Top News | 16.01-22.01
- Tether outperforms Visa and Mastercard
- Revolut's approach to company culture is evolving
- The Ukrainian app Diia taking over the world
- Crypto lender Genesis files for bankruptcy
- PayPal exposed its clients to hacking
- Peel Hunt analysts shared a view on the future of fintech
- Microsoft is next tech company planning to lay off thousands of employees
- EU financial ministers assess the digital euro, while UK skepticism rises
- Davos becomes an important place for digital payments
- FTX CEO fighting to keep lawyers
Peel Hunt Analysts Shared a View on the Future of Fintech
Peel Hunt investment bank analysts believe that the financial technology industry will thrive. The bank's experts linked the growth of the financial technology field to the history of the dot.com corporation, which survived the 2000 collapse.
Analysts say internet companies like Amazon, Meta, and Alphabet make up a significant portion of the Nasdaq index. In their opinion, the current cost of living crisis may further stimulate the use of fintech, and over the next decade, the fintech sector will become the "new Internet."
At the same time, researchers cited the United Kingdom, which already has a thriving fintech sector of 2,500 businesses. However, it should be emphasized that only a few are public.
Peel Hunt predicts that major growth categories will develop in B2B, embedded finance, open finance, and RegTech. That said, specialized fintechs concentrating on specific verticals, client groups, and functions may develop to dominate their niches and leverage this situation to expand into adjacent sectors.
The Ukrainian App Diia Taking Over The World
The US intends to "replicate the success" of Ukraine's Diia e-government program in other countries, said USAID Administrator Samantha Power during the sidelines of the World Economic Forum in Davos.
Power explained that they plan to create similar applications for other countries based on Diia. According to her, the initiative is still in its early stage. However, it has been allocated $650,000 to conduct feasibility studies in countries that have expressed interest.
Estonia is also trying to adapt Diia. At the Diia Reels event held at the World Economic Forum, Ukrainian Minister of Digital Transformation Mykhailo Fedorov and Vice Chancellor for Digital Development of Estonia Luukas Kristian Ilves presented the Estonian app mRiik, which is an analog of Ukrainian Diia.
In February, mRiik will be available for testers, and the full launch is planned for mid-2023.
Diia is a Ukrainian app with all the necessary documents in one place (on a smartphone). In addition, Diia is also a portal where people can get all services online: quickly, conveniently, and humanely.
Tether Outperforms Visa and Mastercard
Tether overpowers Visa and Mastercard in terms of transaction volume in 2022. Tether, the issuer of the USDT stablecoin, processed $18.2 trillion in transactions in 2022, outpacing the largest traditional payment systems.
For comparison, Visa processed $14.1 trillion in transactions, and Mastercard processed $7.7 trillion.
Tether is the largest issuer of stablecoins in the cryptocurrency market. USDT, a centralized stablecoin pegged to the US dollar, ranks third in the overall cryptocurrency ranking with a capitalization of $66.4 billion.
Revolut’s Approach to Company Culture Is Evolving
Fintech startup Revolut is going to hire a team of psychologists and behavioral science experts. Thus, the company is trying to create a new approach to its corporate culture and obtain a banking license in the UK.
The new unit's task is to encourage employees to treat each other more "humanely", meet each other halfway, and show respect "at all times".
The company also plans to change the description of its corporate culture on its website. It now states that the company has a "very high bar" and if employees, who number more than 6,000 in 37 countries, cannot "achieve perfection," they will receive feedback that can "hurt."
Company sources say that Revolut took this step to speed up the process of obtaining a banking license in the UK. However, the startup's management denies this.
Crypto Lender Genesis Files for Bankruptcy
One of the largest cryptocurrency lenders, Genesis, has filed for bankruptcy amid problems in the digital asset market that have intensified after the collapse of the FTX crypto exchange.
The company listed more than 100,000 creditors in its bankruptcy filing, with total liabilities ranging from $1 billion to $10 billion.
Genesis hopes to try to sell assets or raise money from creditors, who would then own the company's reorganized business. This is allowed by Chapter 11 of the US Bankruptcy Code.
PayPal Exposed Its Clients to Hacking
Thousands of PayPal users have been hacked. The accounts of 34,942 PayPal users were hacked between December 2 and 6, 2022, by hackers through a credential spoofing attack. The company officially announced this on January 18.
The attackers gained access to customers' data, including name, address, date of birth, tax number, and social security number.
Credential spoofing attacks occur when hackers use usernames and passwords of accounts obtained due to leaks on various websites. Therefore, PayPal urges customers to avoid reusing passwords and activate two-factor authentication for their accounts.
Microsoft Is Next Tech Company Planning To Lay Off Thousands Of Employees
Microsoft plans to cut thousands of jobs and eliminate some human resources and engineering positions.
According to the report, the company plans to cut about 5 percent of its workforce or about 11,000 positions.
In particular, specialists in several engineering departments and Microsoft's recruiting division will lose their jobs.
The expected layoffs will be the latest in a series of layoffs at technological firms, including Amazon and Meta Platforms, in reaction to declining demand and a worsening global economic outlook.
As of June 30, the company had 221,000 full-time employees, including 122,000 in the United States and 99,000 overseas.
UPD: Over the weekend, it was also revealed that Google will lay off 12,000 workers. Sundar Pichai, CEO of Google, officially confirmed the layoff of more than 6% of the company's workforce. The layoffs will affect the company's whole divisions and offices throughout the world.
EU Financial Ministers Assess the Digital Euro, While UK Skepticism Rises
Eurozone finance ministers discussed the potential introduction of the digital euro. The members of the so-called Eurogroup stated that introducing the digital euro requires decisions that "should be discussed and adopted at the political level." In other words, the creation of the asset requires an appropriate legal framework involving the European Parliament and the Council of the EU based on a proposal from the European Commission.
According to the statement, the digital euro should meet the following criteria:
- be secure and stable, ensuring a high level of confidentiality
- act as a simple and easy-to-use tool that is widely available to the public;
- complement, not replace cash.
CBDCs can play a vital role in an increasingly digitized economy, the Eurogroup members noted.
They also believe that the asset should prevent money laundering and tax evasion and ensure compliance with sanctions.
At the same time, skepticism is growing in the UK. The Governor of the Bank of England, Andrew Bailey, recently questioned the need for a wholesale digital currency from the central bank, given the current modernization of the payment infrastructure taking place in the UK.
Davos Becomes an Important Place for Digital Payments
Davos has launched a universal digital payments network for Stablecoin and central bank digital currencies (CBDC). The goal of the network is to enable interoperability between these digital currencies.
The USPN has been developed over the last two years with cooperation from GFT, Red Date Technology, TOKO, and DLA Piper. In July 2022, a sandbox was established in which multiple banks actively tested Stablecoin transfers and currency transactions.
The network was launched at Davos during a discussion about digital currency, interoperability, and rapidly evolving infrastructure. The panel included representatives from Deutsche Bank, HSBC, Standard Chartered, The Bank of East Asia, and Akbank.
UDPN says that by the end of this month, several tier-one banks will participate in a series of proof-of-concept test cases to demonstrate how UDPN can address current and future challenges of integrating digital currency into everyday business, banking and payment scenarios.
FTX CEO Fighting to Keep Lawyers
U.S. Trustee Andrew R. Vara filed an objection to hiring a law firm on Jan. 14.
He argued that Sullivan & Cromwell hadn't disclosed its connections and previous work at FTX sufficiently and pointed out that publicly available information showed that a former law firm partner had become an adviser to FTX 14 months before the bankruptcy filing.
For his part, current CEO John Ray suggested that retaining the services of that law firm was in the best interests of FTX's creditors.
It seems unlikely that we will feel any progress in the case shortly if such conflicts between the company and regulators continue.