Financial technology is a rapidly evolving field. It is challenging to keep track of all the events, so we compile the most important news on the global stage into the Fintech Weekly digest.
Here's what happened the previous week in fintech and crypto: PayPal took a hit as it risks losing market share across Europe, GDPR fines reached record highs, Crypto Banks exposed to borrow billions of dollars for plugging shortfalls and major banks focused their efforts on developing a competitor to Apple Pay. Continue reading to find out more ➡️
Top News | 23.01-29.01
PayPal Risks to Lose Its Market Share Across Europe
The German anti-competition agency has initiated legal proceedings against the financial company PayPal Europe because of possible anti-competitive behavior in the market.
The subject of the proceedings were additional fees from PayPal customers, a ban on price competition, and violations of the terms of use of the payment system in Germany.
Now the German regulator is examining the rules set by PayPal, according to which sellers cannot reduce the price for customers who choose a cheaper payment method than PayPal. The antitrust authority alleges that PayPal requires sellers not to use other payment methods, much less increase their convenience for customers.
PayPal has not yet commented on the situation.
GDPR Fines Hit Record High
Last year, EU regulators levied a record €2.92 billion in fines for GDPR violations, up 168% from 2021.
At the same time, the average number of data breach reports slightly decreased from 328 to 300 per day. This might imply that firms are becoming more careful about disclosing breaches for fear of being investigated, fined, or having to pay compensation.
The largest fine of €405 million was imposed by the Irish Data Protection Commissioner against Meta Platforms Ireland Limited for problems with the protection of children's personal data on the Instagram app.
Crypto Banks Borrow Billions to Plug Shortfalls
Silvergate and Signature, two of the largest banks serving cryptocurrency firms, are trying to prevent a deluge of customer withdrawals by borrowing billions of dollars from Federal Home Loan Banks.
According to securities filings, Signature Bank borrowed about $10 billion from its local home-loan bank in the fourth quarter, making it one of the highest such borrowings by any bank since early 2020. Meanwhile, Silvergate Capital Corp., a rival lender that turned its focus to cryptocurrency a decade ago, received at least $3.6 billion.
So is that the beginning of the end? We don’t think so. The true fact is that most small banks have done the same as deposits have evaporated. Why would a consumer put money in a local savings bank when treasuries return more?
Major Banks Are Working on a Competitor to Apple Pay
Seven major US banks, including Wells Fargo, JPMorgan Chase, and Bank of America, aim to launch a digital wallet for credit and debit cards. It is supposed to compete with Apple Pay.
Early Warning Services, the fintech company behind the P2P payment service Zelle, will manage the wallet.
The wallet is expected to have 150 million debit and credit cards available for use after its launch, the WSJ reports.
The service is expected to become available in the second half of the year.
OpenAI & Microsoft Partnership Tightens
Microsoft has announced the third phase of its long-term partnership with OpenAI, which envisages "multi-billion dollar investments" in artificial intelligence research and development.
The tech giant has already invested in OpenAI in 2019 and 2021. The investment amount isn't disclosed, but it was $10 billion earlier, with a market valuation of OpenAI of $29 billion.
As part of the cooperation, the companies will develop supercomputer systems like Azure artificial intelligence infrastructure and launch new categories of digital services based on OpenAI technology.
Coinbase CEO Urges Brazil and Argentina to Make Bitcoin Legal Tender
Coinbase CEO suggested that Brazil and Argentina consider bitcoin as a common currency. He called such a move "the right long-term bet."
In turn, former Goldman Sachs executive and macro investor Raul Pal criticized this idea due to the volatility of the first cryptocurrency. In his opinion, this will make it difficult for businesses to plan and hedge risks.
Brazil and Argentina intend to create a single currency to strengthen the region's economy and reduce dependence on the US dollar.
According to reports, Brazil and Argentina will launch preliminary work on a joint currency this week. The talks will take place in a summit in Buenos Aires, and additional Latin American governments may attend.
Morgan Stanley Bankers Chat With Clients in Messengers
The Wall Street giant Morgan Stanley has imposed individual fines on some of its bankers for using unauthorized messaging apps in their communications with clients. The fines range from thousands of dollars to more than $1 million.
A few months ago, Morgan Stanley and ten other major banks agreed to pay significant fines imposed by US regulators for their employees' use of messaging apps such as WhatsApp, violating customer communication requirements. The total amount of fines amounted to $1.8 billion. In particular, Morgan Stanley agreed to pay $125 million to the SEC and $75 million to the CFTC.
Stripe Sets One-Year Timetable for Going Public
Stripe, the unicorn of fintech and one of the most expensive startups in the world, will decide within 12 months whether to go public through a direct listing or a private market transaction, such as fundraising and a tender offer.
The startup has engaged Goldman Sachs and JP Morgan experts to help determine the most appropriate course of action.
Over the past year, Stripe has repeatedly lowered its internal valuation, including this month's $63 billion, which is 40% less than its peak of $95 billion.
Goldman Sachs Revealed the Best Performing Asset of Early 2023
Goldman Sachs named bitcoin the best asset since the beginning of the year.
Since the beginning of 2023, the price of bitcoin has skyrocketed by 40% and exceeded $23,000, outperforming gold (+5%), the S&P 500 (+3%), and the Nasdaq 100 (+2%).
That's why Goldman Sachs analysts have named bitcoin the best asset worldwide since the beginning of 2023.
The recent rise in the price of the first cryptocurrency is partly due to expectations that the Fed is ready to abandon its rate hike program. However, crypto analysts warn that the price of bitcoin may fall in the short term.
Amazon To Launch a Gaming NFT Project
E-commerce giant Amazon aims to join Web3 by launching its first NFT initiative this spring. We may soon see play-2-earn, as well as some other NFT features, from the e-commerce giant.
The initiative is still at its early stages, with a launch deadline of April, according to four anonymous sources shared with the foreign publication Blockworks.
One option would allow Amazon users to play blockchain-based games and receive free NFTs, according to a source from the same publication.
In April 2022, Amazon's CEO, Andy Jesse, participated in a Squawk Box program on CNBC. Jesse said he expects the NFT market to grow and that Amazon could add crypto payments.
Here's what happened the previous week in fintech and crypto: PayPal took a hit as it risks losing market share across Europe, GDPR fines reached record highs, Crypto Banks exposed to borrow billions of dollars for plugging shortfalls and major banks focused their efforts on developing a competitor to Apple Pay. Continue reading to find out more ➡️
Top News | 23.01-29.01
- PayPal risks to lose its market share across Europe
- GDPR fines hit record high
- Crypto Banks borrow billions to plug shortfalls
- Major banks are working on a competitor to Apple Pay
- OpenAI & Microsoft partnership tightens
- Coinbase CEO urges Brazil and Argentina to make Bitcoin legal tender
- Morgan Stanley bankers chat with clients in messengers
- Stripe sets one-year timetable for going public
- Goldman Sachs revealed the best performing asset of early 2023
- Amazon to launch a gaming NFT project
PayPal Risks to Lose Its Market Share Across Europe
The German anti-competition agency has initiated legal proceedings against the financial company PayPal Europe because of possible anti-competitive behavior in the market.
The subject of the proceedings were additional fees from PayPal customers, a ban on price competition, and violations of the terms of use of the payment system in Germany.
Now the German regulator is examining the rules set by PayPal, according to which sellers cannot reduce the price for customers who choose a cheaper payment method than PayPal. The antitrust authority alleges that PayPal requires sellers not to use other payment methods, much less increase their convenience for customers.
PayPal has not yet commented on the situation.
GDPR Fines Hit Record High
Last year, EU regulators levied a record €2.92 billion in fines for GDPR violations, up 168% from 2021.
At the same time, the average number of data breach reports slightly decreased from 328 to 300 per day. This might imply that firms are becoming more careful about disclosing breaches for fear of being investigated, fined, or having to pay compensation.
The largest fine of €405 million was imposed by the Irish Data Protection Commissioner against Meta Platforms Ireland Limited for problems with the protection of children's personal data on the Instagram app.
Crypto Banks Borrow Billions to Plug Shortfalls
Silvergate and Signature, two of the largest banks serving cryptocurrency firms, are trying to prevent a deluge of customer withdrawals by borrowing billions of dollars from Federal Home Loan Banks.
According to securities filings, Signature Bank borrowed about $10 billion from its local home-loan bank in the fourth quarter, making it one of the highest such borrowings by any bank since early 2020. Meanwhile, Silvergate Capital Corp., a rival lender that turned its focus to cryptocurrency a decade ago, received at least $3.6 billion.
So is that the beginning of the end? We don’t think so. The true fact is that most small banks have done the same as deposits have evaporated. Why would a consumer put money in a local savings bank when treasuries return more?
Major Banks Are Working on a Competitor to Apple Pay
Seven major US banks, including Wells Fargo, JPMorgan Chase, and Bank of America, aim to launch a digital wallet for credit and debit cards. It is supposed to compete with Apple Pay.
Early Warning Services, the fintech company behind the P2P payment service Zelle, will manage the wallet.
The wallet is expected to have 150 million debit and credit cards available for use after its launch, the WSJ reports.
The service is expected to become available in the second half of the year.
OpenAI & Microsoft Partnership Tightens
Microsoft has announced the third phase of its long-term partnership with OpenAI, which envisages "multi-billion dollar investments" in artificial intelligence research and development.
The tech giant has already invested in OpenAI in 2019 and 2021. The investment amount isn't disclosed, but it was $10 billion earlier, with a market valuation of OpenAI of $29 billion.
As part of the cooperation, the companies will develop supercomputer systems like Azure artificial intelligence infrastructure and launch new categories of digital services based on OpenAI technology.
Coinbase CEO Urges Brazil and Argentina to Make Bitcoin Legal Tender
Coinbase CEO suggested that Brazil and Argentina consider bitcoin as a common currency. He called such a move "the right long-term bet."
In turn, former Goldman Sachs executive and macro investor Raul Pal criticized this idea due to the volatility of the first cryptocurrency. In his opinion, this will make it difficult for businesses to plan and hedge risks.
Brazil and Argentina intend to create a single currency to strengthen the region's economy and reduce dependence on the US dollar.
According to reports, Brazil and Argentina will launch preliminary work on a joint currency this week. The talks will take place in a summit in Buenos Aires, and additional Latin American governments may attend.
Morgan Stanley Bankers Chat With Clients in Messengers
The Wall Street giant Morgan Stanley has imposed individual fines on some of its bankers for using unauthorized messaging apps in their communications with clients. The fines range from thousands of dollars to more than $1 million.
A few months ago, Morgan Stanley and ten other major banks agreed to pay significant fines imposed by US regulators for their employees' use of messaging apps such as WhatsApp, violating customer communication requirements. The total amount of fines amounted to $1.8 billion. In particular, Morgan Stanley agreed to pay $125 million to the SEC and $75 million to the CFTC.
Stripe Sets One-Year Timetable for Going Public
Stripe, the unicorn of fintech and one of the most expensive startups in the world, will decide within 12 months whether to go public through a direct listing or a private market transaction, such as fundraising and a tender offer.
The startup has engaged Goldman Sachs and JP Morgan experts to help determine the most appropriate course of action.
Over the past year, Stripe has repeatedly lowered its internal valuation, including this month's $63 billion, which is 40% less than its peak of $95 billion.
Goldman Sachs Revealed the Best Performing Asset of Early 2023
Goldman Sachs named bitcoin the best asset since the beginning of the year.
Since the beginning of 2023, the price of bitcoin has skyrocketed by 40% and exceeded $23,000, outperforming gold (+5%), the S&P 500 (+3%), and the Nasdaq 100 (+2%).
That's why Goldman Sachs analysts have named bitcoin the best asset worldwide since the beginning of 2023.
The recent rise in the price of the first cryptocurrency is partly due to expectations that the Fed is ready to abandon its rate hike program. However, crypto analysts warn that the price of bitcoin may fall in the short term.
Amazon To Launch a Gaming NFT Project
E-commerce giant Amazon aims to join Web3 by launching its first NFT initiative this spring. We may soon see play-2-earn, as well as some other NFT features, from the e-commerce giant.
The initiative is still at its early stages, with a launch deadline of April, according to four anonymous sources shared with the foreign publication Blockworks.
One option would allow Amazon users to play blockchain-based games and receive free NFTs, according to a source from the same publication.
In April 2022, Amazon's CEO, Andy Jesse, participated in a Squawk Box program on CNBC. Jesse said he expects the NFT market to grow and that Amazon could add crypto payments.