Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Research
OMFIF / EY Report: Blockchain for Public Finance – Capital Markets and Beyond
More effective and efficient policy-making can be realised by a public finance management system that places transparency and the seamless sharing of data at its heart. A PFM system should ensure that funds reach their intended recipients and are used for their intended purpose. And it must give the central budgetary authority accurate and regular reports of how its resources are being used, providing it with the information necessary to formulate and design fiscal policy.
See: KKR Partners with Securitize to Launch Part of Health Care Fund on Avalanche’s Public Blockchain
The advent of digitalisation promised simplification and efficiency. However, since each entity involved in the finance management and budget delivery process uses their own systems, the consequence is often a huge duplication of effort — financial and nonfinancial reporting conducted anew at every level, requiring manual reconciliation. This duplication wastes time and resources. A more automated process would not only cut down on this, but also reduce the incidence of costly mistakes. A key challenge in the construction of an efficient PFM system is to address these problems.
Table of Contents
Improving public policy and delivery: More effective and efficient policy-making can be realised by a public finance management system that places transparency and the seamless sharing of data at its heart.
Existing challenges: Building a dedicated public finance management system that overlays internal ones will help aid data capture and sharing, delivering for the public good.
See: Canada to Launch ‘Digital Ambition 2022’ Public Consultation For Digital ID Framework of Federal Public Services
Economic advantages of improvements: A modern PFM system would not only save on overhead and administrative costs, but bring benefits through fraud
and waste reduction, as well as better tracking what how impactful spending is.
Applications in capital markets: Green bond issuers and investors will benefit from a modern PFM system, tracking more efficiently how proceeds are spent and regulations are adhered to.
Towards better public finance management: More effective and efficient policy-making can be realised by a public finance management system that places transparency and the seamless sharing of data at its heart.
Public finance management systems have existed in one form or another for a long time but, in many cases, have failed to develop the sort of streamlined interinstitutional functionality now needed.
Download the 24 page PDF report --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Bain & Co Embedded Finance Report: What It Takes to Prosper in the New Value Chain
Bain & Company | Matt Harris, Adam Davis, Blake Adams, and Jeff Tijssen | Sep 12, 2022
A completely new proposition for financial services customers
- Research Overview: We set out to quantify the size, growth profile, and economics of the key offerings powering the rise of embedded finance, focusing on the US market. Consisting of over 50 interviews with industry practitioners, market experts, and analysts, as well as a synthesis of published data, this research also draws on our collective experience working with software platforms, enabling firms, and license and regulatory services providers.
See: Canadien blooming. The fertile “Valley” for finance innovation FLOW: OB, CAN Trends, Beyond OB: BaaS + Embedded Finance, tunl
- The rise of embedded finance marks a new era, not only for banking transactions but also for how consumers and businesses build and manage relationships with financial services more broadly.
- In 2019, we wrote about the burgeoning movement of fintech from a business model unto itself to a key ingredient in the software platform stack—the “fourth platform.” Customers benefit from contextual, seamless experiences; platforms can unlock new use cases and often use proprietary customer data to improve financial access, while reducing costs for their end customers.
- We found that embedded finance already accounted for $2.6 trillion, or nearly 5% of total US financial transactions, in 2021, and by 2026 it will exceed $7 trillion, or over 10% of total US transaction value.
- Demand will grow because the proposition promises to improve customer experiences and financial access, along with providing cost-reduction and risk-reduction benefits to companies throughout the value chain.
- End users increasingly prefer the convenience of using payments, lending, insurance, and other financial services embedded in their day-to-day software, rather than accessing standalone services from traditional financial institutions.
- Since then, the transition has been swift and unrelenting. Several platform archetypes have emerged, including e-commerce (such as Shopify), food delivery services and rideshare apps (Uber, DoorDash), and wellness (Mindbody). These offerings are supported by an army of well-funded fintech enablers, which help platforms deliver products and services.
- The new value chain favors platforms. The traditional, bank-driven value chain shifts to a new ecosystem that typically requires four main participants:
- the end customer, platforms that own the customer relationship, software enablers that help meet complex regulatory and technological requirements, and a regulatory services or license provider. Firms can take on multiple roles and models.
See: McKinsey Global Banking: Revenue pools moving to customer-ownership with embedded digital financial services
- Different sectors and services are developing at different rates. Adoption curves vary. While payments and lending will continue to be the largest segments of embedded finance, we expect to see growth in insurance, tax, accounting, and other services.
- Traditional financial services have reached an inflection point. Traditional institutions face the threats of shifting economics and adverse selection with this new value chain. Yet they can also tap tremendous growth potential, especially if they identify where to play across specific vertical segments. Investing in the right capabilities will ultimately lead to opportunities to serve the new value chain in multiple ways.
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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CFPB to Regulate BNPL Like Credit Card Firms
CNBC | Chelsey Cox | Sep 15, 2022
Image: Pexels/Andrea Piacquadio
- BNPL lenders to be monitored like credit card companies: The U.S. Consumer Financial Protection Bureau plans to subject “buy now, pay later” lenders to the same vigorous oversight as credit card companies, saying the short-term financing industry harvests consumer data in ways that threatens consumer privacy.
- Considered a substitute for traditional credit cards, the buy now, pay later model allows consumers to pay off a loan in a few installments, most commonly four interest-free increments. The service, provided by a host of firms such as Klarna and Afterpay, increased in popularity during the pandemic.
See: Apple Finally Unveils its BNPL Offering. 4 Things to Know Before Signing Up
- Guidance forthcoming: The consumer watchdog, which doesn’t currently regulate the industry, plans to issue guidance to oversee the lenders and subject them to supervisory exams, CFPB officials said.
- Rise in loan approval rates: The CFPB found that adoption of the service is growing across all age groups, according to Chopra.
- Apparel and beauty merchants accounted for over 80% of usage in 2019 but only 58.6% in 2021 as more consumers used buy now, pay later for services such as travel, pet care, groceries and gas.
- More customers are also getting approved for the loans. In 2021, 73% of applicants were approved, compared with 69% in 2020, according to the report.
- Consumer risks: lack of consumer protections compared with traditional credit card companies, data harvesting and monetizing customer data, debt accumulation and “loan stacking” — or taking on numerous loans at the same time.
- Late fees are also becoming more common. The CFPB found that 10.5% of unique users were charged at least one late fee in 2021, compared with 7.8% in 2020.
See:
Why BNPL Swedish giant Klarna has sights set on Canada
Financial Consumer Agency of Canada publishes BNPL pilot study
Mike Taiano, senior director of Fitch Ratings:
“Though not a surprise, the CFPB’s report portends more intense regulatory scrutiny at a time when Buy-Now-Pay-Later faces increasing headwinds in the form of rising funding costs, weaker credit performance, and heightened competition"
Continue to the full article --> here
Download the 83 page CFPB Buy Now Pay Later report --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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KPMG Fintech Pulse H1’22 Report: Global Fintech Investments $107.8B across 2,980 Deals
KPMG | Sep 2022
- Global investment in fintech falls to $107.8 billion despite robust VC funding
- Global investment in fintech fell from $111.2 billion across 3,372 deals in H1’22 to $107.8 billion across 2,980 deals in H1’21, mirroring the decline in investment experienced in the broader technology sector.
- Total fintech investment and deals volume declined in both the Americas and EMEA regions, while the Asia-Pacific region attracted a new annual high of fintech investment amidst a decline in the number of deals.
- US attracts vast majority of fintech investment in Americas
- The US accounted for $34.9 billion of fintech investment in the Americas during H1’22, a drop from $49.7 billion in H2’22. Fintech investment outside of the US dropped even more prodigiously in the wake of the rapid rise in global geopolitical and macroeconomic uncertainty.
- Brazil and Canada seeing declines in investment greater than 50 percent between H2’21 and H1’22. Brazil saw fintech investment drop from $3.7 billion to $1.4 billion, while Canada saw investment fall from $1.9 billion to $810 million.
- Investors turning focus to profitability and cash flow
- Given rising interest rates, increasing levels of inflation, and growing concerns about an economic recession, fintech investors across the Americas enhanced their focus on profitability, top-line revenue growth and cash flow when evaluating targets and companies within their portfolios.
See: CB Insights: Canadian Fintech Funding Dropped 70 Percent in Q2-2022 YoY
- Trends to watch for in H2’22
- Market corrections — including declining valuations, increasing M&A and a growing number of distressed businesses — in light of the predicted recession and the over-enthusiasm and over-investment in key areas over the last 18 months.
- Continued focus on embedded solutions, including payments, finance, and insurance.
- Big tech companies and other corporates prioritizing partnerships, while also looking for opportunities for add-ins at bargain prices compared to recent years.
- Growing focus on B2B solutions aimed at improvement of infrastructure or on the optimization of operational activities like AR/AP.
- Blockchain and crypto space takes hit, still sees big deals. Slowdown in crypto interest and investment, particularly retail firms offering coins, tokens and NFTs.
- Increasing focus on underdeveloped fintech markets, including jurisdictions in Africa.
- Payments space stays hot in eyes of investors in H1’22, but could taper off
- C investment in fintech remains robust as Europe sets new record
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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World Bank Report: Critiques FATFs Work on National Risk Assessments
The Compliance Lady | Sep 9, 2022
𝗪𝗢𝗥𝗟𝗗 𝗕𝗔𝗡𝗞 𝘃. 𝗙𝗔𝗧𝗙: It is always interesting to come across a study that critiques FATF’s work. In a recent report the World Bank takes a closer look at National Risk Assessments (NRAs). For those not familiar with NRAs, the Financial Action Task Force (FATF) requires nations to demonstrate an understanding of the money laundering risks they face in the country by conducting National Risk Assessments.
See: Opinion: Rising cost of compliance may lead to consolidation
- World Bank researchers examined eight of the most advanced nations’ (Canada, Italy, Japan, the Netherlands, Singapore, Switzerland, the UK, and the US) NRAs in order to test their knowledge of those fundamental concepts and to draw lessons from them for national governments.
- A deeply flawed methodology is what they found. The eight NRAs show very different conceptualizations, analytic approaches, and products. Each raises serious issues regarding the risk assessment methodology.
- For example, most relied largely on expert opinion, which they solicited in ways that are inconsistent with the well-developed methodology for making use of expert opinion.
- They misinterpreted data from suspicious activity reports and failed to provide risk assessments relevant for policy makers.
- The report concludes with a set of recommendations for policymakers and NRAs regarding improving risk assessments.
Continue to the full article --> here
Download the 45 page PDF report --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Bitcoin Outperforming Crypto Market Share as Ethereum Merge Nears
Arcane Research | Vetle Lunde and Jaran Mellerud | Sep 13, 2022
Bitcoin has seen a strong recovery of 8% over the last seven days, outperforming the rest of the crypto market and regaining some of its market dominance as we approach the long-awaited Ethereum merge.
- This will be a huge week in crypto. The Ethereum merge is scheduled to occur on September 15th, and market participants are hedging like never before.
- Relative to BTC, ETH has underperformed in the last week, falling from a peak of 0.085 ETHBTC to 0.077 today, while the ETHBTC correlation has declined in a relatively volatile environment.
- Traders are moving into bitcoin ahead of the merge
- Bitcoin’s outperformance has led the bitcoin dominance to soar by 1.8% over the past seven days. It’s currently sitting above 40% for the first time in almost one month.
- In late August and early September, the rest of the crypto market, particularly ETH, managed to steal market share from the underperforming BTC. The ETH dominance fell by 0.7% over the past seven days but is still close to its highest level since December 2021.
See:
IMF Magazine: Money Revolution in the Age of Crypto and CBDCs
Blockdata: State of Crypto Banks in 2022
Canadian Crypto Industry is Working Towards Legitimacy
Top 8 Countries Most Interested in Ethereum's The Merge
- Sentiment is improving, but traders are still cautious
- The Fear and Greed Index has managed to climb out from the ‘extreme fear’ area. A significant component of the index calculation is market momentum and volume, and recently we have seen growing spot volumes in a positive market.
- The bitcoin spot volume surges to yearly highs
- The 7-day average bitcoin spot volume has surged to a yearly high of $11.4 billion.
- Most of this trading activity happened on Binance, which has completely taken over the bitcoin spot market due to its fee removal this summer. Binance’s zero-trading fee policy has made new high-frequency trading strategies profitable and attracted these types of traders to Binance’s bitcoin pairs.
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Lyn Alden Analysis: A Look at the Lightening Network
Lyn Alden | August 2022
This article examines the relationship between a monetary asset being a store of value vs being a medium of exchange. Specifically, it focuses on the scaling method of the Bitcoin network as its main example, but also takes a broad look at the history of trade-offs in the cryptocurrency space as well to see why a layered approach makes the most sense.
The primary goal of this article is to examine the topic of how bitcoin has evolved as a medium of exchange, and more broadly to analyze the order in which new monetary assets can be accepted as a store of value and a medium of exchange. As a big part of that, I’ll include an analysis of the Lightning network, which is a small but fast-growing payments layer that is interwoven into the Bitcoin network. Here are the sections of this article:
- Summary Points
- Store of Value vs Medium of Exchange
- Bitcoin and Lightning: Scaling in Layers
- How the Lightning Network Works
- Lightning Network Critiques
- Concluding Thoughts
Intro
This article is long, so I’ll summarize the main points up front here, and then spend the rest of the article diving into the details.
-A truly decentralized and permissionless payment network requires its own underlying self-custodial digital bearer asset. If instead it runs on top of the fiat currency system or relies on external custodial arrangements at its foundation, then it is neither decentralized nor permissionless.
See: The Most Efficient Payment System In The World: Bitcoin And The Lightning Network
-In order to create a truly new digital bearer asset that is useful for payments in the long run, it must also be an attractive store of value, so that a meaningful percentage of the population begins to persistently hold it as some percentage of their liquid net worth and be willing to accept it for goods and services.
-In other words, in order to create a decentralized version of Visa, beneath that you must first create a decentralized version of Fedwire, and along with that you must first create a decentralized version of digital gold. It’s hard to envision any other path succeeding.
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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