The NYDFS wants state legislators to prevent online lenders from imposing out-of-state interest rates on in-state borrowers; TransferWise announced “borderless” accounts, allowing users to open multiple accounts in different currencies; Canada’s central bank concluded that DLT technology is not ready to “underpin” the financial system; Singapore’s financial regulator helped launch a new network to connect and foster Southeast Asian fintech innovators; and the R3 consortium raised $107 million.
This Week’s News
Vullo wants New York to close rate exportation “loophole.” Superintendent Maria Vullo of the New York State Department of Financial Service urged state legislators to “clarify the statutory definition of ‘making loans,’” claiming that online lenders are evading New York law by using out-of-state partner banks to impose higher interest rates on New York borrowers.
Bank of Canada says DLT not ready for interbank payments. Following its year-long “Cad-coin” experiment (conducted in conjunction with the R3 consortium), Canada’s central bank determined that there are still “many hurdles to overcome” before DLT could reliably be deployed as the technology “underpin[ning] an entire wholesale payment system.”
R3 raises $107M. The R3 blockchain consortium raised $107 million from nearly half of its constituent members, including large banks such as ING, Barclays, and UBS. It was the “largest funding round in the history of [DLT].” According to R3, this raise was “just the first two of three tranches in its Series A round, with the third [coming] later this year.”
FSB releases report on “fintech credit markets.” The Financial Stability Board (FSB) and Committee on the Global Financial System produced a paper on the risks and benefits presented by innovative credit offerings and markets. The report [full text] is the FSB’s latest in a series of studies aimed at “assessing the impact [of] fintech developments on the global financial system.”
TransferWise launches “borderless” accounts. Customers of the London-based money transfer service can now set up multiple accounts in different currencies to transfer money at the firm’s low exchange rates. TransferWise says the service is “just like having a local bank account” in different countries, and will also increase the ease and reduce the cost of making payments.
Wealthfront wants to help you plan for college. The robo-advisor announced that it will roll out a college savings tool as part of Path, the financial planning app it launched earlier this year. Path, which helps users connect their financial accounts to get a “holistic view” of their finances, will now assist parents with “projecting the future cost of college” and creating a savings plan.
MAS and IFC launch SE Asia fintech network. The Monetary Authority of Singapore (MAS) partnered with the International Finance Corporation, a member of the World Bank Group, to launch the ASEAN Financial Innovation Network. The IFC and MAS intend to use the network to “encourage fintech innovation…local compliance and cross-border compatibility in the region.”
Kik to debut digital currency. The messaging app unveiled plans for a new digital currency called “Kin,” which will be based on the Ethereum platform. Kik also plans to use the currency to make an “initial coin offering,” allowing users to buy Kin to pay for services on Kik. CEO Ted Livingston predicted that “Kik will be the largest . . . base of cryptocurrency users in the world.”
Regtech startup Merlon Intelligence launches. Merlon’s platform relies on AI and machine learning to assist bank compliance analysts by ranking and filtering AML alerts. The firm was founded by machine learning entrepreneur Braford Cross and former Promontory COO Konrad Alt. Merlon so far has raised $7.65 million from VCs including Nyca and Fenway Summer.
Can digital payments improve financial inclusion? At this week’s Payments Canada Summit, the Bill & Melinda Gates Foundation suggested that an open-loop payments systems could help connect the world’s two billion unbanked people to the financial system. The Gates Foundation’s Level One Project is helping poor countries re-engineer their national retail payment systems.
Have a great weekend!
Joe Oehmke and Austin Tuell