Stablecoin News for the week ending Wednesday 29th June.

Here is our pick of the 3 most important Stablecoin news stories during the week.

Who controls your stablecoin and what is their interest in you?

This week in stablecoins we look at what is the interest in you by the party issuing your stablecoin or CBDC.

But first, the week got off to a big start with the announcement from Tether that it would be working with UK regulators to create a GBPT. 

Tether, the controversial “stablecoin” that underpins more than $60bn of the crypto economy, is launching a British version to capitalise on the UK government’s desire to make Britain a global cryptocurrency hub.

Like its US dollar counterpart, of which $67bn (£55bn) is actively traded on cryptocurrency markets, the digital asset will be built on the Ethereum blockchain, but its value will be set at £1.

Tether to launch stablecoin tied to pound as UK aims to become crypto hub | Cryptocurrencies | The Guardian

Meanwhile, Bermuda which is regulated on very similar lines to the UK is stepping up its game in Crypto.  The collapse of Terra’s terraUSD (UST) made some investors think twice about buying stablecoins. The algorithmic stablecoin, pegged to the U.S. dollar, turned out to be less than stable, and investors in stablecoins as a whole were spooked about being left with nothing.

It’s the exact opposite way of thinking for Bermuda’s premier, David Burt. He said in an interview the Terra debacle highlights the importance of good regulation, vindicating his goal of making his country the world’s home for safe, innovative assets.

Luna Only Makes Bermuda Love Stablecoins More (

Crypto’s structural flaws make it an unsuitable basis for a monetary system, according to the Bank for International settlements (BIS). Instead, monetary systems could be built around central bank digital currencies (CBDCs), which are digital representations of central bank money.

The BIS, an association of the world’s major central banks, dedicates a 42-page chapter in its “2022 Annual Economic Report” to laying out a blueprint for the future of the global monetary system. In that vision, there is room for only some of crypto’s underlying technical features, like programmability and tokenization, not for cryptocurrencies themselves.

“Our broad conclusion is captured in the motto, ‘Anything that crypto can do, CBDCs can do better,’” said Hyun Song Shin, an economic adviser and head of research at the BIS.

I guess it is not surprising that the BIS sees itself at the centre of a new money system but interestingly, they don’t think CBDC’s will be much help with payments but rather in the implementation of monetary policy (getting money direct to consumers and controlling how, when and why they spend it). 

CBDCs, Not Crypto, Will Be Cornerstone of Future Monetary System, BIS Says (

But before we let BIS run the world of CBDC’s a cautionary tale from China which was the first major country to implement one.

China’s bank run victims planned to protest. Then their Covid health codes turned red – CNN

We may grumble about surveillance capitalism when Facebook/Meta and Google read your content and then throw up relevant advertising but that is nothing compared to state surveillance which blocks any activity it perceives as against its political interest.


Alan Scott is an expert in the FX market and has been working in the domain of stablecoins for many years.  Twitter @Alan_SmartMoney

We have a self imposed constraint of 3 news stories per week because we serve busy senior Fintech leaders who just want succinct and important information.

For context on stablecoins please read this introductory interview with Alan “How stablecoins will change our world” and read articles tagged stablecoin in our archives. 


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Happy 8th Birthday Daily Fintech

The data says it takes 7-10 years for startups to build real value, possibly longer without external capital.

I can celebrate that Daily Fintech has come a long way from a single blog post in 2014; but I also know that we have a long way to go. On our 5th birthday we chose to de-emphasise the advisory business (which we had used for  bootstrapping) so that we could focus on building a scalable media business. To that end we created a paywall, which forced us to up our game in every way, including content expansion, reader experience & monetization.

We are investing in technology to meet these needs. Content is where we started and content will always be our core, but we need to become a tech-enabled media business in order to scale content while maintaining the high quality that we are known for.

We have two big external trends on our side:

  • Fintech is growing & becoming mainstream. According to research by UBS, Fintech industry revenues will more than triple from USD 150bn in 2018 to USD 500bn in 2030, implying an average annual growth rate about three times faster than the broader financial sector’s. We need to grow our content to match that reality.
  • Work from anywhere trend accelerated by the pandemic. Daily Fintech has been a decentralized operation since we started so the fact that “talent is equally distributed, opportunity is not”  (Leila Janah) means that location is never a factor in our hunt for talent.

Content is the apex of the knowledge economy, a fact often obscured by the turmoil in the media business. Watch this space as we announce new services.

PayPal Adds New Business Credit Card
  • PayPal launched a small business credit card this week.
  • The PayPal Business Cashback Mastercard is PayPal’s first business credit card.
  • PayPal also offers a range of other tools for small businesses, including working capital tools, business loans, risk management support, and more.

Small businesses in the U.S. have gained yet another credit card option this week with PayPal’s launch of its its first commercial credit card.

The PayPal Business Cashback Mastercard, which is issued by WebBank, has no annual fee and offers cardholders 2% cashback on all purchases. The rewards are not subject to earning caps nor do they expire. Additionally, the card comes with free employee cards, does not charge a foreign transaction fee, and integrates with PayPal’s merchant platform to facilitate access to transactions, balances, available credit, and rewards.

Once a business is approved for the card, it can immediately begin spending via a virtual card that is automatically integrated into their PayPal account. Businesses can view their account and spending details via their PayPal Business account.

“As small business owners continue to recover from the challenges of the past two years, having multiple financing options to address their capital needs is more important than ever,” said PayPal Vice President of Global Merchant Lending Bernardo Martinez. “The PayPal Business Cashback Mastercard provides merchants greater value, more choice, and the increased flexibility they need to manage their business finances, offering among the best value available on no annual fee business credit cards today. This new solution continues PayPal’s commitment to supporting small businesses and offering options to help manage the day-to-day costs of operating their business.”

Founded in 1998, PayPal has long been an ally to small businesses. In addition to the business credit card, the California-based company also offers a working capital solution that has distributed more than $20 billion, as well as payout capabilities, business loans, payment acceptance tools, risk management support, and more. These products have helped PayPal amass 20 million small business customers in the U.S. And this is no small feat, given the fact that there are only 33 million small businesses in the U.S.

The launch of the The PayPal Business Cashback Mastercard comes five years after PayPal launched its credit card for individual users in 2017.

Listen: RBC’s cybersecurity takes a full-court press approach

Cybersecurity measures are a priority at Royal Bank of Canada (RBC), from monitoring and mitigation to solution investment. Banks rarely consider cybersecurity a finished process; the nimbleness of fraudsters and quick development of new hacking technology spur perpetually evolving security measures for risk and anti-money laundering (AML) divisions at most large financial institutions. But keeping […]

The role of operational excellence in automation

When it comes to implementing a large-scale automation project, banks have to learn to walk before they can run. But they’re under intense pressure to accelerate digital transformation and make it easier than ever for their customers. Financial institutions waste at least $5.9 billion every year due to the poor customer onboarding experience. The new […]

Further Unveils VC Fund Investment Platform
  • Further, a company that helps democratize investing in VC funds, is launching this week.
  • The London-based company enables users to invest as little as £1,000 in startups that are not publicly available.
  • The company allows anyone to invest, as long as they agree not to invest more than 10% of their net assets in shares, bonds, or funds that are not listed or sold on a stock exchange.

London-based Further is launching this week to help democratize investing in VC funds. The company enables users to invest in startups that are not publicly available.

The company’s platform enables users to browse, review, and compare funds, and easily invest as little as £1,000. Once the investment is made, Further enlists U.K. fund managers to invest users’ money into startups that are not generally available to everyday investors. Investors receive returns after around five to 10 years when the startup they invest in exits via sale or IPO.

Accessibility is Further’s differentiating factor. The company allows anyone to invest, as long as they agree not to invest more than 10% of their net assets in shares, bonds, or funds that are not listed or sold on a stock exchange.

That limit is in place for good reason– there is significant risk associated with VC investments. However, while many funds fail, others are quite successful. According to Pitchbook, European VC has delivered an internal rate of return of 14% across a 10-year timespan.

At a time when the public markets are in bear territory, Further’s launch comes at an ideal time. “I’d much prefer to be investing in a fund now and getting the valuations VCs are getting now [rather than last year’s],” Further CEO and cofounder Rob Tominey told Sifted. “The early returns will be strong.”

Further makes money in a couple of different ways. The company charges the funds a marketing fee and also charges investors a small percentage. Consumers also face fees from the funds themselves; each fund they invest in charges fees for onboarding and fund management services. Further argues, however, that the tax benefits users receive help to balance out the expense of the fees. “In addition, the company’s website states, “you can receive tax reliefs alongside each fund’s expert knowledge and management. These tax reliefs typically exceed the lifetime fees charged by funds, although this is not guaranteed.”

Photo by RODNAE Productions

Location Identity Leader Incognia Secures $15.5 Million to Help Fight Identity Fraud
  • Mobile fraud prevention specialist Incognia, which made its Finovate debut in May at FinovateSpring, has raised $15.5 million in Series A funding.
  • The capital will be used to help fuel the company’s growth; Incognia currently has 200 million mobile users in more than 20 countries worldwide.
  • Incognia leverages location and motion sensors to create a unique “location footprint” for trusted users that rivals other authentication methods in accuracy.

In a round led by Point72 Ventures, mobile identity company Incognia has secured $15.5 million in Series A funding to help fight identity fraud. The investment will help fuel the Palo Alto, California-based company’s continued growth, building on the 200 million mobile users in more than 20 countries currently protected by Incognia’s technology.

“Today’s authentication and fraud detection solutions aren’t working for the user, or for businesses, and the market is looking for more innovative technologies,” Incognia founder and CEO André Ferraz said. “Incognia is pushing the frontier of identity assurance and authentication to deliver increased security with minimal user friction.”

Incognia leverages location signals and motion sensors on an individual’s mobile device to help combat identity fraud. The technology creates a privacy-first location identity that is unique to each user and acts like a “location fingerprint” that effectively differentiates trusted users from fraudulent ones. The company says that its solution, which can be deployed in industries ranging from fintech and crypto to gaming and social media, is 10x more accurate than FaceID in terms of uniquely identifying users. Further, Incognia notes that the technology has a false acceptance rate of less than 1 in 17 million.

“We’re emerging as the global location identity leader, effectively combating the increasing fraud on mobile around the world,” Ferraz added. “We’re dedicated to enabling our customers to deliver frictionless mobile experiences without compromising security and privacy.”

Incognia made its Finovate debut at FinovateSpring 2022 in May. At the conference, the company demonstrated how its frictionless fraud prevention solution for mobile apps combats identity fraud without bringing additional friction to the authentication process. The technology’s zero-factor authentication requires no action from the user in order to provide a highly accurate risk assessment with low false acceptance rates.

Founded in 2020, Incognia also recently introduced its new location-based liveness spoofing detection solution module. The offering prevents biometric liveness spoofing during the onboarding process. This particular form of fraud is often used by cybercriminals to create “money mule” accounts for money laundering – as innovative fraudsters have turned to liveness spoofing to get around selfie-based liveness detection algorithms. The challenge of liveness spoofing has become even greater with the availability of cheap – or even free – deepfake video technology. Incognia’s location-based liveness spoofing detection module is designed to prevent these deepfake attacks in real-time.

“As fraudsters advance their techniques to trick liveness detection tools, it is critical that there is a solution on the market that can successfully combat the use of deepfakes at onboarding,” Ferraz said.

Photo by Pixabay

5 Questions with… BMO CIO of Data and Analytics Lisa Christofilos

Lisa Christofilos, chief information officer of data and analytics at BMO, recently sat down with Bank Automation News to discuss data and analytics at the bank-level, along with best practices for ensuring data security. Christofilos helps lead data engineering, analytics and architecture efforts for the $805.9 billion bank. What follows is an edited version of […]

Finovate Newcomer Lokyata Integrates its Credit Decisioning Technology with Infinity Software
  • Lokyata, a credit decisioning specialist, announced a partnership with Infinity Software.
  • The integration will make Lokyata’s BankAnalyze solution available to Infinity Software’s financial services customers.
  • Lokyata, founded in 2017, made its Finovate debut at FinovateSpring earlier this year.

Just over a month after making its Finovate debut at FinovateSpring 2022 in San Francisco, California, credit decision solutions provider Lokyata has announced that its real-time, automated credit decisioning tool, BankAnalyze, is now integrated with Infinity Software’s loan management software platform.

Courtesy of the API-enabled integration with Lokyata, Infinity Solutions will give its customers the ability to access key loan decision information. This includes customer-permissioned bank statement analysis such as average monthly net income, minimum balance, average monthly loan payments, and insufficient funds (NSF) notification histories. The integration will also enable lenders to configure both auto-fund and auto-deny rules to bring additional streamlining to the loan decisioning experience.

“At Lokyata, we are always looking to work with innovators in the market and Infinity Software is demonstrating the value of scalable, modern technology in an evolving lending ecosystem,” Lokyata CTO Steve Bireley said. “Increasingly, lenders are looking for ways to responsibly help more consumers gain access to credit, and through tools like BankAnalyze and Infinity Software’s platform, more lenders are successfully meeting that goal.”

With 20 years of experience providing lending solutions and other tools to direct-to-consumer lenders, Infinity Software has helped more than 700 businesses enhance their lending processes. The company uses a configurable loan product engine that gives lenders access to advanced accounting and reporting, as well as a built-in collections suite and access controls. Infinity Software offers a wide range of services to lenders, ranging from website design to optimized loan agreements to automated underwriting waterfalls, as well as a number of additional consumer loan solutions.

“Infinity has worked with hundreds of vendors to meet the needs of lenders in our space,” Infinity Software Director of Products Shannon Lee said. “Lokyata has proven to have a unique product that helps lenders better meet the needs of underserved borrowers and grow their business in a responsible and innovative way.”

Currently headquartered in Washington, D.C., Lokyata made its Finovate debut last month at FinovateSpring 2022. At the conference, Lokyata’s Bireley demoed the company’s BankAnalyze solution. The technology assesses the bank statements from a loan applicant and then provides an automated credit decision recommendation based on a combination of a weighted rules and a Lokyata score created in collaboration with the client. The company believes that using borrower-permissioned data is a major boon to the lending process, creating a more accurate, and up-to-date depiction of the borrower’s credit status. Moreover, Lokyata says that this approach “primes” near and subprime borrowers by making it easier for financial institutions to lend to “near prime” borrowers without taking on excessive risk.

Lokyata’s other products include ExcelRate, a lending and lead decision platform, and FraudBlock, a real-time identity verification and fraud intelligence solution for financial transactions. With $1.5 million in funding, Lokyata has scored more than 6.1 million loans impacting more than 240,000 customers. Founded in 2017, the company has raised $1.5 million in funding. Santosh Thiruthi is co-founder and CEO.

Photo by Diana Smykova

Digital Bank Kroo Receives Full U.K. Banking License
  • Digital banking startup Kroo received a full banking license from the Bank of England.
  • Kroo will use the new authorization to offer personal current accounts in the coming months.
  • The full banking license places Kroo in competition with Monzo, Starling Bank, and Atom Bank.

Digital banking startup Kroo just received a full banking license from the Bank of England. With the new authorization, the U.K.-based bank plans to offer personal current accounts (checking accounts).

Founded in 2016, Kroo offers a prepaid Mastercard with a tandem mobile app that provides spending insights, peer-to-peer money transfers, bill-splitting capabilities, and more. The payment card, which is biodegradable, works in more than 75 countries.

Kroo will add current accounts to its product line “in the coming months.” After launch, the company will offer its 23,000 customers the option to migrate to the new offering for free.

Kroo CEO Andrea De Gottardo said that the banking license represents a “phenomenal milestone” for the company, which has a mission to create a bank that connects people financially. “The bar to be granted a U.K. banking license is exceptionally high, and I am incredibly proud of the team and our work in achieving this,” De Gottardo added.

Having a full banking license helps Kroo differentiate itself from the massive number of competitors in the digital banking space, since the accreditation enables the bank to protect customers’ deposits of up to £85,000 via the Financial Services Compensation Scheme. Along with this, the license allows Kroo to offer a wider range of products, including loans and savings.

Kroo is only the second bank to earn a full banking license with a personal account since 2016. Having the full license places Kroo in competition with major digital banks, including Monzo, Starling Bank, and Atom Bank. Other European-based digital banks RevolutKlarna, and Wise, have yet to receive their full banking licenses.

Today’s news comes weeks after Kroo closed on a $30 million (£26 million) Series B funding round. The investment brought Kroo’s total funding to $71.5 million.

Photo by James Giddins on Unsplash

Array and Alkami Technology Team Up to Help Banks Boost Digital Engagement
  • Two Finovate alums – Alkami Technology and Array – have teamed up to help financial institutions offer credit and identity solutions to their customers.
  • The partnership makes three of Array’s signature solutions: My Credit Manager, ID Protect, and Offers Engine, available to a wider range of bank and credit union customers and members.
  • Alkami made its Finovate debut in 2009 as iThryv. Array won Best of Show at FinovateFall 2021 and again at FinovateSpring 2022.

A new partnership has been forged between digital banking solution provider Alkami Technology and financial enablement platform Array. The collaboration will bring a range of new solutions to Alkami clients that will help their customers and members better monitor their credit, benefit from anti-fraud identity monitoring, and access actionable, credit-based offers.

“Improving the digital-first banking experience is a top priority for banks and credit unions,” Alkami founder, Chief Strategy Officer, and Product Officer Stephen Bohanon said. “Our partnership with Array enables banks and credit unions to provide added-value products to account holders, which increases engagement and potentially revenue as well.”

Among the solutions that will be made available to Alkami’s bank and credit union partners are Array’s My Credit Manager, ID Protect, and Offers Engine. My Credit Manager keeps users updated on changes to their credit score, enables them to explore different credit scenarios with a credit score simulator, allows them to conduct debt analysis, as well as see how different factors impact their credit score. With ID Protect, users can take advantage of a number of anti-fraud protections including identity and Dark Web monitoring, alerts, insurance, and restoration services in the event of identity theft. Array’s Offers Engine empowers banks and credit unions to better market their products and services to customers and members using targeted, actionable offers that are based on the individual’s actual credit circumstances.

“Today’s success formula for personal service includes a mix of in-branch experiences and digital tools that add value to account holders every time they log in,” Array co-founder and CEO Martin Toha explained. “Alkami and Array are making it easier than ever to help banks and credit unions deploy a consistent roadmap of innovative digital products for account holders.”

A Finovate alum since 2009, when it debuted at FinovateSpring as “iThryv,” Alkami has grown into a leading digital banking solution provider. The Plano, Texas-based fintech serves both retail and business customers with onboarding, engagement, and account servicing. Clients can enhance their use of the Alkami platform with upgrades and leverage both Alkami’s product suite, as well as integrated, third-party solutions to enhance and customize their experience. Alkami is a publicly-traded company on the NASDAQ under the ticker “ALKT,” and has a market capitalization of $1.3 billion.

Winning Best of Show honors in its Finovate debut at FinovateFall last September and again in its return to the Finovate stage last month for FinovateSpring, Array is a financial enablement platform that specializes in embeddable and white label solutions. Founded in 2020, the company enables its clients to boost end customer engagement by providing them with innovative credit and identity solutions that enhance the customer experience.

Array raised an undisclosed amount of funding in June 2021 from Operator Partners and the FIS FinTech Accelerator in Partnership with The Venture Center. The company is based in New York City.

Photo by Pixabay

Raisin Bank’s Newest Acquisition Helps it Expand into Bulk Payments and Cash
  • Raisin Bank has agreed to acquire the payment division of Bankhaus August Lenz.
  • The move will help Raisin Bank diversify its revenue sources by adding payment services to its product lineup.
  • Terms of the deal were not disclosed.

Banking-as-a-service player Raisin Bank is adding cash and payment services to its product lineup. This comes as the Germany-based firm has acquired the payment division of Bankhaus August Lenz, a private bank headquartered in Munich. Financial terms of the agreement were not disclosed.

The move will help Raisin Bank diversify its revenue sources by adding payment services. The new capabilities enable Raisin Bank to offer customers electronic payment transactions and cash solutions. Bankhaus August Lenz’s Mirko Siepmann will head up the new division, which aims to help retailers, restaurant, gas stations, and non-bank operators of ATMs, facilitate the operation of more than 4,500 ATMs in Germany. 

“As a service bank, we will act much more independently and powerfully with the expansion of our payment solutions and continue our growth in the banking-as-a-service market throughout Europe advance,” said Raisin Bank Chief Commercial Officer Dr. Andreas Wolf. “With the new business area, we can position ourselves even better as a provider for bulk payments.”

Raisin Bank, previously MHB-Bank, was founded in 1973. The bank acquired European fintech Raisin in 2019 and has since been working toward its goal to become the leading banking-as-a-service provider in Europe. The bank offers digital solutions to help startups, institutional investors, and financial service providers seeking banking licenses to enhance customer and account management, payment transactions, and lending. Raisin Bank stated in today’s press release that adding payment services represents an “important strategic step on the way to becoming a powerful full-service provider.”

Photo by Anete Lusina

Who is responsible? The English court comments on duties owed to cryptoasset owners

The judgment in Tulip Trading Ltd v Bitcoin Association for BSV and Others sheds light on the legal relationship between the software developers behind various bitcoin networks and their participants. Notably, the court found that there was no case to be made that the developers had a duty to take action to undo the effects of an alleged theft. At the same time, the possibility of other legal duties falling on developers in the future was left open. Players in the crypto markets should be cognisant of this position, amid ongoing market turmoil. 

The decision 

Earlier this year, the High Court denied a prominent bitcoin holder, whose private keys to substantial holdings were allegedly taken in a cyber-attack, the right to serve a legal claim on a group of developers for failing to take action to restore the lost value into the claimant’s hands.

The case was brought by Tulip Trading Ltd (“Tulip”), which claimed that the defendants were the core developers behind various bitcoin networks and/or otherwise controlled the relevant software, and that they owed the claimant fiduciary and/or tortious duties to rectify the “theft” of private keys by writing and implementing a software “patch” that would restore Tulip’s access to the bitcoin assets. In setting aside permission to serve the claim out of the jurisdiction, Mrs Justice Falk held that there was no serious issue to be tried on the merits of the claim. Last month, Falk J also declined Tulip leave to appeal.

No fiduciary and tortious duties – for now

Falk J rejected the argument that the software developers owed the claimant a fiduciary duty. In particular, she noted that the defining characteristic of a fiduciary relationship is the obligation of undivided loyalty, and if the claimant’s argument were accepted, the steps that the defendants would have to take would be for the claimant’s benefit alone, to the exclusion of other users, to whom the defendants would also owe the same duty and who would have a legitimate complaint against the defendants.

Falk J also refused to find a tortious duty of care in this situation. She concluded that it would not merely be an incremental extension of the law to impose a duty concerning “failures to make changes to how the networks work, and were intended to work, rather than to address a known defect”. This was particularly true given that the alleged loss was an economic loss arising out of an omission. 

Underlying both strands of Falk J’s reasoning is a recognition of the “core values of bitcoin as a concept” (in the defendants’ words): digital assets are transferred through the use of private keys and what the claimant was seeking was effectively to bypass that.

Bitcoin networks are not financial institutions 

Tulip argued that bitcoin networks “could be equated with financial institutions”, in the sense that “[f]unds were being entrusted to controllers of the Networks, who profited from their activities, and public policy required the imposition of a corresponding duty of care”, and therefore a duty of care similar to the duty of care on banks established in Barclays Bank v Quincecare [1992] 4 All ER 363 should be imposed on bitcoin networks. Falk J was not persuaded by the argument: in particular, she noted that the starting point for the Quincecare duty of care is the relationship of contract and agency between the bank and its customer. It is interesting that such arguments seen in the more traditional financial sphere were being deployed in the context of a decentralised network with no contractual framework, and the court’s rejection of the direct analogy should be welcomed. 

Room for future claims? 

Without deciding the point, Falk J in obiter commentary left open the prospect of the developers or controllers of digital asset networks owing some other form of duty to owners of digital assets in other situations. For instance, she suggested that it was conceivable that some form of duty could arise if the developers “introduc[ed] for their own advantage a bug or feature that compromised owners’ security but served their own purposes.” Falk J hinted that there may be other circumstances where the developers or controllers could owe a duty.

This is only a first instance decision following a summary procedure and therefore its precedent value will be limited. But, in practice, this decision is likely to be influential given the novel issues raised. The recent turmoil in the cryptoasset market may provide fertile ground for litigation on this topic as the significance of these potential duties takes centre stage.

Bitcoin crash: A new beginning,450&ssl=1#

In January 2000, global financial markets were on the verge of a meltdown that was expected to destroy both the reputations of investors and the riches of day traders, that invested in companies and tech stocks that weren’t generating any revenue.

The “dotcom” crash caused a stock market meltdown.

Between 1995 and 2000, Nasdaq climbed 400% as internet companies sought to profit from the new technology. It peaked in 2000, and by October 2002, Nasdaq had lost 78% of its value, around $5 trillion.

Big advertising budgets and poor business models were the main reasons why companies like, Webvan, eToys,, Kozmo, and many others failed to deliver on their promises and support their high share prices and ended up shutting down or being acquired.

However, a few technology companies got it right, demonstrating remarkable growth and earnings. When you look at companies like Google and Amazon they thrived and turned out to be the dominant players in the sectors.

Looking back at the past two decades only proves to us that early internet entrepreneurs and investors were right about the internet and how it would revolutionize the way we live and work.

While most of the world’s technology companies are not 1 trillion dollar companies like Google ($1.56T) and Amazon ($1.18T), the aggregate earnings of tech companies are 2.5 times higher than they were in 2000.

MSCI World Technology Index vs. MSCI World

This incredible growth tells the story of tech over the past two decades and I think tells us what we should expect from crypto.

Yet, the drop in cryptocurrency and NFT prices has raised concerns, finger-pointing, and calls for regulation.

The entire crypto market is feeling the pain.

Bitcoin has lost about 70% of its value since hitting an all-time high of roughly $69,000 in November 2021. The total market cap of crypto assets has dropped to less than $1 trillion from its November 2021 peak of $3 trillion.

Today 95% of the crypto market is worthless.

There are more than 19,000 cryptocurrencies and dozens of blockchains that exist. Most of what’s out there today doesn’t add any value and some are even scams, just like many of the early internet companies. Eventually, like the dotcom crash, they will go belly up what will be left will be valuable coins and legitimate businesses. In 10 years from now, there’ll be a couple of clear winners for different kinds of applications.

While some things seem similar between this crypto and the dotcom crash, they are very different. The dotcom crash impacted the global economy, while the global economy impacted crypto. Crypto has a long way to go before it becomes the cause of an economic downturn like the dotcom or housing bubbles were. Crypto is simply a volatile new tech market trying to find its way, also victimized by a global recession.

But the crypto crash is teaching us some valuable lessons about crypto and NFTs and how they work in the economy. Similar to how the dotcom crash clarified for internet companies what products and business models are viable, this recent crypto crash is removing our rose-colored glasses about Web3 and the metaverse, and those that survive the crypto crash could become the tech giants of the future.

Crypto has created products that could not have been imagined before, including digital playthings that are often of little practical value, such as nonfungible tokens and meme cryptocurrencies. But there are also some useful ones such as smart contracts that allow financial assets to be bought and sold directly without the intervention of traditional intermediaries. This should, at a minimum, lower costs and improve efficiency by creating competition for entrenched institutions.

Rather than seeing this as the end of bitcoin, we can see it as the next step in the evolution of the market transitioning from a speculative asset to one that creates value by providing useful services to the economy.

by Ilias Louis Hatzis is the founder and CEO of Kryptonio wallet.

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ISO 20022: What it Means For The Payments Industry

There’s five months to go until the adoption of ISO 20022 in Europe – the international standard for exchanging electronic messages between financial institutions, covering cards, payments, securities, FX and trade. Here’s a reminder of what it is and the progress so far.

The International Organisation for Standardisation (ISO) first published ISO 20022 – a global standard for payments messaging – in 2004. The new standard creates a common language for payments data across the globe, enabling faster processing and improved reconciliation.

Benefits of ISO 20022 include increased transparency, automation and digitisation of payments. It provides richer and higher quality data which means much more detailed information about the payment is available.

Which sounds promising when the cost of failed payments – due to inaccurate or incomplete information, or poor reference data and validation tools – is estimated to cost the global economy $118.5billion in fees, labour and lost business a year, according to Accuity data.

There is a global ISO 20022 programme underway to assist all banks to adopt ISO 20022 for all payments and reporting exchanges, which will complete in 2025. The standard has already been adopted in 70 countries to replace domestic or legacy formats, including Switzerland, China, India and Japan.

SWIFT, the global provider of secure financial messaging services, will enable ISO 20022 messages for cross-border payments and cash reporting businesses, starting from August 2022, on opt-in basis, and November 2022 for general availability. MT messages supporting cross-border payments and reporting transactions will be decommissioned in November 2025.

Bank of England and Pay.UK will implement ISO 20022 in the CHAPS and NPA (New Payments Architecture) in April 2023. In the US, The Clearing House (TCH) – operator of CHIPS, the largest private sector USD clearing and settlement system in the world –  plans to implement the ISO 20022 message format by November 2023.

ISO 20022 is ‘good news’

According to financial services consultancy Projective Group, the new framework will alter the way in which payments are received forever, unlocking the speed and transparency associated with low-value domestic payments, and connecting the financial world with far less friction.

Jacob Rider, head of payments for Projective Group, said: “The transition to ISO 20022 needs to happen – and fast – if the industry wants to reap the many benefits it provides. Payments have already become faster, more transparent and more trackable thanks to the widespread adoption of SWIFT gpi, but the current MT standard does not offer the quality of data needed in today’s digital world.

“With better customer experience, better compliance and better efficiency, ISO 20022 is good news for financial institutions, provided they manage this transition quickly and carefully.”

In the latest chapter of Mastercard‘s payment system modernisation insights series, publishd this month, it describes ISO 20022 as enabling several key pain points that exist for both banks and their end users to be addressed.

It says: “In an increasingly competitive landscape, ISO 20022 message standards can smooth the process of innovation, which is critical to long-term success. ISO 20022 delivers operational efficiencies while promoting and supporting the development of value-add products and services for banks, businesses
and consumers alike. As the shift to ISO 20022 rapidly picks up pace, those financial institutions that stay wedded to older standards risk being left behind.”

ISO 20022 adoption

A recent Mastercard review of 61 real-time payment systems around the world found almost two-thirds were based on ISO 20022 data standards.

Banking Circle says it has already adopted the ISO 20022 messaging standard, three years ahead of the 2025 deadline for completion.

Laust Bertelsen, CEO of Banking Circle, said: “To conduct business, financial institutions exchange massive amounts of information with their customers and other institutions. Such exchanges only work if the sender and receiver of a message have a common understanding of how to interpret this information. Rather than managing multiple market systems that speak different languages, ISO20022 offers a universal messaging language. Many real-time, low-value and high-value clearing systems around the world have begun their migration and are using ISO20022, with many more to follow by the end of this year.

“We are delighted to be part of the early wave of businesses that have adopted the new standard. It is perfectly aligned with our mission of simplifying cross-border payments, breaking down barriers to international trade by removing unnecessary delays and challenges with reconciliation and by being ready ahead of the deadline our clients can benefit immediately.”

What’s next for fintechs?

According to BrightBridge, a Midlands-based technology consultancy, banks who fail to initiate moving to the messaging standards of ISO 20022 sooner rather than later risk further setbacks down the line.

In a blog, it said: “With much change yet to pass in the coming years, 2025 may seem a long while off. Yet the institutions able to act now stand a greater chance of making the transition on time – before their existing products and services become obsolete.

“Compared to legacy formats, bank systems will need to process larger data volumes at higher speeds to allow for the real-time payments, daily liquidity management, and compliance checks of the modern world; and not forgetting sophisticated fraud detection and prevention.

“In an ideal world, testing should begin to take place from 2022 onwards – from ensuring the syntax and formatting information is accurate, to data within associated payment and clearing systems being mapped correctly.”

Are you ready for ISO 20022?

SMEs Enjoy Post-Pandemic Profit High Bolstered by International Trade

Two in five SMEs in EEMEA are earning more money than before the pandemic, driven by digital growth and international sales opportunities, according to the latest Mastercard report.

Data from the company’s ‘Borderless Payments‘ report has brought to light how 46 per cent of small and medium-sized businesses (SMEs) in Eastern Europe, the Middle East and Africa (EEMEA) are now enjoying more revenue and profit than they did before the economic crash of the pandemic.

Its report identifies online business and international sales as key drivers of this, with 71 per cent recording above-global-average growth in online sales, while 77 per cent are planning to do more business internationally going forward.

The research, which covered 3,000 SMEs, highlighted that three-quarters had to make changes to their business model to survive the pandemic, while 64 per cent globally believe it has changed how they will do business forever.

The pandemic has accelerated digital transformation to tap into cross-border opportunities, with nearly half of SMEs in EEMEA saying they now do more business internationally.

Sixty-four per cent of respondents credit cross-border payments with enabling their business to grow, making it clear that cross-border payments will be a key focus for business growth across the EEMEA region, and therefore economic recovery, moving forward.

Fifty-nine per cent are now making and receiving more cross-border payments than they were prior to the pandemic, while 72 per cent say the pandemic has allowed them to source more competitive quotes from suppliers across borders and 46 per cent say using international suppliers reduces risk.

Speaking on the findings of the report, Stephen Grainger, executive vice president of Mastercard, describes how the impact of the pandemic and the unprecedented disruption it caused “realigned regional and global economics”, causing many SMEs to start exploring new markets.

“With small businesses in EEMEA and across the world growing their international customer and supplier networks at pace, especially online, it’s crucial that financial institutions have the right cross-border solutions in place to support them,” Grainger comments.

  • Tyler is a Fintech Junior Journalist with specific interests in Online Banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.

China’s Fintech and Internet Sectors Readjust to Macro Risks as Regulatory Environment Eases

As the country continues its lockdown well into 2023 while consumer consumption slows, China’s economic challenges have become important drivers for internet companies’ credit profiles; dampening industry profitability and cash generation in the short term.

According to the findings of Fitch Ratings, China’s internet companies, including its fintech community, now face a diminishing threat of regulatory risk, bolstered by the attention of the country’s policymakers trying to support the economy. Yet in the aftermath of last year’s policy tightening, some companies may continue to encounter difficulties.

The American credit agency has predicted that China’s economic growth will fall to just 3.7 per cent this year, down from an 8.1 per cent expansion in 2021; a prediction that reflects the impact of lockdowns.

The recovery in activity is likely to be restrained and subject to setbacks, given that the government’s zero-Covid policy is set to remain in place well into 2023, with a high risk of new lockdowns if outbreaks re-emerge.

Although lockdowns can lead to some spending shifting to online firms, weaker economic growth will weigh on overall market growth.

Thus, even though the credit agency expects the market share of online retail to rise to 29 per cent of total retail in 2022, it only predicts a single-figure rise in revenue; slower than both years previous.

It puts forward that the strength of the recovery in consumption, expected in the second half of this year, will be affected by various structural changes, including price sensitivity among consumers amid macro-economic uncertainties and decreasing demand for specific non-essential goods and services.

Many Chinese internet companies have now realigned their strategic focus towards optimising costs, rationalising non-core businesses and pursuing more prudent mergers, acquisitions and investments.

According to the company, these adjustments should help reduce pressure on profitability and cash generation and preserve liquidity and financial flexibility.

There is also a risk that some Chinese internet firms could respond to the difficult demand environment by expanding into new business areas to drive sales. For example, the apparel brand JD has considered launching online food deliveries, which would pitch it against the sector’s dominant players such as Meituan and Alibaba Group, which both have a rating of BBB-/negative and A+/stable respectively.

Increased competition could put downward pressure on ratings for a number of internet companies, but some, such as Meituan, have less headroom than others at their current rating level.

The agency recommends that it would be premature to say whether or not the more conciliatory comments of the government to feature over the past few months mark a sustained alleviation of regulatory pressure on China’s large internet companies.

However, it also emphasises how recent developments, including the resumption of issuing monetisation licences for specific online games, the potential conclusion of an investigation into rideshare firm Didi and the government’s approval of a plan for ‘healthy’ development of the payment and fintech sectors, might mark the loosening of its grip.

Still, the agency retains its belief that regulatory risk will recede as a sector credit concern relative to macroeconomic factors.

Risks to the creditworthiness of specific companies will decrease as they are released from or deal with regulatory challenges, allowing them to focus more on core business challenges and growth.

However, the repercussions of previous regulatory actions will continue to be felt and regulatory risk will remain an important consideration for Chinese internet businesses’ ratings, regardless of potentially positive developments over the next few months.

  • Tyler is a Fintech Junior Journalist with specific interests in Online Banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.

Backbase Supports Fintech Innovation in Bahrain; Compass Plus Boosts Digital Payments in Nigeria

This week’s edition of Finovate Global takes a look at two Finovate alums that are helping support fintech innovation in the Middle East and Africa.

First up is engagement banking platform provider Backbase. The four-time Finovate Best of Show award-winning company announced this week that it has forged a new partnership with Bahrain FinTech Bay (BFB). The partnership comes under the auspices of BFB’s Venture Acceleration Platform, which seeks to boost the adoption of digital banking technology in the MENA region.

Head of Partners at Backbase Middle East Mehmet Cakal said, “This new collaboration with Bahrain FinTech Bay aligns with our continuous efforts to help banks in the region with a long-term digital strategy and support them with a holistic approach towards digital transformation, to be able to meet the demands and expectations of their customers in today’s age.”

Backbase is no stranger to the MENA fintech and financial services industry. The company, founded in 2003 and headquartered in Amsterdam, the Netherlands, has established partnerships with a number of key players in the region. This includes the National Bank of Bahrain, Banque Saudi Fransi, and the Kuwait International Bank. In fact, Backbase Middle East was awarded “Digital Banking Provider Of the Year” honors at the MEA Finance Banking Technology Summit and Awards last month.

Bahrain FinTech Bay, a leading finech hub in the region, promotes fintech innovation by incubating fintech initiatives via innovation labs, acceleration programs, curated activities, and educational opportunities. Founded in 2017, BFB launched its Venture Acceleration Platform in order to give emerging fintechs “a launch pad and bespoke go-to-market strategies” to help them scale their businesses and take advantage of opportunities in the MENA region. The platform provides those companies selected to participate in the accelerator with market intelligence, exposure to partners, as well as assistance in implementation and regional expansion.

“Our new partnership with Backbase will strengthen our mandate to bring cutting-edge technology offerings to banks and financial institutions in MENA,” Bahrain FinTech Bay CEO Bader Sater said. “Bahrain FinTech Bay is committed to providing curated opportunities for enterprises and supporting startups in the sector to accelerate their growth and expansion efforts across the region.”

Meanwhile, several hundred miles to the south and west, fellow Europe-based fintech Compass Plus is engaged in its own outreach to markets in developing economies. The U.K.-based company, a Finovate alum since 2012, announced this week that it is teaming up with Nigerian fintech Interswitch to help it enhance its payment processing capability.

Interswitch will leverage Compass Plus’ token-based, cloud-native, API-first open development payments platform, TranzAxis, to process Verve, Visa, and Mastercard credit card transactions. Six African banks already have been onboarded onto the new platform, which has enabled Sterling Bank of Nigeria to launch the country’s first Verve credit card.

“We are delighted to partner with Interswitch, one of the biggest processors in Africa,” Compass Plus MEA VP and Deputy Managing Director Adil Ahmed said. “Interswitch has always strived to drive positive change in the region, and now that they have TranzAxis to support their ambitions, they will continue to revolutionize Africa’s payment space in the region, further strengthen the Verve payments network, and manage their Visa and Mastercard credit card business more efficiently.”

Founded in 1989, Compass Plus offers banks and financial services companies retail banking software and services to enable them to better respond to their customers’ banking needs. The company’s solutions address issues from card, account, and merchant management to card personalization, payment processing, and terminal driving to self-service channel management and both mobile and e-commerce. Compass Plus’ TranzAxis technology helps financial services companies develop and support cards, payments, transaction switching, and other retail banking activities.

Headquartered in Lagos, Nigeria, Interswitch began as a nationally-focused, transaction switching and processing firm. In the 20 years since then, the firm has grown into Africa’s leading integrated payments and digital commerce platform company with more than 900 full-time workers across Africa – 40% of whom are women. Named “Fintech of the Year” at the 2022 African Banker Awards last month, Interswitch also last month secured a strategic investment from LeapFrog Investments and Tana Africa Capital. The amount of the funding was not disclosed.

“The evolution of fintech in Nigeria and the broader sub-Saharan region has been driven by the need to solve challenges and barriers that exist within the traditional financial system,” Interswitch founder and Group Chief Executive Mitchell Elegbe said. “Interswitch was born from the need to develop solutions that match the unique needs of local customers and merchants.”

Here is our look at fintech innovation around the world.

Central and Eastern Europe

Middle East and Northern Africa

Central and Southern Asia

Latin America and the Caribbean


Sub-Saharan Africa

Photo by Satheesh Cholakkal

Only 14% Of BNPL Users in the US Haven’t Had to Pay a Late Fee Finds ConsumerAffairs

Buy Now Pay Later (BNPL) has established itself as one of the primary ways for people to make payments in 2022. The pandemic caused many to become much more financially aware, leading to a massive uptake in alternative payment methods as people looked to stretch their available finances. For better and for worse, this saw a rise in BNPL.

Research from ConsumerAffairs, an American customer review and consumer news platform, looked to uncover how Americans felt about the payment method. It surveyed 1,000 Americans about their experience or lack thereof with buy now, pay later services. 700 respondents were BNPL users, and 300 had never used these services. Among its respondents, 21 per cent were Generation Z, 32 per cent were millennials, 27 per cent were Generation X and 20 per cent were baby boomers.

Aggregate use of BNPL

To begin the study, ConsumerAffairs first asked respondents about their preferred usage of BNPL, comparing the different generations’ responses. They shared their favorite apps, frequency of use and overall sentiments regarding the payment option.

It’s no wonder BNPL is raking in hundreds of billions of dollars and expected to pull in even more; 80 per cent of those surveyed had used it for the first time within the last year alone. People also habitualised paying later with gusto: 44 per cent used BNPL weekly or more frequently. Only 10 per cent said they employed the payment option once a year or less.

Despite BNPL being a relatively new offering, baby boomers were enthusiastic adopters from the beginning. Unlike millennials or Gen Zers, one in four of those between 57 and 75 years old had already been using BNPL for a year or longer.

Interestingly, those using BNPL the most frequently didn’t have the poorest financial health, on average. It was actually those who used BNPL sporadically — just every few months — that had the worst situations. Perhaps holding on to cash for longer is financially advantageous in this particular economy of high inflation and market-dip buying opportunities.

What people are buying now and paying for later

This next piece of research digs into the specifics behind BNPL. Respondents shared what they’re purchasing, how much they’re spending and what types of late fees they owe. Once again, responses were further compared by generation.

Gen Z respondents were the most likely to agree with the statement that inflation has directly contributed to their use of BNPL — and well over half of respondents of all ages agreed. With deferred payments, increasing inflation can lower the amount you ultimately owe. Then there’s the fact that wages have not kept up with inflation — more than one in 10 respondents said they wouldn’t have made a specific purchase without BNPL.

It might be concerning to see Gen Z adapting to this phenomenon the most. It’s reminiscent of the circumstances around the CARD Act of 2010, when college students were preyed upon by credit card companies offering swag, gifts and other inducements on college campuses. Since then, there’s been a steep drop in the number of young adults signing up for credit cards. Instead, it appears they’re opting for BNPL, which mirrors the concept of a credit card.

Currently, Gen Z is racking up the most in late fees, with an average of $483 during their tenure using BNPL.

Future estimations of BNPL

The study wraps up with a look at future approximations of BNPL. Respondents were asked to share what they felt were the pros and cons of the service and which types of products and services they’d like to see BNPL options for.

BNPL ultimately offered more upsides than downsides, according to respondents. They liked the option for its convenience (70 per cent) and low interest rates (33 per cent) — and also because it doesn’t require a high credit score (31 per cent). The perceived downsides were unknown fees (54 per cent), difficult payment tracking (47 per cent) and a lack of rewards or cash-back incentives (46 per cent).

Most respondents wanted BNPL options to extend even further. Nearly half (48 per cent) said the option is particularly helpful during a recession, and more than a third wanted the payment plans to be extended to health care.

With consistent proof that more money actually can lead to more happiness (or at least a life with less stress), this study suggests that having the actual money on hand might not be as important as having access to it through financing options. People who rated their financial health, mental health and quality of life as good or amazing in this study reported higher median fees, on average, suggesting the later (higher) payments could ultimately be worth it.

Using BNPL to your advantage

BNPL offers a trove of possibilities for your financial well-being — if used correctly. Respondents who took advantage of the option with regularity were actually more likely to be happier and financially healthier, even if they were paying higher fees. Particularly during a recession, this option provides access to items people need the most. Of course, those who benefited most probably didn’t do much frivolous spending.

  • Francis is a junior journalist with a BA in Classical Civilization, he has a specialist interest in North and South America.

FDITECH Sprint addressed bank identity fraud

Banks are being challenged by deciphering between their customers and cybercriminals amid a push to provide robust digital experiences. A collaborative effort is required to verify identities, according to solutions presented at the recent Federal Deposit Insurance Corp. (FDIC) FDITECH Sprint, which sought solutions on modernizing digital identity proofing or verification for remote customers. The […]