Fintech Update, 10/2 - 10/9
October 2-9, 2017
Leading Off
Treasury announced its intent to raise the online crowdfunding limit to $5M; Goldman Sachs suggested it is in early discussion to launch a bitcoin trading operation; digital currency firm Circle unveiled its universal payments project; The Bank of England announced a new pilot program, in partnership with blockchain startup Chain, to explore data privacy in blockchain; Navient announced its intent to acquire student loan startup Earnest for $155M; TechCrunch profiled the fintech accelerator CFSI Finlab; and McKinsey explored how startups are radically changing the virtual economy.
The Week in Review...
Treasury to raise online crowdfunding limit. As part of a package of proposed reforms to the JOBS Act, the Treasury is expected to increase the amount that accredited investors can invest in crowdfunding projects to $5 million from $1 million.
Goldman Sachs weighs launching digital currency trading operation. While planning is still in the early stages, Goldman would be the “first blue-chip Wall Street firm preparing to deal directly in this burgeoning yet controversial market,” sources tell the WSJ. Goldman’s thinking is in “sharp contrast” to comments made by JPMorgan CEO Jamie Dimon, who called bitcoin a “fraud.”
Circle unveils universal payments project. The Boston-based money transfer service, which uses blockchain to manage transactions on its network, announced CENTRE, a project dedicated to connecting all digital wallets, regardless of provider or currency, through a universal, open source payments platform. Circle also released a white paper with more details about CENTRE and its aims.
BoE testing privacy on the blockchain. The Bank of England (BoE) announced a new pilot program, in conjunction with DLT startup Chain, to explore data privacy in blockchain systems. The project will “examine the extent to which [DLT]-based systems can be configured to enable privacy amongst participants, whilst keeping data on a shared ledger: one of the holy grails of DLT design,” according to the BoE’s executive director for banking, payments and financial resilience.
Navient acquires Earnest for $155M. Navient, the largest provider of student loans in the U.S., announced its intent to acquire Earnest, an online student loan refinancing service. Earnest, which had raised over $120M in venture capital financing and was once valued at over $300 million, will retain its brand and current management team.
On the value of the CFSI FinLab. TechCrunch profiles several fintech accelerators, including the Center for Financial Services Innovation’s (CFSI) Financial Solutions Lab (“FinLab”), which works with consumer financial products-focused fintech firms to develop their businesses and build relationships with Wall Street and regulators.
McKinsey on how technology is changing the economy. Arguing that “[w]e are creating an intelligence that is external to humans and housed in the virtual economy,” futurist W. Brian Arthur notes that fintech startups exemplify firms that offer “more radical change” by experimenting with “external intelligence” in the service of new business models.
Blackrock considering buying fintech firm. The world’s largest asset manager is reportedly pursuing financial analytics firm Capital Preferences “to help bolster its focus on retail investors,” per Bloomberg. Capital Preferences gathers data to help wealth managers understand the risk tolerance, decision-making, and financial preferences of individual clients.
Philly Fed’s Harker discusses fintech regulation. Federal Reserve Bank of Philadelphia President Patrick Harker addressed a range of regulatory topics at a recent fintech conference, recommending above all that fintech firms “get involved with regulators early and often” and begin creating a framework that “makes sense to protect the people who want to do it right.”
Have a great week!
The Fintech Update Team