Fintech Update, 11/20 - 12/3
Nov. 20-Dec. 5, 2017
Leading Off
The Conference of State Bank Supervisors tapped three fintech firms to help develop a national licensing system; Credit Suisse touted its new regtech compliance platform that allows the firm to perform KYC checks faster and at lower costs; the San Francisco and New York Fed Presidents discussed the possibility of a national digital currency; Circle announced its intent to launch a commision-free, cryptocurrency investment product next year; and former NYDFS Superintendent Ben Lawsky joined Ripple’s board of directors.
The Week in Review...
CSBS asks fintech firms to help develop national licensing system. The Conference of State Bank Supervisors (CSBS) tapped three fintech firms to help it “craft a national licensing and supervisory system for non-depository institutions.” The firms are blockchain-based P2P payments firm Circle, bitcoin exchange platform LibertyX, and financial advisory firm Envestnet.
Credit Suisse lauds new regtech compliance platform. The global bank is praising its recently implemented suite of technology and data analytics tools, which have “generated a 45-fold increase in . . . productive alerts” while “reversing years of rising compliance costs.” The bank can now “perform [international] KYC checks . . . 80% faster at approximately 40% lower costs.”
Fed presidents discuss U.S. fiat digital currency. Federal Reserve Bank of New York President William Dudley and FRB San Francisco President John Williams took skeptical-but-interested views on the possibility of a national digital currency, noting both that the idea is currently “premature,” but that the Fed is interested in the “research . . . about this question."
Circle to launch cryptocurrency investment app in 2018. The Boston-based digital currency firm announced in a blog post that it will launch “Circle Invest,” a commissions-free digital investment product, via its app next year. The post says the new product will include functionality for “a variety of coins,” including bitcoin, bitcoin cash, ethereum, litecoin, among others.
Ripple adds former NYDFS head to its board. The San Francisco-based firm, which is one of the world’s largest blockchain operators, recently added Ben Lawsky to its board. The American Banker describes Lawsky as an “architect of a controversial cryptocurrency regulatory regime” during his time as head of the New York State Department of Financial Services (NYDFS).
Nobel laureate economist says bitcoin should be "outlawed." In an interview with Bloomberg, Joseph Stiglitz, a Nobel Prize-winning economist, said bitcoin “is successful only because of its potential for circumvention and [its] lack of oversight.” He added that the digital currency “doesn't serve any socially useful function” and is in the midst of an epic bubble.
China’s online lending industry gives rise to data theft concerns. The Financial Times reports that Chinese regulators have recently suspended issuance of licenses for new online lenders amid concerns that the industry “has spawned a thriving black market in stolen user data.” While investor appetite for these types of firms has grown, data privacy experts have drawn attention to certain information sharing practices and the potential risks of employee leaks.
PayPal integrates with Acorns. The global payments firm partnered with the micro-investing app to allow users to keep tabs on their Acorns accounts within PayPal. Acorns, which launched in 2014, raised a $30 million in a 2016 PayPal-led round. 2.4 million U.S. customers now use the service, which automatically invests extra cents from PayPal, debit, and credit card purchases.
Have a great week!
The Fintech Update Team