U.S. lawmakers voiced their concerns regarding Facebook’s Libra rollout; Australian digital bank 86 400 was granted a banking license; The FCA announced its partnership with the Alan Turing Institute to explore the use of AI in the financial sector; N26 raised an additional $170M; and Jamie Dimon said he does not expect Libra to have a short-term impact on JP Morgan.
In the News
Facebook faces two days of congressional hearings. In Senate and House hearings on Tuesday and Wednesday, lawmakers told Facebook that its Libra cryptocurrency would threaten sovereign currencies, potentially destabilizing world governments. While questioning Facebook’s David Marcus, head of Calibra, the lawmakers also noted that Facebook’s reputation would impede Libra’s rollout.
FCA to explore explainability of AI. The U.K. financial regulator has announced a partnership to explore the transparency and explainability of AI in the financial sector with research body The Alan Turing Institute. The project will address the key challenge of explaining AI decisions to consumers denied products or services, and hopes to move the debate on from discussion of high-level principles.
IMF on digital money’s challenge to cash. In its first Fintech Notes, the International Monetary Fund (IMF) considers whether cash could be replaced by digital money, and what would be the related challenges for banks and regulators. It also proposes a public-private alternative to central bank digital currencies, in which central banks provide settlement services and access to e-money reserves.
WEF comments on blockchain hype versus value. An industry survey by the World Economic Forum (WEF) and Accenture Research found that more than half of respondents had no confidence of a return on investment from blockchain initiatives. The research has been used to inform a WEF report [link] on how to evaluate the value of blockchain technology and establish if there is a business case for it use.
N26 raises Series D to $470M. Challenger bank N26 has raised its Series D funding round up to $470 million, a $170 million extension of January’s $300 million raise. N26 plans to use the additional funding to support its US expansion, roll out additional features, and invest in organizational and structural growth. With the funding extension, N26 now is valued at $3.5 billion.
PayPal to launch Xoom across Europe. PayPal plans to launch the international money transfer service it acquired in 2015 in 32 European markets. The European rollout of Xoom, already available in the US and Canada, is “expected to increase PayPal’s share of the $689 billion remittance market.”
86 400 granted bank license. The Australian app-only bank cleared a major regulatory hurdle, receiving a licence to operate as an authorised deposit-taking institution (ADI) from the Australian Prudential Regulation Authority, paving the way for a live launch. The bank is chaired by Anthony Thomson, a UK financial entrepreneur and founder of Metro Bank and Atom.
Jamie Dimon plays down Libra threat. Speaking in an analysts call, Jamie Dimon said “to put it in perspective, we’ve been talking about blockchain for 7 years and very little has happened,” and that “we’re going to be talking about Libra three years from now. I wouldn’t spend too much time on it.” Of course, JPM proposed its own cryptocurrency, JPM Coin, in February that could transform the global payments landscape.