Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Fintech Opinions
Open Banking to Bring Multitude of Benefits to Canada in 2023
The Globe and Mail | | Aug 6, 2022
When Colin Deacon started his career as an investment adviser 40 years ago, he made a point of working with some of the smallest customers – those who’d typically be passed over by the financial services industry. His clients got financial and tax planning advice, help with their small business concerns and investing assistance – support that, he said, was and still is typically unavailable to the majority of Canadians.
We still have a situation where most Canadians are not given really good, basic advice … and if you’re somebody from a marginalized community your access to that is 10 times worse.
Mr. Deacon said he sees the development of an open banking system in Canada as a solution to that problem. Open banking, or consumer-directed finance, would allow individuals and businesses to have control over their own financial data, and to securely share it with third-party financial service providers or authorize them to take action on their behalf.
See: Open Banking is Coming to Canada…Are you Ready for Change?
Currently, Canadians don’t own or have the right to share their financial data, and their ability to access services provided by fintech companies is dependent on whether their financial institution permits it. This means that financial products and services aimed at helping Canadians improve their financial picture – such as credit-building products for those with poor or no credit history, predictive budgeting apps that warn the user if their account is at risk of being overdrawn and more – may not be available to them.
Many Canadians are unhappy with the current financial system, according to an April survey by FDATA and Paytechs of Canada. The survey of Canadian consumers and small businesses found more than half felt stress interacting with the country’s financial services sector. Women business owners were more likely than their male counterparts to report stress and younger Canadians were more likely than older individuals to say the same. More than two-thirds of respondents said they’d benefit from more competition and transparency in the market.
On demand Video: FFCON: Inclusive Banking and Affordable Credit
The federal government is expected to roll out an open banking system by early 2023, with working groups under way this summer. Proponents say this system will give Canadians access to a wider range of financial products and services, make it easier to switch financial institutions, reduce fees on transactions and make the financial system more equitable for marginalized Canadians. That includes the millions of consumers without a bank account or who aren’t adequately served by mainstream financial services.
Open banking is ultimately about consumer choice and making financial services more accessible and less expensive for small businesses and individuals, said Andrew Graham, co-founder and chief executive officer of Borrowell, a fintech firm that provides free credit monitoring and offers credit coaching and credit-building products.
I would not overlook the importance of lowering fees and the cost of interacting with financial services. Such payments can become a significant blocker to financial growth for many people and many businesses.
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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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When A Neobank Goes Bankrupt What Happens to the Customers?
Fintech Business Weekly | | Jul 31, 2022
After an incredible bull run in fintech startups powered by ultra low interest rates and cheap, plentiful capital, many companies are getting an overdue reality check. Investors’ priority has abruptly shifted from “growth at all costs” to “do the economics work”?
The impact of this shift has only begun to be felt across the ecosystem. We’re likely to see more M&A activity and, yes, outright failures as startups struggle to raise new capital.
What happens to the customers of failed fintech startups?
- This is a particularly important question for neobanks. Companies like Chime, Varo, and Current have aggressively courted users — many of whom are lower income. They’ve incentivized users to make the services their “primary” bank account, with features like early direct deposit and no-fee overdrafts. "As fintech companies and neobanks are typically not backed by FDIC, there are significant risks associated with them,” – says Shania Brenson, the co-founder of 15M Finance. “Although they provide some benefits and attractively package their products, emphasizing low interest rates, no fees, and other perks, they should not be considered as a primary financial instrument. Otherwise, you could lose all your money if one day your neobank fails.
See: N26 addresses neobank’s culture struggles
- Customers use these accounts to pay rent, buy groceries, put gas in their cars, etc. — and many would have few other ways to pay, if the funds in their neobank account were inaccessible.
- FDIC insurance protects deposits from a failure of the bank partner holding them, but the failure of a consumer-facing neobank or BaaS platform could nonetheless result in disruptions to consumers’ access, if not handled methodically. This isn’t purely theoretical — a number of neobanks have already wound down.
- For example, Beam Financial, which was purportedly a high-yield savings app, collapsed amid regulatory action from the FTC, leaving users unable to access their funds.
- LendUp enters liquidation but instead of a typical bankruptcy filing — which would make details of the company’s failure public — LendUp opted for an “Assignment for the Benefit of Creditors,” (ABC) a non-judicial alternative to a public bankruptcy.
Impact to customers
- Frustrations at not being able to transfer funds also popped up on social media
- Multiple new users attempting to open accounts complained of not being able to do so, encountering “errors” when attempting to verify their information
Read: Behind tech layoffs lay systemic cash flow negative companies
- These developments come on the heels of escalating scrutiny of “banking-as-a-service” business models.
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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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Post-Merge, PoW Die-Hards Plan to Fork Their Own Ethereum Chains
The Defiant | Samuel Haig | Aug 3, 2022
The biggest upgrade in the history of Ethereum is rapidly approaching. The Merge will convert Ethereum into a Proof-of-Stake-based blockchain from a Proof-of-Work one. The shift will make the No. 1 blockchain for smart contracts and dApps faster and more affordable. Jazzed investors have sent Ether soaring 52% in the last 30 days.
But not everyone is happy. 'Maintain the Original'
- Some die-hard miners are facing the obsolescence of billions of dollars worth of mining hardware and a fall in revenue. And they are threatening to maintain the original, Proof-of-Work version of the Ethereum network to protect their investment.
- Colin Wu, a Chinese cryptocurrency journalist, recently estimated The Merge will displace $5B worth of GPU and ASIC-based mining hardware.
- On July 31, Wu reported that Chandler Guo, a Chinese miner and former advisor to Binance, predicted roughly half a dozen PoW forks will emerge after Ethereum moves to PoS.
See: Vitalik’s Announces Next 4 Phases of Ethereum’s Development Which is Only 40% Done
- In response, Llama Salami pondered whether an “NFT black market” could emerge on a PoW fork of Ethereum. But many onlookers are skeptical that post-merge PoW Ethereum forks will survive for long.
Perspectives
- Justin Drake, a researcher at the Ethereum Foundation, dismissed the threat of PoW forks. Drake said he expects there will be little economic activity on the PoW chain because there’s a very strong social buy-in for moving to PoS.
- Marc Zeller, head of developers relations at Aave, said stETH would be worthless on any PoW forks. In a post onTwitter he said stETH won’t be redeemable for Ether, creating a “$1.4B hole” in the books of a PoW fork of Aave.
- Bob Summerwill, the executive director of ETCCooperative, an organization providing grants and funding to the Ethereum Classic ecosystem, also told The Defiant that PoW Ethereum forks will ultimately fail due to the network effects of DeFi and stablecoins.
See: Blockchain-based replacement for traditional crowdfunding: DAOs
“All the dApp websites will stop working because they will reference ETH, not the fork,” he said. “Even if it’s possible for somebody to bring up clone websites, servers, etc, that needs doing for every dApp, and then somebody needs to maintain all those forks, too. Some likely not even possible, because you would need admin keys to be able to operate them, and those belong to the existing operators.” - Bob Summerwill
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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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Conrad Black: Controversy Over the Nomination of Heather Zordel as New Non-Executive Chair at the OSC
FP | OpEd Conrad Black
There have been some recent absurd and disquieting events at the OSC. The current controversy over the nomination of a new non-executive chair of the OSC’s board of directors, Heather Zordel. She seems to represent the premier’s admirable desire to assist in capital formation and encumber the lives of honest people in that pursuit as little as possible.
It conforms to the government’s much-needed five-point plan to revive confidence in Canada’s principal capital market. Zordel has a very extensive background in related activities, including serving as part-time securities commissioner at the OSC, in which capacity she wrote two extremely well-reasoned and well-written dissenting opinions on matters that she believed to be over-regulation.
See: Ontario moving ahead with expanded mandate for OSC
Because her appointment seemed to indicate the beginning of a slight retreat in the authoritarian intrusiveness of the commission, there was the customary escalating bureaucratic recourse to malicious leaks to the media, principally the Globe and Mail, unattributed defamatory comments about the new chair-designate and inter-office backbiting at the OSC itself. These are routine improprieties when an imperious bureaucracy is ruffled.
The securities establishment, both the regulators and the securities bar, have confected the self-serving piety that a memorandum of understanding from the Ford government in 2019 effectively conferred complete autonomy on the OSC, which would henceforth self-select its commissioners. This has been deemed to be necessary to preserve the ”integrity” of the OSC, by which, of course, is meant the unanswerable omnipotence of the self-selected commissioners in their untouchable sinecures.
Zordel has been smeared, two commissioners have resigned in protest over her appointment (though one of the resignations seems to have been as much a righteous smokescreen for an unrelated issue).
Various self-interested securities lawyers have insinuated themselves into the media, uttering unctuous claptrap about how the investing public will be dis-served and under-protected if the provincial government exercises its right and duty to name the commission’s chair, especially when the person designated has twice had the effrontery to dissent, very articulately, from regulatory overreaching.
Read:
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NCFA Letter to Ontario Economic Development on Burden (Jan 2019)
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CSA Responds to Ontario Capital Markets Modernization Taskforce Report: NCFA – The present system is simply not good enough
My normally very sensible friend Ed Waitzer, a former OSC chairman, made the mistake of getting into an exchange in this newspaper with Prof. Jeffrey MacIntosh, in which Ed unsuccessfully peddled the bunk that the Zordel appointment would dilute the integrity of the commission. It doesn’t, and the OSC doesn’t have enough integrity to fill a thimble anyway. Zordel may give it some.
If this imaginative and insightful appointment is, as it appears, a foretaste of the Ford government’s intention to trim the bloat and arrogance of the OSC, all of us who are concerned by the flight of capital from Canada have something to celebrate.
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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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Vitalik: Ethereum creator dumps cold water on Zuckerberg and Michael Saylor
Fortune | Christiaan Hetzner | Aug 1, 2022
Vitalik Buterin says it's too early to judge what metaverse users will actually want.
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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Market Downturns are a Great Time to Build a Startup, or are they?
Inc | Steven I. Weiss | Jul 29, 2022
Is now an especially good time to start a business, or be an early-stage company? That's the thesis of VC Zach Weinberg's tweet that went viral in startup-land, in which he asserted: "Sounds crazy but [now is the] best time to be an early stage founder."
But is it true? That depends a lot on your situation.
Timing is Key
Arguably the most popular claim about startup timing comes from founder and investor Bill Gross, in a TED Talk he delivered back in 2015. After studying 200 companies, he concluded that timing is, in fact, the most important factor contributing to their success or failure. If you can just time your company or product correctly, the implication is that you can make sure you're on the right side of that divide. It's about whether now is the perfect time to get your potential customers to want to adopt your product.
Building during market downturns are better for startups
For companies that need to pivot due to economic shocks, there is reason to believe that the economic conditions benefit newer companies more than than established ones. They're more flexible, able to recognize opportunities, and adjust their teams' focus to respond to stress.
A key insight: "Existing evidence suggests that firms created during major shocks tend to perform better over the long run."
Hiring is Better
When it comes to hiring -- a major challenge for startup founders -- downturns can be a better time for getting talent on board, if a company has sufficient access to capital for that hiring.
See: Governments, Don’t Let your Startups and Scaleups Die
Today, many large companies are freezing hiring or even cutting their teams; if you're in a hiring phase, you'll have access to better talent for less than even just a few months ago.
M&A and Partnerships
This economic climate can also be a great time to acquire a company. Valuations are down for many businesses from a few months ago, so if one of your best paths to growth is through acquisition (something that many Inc. 5000 companies tell me has been essential in their path to four-figure growth), now could be a good time to start having those conversations with competitors or companies offering adjacent products or services that would be a good match for your current offerings.
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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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What’s the latest surrounding USDT (Tether) risks about?
Guest Post | Jul 21, 2022
Stablecoins are an extremely interesting type of cryptocurrency which is backed up by a reserve asset like the USD was before on August 15, 1971, when President Richard Nixon announced that the United States would no longer convert dollars to gold at a fixed value, thus completely abandoning the gold standard.
Buckle up, this is about to get difficult and complex. However, here is a more easy to read digestible and in-depth article about how the entire market can collapse because of Tether any moment.
So stablecoins are like the old USD-backed gold? Well yes and no, Stablecoins are mainly backed by fiat currency, which is decipetable to inflation. If stablecoins were only backed up by gold which is something limited in supply, then, we would have the “old” USD back. So, every dollar you buy USDT with is a virtual dollar lent to you but over there in their office they still hold your dollar until you sell the USDT again. Now we’ve all seen what can happen with extreme liquidity crunches in bear market cycles which forced crypto juggernauts Voyageur and Celsius into bankruptcy.
Has Tether learned its lesson and is it risking the same fate? USDT is founded by a Dutchman (Jan Ludovicus van der Velde) and the company behind it run by a vast team in which the executives are reportedly being currently investigated by the Department of Justice over a criminal probe into bank fraud.
Legally, a stablecoin can back up your virtual dollar with a debt loan to another company or back up your virtual dollar by things like gold. They are legally allowed to do that. But what if Tether is not actually backing up every dollar in their office? Well, this is where three-party audits come in. Every quarter, the company behind any stable coin needs to let an external audit professional verify if every single dollar lent out virtually is really backed up.
See: CFTC fines Tether US$41M for misleading claims about currency backing
However, some reports in the past showed us that Tether only had 70% of their stablecoin backed up. Right now, audit reports show us that 100% of all assets are nicely backed up in a 1:1 ratio, but also the report shows that only a mere 10% of their entire supply of Tether is backed up by actual Fiat money or currency. Over 50% of their “backing” are short-term loans they lent out to companies in China which are getting into more and more debt without the hope of recovering anytime soon. Stablecoins like USDC or DAI carry out monthly transparent audits. These stablecoins are founded by the company “Circle” and the exchange “Coinbase.” More and more people are turning to these more trustworthy stablecoins amidst the controversy surrounding USDT.
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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