The U.S. Treasury Secretary said U.S. regulators are likely to issue new crypto regulations; despite misgivings about Facebook, Congress appears unlikely to block its plans to go live with Libra; the IRS is warning U.S. taxpayers to review and potential revise their tax returns to account for gains from crypto transactions; Apple’s new credit card is expected to launch in August; Robinhood raised over $300 million at a $7.6B valuation; and Facebook is readying its launch of WhatsApp Pay in India.
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U.S. regulators are likely to issue new rules on cryptos. Treasury Secretary Steven Mnuchin said U.S. regulators are likely to issue new rules on cryptocurrencies, to ensure that they do not negatively impact the financial system. Secretary Mnuchin repeated concerns that Bitcoin is being used for criminal activity and urged regulators around the world to work together on the issue.
Congress is unlikely to block Libra. Republican and Democrat lawmakers appear unlikely to approve legislation that would block large technology firms from “establishing and operating a digital asset that is intended to be used as a medium of exchange [or] store of value,” such as Facebook’s Libra. While “nearly all lawmakers . . . were critical of Facebook” during recent hearings, Congress appears content to take a wait-and-see approach for now.
IRS warns US crypto owners to pay their taxes. The Internal Revenue Service (IRS) is sending letters to U.S. taxpayers advising them to pay any taxes owed as a result of cryptocurrency transactions in which they participated. “Taxpayers should take these letters very seriously by reviewing their tax filings and [amending them] when appropriate,” said IRS Commissioner Chuck Rettig.
U.S. House considers new credit report legislation. Lawmakers in the House Financial Services Committee are considering whether to expand the scope of data included in credit reports to help consumers, particularly in lower-income households, build a credit history. However, critics warn that the inclusion of new and alternative sources of data could potentially damage consumer credit profiles.
Apple Card expected to launch in August. The credit card, a collaboration between the tech giant and Goldman Sachs, reportedly will go live in the next several weeks. The Apple Card offers users cash-back rewards of “1% on purchases made with the physical card, 2% for Apple Pay transactions and 3% for purchases of Apple products or services.”
Robinhood deals with security issue… The commission-free stock and cryptocurrency trading app revealed that user passwords and sensitive data were stored as plain text, rather than an encrypted format, in its internal systems, and urged customers to change their passwords as soon as possible. Robinhood has said it has now resolved the issue and has not found any evidence of a data breach or improper access.
…and nears an $8B valuation. Robinhood also announced that it raised $323 million in Series E funding, valuing the company at a $7.6 billion valuation. The firm said the new cash would go towards “pursuing our mission of democratizing finance for all.”
MoneyLion inches closer to unicorn status. The New York-based startup, which provides customers with financial advice and access to loans and other services, completed a $100 million Series C funding round that gave it a post-money valuation of nearly $1 billion. The five-year-old company has over five million members and generated over $12 million in cashback rewards in 2018.
Facebook prepares to launch WhatsApp Pay in India. WhatsApp is planning to launch its P2P payments system later this year, starting in India before expanding to all of its 1.5 billion users across the globe. As part of a global push to improve the time and user experience for cash transfers across its services, Facebook has been testing the WhatsApp Pay system in India for the past year, where the app has 400 million users.
Big banks are looking into quantum computing. Banks like JPMorgan Chase are beginning to explore the nascent technology as a way to lower costs and cut processing times for complex financial models. IBM and JPMorgan recently ran a simplified option valuation using one IBM quantum computing technology.