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Jackson Mueller
Associate Director, Center for Financial Markets
Jackson Mueller is an associate director at the Milken Institute's Center for Financial Markets. He focuses on fintech, capital formation policy and financial markets education initiatives. Prior to joining the Institute, Mueller was an assistant vice president at the Securities Industry and Financial Markets Association (SIFMA), where he focused on...
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FinTech in Focus

By: Jackson Mueller
January 12, 2016
   
   

FinTech in Focus will be available via e-mail beginning Tuesday, Jan. 19. If you would prefer to receive our weekly highlights in your inbox rather than wait for us to tweet out the post, please sign up today by selecting the “FinTech in Focus Weekly E-Newsletter”. As always, please contact Jackson Mueller with any questions.

Headlines

Venture Capital Reaches New Heights
Nearly $140 billion in deals were recorded in 2015, up from $95 billion in 2014 and more than double the roughly $60 billion in 2013. In the UK, for instance, tech companies raised close to $4 billion in 2015a 70 percent increase over the previous record set in 2014. U.S. venture funds continue to pour money into tech companies at home while also expanding across the pond. Nearly 30 percent of venture capital investments in London’s tech sector came from American firms last year.

FTC & Big Data
The U.S. Federal Trade Commission released a 50-page report last week covering the benefits and risks of big data, along with a list of potential laws and policy considerations. The report was based on a public workshop held in September 2014 which was attended by industry stakeholders and consumer groups, an FTC seminar covering alternative scoring products and recent reports. After a unanimous vote to release the report, FTC Commissioner Maureen Ohlhausen issued a statement, saying: “Our competition expertise tells us that if one company draws incorrect conclusions and misses opportunities, competitors with better analysis will strive to fill the gap. Therefore, to the extent that companies today misunderstand members of low-income, disadvantaged, or vulnerable populations, big data analytics combined with a competitive market may well resolve these misunderstandings rather than perpetuate them.”

Legislative & Regulatory Focus on Bitcoin and the Blockchain
In Russia, proposed legislation to outlaw digital currencies, including bitcoin, has reached the legislative assembly. Despite President Vladimir Putin’s somewhat encouraging remarks in July, the Ministry of Finance is staunchly against digital currencies, voicing its opinion several times late last year.

In the U.S., the Commodity Futures Trading Commission Technology Advisory Committee will hold a public meeting on Jan. 26 to discuss “blockchain and the potential application of distributed ledger technology to the derivatives market.” In early December, Christopher Giancarlo remarked on the technology’s potential to improve derivatives markets, saying, “Distributed open ledgers have the potential to revolutionize modern financial ecosystems.” Blockchain is becoming a hot topic in Washington, D.C., where it was the focus of recent Milken Institute event and will be at an upcoming event at the Brookings Institution.

From Space to the Blockchain — Who’s first?
Those who followed the launch and return of the SpaceX Falcon 9 rocket a few weeks ago (to raucous celebration) might have also come across Blue Origin founder Jeff Bezos welcoming Elon Musk “to the club,” which, not surprisingly, led to a Twitter uproar as to which company was the first to perform such a mission. It also gave this newsletter’s curator a crash course in rocket science. Back on Earth, in more familiar territory, a separate dispute arose between Nasdaq and Symbiont over which was the first to use its distributed ledger technology to record securities transactions. Nasdaq and Symbiont are developers of the Linq and Smart Securities platforms, respectively.

Millennials and Alternative Finance
In a recent survey conducted by PwC and The George Washington University Global Financial Literacy Excellence Center, more than 40 percent of millennials have used a payday loan, pawnshop, tax refund advance or other alternative financial product in the past five years. The survey also found that only 24 percent of millennials have a solid grasp of basic financial concepts, even as a staggering 81 percent of them have at least one long-term debt. Even more worrying is the lack of communication between millennials and financial professionals. Only 12 percent of those surveyed have sought advice on debt management, and only 27 percent of respondents have sought financial advice when it comes to savings and retirement.

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