Centrelink data-matching problems show the need for a government blockchain

From The Conversation.

Governments across the globe are experimenting with the blockchain, the technology behind Bitcoin, as a way to reduce costs and provide more accountability to the public. In Europe alone, the United Kingdom, Ukraine and Estonia are experimenting with blockchains to fight corruption and deliver public services.

Australia, too, is looking at what a blockchain might achieve. The recent problems with Centrelink’s automated data-matching system show precisely where a government blockchain would fit in.

Rather than siloing our data in government agencies, we could create a single source of information. This would speed up our interactions with government, while reducing errors and fraud.

What is a blockchain?

The blockchain is a kind of public database, one stored simultaneously on a bunch of different computers. When a new transaction occurs it is verified (otherwise known as “mining” or “consensus”), encrypted and added to the database.

The most famous example of the blockchain is Bitcoin, a crypto-currency built upon the blockchain. However, the blockchain is suitable for many other applications, not just financial transactions. For example, the blockchain could be used to authenticate that a diamond has not come from an illict source, or for buying and selling property.

A government blockchain

For the government’s purposes, the killer feature of the blockchain is that it is a way to record transactions so that they are transparent and cannot be altered or tampered with. When used to track fish through a supply chain, for instance, it allows customers and restaurants to follow where the fish has been and have confidence in the data.

When applied to a government context, these capabilities could be useful for collecting tax, delivering benefits, or regulating business. From the public’s point of view, this could enable us to track government spending, eliminate fraudulent transactions, reduce errors in data processing and speed up service delivery to almost real time. It could be useful almost anywhere records are kept.

All the while the public could be more confident about the accuracy and integrity of the data being held.

In practice

The Australian government makes benefit payments and provides support services through Medicare, Centrelink and Child Support services. It also collects information through numerous other agencies, such as the Australian Tax Office. A government blockchain could record the transactions about a citizen and link together information about health, welfare and child support.

The information would be entered only once into the blockchain by any one of these agencies. There would be no need for the data to be re-entered or matched again. Thus errors that occur in data processing as information is passed on down the line will be eliminated, avoiding some of the issues with the current Centrelink system.

Further, once data is entered it cannot be altered or changed in any way without proper authentication. Any authorised officer within the government could then access the information in the blockchain, avoiding a paper-pushing exercise between government departments. All of your data would be in one place.

We could go even further, as the blockchain would also allow other services to be processed through an app, as the UK is trialling with welfare payments.

The overall cost savings, reduction in bureaucracy and increased responsiveness to helping people in need could be immense. All we need is the government to invest in its own blockchain.

The challenge is making it legitimate

The essence of a blockchain is to reduce the reliance on centralised systems (such as the government), replacing it with a system with inherent accountability, transparency and trust. The original blockchain concept achieved this by being open, like the internet (also known as unpermissioned), relying on independent, anonymous “miners” to validate transactions. This guarantees the integrity of the data as no-one knows who the miners are to bribe or bully them into underhanded actions.

However, some might view a government-run, “permissioned” blockchain with suspicion. The trust of the public would need to be gained. A government blockchain would not be open, and we would have to rely on the government to approve all of the transactions. This negates some of the benefit offered by a blockchain. The legitimacy and trust would have to come from the government itself.

Thus a government-run blockchain would not be without its challenges. But if an Australian government blockchain is developed and allowed to succeed, then the potential benefits could be enormous. Society as we know it will be disrupted!

Author: Christine Helliar, Professor School of Commerce, University of South Australia

Lost or stolen cards replaced instantly with ANZ digital wallets

ANZ today announced its customers can continue to use their digital wallets when they report their card as lost or stolen with a new service that automatically updates their replacement card details.

As soon as a customer calls to report their debit or credit card as missing, ANZ puts a stop on the original card and automatically uploads the new virtual card details to the customer’s digital wallet.

ANZ Managing Director Products Australia, Katherine Bray said: “Our customers report about 670,000 cards as lost or stolen each year and we know waiting for a new card to arrive can be a real inconvenience.

“Now our customers can keep using their digital wallet, whether it’s Apple Pay or Android Pay, to make purchases while they wait for the new physical card to arrive in the mail.

“For many customers their smartphone is now the primary way they do their banking, including making purchases, so we’re working hard to keep improving their mobile experience with changes like this.”

ANZ has also made it possible for customers to keep their existing Personal Identification Number (PIN), provided it hasn’t been compromised, meaning less change with the same high level of security.

ANZ is the only major Australian bank to offer both Apple Pay and Android Pay with about 8.3 million transactions made across the bank’s digital wallets last year.

A Brave New World for Global Banking

Mckinsey in a new report “A brave new world for global banking“, says three formidable forces—a weak global economy, digitization, and regulation—threaten to significantly lower profits for the global banking industry over the next three years. Developed-market banks are most affected, with $90 billion, or 25 percent, of profits at risk, but emerging-market banks are also vulnerable, especially to the credit cycle. Countering these forces will require most banks to undertake a fundamental transformation centered on resilience, reorientation, and renewal.

Our report, A brave new world for global banking: McKinsey global banking annual review 2016, finds that of the major developed markets, the United States banking industry seems to be best positioned to face these headwinds, and the outcome of the recent presidential election has raised industry hopes of a more benign regulatory environment. Japanese and US banks have between $1 billion and $45 billion in profits at risk by 2020, depending on the extent of digital disruption. Yet after mitigation, their profitability would drop by only one percentage point to 8 percent for US banks and 5 percent in Japan. Banks in Europe and the United Kingdom have $35 billion, or 31 percent, of profits at risk; more severe digital disruption could further cut their profits from $110 billion today to $50 billion in 2020, and slice returns on equity (ROEs) in half to 1 to 2 percent by 2020, even after some mitigation efforts (see exhibit for how digitization may reduce fees and margins across different businesses).

Emerging-market banks face a different challenge. They are structurally more profitable than their developed-market counterparts, with ROEs well above the 10 percent cost of capital in most cases but vulnerable to the credit cycle. Brazil, China, and Russia could have $50 billion in profits at risk, with China comprising $47 billion. A slower growth scenario could result in additional credit losses of up to $250 billion, of which $220 billion would be in China, our report finds, but with their current high profitability of $320 billion, Chinese banks should be able to withstand these losses.

Three formidable challenges

Banks must adapt to the reality of a macroeconomic environment that offers a number of risks and limited upside potential. Along with stagnating growth, banks face enormous challenges to digest the wave of postfinancial-crisis regulation, despite industry hopes of a more benign regulatory environment in the United States. Control costs in risk, finance, legal, and compliance have shot up in recent years. And additional proposals, termed “Basel IV,” are likely to include stricter capital requirements, more stress testing, and new guidelines for conduct and compliance risk.

Meanwhile the pressures of digitization, which boosts competition and compresses margins, are growing. Some emerging-market banks are managing well, offering innovative mobile services to customers. But our report finds that in the largest emerging markets, China and India, banks are losing ground to digital-commerce firms that have moved rapidly into banking.

In developed economies, digitization is impacting banks in three major ways. First, regulators, who were initially more conservative about the entry of nonbanks into financial services, are now gradually opening up. Over time, huge tech companies may be able to insert themselves between banks and their customers, capturing the vital customer relationship and presenting an existential threat. On the positive front, a number of banks are teaming up with fintech and digital firms, using big data and analytics to sharpen risk assessment and drive revenue growth. Lastly, many banks have been able to digitize processes and dramatically lower costs in their middle and back offices (although digitization can sometimes add costs).

A fundamental transformation

Countering the headwinds now gathering force means most banks will need to embark on a fundamental transformation that exceeds their previous efforts. Tinkering around the edges, as many banks have done for years, is not adequate to the scale of the task and will only exacerbate the sense of fatigue that comes from years of one-off restructurings.

This transformation is centered on three themes:

  • Resilience. Banks must ensure the short-term viability of their business through tactical measures to restore revenues, cut costs, and improve the health of the balance sheet. They need to protect revenues through repricing and greater intermediation, reduce short-term costs, manage capital and risk, and protect core business assets. Our report found that digitization is only the start of the answer on costs, with radical reductions in functional costs needed to fundamentally rebase the cost structure.
  • Reorientation. While the resilience agenda is defensive in nature, in reorientation, banks go on offense. They must reorient their business models to the customer and the new digital environment by establishing the bank as a platform for data and digital analytics and processes, and aggressively linking up with fintechs, platform providers, and other banks to share costs through industry utilities. They also need to streamline their operating models and IT structure and move toward a proactive regulatory strategy.
  • Renewal. The industry must move beyond traditional restructuring and renew the bank via new technological capabilities, as well as new organizational structures. Any new business model that banks design will likely require new technology and data skills, a different form of organization to support the frenetic pace of innovation, and shared vision and values across the organization to motivate, support, and enable this profound transformation.

Innovative platform to help kickstart SMEs

Suncorp says it is making it easier to start a business in 2017 with the launch of Suncorp Start Company.

Suncorp Start Company, a new online platform, brings together a diverse range of services and solutions to create a user-friendly guide for aspiring entrepreneurs.

Suncorp Customer Platforms Chief Executive Officer Gary Dransfield said the website connects customers with resources like legal and accountancy documents, business name registration forms and website development tools, which are essential to starting a business.

“It also provides access to educational tutorials, tips and plans to help recently established and trading businesses to take the next step,” Mr Dransfield said.

“Our research tells us that small businesses want to spend more time on building their business, not completing paperwork – early access to the right tools and information can set them up for faster success.

“With Suncorp Start Company we consolidated solutions from our partner companies and insights from customer feedback to develop a product which solves problems and helps to meet their needs.”

The new platform follows Suncorp’s partnership with 9 Spokes to bring to the market ‘Suncorp Business Toolbox’ – a business dashboard that enables customers to gain insights across their business.

“We know small businesses are busy. Suncorp is committed to making it easier for them to achieve their financial goals through solutions and services which are easily available as part of our new Marketplace strategy,” Mr Dransfield said.

Ten years on, the iPhone has taken us back as many steps as it has taken us forward

From The Conversation.

The 10th anniversary of the Apple iPhone reminds us that while it was not the first smartphone, it was the first to achieve mass-market appeal. Since then the iPhone has defined the approach that other smartphone manufacturers have taken.

Smartphones have transformed our lives, essentially giving us an internet-connected computer in our pocket. But while we’re distracted by Candy Crush or Pokemon Go, we are losing freedoms. We are losing control of our own devices, and losing access to the information they contain – in the very same devices that are increasingly important in our life.

To see how far we’ve come, consider that personal desktop computers only became widespread with the IBM PC. By designing the PC with an open architecture, an enormous industry of PC-compatible products from other manufacturers sprang up. It’s the same today: when you purchase a computer, you’ll have (if you wish) the ability and the right to add or remove, swap or upgrade any element of the system hardware, install or remove any software you wish, including the operating system, and access to any information stored on it.

However, today the smartphone or tablet have in many cases effectively replaced the desktop or laptop computer. In parts of the developing world, smartphones are the first experience many have of computing and internet access. The fact that they are small and portable and work wirelessly means they are put to many other uses, such as receiving guidance from navigation systems, listening to music while exercising, or playing games in waiting rooms.

Yet doing something that’s very simple on a computer – such as listing your files – is impossible on an iPhone. iPhone users can change their background image, their ring-tone, the time of their alarm. But the iPhone guards what files it contains jealously. Your phone that is carried everywhere with you, which knows your precise location, which records the websites you visit – has all of its files completely inaccessible to you. If you care about privacy this should sound disturbing.

We have always had the right to govern our own computers, to do with them as we wished. But the smartphones and tablets we’re buying today come without administrator rights: we are merely users in the hands of the big tech companies, and these firms effectively rule the machines we live with.

Information and freedom

Of course, the iPhone does allow access to some information, such as photos, emails or documents. But it is often difficult to get that data off the phone. The way the iPhone communicates with your computer is a closed, proprietary protocol, and Apple changes this protocol each time it updates the phone. So if you use neither Microsoft Windows or Apple Mac computers you will have a hard time even to get your own photos out of your own phone.

Apple also restricts what information can be stored on the device. For example, iPhone users are obliged to transfer any music files on the phone through Apple iTunes software. If you cannot or do not wish to run iTunes – no music for you. Additionally, iTunes will automatically delete all the music tracks on your phone if you try to transfer files from more than one computer, due to digital rights management software that assumes that access from more than one computer means that the file has been shared illegally. It’s a bit like buying spectacles that control the conditions under which you’re allowed to read books. Or a backpack that will destroy all its contents if you attempt to carry items bought from different stores.

The same issue also affects which applications can be installed. If you learn how write code, you can develop your own applications to solve your own unique problems. But the iPhone doesn’t allow you to run those programs: only software authorised by Apple and distributed via the Apple Store is permitted.

Open alternatives

Why so tightly control what we can do with our devices? Some may argue that these restrictions are necessary in favour of security. If we look again at computers, however, we find that Linux, an open source non-commercial operating system, is also the most secure. It’s true that the Android mobile phone operating system, which is more open, is not as secure as the iOS operating system that runs Apple’s iPhone. But it shows that it is possible to have a system that is both secure and open.

In fact, iOS is built around several open source software projects – those whose internal workings are open to anyone to view or modify, for free. But while elements of iOS are open source, they are used as part of a tightly closed system. Android, an open source mobile phone operating system originally created by Google, is the chief alternative to the iPhone. But Android phones too have many closed source components, and Google is constantly replacing open components with closed source ones.

Another alternative comes in the form of Ubuntu Touch, a recent version of the popular Ubuntu Linux for phones and tablets, although it is not yet widely used. The fact remains that ten years on, the mobile revolution kicked-off by the iPhone has taken us several steps forward and several steps back; leaving us uncertain of whether some day we will actually fully own our devices.

Author: Leandro Soriano Marcolino, Lecturer in Data Engineering, Lancaster University

Fintech, Beyond The Hype

From InvestorDaily.

The impact technology is having on the financial services industry is immense and getting caught up in the hype surrounding new technologies is all too easy, writes SuiteBox’s Ian Dunbar.

The list of buzzwords that dominate the landscape of tech innovation in financial services grows by the day (and yes, they all have to come with a hashtag). But so what?

It is easy to get swept up in the hype of the industry and forget what the point of all this innovation is.

What defines innovation that changes the shape of an industry and, more importantly, makes a difference to real peoples lives?

I have been to many Fintech innovators conferences and have organised two of them through the Afiniation Fintech Network.

I must have seen more than 500 ‘innovators’ presenting their carefully crafted wares to the eager (or cynical) audience.

But again, so what?

Here is an example of how big a difference technology innovation can make in the convenience of life.

The ‘old banking’ in the story is a big lumbering Australian bank and Visa. The ‘new banking’ is Apple and American Express.

I really wish I had been able to say the star of this story was a super exciting start-up operating from a garage somewhere, but yes, it is Apple and Amex (and how often do you read about Amex in a Fintech blog?)

I was travelling in the UK earlier this year and I managed to lose my wallet.

That is a horrible experience at the best of time, but absolutely the worst experience when sitting at a train station outside of London, heading to Heathrow to catch a flight to Zurich.

Hmm, little money (about 5 quid in change), no cards, no drivers licence. What does one do?

The ‘old bank’ financial services provider:

Emergency phone call to Visa and the bank in Australia – Absolutely no way I can get an emergency card quickly in London, but I can arrange an emergency funds transfer to Western Union in 48 hours.

No worries, I will walk from Zurich Airport to the Airbnb and eat nothing for 2 days!

I borrow 200 pounds from a friend in London (phew) and get on my way.

The problem, no confirmation ever arrives of the emergency funds. I phone Visa and the bank a grand total of seven times. Each time I get one step closer to my emergency funds.

The final hurdle, the bank won’t release the funds because Visa has spelled my address with ‘St’, rather than ‘Street’. Seriously!

Later, when I get back from Zurich to London, I get my emergency card via courier, but my unbranded Visa card comes with no pin and no bank in London has any idea what to do with it.

Four more calls to the bank in Australia and I give up.

The ‘new bank’ financial services innovator:

Wondering how I survived? Straight after the first call with Visa and the bank in Australia, I called American Express to cancel my Amex card and order the new one.

Within 2 hours I received an alert on my Apple Pay Wallet on my iPhone that my new Amex card had been loaded and activated.

No more calls, no need for a pin, no courier.

I survived for the next seven days on the cash I had borrowed and using Apple Pay on my phone absolutely everywhere.

The Tube in London, supermarkets, cafes, shops and Uber – I became the walking example of the cashless society.

The point of this story is not to promote Apple or Amex; they are well and truly big enough to do that without me.

The point of recounting my story is to highlight that technology needs to make a difference, not just a little difference but a big difference.

Combine that with good marketing and excellent management and you have a winner.

So, how to cut through the hype of Fintech? The ‘difference’ can come in a number of ways:

Deliver convenience

Technology should make peoples’ lives easier, much easier. It should cut out the friction in the way we interact with financial services.

By reducing wait times, cutting out painful steps in a process, eliminate repeated identity verifications, eliminate paper, printing and postage, offer services when the client is free, not when you are.

The story above, while being an infrequent occurrence, is all about convenience.

Automated advice tools (whether adviser or consumer led), online FX, virtual meeting rooms, video banking, digital signing, digital mortgages, mobile payments, digital identification and biometrics all fall into the domain of enhancing convenience.

Save people money

Technology shouldn’t save users just a little bit of money – as we consumers don’t generally change our behaviour for a small saving – but offer exceptional value, and that generally means savings.

Innovators in the foreign exchange space are great examples of this.

The large banks are making huge returns on small business and consumer FX, which is now being eroded by new entrants.

Peer-to-peer lending is another example, providing lower cost lending to many individuals that might otherwise be denied credit or use pay-day lenders.

Enhanced security of services:

Cyber-security, identity theft, payments fraud are all huge businesses, and while consumers might not pay for it, businesses will.

In Australia in 2015, some 8.5 per cent of the population experienced some form of online theft, costing over $2.1 billion.

Biometrics (voice, eye, thumb print, facial) are growing rapidly and will make a substantial difference to the security of our online and mobile transactions of the future (forget cards, what will a card be?).

Back the leaders in enhancing the security of our financial transactions.

Create an exceptional customer experience:

The financial services industry is not well known for innovative client facing.

Delivering a mobile app is not enough. A staggering 23 per cent of apps are abandoned after first use and 90 per cent after a month.

Fintech innovators are changing this rapidly, with the use of innovative user experience design, gamification, behavioural psychology and more.

Collate, use and share data to create powerful insights and connected eco-systems

Fintech leaders know how to source and use data. Credit scoring, for example, might use information not just from a credit agency (the majority of the world is not scored in credit bureaus) but also source data from social media.

Wealth platforms may source website search histories and social media to predict consumer behaviours before they occur.

AI engines can assess personality profiles based on written content and social media posts.

Data itself, however, is not enough, but when combined with smart algorithms, powerful and valuable consumer insights are created. These insights are valuable.

Fintech is big and it has the attention of the incumbent financial players globally. Spot the difference that a fintech innovator is making, validate it against objective criteria, and strap in and enjoy the ride.

Ian Dunbar is the chief executive officer of SuiteBox.

High-net-worth investors embracing robo-advice

From Investor Daily.

Robo-advice platforms’ capacities are expected to continue growing in the coming year, according to Finovate, expanding their functionality to include broader wealth management functions and cater to high-net-worth customers.

The “myriad” financial needs facing Millennials, coupled with increasing longevity risk confronting older investors, has driven change in the robo-advice space, Finovate research analyst David Penn said, with the improving abilities of such services now extending beyond “traditional boundaries”.

“The growing capacity of robo-advisers to help manage other aspects of personal finance supports a more expansive view of wealth management and financial planning,” he said.

“This includes everything from health care planning, insurance, even real estate, education and leisure.”

As robo-advice becomes “both more sophisticated and more accepted”, high-net-worth investors are increasingly making use of these services to manage parts of their finances, Mr Penn said.

“Catering to high-net-worth clients, according to some, involves both greater technological sophistication on the part of robo-advisors as well as more extensive customer service,” he said.

“Specifically, high net worth clients may require access to more complex investment vehicles, including non-equity investments, as well as more advanced rebalancing and tax harvesting than the average investor.”

Fintech services designed to help high-net-worth individuals manage their wealth are already emerging on the market, Mr Penn said, adding that high-net-worth individuals already using these services had increased their investment from 5 per cent to 20 per cent in the last two years alone.


Trustees Australia announces fintech merger

From InvestorDaily.

Fintech marketplace operator Cashwerkz has merged with Trustees Australia to create a platform that aims to disrupt the fixed interest investment sector.

According to the companies, the merger helps bring together Trustees Australia’s funds under management with Cashwerkz’s distribution platform to serve retail customers, the financial planning industry, superannuation funds, councils and other entities that are looking to invest large cash balances.

It is hoped the merged companies will allow Australian fixed income investors “to find the best term deposit and fixed income solutions to match their investment criteria and to simultaneously and seamlessly transact term deposits online between banks and buy/sell fixed interest securities, such as small parcel bonds, with or without the involvement of intermediaries”.

The merged platform will enable those seeking a term deposit or a related cash product to access Cashwerkz’s marketplace for cash. It will offer consumers a wider choice of ADIs, including access to regional ADIs such as smaller banks, credit unions and building societies. Likewise, it will offer regional ADIs and smaller banks access to a huge number of potential new consumers.

Brook Adcock, chairman of Adcock Private Equity, the company behind Cashwerkz, commented, “While some incumbents are keen to use the cost and difficulties associated with compliance of cash investments to ‘own’ their clients, consumers in many markets are now empowered by technology to break those compliance shackles and access better deals.

“There is an enormous opportunity to scale the business by expanding into the (before now), too granular and untapped retail market, the up-until-now paper-based middle-market, and the before-now too-time-consuming IFA market.”

Cashwerkz says it aims to expand into new products such as cash management accounts, high interest savings accounts, annuities and bonds.

Further, by retaining its custodial licence, the entity, listed under Trustees Australia, can offer custodial services to small and medium third parties, which it has identified as a gap in the market.

Data akin to deregulation on disruption scale

From InvestorDaily.

Digital trends and the increasing sanctity of data will be as disruptive a force on the provision of financial services in the years ahead as deregulation was in the 1980s, says CommInsure.

In a forward-looking article penned for InvestorDaily sister title ifa magazine, CommInsure head of life product and strategy Franco Crapis drew parallels between the impact of deregulation under the Hawke and Keating federal governments and the disruptive trends of the digital age, with a specific focus on the life insurance business.

“In the 1970s and before deregulation, the insurance industry was heavily concentrated, with the five largest life insurance firms accounting for more than 85 per cent of premium income,” Mr Crapis said.

“While the term disruption wasn’t as common, the legislative and economic events that took place at that time to open up the financial markets to competition definitely resulted in greater convenience and choice for customers. [This is] the desired outcome of disruption, after all.”

Use of data and digital technology in the current climate are likely to create similar disruption leading to greater competition in the insurance and financial services sector, Mr Crapis predicted.

“In years to come, we will look back and see this was the time for evolution. It will be the period when data provided the industry new ways to offer life insurance and digital provided customers new ways to consume it,” he wrote.

“Insurance providers will be impacted in ways not dissimilar to the demographic trends changing other parts of the financial services industry.”

The article singles out the emergence of P2P and crowdfunding-enabled models within the insurance market, suggesting significant changes in the customer experience of insurance policyholders.

“The prudent use of digital channels coupled with data analytics is tapping into unmet consumer needs through convenient and hassle-free technology, while increasing product choices and adding transparency to the customer service experience,” Mr Crapis wrote. “It is these trends that insurers need to be aware of and find new ways to deliver to.”

Equities markets are also likely to be affected by digital trends, evidenced by the appetite for tech start-up investment by Millennial investors who instinctively understand this economic sector, he said.

Bitcoin Surges Above $900 on Geopolitical Risks, Fed Tightening

From Bloomberg.

Bitcoin headed for its biggest weekly jump since June as rising geopolitical risks boosted demand for alternative assets.

The cryptocurrency surged 15 percent this week to $900.40 as of 2:38 p.m. in Hong Kong, taking its gain this year to 107 percent, data compiled by Bloomberg show. The last time it was at such levels was in January 2014, when bitcoin was tumbling from its record price of $1,137 following the implosion of the MtGox exchange and tightening Chinese controls.


Bitcoin is extending a rally that’s beaten every major currency, stock index and commodity contract in 2016. Buyers sought alternative assets this week amid the killing of Russia’s envoy to Turkey and a separate attack that left 12 people dead in Berlin. Weakening pressure on the yuan, which intensified this month as the U.S. projected a faster pace of tightening next year following Donald Trump’s election win, is also increasing demand for bitcoin in China, where the majority of trading occurs.

“Terrorist attacks in Europe boosted haven demand in capital markets, and gold has been falling since Trump was elected,” said Le Xiaotian, an analyst at Huobi, a Chinese exchange. “Global instability has to a large extent directed funds to the bitcoin market.”

Bitcoin, which trades in cyberspace and is mined by code-cracking computers, is gaining popularity among some investors as an alternative safe haven because it’s deemed to be less influenced by government regulations and changes to monetary policy. Gold, which tends to trade in tandem with bitcoin when haven demand is strong, has fallen this quarter as U.S. rates rise, narrowing its premium over bitcoin to the least in three years.

“The Fed’s rate hike announcement has probably spooked a lot of emerging-market investors, particularly those in China, who are now flocking to bitcoin as a refuge from weak fiat currency assets,” said Thomas Glucksmann, head of marketing at Gatecoin Ltd. in Hong Kong. “As we’ve passed the $800 bitcoin price, a strong resistance point in the past, and move closer towards the psychological $1000 stratosphere, anything seems possible.”