Source: Record.com

Facebook’s CEO Mark Zuckerberg on 27th January 2021 said in a quarterly earnings call: “We increasingly see Apple as one of our biggest competitors using its dominant platform position to push its own apps while interfering with Facebook’s. Apple may frame this as a privacy service to its customers, but it’s really only in Apple’s own best anti-competitive interests”. CEO Tim Cook spoke at the Computers, Privacy and Data Protection conference on 28th January and while he never mentioned Facebook by name to many the target was obvious. “Technology does not need vast troves of personal data, stitched together across dozens of websites and apps, in order to succeed. Advertising existed and thrived for decades without it. And we’re here today because the path of least resistance is rarely the path of wisdom. If a business is built on misleading users, on data exploitation, on choices that are no choices at all, then it does not deserve our praise. It deserves reform.”

While Apple has been publishing its transparency report since 2013, listing the requests that it receives from governments on users data as a company Apple has been less than transparent in other ways. In November 2020 as reported by the Washington post: “Apple will pay $113 million to settle an investigation by nearly three dozen states into the tech giant’s past practice of slowing customers’ old iPhones in an attempt to preserve their batteries.” In 2019 Apple were sued “for alleged lack of transparency over iCloud data” In 2016 the publication 9to5 wrote: “Apple’s product secrecy may create ‘magic,’ but lack of transparency on upgrade cycles creates frustration.”

The reason for this focus on transparency is because one of the key attributes that Blockchain technology is able to bring greater transparency a business and indeed governments. Indeed the  European Parliament publication Europal wrote “One of the most appealing aspects of blockchain technology is the degree of transparency that it can provide. Blockchain has the potential to improve supply chains and clinical trials, enforce the law, enable responsible consumption, and enhance democratic governance, through traceability of information as a means of ensuring that nothing is unduly modified. The level of transparency that blockchain affords adds a degree of accountability that has not existed to date”

Crypto/Blockchain venture funding by size

Source: Block Research

In 2020, there were just four venture capital-funded deals worth $100 million, and three deals worth between $50 million and $100 million. Already in the first three months of 2021 there have been six deals worth more than $100 million: BlockFi, NYDIG, Dapper Labs, FireBlocks and Blockchain.com (twice). Seven more were worth $50 million to $100 million. But not all institutions are bullish on crypto since HSBC now prohibits customers from buying quoted companies which hold Bitcoin, such as Square or Microstrategy. The image below is proof of HSBC’s current sentiment towards crypto-related assets.

Message from HSBC to its clients

Source: HSBC

Surely such a dictate from HSBC to its clients flies in the face of a freewheeling capitalist bank, such as HSBC? Maybe HSBC is now taking a much more cautious stance, having once been found moving vast sums of dirty money and been forced into paying record anti- money laundering fines. One wonders how long HSBC will continue pursuing such an aggressive stance towards crypto or will it, like JP Morgan, end up ‘eating humble pie’ and even begin to back organisations engaged with crypto assets? Afterall, HSBC clearly understands the benefits of Blockchain technology, which gave birth to the asset class of crypto currencies since, back in September 2020, it published a report: “How blockchain could revolutionise bonds”. Furthermore, HSBC’s Digital Vault offers custody of assets including assets such as equity, debt or real estate. HSBC digitises its clients’ holdings whereby enabling customers to check their records without the need to request the paper documentation that maybe required, for an audit, or to check an interest payment for tax returns, for example. The benefit of using Blockchain technology and the digitisation of the records are a lower cost for HSBC and give clients faster access to information.

Undoubtedly, there continues to exists a blurring between traditional institutions and those organisations engaged in crypto assets and, as the size of both the cryptocurrency market and digital assets grow, the boundaries are likely to blur even more. The amount of money being invested into these sectors is ever-expanding as we see the likes of crypto, DeFi, NFT, and the digitisation of real assets (such as equities, bonds, commodities and real estate) become more popular. It is not simply the private sector but the governments with their CDBCs which are equally looking to be part of this new growing ecosystem. This is likely to lead to more and more M&A activity by traditional and more native crypto organisations.