Internet Finance Is Disrupting The Banking Business In China

Yuebao is a hot topic in China, and has even gotten international attention. But what is it? Yuebao is a value-added service that customers of Alipay (China’s version of PayPal) can use to earn interest and to make payments and transfers. An individual can start a Yuebao account with as little as RMB 1 (US$0.17).

The Alibaba Group launched Yuebao in June 2013. By mid-February 2014, 61 million people had invested money in Yuebao, and total fund skyrocketed to RMB 400 billion (US$65 billion) – making it the largest fund in China.

People are drawn to Yuebao because of its:

  • High yield. The average annualized return is around 6% — much higher than similar funds and banks’ financial products.
  • Good liquidity. Yuebao offers great flexibility; investors can deposit and withdrawfunds anytime. Other financial institutions require lock-in periods and much higher initial investments.
  • Ease of use. Yuebao offers a much easier way to invest. People can see the value of their assets anytime, anywhere on their smartphones.
Read more

Bitcoin: Some Parts Brilliant, Some Parts Sure To Bomb

A version of this post originally appeared on Re/code.

The rollercoaster ride for Bitcoin enthusiasts continued this week: There was good news from UK regulators, who have taken a relatively progressive stance on virtual currencies, and bad news with the latest heist of 890 Bitcoin (roughly $600,000) and the resulting demise of Flexcoin, a Bitcoin storage service. The breaking news frenzy perhaps reached a new peak with the claim that the real Satoshi Nakamoto has been identified. There’s no doubt that additional revelations are on the horizon when it comes to the first crypto-currency, and with that, the debate about the longevity and usefulness of Bitcoin will continue. In our new report on Bitcoin, we address the following questions:

1.       What is Bitcoin?

2.       Who are the main players?

3.       What headway has Bitcoin made?

4.       How viable is Bitcoin as a consumer payment alternative?

5.       Should I worry about crypto-currencies like Bitcoin disrupting my business?

6.       How can I outsmart crypto-currencies?

Here’s the bottom line: Bitcoin is deeply flawed as an alternative currency or payment method for mainstream consumers. It will, however, be a catalyst for a more efficient global payments system because it demonstrates one way to tackle the many embedded inefficiencies.

Bitcoin Is Not A Viable Payment Alternative For Mainstream Consumers

Read more