Paul Schulte, Advisor, Banking and Financial Services
August 22nd, 2019
Paul Schulte is the Founder and Managing Editor of Shulte Research based in Singapore. Paul's roles[...]
Ex-SoFI CEO’s Startup Closes $1 Billion Credit Line on a Blockchain
Coindesk | Yogita Khatri | May 10, 2019
Figure Technologies, a fintech startup founded by former SoFi CEO Mike Cagney, has closed a $1 billion “uncommitted” line of credit on a blockchain.
Investment bank Jefferies and WSFS Financial Corporation, the parent of WSFS Bank, are the project’s participants, Figure announced Thursday.
As part of the deal, Jefferies may periodically lend to Figure under a variable funding note, which is secured by Figure’s home equity lines. WSFS Financial is acting as trustee for Jefferies.
Lines of credit have a maximum loan amount that can be borrowed as needed, paid back, and borrowed again. Figure’s financing facility is custodied on its own blockchain platform called Provenance, according to the announcement.
See: FaceCoin: Here’s What Facebook Could Build In Blockchain And Cryptocurrency
The platform can support “the entire end-to-end financing of loans, from origination to funding to servicing to financing,” said Cagney, adding:
“It paves the way for the first securitization on chain, which will demonstrate the massive cost savings, risk reduction and liquidity benefits blockchain delivers.”
Brian McGrath, head of the securitized markets group at Jefferies, commented on using the blockchain:
“We’ve gained full transparency into the underlying assets, real-time access to loan performance and the process of accepting collateral has less friction than off chain.”
If the prospective securitization deal closes, it will become the first asset-backed security transaction with loans originated on a blockchain platform, said WSFS’ senior vice president and director of corporate trust, Kristin Moore.
Continue to the full article --> here
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Forbes | Michael del Castillo | Feb 19, 2020 Credit card giant Visa has granted its principal membership to a cryptocurrency company for the first time. Officially awarded to cryptocurrency exchange Coinbase in December, but not revealed to the public until today, the membership cuts out a crucial, and expensive middleman from the process of issuing a debit card that lets users spend their own bitcoin, ether and XRP anywhere Visa is accepted. Perhaps even more importantly though, the principal membership makes Coinbase the first cryptocurrency company with the power to issue debit cards for others, including other cryptocurrency companies and more traditional firms alike. Visa confirmed it granted Coinbase the principal membership, clarifying that the company itself won’t actually accept cryptocurrency when the project goes live later this year. See: Visa R&D Arm Develops a Blockchain System That Could Replace Financial Data Aggregators While Coinbase says it’s not planning on issuing cards to others anytime soon, the principal membership status marks a potentially important new revenue stream for the company, which Forbes estimates saw a 40% decline in earnings last year. By simplifying the process of spending cryptocurrency anywhere Visa is accepted, the membership also lays the foundation for ...
Read More
Forbes | Ron Shevlin | Feb 21, 2020 LendingClub, one of the nation’s first peer-to-peer lenders (oops! I mean, “marketplace” lenders—real ”peer to peer” lending lasted all of about a month), announced it plans to acquire Radius Bank, a relatively small Boston-based bank, unknown to most people outside of the industry (and within, for that matter). The press release announcing the pending deal contained the usual platitudes from the acquiring CEO: “This is a transformational transaction that allows us to reimagine banking in a way that is free from legacy practices and systems. We will create a category-defining experience for our members that will dramatically enhance the resilience and earnings trajectory of our business.” Despite the buzzword-laden proclamation, this acquisition makes a lot of sense for both parties for reasons that go beyond what many observers have reported on. The Short-Term Benefits Aren’t About Radius Bank Much of the discussion about the deal has focused on the obvious and shorter-term benefits of the acquisition, including a more stable source of funding and a $40 million reduction in bank fees and funding costs, both of which will help boost the spread Lending Club earns on the loans it keeps on its ...
Read More
Pymnts | February 18, 2020 Online bank N26‘s decision to exit the U.K. has customers feeling left behind, CNBC reported. The Berlin-based digital bank said it would not be able to operate in the country anymore in the wake of Brexit, as it will no longer have a license to do business there. The startup will shutter all of its U.K. locations on April 15. N26 made its entry into the U.K. in October of 2018 — more than two years after the U.K. made its decision to leave the European Union, but six months before Brexit was officially planned. However, the fact that N26 used Brexit in its reasoning to leave the U.K. hasn’t sat well with some. One customer in London told CNBC that he was “outraged” that the company had used Brexit as an excuse, calling it “fake news.” He said N26 needed “an excuse” for investors, and had found in Brexit a convenient scapegoat so that it wasn’t N26’s own failure. Others said they were disappointed in the closure, enjoying the extra bonuses that come with accounts. See: Majority of London FinTechs not prepared for no-deal Brexit N26 is one among a new breed of branchless ...
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TechTalks | Andrey Sergeenkov | Feb 12, 2020 As 2018 drew to a close, crypto skeptics were ready to write obituaries after the devastating bear market that year. Talk of blockchain and cryptocurrency demise was rife among seasoned analysts. Just over twelve months later, the industry has shown remarkable resilience to rebound back. Regulators are a segment of stakeholders who seem to be appreciating that crypto is here to stay, with Federal agencies in the US and Chinese authorities praising the potential of this technology in their respective countries’ digital future. Blockchain technology has gained independent credibility over and above its application in cryptocurrency. The opportunities are endless as the emerging enterprise sector continues to draw plaudits. So far, this technology has grown in spite of regulatory infrastructure rather than because of it. A suitable regulatory climate is essential for widespread adoption. See: The Decade in Blockchain — 2010 to 2020 in Review This is how Jason Lee, Vice President of NEM Foundation, describes the industry’s evolution: “2017 was the year of the blockchain craze. In 2018, we hit the brakes towards the end of the year. For 2019 and the start of 2020, Don Tapscott at the World Economic ...
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Betakit | Isabelle Kirkwood | Feb 10, 2020 PwC Canada and CB Insights have released the MoneyTree report on Canadian investment trends for the second half and full year of 2019 (all figures in USD). “Increased competition for funding from global investors has created a healthy funding environment for Canadian startups.” Last year saw Canadian venture capital (VC) funding rise to a record-setting $4.1 billion. Although Canadian funding experienced an 11 percent decline in deal count last year, the report tracked a 16 percent increase in year-over-year funding. Some massive rounds from last year were not included in this year’s report, including Verafin’s round, as the company did not disclose the debt and equity break out, and Sonder’s $210 million raise as the company is now headquartered in the United States. A strong year for AI, FinTech, cybersecurity Artificial intelligence companies saw increased investor attention in 2019, investment in Canadian AI companies more than doubled in the second half of 2019. Last year’s funding to Canadian AI companies saw a 49 percent year-over-year increase in 2019 to $658 million with deal count reaching a new record at 57 deals. See: The paradox of 2020 VC is that the largest funds ...
Read More
Forbes | Billy Bambrough | Feb 18, 2020 Samsung, the South Korean technology giant and creator of the Galaxy smartphone range, could soon become one of the biggest drivers of bitcoin, crypto and blockchain adoption. While bitcoin traders and investors are focused on the upcoming bitcoin halving, a looming U.S. bitcoin crackdown, and rocky crypto trading volume, Samsung is putting the power of bitcoin, crypto and blockchain in people's hands. Last week, Samsung, which makes up 19% of global smartphone sales and last year sold almost 300 million phones according to data site Statista, unveiled it latest Galaxy smartphone range with its new flagships the S20, S20+ and S20 Ultra models. These new 5G enabled smartphones build on the Galaxy S10 ranges' bitcoin, cryptocurrency and blockchain support, which last year was revealed to boast a built-in bitcoin and cryptocurrency wallet. "We created a secure processor dedicated to protecting your PIN, password, pattern, and Blockchain Private Key," Samsung wrote on its website, announcing the new S20 Galaxy phones. "Combined with the Knox platform, security is infused into every part of your phone, from hardware to software. So private data stays private." Samsung's so-called Blockchain Keystore was introduced last year, initially with ...
Read More
Bank Innovation | Rick Morgan | Jan 22, 2020 HSBC is improving payments for its business clients through a suite of tools launched last week called Treasury APIs, which are designed to speed up payments for small businesses and large corporate clients alike. HSBC’s Treasury APIs embed payment capabilities into other workflows. According to the bank, this allows treasurers to make payments from their own workstations without logging into a proprietary bank platform. Clients receive confirmation that a payment request has been received and can track payments from their accounts to recipients. Nadya Hijazi, head of digital, global liquidity and cash management at HSBC, said clients using the tool include e-commerce platforms, treasury teams and mutual fund teams. The new products let HSBC business clients pay suppliers more quickly; Hijazi said payments that used to take anywhere from one or two days in the past now take about 10 or 20 seconds. HSBC, which is headquartered in London, has $2.7 trillion in assets. Treasury APIs are now available in 27 markets throughout Asia, Europe, the Middle East and the Americas. The bank piloted the tools in India last summer. See: HSBC Canada Breaks from Big Six Banks in Call to Encourage Fintechs In addition to paying suppliers, HSBC business customers can also issue ...
Read More
Investment Executive | James Langton | Feb 12, 2020 Regulators grapple with crypto trading Global securities regulators are monitoring the emerging crypto asset sector, but aren’t yet seeking to establish global standards for crypto trading platforms. The International Organization of Securities Commissions (IOSCO) has issued a report detailing the risks associated with crypto trading, including concerns about platform access, asset safekeeping, price discovery, transparency and conflicts of interest. See: SEC Commissioner Speech: A Proposal to Fill the Gap Between Regulation and Decentralization Many of these same issues arise in the regulation of traditional securities trading too, the report noted. So, to the extent that particular crypto assets are considered to be securities, “the basic principles…of securities regulation should apply,” the report said. However, crypto trading platforms may also raise novel regulatory concerns due to their particular business models, IOSCO warned. The report said that some regulators have determined that their existing frameworks for overseeing traditional trading venues will also apply to crypto trading, but that some are also considering new requirements “to account for the novel and unique characteristics” of crypto trading. The group’s report — which was prepared by an IOSCO committee led by the Ontario Securities Commission (OSC) — ...
Read More
Wharton Knowledge | Kalin Anev Janse | Oct 10, 2019 Can Fintech Make the World More Inclusive? The potential gains for the start-ups driving fintech (financial technology) are obvious. But the possibilities for extending financial services to the underserved – or those without services at all – are already being realized. With proper oversight and regulation even more is possible, notes this opinion piece by Kalin Anev Janse, secretary general and a member of the management board of the European Stability Mechanism (ESM), the Eurozone’s lender of last resort, and Gong Cheng, senior economist and policy strategist at the ESM. “It is thus essential for researchers and technical experts to shed light on the considerable social impact and promise fintech is offering and to find solutions to contain potential risks.” Financial inclusion – making banking services accessible and affordable to everyone globally – has been a buzzword for the last few years. Technology-based financial services have propelled innovation to “bank the unbanked” making daily financial operations accessible and user friendly for almost everyone – especially people who had no access to banks before. Emerging markets like China, Kenya and Indonesia are leapfrogging the developed world. So – how is fintech making the ...
Read More
Coindesk | Nathan DiCamillo | Feb 13, 2020 Fresh on the heels of an $18.3 million Series A funding round in August, crypto lending startup BlockFi has secured a $30 million Series B. Announced Thursday, the new funding will help the firm expand both its product offering and geographic footprint. “We decided to opportunistically raise the Series B to expand the balance sheet and give ourselves the ability to invest in the things we’re doing this year,” BlockFi CEO Zac Prince said in an interview. The Series B was led by Peter Thiel’s Valar Ventures with participation from repeat investors Morgan Creek Digital, PJC, Akuna Capital, CMT Digital, Winklevoss Capital and Avon Ventures. New investors included Castle Island Ventures, Purple Arch Ventures, Kenetic Capital, Arrington XRP Capital and HashKey Capital. Having Hong Kong-based HashKey as an investor will help BlockFi expand into Singapore later this year, Prince said. While the company has been serving customers in the region, this would be its first physical presence there. See: Why DeFi’s Billion-Dollar Milestone Matters In the Asia-Pacific region, BlockFi expects to attract a lot of institutional customers, Prince said, given the number of mining companies, asset managers, exchanges and market makers that ...
Read More
Forbes | Michael del Castillo | Feb 19, 2020 Credit card giant Visa has granted its principal membership to a cryptocurrency company for the first time. Officially awarded to cryptocurrency exchange Coinbase in December, but not revealed to the public until today, the membership cuts out a crucial, and expensive middleman from the process of issuing a debit card that lets users spend their own bitcoin, ether and XRP anywhere Visa is accepted. Perhaps even more importantly though, the principal membership makes Coinbase the first cryptocurrency company with the power to issue debit cards for others, including other cryptocurrency companies and more traditional firms alike. Visa confirmed it granted Coinbase the principal membership, clarifying that the company itself won’t actually accept cryptocurrency when the project goes live later this year. See: Visa R&D Arm Develops a Blockchain System That Could Replace Financial Data Aggregators While Coinbase says it’s not planning on issuing cards to others anytime soon, the principal membership status marks a potentially important new revenue stream for the company, which Forbes estimates saw a 40% decline in earnings last year. By simplifying the process of spending cryptocurrency anywhere Visa is accepted, the membership also lays the foundation for ...
Read More
Read More
Forbes | Ron Shevlin | Feb 21, 2020 LendingClub, one of the nation’s first peer-to-peer lenders (oops! I mean, “marketplace” lenders—real ”peer to peer” lending lasted all of about a month), announced it plans to acquire Radius Bank, a relatively small Boston-based bank, unknown to most people outside of the industry (and within, for that matter). The press release announcing the pending deal contained the usual platitudes from the acquiring CEO: “This is a transformational transaction that allows us to reimagine banking in a way that is free from legacy practices and systems. We will create a category-defining experience for our members that will dramatically enhance the resilience and earnings trajectory of our business.” Despite the buzzword-laden proclamation, this acquisition makes a lot of sense for both parties for reasons that go beyond what many observers have reported on. The Short-Term Benefits Aren’t About Radius Bank Much of the discussion about the deal has focused on the obvious and shorter-term benefits of the acquisition, including a more stable source of funding and a $40 million reduction in bank fees and funding costs, both of which will help boost the spread Lending Club earns on the loans it keeps on its ...
Read More
Read More
Pymnts | February 18, 2020 Online bank N26‘s decision to exit the U.K. has customers feeling left behind, CNBC reported. The Berlin-based digital bank said it would not be able to operate in the country anymore in the wake of Brexit, as it will no longer have a license to do business there. The startup will shutter all of its U.K. locations on April 15. N26 made its entry into the U.K. in October of 2018 — more than two years after the U.K. made its decision to leave the European Union, but six months before Brexit was officially planned. However, the fact that N26 used Brexit in its reasoning to leave the U.K. hasn’t sat well with some. One customer in London told CNBC that he was “outraged” that the company had used Brexit as an excuse, calling it “fake news.” He said N26 needed “an excuse” for investors, and had found in Brexit a convenient scapegoat so that it wasn’t N26’s own failure. Others said they were disappointed in the closure, enjoying the extra bonuses that come with accounts. See: Majority of London FinTechs not prepared for no-deal Brexit N26 is one among a new breed of branchless ...
Read More
Read More
TechTalks | Andrey Sergeenkov | Feb 12, 2020 As 2018 drew to a close, crypto skeptics were ready to write obituaries after the devastating bear market that year. Talk of blockchain and cryptocurrency demise was rife among seasoned analysts. Just over twelve months later, the industry has shown remarkable resilience to rebound back. Regulators are a segment of stakeholders who seem to be appreciating that crypto is here to stay, with Federal agencies in the US and Chinese authorities praising the potential of this technology in their respective countries’ digital future. Blockchain technology has gained independent credibility over and above its application in cryptocurrency. The opportunities are endless as the emerging enterprise sector continues to draw plaudits. So far, this technology has grown in spite of regulatory infrastructure rather than because of it. A suitable regulatory climate is essential for widespread adoption. See: The Decade in Blockchain — 2010 to 2020 in Review This is how Jason Lee, Vice President of NEM Foundation, describes the industry’s evolution: “2017 was the year of the blockchain craze. In 2018, we hit the brakes towards the end of the year. For 2019 and the start of 2020, Don Tapscott at the World Economic ...
Read More
Read More
Betakit | Isabelle Kirkwood | Feb 10, 2020 PwC Canada and CB Insights have released the MoneyTree report on Canadian investment trends for the second half and full year of 2019 (all figures in USD). “Increased competition for funding from global investors has created a healthy funding environment for Canadian startups.” Last year saw Canadian venture capital (VC) funding rise to a record-setting $4.1 billion. Although Canadian funding experienced an 11 percent decline in deal count last year, the report tracked a 16 percent increase in year-over-year funding. Some massive rounds from last year were not included in this year’s report, including Verafin’s round, as the company did not disclose the debt and equity break out, and Sonder’s $210 million raise as the company is now headquartered in the United States. A strong year for AI, FinTech, cybersecurity Artificial intelligence companies saw increased investor attention in 2019, investment in Canadian AI companies more than doubled in the second half of 2019. Last year’s funding to Canadian AI companies saw a 49 percent year-over-year increase in 2019 to $658 million with deal count reaching a new record at 57 deals. See: The paradox of 2020 VC is that the largest funds ...
Read More
Read More
Forbes | Billy Bambrough | Feb 18, 2020 Samsung, the South Korean technology giant and creator of the Galaxy smartphone range, could soon become one of the biggest drivers of bitcoin, crypto and blockchain adoption. While bitcoin traders and investors are focused on the upcoming bitcoin halving, a looming U.S. bitcoin crackdown, and rocky crypto trading volume, Samsung is putting the power of bitcoin, crypto and blockchain in people's hands. Last week, Samsung, which makes up 19% of global smartphone sales and last year sold almost 300 million phones according to data site Statista, unveiled it latest Galaxy smartphone range with its new flagships the S20, S20+ and S20 Ultra models. These new 5G enabled smartphones build on the Galaxy S10 ranges' bitcoin, cryptocurrency and blockchain support, which last year was revealed to boast a built-in bitcoin and cryptocurrency wallet. "We created a secure processor dedicated to protecting your PIN, password, pattern, and Blockchain Private Key," Samsung wrote on its website, announcing the new S20 Galaxy phones. "Combined with the Knox platform, security is infused into every part of your phone, from hardware to software. So private data stays private." Samsung's so-called Blockchain Keystore was introduced last year, initially with ...
Read More
Read More
Bank Innovation | Rick Morgan | Jan 22, 2020 HSBC is improving payments for its business clients through a suite of tools launched last week called Treasury APIs, which are designed to speed up payments for small businesses and large corporate clients alike. HSBC’s Treasury APIs embed payment capabilities into other workflows. According to the bank, this allows treasurers to make payments from their own workstations without logging into a proprietary bank platform. Clients receive confirmation that a payment request has been received and can track payments from their accounts to recipients. Nadya Hijazi, head of digital, global liquidity and cash management at HSBC, said clients using the tool include e-commerce platforms, treasury teams and mutual fund teams. The new products let HSBC business clients pay suppliers more quickly; Hijazi said payments that used to take anywhere from one or two days in the past now take about 10 or 20 seconds. HSBC, which is headquartered in London, has $2.7 trillion in assets. Treasury APIs are now available in 27 markets throughout Asia, Europe, the Middle East and the Americas. The bank piloted the tools in India last summer. See: HSBC Canada Breaks from Big Six Banks in Call to Encourage Fintechs In addition to paying suppliers, HSBC business customers can also issue ...
Read More
Read More
Investment Executive | James Langton | Feb 12, 2020 Regulators grapple with crypto trading Global securities regulators are monitoring the emerging crypto asset sector, but aren’t yet seeking to establish global standards for crypto trading platforms. The International Organization of Securities Commissions (IOSCO) has issued a report detailing the risks associated with crypto trading, including concerns about platform access, asset safekeeping, price discovery, transparency and conflicts of interest. See: SEC Commissioner Speech: A Proposal to Fill the Gap Between Regulation and Decentralization Many of these same issues arise in the regulation of traditional securities trading too, the report noted. So, to the extent that particular crypto assets are considered to be securities, “the basic principles…of securities regulation should apply,” the report said. However, crypto trading platforms may also raise novel regulatory concerns due to their particular business models, IOSCO warned. The report said that some regulators have determined that their existing frameworks for overseeing traditional trading venues will also apply to crypto trading, but that some are also considering new requirements “to account for the novel and unique characteristics” of crypto trading. The group’s report — which was prepared by an IOSCO committee led by the Ontario Securities Commission (OSC) — ...
Read More
Read More
Wharton Knowledge | Kalin Anev Janse | Oct 10, 2019 Can Fintech Make the World More Inclusive? The potential gains for the start-ups driving fintech (financial technology) are obvious. But the possibilities for extending financial services to the underserved – or those without services at all – are already being realized. With proper oversight and regulation even more is possible, notes this opinion piece by Kalin Anev Janse, secretary general and a member of the management board of the European Stability Mechanism (ESM), the Eurozone’s lender of last resort, and Gong Cheng, senior economist and policy strategist at the ESM. “It is thus essential for researchers and technical experts to shed light on the considerable social impact and promise fintech is offering and to find solutions to contain potential risks.” Financial inclusion – making banking services accessible and affordable to everyone globally – has been a buzzword for the last few years. Technology-based financial services have propelled innovation to “bank the unbanked” making daily financial operations accessible and user friendly for almost everyone – especially people who had no access to banks before. Emerging markets like China, Kenya and Indonesia are leapfrogging the developed world. So – how is fintech making the ...
Read More
Read More
Coindesk | Nathan DiCamillo | Feb 13, 2020 Fresh on the heels of an $18.3 million Series A funding round in August, crypto lending startup BlockFi has secured a $30 million Series B. Announced Thursday, the new funding will help the firm expand both its product offering and geographic footprint. “We decided to opportunistically raise the Series B to expand the balance sheet and give ourselves the ability to invest in the things we’re doing this year,” BlockFi CEO Zac Prince said in an interview. The Series B was led by Peter Thiel’s Valar Ventures with participation from repeat investors Morgan Creek Digital, PJC, Akuna Capital, CMT Digital, Winklevoss Capital and Avon Ventures. New investors included Castle Island Ventures, Purple Arch Ventures, Kenetic Capital, Arrington XRP Capital and HashKey Capital. Having Hong Kong-based HashKey as an investor will help BlockFi expand into Singapore later this year, Prince said. While the company has been serving customers in the region, this would be its first physical presence there. See: Why DeFi’s Billion-Dollar Milestone Matters In the Asia-Pacific region, BlockFi expects to attract a lot of institutional customers, Prince said, given the number of mining companies, asset managers, exchanges and market makers that ...
Read More
Read More
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