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The flags of the European Union and the British Union Jack painted on the face of a man. (Photo credit: Getty)Getty
The economic impact of Brexit has been much explored and discussed. OECD e HM Treasury have advanced analyzes that suggest that Brexit could have a negative impact on the country's GDP by 3% until 2020, while the Bank of England has issued occasional declarations on other terrible scenarios, forecasts that could dub "Project Fear 2.0" .
These forecasts include falling house prices, spiral interest rates, loan defaults, capital outflows, negative capital returns and anemic stock market performance. It's certainly a volatile cocktail and things could be looking for a perfect storm. And, in any case, we live in interesting times with new technologies and their associated changes and interruptions.
Through the pond, Lael Brainard, a governor of the US Federal Reserve, gave a speech at the Peterson Institute for International Economics in Washington, D.C., this Friday stating: "In Europe, there are risks associated with the resolutions on the fiscal trajectory and debt of Italy and the UK deliberations on the Brexit agreement".
Obviously, in Britain we do not know if there will be any agreements at this time, nor if the current government will last or if the Tory party will split. Of course, Prime Minister Theresa May has a challenge to get an agreement in Parliament on the proposed Brexit agreement with parliamentarians and those prospects seem unlikely – hence the delayed vote.
The deputies of the House of Commons should give him the thumbs up, then the chances of a "No-deal" Brexit It seems very real. This does not necessarily mean that Britain will not leave the European Union (EU) on 29 March next year, but leaves very little clarity about what will actually happen later. Yet, even last week, it seemed that the moves on the political front in Westminster suggested that the odds of a catastrophic non-agreement scenario were fading.
And, at the time of today's writing, it seems that money has been put on the prospect that the Brexit vote will be "pulled", which opens a new front for investors' uncertainty. The pound fell to its lowest day, renouncing the 1.27 handicap against the US dollar, among the news that Theresa May is destined to pull the significant vote on Brexit.
Neil Wilson, senior analyst at Markets.com he observed at noon on Monday: "The pound remains at the mercy of a very sensitive news stream around the Brexit and this morning was an example." With regard to the vote, it is difficult at this point to draw concrete conclusions on what it means as the situation remains very fluid.
But regardless of opinions on the actual economic impact of Brexit, the surprisingly small public discourse focused on the opportunities offered by Britain's ability to pursue a relatively freer industrial strategy.
The thinkers of the nineteenth century – David Ricardo, one of the most influential British classical economists, and Friedrich List, an ancestor of the German & nbsp;historical school of economics – had much to say about understanding and developing the comparative economic advantages of a nation, in order to establish greater relative growth on a global scenario.
Hirander Misra, CEO of GMEX Group, a provider of technology and commercial services with a British base for traditional exchanges and cryptocurrencies and digital token exchanges, commented: "The UK has an incredible opportunity to support an innovation economy focused on its relative strengths, in particular with London as an international financial center leader and, increasingly, as a technological hub with significant international investments ".
In fact, Apple, Google and other technology companies have recently increased their presence in the British capital. Added to this is the emergence of several national technology companies with valuations above $ 1 billion ("unicorns"), Like Revolut, among others.
Hirander Misra, President and CEO of GMEX Group, which includes a group of companies offering innovative solutions in a new era for global financial markets. (Source: GMEX).GMEX.
Now Blockchain, or Distributed Ledger Technology ("DLT") to give its full name, is increasingly seen as a path towards the realization of a new industrial revolution – dubbed the 4th Industrial Revolution – providing a reliable means of communication and exchange that can be verified publicly.
The logic behind the blockchain is likely to be "revolutionary as the Internet" in Misra's vision. It is also a vision shared by experts like Matej Michalko, CEO and co-founder of the Slovak blockchain venture DECENT focused on the digital media industry and a technology pioneer "Forbes 30 Under 30".
In addition, a lot of work and investments are developing "use cases" of transformation for implementation, not only in the most developed areas of financial services, but also in any sector where information is stored and transferred, between health care and real estate among other sectors.
According to Gartner, a leading company in research and technology consulting, the added business value of Blockchain it will rise to just over $ 3.1 trillion by 2030, from around $ 176 billion by 2025 and about $ 360 billion by 2026. That rate of growth is enormous. And while Blockchain technologies could one day redefine economies and industries through programmable economics and the use of smart contracts, Gartner noted this year that "… for now, technology it is immature ".
Misra, former co-founder and COO of Chi-X Europe (now part of the CBOE Global Markets) and co-author of a forthcoming book on the case of a Blockchain economy, said in the wake of the Brexit of 5 Discussion days in Parliament last week: "The UK with its intrinsic strengths in finance and technology is certainly in a privileged position to take a leadership position in the construction of this innovation economy – and despite the Brexit ".
In this context, Global DAG, a company based in the UK that seeks to establish the first "digital activity bank" regulated in the UK to meet the banking and cryptographic needs of SMEs, fintech and crypto, has recently published a relationship with the U.K. Parliamentary group made up of all the parties (APPG) on Blockchain, together with the Big Innovation Center.
Founded in January 2018, APPG Blockchain's stated purpose: "To guarantee the industry and society to take full advantage of the potential of blockchain and other distributed accounting technologies (DLT) by making the UK a leader in the innovation and implementation of Blockchain / DLT. "
Their report outlines the current state of blockchain investments in the UK, as well as the considerable ecosystem that has emerged (with 225 blockchain companies among the sectors referred to), and largely without an industrial support strategy in the United Kingdom. Kingdom. APPG has accidentally cited GMEX as one of the leading companies in the blockchain economy in the UK.
Countries like Malta – nicknamed "Blockchain Island"– was the November scenario for a DLT summit attended by about 8,000 delegates – in addition to Gibraltar, through the Gibraltar Financial Services Commission (GFSC) and Switzerland – they promoted publicly and actively their strengths related to the promotion of blockchain innovation. These countries have recently presented a specific financial services regulation that establishes permissions for blockchain companies to list and trade freely.
Malta now has complete DLT legislation and regulatory guidelines and the Swiss Financial Market Supervisory Authority (FINMA) has guidelines issued for initial coin offers ("ICOs"), with the latter having recently authorized its first blockchain asset management company Crypto Fund AG. The company offers a passive investment vehicle, which tracks the performance of the & nbsp;Crypto Market Index 10& nbsp; ("CMI10") calculated and managed by SIX Swiss Exchange.
Gibraltar Financial Regulator announced a year ago the jurisdiction was to introduce the "First customized license of the world" for Fintech companies that use blockchain / DLT as of January 2018, in an attempt to attract start-ups in the British overseas territory in preparation for Brexit.
This has sent an important message to the market that these countries are open to businesses and there have been huge investments in the blockchain, including Binance, one of the main crypto-exchange, which has moved its headquarters to Malta.
However, like Sean Kiernan, CEO of DAG Global and co-author of Misra in an upcoming book "Tech Meets Trust: Blockchain Britain", he said: "The UK is in a better position to adopt Blockchain and implement the necessary post-Brexit regulations than other EU nations, such as Malta, having to deal with the EU as it seeks to introduce blockchain regulations. Global will be a big speed dump, triggering the United Kingdom will be in a better position in the long run, as it will move its markets independently.
That said, in Britain many existing banks will not serve blockchain activities (let alone anything related to cryptocurrency!) Due to concerns of reputational and regulatory risk in facilitating money laundering.
These fears are not without foundation, even if the recent developments in what has been called "Blockchain analysis" help track down every single transaction on known public Blockchains, so that the flows of funds can be clearly obtained up to the 39; origin.
"In this sense, the control of flows in digital tools based on blockchain is more robust than traditional transactions based on the legal currency, where it is often possible to trace the source of funds only from the immediately preceding entity from the funds that were sent , "Kiernan stated.
The UK Treasury Selection Committee in the last few months has issued a comprehensive one relationship (September 2018), citing: "The regulation is necessary for the crypto-asset market" Wild West & # 39; " The report emphasized that the country was hesitantly positive about accepting these new blockchain-based instruments. A lot of work still remains to develop regulatory frameworks and governance standards to promote general acceptance.
UK Plc
Looking at the Cboe Brexit Low 50 index, which includes UK companies that operate mostly on a global scale, outperformed the Cboe Brexit High 50. This last includes more companies focused on the blue index # FTSE 100 blue-chip index.
The distinction is measured from where most of their income is generated. And, the crisis after the referendum and the price of companies that made big profits abroad came up immediately. For about a year, there was a clear trend. So, if Sterling were growing, global equities in London were falling and vice versa.
Cboe Brexit Low 50 Index and Cboe Brexit High 50 Index in the period from 2016 to 2018. (Source: Cboe Europe).Cboe Europe.
Occupation projections
In addition, according to an in-depth joint research and analysis conducted by GMEX Group and DAG Global, Britain's exit from the EU will result in a "loss of 150,000" jobs in five years, with a annualized negative GDP growth of 0.41% over a period of 15 years period. But this is not the complete picture.
On the upside, 250,000 jobs will be created within five years of Brexit and an annualized GDP growth of 3.82% will result from the growth of the digital economy in Britain, according to the analysis of GMEX and DAG Global. Therefore, the net result of the focus on digital innovation is 100,000 jobs created over five years and 3.41% of GDP growth on an annual basis, thus serving as a positive counter to Brexit.
According to the joint analysis of the company, the impact of capital outflows as a result of Brexit is "counterbalanced or even improved" in terms of net GDP from the creation of a broader digital economy in the UK attracting foreign investment and create jobs.
Impacts of GDP
The short-term risks associated with Brexit include the economic effects on exchange rates and investment returns. Now that the United Kingdom loses its influence on the rules of the single market, financial services would immediately lose compared to other sectors.
In the long term, however, GME of Misra and DAG Global Kiernan has suggested negotiating trade agreements with emerging markets (see & nbsp;Emerging Markets for MSCI iShares Emerging Markets& nbsp; -EEM with a total return of NAV -13.80% per annum, e Vanguard FTSE emerging markets ETF – VWO for benefits), could help the UK financial sector recover losses in the short and medium term.
And, in the medium to long term, UK GDP is expected to suffer a negative impact from Brexit. Falling production means a decrease in economic activity and production, which means less business income. According to estimates by the Organization for Economic Cooperation and Development (OECD) and HM Treasury, Brexit could reduce US GDP by 3% by 2020.
The Bank of England presented some estimates in July 2016 relationship GDP could increase by 3% by introducing a Digital currency of the Central Bank (CBDC). Recently, a similar effort in Estonia has been interrupted by the EU, which is considered imperative to maintain the status of the euro as a single regional currency. So, the image is mixed, if not even foggy.
All that he said, Misra, a former student at the London School of Economics and Political Science, postulated: "Perhaps, with a vision and a little courage, the effects of Brexit should not be so negative, after all. ? " Carpe Diem.
Misra and Kiernan are currently looking for input for a book they publish entitled "Tech Meets Trust: Blockchain Britain", which will further explore the opportunities described above.
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The flags of the European Union and the British Union Jack painted on the face of a man. (Photo credit: Getty)Getty
The economic impact of Brexit has been much explored and discussed. OECD and HM Treasury have advanced analyzes suggesting that Brexit could have a negative impact on the country's GDP of 3% until 2020, while the Bank of England made occasional statements about other terrible scenarios, predictions that could dub "Project Fear 2.0".
These forecasts include falling house prices, spiral interest rates, loan defaults, capital outflows, negative capital returns and anemic stock market performance. It's certainly a volatile cocktail and things could be looking for a perfect storm. And, in any case, we live in interesting times with new technologies and their associated changes and interruptions.
Through the pond, Lael Brainard, governor of the US Federal Reserve, gave a speech to the Peterson Institute for International Economics in Washington, DC, this Friday stating: "In Europe, there are risks associated with the deliberations on the fiscal and debt trajectory. 39; Italy and UK Resolutions on the Brexit Agreement. "
Of course, in Britain we do not know whether there will be an agreement at this time, nor whether the current government will last or whether the Tory party will split. Of course, Prime Minister Theresa May has a challenge to get an agreement in Parliament on the proposed Brexit agreement with parliamentarians and those prospects seem unlikely – hence the delayed vote.
If the parliamentarians of the House of Commons give him the thumbs-up, then the chances of a "no-deal" Brexit appear very real. This does not necessarily mean that Britain will not leave the European Union (EU) on 29 March next year, but leaves very little clarity about what will actually happen later. Yet, even last week, it seemed that the moves on the political front in Westminster suggested that the odds of a catastrophic non-agreement scenario were fading.
And, at the time of today's writing, it seems that money has been put on the prospect that the Brexit vote will be "pulled", which opens a new front for investors' uncertainty. The pound fell to its lowest day, renouncing the 1.27 handicap against the US dollar, among the news that Theresa May is destined to pull the significant vote on Brexit.
Neil Wilson, a senior analyst at Markets.com, noted at noon on Monday: "The pound remains at the mercy of a very sensitive news stream around Brexit and this morning was an example." As for the vote, it is difficult to draw concrete conclusions on what it means that the situation remains very fluid.
But regardless of opinions on the actual economic impact of Brexit, the surprisingly small public discourse focused on the opportunities offered by Britain's ability to pursue a relatively freer industrial strategy.
Nineteenth-century thinkers – David Ricardo, one of Britain's most influential classical economists, and Friedrich List, an ancestor of the German historical school of economics – had much to say about understanding and developing the comparative economic advantages of a nation, with a view towards the establishment of greater global relative growth.
Hirander Misra, CEO of GMEX Group, a provider of technology and commercial services with a British base for traditional exchanges and cryptocurrencies and digital token exchanges, commented: "The UK has an incredible opportunity to support an economy Innovation focused on its relative strengths, that is to say with London as a leading international financial center and, increasingly, as a technological hub with significant international investments ".
In fact, Apple, Google and other technology companies have recently increased their presence in the British capital. Added to this is the emergence of several national technology companies with valuations above $ 1 billion ("unicorns"), such as Revolut, among others.
Hirander Misra, President and CEO of GMEX Group, which includes a group of companies offering innovative solutions in a new era for global financial markets. (Source: GMEX).GMEX.
Now Blockchain, or Distributed Ledger Technology ("DLT") to give its full name, is increasingly seen as a path towards the realization of a new industrial revolution – dubbed the 4thth Industrial Revolution: providing a reliable means of communication and exchange that can be verified publicly.
The logic behind the blockchain is likely to be "revolutionary as the Internet" in Misra's vision. It is also an opinion shared by experts such as Matej Michalko, CEO and co-founder of the Slovak blockchain venture DECENT focused on the digital media sector and a technology pioneer "Forbes 30 Under 30".
In addition, a lot of work and investments are developing "use cases" of transformation for implementation, not only in the most developed areas of financial services, but also in any sector where information is stored and transferred, between health care and real estate among other sectors.
According to Gartner, a leading company in the field of research and technology consulting, the added value of Blockchain will rise to just over $ 3.1 trillion by 2030, from around $ 176 billion by 2025 and around $ 360 billion by 2026. The rate of growth is enormous. And while Blockchain technologies could one day redefine economies and industries through programmable economics and the use of smart contracts, Gartner noted this year that "… for now, technology it is immature ".
Misra, former co-founder and COO of Chi-X Europe (now part of the CBOE Global Markets) and co-author of a forthcoming book on the case of a Blockchain economy, said in the wake of the Brexit of 5 Discussion days in Parliament last week: "The UK with its intrinsic strengths in finance and technology is certainly in a privileged position to take a leadership position in the construction of this innovation economy – and despite the Brexit ".
In this context, DAG Global, a British company that seeks to establish the first "digital activity bank" regulated in the UK to meet the banking and cryptographic needs of SMEs, fintech and crypto, has recently published a relationship with the Parliamentary Group All -Party of the United Kingdom (APPG) on Blockchain, together with the Big Innovation Center.
Founded in January 2018, APPG Blockchain's stated purpose: "To guarantee the industry and society to take full advantage of the potential of blockchain and other distributed accounting technologies (DLT) by making the UK a leader in the innovation and implementation of Blockchain / DLT. "
Their report outlines the current state of blockchain investments in the UK, as well as the considerable ecosystem that has emerged (with 225 blockchain companies among the sectors referred to), and largely without an industrial support strategy in the United Kingdom. Kingdom. APPG has accidentally cited GMEX as one of the leading companies in the blockchain economy in the UK.
Countries like Malta – nicknamed "Blockchain Island" – was the context of this November for a DLT summit attended by about 8,000 delegates – in addition to Gibraltar, through the Gibraltar Financial Services Commission (GFSC) and Switzerland – they have publicly and actively promoted their relative strengths in promoting blockchain innovation. These countries have recently presented a specific financial services regulation that establishes permissions for blockchain companies to list and trade freely.
Malta now has a complete DLT legislation and regulatory guidelines and the Swiss Financial Market Supervisory Authority (FINMA) has issued guidelines for initial coin offerings ("ICO"), with quest & # 39; last that recently authorized its first blockchain asset management company in Crypto Fund AG. The company offers a passive investment vehicle, which replicates the performance of the Crypto Market Index 10 (the "CMI10") that is calculated and managed by SIX Swiss Exchange.
Gibraltar Financial Regulator announced a year ago the jurisdiction was to introduce the "world's first tailor-made license" for fintech companies using blockchain / DLT as of January 2018, in an attempt to attract start-ups in the British overseas territory in preparation for Brexit.
This has sent an important message to the market that these countries are open to businesses and there have been huge investments in the blockchain, including Binance, one of the main crypto-exchange, which has moved its headquarters to Malta.
However, as Sean Kiernan, CEO of DAG Global and co-author with Misra in an upcoming book "Tech Meets Trust: Blockchain Britain", he said: "The UK is in a better position to adopt Blockchain and implement the necessary post-Brexit regulations than other EU nations, such as Malta, having to deal with the EU as it seeks to introduce blockchain regulations. Global will be a big speed dump, triggering the United Kingdom will be in a better position in the long run, as it will move its markets independently.
That said, in Britain many existing banks will not serve blockchain activities (let alone anything related to cryptocurrency!) Due to concerns of reputational and regulatory risk in facilitating money laundering.
These fears are not without foundation, even if the recent developments in what has been called "Blockchain analysis" help track down every single transaction on known public Blockchains, so that the flows of funds can be clearly obtained up to the 39; origin.
"In this sense, the control of flows in digital tools based on blockchain is more robust than traditional transactions based on the legal currency, where it is often possible to trace the source of funds only from the immediately preceding entity from the funds that were sent , "Kiernan stated.
In recent months, the UK Treasury Select Committee has published a full report (September 2018), citing: "The regulation for the crypto-active market" Wild West is needed. "The report underlined that the country was hesitantly positive in accepting these new blockchain-based tools There is still a lot of work to develop regulatory frameworks and governance standards to promote general acceptance.
UK Plc
Looking at the Cboe Brexit Low 50 index, which includes UK companies that operate mostly on a global scale, outperformed the Cboe Brexit High 50. This last includes more companies focused on the blue index # FTSE 100 blue-chip index.
The distinction is measured from where most of their income is generated. And, the crisis after the referendum and the price of companies that made big profits abroad came up immediately. For about a year, there was a clear trend. So, if Sterling were growing, global equities in London were falling and vice versa.
Cboe Brexit Low 50 Index and Cboe Brexit High 50 Index in the period from 2016 to 2018. (Source: Cboe Europe).Cboe Europe.
Occupation projections
In addition, according to an in-depth joint research and analysis conducted by GMEX Group and DAG Global, Britain's exit from the EU will result in a "loss of 150,000" jobs in five years, with a annualized negative GDP growth of 0.41% over a period of 15 years period. But this is not the complete picture.
On the upside, 250,000 jobs will be created within five years of Brexit and an annualized GDP growth of 3.82% will result from the growth of the digital economy in Britain, according to the analysis of GMEX and DAG Global. Therefore, the net result of the focus on digital innovation is 100,000 jobs created over five years and 3.41% of GDP growth on an annual basis, thus serving as a positive counter to Brexit.
According to the joint analysis of the company, the impact of capital outflows as a result of Brexit is "counterbalanced or even improved" in terms of net GDP from the creation of a broader digital economy in the UK attracting foreign investment and create jobs.
Impacts of GDP
The short-term risks associated with Brexit include the economic effects on exchange rates and investment returns. Now that the United Kingdom loses its influence on the rules of the single market, financial services would immediately lose compared to other sectors.
In the long term, however, GME of Misra and DAG Global Kiernan has suggested negotiating trade agreements with emerging markets (see emerging MSCI-Markets ETF with a total return of NAV -13.80% per annum, and Vanguard FTSE Emerging) Markets ETF – VWO for benefits), could help the UK financial sector recover losses in the short and medium term.
And, in the medium to long term, UK GDP is expected to suffer a negative impact from Brexit. Falling production means a decrease in economic activity and production, which means less business income. According to estimates by the Organization for Economic Cooperation and Development (OECD) and HM Treasury, Brexit could reduce US GDP by 3% by 2020.
The Bank of England made some estimates in a July 2016 report that US GDP could increase by 3% by introducing a digital currency from the Central Bank (CBDC). Recently, a similar effort in Estonia has been interrupted by the EU, which is considered imperative to maintain the status of the euro as a single regional currency. So, the image is mixed, if not even foggy.
All that he said, Misra, a former student at the London School of Economics and Political Science, postulated: "Perhaps, with a vision and a little courage, the effects of Brexit should not be so negative, after all. ? " Carpe Diem.
Misra and Kiernan are currently looking for input for a book they publish entitled "Tech Meets Trust: Blockchain Britain", which will further explore the opportunities described above.
