Fintech Raisin Adds Naqoda’s Tax Engine Solution to Provide Tax Calculations

Fast-growing Fintech Raisin has integrated Naqoda’s tax engine solution.

Raisin is a Fintech that provides access to higher interest savings accounts in multiple countries. Naqoda provides a multi-country software solution for the calculation and reporting of interest income tax and capital gains tax.

Raisin states that it will now have all the compliance requirements of German withholding tax (or Abgeltungssteuer). Raisin did not clarify if the service will be offered to other European countries or the US.

The German flat-rate withholding tax, or Abgeltungssteuer, is a tax on private income from capital and capital gains. This flat rate withholding tax came into effect on the 1st of January 2009.

Raisin COO and co-founder Michael Stephan explained the new service:

“By integrating Naqoda’s engine, we can offer Raisin customers in Germany an improved service. Those who select fiduciary deposit products now have a streamlined and transparent way to calculate and report the withholding tax on the income they earn from their Raisin-brokered savings.”

Raisin’s marketplace offers simple access to guaranteed deposit products from all over Europe, as well as globally diversified, ETF portfolios and pension products (currently available in Germany).

Since launch in 2013, Raisin has brokered €17.5 billion for more than 215,000 customers.

Karatbars International GmbH is “Not Authorized to Render Any Financial Advice and Intermediary Services”, South Africa’s Financial Regulator Warns

South Africa’s financial regulator, the Financial Sector Conduct Authority (FSCA), has issued a warning against Karatbars International GmbH, a German company that has been promoting a digital currency, called KaratGold Coin, which is allegedly backed by gold.

According to FSCA’s release:

“Karatbars International GmbH is not authorized in terms of the Financial Advisory and Intermediary Services Act, 2002 (FAIS Act), to render any financial advice and intermediary services.”

The FSCA says it was informed that Karatbars International’s representatives had offered investments to various people through WhatsApp. Karatbars International has not been licensed to offer any type of financial advice or intermediary services in South Africa, the FSCA clarified.

The  FSCA added that it wants to remind consumers to always check beforehand with the regulatory agency before engaging in any type of business relations with financial service providers. The FSCA can be reached at 0800 110443 or through their official website:

Germany’s financial regulator, the Financial Supervisory Authority (BaFin), has also warned consumers about dealing with Karatbars International.

BaFin’s official website states:

“As of 21 October 2019, the Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin (German Federal Financial Supervisory Authority) issued a cease and desist order to Karatbit Foundation, Belize, to stop and wind up the electronic money business Karatbit is conducting in Germany based on the issuance of the ‘KaratGoldCoin’ without the necessary license.”

BaFin further noted that “by law, the administrative order is immediately effective and enforceable though it may still be subject to judicial review.”

Last month, Florida’s regulatory authorities had confirmed that they were investigating Karatbars, which had been promoting its crypto token by claiming that it was linked to a Miami “crypto bank.”

Karatbars previously introduced a cryptocurrency that it claimed was backed by gold. The company has also been selling gold products online through a questionable affiliate marketing program.

Katie Norris, Deputy Director of Communications of the Florida Office of Financial Regulation, told Crowdfund Insider that the Florida Office of Financial Regulation has an open investigation but as the investigation is ongoing, additional information is currently not available.

Karatbars’ representatives have said that the gold backing their crypto token has been mined from Fort Dauphin in Madagascar. But the company’s claim has not been verified.

A third-party researcher at the Madagascar Chamber of Mines stated:

“We regret to inform you that there is no Fort Dauphin gold mine in Madagascar and Karatbars does not hold a mining permit in Madagascar.”

[pdf-embedder url=”….pdf” title=”BaFin – Consumer news – Karatbit Foundation_ BaFin issues cease and desist order to …”]

Germany: SMEs are Finding it Harder to Receive Bank Financing Reports creditshelf

SME online lender creditshelf says banks are becoming more skeptical about investing in small businesses in Germany.
creditshelf claims that last year only every third company had problems with bank financing, now every second medium-sized company encounters resistance from its house bank.

It has been widely reported that Germany’s economy may have entered a recession during September.

These are the results of creditshelf’s third annual study “Industrial SMEs and Financing 4.0”. The Fintech, along with TU Darmstadt, surveyed more than 250 business executives to garner the data.

“The economic engine stutters, and the banks react very sensitively. Nobody now wants to include problem loans in their portfolio. Accordingly, the institutes are cautiously financing new corporate projects,” says Dr. Daniel Bartsch, CEO and founding partner of creditshelf. “While last year 63 percent of the companies surveyed stated that they could easily convince their house bank to make new investments, by 2019 the figure was only 51 percent.”

Bartsch states this is a significant decline that considerably aggravates the situation with SMEs in Germany.

The head of the Department of Corporate Finance at the TU Darmstadt Prof. Dr. Dirk Schiereck says that SMEs must increase their investments to remain competitive. If banks do not provide access to capital, SMEs should turn to alternative finance:

“SMEs should not rely solely on their house bank, but should open up new financing possibilities. Digital credit marketplaces convince with fast processing, favorable conditions and flexible adjustment options. For the financing of new plants, machines or equipment, the house bank still requires real security for about half of all loans. Digital credit portals are set up more flexibly depending upon adjustment.”

Of course, the banks turning away from lending means more opportunity for creditshelf. If SMEs cannot access credit and Germany’s economy declines – the lack of credit can make things worse. Just like the last time.

Fintech Acatus raises €5,5 Million in a Series A round led by VCs DIP Capital and coparion

Acatus, a Berlin-based Fintech, has raised €5.5 Million in a Series A funding round, according to the company. The funding was led by DIP Capital and the VC fund coparion. The existing investors and angels also participated in the round.

Acatus claims to be the first “digital debt capital markets platform.”

The B2B-Fintech offers originators the ability to sell debt in the form of bonds to existing or new investors. Assets such as loans or insurance are converted into individual securities and placed directly on the capital market by Acatus.

Acatus CEO Dr. Marie Louise Seelig, a co-founder of CrossLend, expects to benefit from the expertise of new investor DIP Capital, which has experience in project financing and is said to be strongly represented in the Italian, French, Spanish and UK markets, especially in the field of renewable energies. coparion is described as an experienced Fintech and Blockchain investor.

“To maintain the necessary independence and avoid potential conflicts of interest on the originator side, I gave up my leadership position as the founder of CrossLend and decided to establish Acatus with a strong network of experts as a bank-independent digital debt capital markets platform,” said Seelig. “Against this background, I am particularly pleased that we have brought on board two strong and experienced VCs that will enable us to continue our journey and offer both investors and originators the best service when it comes to capital market access and investments. With our flexible Debt Capital Markets platform, we have created a tool to make loans available to the debt capital market. According to the ECB, there are twelve trillion EUR in loans available in Europe which shows the extraordinary market potential here. At the same time, we are making the European financial market more flexible and transparent”.

Riccardo Cirillo, founder and Managing Partner of  DIP Capital, said they were delighted to have taken a leading role in supporting the team of ambitious entrepreneurs. Cirillo said that Acatus has developed rapidly since its foundation and its has created a differentiated Debt Capital Markets platform to overcome the complex securitization process.

“Acatus’ platform enables its customers to optimize their loan financing processes and investments into an easily tradable and transparent form of securities,” Cirillo said. “This creates added value for all parties involved and at the same time opens up the opportunities for new business which are all absolutely necessary features for a well-functioning, fungible, European Debt Capital Market.”

Christian Schulte, Investor at coparion called the economic potential “enormous.”

Fintech Kreditech Says Break Even Cash Flow by 2020 as 2018 Loss Shrinks

German online lender Kreditech says the company is on track to “reach profitability in the near future,” as operating loss shrinks. Simultaneously, revenue and originations both declined.

The Fintech claims significantly improved performance as a result of a new strategy that was implemented in 2018. Kreditech has gone through numerous changes in the past year or so, including a change in executive leadership.

According to Kreditech, their net financial results in 2018 improved by 76% compared to the year prior. Kreditech says that achieving profitability is being driven by an “evolution of the product portfolio, investment in innovations and effective cost-management measures.”

Kreditech also closed on a recent funding round while announcing plans for expansion.

Kreditech lends through its consumer brands including Monedo Now and Kredito24, as well as through partners in four markets: India, Poland, Russia and Spain.

In 2018, the company focused on pivoting its operations toward the near-prime lending market, with installment loans as a key product.

Kreditech reports that during 2019, it has “successfully transitioned” back to growth in its core installment loan product and has achieved its highest-ever levels of monthly installment loan issuance.

David Chan, Kreditech CEO, commented that their results clearly indicates they have made excellent progress in accomplishing their objectives:

“We successfully expanded into the near-prime segment in most of our major markets, and we have continued, and will continue, in this strategic direction throughout the whole of 2019,” said Chan. “Our growth is supported by investments in core infrastructure and the successful opening of exciting new possibilities, such as obtaining an NBFC license in India, which enables us to expand in this high-potential market.”

Kreditech’s net losses fell by 76%, from € 58.4 million in 2017 to € 13.9 million for 2018. Revenue fell by 21.4% from € 71.4 million in 2017 to € 56.1 million in 2018.

The drop in revenue was made up for by a reduction in impairments.

The net result was an increase in gross margin (+32.3%) and a gross rate of return (38.7% in 2018, up from 23.0% in 2017).

In 2018, Kreditech issued € 107.3 million of credit across all of the markets in which it provides lending services. In 2017, lending was €185.2 million – a 42% decline.

The company generated revenue from core products amounting to € 56.1 million. This represents a decline of approximately 21% compared to the previous financial year, which is said to be a reflection of Kreditech’s shift in strategic product focus from high-yield and short-term microloans with higher risk, to long-term installment loans, demand for which is said to be increasing.

Kreditech’s mission is to be the global leader in technology-enabled consumer lending and the platform of choice in the near-prime market.

Online Lender creditshelf Expands with Physical Branch in Munich

creditshelf Aktiengesellschaft, a Fintech providing access to capital for SMEs, is opening a physical branch in Munich. While many Fintechs are focusing on less real estate, creditshelf believes a localized office can help expand its services.

Jan Stechele, Head of Product Management, Head of Business Development Sebastian Seibold and Florian Weinkauf  Relationship Manager will all operate out of the Munich location with further expansion planned.

Dr. Daniel Bartsch, Chief Operating Officer of creditshelf, commented on the move:

“Bavaria is one of our most important sales regions and Munich an attractive location for technology and growth companies as well as the headquarter of numerous of our cooperation partners. We would like to further expand this segment. Consequently, it was time to implement the planned location in Munich.”

Founded in 2014 and is based in Frankfurt am Main, creditshelf arranges loans via an online platform. By arranging corporate loans, creditshelf enables SMEs companies to access highly attractive alternative finance options. At the same time, creditshelf offers professional investors looking for attractive investment opportunities access to SME finance.

Fundament to Provide Institutional Grade Custody in New Partnership with “DACS,” Digital Asset Custody Services

Fundament Securities, the issuer of the first regulated Real Estate Security Token offer in Germany, will provide institutional-grade custody solution for its digital assets in a new partnership with DACS “Digital Asset Custody Solution” a digital asset lifecycle management business.

Fundament Group is a Berlin-based end-to-end issuance solution for tokenized assets. Fundament Group co-founders include the President of the German Blockchain Association, Florian Glatz, policy advisor to the German government, Robin Matzke and seasoned real estate investor, Thomas Ermel.

According to a release, Fundament Securities and DACS will jointly provide an institutional-grade custody solution for Fundament’s digital securities. The custody solution will cater to high-volume professional investors such as pension funds, insurance providers, family offices and high-net-worth individuals.

Fundament adds that its growing investor-base’ digital assets are protected by advanced cybersecurity under FIPS 140-2 Level 4 certification, the highest level of certification currently achieved by commercial cryptographic Hardware Security Module (HSM) devices.

DACS has teamed up with IBM to create a one-of-a-kind cloud service built on IBM LinuxONE enterprise platform, using IBM Hyper Protect Virtual Servers.

Neil Fillary, co-founder and Board Member at DACS, commented on the announcement:

“Fundament Securities is on track to bring institutional players into the space of decentralized finance. Smart contracts and digital-asset technologies are set to transform the way enterprises across industries do business. Now with our digital asset custody solution, Fundament’s underlying infrastructure can help bring security, and accessibility in the crypto-asset market to new heights.”

Fundament recently received a significant strategic investment from Bauwens Group, one of Germany’s leading real estate developers.

In July, Fundament received approval from the German Financial Market Supervisory Authority (BaFin) for the country’s first tokenized real estate bond, with an issue volume of €250 million.

Association of German Banks Advocates for Programmable Digital Euro

The Association of German Banks (Bundesverband Deutscher Banken), the association that represents all of the private banks in Germany, is demanding a programmable digital Euro.

A position paper published by the Association is advocating for the creation of a digital Euro in response to Facebook’s attempt to create a non-sovereign cryptocurrency – Libra.

Tha Association states:

“There can be no question that responsibility for the monetary system lies, and will continue to lie, with sovereign national states. Any currency provided either by banks or by other private companies must, therefore, fit into the state-determined system. Anything else would ultimately lead to chaos and instability.”

The Association has embraced the technology underpinning digital currencies as the “Fourth Industrial Revolution” alters the global economy.

“This innovation has the potential to once again radically alter the way we pay and how we store value. This makes it all the more important to achieve a social consensus on how programmable digital money can be integrated into the existing financial system. The main burden of this public-policy (in the best sense of the term) task rests with central banks, governments, parliaments, and regulators. But one thing is certain: banks, in particular, are challenged as well, since innovation and digital change will permanently transform their world.”

The Association of German Banks “explores what contribution banks can make towards a sustainable and innovative monetary system, how the general environment should be designed so that banks can operate alongside new competitors, and what is needed to ensure the stability of the financial system.”

The policy positions of the Association of German Banks is as follows:

  • A stable currency is the basis for any economic system; ensuring one is a key element of state sovereignty. The stability of the existing monetary system must not therefore be endangered by the provision of crypto-based digital money.
  • The German private banks rate programmable digital money as an innovation with great potential that can be a key component in the next stage of the evolution of digitalisation.
  • The German private banks will play their part in establishing a sustainable and innovative monetary system.
  • For this purpose, a programmable account and crypto-based digital euro should be created and its interoperability with book money ensured. The condition for this is establishing a common pan-European payments platform for the programmable digital euro.
  • To create public trust in programmable digital money, compliance with the highest regulatory standards is essential. To ensure legal certainty, a legal classification of programmable digital money is necessary as well.
  • All innovators must respect a uniform supervisory and regulatory framework. The issuance and custody of programmable digital money should also be possible under existing full banking licence rules.
  • The German private banks expect lawmakers and regulators to lay the necessary foundations for digital innovation, especially in the banking sector.
  • European lawmakers must establish a basis in competition law to facilitate pan-European payment solutions.
  • To enable banks to meet new competitors on an equal footing, competition policy should take account of changes in the international competitive environment and create a new framework that will establish legal certainty for cooperation between European market participants.
  • We support a uniform European approach to defining this competitive framework. The user of a digital euro – whether man or machine – must be clearly identifiable. This requires a European or, better still, a global identity standard. With every form of digital money, customers should be identified using a standard that is just as strict as that which banks and other obligated entities are required to apply under current legal framework pursuing the combat against money laundering and terrorist financing.
  • The processing of personal data in connection with programmable digital money requires a viable data protection strategy.
  • In light of its global reach, there is a need to clarify the legal basis on which programmable digital money may be used. Existing consumer protection standards must be observed.
  • German tax law must clarify for income tax purposes whether programmable digital money is a currency or an economic good. The precise design of programmable digital money requires clarification to facilitate its VAT treatment. With respect to wallet management – especially in third countries – tax enforcement must be guaranteed.
  • Thanks to deposit guarantee schemes, deposits of bank customers enjoy a high level of protection. This level of protection should also be the benchmark for programmable digital money. In any event, providers must inform customers clearly and verifiably if no deposit protection exists.

The Association recognizes the fact that digital money is already in use on a daily basis in the form of direct debits, payments etc. The emergence of “cryptomoney” increases the diversity of digital forms of money.

Cryptomoney or digital currency offers a significant technological innovation, states the Association.

This includes Smart contracts or computer protocols that map or verify contract terms.

But in Libra, Bitcoin, as well as Alipay and M-Pesa, there are now new forms of currency that the banks do not yet fully know how to handle.

The private German banks are:

“Convinced that, in a digitalized economy, this form of digital money will rapidly gain in importance. Smart contracts can be connected not only to cryptocurrency but also to account-based book money. It, therefore, makes sense to distinguish between programmable and non-programmable digital money. Libra is crypto-based, programmable digital money.”

The Association’s position is a powerful statement in support of the utilization of distributed ledger technology or blockchain, to better manage transactions.

The German banks believe a programmable digital euro should be pursued to establish a pan European payments and transfer platform.

While currency innovation has been driven by the private sector there is a strong movement for policy makers to maintain control while learning from experiences outside the public sector. Expect this debate and discussion to continue globally.

The entire position paper is embedded below.

[pdf-embedder url=”” title=”Bundesverband deutscher Banken German banks say The economy needs a programmable digital euro! – Association of German Banks”]

Fundament to Use Tezos for Digital Securities Issuance, Receives Investment from Tezos Foundation

The Fundament Group, a Germany based security token issuance platform, has announced a partnership with Tezos to develop regulated digital securities. Fundament also revealed that the Tezos Foundation has invested in the Fintech startup.

Fundament’s vision is to provide institutional-grade financial products for all investors – not just big money. Fundament will provide these services in a regulatory compliant manner as outlined by German and European securities law. Fundament was the first German Fintech to receive approval from Germany’s regulator – BaFin, for a €250m blockchain-based real estate bond.

The digital security is Germany’s first tokenized real estate offering, issued on a public blockchain with minimum investments starting at just one Euro. By incorporating blockchain, these digital assets are easily tradable and manageable. Fundament allows for self custody on digital wallets.

Switzerland based Tezos Foundation is well known for its huge initial coin offering that raised $230 million back in 2017. Tezos committed around the same time to dedicate approximately $50 million to build out its network and community.

Florian Glatz, Co-Founder of Fundament Group, commented on his company’s vision for the future:

“Right now, capital markets are segregated between professional and retail investors. Small investors, in particular, find it difficult to build sustainable wealth through attractive dividends and are largely restricted from investing in certain asset classes. It is our vision to break down these barriers and build a truly inclusive market for financial products on a global level, without compromising on investor protection.”

Glatz, an attorney, is also the founding president of the German Blockchain Association and was involved in the founding of the European Blockchain Association.

Hubertus Thonhauser, board member of Tezos Foundation, said they look forward to working with Fundament Group to provide an end to end infrastructure for securities:

“We are aligned in our vision to challenge the current financial system and we very much look forward to a productive and fruitful partnership.”

Several weeks ago, Bauwens Group, invested in the Fundament Group ostensibly with the intent of issuing digital assets backed by real estate. Details on the investment were not disclosed. Bauwens Group, a German real estate developer, reports a project development pipeline of €6.7 billion.

Commerzbank, Deutsche Börse and MEAG are Examining the Scope of DLT in Post-Trade Services

Commerzbank, Deutsche Börse and MEAG, the asset manager of Munich Re and ERGO, are examining and assessing the scope of distributed ledger technology (DLT) in post-trade services. 

The partners recently performed the settlement of a legally binding secondary market securities transaction through tokens. Frankfurt-based Commerzbank, which provides seed and debt financing investments, reportedly used the tokenized cash as collateral at Eurex Clearing as Central Counterparty. 

The prototype “reflected a delivery-versus-payment transaction and the transfer of tokenized cash, aiming on exploring the potential of various comprehensive services leveraging DLT,” according to an October 23 release.

The announcement explained: 

“For this transaction, digital tokens were generated using both commercial bank money (cash tokens) and securities (securities tokens). The simultaneous swap of the tokens as final and binding settlement was enabled by using DLT. As a further use case for cash tokens, Commerzbank provided the tokenized cash credits for coverage of margin requirements to Eurex Clearing as Central Counterparty as part of their operative risk management.”

Eurex Clearing served as the cash tokenizer, while MEAG acted as the buyer of securities and Commerzbank was the seller and the custodian of the security tokens. The main incubator, Commerzbank’s research and development (R&D) division, provided the blockchain-based platform.

As noted in the release, the technology for the project and the legal concept behind it were created by Commerzbank and Deutsche Börse. Earlier this year, Commerzbank and Deutsche Börse conducted a DLT-enabled, legally binding repo transaction.

Jens Hachmeister, managing director of DLT, crypto assets and new market structures at Deutsche Börse, stated:

“This is an important joint effort in further exploring the potential of distributed ledger technology for the financial services industry. By combining multiple use cases within these transactions, we have broadened the scope of applications where the market can benefit from possible standards in this new technology. Our goal is to foster our role as financial infrastructure provider of choice.”

Benjamin Duve, head of custody & direct market access, Commerzbank AG, noted:

“After our first collaboration with Deutsche Börse in March 2019, we are pleased to jointly reach a further milestone in using DLT for post-trade-services in capital markets. We will continue to work on these topics to provide our clients with market-ready solutions.”

Dr. Frank Wellhöfer, member of the board of management at MEAG, remarked:

“For us as investor, distributed ledger technology has a significant potential to increase efficiency of operations. By reducing the need for intermediaries, the transaction process of securities is going to accelerate furthermore. The involvement of tokens representing securities and money will facilitate network efficiencies and build a foundation for the creation of standards. This is important for the buy side as standards lead to broader market acceptance and thus create liquidity on DLT platforms in general.”

As mentioned in the release, the concept of the test transaction was shared with regulatory authorities. However, further productive introduction is subject to approval from regulators. 

The partners are planning to further develop financial markets infrastructure and services. The initial steps to develop a respective framework have been launched by the German Federal Government.

Payment Processor Wirecard Hires KPMG to Perform Independent Audit of Its Accounting Books

Payments processing firm Wirecard (WDI.DE) has commissioned an independent audit of its accounts by professional services firm KPMG. The audit is being performed to address questions related to allegations of improper accounting by Wirecard’s management.  The audit will commence immediately according to a statement by the company with the results being released to the public.

Wulf Matthias, Chairman of the Supervisory Board of Wirecard AG, stated:

“We have complete confidence in the audit procedures performed to date and their results. We assume this renewed independent review will lead to a final end to all further speculation.”

Markus Braun, CEO of Wirecard AG, added that he was convinced that confidence in their successful and strongly growing business will be “strengthened as a result of this independent audit.”

Last week, the company’s shares tanked after the Financial Times (FT) published articles regarding Wirecard’s alleged attempts to artificially boost sales and profits at its business offices in Dubai and Ireland.

Wirecard countered that FT journalists are engaging in collusion with short sellers to devalue the company. Wirecard has “categorically rejects the Financial Times’ allegations of impropriety.”

Earlier this year, the FT reported that Wirecard may have been involved in fraud and dodgy accounting practices at its Singapore branch.

Internal company spreadsheets and related conversations between Wirecard’s finance team appear to suggest that an effort was made to intentionally mislead Ernst & Young (EY) auditors on the actual state of the P&L book at the company’s offices in Dubai and Ireland.

Wirecard’s management denied the allegations, noting that while its Dubai-based operations were not individually audited, its accounting books had been carefully reviewed by EY. Wirecard is accusing FT’s reporters of colluding with short sellers in Germany.

Reportedly, law firms investigating the matter have discovered what they claim are unusual accounting entries in the documents released by the FT and recommended an independent audit.

In the past month, shares in Wirecard are down from around €150/share to currently trade at around €116 a share.

Wirecard is a leading digital payments provider.


Germany: Digital SME Lender creditshelf Says More Loans Originated in 2019 So Far than All of 2018

creditshelf Aktiengesellschaft, a peer to peer lender providing financing options to German SMEs, says that more loans have been originated on its platform in the 9 months of 2019 than all of 2018.

According to creditshelf, loan volume through the past 9 months stands at €51.7 million – 72% higher than year prior. The volume of arranged loans after the first nine months is already higher than for the full
year 2018 which was € 50.7 million.

Since platform launch, creditshelf has originated loans totaling € 154.0 million.

creditshelf adds that the volume of requested loans was € 944.5 million,  26 % higher than previous year.

As of September 30, 2019, outstanding loans was reported to be € 67.3 million.

The average ticket size in the first nine months of 2019 was € 728 thousand versus 652,000 in prior period.

Dr. Tim Thabe, CEO of creditshelf, issued a statement on platform performance:

“Digital SME financing continues to gain importance in Germany and has by no means fully realized its market potential. Despite a tense economic environment, we had the highest volume of requests in the history of our company in the third quarter, in total 43% above the previous quarter. Our pipeline is well filled and marks a good starting point for a traditionally strong fourth quarter.”

creditshelf said the complete Q3 release will be published on November 21, 2019.

Survey: Almost 75% of German Residents Say They Won’t Use Facebook’s Libra Stablecoin

Nearly three-quarters, or 75%, of German consumers said they would not use Facebook’s controversial stablecoin Libra, according to a recent survey

Out of 2000 Germans, aged 16 and over, that were questioned, only 27% said they might consider using Libra to conduct local or international transactions.

The poll was carried out on behalf of Creditplus Bank AG and the Wirtschaftswoche business magazine. The survey’s results reveal that 73% of respondents completely rejected the idea of Libra as a global digital currency. Approximately 42% said they would not use the stablecoin because they did not trust Facebook and 31% said they won’t use it because they only trust state-backed currencies.

Survey respondents over the age of 35 are even more unlikely to use Libra, the poll revealed. Approximately 85% of the respondents in the 55 plus age group noted that it’s impossible to do anything with Facebook’s stablecoin.

Nearly 42% of survey participants between 22 and 34 said they would consider using Libra.

Last month, German finance minister Olaf Scholz said that the nation’s policymakers must not accept parallel currencies including Facebook’s Libra stablecoin.

In September, Germany’s government approved a blockchain strategy that would prevent stablecoins from being used as an alternative medium-of-exchange, which could pose a threat to state sovereignty.

Scholz said last month:

“We want to be at the forefront and further strengthen Germany as a leading technology location. At the same time, we must protect consumers and state sovereignty. A core element of state sovereignty is the issuing of a currency, we will not leave this task to private companies.”

Another Financial Times Exposé Casts Doubt on Professed Profitability at Operational Integrity at Wirecard

The latest Financial Times coverage is casting further doubt on the profitability and integrity of operations at the German payments giant Wirecard. (WDI.DE)

Wirecard, for its part, has countered that FT journalists are engaging in collusion with short sellers to devalue the company.

In response to Wirecard’s claims of market interference, German financial regulator BaFin reportedly, “slapped a unique ban on short sales of Wirecard stock, citing risks to the economy and market stability.”

BaFin has also launched a full investigation into Wirecard’s claims of subversion by journalists.

FT says Wirecard’s allegations are false, and that, “a review conducted by an external law firm, RPC, found no evidence of collusion between FT reporters and market participants.”

Less than sanguine reporting by other outlets may also have contributed to a reduction in the Wirecard share price this year.

According to FT, until last spring, Wirecard, founded in 1999, was, “worth more than Deutsche bank…(and) rank(ed) as an elite German blue-chip institution and one of the most successful Fintech businesses in Europe.”

But news of a series of raids on Wirecard’s headquarters this year by white-collar crime investigators in Singapore did not bode well in markets.

Singaporean investigators were reportedly acting on information indicating that, “sales and profits were invented at numerous (Wirecard) subsidiaries across Asia.”

Wirecard’s Austrian CEO, Markus Braun has said the raids were of only local relevance and said compliance weaknesses at Wirecard were a result of fast growth and would be rectified.

But FT is now claiming that:

“(Internal spreadsheets and correspondences provided by whistleblowers) appear to indicate a concerted effort to fraudulently inflate sales and profits at Wirecard businesses in Dubai and Ireland, as well as to potentially mislead EY, Wirecard’s tier-one auditor.”

Crowdfund Insider (CI) has been reporting on Wirecard press releases in recent months and years. The profusion of releases suggests breakneck expansion at Wirecard all summer.

The latest FT exposé is even more comprehensive than a previous one produced by FT in April.

The latest exposé also provides numerous primary documents the outlet says were furnished by whistleblowers.

In the previous article, FT alleged that several payment referral partnerships maintained by Wirecard in the Philippines were either insubstantial or dubious.

FT journalists on the ground in the Philippines, “identified a vivid mismatch between the supposed scale of the partner businesses to which Wirecard entities have ascribed substantial revenue, and the modest reality on the ground in countries such as the Philippines.”

One FT reporter found that Wirecard affiliates PayEasy and Centurion shared an office in the Metro Manila city of Pasay with Froelich tours, “a bus and coach rental business that operates across the country.”

The reporter found only signage, however, and could not otherwise uncover evidence that PayEasy and Centurion were handling any payments at the location.

The Wirecard share price has fallen dramatically in the past few days. Earlier this week, Wirecard was trading at over € 140, today shares in Wirecard are hovering around €110.

Wirecard has issued a statement in which it, “categorically rejects the Times’ allegations of impropriety.”

The company further states, “Yesterday’s article by the Financial Times is a compilation of a number of false and misleading allegations, which the Financial Times had raised before in a series of defamatory articles, and which were already fully refuted before.”

As well, Wirecard CEO Markus Braun told a reporter at Bloomberg that “go(ing) global” has spurned the company’s tremendous growth. He also said allegations in the Financial Times, “(aren’t) true.”

Wirecard Announces Digital Installment Payment Plan in Germany

Germany-based global provider of digital payments and commerce solutions Wirecard announced on Friday it has launched a new installment payment plan for online shops in Germany. According to Wirecard, the new offering is available through its digital financial commerce platform, benefits both merchants and consumers thanks to its B2B2C approach.

“Merchants are able to increase e-commerce sales by offering customers the option to pay in installments while still receiving full settlement when the shopper completes the order. Consumers can more easily afford premium items thanks to flexible payment options and benefit from a seamless shopping experience. Wirecard acts as the acquirer and also processes all transactions.”

While sharing more details about the payment plan, Kilian Thalhammer, VP Product Management Payment and Risk at Wirecard, stated:

“At Wirecard, our focus is on constantly expanding our service offering to enhance the customer journey. According to recent statistics, merchants offering installment payments in their online shops not only notice significant sales growth but also increased customer satisfaction. By giving consumers more flexibility, merchants improve the overall shopping experience which in turn leads to more loyalty.”

Wirecard went on to add that consumers can easily afford premium items as they do not have to pay the full amount immediately. In addition, consumers may also choose to pay for purchases in fixed monthly payments over periods of between three and 24 months – or up to 36 months for items over EUR 1,000.

Germany: Huge Real Estate Developer Bauwens Group Invests in Security Token Issuance Platform Fundament Group

Huge German real estate developer, Bauwens Group, has invested in security token issuance platform Fundament Group ostensibly with the intent of issuing digital assets backed by real estate. Details on the investment were not disclosed.

Bauwans Group has an estimated €6.7 billion in managed project development volume and over 370 employees. The company is one of Germany’s leading real estate developers.

Fundament Group is an end-to-end security issuance solution for asset tokenization. Fundament Group reports that is has gained a long-term partner in the real estate development market as well as access to an extensive pipeline of projects in Germany’s key metropolitan areas including Munich, Hamburg, Berlin, and Frankfurt.

By investing in Fundament Group, Bauwens is expanding its expertise to the innovative new market of tokenized real estate investments and digital assets.

Alexander Jacobi, Managing Director of Bauwens digital GmbH commented on the announcement:

“We are delighted to announce this partnership with Fundament Group which recently achieved a decisive breakthrough in Germany by securing the first regulated tokenized real estate bond. The Fundament Real Estate Token is an extremely interesting option for selling our real estate and we are proud to support them with our real estate and digitization expertise. By partnering with Fundament Group, Bauwens is positioning itself sustainably in the emerging real estate tokenization market.”

Earlier this year, Fundament Group received approval from the German Financial Market Supervisory Authority (BaFin) for the country’s first tokenized real estate bond, with an expected issue volume of €250 million. The Fundament Real Estate Token securitizes a right or share certificate using a digital token. With the Real Estate Token, investors can liquidate their investment at any time they want on designated secondary markets.

Offerings by the Fundament Group are available to both retail and institutional investors, according to the company.

In contrast to many other European countries, Germany has pushed forward with digital assets that are regulated securities. BaFin has worked closely with multiple issuers and platforms to facilitate the process.

The tokenization of real estate assets is frequently referenced as a significant opportunity to reduce friction in the issuance, holding and trading of an asset.

Two New CEOs Appointed at Deutsche Handelsbank as Bank Focuses on Fintech, SMEs

Deutsche Handelsbank has appointed two co-CEOs.

Deutsche Handelsbank is an interesting institution that is focused on Fintech. Originally launched as a payment transaction service provider, today the bank provides SME loans, including factoring, as well as savings accounts. On top of this, Deutsche Handelsbank provides “banking as a service.”

The bank also benefits from the patronage of the Reimann family, or more specifically, the family branch Reimann-Dubbers, the branch that sold its shares in detergent manufacturer Reckitt Benckiser in 1997.

Jens Munk and Dr. Frank Schlaberg are now co-CEOs with immediate effect.

According to a release, Munk is an experienced investor and investment banker in the European technology sector.

Dr. Schlaberg, who was appointed to the Management Board of Deutsche Handelsbank on August 1st, has years of experience in corporate & investment banking and strategic management consulting.

CFO Dr. Michael Eberhardt will continue to be run the back-office operations.

The prior CEO Daniel Kreis will remain with Deutsche Handelsbank and chair its Advisory Board.

Dr. Michael Riemenschneider, Chairman of the Supervisory Board of Deutsche Handelsbank, commented on the transition:

“Daniel Kreis played a key role in establishing, developing and expanding Deutsche Handelsbank. His in-depth understanding of the market and the bank’s consistent focus on technology companies have made Deutsche Handelsbank the most established institution for growth financing of the new digital “Mittelstand”. We are delighted that he will continue to support the bank’s development in his new role as chairman of the Advisory Board of Deutsche Handelsbank.”

The bank says it is all about growth and expansion plans are in the works.

Munk said the bank sees the demand and intend to expand their loan book further.

“We also plan to increase our payment transactions volume by 75 percent to €70 billion per year per. Handelsbank delivers exactly what growth companies need, with services ranging from payment transactions and growth financing to corporate loans for SMEs and banking-as-a-service. On that account, we will continue to expand upstream, providing finance for investment companies and managers of venture capital funds.”

Schlaberg added:

“In the German-speaking region, there are very few financial institutions that are willing to lend to digital growth companies before they meet traditional lending criteria. Deutsche Handelsbank is closing that gap and hence, plays an economically important role in a very exciting and dynamic field. My goal is to substantially grow this business. We aim at expanding our product range in order to become a full-service provider for growth companies. Furthermore, the successful concept will eventually be applied to other European countries in the medium to long term.”

The bank reports that by mid-year, the total loan volume exceeded € 300 million. By the end of August, the volume of new loans granted in the current year amounted to more than  €75 million, of which more than €50 million went towards digital growth companies.

“We proofed that our business model is profitable. We are growing in all business segments, be it payment, growth or VC financing, corporate loans or banking as a service for Fintechs. Now it is our task to scale up and Europeanize the bank,” stated Munk.


Yolt Now Provides Access to Raisin with Integration of Savings Accounts

In partnership with Raisin, Yolt has launched access to competitive savings accounts in the UK, Italy and France. Raisin announced a new relationship with Yolt this past summer.

Yolt users may now apply for a Raisin account accessing a range of deposit products, select from competitive Raisin offers and see their deposits, directly within the Yolt app.

Yolt explains the move as aligning with their mission of helping users make better financial decisions. Within the Yolt marketplace, users can currently switch their household bills, shop for insurance, make investments, combine their pensions and now, grow their savings via Raisin.

Yolt’s Chief Marketing Officer Cristel Lee Leed commented on the new arrangement:

“Our latest partnership with Raisin will benefit our Yolt community of users, giving them access to savings products with competitive interest rates – empowering them to do more with their finances.”

Raisin has pursued a goal of wide adoption and exposure with a growing list of partnerships. Raisin currently lists more than 500 deposit offerings from 82 partner banks across Europe.

Raisin deploys a range of technical solutions, from fully integrated “white label” products using Raisin’s proprietary API to a variety of lead-outs, connecting a bank or money app’s customers smoothly to the Raisin platform.

Dr. Tamaz Georgadze, Raisin CEO and co-founder explained:

“In Europe’s current negative interest environment, Raisin’s B2B solution gives banks a means of moving excess liquidity without losing their customers. Meanwhile partnerships with innovative platforms like Yolt, which allow financial services providers to extend their range of offers, expand the reach of our partner banks as well as choice for savers yet further.”

Raisin is one of the fastest-growing Fintechs in continental Europe. Since launch in 2013, Raisin has brokered over €16.5 billion for more than 200,000 customers in 31 European countries to 82 partner banks.

Germany’s Bavarian State Bank’s Report: Bitcoin Is Designed as an “Ultra-Hard Type of Money,” Poised to “Take a Big Leap” in 2020

BayernLB (Bavarian State Bank), a publicly regulated bank in Munich, Germany, recently published a report that analyzes the claim made by some investors that Bitcoin is outperforming gold.

The report states that the “hardness” of an asset in the traditional commodities market is determined using the stock-to-flow approach. When applied to Bitcoin, this approach shows a strong correlation between the market value of the cryptocurrency and “the ratio between existing stockpiles of Bitcoin, called stock, and new supply, called flow.”

When making forecasts using this model, even the best statistical model can fail when it comes to accurately predict future market conditions, the BayernLB report noted. The next Bitcoin halving, when the digital currency’s supply will be reduced by 50%, represents a significant challenge for the stock-to-flow model, the report stated.

However, the stock-to-flow approach is still a good heuristic for understanding the value of Bitcoin. According to the BayernLB:

“It becomes clear that Bitcoin is designed as an ultra-hard type of money. Next year, it will already exhibit a similarly high degree of hardness as gold. In 2024 (when halving is set to take place again), Bitcoin’s degree of hardness will again increase massively.”

The bank’s report adds:

“Gold has had to earn its high stock-to-flow ratio ‘the hard way’ over the course of millennia… Bitcoin’s purely digital character enables ‘supply engineering,’ which causes the stock-to-flow ratio to rise at a breakneck pace.”

Central banks throughout the world will resort to extensive loosening measures while the $15 trillion bond market has yields in negative territory, the BayernLB report noted. This may have led to the gold price temporarily breaking out above the $1,500 mark. 

Gold’s attractiveness as an asset comes from the fact that the supply side cannot be increased indiscriminately, the report stated. Moreover, the limited production of gold (“flow”) only adds to a very large stockpile (“stock“), which is why the precious metal has a relatively high stock-to-flow ratio (a measure of the “hardness” of gold as an asset)

Accordingly, gold is not susceptible to the “easy money trap.” As explained in the report, this “trap” leads to a price increase and higher production, which dilutes the existing stock and causes a downward price spiral.

The report pointed out that the basic idea behind Bitcoin, which was “explicitly designed as a new monetary good and geared to precious metal forms of money,” is based on financial (store of value) concepts related to the stock-to-flow approach. 

The approach provides a quantitative framework for analyzing Bitcoin’s price. It allows us to compare the censorship-resistant cryptocurrency to gold and various other commodities. 

Notably, the report mentions that Bitcoin will already have “a similarly high stock-to-flow ratio as gold in the coming year.” 

Bitcoin’s digital nature allowed its supply path to be fixed when the protocol was first defined, the report explained. Bitcoin creator Satoshi Nakamoto specified such “a drastic and abrupt decline in supply growth (set to halve every 4 years) that no physical element from the periodic system could possibly keep pace with it”, the report mentions. 

Satoshi decoupled supply from price and from mining activity or the computing power used to mint new Bitcoins. New bitcoins are created approximately every 10 minutes (currently 12.5 BTC).

The report further explained:

“When the [Bitcoin] price rises (falls) and more (less) computing power enters the system, the difficulty of mining new bitcoins will correspondingly ratchet up (down). This safeguards the targeted bitcoin circulation irrespective of price fluctuations. A further special feature of bitcoin tokens, which is likewise due to their digital character, is that they cannot be hung around people’s necks (in contrast, for example, to a gold necklace) or used as an input in production.” 

It added:

“What would appear, at first glance, to be a disadvantage is, in fact, a feature and not a bug from the point of view of the stock-to-flow approach. Given that there are no other uses at all for bitcoins, no other demand-side developments (e.g. demand for gold in connection with the spread of smartphones) can distort price formation. Due to the deterministic trend in supply, there are naturally no supply-side shocks either.” 

The report closes with a significant prediction. The authors state “Bitcoin is poised to take a big leap forward in 2020” – a jump that may hit a “vertiginous” price of USD $ 90,000.

You can check out the full report here.

STO: Bitbond Issues First Bond Coupon Payment on Chain

Bitbond, the first security token offering in Germany to have its prospectus approved by Bafin, has issued its first on-chain coupon payment according to a tweet.

Bitbond is a unique global online lender that recently completed a security token offering (STO) for a debt offering using the Stellar blockchain. Bitbond raised approximately €2.1 million with participation coming from 87 different countries around the world.

This past July, the security token (BB1) became tradable.

Bitbond announced it had paid out token holders as scheduled. BB1 pays a 4% annual coupon which is distributed quarterly. Additionally, the security token may include up to 60% of Bitbond’s pre-tax profit which may be paid out annually.

While the BB1 issuance was small, and trading volume has been light, Bitbond is a clear pioneer in the emerging digital securities market.