July 4, 2023 FinTech Monitor

BFC FinTech Monitor (June 2023)

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Stay up-to-date on all the latest FinTech news and information from around the world in the BFC FinTech Monitor.

Around the World

#Reports and Studies

  • A recent study by the Capgemini Research Institute indicates that approximately 50% of consumers trust generative AI for financial planning.
  • IDC Financial Insight analysts are predicting that banks globally will send USD 57.1 billion to support legacy payment systems in 2028.
  • According to a McKinsey report, generative AI is expected to generate for trillions of dollars across 63 areas, helping boost global GDP and living standards.

#Innovations

  • Moody’s is partnering with Microsoft and OpenAI to develop an AI-based risk assessment tool.
  • FinGPT, a language model for solving financial sector problems with source code, has been released.
  • Demis Hassabis, CEO of the Google subsidiary DeepMind, believes that Gemini’s AI system will be “more powerful” than ChatGPT and offer new features such as planning and problem solving.
  • Fintech startup Weavr has launched Embedded Finance Cloud, which allows banks to create and distribute embedded financial products and services.
  • Google Cloud has introduced the AML AI product. Based on AI, it helps financial institutions detect cases of money laundering.
  • CaixaBank (Spain) has introduced an application for converting Android smartphones into POS terminals. The bank has also launched the FXWallets service for international payments in different currencies.
  • Nvidia is building one of the world’s highest-performing supercomputers (Israel-1), which is expected to meet consumer demand for AI software solutions.

#Cryptocurrencies, Blockchain, Non-Fungible Tokens (NFTs) and Decentralized Finance (DeFi):

  • Analysts from Beosin, a company specialized in Web3 security, has determined that the total amount stolen by cryptocurrency scammers and hackers amounts to USD 656 million.
  • The UAE has become a major growth destination for the digital asset industry thanks to its friendly regulatory environment, with crypto exchange company Binance expressing interest in the country and crypto exchange company Gemini already announcing its intention to obtain a license for crypto services in the country.
  • Experts from the International Monetary Fund (IMF) have decided that banning cryptocurrencies is not the best way to reduce the risks associated with them.
  • According to a report from the Reserve Bank of India, stablecoins can cause serious harm to emerging economies.
  • TRM Labs has found that the share of bitcoin in illegal crypto-operations is only 19%.
  • The US Securities and Exchange Commission (SEC) has filed a lawsuit against the crypto exchange company Coinbase. In response, Coinbase has stated that the regulator has gone beyond its competence in relation to digital assets.
  • The management of the crypto exchange company FTX intends to rename and restart the company despite the loss of its reputation in the market.
  • Paysafe Payment Solutions will stop supporting the crypto exchange company Binance starting on September 25, 2023, meaning that euro transactions on the platform will not be possible on the platform after this date if a new intermediary cannot be found. Binance is suspected of illegally providing crypto services and “aggravated money laundering activities”. The company has been forced to leave the Netherlands, had to withdraw its application for registration in Cyprus and is being sued by the US Securities and Exchange Commission (SEC).
  • A report published by the crypto exchange company Coinbase has found that more than half of the Fortune 100 companies have launched blockchain projects since the beginning of 2020.
  • Neobank Revolut has reduced commissions on cryptocurrency transactions.
  • HSBC’s Hong Kong branch intends to provide cryptocurrency services such as the buying and selling of exchange-traded funds (ETFs).
  • Six Clovers, founded by ex-PayPal employees in 2021, has launched an analogue of SWIFT based on the Sui blockchain.
  • The European Parliament has proposed classifying cryptocurrencies as securities.
  • El Salvador plans on spending USD 1 billion to build one of the largest mining farms in the world.
  • The Central Bank of Brazil has received the right to regulate the activities of crypto companies.
  • The European Investment Bank (EIB) has issued the first blockchain-based green bond, valued at USD 93 million.
  • The Asian Development Bank (ADB) has declared blockchain suitable for cross-border bond settlements.
  • DappRadar expert Sarah Gergelas has stated that the low barrier to entry for memcoins could play a role in promoting the global adoption of digital assets.
  • The EU plans to introduce restrictions on the use of borrowed funds in crypto trading.
  • JPMorgan and a number of Indian banks have launched a pilot blockchain settlement system.

#Central Bank Digital Currencies (CBDCs)

  • The European Central Bank (ECB) will decide on the creation of the digital euro by the end of October 2023. The front-end prototype for the European CBDC was recently presented by the French payment service provider Worldline. A report was also released analyzing the legal framework for the digital euro, emphasizing that oversight should be “impossible by nature”.
  • The International Monetary Fund (IMF) is creating a platform for cross-border transactions using CBDCs.
  • The Swiss National Bank (SNB) is preparing to issue a wholesale CBDC on the SDX exchange as part of a pilot project.
  • The Innovation Center of the Bank for International Settlements (BIS) published an interim report on Project Mariana, which involves the use of wholesale CBDCs in tokenized foreign currency trading.
  • The Bank of England has declared that the digital pound can work without blockchain.
  • Ripple and the Central Bank of Colombia are developing a pilot project based on the cryptocurrency XRP.

#Miscellaneous

  • The European Commission (EC) has published proposals for the Third Payments Directive (PSD3), including revising parts of PSD2 and creating a framework for financial data access.
  • Mastercard has created Multi Token Network, an analogue of the App Store for financial applications.
  • Amazon has allocated USD 100 million for the development of projects focused on generative AI.
  • PKO Bank Polski has organized the first metaverse job fair in Poland.
  • Alipay and Mastercard are launching a new solution for travelers in China to “pay like a local”, independent of where the Mastercard card was issued.
  • Microsoft has described its approach to managing the risks of introducing biometrics into technology applications.

Ukraine:

  • The Ukrainian Association of Fintech and Innovative Companies has presented its Catalog of Ukrainian Fintech Companies for 2023.
  • Ludmila Kukuetu, general counsel for the crypto neobank Trustee Plus, has stated that amendments to the tax code regulating the taxation of cryptocurrency transactions do not adequately take into account the specifics of digital assets.
  • Participants of the forum Digital Money, organized by the Association of Ukrainian Banks, believe that the launch of the digital hryvnia will lead to a decrease in remittances through commercial banks.
  • PaySpace has published material on the main outcomes of the Money 20/20 Europe fintech conference.
  • The Ministry of Digital Transformation has announced five new services in the Diya app, including deposit reimbursement.
  • The Ukrainian Startup Fund discusses the results of several years of work.
  • According to President Volodymyr Zelensky, Ukraine is helping other countries across Africa, Europe and Latin America in the development of government mobile apps.
  • Monobank has announced the launch of a platform update that includes a number of new features.

Kazakhstan:

  • The head of the International Finance Corporation (IFC) has stated that Kazakhstan has the potential to become a regional center for the fintech industry.
  • Zhanar Samaeva, director of the National Payment Corporation (a subsidiary of the National Bank of Kazakhstan), discusses the switch to open banking.
  • The crypto exchange company Binance is launching a new regulated exchange for users in Kazakhstan that will operate under a license from the Financial Services Regulatory Committee of the Astana International Financial Center (AIFC).
  • Ainur Zhanturina, leading consultant of Accion in Kazakhstan and Central Asia and founder of RISE (Research, Insights and Studies in Eurasia), identifies 9 key trends in Kazakhstan’s fintech market.
  • J’son & Partners Consulting is predicting that the compound annual growth rate of the internet of things (IoT) market in Kazakhstan will be 21.2% by the end of 2024, with a volume three times higher than in 2019.
  • Startups that took part in the Silkway Accelerator (a joint program of Astana Hub and Google for Startups) has attracted USD 7.5 million in investments.
  • Ruslan Konurbaev, business analyst for the Digital Tenge Project, discusses the possibilities for a future Kazakh CBDC.
  • Kazakh company Verigram, which is specialized in biometric verification using AI, has unveiled a new solutions in this domain at iFX EXPO Asia, the world’s largest fintech exhibition.

Kyrgyzstan:

  • Turkish fintech startup Turan Teknoloji intends to open representative offices in Kazakhstan, Kyrgyzstan and Uzbekistan.
  • Farhad Ibraev, head of Balance.kg, explains why there is no analogue to the Kazakh super-app Kaspi in Kyrgyzstan.
  • The annual international financial forum BIFF-2023 was held in Bishkek.

Uzbekistan:

  • The International PLUS forum Fintech, Banks and Retail was held in Tashkent, with support provided by the Central Bank of Uzbekistan.
  • A subsidiary of UAE brokerage firm Lockton Solution LLC-FZ has received the first license in Uzbekistan to operate a crypto depository.
  • The Uzum Group of companies has been awarded the Digital Ecosystem of the Year award at the Leaders in Fintech Awards.
  • The Click payment system will become part of the Uzum ecosystem, giving users (including those in remote areas) access to additional marketplaces and financial services. This is part of a plan to turn Click into a super app.

Azerbaijan:

  • Zakir Nuriyev, president of the Azerbaijan Banks Association, has stated that inflation around the world has led to an increase in demand for lending, requiring fintech companies to increase their transparency.
  • The Fintex Summit 2023 – Finance and Technologies Expo was held in Baku.
  • The volume of payments using Apple Pay and Google Pay in Azerbaijan amounted to AZN 327 and AZN 107 million manats, respectively, in January–May 2023.

Armenia:

  • Polish State Secretary Grzegorz Piechowiak has noted that Armenia and Poland intend to cooperate in the fields of IT and fintech.

Georgia:

  • The National Bank of Georgia is introducing mandatory supervision requirements for service providers with virtual assets. The new requirement are scheduled to go into effect on September 1, 2023.
  • Tether Limited, creator of the USDT stablecoin, has signed a memorandum of understanding with the government of Georgia.

Moldova:

  • A Ukrainian fintech company that is part of the Nova Poshta Group, has entered the Moldovan market.
  • Fintech startup Fagura was recognized at the Moldova Innovation Awards.

Prepared by BFC