Problem viewing this email? View online version.
Twitter Facebook

Welcome to the May edition of the DigitalX Newsletter. In this newsletter we will provide updates from our March Quarterly Report, which we filed with the ASX on April 29.     

If you have any questions or comments for DigitalX, please email us at

Company Update

The Company continues to morph from its early stages of bitcoin mining into a disruptor in the global payments market with its secure, low cost and instant blockchain-based money transfer app, AirPocket.

The partnership agreement, signed in February with one of Latin America’s largest telecommunications groups, allows consumers in North America the choice to use DigitalX’s AirPocket app to top-up and pay the mobile phone accounts of more than 100 million mobile subscribers in Latin America. DigitalX will receive an 11% commission, alongside standard rate fees, on the value of transfers that will range between US$2 and US$70.

DigitalX also signed a Memorandum of Understanding (“MOU”) in February with one of Mexico’s leading payment providers, which, subject to the entry into formal documentation, will allow customers to use the AirPocket app to transfer money from the US to Mexico to be withdrawn in Mexican Pesos. The US-Mexico remittance corridor is one of the world’s largest and was estimated to be worth US$25 billion in 2014 by the World Bank.

DigitalX Direct trading activity in the quarter ending 31 March 2016 produced ~$5.7m in revenue and helped to offset the cash burn from AirPocket development and integration costs and the winding down of mining. DigitalX Direct revenue was $2.42m for the quarter, a fall of 35% from the prior quarter. The performance of DigitalX Direct and Liquidity Operations was reflective of the low volume seen across USD exchanges globally, which fell 61% over the same period. The platform has seen renewed interest since the end of the quarter in line with global exchange volume.

Market Update

The warming winds of April brought a raft of positive comments from financial regulators on blockchain and distributed ledger technology (DLT). In remarks before the CATO institute on April 12, CFTC Commissioner J. Christopher Giancarlo pointed to the potential of blockchain systems for trade settlement to bring much-needed transparency to financial markets. The Commissioner gave the example of the interest rate swaps market: the lack of harmonized reporting standards in this global, over-the-counter market means regulators have no overall viewpoint on systemic risk, and reforms following the financial crisis were agreed to increase reporting. Despite a CFTC initiative dating to 2011 to increase transparency in this market, however, the agency still lacks a complete picture of risks in this crucial market due to the practical impossibility of regulators collecting and collating this data in real time.

Commissioner Giancarlo suggested distributed ledgers could be a potential solution to this problem through their ability to streamline trade settlement and drive protocol standardization in asset markets in a way that also gives regulators a data resource for monitoring systemic risk. In markets such as the multi-trillion dollar repo market which funds much of the crucial ‘shadow banking system’, for example, distributed ledgers could be used to track ‘rehypothecation’ across multiple owners—the practice of multiple parties claiming to own the same asset at the same time for use as credit collateral, a practice that multiplies leverage in a way that is not easy for regulators to see.

The positive sentiment from regulators, which was echoed in comments by the SEC Chair in late March and a Federal Reserve Governor earlier this month, is encouraging for AirPocket’s novel usage of the blockchain as an audit trail. The AirPocket team sees the potential regulatory transparency the blockchain could bring to international money transfers as a key benefit in the development of the AirPocket remittance platform. The blockchain audit trail is both a tool for regulatory monitoring and a means for developers to develop automated applications that are triggered by transaction events recorded on the AirPocket blockchain record.

For further reading, Caitlin Long follows the warming trend among regulators on distributed ledger tech at Alt-M here.

The bitcoin price is posting a sustained rally in the latter half of this month, with the price approaching yearly highs of $470 as of this writing. The moves come ahead of the anticipated block-reward halving slated for July, which is likely to have important repercussions for trading dynamics in the short term. The liquidity desk is well positioned to take advantage of any upside in price and volatility via DigitalX Direct, OTC trading and market making.



Blockchain in the News
  1. Blockchain apps and the need for remediation
  2. Bitcoin's blockchain technology may be its real legacy
  3. The Blockchain Revolution, Smart Contracts and Financial Transactions
  4. Blockchain Tech Is Here To Stay
Newsletter Tools
» Unsubscribe

» Send to a Friend

» Contact Us
» About

» Industry News

» Press Room
Copyright © 2016 - DigitalX -