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.
Fed Chair Jerome Powell joined the growing chorus of regulators raising flags about the Facebook-backed Libra cryptocurrency; German digital bank N26 launched operations in the U.S. market; payments processor Stripe suffered downtime issues that halted online sales for many businesses; British Airways and Marriott were both fined over $100 million by the U.K. ICO for data breaches, while Facebook faces a $5 billion fine from the FTC; and the EU and U.K. are looking for ways to stem the use of cryptocurrency services to launder money.
The U.S. House Financial Services Committee formally requested that Facebook halt its planned Libra rollout; the U.K. FCA proposed a ban on derivatives tied to crypto assets; IBM’s TradeLens consortium added new members; the forthcoming Libra currency is already attracting digital scammers and domain squatters hoping to make a quick profit; and the Financial Times published an opinion piece on why central banks should issue digital currencies.
We look at the recent news and reactions to the Libra cryptocurrency in our “Big Idea”; the CFTC established its LabCFTC Accelerator to further support its fintech R&D efforts; Congress investigated the use of algorithms in lending decisions; TransferWise announced it will launch in the U.S. market; Monzo raised £113M to support its U.S. expansion; and JPMorgan is rumored to be launching a digital banking operation.
Facebook announced its new cryptocurrency, Libra, which brought immediate scrutiny from global lawmakers, including the U.S. Senate Banking Committee; Alipay partnered with six European mobile wallets to implement QR codes in their services; Ripple invested $50M in MoneyGram, which will use Ripple technology to conduct money transfer and settlement; two Nordic banks are trimming compliance staff in favor of AI tools; and Grab is considering applying for a Singaporean banking license.
Senator Warren sent a letter to several U.S. regulators seeking information on whether algorithmic lending produces discriminatory outcomes; Monzo is planning an “imminent” U.S. launch; Facebook landed commitments from large banks and tech companies in support of its new cryptocurrency; the Bank of England found widespread weaknesses in stress tests of U.K. challenger banks; Circle announced it is discontinuing its payment app; and Revolut launched in Australia.