First US Public Pensions Invest in $40M Cryptocurrency Fund

pension fund

A brace of public pension funds is backing a $40 million venture-capital fund established by Morgan Creek Digital which focuses on cryptocurrency investments. This development marks the first ever involvement of U.S. pension funds in the virtual currency investment space.

Pension Funds Anchor $40M Cryptocurrency Investment

Morgan Creek Digital announced on Tuesday (February 12, 2019) the launch of a $40 million cryptocurrency venture fund anchored by two public pension funds.

According to the announcement, the Fairfax County Employee’s and Fairfax County Police Pension Plans are the two largest investors in the fund.

Both pensions manage an asset portfolio worth about $1.2 billion. They are also the first ever public retirement fund to invest in cryptocurrencies, a notable milestone for the burgeoning industry.

Speaking to Bloomberg, Morgan Creek Digital founder, Anthony Pompliano revealed that the fund would invest in blockchain startups and cryptocurrencies. Already, the new fund has investments in notable companies like Bakkt and Coinbase.

Currently, there is no public disclosure of the investment terms, but Pompliano did indicate that the fund is a special purpose vehicle (SPV). Also, reports suggest that apart from equity investments in crypto-based companies, the fund will retain a portion of its value in cryptocurrencies like bitcoin 00.

Institutions ‘Already Here’

Many crypto critics usually never fail to bring up the absence of public pension funds in the virtual currency investment arena. Back in January, JPMorgan analysts repeated the same rhetoric as part of their “Bitcoin is only valuable in a dystopia” narrative.

The significance of these two public pension funds taking the plunge can potentially hold profound ramifications for the industry as a whole. Usually, critics attribute the reticence of pension funds in investing in cryptocurrency to issues related to manipulation, volatility, lack of security, among others.

In late 2018, the Morgan Creek Digital partner called on public pension funds to pivot towards the cryptocurrency and blockchain technology market. According to Pompliano, cryptos could serve as a viable hedge for such funds against what he called an “impending US pension crisis.”

For Pompliano, the news is a massive win for cryptocurrency, saying “the institutions aren’t coming. They’re already here.”

During the interview with Bloomberg, the Morgan Creek Digital founder also said:

There’s a belief in the institutional world that if the industry will be around for a long time, it will be very valuable. The smart money is not distracted by price but looks at the long-term trends, and believes they’re betting on innovation as a great way to deliver risk-mitigated returns.

Do you think this development will vastly enhance the pedigree of cryptocurrencies in the eyes of other reticent mainstream investors? Let us know your thoughts in the comments below.

Image courtesy of Twitter (@APompliano), Shutterstock

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Source: Blockchain

Banks in India: Don’t Touch Bitcoin Or Your Accounts Will Be Closed

India Bank

Reports on social media indicate that banks in India are threatening customers that deal in Bitcoin and other cryptocurrencies with the closure of their accounts. This move is the latest salvo from the banking industry in a country where cryptos seem all but banned.

Upping the Ante

On Friday (Jan. 11, 2019), Morgan Creek founder and partner, Anthony Pompliano published a tweet culled from sources in India about the latest move by banks in India to prevent Bitcoin trading. According to the tweet, banks sent out warnings telling their customers not to deal in cryptos or risk the closure of their account.

The notice even declared that banks need not send any further correspondence before closing customer accounts. Pomp’s tweet came directly from another Twitter user; Indian CryptoGirl, who commented on the situation saying:

Indian Banks now forcefully taking permission from us to ‘reserve right to close our account without further intimation’ if we deal in #cryptocurrency transactions Ability to decide what to do with our own money is the very reason we need to invest, #BUIDL, & believe in #bitcoin.

There are also reports of similar messages on ATM screens belonging to Kotak Mahindra Bank. According to Indian CryptoGirl, the bank has even made good on its threat. In an update of the situation posted on Saturday (Jan. 12, 2019), the bank issued a notice of account closure for doing transactions involving cryptocurrencies.

Bitcoin all but Banned

Unsurprisingly, the reaction on social media has been one of outrage with many saying Bitcoin is all but banned in India. In 2018, the Reserve Bank of India (RBI); the country’s apex bank, prohibited banks from facilitating cryptocurrency transactions.

India's Supreme Court to Issue Final Ruling on RBI Cryptocurrency Ban in September

A coalition of stakeholders challenged the decision, and the matter remains unresolved. The government failed to respond to a Supreme Court deadline back in October 2018. Reports are indicating a plan to establish regulatory clarity for the market.

However, before such regulations emerge, the legacy banking system in India continues to stifle avenues for cryptocurrency trading. With the government failing to provide a definite stance on cryptos, the RBI ban remains the de facto regulation in the country.

What do you think about this latest move by Indian banks; legitimate concerns or fear of being usurped by decentralized currency systems? Let us know your thoughts in the comments below.

Image courtesy of Twitter (@APompliano and @DesiCryptoHodlr), Shutterstock

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Source: Blockchain