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Please enjoy another week of fintech and banking news below.

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💬 Quote of the Week

📖 Read of the Week

In the wake of the Silvergate, Signature, Silicon Valley Bank, and now First Republic collapses, one industry vertical has found it particularly hard to leverage banking services: crypto startups. This is not just the story of bank failures, but the story of the myriad exploits, frauds, hacks, and crashes that began with Terra / Luna, took down Celsius, and accelerated through FTX.

More crypto companies in the US are opting to use banking middlemen such as Prime Trust in Nevada, which stores assets with four banking partners, or Puerto Rico-based FV Bank. Banks that do continue to serve crypto clients are keeping very quiet about it, as VCs and entrepreneurs search around to understand which financial institutions they can work with to continue building their businesses. Financial regulators like the SEC, CFTC, and the New York AG (who proposed new crypto legislation this week) are increasingly cracking down on crypto startups in a way that is driving many of their services (and primary banking relationships offshore).

So will this result in less crypto usage in the US? More compliant domestic crypto growth? Or unregulated offshore entities offering their services to Americans via VPNs and workarounds?

But where to go? This week, the European Parliament came out against a digital euro, Hong Kong moved forward with a new crypto license, Nigeria passed a national blockchain policy, and... even the White House announced its support for DLT standards?

Relatedly, I enjoyed Max (Chong) Li’s very concise overview of decentralized system benefits and drawbacks, that gets away from the crypto / blockchain lens that has come to dominate decentralization analysis.

📊 Stat of the Week

The ‘post-credit card’ generations, Gen Z and Millennials, were found to use credit cards 30% more than the average cardholder. (Source)

“The value of non-cash payments in the United States grew faster from 2018 to 2021 than in any previous Federal Reserve measurement period since 2000.” (Source)

🏦 Financial Services & Banking

📰 Other News

BNP Paribas, Deutsche Börse Group, Goldman Sachs and Equilend were a few of the 30+ financial institutions that announced a new initiative this week to join the Canton Network for institutional blockchain interoperability. Banks and FIs have been developing their own blockchains, such as JP Morgan’s Onyx or the Swedish Central Bank’s e-Krona, which operate in silos and are not necessarily interoperable. In a future of increasing cross-border bank collaboration, bank blockchains need to be interoperable as well – now it remains to be seen whether they will be permissionless.

Stablecoins have dominated the conversation as crypto's first 'killer use case,' but programmable money is waiting in the wings: this week, Visa announced that it is working with the Brazilian central bank on a programmable CBDC prototype for farmers. And Standard Chartered is readying custody for digital assets in Dubai.

Meanwhile, even the most technologically-savvy banks are struggling to assess high volumes of check fraud with their retail clients.

The London Stock Exchange is migrating its app, which provides wealth advisors, research analysts, portfolio managers, investment bankers and traders with access to financial data, over to fintech platform OpenFin.

Barclays partnered with Transfermate to make it easier for businesses to manage international receivables.

Zimbabwe is launching its own dollar-denominated stablecoin to combat the use of USD.

JP Morgan was ordered to pay the legal fees of fintech Frank’s founder, whom it is suing for falsifying accounts and Goldman settled a decade-old lawsuit for $215 million that alleged it underpaid women.

Fresh off draining its bank failure insurance fund, the FDIC plans to hit big banks with fees to top it up.

💻 Fintech

🚀 Product Launches

Stripe launched a new hosted on-ramp for web3 companies to enable their clients to buy cryptocurrencies so that they can transact.

Pan-African payment processor Paystack (acquired by Stripe) launched Paystack Catalyst, a program to help startups get off the ground.

B2B payments platform Melio launched a new mobile app to streamline payments for small businesses.

PrivPay launched an app to let users send anonymous M-Pesa transactions, a needed feature given the harassment that female users of the payment method sometimes face for their public transactions.

Paydora Finance launched a white-label banking platform.

Taktile launched a Data Marketplace to help with bank decisionmaking.

Charlie came out of stealth with new banking services for older users and retired people.

Unstoppable Finance launched a new DeFi bank and euro-pegged stablecoin.

📰 Other News

Brex added new support for Brazil, Canada, Israel, Japan, Mexico, Singapore, South Africa, the Philippines.

Indian payments giant Paytm crossed $977 million in annual revenue and cut its losses by 57%.

Liechtenstein’s government plans to accept bitcoin payments for government services.

🤝 Partnership Corner

Stripe partnered with WhatsApp to allow Singapore merchants to accept payments directly in the chat interface.

Crypto custodial trust company Fortress partnered with faster payments infrastructure builder Astra* to bring real-time settlement to new use cases.

👎 The Bad News

Tellus, a firm that claims to provide a safe savings account, which is somehow backed by a basket of mortgages (??) could come under investigation by the FDIC after urging from the Senate Banking Chair. I agree that fintech has lessons to learn from crypto, but this fintech may have learned the wrong ones.

US neobank Varo’s $50 million fundraise reportedly only extends its runway by 6 months.

Crypto exchange Bittrex filed for bankruptcy in the US after facing SEC charges.

The UK’s FCA continues to crack down on crypto ATMs, which are unregulated and convert financial assets into crypto.

Hackers published sensitive user information from accounts payable automation provider AvidXchange, which fell victim to a second ransomware attack this year.

Coinbase will officially stop offering new loans through Coinbase Borrow.

People are wondering about a potential conspiracy to drive up bitcoin transaction costs.

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