TFU | Mar. 11-17

Leading Off

The SEC announced it will hold a public forum on DLT and digital assets; IBM is working with CULedger on a digital identity blockchain system and signed a deal with the French commercial court; PayPal now offers instantaneous money transfers to U.S. banks; the Basel Committee has warned banks about their exposure to crypto; the U.K. FCA is considering eliminating investment platform exit fees; and micro-investing startup Stash raised $65 million in new funding and rolled out new banking services in partnership with Green Dot Bank.

 

In the News

SEC to host forum on DLT and digital assets.  The Securities and Exchange Commission (SEC) will hold a public forum on distributed ledger technology (DLT) and digital assets. The event will be the second hosted by the agency, in connection with its “FinHub” initiative, and will include panelists from industry and academia. The forum will be held on May 31 at the SEC’s Washington D.C. headquarters.

Fintechs moving to improve construction lending. The American Banker reports on a number of fintech firms building new platforms aimed at rebuilding the construction loan market, which has never recovered to pre-Great Recession levels. Firms are working to support banks by building services that allow for better credit risk analysis and error reduction.

Natwest trials fingerprint debit cards for payments.  The U.K. retail bank, part of RBS Group, will run a pilot in April to allow customers to complete purchases over £30 using their fingerprint rather than the usual four-digit pin. Customers will be able to place their finger on a corner of the card to authorize a contactless purchase using existing payment terminals. The pilot is the first of its kind in the U.K.

Riot Blockchain to launch regulated U.S. crypto exchange. The former biotech startup, which pivoted to blockchain during Bitcoin’s rapid rise in 2017, plans to launch a crypto exchange called RiotX that will offer banking, trading, and digital wallet service, according to an SEC filing. Riot was previously subpoenaed by the SEC in 2018 after its sudden shift in business model and resulting stock price gains.

IBM to work with credit unions on blockchain implementation…  The technology services giant will work with CULedger, a consortium of credit unions focused on blockchain development, which has developed a digital identity blockchain to help authenticate financial transactions. MyCUID’s use cases include smart contracts for lending, cross-border payments, wire transfers, and loyalty rewards.

…and scores nationwide blockchain deal in France. IBM also completed a deal with France’s commercial courts to implement a Hyperledger-based system that court clerks will use to record changes in companies’ legal status and “share regulatory information about the difficulties companies experience.”

PayPal enables instant transfer to U.S. bank accounts.  PayPal is rolling out Instant Transfer, which will allow U.S. consumers to instantly move money from their online wallet to their bank accounts. The new feature is a result of PayPal’s partnership with JPMorgan, which gives PayPal access to the Clearing House’s real time payments network. The service will next be rolled out for business customers.

Basel Committee cautions banks about exposure to crypto.  According to the international committee of central bankers, exposure to crypto-focused exchanges and financial products could “raise financial stability concerns and increase risks faced by banks.” The Committee continued on to list potential risks, including those to liquidity, credit, bank operations, and money laundering.

FCA considering eliminating investment platform exit fees.  A Financial Conduct Authority (FCA) report on potential measures to increase competition in the investment platforms market proposed removing exit fees to help customers move between providers. A 2018 FCA study identified exit fees as a key obstacle for investors wanting to switch to platforms better suited to their needs.

PayPal to invest $750M in MercadoLibre. PayPal has agreed to invest $750 million through common stock purchase in MercadoLibre, an Argentinian e-commerce firm, as part of a $1.85 billion equity offering. The offering is designed to “help the Argentinian e-commerce firm cement its position as the Amazon of Latin America.”

Stash raises $65M, rolls out mobile banking offering. The micro-investment app raised $65 million in Series E funding and announced that users can now open mobile-based bank accounts from Green Dot Bank. In addition, Stash users can now participate in a new rewards program, which gives value back on purchases in the form of fractional shares in the companies they spend with.

 

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