Frank Schwab

I help navigate digital transformation

Practicing What You Preach




It's getting wild how many people jump in with "amazing" crypto or investment advice these days. But honestly, it often feels like a house of cards. When I try to dig deeper, to understand the why behind their recommendations, the foundation just isn't solid. It makes me even more convinced that you absolutely have to practice what you preach.


For me, it's a gut feeling that comes from basic logic. You wouldn't let someone build your home if they'd never picked up a tool, would you? Or trust a teacher who's just skimming the textbook themselves? The same goes for something as crucial as my financial future. If someone wants to guide me on navigating the complexities of investments or the banking world, I need to see that they've successfully navigated it themselves. Show me you've actually grown your own money, made smart choices, and learned from the ups and downs. That's the kind of lived experience that earns my trust and makes advice truly valuable. Otherwise, it just feels like empty talk.




#investments #money #advice 



#SundayThoughts 



Published in SundayThoughts, all on 20.04.2025 9:30 Uhr. 0 commentsComment here

Tomorrow's Money

Lighter than paper, faster than PayPal, cheaper than Visa, rarer than gold, and as secure as Fort Knox.




I've been fascinated by the concept of money for the past 37 years, ever since I began my apprenticeship at Deutsche Bank.


Beyond health, time is life's most valuable resource. Money can buy you time, and to some extent, even health. These are the primary reasons for my interest in money. The more money you possess, the more you can prioritize your life and use your time as you choose.


And I'm deeply interested in the future, because that's where I will spend the rest of my life. This interest drove me to write a book titled 'Tomorrow's Money.'


'Tomorrow's Money' is lighter than paper, faster than PayPal, cheaper than Visa, rarer than gold, and as secure as Fort Knox.


In 19 chapters, I share my views, insights, and beliefs about tomorrow's money, which, in essence, is digital and comes with new features like programmability.


If you haven't encountered this topic yet, my book might be a good recommendation for your summer reading.


It's available in both English and German.



🇬🇧 https://amzn.to/3r97JiG


🇩🇪 https://amzn.to/3mKNyEG






#tomorrowsmoney #crypto #blockchain #bitcoin 




#SundayThoughts 




FrankSchwab.de

Published in SundayThoughts, all on 30.03.2025 16:26 Uhr. 0 commentsComment here

Buy „Made in Europe“


Given today's volatile geopolitical climate, for the first time in my life, I feel the need to actively defend the democracy in which I was raised. While we might think individuals can't make a difference, I believe that's incorrect. Through our daily decisions, we can collectively make a huge impact, for example, by directing how we spend our money.


Indeed, we all can support European democracy daily by prioritizing European products and services. Our economic choices as EU citizens carry significant weight. By prioritizing EU-produced goods and services, we directly strengthen our Union's strategic autonomy, reducing dependence on potentially unreliable external sources. This bolsters our resilience against global disruptions.


We, as individuals, uphold the EU's high standards for environmental protection, labor rights, and consumer safety through our purchasing decisions. Choosing EU-made products directly supports these values, fostering a sustainable and ethical economic model.


Significantly, every EU citizen's choice matters. Supporting EU businesses fuels innovation and long-term prosperity. The resulting economic benefits are reinvested within our Union, creating jobs and supporting essential social programs.  


In essence, each purchase we make is a vote. We can each contribute to a more secure, sustainable, and prosperous Europe by consciously choosing EU products and services. This collective action reinforces our shared values and strengthens the European project for future generations.


Now is the time. Support European Values. Buy „Made in Europe“.  🇪🇺🇪🇺🇪🇺


Here a community-driven directory that helps you buy European products and services, based on personal recommendations.


🔗  https://www.goeuropean.org/




#Europe #MadeInEurope 




#SundayThoughts 




FrankSchwab.de

Published in SundayThoughts, all on 23.03.2025 9:30 Uhr. 0 commentsComment here

Banking in the Age of Stablecoins

Stablecoins are rapidly transforming the financial landscape by providing a stable digital currency, forcing traditional banks to adapt to new technologies and regulatory frameworks. Their increasing use in cross-border transactions and decentralized finance is driving innovation, while also presenting challenges related to risk management and the need for robust digital infrastructure.


The Anchored Tide 


The digital age has ushered in a new financial paradigm with the rise of stablecoins. While the volatility of cryptocurrencies like Bitcoin initially captured global attention, a more subtle revolution was underway. Stablecoins, designed to maintain a stable value pegged to traditional assets, are emerging as a powerful megatrend, reshaping finance, commerce, remittances, and humanitarian aid. They represent a fundamental shift in how value is transferred and stored, bridging the gap between volatile cryptocurrencies and the stability of fiat currencies. 


A stablecoin is a cryptocurrency whose value is anchored to another asset, primarily the US dollar, through mechanisms like reserve holdings, algorithmic methods, or cryptocurrency collateral. The appeal lies in combining the speed and borderless nature of cryptocurrencies with the familiar stability of traditional currencies. 


The growth of stablecoins has been substantial, with market capitalization surging from approximately $3 billion in early 2019 to over $200 billion in Q1 2025, and demonstrating resilience even during market downturns. This growth signifies a fundamental shift in value perception and transfer, particularly in regions facing hyperinflation or political instability. In Venezuela, for example, stablecoins have become essential for everyday transactions, protecting savings and facilitating business. Similarly, in Argentina, stablecoin adoption has surged, driven by individuals seeking refuge from economic uncertainty. Beyond individual use, stablecoins are revolutionizing cross-border remittances, offering near-instantaneous, low-cost transfers that bypass traditional intermediaries. This trend is evident in countries like the Philippines, where migrant workers increasingly use stablecoins to send money home, supported by the growing adoption of mobile wallets. 





The gig economy also benefits, as freelancers and remote workers receive payments quickly and securely, circumventing traditional banking challenges. Furthermore, stablecoins are streamlining supply chain management and international trade by tokenizing invoices and trade documents, particularly benefiting small and medium-sized enterprises. In humanitarian aid, organizations like the World Food Programme use stablecoins to distribute aid efficiently to vulnerable populations, ensuring rapid delivery and reducing fraud. 


The European Union's Markets in Crypto-Assets (MiCA) framework exemplifies the growing regulatory recognition of stablecoins. Like the internet's trajectory, stablecoins are experiencing steady and then explosive growth, driven by their inherent advantages. 


The decentralized finance (DeFi) ecosystem, with its reliance on stablecoins for lending and trading, further fuels this adoption. E-commerce, especially cross-border transactions, is being transformed by the near-instantaneous and low-cost payments enabled by stablecoins.


Content creators also benefit, receiving payments quickly and directly, regardless of location. The exploration of central bank digital currencies (CBDCs) contributes to the broader acceptance of digital currencies, paving the way for wider stablecoin adoption. 


In essence, the stablecoin megatrend is a fundamental shift in value perception and transfer, with its transformative potential evident across commerce, remittances, humanitarian aid, and beyond.



Stablecoins' Impact on Bank Operations


The impact of stablecoins on traditional banking is multifaceted, challenging established models and creating new opportunities. The long-term trend of declining branch usage, coupled with the rise of digital banking, has paved the way for the acceptance of stablecoins. Banks with robust digital infrastructure are better positioned to integrate stablecoin services. 


The Bank for International Settlements (BIS) has conducted extensive research on the implications of digital currencies, highlighting both the risks and benefits of stablecoins. While concerns about systemic risk and bank disintermediation exist, the potential for improved payment efficiency and financial inclusion is also acknowledged. Early adopters like Signature Bank, despite its collapse, demonstrated the potential of blockchain technology and stablecoin-related services. The growing trend of banks offering digital asset custody services, exemplified by institutions like BNY Mellon and State Street, indicates a significant revenue opportunity. Traditional correspondent banking faces increasing competition from stablecoins, which offer the potential to reduce cross-border payment costs.


The growth of decentralized finance (DeFi) presents both challenges and opportunities, with banks exploring partnerships to offer stablecoin lending and borrowing. Central banks and financial regulators worldwide are actively exploring the potential risks and benefits of stablecoins, with the pace of regulatory change significantly impacting adoption. A regional bank's pilot program offering stablecoin-based loans to small businesses illustrates the potential for banks to leverage stablecoins for innovative financial products. The impact of stablecoins on banking is evolving, with banks facing both challenges and opportunities as they navigate this new landscape. The potential for disintermediation, the need to adapt to changing customer needs, and the evolving regulatory environment are all factors shaping the future of banking. Banks that embrace innovation and adapt to the changing landscape are more likely to thrive in the age of stablecoins.





Stablecoins and the Next 20 Years


Looking ahead, stablecoins are poised to fundamentally reshape the banking industry over the next 20 years. The convergence of blockchain technology, digital assets, and evolving consumer demands will drive a transformation that necessitates innovation. By 2040, stablecoins could be a standard payment option, particularly for cross-border transactions and e-commerce, forcing banks to adapt their payment infrastructure. The trend towards real-time settlement will accelerate, with stablecoins enabling near-instantaneous transactions and prompting banks to invest in blockchain technology. Stablecoin-based lending and borrowing platforms will emerge, leveraging 

the transparency and efficiency of blockchain technology. 


The future of banking will also see a shift towards programmable money, with stablecoins enabling the creation of smart contracts that automate financial transactions. The development of central bank digital currencies (CBDCs) will accelerate the adoption of digital currencies, creating a conducive environment for stablecoin adoption. Embedded finance, facilitated by stablecoins, will integrate financial services into non-financial platforms, expanding access and generating new revenue streams. The regulatory landscape will continue to evolve, with regulators developing comprehensive frameworks for stablecoins. By 2035, a significant portion of wholesale interbank settlements could be conducted using stablecoins, transforming treasury operations. 


Stablecoins have the potential to accelerate financial inclusion, particularly in developing economies, bringing billions into the formal financial system. The digitalization of trade finance, driven by stablecoins and blockchain technology, will streamline processes and unlock new trade flows. The remittance market will be transformed, with stablecoins significantly reducing fees and speeding up transfer times. The growth of the digital asset market will create new opportunities for banks to offer custody, trading, and lending services. Corporate treasury management will see cost reductions through stablecoin adoption, and the insurance industry will benefit from reduced fraud. 


The metaverse and virtual economies will create new opportunities for stablecoins, and supply chain finance will be streamlined through blockchain integration. The impact of stablecoins on the future of banking will be transformative, with banks that embrace innovation and adapt to the changing landscape thriving in the digital age.





Adapting to the Anchored Tide: Banks' Action Plan


The trajectory of stablecoin adoption necessitates a proactive and strategic response from the banking sector.


 Banks must prioritize the development of robust digital infrastructure, investing in blockchain technology and secure digital asset custody solutions. Proactive regulatory engagement is crucial, with banks participating in shaping regulatory frameworks. Banks should explore the development of stablecoin-based products and services, leveraging stablecoins in payments, lending, and trade finance. Investing in workforce education about digital assets and blockchain technology is essential, as is exploring partnerships with stablecoin issuers. 


Cybersecurity and risk management must be prioritized, with robust security measures implemented to protect customer assets. Banks should explore the potential of decentralized finance (DeFi), engaging with the ecosystem to identify innovation opportunities. Preparing for the coexistence of CBDCs and stablecoins is crucial, with banks developing strategies to integrate both into their operations. Actively monitoring the competitive landscape and adopting a customer-centric approach to innovation are also essential. Banks must understand evolving customer needs and develop stablecoin-based solutions that address those needs. By embracing these strategies, banks can prepare for the future of stablecoins, ensuring they remain at the forefront of the evolving financial ecosystem. The transition will be challenging, but those that adapt and innovate will thrive.








#megatrends #stablecoin #banking #crypto #cbdc 





http://www.FrankSchwab.de


Published in megatrends, crypto, stablecoins, all on 20.03.2025 9:30 Uhr. 0 commentsComment here

Kelly Review: Top 10 Findings on IT Failures and The Co-operative Bank's £1.5 Billion Capital Shortfall (2013)

The Co-operative Bank's near-collapse in 2013, requiring a £1.5 billion bailout, was significantly caused by a failed £300 million IT replatforming project, exacerbated by the Britannia merger, risky lending, and other financial issues.




Sir Christopher Kelly's review of the Co-operative Bank's near-collapse blamed the 2009 Britannia merger, citing pre-existing problems in both organizations. The merger exacerbated issues like Britannia's £3.7bn commercial property loan book and the Co-op Bank's risky lending, contributing to a £300m IT project shortfall. The bank also faced PPI mis-selling costs and was impacted by the 2008 financial crisis and subsequent regulatory changes. The Co-op Bank reported a £1.3bn loss in 2013 and required a £1.5bn rescue deal, resulting in US hedge funds taking a 70% stake. Further financial issues emerged, including a £400m black hole, leading to additional share issuance and potential dilution of the Co-operative Group's remaining 30% stake. The Co-operative Group itself faced a £2bn loss and leadership changes, with CEO Euan Sutherland departing.


The Co-operative Bank’s IT failures, particularly the failed replatforming project, significantly contributed to its capital shortfall and overall difficulties. The bank’s decision to embark on an ambitious IT transformation project without adequate expertise and resources, coupled with poor program management, led to significant cost escalations and ultimately the project's failure. This failure hindered the integration of the bank with Britannia Building Society and resulted in substantial impairment charges, further weakening the bank's financial position. The IT failures also highlighted broader issues with the bank’s culture and decision-making processes, including a lack of challenge and a tendency to underestimate risks.


The Top 10 Findings on IT Failures


1️⃣ Failure of the IT Replatforming Project: The Co-operative Bank's ambitious project to replace its core banking system and upgrade other IT applications ultimately failed, contributing almost £300 million to the capital shortfall.   


2️⃣ Underestimation of Replatforming Complexity: The bank underestimated the complexity and risks involved in the replatforming project, particularly in light of the simultaneous merger with Britannia Building Society.   


3️⃣ Lack of Expertise and Resources: The bank lacked the necessary expertise and resources to successfully execute such a complex IT transformation program.   


4️⃣ Poor Program Management: The replatforming program suffered from unstable leadership, poor coordination, and inadequate planning.   


5️⃣ Impact on Integration Efforts: The failure of the replatforming project hindered the integration of Britannia and the Co-operative Bank, as many integration tasks were dependent on the new IT platform.   


6️⃣ Lack of Contingency Plans: The bank did not have adequate contingency plans in place in case the replatforming project failed, which left it with limited options when the project ultimately did not succeed.   


7️⃣ Underinvestment in Legacy Systems: The bank underinvested in its legacy IT systems while waiting for the replatforming project to be completed, which left it with outdated and inefficient systems.   


8️⃣ Impairment Charges: The failure of the replatforming project resulted in significant impairment charges, further contributing to the bank's capital shortfall.   


9️⃣ Missed Opportunities: The bank missed opportunities to improve its IT systems through less ambitious alternatives, such as remediation of its legacy systems.   


🔟 Culture and Decision-Making: The bank's culture and decision-making processes contributed to the IT failures, as there was a lack of challenge and a tendency to underestimate risks.   





#megaprojects #banking #itproject #failure 





http://www.FrankSchwab.de




Published in tech, DigitalTransformation, all on 04.03.2025 9:30 Uhr. 0 commentsComment here

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