UBS to Use Ethereum Platform for MiFiD II Compliance

UBS to Use Ethereum Platform for MiFiD II Compliance
December 13, 2017

In our December 6 report, we had predicted the ETHUSD pair to turn bullish in the short-term. Additionally, we had also expressed our interest to take a long position in the crypto currency, near 450 levels. As anticipated, Ether shot up to hit a high of about $653 yesterday. We expect a consolidation (or range bound movement) for the next few days due to reasons given below.

UBS has announced that it has entered into a partnership with Barclays, Credit Suisse, Thomson Reuters, KBC and other financial institutions to move forward with the MiFID II (Markets in Financial Instruments Directive) data collection initiative. MiFiD II will replace the current regulatory directive and will be launched officially on Jan 3, 2018. In this regard, UBS is planning to use Ethereum’s smart contract capability for complying with the new European financial regulation. UBS revealed that the smart contract will run on the Microsoft Azure platform.

By running a smart contract on a cloud platform, the banks will be able to meet stringent regulations on a common platform, leading to an industry-wide reconciliation. As of date, checks are performed independently.

The Massive Autonomous Distributed Reconciliation platform (Madrec), referred as Project Conrad, was in development for the past six months at UBS’ block chain research and development lab in London. The laboratory is a neutral place where developers from multiple institutions work together on six block chain projects, which will go live next year. It is the same site where UBS is currently working on the Utility Settlement Coin project.

While comparing the crypto currency market with the Salvator Mundi auction, which raised $450 million last month, Ethereum founder Vitalik Buterin said that he was impressed with the “CryptoKitties” games which now contributes to about 14% of the total Ether transactions. He also pointed out how Ethereum platform can be used for applications which are in no way related to banks or governments. The facts mentioned above sparked a rally in Ethereum. Fundamentally, until there are further updates, the token of the smart contract platform is expected to exhibit a range bound price movement.

Technically, Ethereum is now trading near the major Fibonacci resistance level of 688. The on balance volume indicator has flattened. Since the rally was driven by fundamental developments, the crypto currency is not expected to undergo a big correction. Thus, we expect Ethereum to remain range bound between 690 and 570.

ETHUSD - Technical Analysis - 13th December 2017

To benefit from the range bound movement, we are considering opening a short position near 690 levels, with a stop loss order above 770. We will book profits, when the pair trades at about 570 in the major crypto currency exchanges. Likewise, when Ethereum falls to 570 levels, we may take a long position with a stop loss order below 530, with an aim to book profit at 680 levels.

Disclaimer: The trading analysis offered here is our opinion. It is not provided as trading advice, merely an indication of our trading plan. We cannot guarantee success and we encourage traders to incorporate a strong money management strategy to limit losses. Please use this article as part of your own research before formulating strategies prior to trading. 

Ian Maguire

Ian Maguire

Ian is our resident contributor to the latest going ons in the cryptomarket, keeping up to date with the latest icos and coins

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