The Financial Integrity Network urged Congress to apply BSA standards to crypto firms; SEC Chairman Jay Clayton affirmed his stance that crypto products are subject to existing securities laws; China’s proposed cryptocurrency is taking shape ahead of an expected go-live later this year; Stripe launched a lending product for online businesses; Uber is exploring offering loans to its drivers; the Hong Kong Stock Exchange suffered cyber attacks; and an Accenture report found that U.K. digital banks are expected to triple their customer base over the next year, but likely will remain unprofitable.
In the News
FIN urges Congress to regulate crypto firms under BSA. Advisory firm The Financial Integrity Network (FIN) called on Congress to apply Bank Secrecy Act (BSA) regulations to crypto firms, arguing that BSA standards should apply to such firms given the services they provide. FIN’s testimony [full text] noted that compliance with the BSA would likely require some firms to modify their operating practices.
Clayton comments on securities rules’ applicability to crypto. In two interviews with Bloomberg, SEC Chairman Jay Clayton affirmed his stance that crypto products are subject to existing securities laws, which will not change to accommodate them. “I am not looking to expand the securities laws to capture things,’’ said Clayton, “but I am not in the head-sticking-in-the-sand business either.’’
China’s digital currency will be similar to Libra. The cryptocurrency proposed by the Chinese central bank will be similar to Facebook’s Libra and work across payment platforms such as WePay and Alipay, according to a senior official. The People’s Bank of China is developing the token “to protect [China’s] monetary sovereignty and legal currency status,” and it could be ready as soon as November.
Kabbage acquires Radius Intelligence. The AI-enabled lending firm, which focuses on loans of up to $250,000 for small- and medium-sized enterprises (SMEs) is purchasing the SME-focused marketing technology firm for an undisclosed amount. The purchase will “integrate Radius’ tech and IP into the Kabbage platform,” as well as its “database of information on some 20 million [SMEs] in the US.”
Stripe launches lending product. The payments firm launched Stripe Capital, a service that offers loans to online companies to help grow their businesses. The company is planning to continue its rapid growth by entering new areas, including in-store payments and through the upcoming launch of a business credit card.
Uber explores loan offerings. The ride-hailing giant is gauging drivers’ potential interest in a service that could help with their finances in “a time of need.” Uber experimented with a similar idea in 2016 by offering interest-free cash advances to drivers in California and Michigan. Some commentators are critical of the idea, as the offering could act like a predatory, payday loan-like product.
Seven mobile payment firms form Euro association. The seven, which together cover over 25 million registered users, are created the European Mobile Payment System Association, which will foster collaboration and facilitate international payments. The primary aim of the group is to “enable more cross-border interoperability for different, domestically focussed m-payment systems.”
Hong Kong stock exchange suffers cyber attacks. The Hong Kong Stock Exchange’s chief executive, Charles Li, relayed that the exchange suffered a series of cyber attacks last week. Li insisted that an outage, which brought derivatives trading to a halt, was related to a software bug and was not brought on by a hacker. This view left cyber security experts unconvinced, as it did not explain a root cause.
Ipagoo to be acquired, brought out of administration. The British e-money firm, which was ordered to halt regulated activities by the U.K. Financial Conduct Authority in July, will be acquired by Anglo-Dutch investment group Chairmans Financial. Chairmans reportedly considered buying Ipagoo before it fell into administration, and feels the firm has a “reasonable path to return of operations.”
Monese partners with Raisin on savings product. The London-based banking app joined with fellow fintech firm Raisin to establish “Monese Savings.” The new product will allow Monese customers to browse and select a “competitive interest rate via the various European banks signed up to Raisin.” Monese also said it now has over 1.4 million customers, with over 100,000 new joiners every month.
Accenture report: Digital banks to treble customers, struggle for profits. According to a new report by the global consultancy, digital banks operating in the U.K. are expected to triple their customer base to 35 million people over the next year but will remain unprofitable. The average challenger bank continues to lose £9 per customer while facing challenges with scale, governance, and competition.
Railsbank raises $10M in Series A funding. The open banking and compliance platform will use the funding to expand beyond Europe to the U.S., Australia, and Singapore. Railsbank positions itself as a “utility” on which other companies can build financial services and add fintech features. CEO Nigel Verdon likens the company to AWS and as a “utility for the complete financial services backend”.
Credit Sesame raises $43M ahead of planned IPO. The platform, which allows users to check their credit score and helps consumers manage credit, will use the latest round of funding to continue to work on artificial intelligence algorithms.