January 19, 2022 FinTech Monitor

BFC FinTech Monitor (1st – 19th January)

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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

#Research

  • According to a new analytical report published on NFCW, biometric cards will soon become a priority for financial institutions operating in Egypt, India, Iraq, Lebanon, Mexico and Poland due to agreements signed with Norwegian biometric solutions provider Zwipe.
  • American analytical company Mordor Intelligence is predicting that the global market for biometric cards will reach USD 1.69 billion by 2026.
  • Juniper Research expects that the volume of transactions on prepaid cards will exceed USD 4.1 trillion by 2026 due to prepaid cards starting to replace cash as a payment instrument as the digital payments ecosystem begins to include consumers who do not use financial services.
  • A study by software developer Netskope has found that more than 2/3 of malware downloads in 2021 were cloud apps. Most such downloads were completed via Google Drive.
  • The African Blockchain Research Institute is planning a study to identify the opportunities, challenges and implications of using blockchain in various aspects of life.

#Cryptocurrencies, Blockchain and Non-Fungible Tokens (NFTs)

  • American automaker Tesla has started accepting the cryptocurrency Dogecoin as payment for merchandise (accessories, branded clothing, etc.). Following the announcement, the value of Dogecoin rose 30% in one day.
  • According to Bloomberg, PayPal’s payment system is preparing to issue stablecoins; however, a potential release date remains unknown.
  • Ex-Twitter CEO Jack Dorsey has announced the creation of a non-profit legal defense fund for bitcoin developers.
  • NFT sales reached USD 25 billion in 2021, up from just USD 94.9 million one year earlier.
  • Eduardo Pais, the mayor of Rio de Janeiro (Brazil), has announced the creation of the city’s own cryptocurrency, into which the city will invest 1% of its treasury.
  • Users of Chivo (El Salvador’s national crypto wallet) lost at least USD 96,000 due to unapproved transactions.
  • According to a joint report from the government and regulator of Pakistan, the country is planning to ban cryptocurrencies.
  • Estonia’s Ministry of Finance has denied rumors of a planned ban on cryptocurrencies in the country, stating: “The legislation does not contain any measures prohibiting consumers from owning or trading virtual assets. Consumers also do not need to share keys to their wallets.”
  • Staking and crypto lending in Japan will now be taxed the same way as cryptocurrency mining.
  • EthereumMax investors have filed a lawsuit against Kim Kardashian. The suit alleges that the creators of EthereumMax and some celebrities artificially inflated the price of the cryptocurrency through “false or misleading claims” on social media.
  • Swiss crypto bank SEBA has raised USD 120 million in Series C funding.
  • The Associated Press will start selling photos in an NFT format through the Polygon blockchain marketplace, which is scheduled to launch on January 31, 2022.
  • Samsung plans to launch NFT-enabled smart TVs this year.
  • A group of US banks has formed a consortium to issue a USDF stablecoin, which will be pegged to the US dollar at a ratio of 1:1. It will be possible to exchange the stablecoin for fiat currency at any consortium bank.

#Central bank digital currencies (CBDCs)

  • Visa will partner with blockchain company ConsenSys to develop a module that will help regulators and financial institutions test applications related to the use and implementation of CBDCs.
  • The People’s Bank of China has launched a Digital Yuan Wallet on both Google Play and the App Store for digital yuan payments. In the future, support for the Chinese CBDC will also be added to the WeChat messenger. Chinese authorities have also banned competitors of the digital yuan (Alipay and WeChat) in the Olympic Village, where it is being tested.
  • The Bank for International Settlements (BIS), in collaboration with the Swiss regulator, has successfully tested the integration of wholesale CBDC settlements with the systems of five financial institutions.
  • Jerome Powell, US Federal Reserve Chairman, has stated that CBDCs can coexist with stablecoins, promising a to submit a report on the digital dollar within the next few weeks.
  • The UK Parliament has questioned the wisdom of issuing a digital pound, with the House of Lords Economic Affairs Committee concerned that a CBDC could pose serious problems for financial stability and privacy.

#Miscellaneous

  • Singapore-based fintech startup Thunes will partner with the World Economic Forum (WEF) to close systemic inequalities in access to financial services, particularly by introducing innovations to payment and market infrastructures.
  • Revolut has launched deposit insurance up to EUR 100,000 in ten European countries following the issuance of a specialized banking license the company received in Lithuania.
  • British fintech startup Checkout.com, which allows companies to accept various types of payments from different countries via the internet, has been valued at USD40 billion.

Russia

  • The Central Bank of Russia plans to start collecting data from from controlled entities on transfers between individuals within the Russian Federation. According to Bloomchain, this will allow the regulator to better deal with crypto exchangers. Additionally, Alexander Bastrykin, head of the state Investigative Committee, has called for the mandatory identification of cryptocurrency owners.
  • A mechanism for transferring biometrics from financial institutions to the state system will be developed this year. It is worth noting that financial and other commercial organizations will not be able to keep copies of this data for themselves.
  • Olga Skorobogatova, first deputy chairman of the Central Bank of Russia, has announced that a prototype for a digital ruble platform is now ready and that testing will begin on it sometime this month.
  • Tinkoff Bank’s parent company TCS Group Holding has bought a stake in the Swiss cryptocurrency project Aximetria.

Ukraine

  • Alexander Bornyakov, Deputy Minister of Digital Transformation for IT Development, has appealed to US authorities regarding the withdraw of a number of bitcoin exchanges from the Ukrainian market. The issue stems from issues in identifying users from Crimea.
  • Fintech Farm, founded by Dmitry Dubilet (the co-founder of Monobank and Koto), has raised USD 7.4 million in investments. Within two years, the company plans to launch neobanks in eight countries throughout Africa and Asia. The first country for a planned launch is Nigeria, which is expected within a few months.
  • Monobank has introduced a new service interface that will allow its clients to trade on the stock market, which will be functional for users by the end of the month.
  • Oleg Gorokhovsky, co-founder of Neobank, recently warned about a new money theft scheme in which scammers launch various fake services on a network allegedly linked to Monobank.
  • Internet-of-things (IoT) startup OMO, which offers smart home solutions, has entered the US market.

Kazakhstan

  • Assel Urdabayeva, partner in KPMG’s auditing practice in Central Asia, discusses the challenges Kazakhstan’s financial sector may face, including tax risks, cancel culture and cyber threats.
  • Kazakhstan’s financial sector lost 4 players in 2021. As of January 1, 2022, only 22 banks are operating in the country, with 14 of them having foreign participation.
  • In collaboration with Visa, CenterCredit has become first Kazakhstani financial institution to launch fast transfers by phone number to any bank.
  • ZoodPay‘s super app has received USD 38 million in Series B funding, which will enable it to expand its presence in Kazakhstan by offering instant online installment payment solutions.
  • The Agency for Regulation and Development of the Financial Market has announced that banks can now reopen their branch locations and ATMs in Kazakhstan as they now have enough equity capital and liquidity to provide a full range of services.
  • Cryptocurrency miners may start leaving Kazakhstan following protests in the country, which shut down the internet and resulted in about 15% of the world’s mining capacity ceasing temporarily.
  • Tayyab, an Islamic fintech startup from Kazakhstan, plans to enter the Turkish market.

Uzbekistan

  • The Central Bank of Uzbekistan has adopted standards for protecting the rights of users of fintech services. In particular, the standards include the concept of “digital financial services” and related key terms important for ensuring the protection of rights.
  • Anorbank and Payme have signed a strategic partnership agreement aimed at sharing experiences in the development of digital financial services and products.

Azerbaijan

  • Visa will finance the introduction of innovative payment technologies among Azerbaijani small- and medium-sized businesses, with both Kapital Bank and Expressbank already having confirmed their participation in the project.
  • Kristina Dorosh, vice president and regional manager of Visa in Central Asia and Azerbaijan, has stated that the payment system is open to cooperation in the field of neobanking within Azerbaijan.
  • Experts have identified the main financial trends expected in Azerbaijan in 2022, including a change in loan interest rates, an increase in the use of bank cards and an increase in the number of available online banking services.
  • The Central Bank of Azerbaijan plans on expanding its policy for introducing non-cash payments in Azerbaijan this year.
  • Igor Bychek, a former top manager of the Belarusian MTBank, has launched the Umico super app in Azerbaijan, which combines a number of services such as cashback, marketplace and mobile banking services.

Moldova

  • For EUR 1.7 million, IuteCredit has acquired a 9.9% stake in the Moldovan Energbank. IuteCredit, which also operates in Albania, Bosnia and Herzegovina, Bulgaria and North Macedonia, is specialized in offering consumer loans.
  • Romanian startup studio V7 Capital has invested EUR 100,000 in the Moldovan fintech Fagura, which was previously included in Global Banking & Finance Review’s list of Top 100 Most Innovative and Promising Companies.

Prepared by BFC