Senator Warren sent a letter to several U.S. regulators seeking information on whether algorithmic lending produces discriminatory outcomes; Monzo is planning an “imminent” U.S. launch; Facebook landed commitments from large banks and tech companies in support of its new cryptocurrency; the Bank of England found widespread weaknesses in stress tests of U.K. challenger banks; Circle announced it is discontinuing its payment app; and Revolut launched in Australia.
In the News
Sen. Warren calls for information on algorithmic lending. Senator Elizabeth Warren (D-MA) sent a letter [full text] to several U.S. federal regulators concerning recent findings that “algorithmic models . . . can result in discriminatory lending outcomes.” Sen. Warren is seeking additional information on lending algorithms and how regulators can ensure they produce fair, nondiscriminatory outcomes.
Nevada passes blockchain-friendly bills. In an effort to encourage blockchain investment and entrepreneurship in the state, Nevada’s governor signed a series of bills creating a regulatory sandbox, defining virtual currencies as intangible personal property (exempting them from personal property taxation), and authorizing businesses to store corporate records on a blockchain.
Monzo plans “imminent” U.S. launch. The London-based challenger bank is reportedly planning to launch U.S. operations soon, joining fellow European digital banking firms like Revolut and N26 in making a play for part of the $7 trillion U.S. financial services market. Since launching in 2015, Monzo has gained over two million customers, pulling many from traditional high street banks.
BoE finds challenger banks cut corners. The U.K.’s central bank found widespread weaknesses in stress tests on 20 U.K. challenger banks, with an “inability to explain assumptions” and an “aggressive” focus on growth despite riskier loans. In a letter to chief executives, the Bank of England (BoE) said most firms were “overly optimistic about the potential impact of a stress scenario on their business”.
Facebook signs up big names to back its GlobalCoin. The social media giant received $10 million commitments from a variety of large banks and tech firms, including Mastercard, Visa, Uber, and PayPal, as it prepares to officially unveil its cryptocurrency this week. The firms will join GlobalCoin’s governing consortium, the Libra Association, and each will be given a node on the new network.
Uber is expanding its financial offerings. The ride-sharing and mobile services firm reportedly is hiring “several dozen engineers and product managers” to “accelerate the creation of financial products” in its ecosystem. The firm is building a new “fintech outpost” in New York, which will focus both on building “payment experiences” for riders and helping drivers manage their earnings.
Circle to close payments app. The U.S. cryptocurrency exchange announced that it will discontinue its Circle Pay service in September. Circle set up the app five years ago to integrate fiat and cryptocurrency payments. The company will now focus instead on a U.S. dollar-pegged stable coin, “USD Coin”, being developed in a consortium with fellow cryptocurrency exchange Coinbase.
Revolut launches in Australia. The British challenger bank launched a public beta in Australia, with over 20,000 people currently on the waiting list. Revolut’s Australian operations will be based in Melbourne and the firm plans to hire 30 staff to support a gradual rollout of the app. Revolut “has set its sights on global expansion, recently launching services in Russia . . . Singapore and Japan.”
Binance prepares for U.S. launch. Ahead of launching a U.S.-based service, the world’s largest crypto exchange is formalizing its services and restricting U.S. passport holders from signing up to its global service. The move towards compliance is a strict departure from Binance’s prior ethos, seen as embodying crypto’s ‘Wild West’ culture, allowing anyone to trade myriad tokens without KYC.
On the stablecoin explosion. The Wall Street Journal explores the growing number of stablecoins (tokens pegged to stable assets like the U.S. Dollar) and considers why they have grown in popularity. The WSJ highlights how stablecoin proponents see uses for the tokens beyond trading, while also noting that acceptance will need to increase to make them truly valuable.
Brex raises $100M at $2.6B valuation. The San Francisco-based firm, which offers corporate credit cards designed for startups, completed a previously reported funding round of $100 million, led by Kleiner Perkins Digital Growth Fund. The two-year-old firm is now valued at $2.6 billion. Brex plans to use the funding to expand its customer base and product offerings.