What The FinTech : Weekly Update 25 Apr 2021
Medhy Souidi
💡 AI, FinTech & Digital Banking Strategist | Gen AI, Payments & Web3 Innovation | Ecosystem & Partnerships Leader | 🎙️ Industry Speaker & Podcast Host
Happy Sunday and Welcome back to What The FinTech, your regular FinTech & Innovation Newsletter focusing on Hong Kong & Asia ! Here are the selection and the top headlines for this week.
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Revolutionising SME Banking through Fintech Partnerships
How do fintech partnerships ese banking processes between the bank and their customers? We caught up with Adrien Barthel, Co-Founder of Sleek to find more !
What was the FinTech this week in: 📰
Crypto - Digital Assets - DeFi
More than 60 Central Banks have been exploring CBDCs since 2014. Progress has been accelerating with some CBDC projects now entering implementation phases. Institutional involvement in CBDC continues to strengthen the ecosystem at large, with public stakeholders such as the Bank for International Settlements, the World Bank, the International Monetary Fund or the World Economic Forum, active on the topic. Central Banks are working on two main CBDC operational designs: Retail applications and Interbank/Wholesale applications. Retail CBDC projects appear to be more advanced in emerging economies with financial inclusion stated as an expected outcome. Wholesale efforts are mostly conducted in more advanced economies with more developed interbank systems and capital markets. Looking at the most advanced projects globally, retail efforts have already produced two live projects in the Bahamas and Cambodia. No interbank/wholesale CBDC projects have reached this maturity level yet.
Multi-CBDCs: Designing a digital currency stack for governability
There is growing global interest in the issuance of Central Bank Digital Currencies (CBDCs) for domestic payments. If these CBDCs are also available across borders, it could lead to a significant improvement in the speed, cost and transparency of cross-border payments. m-CBDC arrangements are most effective and efficient if the multiple CBDCs are hosted on the same infrastructure and platform. But this runs into a significant governance challenge: some central banks will be unwilling to share their CBDC infrastructure with certain other central banks, and some central banks may not be willing to share their infrastructure with anyone at all. One possible solution would be to “unbundle” the digital currency stack to improve governability of m-CBDC networks and create a viable path towards making m-CBDC arrangements a reality.
PayPal's Venmo launches crypto buying and selling
Venmo, the peer-to-peer payment service owned by PayPal Holdings, has started allowing users to buy, hold and sell cryptocurrencies on its app. Venmo users will be able to buy bitcoin, ethereum, litecoin and bitcoin cash for as little as US$1 and publish transactions on the app's feed. Crypto on Venmo is enabled through PayPal's partnership with Paxos Trust Company, a regulated provider of cryptocurrency products and services. More than 30 per cent of Venmo customers have purchased crypto or equities, 20 per cent of which started buying during the pandemic. Square's rival Cash App, which has allowed cryptocurrency purchases since 2018, has seen user growth boom over the last year. Other financial technology startups popular with young consumers, such as broker Robinhood, also allow crypto buying and selling.
Facebook-backed Diem aims to launch digital currency pilot later this year
According to reports citing sources, the Diem Association, the Switzerland-based non-profit which oversees diem’s development, is aiming to launch a pilot with a single stablecoin pegged to the U.S. dollar in 2021. Sources said the pilot will be small in scale, focusing largely on transactions between individual consumers. There may also be an option for users to buy goods and purchases Formerly known as Libra, the Facebook-backed digital currency project faced strong opposition from regulators and lost several key backers and executives. It has since gone through a makeover and is now in talks with Swiss financial regulators to secure a payment license. It was rebranded from Libra earlier this year and is beefing up its leadership team with big hires like CEO Stuart Levey, who was formerly HSBC’s chief legal officer.
MakerDAO Brings Real Estate to DeFi
"Real world" assets have entered DeFi, as the Maker protocol reportedly just minted $38,000 of dai stablecoins to finance a mortgage loan. Maker is paving the way for what might become another source of growth in the now-$60 billion DeFi industry: lending against trillions of dollars of “real-world” assets like residential properties. MakerDAO community – the decentralized organization that governs the project – passed an executive vote to allow an ERC-20 token representing an ownership stake in a pool of real estate assets as collateral. The proposal allows the Tinlake blockchain protocol to serve as a bridge between New Silver, a real estate loan company, and MakerDAO. Two tranches of interest-bearing tokens will be issued under the Ethereum blockchain’s ERC-20 token standard – DROP and TIN – against non-fungible tokens (NFTs) based on individual deposits from New Silver.
Turkey bans use of cryptocurrencies to purchase goods and services
Turkey's central bank has banned the use of cryptocurrencies and crypto assets to purchase goods and services, citing "irreparable" possible damages and significant risks in such transactions. Payment service providers will not be able to develop business models in a way that crypto assets are used directly or indirectly in the provision of payment services and electronic money issuance, and will not be able to provide any services related to such business models. In a statement explaining the reason behind the ban, the bank said these assets were "neither subject to any regulation and supervision mechanisms nor a central regulatory authority", among other security risks. The central bank also cited that cryptocurrencies include elements that may undermine the confidence in methods and instruments used currently in payments.
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HONG KONG
Hong Kong Digital Asset Exchange To Launch NFT Trading Platform
Hong Kong Digital Asset Exchange, the first digital asset exchange to combine both an online platform and a sizable physical store in Hong Kong, plans to launch a one-stop NFT (Non-Fungible Token) trading platform in the third quarter of this year. It will be the first digital asset exchange in Hong Kong to introduce blockchain technology and provide the NFT trading platform. Users will be able to use the platform for the artworks publishing, promotion, trading and payment, with diversified product categories, including digital art, encrypted collections of animation, music and movies etc. On the trading platform, users can trade through public offer or bidding, and carry out token trading and exchange; while artists can also publish their own digital artworks through the trading platform.
SINGAPORE
Blockchain Association Singapore and Elliptic to roll out a Digital Asset Compliance Certification
Global FinTech Institute (GFI), a global professional credentialing body for FinTech professionals, Blockchain Association Singapore (BAS), the industry association for Digital Asset and Enterprise Blockchain, and Elliptic, a provider of Digital Asset Risk Management Solutions, have inked a Memorandum of Understanding to roll out a Digital Asset Compliance Certification. It will be the first Digital Asset Compliance training program available in Singapore for financial institutions, digital asset businesses, and law enforcement. Both financial institutions and digital asset businesses have a responsibility to exercise the same duty of care to be Anti Money Laundering (AML) compliant for digital assets. This Digital Asset Compliance Certification opens new opportunities for compliance professionals to grow their AML and financial crime skills with certified digital asset compliance knowledge.
UK fintech Currencycloud on hiring drive for new Asia-Pacific HQ in Singapore
London-based fintech startup Currencycloud has named Singapore as its Asia-Pacific headquarters, and is set to hire more than 50 staff here over the next year. Currencycloud will occupy a new office in Raffles Quay, and use Singapore as a hub to expand regionally. The office will provide on-the-ground support for Currencycloud's existing customers here, including TranSwap, NIUM, Wallex, XTransfer, WireBarley, PicoPay, CurrenC and Geoswift. Currencycloud is a business-to-business firm that specialises in global, multi-currency account infrastructure and cross-border solutions. The company is applying for a major payment institution licence from the Monetary Authority of Singapore.
HSBC, Marketnode complete digital bond issuance with Singtel
HSBC Singapore and Marketnode, the joint venture between the Singapore Exchange (SGX) and Temasek, have completed a digital bond issuance on Marketnode's digital asset issuance, depository and servicing platform. The bond issuance was done in conjunction with a S$1 billion perpetual securities issue by Singtel Group Treasury, guaranteed by Singtel. The transaction represents the largest issuance on the platform to date, with the widest investor base of 123 accounts. The bank also noted that the digital bond issuance was conducted alongside the traditional bond issuance process as part of SGX's ongoing pilot to assess the use of digital assets in streamlining processes within the Asian bond market.
CHINA
PayPal Plans Cross-Border Payments Wallet In China
PayPal is planning to launch a wallet in China that will focus on cross-border payments and will not directly compete with local firms Alipay and WeChat. PayPal completed its acquisition of China’s GoPay in January, giving it 100 percent ownership of the payments platform. It also was the first foreign company licensed to provide online payment services in China. PayPal is targeting cross-border payments and is looking to cooperate with local payment companies rather than compete with them. PayPal is aiming to build a payment bridge that connects China to its large overseas market network with more than 20 million corporate and over 377 million individual users.
ASIA
India’s Razorpay Triples its Valuation to $3 Billion as It Eyes South East Asia
Indian payments firm Razorpay has secured US$160 million during its Series E funding round which has tripled its valuation to US$ 3 billion. The Bangalore-headquartered company, which helps businesses to automate their payment systems, will use the funds to expand into banking and lending, make acquisitions and add services in South-east Asia. India is in the middle of an unprecedented startup boom, as the coronavirus pandemic drives more activity online and investors see untapped opportunity for profit in the fledgling digital ecosystem. Razorpay has seen 300 per cent growth in both volume and revenues during the financial year ending in March. More than 5 million businesses use its payments infrastructure currently, compared with 3 million last year.
Revolut is laying the groundwork for an expansion into India
Revolut, an online banking start-up based in the U.K., is planning an expansion into India. The company has announced that it had tapped a former executive for Indian start-ups Flipkart, Via.com and LendingKart to lead its operations in the country. Revolut will invest about $25 million into the Indian market and aims to launch its app there by 2022. Revolut, which has already expanded into Asia in countries like Japan and Singapore, is hoping to tap into India’s fast-growing remittances market. The company is in talks with the Reserve Bank of India and a number of local banks to secure the licenses and partnerships required make the launch happen. Revolut aim is to become a global bank, and even has ambitions to launch in China, a highly-competitive fintech market
E-commerce competition set to rise with Coupang said to be entering Singapore
South-East Asia's e-commerce market is set to get more crowded, with South Korea's e-commerce giant, Coupang, reported to be expanding into Singapore. The reported expansion could spark greater competition in Singapore’s e-commerce market, where key players include Sea-subsidiary Shopee, Alibaba-backed Lazada, as well as Qoo10 and Amazon. Coupang picked Singapore as its first overseas market as the city-state will provide a perfect test-bed for Coupang's digital logistics business optimised for densely populated areas. For instance, the company could roll out its same-day "Rocket Delivery" service, to try and gain an edge over its rivals. While Singapore has a relatively small domestic market, an entry could pave the way for Coupang to move into the larger South-east Asia market.
India’s Life Insurance Corp Partners With Paytm To Facilitate Digital Payments
The Indian government’s Life Insurance Corporation of India (LIC) has chosen local payments startup Paytm to facilitate digital payments for the country’s largest insurance company. The new agreement with Paytm requires it to provide seamless processing, more options and a wider variety of players, like wallets and banks. Paytm's ability to work across multiple payment services beyond a specific segment, such as UPIs or cards, worked in its favour to seal the LIC deal. Like other businesses across India and around the globe, LIC has seen an acceleration of electronic transactions since COVID-19 gripped the region. The Public Sector Undertaking (PSU) insurer now gets roughly Rs 60,000 crore in digital payments for premiums, not including those made via banks. Additionally, the PSU gets about 8 crore in digital transactions, a number that is expected to rise.
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Medhy
MD UK - Employment Hero | Payroll and HR Tech | Business Digitalisation | Tech & Finance Expert | ACCA Accredited | Online Accounting
3yNice work Adrien Barthel 👍🏻