Open banking platform Deposit Solutions raised $20mn from existing shareholders e.ventures and Greycroft; they will use the funds to continue building the platform out and expand to more markets around the globe; “This investment round is a strong vote of confidence from our shareholders and allows us to further focus on our core mission, establishing Open Banking as the new industry standard for the deposit market,” Deposit Solutions founder and CEO Dr. Tim Sievers said to Bankless Times. Source.
JoinedNov. 30, 2016
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Todd is the host of PitchIt: the fintech startups podcast, a weekly interview show featuring emerging fintech founders and leading venture capitalists. He is responsible for leading the content team which covers fintech through daily & weekly email newsletters, editorial, virtual events, and in-person conferences. He has been covering fintech, banking, and venture capital for more than 15 years, including speaking regularly at industry events.
While speaking at an event by the office of Financial Research Federal Reserve Vice Chairman for Supervision Randal Quarles talk about the issues digital currencies could pose to the markets; the current level of use doesn’t pose a risk but as the scale of usage increases so does the potential potential problem; Quarles said, “if the central asset in a payment system cannot be predictably redeemed for the U.S. dollar at a stable exchange rate in times of adversity, the resulting price risk and potential liquidity and credit risk pose a large challenge for the system.”; he also talked about the the benefits of blockchain technology and if the central bank would issue their own digital currency. Source.
Alibaba spin-off Ant Financial and non profit online lender QCash won the second annual FT fintech awards; they were selected from a group of over 200 companies in the fintech space and the winners were announced at the FT Banking Summit; both companies were rewarded for innovation and providing increased access to financial services. Source.
Thomas Peterffy, CEO of Interactive Brokers Group, sent a letter to the CME and OCC Clearing Members voicing concerns about bitcoin futures; Mr. Peterffy believes bitcoin price movements are too big and arbitrary; he would prefer to put the clearing of bitcoin into an isolated clearing house or another isolated entity; he is sounding the alarm because he does not want to see the repeated mistakes of the 2008 financial crisis. Source.
Coinbase was ordered to hand over information on customers who made transactions over $20,000 between 2013 and 2015; the IRS believes people have not been correctly reporting income made from trades; the information required by the IRS was significantly less than they originally tried to get back when the IRS initially summoned records a year ago; Coinbase might still challenge the order. Source.
The National Internet Finance Association of China has been tasked with the job of making the agency but has offered little details so far; the PBoC invited eight leading Internet companies in 2015 to help with this issue but have received eight individual ideas and rejected them all; the issue of sharing proprietary data still plagues the project and the current issues don’t look to be solves soon. Source.
Federal Reserve Bank of New York President William Dudley said the U.S. central bank is starting to think about adopting its own digital currency; while talks are in their infancy Mr. Dudley does see the value in the technology behind bitcoin; he doesn’t see bitcoin being a rival to the dollar as it is currently to unstable. Source.
Ally Bank, Goldman Sachs GS Bank and Sallie Mae Bank are all paying much higher rates for deposits which can put brick and mortar competitors in a tough spot; banks typically lag a bit when it comes to rates so their current loans can reprice and profits are not hit; though they could lose deposits if they wait to long to raise rates as customers will move to the better rate; Fitch Ratings released a report Wednesday showing online bank rates were 1.18 percent versus brick and mortar rates of 0.075 percent. Source.
Writing a guest post on FT Alphaville Victor Basta, the managing director of Magister Advisors talks bout the struggle digital banks face in making a profit; digital banks have certainly made a name for themselves and offer a better product to the consumer; rising customer acquisition costs and the tough scaling of affiliate agreements are just two of the reasons these banking startups will find it a challenge to reach profitability; the future looks like potential acquisition of digital banks for technology or merging with other fintechs to form a stronger conglomerate. Source.
Goldman Sachs head of commodities research, Jeff Currie, told Bloomberg TV that bitcoin is a commodity though with less liquidity than gold; he explains, “"It's a commodity. A security, by definition, has a liability attached to it. Take a dollar bill, it has a liability to the US government. Commodities do not have liabilities.”; similar to gold it is not backed by a government or a company but is significantly more volatile. Source.