First Global Credit Board Comments at Two Major Banking Events about R3 Private Blockchain Initiative and the Future of bitcoin

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The 35% rise in the October price of bitcoin has replaced the R3 private blockchain initiative in the media this week. October also marked a milestone for bitcoin collateral trading company First Global Credit, as volume on the platform topped $1.4 million dollars, up 48% over the previous month’s performance.

Bitcoin is once again in the news as the bitcoin/USD price has risen around 35% in October. October also marked a milestone for bitcoin investment company First Global Credit, as trading volume on the platform achieved record growth. Customers traded over $1.4 million dollars’ worth of mainstream stocks and ETFs using bitcoin as collateral margin. This represents an increase of 48% over the previous month’s trading volume following a trend established earlier this year. First Global Credit’s platform allows the use of bitcoins as collateral margin to generate a return trading blue chip and high growth stocks, stock market indices and ETFs. First Global Credit is one of a growing number of companies using bitcoin as an asset to generate a return on investment.

This acceptance of the tangible value of bitcoins coupled with the upward trend in bitcoin’s value contradicts recent assertions supported by the press that there is greater interest in developing the potential of private blockchains rather than bitcoin itself. Many feel this refocus of attention on blockchain technology is being championed by mainstream banks as demonstrated by the R3 initiative. This initiative is being led by a consortium of banks publicised as a way to use blockchain technology to decrease consumer costs, but is, in fact a clear attempt by the banks to retain control over the world financial networks. Contrarian company First Global Credit and companies like them are committed to supporting the development of a free bitcoin capital market independent of banks and government. Instead of forgoing the benefits of bitcoin as an independent currency, their strategy is to create services that bridge the traditional economic environment and the digital currency economy.

This is the message First Global Credit CEO Gavin Smith brought to the European Banking Community last month at Barcelona’s Blockchain Week’s Trading Conference: “Allowing the establishment of a capital market in bitcoins will create the economic efficiencies supposedly being sought by the banks through the R3 initiative. This will allow people to transact business just as they do in the fiat economy,” says Smith. “The focus should be on the creation of an independent bitcoin capital market separated from the control of banks. This will be the best way to facilitate the benefits available through the adoption of the blockchain. The next step in attracting the attention of mainstream individuals and businesses is to provide products and services that generate a return from non-committed capital. These services in turn provide the capital needed to underwrite loans which will finance business growth for companies transacting all their business in bitcoins. Bitcoin based futures and options will make it possible to anticipate costs and project profit. After the facilities are in place for a bitcoin capital market, let the banking industry join the free trade network that has been established.”

This is also the view shared by First Global Credit board member Jon Matonis. Mr. Matonis was speaking to the European Banking Industry as guest of honor at Geneva’s Findating event sponsored by Dukascopy Bank and the House of Versace: "The problem with the banking industry is not that they lack access to blockchain tech. The problem is that the banking industry functions as a protected cartel with unique government privileges and regulatory barriers to entry. On the other hand, the public bitcoin blockchain drives the standard for a value transfer protocol in a permissionless environment offering global accessibility and unparalleled security. I think the question the R3 participants need to answer is that if in the end the consortium only serves to replicate the existing cartel then what have they really achieved?”

Matonis continues, “I think it’s a noble experiment and the experience they get from working with blockchains will be invaluable and a potential onramp to the public blockchain. But they need to realize that at the end of the day the banks may just be creating their own altcoins.”

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Marcie Terman

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