This Week in Fintech (10/8)

Hello Fintech Friends,

Here’s a look ahead at our month in fintech (it’s busy) -

Please enjoy another week of fintech and banking news below.


💬 Quote of the Week

“Stablecoins — privately-issued cryptocurrencies that are pegged to a stable asset such as the U.S. dollar — have an important role to play in the next generation of democratized financial services”

  • Katie Haun, Tomicah Tillemann, and James Rathmell, a16z (Source)


📖 Read of the Week

Does fintech really exist?

Fintech increasingly does not seem to be a tech product category, but rather an integral feature of online products and services. Payments are a core component of everything from e-commerce to healthcare. Lending is an integrated part of the home and auto acquisition experience. Insurance is baked into products from surgical procedures to flights. But these consumer products and services are not in and of themselves financial - they just have a financial layer the same way they may have a software layer or a web layer.

This is partly the embedded finance thesis elucidated by Angela Strange (link) or Matt Harris (link). But, if you’ll humor me, rather than every company becoming a fintech company, I think the likely end state is that ‘fintech’ as a category won’t exist. Fintech is becoming overbroad to the point where it is no longer meaningful. Rather, the code that determines how and where money moves and rests will be a feature of every product, not a product category unto itself.

📊 Stat of the Week

(Source)


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🏦 Financial Services & Banking

🚀 Product Launches

Barclaycard rolled out a multicurrency B2B payment service.

Portugal’s Crédito Agrícola launched a carbon-tracking tool.

US Bank launched its own crypto custody service.

📰 Other News

Bank of America’s Life Plan tool grew to over 5 million users in its first year.

JPMorgan Chase's digital bank in the UK will be built on 10x Banking.

DBS Bank’s brokerage arm received approval from the Monetary Authority of Singapore for a digital token payment service. The Monetary Authority of Singapore is also prepping a data sharing platform to fight money laundering.

Singaporean bank UOB will invest $500 million in its own digital innovation initiatives.

Interac bought exclusive rights to Canada’s SecureKey ID system and is building a decentralized identity banking credential service for the country.

French bank Société Générale applied for a $20 million loan on the MakerDAO protocol.

The Saudi Arabia Tourism Development Fund partnered with Temenos on a digital lending service. Laos is working with a Japanese fintech startup on its own central bank digital currency and Hong Kong is exploring its own CBDC.

Microsoft rolled out its financial services-specific cloud.

Wells Fargo predicts over 100,000 banking jobs will disappear to technology in the next 5 years. NatWest plead guilty to money laundering charges.


💻 Fintech

🚀 Product Launches

Investing exchange Public launched crypto trading.

Dastgyr launched a buy-now-pay-later product in Afghanistan.

Azimo launched an instant remittance service to Turkey.

📰 Other News

Target is partnering up with Affirm and Sezzle to enable buy-now-pay-later payments. Affirm, meanwhile, is launching crypto and debit products in its bid to create a ‘superapp.’ Australian buy-now-pay-later lender Zip is building an integration into Microsoft’s Edge browser. Visa is also partnering with ANZ bank on BNPL in Australia. US card issuer Upgrade is adding BNPL loans to its cards.

Banks are pushing back on the fees that Apple Pay layers onto credit card transactions, trying to get Visa to change the way that fees are appended.

Dutch transaction monitoring startup Sentinels is partnering with YouWorld to fight financial crime.

After ending its relationship with Ripple, Moneygram is partnering with its competitor Stellar on cash-to-crypto transfers.

Bitpanda and Fabrick combined to build a white-label digital asset investing service (similar to Zero Hash) for Italian banks.

Indian revenue-based financing startup GetVantage introduced an initiative to help Indian businesses recover from pandemic stress.

Vast is building crypto banking as a service. Lending protocol Compound mistakenly credited $90 million to users.

CB Insights released their top 250 fintech companies of 2021. Online checkout startup Bolt moved to a 4-day work week.

UK startups are democratizing litigation funding.

UK neobank Monzo is abandoning its plan to get a US banking license. Google is abandoning its plan to provide Plex bank accounts to users. Zillow is embroiled in a scandal that has to do with Tiktok and housing price manipulation. Wise CEO Kristo Käärmann was fined £350,000 for defaulting on his tax bill.


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🌎 Latin America

  • Merama raised the largest-ever Series B round in Latin America. The $225 million equity round will help the Mexico City-based company continue to acquire and build direct-to-consumer brands throughout the region.

  • Konfio raised a $110 million Series E extension, bringing its valuation to $1.3 billion and minting Mexico’s fourth unicorn.

  • Accendo, a Mexican bank, lost its license due to compliance issues around capital and liquidity requirements. Accendo provided banking-as-a-service to various fintechs in Mexico.

 🇪🇺 Europe

  • Reports of fraudsters using Monzo accounts to steal millions from Barclays accounts using PISP raising fresh questions about security at Monzo.

  • Santander is closing its Wise rival PagoFX, another notch against incumbent banks copying a fintech.

  • Starling is launching its BaaS product across Europe, continuing the trend of B2C fintechs launching B2B products.

🌏 Asia

  • CoinSwitch Kuber, an Indian crypto exchange, raised $260 million at a $1.9 billion valuation led by a16z.

  • BharatPe launched PostPe, a BNPL product, for one-click purchases at stores with a credit limit up to INR 10 lacs ($13,500).

  • Singapore's central bank, MAS, will launch COSMIC - a centralised data sharing platform to curb money laundering and terror financing.

  • Hong Kong's central bank released a technical overview of launching an e-HKD, its central bank digital currency.


📜 Policy

In collaboration with Ben White.

  • The US FDIC is investigating deposit insurance for stablecoins.

  • Rep Patrick McHenry (R-NC) introduced a bill to establish a safe harbor for digital asset projects. 

  • The Biden Administration is said to be considering options for regulating stablecoins like bank deposits. 

  • OCC Comptroller Michael Hsu compared crypto and DeFi to toxic credit instruments that led up to the ‘08 financial crisis. 

  • The Federal Reserve is set to launch its review into the benefits and risks of Central Bank Digital Currency. 

  • SEC Chair Gary Gensler testified that the U.S. won’t outright ban cryptocurrency. 

  • Circle revealed as part of its public listing disclosures that it had been subpoenaed in July by the SEC. 

  • Lawmakers on the Financial Technology Task Force are coming together across the aisle to curb aggregator data-sharing.

  • Sen. Elizabeth Warren (D-MA) continued her barrage against the Federal Reserve, accusing it of having a “culture of corruption.”

  • The US Department of Justice launched a national cryptocurrency enforcement team.

  • The US Department of Education overhauled its Student Loan Forgiveness Program. 

  • The State of Ohio passed legislation standing up a regulatory sandbox for fintech companies.

  • The EU is reportedly preparing an antitrust suit against Apple over its NFC chips.

  • The Bank of International Settlements GM Agustin Carstens warned of stablecoin risk to financial stability in a two-day BIS conference on “Regulating Big Tech.”

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