TFU | April 1-7

Leading Off

The SEC issued new guidance on digital assets, and also issued a no-action letter regarding digital token use; BNY Mellon and BlackRock partnered on a data sharing agreement; the FSB published a directory of global crypto-asset regulators; Affirm raised $300M in Series F funding; and JP Morgan CEO Jamie Dimon highlighted developments in AI, fintech, and China in his annual letter to shareholders.  

 

In the News

SEC publishes digital assets guidance…  The U.S. Securities and Exchange Commission (SEC) published its new framework to analyze whether and how digital assets should be regulated under securities law. The guidance was anticipated after one of the regulator’s directors, William Hinman, revealed in November that “plain English” guidance was forthcoming to help guide token issuers.

…and issues a digital token “no action” letter.  The SEC also issued a “no-action” letter to business travel firm TurnKey Jet, Inc., agreeing that the firm may issue digital tokens under certain conditions [full text], including that the tokens be non-transferable, “immediately useful,” remain at a fixed price of $1, and only used for air charter services.

BNY Mellon and BlackRock team up to share data.  The bank and asset manager will integrate their customer data pools in hopes of jump-starting growth. BNY Mellon plans to deliver real-time information to the roughly 50 clients it shares with BlackRock Aladdin’s money manager system. The alliance is the first partnership to capitalize on the bank’s “open architecture” strategy.

One third of retail banks are planning digital brands.  The results of an Economist Intelligence survey of global bank executives indicated that 33% of retail banks are looking to create their own digital banks to address competition from challenger banks and other fintech startups. The report also cites the importance of AI, machine learning, and Open Banking to global banks’ strategic thinking.

Barclays and RBS trial blockchain for property transactions.  The two banks partnered with enterprise blockchain firm R3 to simulate property transactions on a DLT system, and found the effort reduced the real estate buying and selling process from months to weeks. R3’s CEO noted that the trial not only proved DLT’s benefits, but also showed appetite in the market to evaluate it further.

FSB publishes directory of crypto-assets regulators.  The Financial Stability Board (FSB) published a directory of crypto-assets regulators and other authorities in FSB jurisdictions dealing with crypto-asset issues. The directory will be delivered to the G20 Finance Ministers and Central Bank Governors meeting on April 11-12, 2019.

Affirm raises $300M for a $2.9B valuation.  The San Francisco-based consumer credit startup raised $300 million in Series F funding at a post-money valuation of $2.9 billion. Affirm was set up by PayPal co-founder Max Levchin and provides micro-loans to consumers at the point of sale via a mobile app, using an algorithm to instantly determine credit-worthiness.

Onfido raises $50M for AI-powered identity verification.  The global identity verification startup raised $50 million in new funding, led by Softbank Investment and Salesforce Ventures. Onfido claims that its AI-driven platform can automate background checks in 192 countries and complies with relevant Know Your Customer and Anti-Money Laundering regulations.

Tandem starts fundraising talks.  The British challenger bank, which currently has ~600,000 customers, started discussions with investors to support a planned overseas expansion. Tandem focuses on savings and lending through credit cards, as opposed to current accounts offered by peers like Monzo.

Does the RTP monopoly put the financial system at risk?  In an American Banker op-ed, Thomas M. Hoenig and Bruce Summers argue that The Clearing House’s Real Time Payments (RTP) network is “a de facto monopoly, resulting in a less competitive and less efficient market for immediate payments.”

 

Dimon highlights China, fintech, AI in annual letter to shareholders.  In his annual letter to shareholders, JPMorgan CEO Jamie Dimon said he’s “both impressed and a little worried” about China’s progress in fintech and AI. Citing the disruptive potential of new technologies and new firms, Dimon said the bank “cannot rest on [its] laurels.”

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