TFU | Dec. 23 – Jan. 5

Dear readers, Welcome back and Happy New Year! We hope you had an enjoyable holiday season. We’re looking forward to continuing to share the latest developments in fintech with you in 2020. Best, Team TFU

Leading Off

The NYDFS is exploring how regtech solutions can improve its effectiveness and efficiency; Switzerland’s finance minister said the Libra project has “failed” in its current form;  the CCPA officially went live in California, giving GDPR-like privacy rights to Californian consumers; Australia’s competition watchdog delayed the roll-out of its Open Banking initiative; Malaysia’s central bank is planning to issue up to five digital banking licenses; and TechCrunch predicts what will change in fintech in the next decade. 

In the News

States take on fintech chartering issues.   With the OCC’s special purpose “fintech” charter in legal limbo and firms struggling to attain industrial loan company charters from the FDIC, states are looking to fill the void by offering their own chartering alternatives. States are expected to craft common regulatory standards and model legislative language to streamline multiple regimes.

NYDFS explores RegTech solutions.  The New York Department of Financial Services (NYDFS) is working to build a program for RegTech solutions that will “have the potential to significantly improve DFS [supervision] capabilities.” The NYDFS’s regtech strategy is similar to that of the Bank of England, which has explored how technology can be used to improve effectiveness and reduce costs.

Swiss finance minister says Libra has “failed.”  Ueli Maurer said the Libra project “in this form, has . . . failed” because “central banks will not accept the basket of currencies underpinning it.” Libra has been seeking regulatory approval in Switzerland, but challenges from numerous global regulators have put a damper on its launch. Maurer noted that Libra would require “reworking” to gain regulatory approval.

China’s central bank says stablecoins are a threat to the yuan.  The bank’s vice governor Chen Yulu noted that worldwide use of stablecoins like Libra could hamper the international development of the yuan, and undermine financial stability more broadly. Separately, the bank’s digital currency research lead noted that a chinese digital currency will not require a currency basket to keep a stable value. 

CCPA goes live in California.  On January 1st, the California Consumer Privacy Act (CCPA) went into effect in California. The CCPA, which has been referred to as ‘GDPR-like,’ allows Californians to see the data that businesses have collected on them, request that it be deleted, and opt-out of it being sold to third parties. There will be a six-month enforcement grace period, but covered businesses are already gearing up their privacy compliance programs. 

Australia delays Open Banking roll-out.  The country’s competition watchdog has delayed the launch of the Consumer Data Right Act for the banking sector from February to July 2020 amid to concerns with testing and security. The new rules will initially allow consumers to share card transactions and account data with accredited service providers, with data on mortgages and personal loans to follow.

Malaysia’s central bank to issue up to five digital banking licenses.  After unveiling a proposed framework for the licensing of digital banks [full text], Malaysia’s central bank is set to issue up to five digital banking licenses to qualified applicants to offer conventional or Islamic banking services in the country. The central bank plans to finalize the proposed framework in the first half of 2020.

Grab is applying for a digital banking license in Singapore.  The Malaysian ride hailing and digital payments group has partnered with Singaporean communications group Singtel to apply for a virtual banking license from the Monetary Authority of Singapore (MAS). If successful, the joint venture plans to target ‘digital-first’ customers and small-to-medium sized enterprises. 

Will the next decade of fintech’s be radically different?  TechCrunch predicts what the key trends will be in fintech over the next 10 years, highlighting increased portability, inter-operability, ubiquity, accessibility, and centralization. The article argues that new developments will change the character of fintech firms, opening them up from their current, “heavily verticalized” nature.

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