TFU | Feb. 25 – Mar. 3

Leading Off

The Fed is considering adding a bitcoin crash to stress test scenarios; British banks published outage details; Facebook is testing its own cryptocurrency; the European Commission weighs a regulatory push for the TIPS payment system; and JP Morgan is testing a new ethereum-based platform that could mitigate privacy concerns.

 

In the News

Fed may add bitcoin crash to stress test scenarios.  The Federal Reserve announced changes to a policy statement on stress testing, noting that the collapse of the bitcoin market may be considered a “salient market risk.” The amendment follows Randal Quarles’s recent comment that “developments like the emergence of crypto-assets may challenge any framework” for assessing financial vulnerability.

FCA tells British banks to publish outage details. Britain’s Financial Conduct Authority (FCA) has urged U.K. banks, under a voluntary scheme, to publish the number of security and operational incidents that occured in 2018. The data, which allows customers to compare banks’ service quality, reveals that major banks typically suffer over an outage a month.

Facebook leads new wave of mainstream digital currency offerings.  Some of the world’s largest internet messaging companies are planning to introduce mainstream consumers to digital currencies by offering their own tokens, allowing members to send money across borders. Facebook, whose crypto project is well underway, is already in talks with crypto exchanges about selling its coins to consumers.

JPMorgan eyes $250B credit card loans opportunity.  The multinational U.S. bank revealed new credit card loans services, through which it hopes to capture some of the $250 billion that its customers borrow from other firms. The two new features, My Chase Plan and My Chase Loans, will allow customers to pay in installments for purchases over $500 and borrow against unused credit lines.

Chinese tourists spur Japan to adopt digital payments.  Cash has reigned supreme in Japan, but a flood of Japanese tourists expecting to pay with smartphones is beginning to change that. Japanese firms like Line are partnering with Chinese counterparts like Tencent to capture a larger piece of the $14 billion dollars Chinese tourists spend in Japan each year.

JP Morgan tests ethereum privacy tech. JPM’s blockchain team is testing a zero-knowledge privacy solution that aims to allow encryption of blockchain data more efficiently and at a lower cost. Zero-knowledge proofs allow statements about a set of data to be proven true without revealing the data itself—a potential solution to privacy issues that have made regulated companies wary of shared digital ledgers.

European Commission (EC) weighs regulatory push for TIPS instant payments.  Facing limited adoption since its launch last year, the EC is considering a “regulatory push” to encourage use of the Target Instant Payments Settlements (TIPS) service. TIPS was, in part, designed to help banks take on the growing popularity of digital, contactless payment services offered by large technology firms.

Figure expands into banking.  The blockchain startup, run by former SoFi CEO Mike Cagney, plans to announce $65 million in new funding to enable expansion into traditional banking services. Cagney plans to grow Figure, which primarily uses blockchain to provide home equity loans in short order, much like he did SoFi: launching a product with a competitive edge, then building services around its customer base.

HSBC forges partnership with commercial lending platform NepFin.  HSBC is teaming up with commercial lending platform Neptune Financial (NepFin) to target middle-market businesses in the U.S. with revenues between $10m and $100m requiring capital. NepFin’s platform uses machine learning, and claims to more efficiently identify demand for credit at a lower cost than traditional lenders.

ACI Worldwide acquires Speedpay for $750M. ACI Worldwide acquired Speedpay, Western Union’s U.S. bill pay business, for $750m in an “all-cash transaction.” ACI plans to merge its own UP Bill Pay platform with Speedpay, creating a “unified solution capable of supporting billions of transactions” that will serve more than 4,000 business customers across the U.S.

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