TFU | Aug. 12-18

Leading Off

New York regulators approved Bakkt to offer Bitcoin futures; Barclays has ended its relationship with Coinbase in the U.K.; Venmo rolled out instant bank transfers; the woman responsible for hacking Capital One may have targeted 30 other firms; TransferWise has launched a debit card in Australia and New Zealand; and Funding Circle surpassed the $10 billion mark in its combined global lending.

In the News

Bakkt approved to sell Bitcoin futures.  The unit of NYSE parent company Intercontinental Exchange Inc. was approved by New York regulators to hold custody of customers’ tokens [full text], allowing it to move forward with selling Bitcoin-paying derivatives contracts. Bakkt believes the new futures will create a “price curve . . . that traders can use to express views on [Bitcoin] as they would with other asset classes.”

Coinbase acquires Xapo’s custody business.  The crypto exchange purchased the Hong Kong-based crypto wallet and storage provider’s custody business for $55 million, and now has over $7 billion in crypto assets under management. Coinbase is said to be making an “aggressive push” to expand its custody services, which would grow its product and customer base and could result in the firm “storing over 5% of all Bitcoins in circulation.”

Northern Trust rolls out machine learning for securities lending.  Northern Trust is set to apply a machine learning-powered pricing ‘engine’ to its securities lending business to improve forecasting of rates for its lendable securities. Northern Trust predicts borrowers and lenders will both benefit from more transparency and revenue, respectively.

Barclays ends relationship with Coinbase. The British bank terminated its partnership with the crypto exchange, which had been in place since March 2018. Barclays’s support for Coinbase had allowed British customers to convert GBP to cryptocurrencies and easily withdraw funds, but global banks are demonstrating increased wariness of allowing customers to engage in crypto transactions due to regulatory and criminal concerns.

Venmo rolls out instant transfers to bank accounts.  The PayPal-owned money transfer service launched Instant Transfer, allowing customers to cash out their Venmo wallets to bank accounts in minutes. The announcement comes amid increased competition from Square’s Cash App and the large bank-backed Zelle system, and the Federal Reserve’s plans to create a real-time payments system.

Capital One hacker may have hit other firms.  U.S prosecutors allege that accused Capital One hacker Paige Thompson also broke into 30 other companies. Though Thompson claims she did not share any information, the government notes that she could “sell or disseminate it” if released, “likely causing additional hundreds of millions of dollars of damage.”

Chinese central bank nears digital currency launch.  The People’s Bank of China is “almost ready” to launch its own digital currency, according to a senior official. Both the central bank and commercial financial institutions will be able to issue the currency. The move is seen both as a way to speed up the transition away from cash and to give Chinese authorities more control over the financial system.

Global fintech investment declines sharply.  According to Accenture and CB Insights, the total value of fintech deals globally has fallen 29% “in the six months ended June 30 . . . compared with $31.2 billion in the same period of 2018.” Accenture’s analysis points to a significant halt in Chinese investment, which has offset continued strength in US and European investing.

Monzo formally launches loans.  The U.K. challenger bank launched a range of personal loans, following initial trials with 4,000 customers. Although the products include short-term loans similar to those typically offered by payday lenders, Monzo insists it is not trying to appeal to customers with low credit scores.

TransferWise’s debit card launches in Australia and New Zealand.  Following a June launch in the United States, Transferwise’s debit card is now available in Australia and New Zealand. The card allows users to spend more than 40 currencies at real exchange rates. TransferWise says its cards have been used for 15 million transactions since rolling out in the U.K. last year.

Funding Circle reaches $10B lending milestone.  The peer-to-peer lending marketplace, recently reached a cumulative lending milestone of over $10 billion globally. The $10 billion milestone is more than twice what the company reported only a year and a half ago, due largely to an active loan portfolio in the U.S market, which has expanded to over $1 billion.

Institutional investors warm to Bitcoin. The nascent world of crypto custody saw a spike this week, with Coinbase acquiring rival Xapo’s institutional business and Bakkt receiving approval to sell bitcoin futures, suggesting growing interest in crypto from institutional investors. While total crypto custody remains small, a May Fidelity survey found that 22% of institutional investors already hold crypto.

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