision on adding new coins


Coinbase just threw a bit of cold water on Ripple enthusiasts eager to see their coin hit the popular mainstream exchange. 

Rumors that Ripple’s XRP would be next in line after Bitcoin Cash reached a fever pitch this week among coin hype types, with some reading between the lines of a Tuesday segment of CNBC’s Fast Money that’s set to feature Ripple CEO Brad Garlinghouse and Coinbase President Asiff Hirji in what appears to be a panel discussion on cryptocurrency trends.

Speculation based on the Fast Money segment drove XRP up to $1.07, up about 6{36b96a1f853ebc4400789db5a6750c1e4fd7f7ac668ceaf8c757e025080de237} from weekly averages. Ripple’s XRP remains the only coin in the top five by market cap that isn’t available on Coinbase, though given XRP’s centralized nature and very different aims when compared to other cryptocurrency projects, its absence isn’t that surprising. Still, there is plenty of trading interest and those things don’t preclude Coinbase from adding XRP in the future were it to choose to do so.

Responding to the rumors, Coinbase tweeted “Our January 4th, 2018 statement continues to stand: we have made no decision to add additional assets to either GDAX or Coinbase. Any statement to the contrary is untrue and not authorized by the company.” Following the statement, XRP slid back modestly toward its previous averages. 

The company also linked to a January 5 blog post on its criteria for adding new assets. That post states that “Coinbase will announce the addition of new assets only via our blog post or other official channels.” The company likely isn’t eager to repeat the chaos around the introduction of Bitcoin Cash. Support for Coinbase’s newest asset was announced officially well ahead of time, but the rollout itself was marred by massive premiums, a trading freeze and an internal insider trading investigation.

Disclosure: The author holds a small position in some cryptocurrencies. Regrettably, it is not enough for a Lambo.

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Visa confirms Coinbase wasn’t at fault for overcharging users


Yesterday, we wrote that Coinbase customers were being charged multiple times for past transactions.

While some speculated that the erroneous withdraws were down to a Coinbase engineering issue, Coinbase issued a statement saying it wasn’t liable for the duplicate charges. The blame, instead, rested with Visa for the way it handled a migration of merchant categories for cryptocurrencies, Coinbase said.

While you can read my post yesterday for an in-depth description of what happened, the basic gist is that Visa refunded and recharged (under a different merchant category) a month of old transactions. Many users saw the recharge come through before the refund processed, making it look like they were double charged. Honestly, the issue was likely exacerbated by existing payment rails — it’s normal for refunds to take multiple days to show up on credit and debit statements.

But here’s where it gets weird — this morning Visa issued a statement to some publications shifting the blame back to Coinbase, telling TNW that “Visa has not made any systems changes that would result in the duplicate transactions cardholders are reporting.” We are also not aware of any other merchants who are experiencing this issue.”

But now it seems that the payment giant has revised its stance, and clarified that it wasn’t Coinbase’s fault.

The following is a joint statement from Visa and Worldpay, which is Coinbase’s payment processor partner. While Coinbase initially distributed the statement on its own blog, we’ve also received the statement directly from Visa.

Over the last two days, some customers who used a credit or debit card at Coinbase may have seen duplicate transactions posted to their cardholder accounts.

This issue was not caused by Coinbase.

Worldpay and Coinbase have been working with Visa and Visa issuing banks to ensure that the duplicate transactions have been reversed and appropriate credits have been posted to cardholder accounts. All reversal transactions have now been issued, and should appear on customers’ credit card and debit card accounts within the next few days. We believe the majority of these reversals have already posted to accounts. If you continue to have problems with your credit or debit card account after this reversal period, including issues relating to card fees or charges, we encourage you to contact your card issuing bank.

We deeply regret any inconvenience this may have caused customers.

While the statement doesn’t give a ton of clarity on the issue, it seems to absolve Coinbase of any blame, which is a win for the startup considering it’s been trying to prove to the world that its engineering and customer service teams can stand up to the challenge of maintaining a reliable financial platform.

Indeed, Coinbase CEO Brian Armstrong hit out at media reports that initially placed the blame for the snafu on Coinbase.

The startup — is valued at $1.6 billion after raising $100 million last year — has endured some challenging periods as it continues to scale its service to accommodate its 10 million-plus registered customers.

Issues over the past year have included muddling prices on Overstock.com, a flash crash, and a general struggle to keep up as cryptocurrencies boomed in 2017. In December, Coinbase launched an internal investigation into suggestions that company insiders profited from knowledge of impending support for Bitcoin Cash.

Note: The author owns a small amount of cryptocurrency.

Jon Russell contributed to this story. He also owns a small amount of cryptocurrency.

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Chat app Line announces plan for cryptocurrency services, loans and insurance


Line, the messaging app with around 200 million monthly users, is embracing bitcoin and other cryptocurrencies to fend off increased competition from Facebook and others.

The Japanese company told announced the creation of a new financial services division which will spearhead a move into cryptocurrencies and other services including loans and insurance. Line already operates a payment service — which claims 40 million users $4 billion in annual GMV — but now it plans to do much more.

Line said it has applied for a cryptocurrency license in Japan — where more than a dozen exchange and other businesses have been approved — which is currently under review.

Bloomberg reported earlier this month that Line was considering a move into crypto, but at this point it isn’t clear exactly what that will entail. From the announcement, Line said it will operate a marketplace inside its app where people can trade crypto and get loans or insurance. It said, too, that it will look into how it can use blockchain technology within its services.

Loans and insurance, while not as attention-grabbing a crypto, may prove to be lucrative ventures in markets where Line has strong recognition among consumers.

The company is need of something fresh to revitalize its business in the wake of increasing competition from Facebook, which operates WhatsApp and Messenger, the world’s most popular messaging apps with over one billion monthly users each.

Prior its $1.1 billion U.S.-Japan IPO in 2016, Line had targeted a global audience via its messaging service — which pioneered the concept of stickers — and a connected games business. Its international expansion didn’t go according to plan, however, and the company refocused efforts on its four core markets of Japan, Thailand, Taiwan and Indonesia, which account for 168 million of its active users.

In those markets, it offers a range of localized services that include a video streaming, manga cartoons, shopping, ride-hailing and other on-demand services. Last year, it began to sell smart hardware and AI to offer its own cartoony alternative to Amazon’s Echo range and Google Home devices. In some markets, it also offers a Line-branded mobile phone/data service.

There’s plenty of pressure, however. Facebook’s global popularity makes Messenger an option for most internet users on the planet while the company is busy in other areas. WhatsApp recently moved into business solutions that allow companies to correspond with users via its service, and it is tipped to move into payments soon. CEO Mark Zuckerberg has also pledged to look into whether Facebook can make use of blockchain technology.

Line will hope these new services can boost its business in its strongest markets and pick up new users in other countries.

Line might well be the largest consumer-focused business to adopt crypto to date. It is far from the only chat app, though. Kik raised $100 million in an ICO earlier this year, while there are also newer blockchain-based solutions such as Status. Then there’s Telegram, a chat app that has over 150 million users that is popular among the crypto community, which is planning a much-anticipated ICO that could raise upwards of $1.2 billion.

Line’s announcement comes as the price of bitcoin dropped below $10,000 for the first time since the end of November, according to Coindesk’s price tracking service.

Note: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.

Financial technology startups emerged as serious challengers to financial services in 2017


All the attention in financial services this year has gone to the newest kids on the block: cryptocurrencies. With Bitcoin now eclipsing $15,000 and Coinbase adding more than 300,000 users in one week alone, it’s easy to see why.

While cryptocurrencies stole the spotlight, a clutch of companies were quietly working behind the scenes to slowly bring the financial services establishment to its knees. It may turn out that these startup entrants of the last several years will prove to be the more relevant disruptors.

Earlier this year the “FinTechs” hit a massive milestone, one that very few people noticed but which must certainly be keeping senior execs at banks, credit card companies, and other institutions up at night. In June of 2017, for the first time in history, the top 10 publicly traded U.S. FinTechs surpassed $100 billion in total market capitalization.

Now that number is over $130 billion, and there are another dozen privately held FinTechs in the U.S. collectively valued at almost $35 billion. Together this is nearly $175 billion of value that didn’t exist 20 years ago. Other recent artifacts that must surely be unsettling for the incumbent financial institutions include: Paypal’s market cap surging past that of Amex and Robinhood quickly closing in on E*Trade in terms of total number of accounts opened — in just three years.

Definition: Matrix considers “FinTechs” to be (a) technology-first companies that leverage software to compete with traditional financial services institutions (e.g. banks, credit card networks, insurers, etc.) in the delivery of traditional financial services (e.g. lending, payments, investing, etc.) or (b) software tools that better enable traditional finance functions (e.g. accounting, point-of-sales systems, payments, etc.)

Introducing the Matrix U.S. FinTech Index

With an eye towards tracking the progress of disruption in the financial services space, we’re excited to release the Matrix U.S. FinTech Index. This index is a market-cap weighted index that tracks the progress of a portfolio of the 10 leading public FinTech companies listed above over the course of the last year (beginning in December of 2016). For comparison, we have also included another portfolio of the 10 largest financial services incumbents (companies like JP Morgan, Visa and American Express) as well as the S&P 500 index.

As seen below, the Matrix FinTech Index shows a clear win for the FinTechs. To their credit, after a rough year in 2016, the incumbents rallied in 2017 to perform slightly better than the S&P 500 Index — yielding 29{36b96a1f853ebc4400789db5a6750c1e4fd7f7ac668ceaf8c757e025080de237} returns over the one year period (compared to the 20{36b96a1f853ebc4400789db5a6750c1e4fd7f7ac668ceaf8c757e025080de237} returns by the S&P 500 Index).

The FinTechs, however, have blown by this, delivering 89{36b96a1f853ebc4400789db5a6750c1e4fd7f7ac668ceaf8c757e025080de237} returns and handily beating the incumbents by 60 percentage points. If you had invested in the Matrix FinTech Index a year ago, you would have almost doubled your money in just one year.

This Is Just the Beginning

Unfortunately for the incumbents, the outlook only worsens from here. The “old-guard” has long been suffering from inflexible back-end systems, antiquated ways of serving customers, and human intensive processes. They’re also increasingly at risk of losing trust with consumers as a result of very public failures like the Wells Fargo scandal and the Equifax data breach.

In the next 10 years, we predict that the incumbent’s portfolio returns (shown above in red) will drop well below the S&P 500 as they continue to disappoint end consumers and cede ground to the FinTechs.

Meanwhile, the FinTech takeover has just begun—financial services in recent years has been 7-9{36b96a1f853ebc4400789db5a6750c1e4fd7f7ac668ceaf8c757e025080de237} of U.S. GDP (i.e. trillions of dollars). In the decade to come, we will see the Matrix FinTech Index continue to climb to new heights as the existing FinTechs surge in value and as we add many more FinTechs to the Index. In fact, the nearly 100{36b96a1f853ebc4400789db5a6750c1e4fd7f7ac668ceaf8c757e025080de237} growth we’ve seen in the last year is the bottom end of the hockey-stick, just hitting the inflection point. By 2027, as we accelerate up the hockey stick, every aspect of financial services, from payments to lending to investing will be dominated by FinTechs.

Move over financial services – the FinTechs are here and they aren’t going anywhere anytime soon.

Featured Image: Thomas Trutschel/Getty Images