TFU | May 6-12

Leading Off

The Senate Banking Committee is seeking details from Facebook about its reported stablecoin project; the Binance crypto exchange was hacked, causing a loss of about $40M; Nordea launched its IBM-built we.trade blockchain platform; Facebook is ramping up its Whatsapp-based mobile payments plans, centering its efforts in London; the HKMA approved four new virtual banking licenses; and SoFi launched two new ETFs.

 

In the News

Senators seek information on Facebook’s crypto project. The U.S. Senate Banking Committee sent an open letter to Facebook CEO Mark Zuckerberg asking for details about Facebook’s secret “Project Libra” cryptocurrency, focusing specifically on consumer privacy. Little is known about Libra, a stablecoin that the company seeking to back with $1B in collateral.

House of Representatives launches fintech and AI task forces. The U.S. House Committee on Financial Services is launching groups to explore the use of innovative technology and AI in financial services. Committee chairwoman Maxine Waters said “Congress must make sure that . . . regulators and the law are adapting to the changing landscape to best protect consumers, investors and small businesses.”

Binance hacked, pledges greater security.  The Chinese crypto exchange widely believed to be the world’s largest based on volume, vowed to “significantly revamp” security measures following a hack that siphoned $40 million in Bitcoin from the exchange. Binance did not support hardware-based two-factor-authentication prior to the attack, a common security feature for many exchanges.

Nordea launches blockchain-based trading platform for SMEs. The Nordic financial services group launched its we.trade blockchain-based platform built using IBM technology. We.trade is designed to make it easier for SMEs to trade with other companies in Europe, and the platform’s set of trading rules are designed to bring additional security to the process.

Facebook picks London as Whatsapp payments hub.  The social media giant chose London to be the center of its global expansion of Whatsapp-based mobile payments. London-based staff will develop a payments feature for the messaging app as part of Facebook’s plan to monetize the platform. Facebook has tested mobile payments in India but delayed wider rollout due to regulatory concerns.

Companies scramble to fill cybersecurity roles.  The Wall Street Journal reports that many companies, including IBM, are casting a wider net to find and develop cybersecurity experts, even pursuing workers without traditional four year degrees. Demand for cyber expertise greatly outpaces supply, as few colleges offer relevant programs, and firms are now spending millions to help fill the talent gap.

HKMA grants four new virtual banking licenses.  The Hong Kong Monetary Authority (HKMA) approved the virtual banking licenses for units of Ant Financial, insurer Ping An, smartphone-maker Xiaomi, and a joint venture involving Tencent. The HKMA has now awarded eight new banking licenses in 2019, which Goldman Sachs estimates could shift up to 30% of Hong Kong’s banking revenue.

Grab exploring financial services business spinoff.  The Singapore-based ride-hailing company is reportedly discussing potential investors for its financial services business as it considers spinning it off into a separate entity. The spinoff would reportedly be “more about getting in strategic investors than . . . raising funds,” and Grab would plan to retain a controlling stake in the new company.

Ant Financial and VMWare partner with QEDIT on data privacy.  The Chinese fintech giant and U.S. software firm announced a partnership with the Israeli blockchain security company that specializes in data privacy. The partnership will allow Ant and VMWare to leverage QEDIT’s technology, which helps firms confidentially transfer assets on decentralized networks.

SoFi launches two ETFs.  The online lender created two new exchange-traded funds (ETFs): the first, GIGE, trades on the Nasdaq exchange and is a bundle of “gig economy” stocks; while the second, SFYX, trades on the NYSE and is composed of 500 “public companies that show the strongest growth in top-line revenue, net income, and [estimates of future] net income growth.”

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