What The FinTech #74: 21 Nov 2021
Happy Sunday and Welcome back to What The FinTech, your regular FinTech & Innovation Newsletter focusing on Hong Kong & Asia ! Here are the selection and the top headlines for this week.
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What was the FinTech this week in: 📰
BLOCKCHAIN - CRYPTO - DIGITAL ASSETS - DE FI
Taproot, Bitcoin’s long-anticipated upgrade, has activated
NFTs for 46-year-old whisky to ensure buyers get the real deal
Binance CEO advocates for 'fundamental crypto rights'
Crypto, cyber-attacks, and CBDCs: OneSpan releases global regulator report
Coinbase is looking at support for third-party DeFi a pps on its platform
Swiss Exchange's new platform to use 'revolutionary' crypto tech for bond issuance
Taproot, Bitcoin’s long-anticipated upgrade, has activated
The first bitcoin upgrade in four years has just gone live. Taproot gives developers an expanded toolbox to work with as they continue to ideate, iterate and build on Bitcoin. The Taproot update means greater transaction privacy and efficiency – and crucially, it will unlock the potential for smart contracts, which can be used to eliminate middlemen from transactions. At the root of the upgrade are “Schnorr signatures.” Every transaction using Taproot will now use this new Schnorr digital signature scheme, adding new capabilities designed to boost the privacy, security and scale of Bitcoin transactions. Taproot will have many positive repercussions for various projects across the ecosystem. For instance, multisignature transactions, which require more than one out of a group of signers to sign a transaction, will be cheaper and will use less data.
NFTs for 46-year-old whisky to ensure buyers get the real deal
BlockBar, a New York-based start-up, is now using non-fungible tokens (NFTs) to make tracking and trading of high-end liquor – much sought after in Asian markets such as Hong Kong – easier for connoisseurs. It has partnered with Scottish distiller William Grant & Sons, to issue NFTs for 46-year-old Glenfiddich single malt whisky that costs US$18,000 a bottle. The NFTs can be redeemed for the bottles, or be used as digital receipts to sell them. The secondary market sale of these high-end spirits have been impeded by the traditional way of verifying authenticity – opening up the bottle and tasting the liquor. “Through the blockchain, there is a ledger of previous owners of a bottle. So, a prospective buyer could trace back where it comes from, all the way up to the brand owner and distiller,” said Samuel Falic, BlockBar’s co-founder.
Binance CEO advocates for 'fundamental crypto rights'
Crypto exchange Binance has published a list of "fundamental rights" amid increasing regulatory pressure, arguing everyone should have access to financial tools like crypto. Chief executive officer Zhao Changpeng, who goes by CZ, told Bloomberg News the list is a reflection of what Binance considers to be most important when it comes to regulating crypto, providing the latest example of an exchange trying to shape the rules of the road. Binance has spent the last year facing intense regulatory scrutiny in several countries - including Japan, Hong Kong, Italy and the UK - over issues such as money laundering controls. In September the firm set out a plan to centralise its business structure to, as CEO Changpeng Zhao put it, "work well with regulators". Now, the exchange is calling for a global regulatory framework governing crypto markets, saying that it is working with policymakers to "achieve the mutual goal of protecting users while allowing innovation to continue in a responsible manner, ensuring a healthy trajectory forward for the industry".
Crypto, cyber-attacks, and CBDCs: OneSpan releases global regulator report
OneSpan has released its yearly Global Financial Regulator Report, crafted through data collected by financial intuitions around the world. The report highlights the topics of A.I., cryptocurrency adoption, data protection, and digital identity standards in what has become a roaring twenties of digital finance. The report found that more than half of banks reported challenges reducing cyberattacks, and nearly half of firms are concerned with safeguarding sensitive data and adapting to consumer privacy laws. To keep pace, almost half of firms develop identity verification and biometric tools, and 41% focus on emerging technologies like remote online notarization. Furthermore, many are looking toward new tech like cryptocurrencies and Central Bank Digital Currencies (CBDCs) soon when it comes to the banking leaders.
Coinbase is looking at support for third-party DeFi a pps on its platform
Coinbase's interest in decentralized finance has long been known, but new comments from the publicly traded crypto exchange's chief financial officer suggest that the company is eyeing a broader scope. Coinbase’s chief financial officer officer, Alesia Haas provided insight into the exchange's overall strategy, dividing it into three "pillars." The third one, centers around the Coinbase platform as one that users can access an array of applications and uses within. As crypto as an app platform, will help DeFi in two ways. One, building tools to accelerate the builders in the ecosystem through Coinbase Cloud.
Swiss Exchange's new platform to use 'revolutionary' crypto tech for bond issuance
SIX Swiss Exchange's new digital trading and settlement arm will issue a bond to show how blockchain can benefit mainstream securities and not just the cryptoassets it was originally intended for. The Swiss Digital Exchange (SDX) will be the first fully regulated market infrastructure to issue a digital bond and use distributed ledger technology (DLT) for settlement. The bond in SIX Group AG would have a total volume of 150 million Swiss francs and mature in 2026, with the offering oversubscribed several times, SIX said. Two-thirds of the bond will be tokenised on SDX, the rest on SIX's main exchange, with net proceeds used for general financing. DLT is the technology that underpins cryptoassets such as bitcoin, and SDX CEO David Newns said the benefit for investors would come from "atomic" or trading and settlement in a single, instantaneous step.
SINGAPORE
Coinhako gets MAS’ in-principle approval for digital payment tokens services
HSBC Singapore teams up with Saxo Bank for enhanced digital investment offerings
Circle opens Singapore office
4 in 5 Singaporeans prefer online methods of banking: survey
UBS launches TechConnect SEA to connect more Asean tech unicorns out of Singapore
Coinhako gets MAS’ in-principle approval for digital payment tokens services
Singaporean cryptocurrency platform Coinhako has been issued an in-principle approval from the Monetary Authority of Singapore (MAS) to provide digital payment token services under the Payment Services Act (PSA) as a major payment institution. Coinhako said that it is currently working through the conditions of its in-principle approval with a view towards meeting MAS’ requirements to receive the full license. MAS has so far granted three full licenses to Australian cryptocurrency exchange Independent Reserve, DBS Vickers, and QR code payment solution provider FOMO Pay. Coinhako offers both fiat-to-crypto and crypto-to-crypto trading services with a digital wallet for traders to store their digital assets.
HSBC Singapore teams up with Saxo Bank for enhanced digital investment offerings
HSBC Singapore has entered into an agreement with investment bank Saxo Bank to enhance the former's digital investment offerings in Singapore. This will be done by incorporating Saxo's trading infrastructure into HSBC's digital platform. The agreement entails HSBC's adoption of Saxo's self-directed trading infrastructure for equities investments. HSBC said that it expects the collaboration to strengthen its offerings for its retail banking customers, including those overseas, by granting them access to new platform functionalities, more global opportunities and an enhanced user experience. The investment offerings will be fully digital.
Circle has announced plans to expand to and invest in the Singapore market and initiate the application process to obtain applicable Singapore licenses and registrations. Circle plans to establish a hub in Singapore in what the digital payment company calls a key part of its global expansion plans. Also the principal operator of USD Coin (USDC), a fully reserved dollar digital currency, Circle is looking for partners to experiment in stablecoin innovations in the Singapore market as part of a Lighthouse Project with the Monetary Authority of Singapore (MAS) observing and guiding the design of the project. The initiative aims to demonstrate how digital currencies, open payment systems, and innovation-forward fintech regulations can solve business and regulatory challenges while fuelling economic growth and Web3 financial innovations.
4 in 5 Singaporeans prefer online methods of banking: survey
Mobile banking is now the way to go for Singaporeans, with four out of five respondents indicating that they prefer online over in-person interactions when they bank, according to a survey by American digital consulting company Publicis Sapient. 50% of respondents turn to mobile apps for banking interactions, whilst another 33% rely on bank websites. Only 12% of respondents rely on physical bank branches whilst 4% concentrate their banking activities at the ATM. Furthermore, the Publicis Sapient found that dissatisfaction with digital services typically occurs when a certain activity is too difficult to navigate or too complex to complete, signalling a need for more seamless digital experiences across channels. The study also found that the future of physical bank branches could reside in their ability to serve advisory needs, with 47% of respondents preferring to speak with a financial advisor in-person at a bank.
UBS launches TechConnect SEA to connect more Asean tech unicorns out of Singapore
The world's largest wealth manager UBS has launched TechConnect SEA, an ecosystem that will help tech companies connect and grow to become the next generation of unicorns in this region. It is also piloting UBS Circle One, an app being developed out of Singapore that will connect investors to ideas on a global ecosystem. These were just two initiatives announced by UBS as it officially opened its largest Asia-Pacific office. The new office sits on 400,000 square feet of prime property, and runs fully on renewable energy. The bank expects Asean's new economy to more than double to US$800 billion by 2025 from US$380 billion, and will look to better connect the growing number of technology unicorns across the region, via TechConnect SEA.
ASIA
Digital Wallets to become preferred payment method in Hong Kong and India by 2023
CommBank's x15ventures launches AI-based shopping platform for Gen Z
Indonesian E-Wallet OVO launches its first Fixed Income product
Pine Labs and Standard Chartered Malaysia to offer BNPL solution
Digital Wallets to become preferred payment method in Hong Kong and India by 2023
In Asia-Pacific (APAC), digital wallets are gradually booming in popularity. By 2023, these apps and digital platforms are expected to become the preferred payment method for consumers in Hong Kong and India, a new whitepaper by payment solution provider HPS says. Within the next two years, digital wallets usage will surpass card usage in the two nations, taking a 47% market share in Hong Kong and a 38% market share in India, the report says. In all major APAC nations, digital wallet usage is expected to increase. The emergence of real-time payment systems will further help push mobile wallet usage. Despite a boom in digital wallet adoption, cards will continue to remain relevant, an opportunity bigtechs and fintech players have been looking to tap into.
CommBank's x15ventures launches AI-based shopping platform for Gen Z
Commonwealth Bank of Australia’s (CBA) venture-scaling entity, x15ventures, has launched its newest venture, Cheddar, a brand and deal discovery app that rewards Gen Z and millennial Australians for shopping with popular brands. Cheddar uses artificial intelligence (AI) to help customers discover personalised brands, authentic content and deals, as well as rewarding them with cashback. Similar to TikTok or Instagram, Cheddar’s AI algorithm surfaces curated, bite-sized content to young consumers from a market pool of 600+ merchants, offering deals to an already highly-engaged user base. Customers will be able to discover personalised deals and brand recommendations, and receive cashback rewards for shopping with those brands.
Indonesian E-Wallet OVO launches its first Fixed Income product
Indonesian digital wallet OVO, has collaborated with financial marketplace Bareksa and Bahana TCW Investment Management to launch its first fixed income product. The Bahana MES Syariah Fund Kelas O is said to be offered exclusively on the OVO app as part of the e-wallet’s investment vertical. This is the latest addition to a range of affordably priced digital financial offerings on the OVO platform, all of which are available with a minimum buy-in of IDR 10,000 (US$ 0.70) and seamless buy-in using the e-wallet’s payment capability. OVO said in a statement that it is well placed to drive grass-roots investment penetration by leveraging its national payment platform.
Pine Labs and Standard Chartered Malaysia to offer BNPL solution
Indian FinTech firm Pine Labs announced it has partnered with Standard Chartered Malaysia on a buy now, pay later (BNPL) offering that includes 0% installments on credit cards at the more than 25,000 merchants across Malaysia equipped with Pine Labs point of sale (POS) terminals. The partners are also planning to periodically roll out other services like cashbacks and discounts for the Bank’s credit card customers. Pine Labs launched its BNPL services in Malaysia in March after the offering debuted in India. BNPL payment adoption in Malaysia is expected to grow through 2028 at a CAGR of 33.2%, according to a report by Research and Markets. The collaboration with Pine Labs on BNPL solutions would connect Standard Chartered’s customers to a wider ecosystem of merchants to provide a flexible and manageable way to cope with purchases or paying bills, said Sammeer Sharma, head of consumer, private and business banking at Standard Chartered Malaysia.
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