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Visa Sheds Light On Its Exit From The Libra Project

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The crypto-verse is luring in several mainstream platforms into exploring the prospects of cryptocurrencies. After payments giant, PayPal expressed its interest in crypto, another popular financial service company, Visa seems to have jumped the bandwagon.

In a recent interview with Forbes, Cuy Sheffield, the senior director, head pf crypto at Visa along with Terry Angelos, SVP global head of fintech at Visa addressed several elements and elaborated on the incorporation of crypto in Visa. Sheffield pointed out that, Visa was working on both the product as well as the research side of digital currency. Despite, this the platform is reportedly yet to discuss new strategies.

Back in February 2020, San-Fransico’s prominent cryptocurrency exchange, Coinbase revealed its association with Visa by unveiling the Coinbase Card. This card is a Visa debit card that permitted users to withdraw their cryptocurrencies. The entire partnership put both the parties under the crypto spotlight as it was the first of its kind.  Revealing that Visa had onboarded about 25 companies, Angelos added,

“We are seeing significant interest in demand from crypto companies that want to work with Visa and connect their clients to our network of 60-plus million merchants.”

Visa To Work On CBDC?

Central Bank Digital Currencies have drawn the attention of several governments across the world. China’s advancement in the same has turned several heads. Speaking about the integration of CBDCs into the economy, Sheffield pointed out that Visa’s relationship with central banks is not news. Visa has been working with several central banks across the globe and discussions about CBDCs has reportedly gained more traction. While several continue to diss stablecoins formulated by private companies, Sheffield believes that CBDCs would have to deal with similar prospects.

Stressing on the process of including CBDCs into the global economy, he added,

“[…]We think there’s a big opportunity for Visa to leverage our existing network and assets and expertise to add value to both central banks as they think about CBDCs, as well as to other private sector entities that are exploring these privately issued stable coins.”

Exiting The Libra Project

Facebook’s crypto venture, Libra had stirred the entire globe. As the regulatory pressure around the project surged, several members of the project walked out of the door. Shedding some light on the same, Sheffield put forth a conjecture that the payments platform was keen on aiding digital asset projects that the “diverse set of clients demand.” The focus was more on delivering a service that worked with a wide variety of digital currencies and networks, he added.

Furthermore, Angelos said,

“If we join a consortium, it’ll be because we want to influence and help some of those principles that we believe in be executed.”

Lockdowns Due to COVID-19 Seems to Have Lent Traction to Fintech Acceptance Movements; Changes Here to Stay

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The coronavirus pandemic has brought with it multiple changes that have permeated almost all major industries on the planet. One of the sectors where the effects of the pandemic have been felt is the financial world, which is in the midst of a complete transformation.

The latest studies have shown that as the pandemic has progressed, more and more people were delving into the world of financial applications. This was a marked change from the time when people preferred in-person meetings with their brick and mortar establishments.

Market experts have stated the pandemic has revealed the underlying expectations of users who are involved in making big money transfers. Since a majority of the people were stuck at homes because of government-mandated lockdowns, they were delving into mobile applications built by banks as well as non-banks. The non-banking sector has been heavily involved in the fintech area for some time now and their progress has beaten all market expectations.

One of the fintech firms that has benefitted massively from this pandemic was the San Fransisco based Plaid. The firm, which was recently acquired by Visa for a whopping $5.3 billion has been on a roll with many services using its digital architecture to carry out transactions on a large scale. Plaid’s chief executive Zach Perret went on an interview with CNN, where he stated:

“I think the pandemic has made it incredibly clear that digital financial services are here to stay. People are trying digital finance for the first time. It’s going from an attitude where people think, ‘I do my banking in person,’ or, ‘I do financial services in person,’ to an attitude of thinking, ‘I could use these digital services. Breaking that zero-to-one gap, that’s the biggest gap.”

Analysts have also agreed with Perrett’s sentiment, with many predicting a future where big banks will make use of fintech architecture to keep up with customer demands. New technologies like blockchain and smart contracts have opened up an entirely new avenue for speed and efficiency. Although the cryptocurrency market still has a major share of critics, more and more people were warming up to the idea of its foundation, blockchain technology. As major banks try to create their own version of the existing blockchain system, only time will tell if it becomes a complete mainstay.

California-Based Blockchain Capital The Latest Addition To Libra Association

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After receiving immense backlash from regulators across the globe, social media giant, Facebook, decided to delay the release of the Libra project. The project had previously assured to meet the regulatory requirements put forth by the regulators and the latest news suggests that the platform is at it.

Libra Association On-Boards Latest Member

The social media giant seems to be back on track with its Libra project as the Libra Association has been rolling out an array of updates pertaining to the project. On Friday, the Association welcomed Blockchain Capital, a San Fransisco-based venture capital company. The platform was rolled out back in 2013 and co-founder, Bart Stephens elaborated on his view about the company’s association with the Libra project. He added,

“We’re honored to join the Libra Association and believe deeply in the mission of creating a more equitable payment system. Leveraging blockchain technology to improve financial access and promote innovation has been at the core of Blockchain Capital’s portfolio strategy.”

After severe regulatory opposition from the SEC last year, several members of the Libra Association bid adieu to the project. Prominent platforms like, PayPal, Mastercard, Visa, Stripe, and several others exited the project. However, everything seems to be falling in place for the Association as it recently on-boarded, Temasek, an investment firm in Singapore, and Slow Ventures along with Paradigm.

Furthermore, just this week the Association hired, James Emmett a former HSBC Exec as the Managing Director of Libra Networks. This list goes on as the platform recruited several to spearhead the operations at Libra.

Dante Disparte, the Vice Chairman and head of policy and communications at the Libra Association was pleased with the latest alliance as he stated,

“As a member of the Libra Association, Blockchain Capital brings deep industry insight and a dynamic network of supporters as we work on building a blockchain-based payment system that supports responsible financial services innovation.”

Even though the Association released the updated version of the Libra white paper, the European Union recently asserted that the European Central Bank [ECB] was the only entity authorized to issue currencies. The French Finance Minister part of the meeting specifically mentioned the Libra project in his statement.

Payments Giant PayPal Probes Incorporation Of Crypto Into The Fold

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Several mainstream companies have been looking at the prospects of cryptocurrencies and have been venturing into the industry. While the social media giant, Facebook’s Libra project has been a great example of the same, several other platforms have been making use of the existing currencies. PayPal is reportedly the latest company to delve into the acceptance of crypto.

PayPal Steers Towards Crypto

Appearing on CNBC’s Squawk Box, Sandi Bragar, the Managing Director at Aspiriant hinted that online payments company, PayPal was working on incorporating crypto into their platform. The COVID-19 pandemic has put the entire globe in shackles, however, the virus hasn’t restrained individuals from engaging in activities pertaining to e-commerce. Bragar pointed out that this cycle would prolong even after the pandemic and PayPal has been evidently been at the forefront of e-commerce and digital payments.

Revealing details regarding PayPal and its interest in crypto, Bragar further added,

“We also like that PayPal is working with merchants to bring crypto into the fold, and we think that’s gonna be really important as cryptocurrencies become more mainstream in the years ahead.”

While Bragar did not provide any further details about PayPal working with its merchants to incorporate crypto, the payments platform isn’t a new name to the crypto-verse. PayPal made news back in June, as rumors pertaining to the platform launching a crypto-centric trading service surfaced the internet. However, a recent letter that the company presented before the European Commission highlighted that PayPal intends to carry forward its presence in the crypto-verse by aiding regulations. The letter further read,

“Of particular interest for us is how these technologies and crypto-assets can be utilized to
achieve greater financial inclusion and help reduce/eliminate some of the pain points that exist today in financial services.”

PayPal has already established its support for the crypto-verse as it provides payment services to cryptocurrency exchanges like Local Bitcoins, Coinbase as well as Paxful.

Additionally, PayPal’s latest move could prove beneficial to the crypto industry as the company hoards a user base of 325 million.

After Libra, Regulations Delay Launch Of Digital Settlement Project Led By Banks

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Soon after the world witnessed the evolution of cryptocurrencies, several mainstream companies started pouring into the industry. While a few platforms invested in the existing coins, firms like Facebook and JP Morgan decided to roll out their own. After mainstream organizations, banks started taking a keen interest in developing digital coins. The announcement of the world’s biggest banks collaborating to roll out digital currencies took the world by storm. However, the latest updates suggest a delay in the project.

Regulatory Hurdles Stand Tall Before Digitalization

The Utility Settlement Coin [USC] was a project put forth by the 13 of the largest banks in the world, including Credit Suisse, Barclays as well as Banco Santander. After a while, USC changed into Fnality International and was originally scheduled to roll out this year. However, the project will reportedly launch during the Q1 of 2021.

The project aims at launching digital versions of the U.S dollar, Canadian dollar, the Japanese yen, euro as well as the British pound. While the world was in anticipation of the launch of this project, regulations put a hold on it. The Chief Executive of Fnality International, Rhomaios Ram told Reuters that the project was still in need of regulatory approval.

The 13 banks involved in the project invested a whopping 50 million pounds. The project has reportedly been under development for the past five years and was operated by the USB Group AG. The banks involved in the project intend to steer towards digitalization by limiting paperwork that takes place during the transfer of funds.

This isn’t the first time regulations have come in the way of innovations. Social media giant, Facebook’s crypto venture, Libra is the perfect example of the above statement. The project was constantly subject to scrutiny from regulators across the globe and was delayed. Even though the magnitude of regulatory pressure of the Libra project and Fnality have a huge disparity, seeking regulatory approval has become quite a task. Stressing on the same, Ram added,

“The technology is the least complicated part of this whole thing.”

American Express Announces Acquisition of Fintech Firm Kabbage

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A week after acquisition talks began, the New York-based multinational financial services corporation, American Express, finally announced that it had entered into an agreement to acquire substantially all of the fintech company, Kabbage, in an effort to expand its services to small businesses.

This includes a full suite of financial technology products, data platform as well as IP built for small businesses, and excluding Kabbage’s pre-existing loan portfolio, according to the official press release.

Following the latest development, Kabbage CEO and co-founder, Rob Frohwein commented

“At Kabbage, we have always made the success of America’s small businesses our primary objective. We have built a technology and data platform that provides them with the kind of capabilities and insights often reserved for larger businesses. By joining American Express, we can help more small businesses succeed with a fully digital suite of financial products to help them run and grow their companies.”

The Atlanta-based Kabbage products, backed by investors including SoftBank Group Corp. ‘s Vision Fund and Reverence Capital Partners, include access to flexible credit lines, online bill payment, cash flow visualization tools, e-gift certificates. Other financial details of the deal have not yet been disclosed, but reports suggest that the numbers could be as high as $850 million.

This comes at a time of severe distress among the SMBs amid the COVID-19 pandemic. Kabbage was founded to provide quick funding to small businesses more than a decade ago and the news of its acquisition by the credit-card giant did not sit well with many commentators in the space.

Anna Marrs, the President of Global Commercial Services at AmEx, had recently asserted,

“For several years, American Express has been expanding beyond our industry-leading commercial card products to offer our business customers a growing set of payment and working capital solutions. This acquisition accelerates our plans to offer U.S. small businesses an easy and efficient way to manage their payments and cash flow digitally in one place, which is more critical than ever in today’s environment.”

 

Mastercard Partners with Wirex to Take the Cryptocurrency Industry up to the Next Level

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The cryptocurrency market is maturing at a faster rate than thought before and investors are loving it. As the days progress, more and more mainstream players are entering the field which makes it even more important for developments to take place at a faster rate.

Mastercard was the latest mainstream player to make a mark in the virtual asset world after its recent tie-up with the London-based financial firm Wirex. Mastercard ‘s move is a step in the right direction for the industry that has been trying to get out of the shell.

With Mastercard’s latest offering, it has become clear that there is a pressing need for a legitimate platform for cryptocurrency transactions. Officials close to Wirex also said that they would become the first native cryptocurrency platform to gain principal membership on Mastercard. Raj Dhamodharan, Mastercard’s executive vice president for digital asset and blockchain products and partnerships said:

“The cryptocurrency market continues to mature, and Mastercard is driving it forward, creating safe and secure experiences for consumers and businesses in today’s digital economy. Our work with Wirex and the wider crypto ecosystem is accelerating innovation and empowering consumers with more choice in the way they pay.”

Now that Wirex can directly issue cards on the Mastercard platform, customers will have the added advantage of using Mastercard’s privacy and security features. At the same time, Mastercard will also bring more cryptocurrency firms into its Mastercard Accelerate start-up initiative.

While Mastercard certainly has an elevated playing field in the financial world, it is certainly not the first to enter space. Last year, Brian Armstrong, led by Coinbase, launched his own crypto card in partnership with Visa, the rival of Mastercard. Following this development, Coinbase went on to become a principal member of Visa.  Principal membership allows a partner to make use of more features within the card as well as penetrate into new markets.

Market analysts have refrained from calling the Mastercard update a watershed moment because of how the industry as a whole has grown. Looking at the changes over the last few months, it has become evident that there has been an increasing demand not only from an investor point of view but also from a regulatory standpoint. This will be Mastercard’s first major cryptocurrency venture following its association with the Facebook Libra project in 2019.

Crypto Debit Card Issuer Wirecard Files for Insolvency

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Troubled fintech crypto debit card issuer, Wirecard, has allegedly filed an open insolvency proceeding. According to the Wall Street Journal ‘s report of 25 June, the Munich-based crypto card firm applied to the Munich District Court to initiate the insolvency settlement process.

The global Fintech firm cited its imminent insolvency and excessive debt as the chief encouragement for the application, referring to the $2.1 billion missing from its balance sheet. Situations have rapidly changed for the crypto debit card issuer after finding out that 32 percent of its balance sheet did not really exist.

 

Crypto debit card Issuer not yet bankrupt

Immediately after the discovery, Fintech became a leaderless company as the CEO and other top officials quit their positions. Wirecard ‘s insolvency application suggests that the company can not meet its liabilities for a short period of time. Insolvency may be the result of either a cash-flow deficit or a negative net asset balance. In the case of Wirecard, this seems to be the latter.

“The Management Board has come to the conclusion that a positive; going concern forecast cannot be made in the short time available. Thus, the company’s ability to continue as a going concern is not assured,” stated Wirecard.

As per the most recent financial filings in 2018, the Crypto Debit Card Issuer has a net profit of $350 million. However, as per the latest developments, investors might want to do a careful study on the figures. During the insolvency process; firms will typically implement radical policies to keep treading waters; such as scaling down staff and expenses, reorganizing debt, selling a section of their assets, and other measures. 

Bankruptcy vs. insolvency

Bankruptcy happens when a firm is completely incapable of meeting its debt obligations. Insolvency, on the other hand, is a precondition for bankruptcy. Insolvency does not suggest that the company has completely failed.

In conclusion, Wirecard ‘s business areas include the issuing of crypto payment cards to Cryptop.com and Tenx. According to a Tenx representative, client funds in fiat and digital currency have not been affected by the latest drama of the crypto debit card issuer.

 

Monetary Authority of Singapore Reveals Latest $1.75 Million Fintech Challenge to Combat Effects of Coronavirus

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The world’s financial situation was in jeopardy once global economies were taken over by the coronavirus. Major countries have witnessed a recession like a situation that has caused millions to lose their jobs.

To curb this, the Singapore Monetary Authority [MAS] has kick-started a $1.75 million competition to bring innovative fintech solutions to solve COVID-19 issues. Singapore was one of the few countries that heavily invested in blockchain technology with the goal of helping its citizens.

The MAS Global Fintech Innovation Challenge is set up to promote fintech solutions in the country that would aid frontline workers in the fight against the pandemic. The initiative will be comprised of two different awards, mainly the MAS FinTech Awards and the MAS Global FinTech Hackcelerator. Reports from sources revealed that the challenge will be hosted on the popular API Exchange.

According to inside information, the usage of Apix will not only collate more fintech solutions but also allow said solutions to be contextualized in a practical sense. The 12 winners of the competition will receive a total price of $1.2 million, presented in the Asean FinTech and Singapore Financial Institution category. There will be two different segments for the MAS Global FinTech Hackcelreator: the International Programme and the Local program.

In the International, Programme will comprise of winners from various other fintech competitions conducted at a global level. These separate fintech competitions were sponsored by bigwigs such as the Saudi G-20 Presidency, the Bank of International Settlements Innovation Hub, the United Nations Capital Development Fund, and Women’s World Banking.

The Local Programme, on the other hand, will cover high priority problem statements collated from the finance industry within Singapore as well as other global markets. Competition runners have said that over 107 different problem statements were received in 2020 alone. This was the first time that such a large number of statements were filed under the MAS Global Fintech Hackcelerator Local Programme.

 

German Digital Bank N26 Raises $100m in Extension of Series D round

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German digital bank N26 today announced it has raised an additional $100 million in its Series D funding round. Overall, the highest valued Fintech firm to date has raised almost $800 million at a valuation of $3.5 billion.

The Berlin-headquartered bank, founded in February 2013 by Valentin Stalf and Maximilian Tayenthal, now has 5 million customers worldwide. The investment, backed by global investors such as Peter Thiel’s Valar Ventures, Li Ka-Shing, Battery Ventures, Greyhound Capital, Earlybird Venture Capital and Horizons Ventures.

In the announcement N26 notes the funds will be used to facilitate the growth of N26’s product and expand its presence in its core markets, where mobile banking demand is higher than ever before.

With shifts in consumer banking preferences and banking preferences in the face of the COVID19 turmoil, the mobile bank expects a long-term shift in overall acceptance of digital banking.

“With banking from home now more important than ever, we want to make sure that everyone can open a bank account in minutes to explore the freedom and safety of mobile banking,” says Valentin Stalf, Co-Founder and CEO of N26”

N26 is one of the online-only banks which has grown in Europe, drawing millions of users despite any physical branches. The mobile bank continues to aim to invest in the near future in expanding its presence across its 24 European and US markets.

The Covid-19 has a significant effect on the mobile payment industry as customers and companies have been forced to change their spending habits dramatically and the banking sector is struggling to retain cash accessibility while keeping clients safe.

Large numbers of companies and people around the world have stopped using banknotes in the fear that the handling of physical cash handled by different people may be a source of coronavirus spread. This has encouraged the adoption of electronic payments in many countries. ‘