Fintech Digest

Amazon Dives Into Fintech

There are a lot of interesting tidbits coming out of the world of fintech this week. The European Central Bank is working on a digital euro, the US recorded the longest period without major IPOs in the technology sector, Bitcoin mining pollutes US air, and people experience Meta-wooziness

If you want to go over the most important things from the fintech world that happened this week, read on.

Top News | 19.09-25.09
  • Amazon Dives Into Fintech
  • History Repeats Itself. Dot-Com-Like Crash Is Back?
  • EU Finally Got Around to NFT: Leaked Documents
  • Hong Kong Is One Step Ahead Again
  • Revolut Faces an Issue
  • UK Government Found a New Way To Fight Against Fraudsters
  • Bitcoin Mining Affects the US Air
  • OpenSea Unveils a New Feature
  • A Bit More Good News for Crypto Enthusiasts From Opera
  • Vitalik Buterin Makes a Prediction Regarding Dogecoin and ZCash
  • Cryptocurrency Is Losing It
  • Users Complain on Meta-wooziness

Amazon Dives Into Fintech

Amazon, the world's largest online retailer, is one of five organizations chosen by the European Central Bank to create a prototype of the digital euro. 

The Frankfurt-based organization stated that the objective of this prototyping is to assess how effectively digital euro technology fits with the prototypes generated by the enterprises.

The digital euro project is now in a two-year «research phase,». So far, the decision to launch a digital currency hasn’t been announced publicly.

The ECB will most likely be one of the first central banks in industrialized economies to issue a digital form of its currency. A conceivable introduction, according to authorities, may occur around the middle of this decade.

History Repeats Itself. Dot-Com-Like Crash Is Back?

On Wednesday, September 21, the period during which the IPO price of a technology company didn’t exceed $50 million will reach 238 days. This surpasses the previous similar periods after the 2008 financial crisis, and the dot-com crash in the early 2000s.

The fall of the US stock market was provoked by the aggressive increase of interest rates by the Federal Reserve in the fight to reduce inflation.

Background info: The US stock market is under pressure this year from hawkish rhetoric from the Federal Reserve, which is fighting to reduce inflation by aggressively raising interest rates. Higher rates have hit stock prices, reducing the value of future earnings, and raising fears that the economy will face a recession.

EU Finally Got Around to NFT: Leaked Documents

Due to the leak of information about the draft law «Digital Asset Markets», it became known that the European Union plans to grant NFT the status of securities.

"NFTs, which are part of large collections, have virtually no unique qualities or useful properties, so they should be subject to legislative regulation along with cryptocurrencies," the regulation says.

Brian Fire, a professor of law at the University of Kentucky, who specializes in NFTs, believes that the EU authorities will recognize tokens from popular collections, such as Bored Ape Yacht Club, Cryptopunks or Doodles, as securities.

If all goes as planned, the law will become valid in 2024.

Background info: The question of whether certain crypto-related assets should be considered securities has long been the cause of debate, and it has recently escalated. The SEC in the United States claimed earlier this week in a federal court filing that the whole Ethereum network could be deemed a securities exchange under American regulatory scope.

Fyre argues that if the EU starts designating blue-chip NFT collections as securities, the influence on American regulators will be inescapable.

Hong Kong Is One Step Ahead Again

From the fourth quarter of 2022, Hong Kong authorities will begin testing the central bank's retail digital currency (e-HKD). It was announced shortly after a positive response to consultations scoping out the technical and policy perspectives.

According to the Hong Kong Monetary Authority, the architecture required for e-HKD will begin to be implemented in the fourth quarter. Besides, the Authority will also prepare legislative changes to allow for the use of digital currency as legal tender in Hong Kong.

However, there are concerns that e-HKD will have no practical use in the near future.

During the public consultation regarding demand, privacy, and possible risks associated with the asset, respondents indicated the need for further study of issues such as privacy protection, legal aspects, and use scenarios.

Revolut Faces an Issue

The British neobank Revolut suffered a data leak. The data of about 50,150 customers worldwide (20,687 of them in the European Economic Area) was compromised, including names, addresses, email addresses, phone numbers, some payment card data, and account details. In total, this is 0.16% of the 20 million neobank users worldwide.

Revolut has already reported the cyberattack to the Lithuanian State Data Protection Inspectorate, claiming that fraudsters gained access to its database using social engineering techniques.

The neobank added that all these cards were hashed, and no PINs or passwords were available.

UK Government Found a New Way To Fight Against Fraudsters

The government of the United Kingdom has announced new measures to safeguard the economy against fraud and money laundering. According to a Home Office news release, the Economic Crime and Corporate Transparency Bill intends to «push filthy money out of the UK.»

Right after the Bill comes into force, all entrepreneurs wishing to start a business in the UK will have to verify their identities before registering. 

In order to safeguard small business owners and consumers from fraud and money laundering, this solution is designed to promote better transparency from organizations adopting limited partnerships and to simplify registration processes for trustworthy enterprises.

According to Thomas Cattee, head of white-collar crime at Gherson Solicitors LLP, with this provision, SFOs will be able to request much more information and involve a wider range of suspects before they begin investigations. This, in turn, will help solve more crimes other than bribery and corruption.

The Bill is now in Parliament, awaiting a second reading next month.

Bitcoin Mining Affects the US Air

Bitcoin mining causes similar environmental damage as 6 million cars in a year, a new report says.

According to an Earthjustice and Sierra Club analysis, between mid-2021 and 2022, the carbon footprint of the leading cryptocurrency infrastructure was 27.4 million tons of CO2 equivalent. This is three times higher than the largest coal-fired power plant in the US.

According to Jeremy Fisher, Sierra Club energy sector analyst, bitcoin mining could impede efforts to decarbonize the economy.

Environmentalists' judgments are not shared by representatives of the bitcoin industry. According to them, digital asset development and maintenance are less hazardous to the environment than heavy industry, and their energy consumption is quite low - ranging from 0.09% to 1.7% of total power output in the United States. Furthermore, miners generate more than half of their energy from renewable sources.

Bitcoin is created via the operation of a large number of energy-intensive computers that verify transactions and generate new digital currency. According to a recent US government assessment, the United States accounted for only 3.5% of worldwide bitcoin mining in 2020. This percentage is presently approaching 38%.

OpenSea Unveils a New Feature

NFT-marketplace OpenSea has announced the release of its NFTs builder, which doesn’t require technical knowledge to produce NFTs.

The new initiative implies users will be able to use a special section to generate NFTs right on the website. In addition to the builder itself, OpenSea will also make it possible for digital artists to create customized web pages for their giveaways.

The personalized pages will display information about the NFT giveaway, the authors of the project, the NFTs themselves, and a timer with the launch date of the collection. 

Using the builder, users will also be able to configure limited access lists for NFTs. 

When the new feature will be released is still unknown.

A Bit More Good News for Crypto Enthusiasts From Opera

Elrond blockchain services will be integrated into the Opera Crypto Browser, according to Opera Software.

This decision will make Web3's 300 million addicts happy by giving them direct access to a suite of decentralized applications (dApps) and other services through the browser's built-in wallet.

Background info: Elrond (EGLD) is a type of digital cryptocurrency that allows you to create a modern asset through transactions between independent nodes, mining, and other technologies. This blockchain network is focused on decentralized applications (dApps), business infrastructure, and the new Internet economy. Elrond is also regarded by developers as one of the quickest ecosystems currently available.

Opera Users will have at their disposal Elrond's standard digital token and the standard for issuing their own tokens. In addition, they will be able to use an embedded wallet, which is expected to provide smooth transactions and security.

Vitalik Buterin Makes a Prediction Regarding Dogecoin and ZCash

Vitalik Buterin has predicted the transition of Zcash and Dogecoin projects to the Proof-of-Stake algorithm.

Vitalik anticipates PoS's legitimacy to grow over time as it grows. He's also hoping Zcash moves over, and is optimistic about Dogecoin evolving over to proof of stake at some point soon.

However, Buterin didn’t specify when both projects may follow Ethereum's example and switch to the new algorithm.

Cryptocurrency Is Losing It

Cryptocurrencies are in decline. According to the JP officer Takis Georgakopoulos, over the last six months, demand for bitcoins as a payment tool has plummeted.

Nonetheless, Takis stated that the bank will continue to assist customers who are interested in utilizing e-money to pay for products and services.

In less than a year, the capitalization of this market has fallen by $2 trillion. Trading volumes have dropped significantly on most cryptocurrency exchanges, and many companies operating in this segment have found themselves on the verge of bankruptcy.

Anyways, JPMorgan JPMorgan is banking on the expansion of tokenized assets. The bank recently became a key sponsor of London-based cryptostartup Owners, and in May 2022, the company experimented with using blockchain for payments.

Users Complain on Meta-wooziness

The metaverse ecosystem is experiencing an increase in cybersickness, PYMNTS says

According to PYMNTS, which refers to some clinical studies, the term "cybersickness" refers to a digital equivalent of seasickness that looks to be significantly more frequent with virtual reality headsets. One of them says that despite the technical breakthroughs in virtual reality (VR), consumers are always plagued by nausea and confusion.

This news seems disappointing amid a growing number of companies wishing metaverse to become a part of their employees’ work lives.

Following Meta's lead, a number of automakers — from Rimac Bugatti to BMW — have teamed up with graphics chip maker Nvidia to establish metaverse-style work spaces where prospective purchasers may test drive vehicles and view interior design options. In addition, Nvidia has also been approached by multinational corporation Siemens and consulting giant Deloitte, using Nvidia's Omniverse Cloud as the basis for creating such mini-metaversions for clients.

This is bad news for business, and the latest study of Coburg University in Germany confirms it.

Two of the 18 participants who were supposed to complete a whole work week wearing a VR headset dropped out on the first day due to symptoms of cyberbullying.

The remaining 16 reported the following symptoms:

  • 35% increase in workload 
  • 42% increase in frustration
  • 50% increase of eye strain 

At the same time, participants' perceived productivity dropped by 16%.

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