Newsflash: Why This Virginia Police Department’s Pension Just Invested in a $40 Million Crypto Fund

Frequent Bitcoin commentator and t-shirt salesman Anthony Pompliano told Bloomberg this morning that two Fairfax County, Virginia pension funds have gone in on Morgan Creek Digital’s new fund for cryptocurrency companies. The funds represent $1.2 billion in assets for the pensions of police and other public workers in the county.

$25 Million Fund Oversubscribed to $40 Million

The $40 million fund originally only sought $25 million. A small portion of its investment will be in liquid blue chip cryptos like Bitcoin and Ethereum. Investment in cryptocurrency companies will be the majority of the fund’s work, however. Coinbase and Bakkt have already been named as targets for investment.

Public pension funds affect almost 20 million Americans. Nearly 4,000 exist. If the experiment in Fairfax County goes well, and police have an even more comfortable retirement as a result, will others follow suit?

Bloomberg reports that “an insurance company, a university endowment and a private foundation” is also throwing in with the fund. It has already bought equity in Bakkt, the Starbucks/NYSE crypto exchange which will likely launch America’s first Bitcoin ETF (eventually).

Everything will be tokenized in the future, Morgan Creek convinced asset managers. Whatever the crypto markets have been doing, blockchain as an industry has been attracting many of the brightest minds in Silicon Valley for years. Fairfax County’s police fund chief investment officer Katherine Molnar told Forbes:

“Blockchain technology is being applied in unique and compelling ways across multiple industries. We feel it is important to be opportunistic and are excited to participate in this emerging opportunity.”

Meanwhile, Pompliano told Bloomberg:

“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.”

Coinbase and Bakkt: First Choices for Morgan Creek

To safely manage the money, Morgan Creek needs to focus on companies not directly attached to the value of Bitcoin. Companies focused on the innovation of the blockchain itself, exchanges that profit whether the price is up or down, and companies looking to use the technology for public interest projects. In addition to Bakkt, the fund is making a play in Coinbase, the king of retail crypto sales.

The outspoken Bitcoin bull Pompliano might just invest the money in Bitcoin at these discount prices if it were up to him, however. He spends a great deal of time on Twitter telling people to stop waiting around.

Pompliano recently made headlines when his podcast “Off the Chain” was banned by Apple without warning. Morgan Creek Digital’s $1 million bet against the stock market as of yet has no takers, indicating that while some people speak strongly against cryptos, most people aren’t sure enough to put their money where their mouth is.


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Author: P.H. Madore 
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Russia’s Pension Fund Eyes Blockchain to Prevent Labor Abuse

Russia’s FIU pension fund will use blockchain technology to integrate all of its information into a distributed registry and will prepare proposals to integrate all systems into a single platform, according to Izvestia. The fund believes it will cut costs for servicing and storing significant amounts of data.

LIONBIT

The technology will also provide more transparency to labor relations agreements and help protect workers from having their rights violated by negligent employers, which experts have cited as a pervasive problem.

Data to Move to Distributed Databases

The FIU currently houses employers’ data about insurance premiums and tax deductions on centralized servers. Once the distributed ledger technology is in place, all information will be stored on distributed databases.

Users will be able to record all agreements on the distributed ledger, and it will not be possible to edit the information retroactively.

Dmitry Medvedev, a government chairman, said in June that the digital labor books will consolidate labor relations work electronically from 2020.

Improved Labor Contracts

FIU said the use of smart contracts in labor relations will prevent compulsory exclusion in paper form.

Blockchain technology, the FIU noted, will enable information to be distributed concerning employment contracts between employers and certifying centers. This will protect citizens from illegal employment contracts as well as save the cost of servicing and storing large amounts of data.

Alexander Shcherbakov, a professor in the Russian Academy of Science and Technology’s Institute for Public Administration and Management’s department of labor and social policy, said labor violations are widespread among small- and medium-sized enterprises in Russia. New technology will enable such situations to be monitored.

TIP

Employers often violate employee rights as soon as employees apply for a job, through to when they are dismissed, Shcherbakov said.

More than 465,000 appeals were filed in the past year from citizens concerning labor violations, according to Rostrud.

Experts have noted that smart contracts will change the relationship between legal entities and individuals. The contracts will be more transparent and help free people whose activities are impacted by the termination of agreements.

Also read: The Russian military is building blockchain research lab to combat hacks

Digital Economy Emerges

The transition to the digital economy is increasing, the FIU noted, encompassing more services, including tourism, transportation logistics and network trade. The pension fund, for example, has included Airbnb, Saloodo, Alibaba, Amazon and others.

The FIU’s digital platform should reduce the fund’s transaction costs and provide for the proactive digitalization of the country’s economy.


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Author: Lester Coleman
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