February 17, 2023 FinTech Monitor

BFC FinTech Monitor (January–February 2023)

Tags Artificial Intelligence Cryptocurrency Cybersecurity Digital Banking Events Payments Regulation

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

Many experts believe that artificial intelligence (AI) will soon replacing many existing jobs, resulting in an increase in wealth inequality.
According to a recent McKinsey report, the Metaverse market size could reach USD 5 trillion by 2030.
A new study from KPMG shows that blockchain is now the 5^th-most demanded fintech in China.
A European Central Bank study indicates that cash remains the most common payment method at points of sale.
Alibaba Damo Academy has declared generative AI as the biggest trend of this year, predicting that it will become more interactive, more useful, safer and smarter.
The Bank for International Settlements has released a working paper on the integration of decentralized finance (DeFi) with traditional ones.

#Innovations

Mastercard has launched an AI-based algorithm to combat card fraud.
Microsoft is planning to release software that will help third parties run their own chatbots.
Alibaba Cloud has introduced its first international product innovation center and partner management center. It is expected that this will improve the quality of customer service and facilitate greater digitalization.
Romanian authorities have launched the Ghișeul.ro app, which allows users to pay taxes and get criminal records using a smartphone. Account creation requires face recognition.
Deutsche Bank‘s fintech laboratory has released its first commercial product: a robotic process automation platform for processing and reconciling data between financial institutions.
The Plum financial app has launched an unusual feature that allows the app to automatically save funds if users start spending.
Credit Agricole has implemented services based on quantum computing, including one designed to assess financial products and another to assess credit risks.

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

A Recap study has found that London is the ‘world’s most prepared city for cryptocurrencies’ for business and startups.
Within a collaboration with fintech startup Bitfy, Bank of Brazil (the oldest bank in the country) now allows taxes to be paid using cryptocurrencies.
Wirex has signed a partnership agreement with Visa as part of its expansion program in the Asia-Pacific region and the UK. The agreement will allow Wirex to issue crypto-enabled debit and prepaid cards in more than 40 countries.
The US Securities and Exchange Commission is planning to sue the issuer of the stablecoin Binance USD (BUSD).
Speaking at the StarkWare Sessions 2023 conference, Visa representatives announced their plan to launch stablecoin settlements.
North Korea-linked hackers have been implicated in the theft of between USD 630 million and USD 1 billion worth of cryptoassets in 2022.
PayPal has frozen the issuance of a stablecoin due to the tightening of regulations over the cryptocurrency space and the investigation of a key partner (Paxos Trust) by the New York State Department of Financial Services.
EU legislators have voted to tighten requirements for banks that own cryptocurrencies. In particular, they are now required to hold capital reserves equivalent to the full value of their cryptocurrency holdings.
Regulators in the US and several other countries are discussing the development of global industry standards for crypto regulation.
Fabio Panetta, board member of the European Central Bank, said that cryptocurrencies should be regulated in a similar way as gambling.
Elon Musk intends to integrate cryptocurrency payments into Twitter.
Mastercard, in collaboration with the largest crypto exchange Binance, has launched a prepaid cryptocurrency card in Brazil.
The combined losses of users and investors in the crypto industry exceeded USD 63.9 billion in 2022.
More than 88% of Binance CIS customers are expected continue to invest in cryptocurrencies in 2023.
The number of developers working on cryptocurrency projects increased 5.4% in 2022, reaching 23,300.
According to a JPMorgan study, 72% of institutional traders do not plan to invest in cryptocurrencies.
Visa CEO Alfred Kelly has stated that blockchain solutions can be integrated into services and offerings to support the next generation of payments.
Damage to the crypto industry from hacks increased to USD 3.6 billion in 2022.
The Bank for International Settlements (BIS) has proposed three main options for regulating the crypto industry: (1) banning certain types of activities in the industry, (2) isolating the industry from the TradeFi sphere and the real sector of the economy and (3) applying the rules that apply to traditional finance to the crypto industry.
Analysts at Grand View Research, Inc. expect the global crypto payment app industry to reach USD 2.15 billion by 2030.
The stablecoin USDT outperformed Visa and Mastercard in terms of 2022 transaction volumes.
The US House of Representatives has formed a subcommittee to focus on developing cryptocurrency-related rules for federal regulators.
The Japan Financial Services Agency has called for the regulation of the crypto industry.
German internet bank N26 is launching a cryptocurrency product in the Belgian, German, Irish, Portuguese and Swiss markets.
Indonesian regulators are planning the 2023 launch of a national cryptocurrency exchange.
A committee to develop legislation governing the use of cryptocurrencies has been established in the Central African Republic.
The Legislative Assembly of El Salvador has approved the legal framework for the issuance of digital assets, including bonds based on bitcoin.
Italy has introduced a 26% tax on profits gained from cryptocurrency trading that exceed EUR 2,000.

#Central Bank Digital Currencies (CBDCs)

The BIS innovation hub is planning to focus more on improving payment systems and experimenting with CBDCs in 2023.
A universal digital payment network for stablecoins and CBDCs was launched at the World Economic Forum in Davos.
The possibility of payments using a QR code has been included within the digital euro project.
Five UK organizations (The City of London Corporation, The Digital Pound Foundation, The Payments Association, TheCityUK and UK Finance) have formed an alliance to help shape the future of a local CBDC despite the head of the Bank of England expressing doubts over the need for a digital pound. At the same time, the UK regulator has launched a four-month public consultation process on its introduction.
In a new report, Bank of America has referred to digital currencies, CBDCs and stablecoins as part of the natural evolution of money and payments.
Ripple will help the Central Bank of Montenegro develop a CBDC.
The People’s Bank of China has started to include the local CBDC in its domestic financial market reports.
Turkey’s regulator has completed the first pilot tests of the digital lira and is now planning to expand the platform for working with the CBDC by connecting more banks and fintechs.

#Miscellaneous

Apple is testing a new buy-now-pay-later (BNPL) solution among its employees and expects it to be available within the US market shortly.
American financial holding JPMorgan Chase is planning to launch a neobank in Germany.
Emirates Islamic, a leading Islamic financial institutions in the UAE, has launched a global fintech accelerator program in the Islamic finance segment.
Wells Fargo, JPMorgan Chase and Bank of America are planning to create a digital wallet to compete with Apple and PayPal.
Samsung Wallet is available in Australia, Brazil, Canada, Hong Kong, India, Malaysia, Singapore and Taiwan.
Revolut has launched programmatic cryptocurrency staking for customers in the European Economic Area and the UK.
Alibaba founder Jack Ma has ceded control of the fintech giant, reducing his stake in the company to 6%.

#Conferences

The Baltic Payment Forum will be held in Vilnius on April 25, 2023. According to organizers, the themes of the forum will be supporting the Ukrainian financial market and creating a platform for international exchanges of experience in the field of payments.

Ukraine:

A new Mastercard report shows that a third of Ukrainians are ready to switch to payments exclusively using digital cards.
Winners of the PaySpace Magazine Awards 2022 have released, with eDopomoga recognized as the best fintech startup and NovaPay recognized as the best fintech project.
Ukrainian cryptocurrency startup Kolibrio has raised USD 2 million from the Jump Crypto fund.
A recent CoinKickoff study indicates that Ukraine is the third-most interested country in terms of growing interest in metaverses.
The EasyPay payment network has launched QR-code payment options within terminals.
97% of Privatbank’s payments are now made through digital channels.
The United States Agency for International Development (USAID) plans to allocate USD 650,000 to shape an approach to disseminating Ukraine’s digital experience and the Diya mobile app in other countries.
Ukraine will take part in the development of a single European digital identity wallet, which will be capable of storing digitized driver’s licenses, identity cards, etc. in a smartphone.
The Ukrainian Phoenix Fund is raising EUR 50 million to finance Ukrainian startups at the pre-seed and seed stages.
Monobank is planning to enter the Polish market in cooperation with a local partner.
The Minister of Digital Transformation of Ukraine has stated that he is ready to be one of the first to receive a salary in digital hryvnias.
Ukrainian startup Global Ledger has partnered with the United Nations Department on Drugs and Crime (UNODC) to launch a course on cryptocurrencies.
The ANC pharmacy chain has launched a payment service through Binance Pay, meaning that medicines can now be purchased using cryptocurrencies.

Kazakhstan:

Revolut is testing the possibility of entering the Kazakhstani market.
The Association of Venture Capital and Private Equity has been established in Kazakhstan. According to experts, the current venture capital industry in the country is estimated at USD 150 million.
Entrepreneurs can now submit tax reports through the Kaspi Pay app.
According to Venture Capital Market Review, the majority of Kazakhstani startups attract investments at the pre-seed and seed stages.
The Concept for the Development of Open API and Open Banking in Kazakhstan for 2023—2025 has been published. It was developed jointly by the National Bank of Kazakhstan, the Agency for the Regulation and Development of the Financial Market and the Agency for the Protection and Development of Competition.
The National Bank of Kazakhstan and the cryptocurrency exchange Binance have released a joint report on the state of the digital asset industry in Central Asia.
Binance has become a partner of the largest airline in Kazakhstan, Air Astana. This means that members of the Air Astana Nomad Club reward program can convert their accumulated points into cryptocurrency.
The Astana International Financial Center (AIFC) Committee on Financial Services Regulation issued a consultation paper on proposed improvements to the digital asset trading system. Comments will be accepted until February 25, 2023.
The Kazakh Senate has approved a new version of the Digital Assets Law and four other related regulations.
Evgeny Lesnyak, head of the Department of Strategic Partnerships, Fintech and Joint Projects of Visa in Ukraine, Georgia, CIS countries and Southeastern Europe, discusses how the fintech market in Central Asia has changed.

Kyrgyzstan:

The Digital Kyrgyzstan International Forum, which was organized by PLUS magazine, will be held in Bishkek on March 15, 2023.
The shadow turnover of cryptocurrency in Bishkek is estimated at between USD 5 million and USD 10 million daily.
The Accelerate Prosperity initiative of the Aga Khan Development Network (AKDN) is openly exploring cooperation with innovative and technological businesses from Kyrgyzstan, Pakistan and Tajikistan.

Uzbekistan:

In 2022, the five licensed cryptocurrency companies in Uzbekistan paid USD 310,000 in taxes.
The Central Bank of Uzbekistan has banned non-resident legal entities from using funds from the sale of cryptocurrencies in the domestic market, with the exception of bitcoin exchange operations.
Starting on May 1, 2023, payment services will be required to provide invoices for transfers between individuals, including those with zero commission.
According to the head of International Cooperation Department of the Central Bank of Uzbekistan, Uzbekistan has created all the conditions necessary for Apple Pay and Google Pay to become available in the country.
The Islamic Corporation for the Development of the Private Sector (ICD) and Trustbank have signed a USD 20 million loan agreement. The funds will be used to finance the private sector and fintech companies as well as promote Islamic finance and expand access to financial services.
The Chairman of the Board of neobank Uzum Bank (formerly Apelsin) speaks about experiences in integrating banking services into the fintech and e-commerce ecosystem.

Azerbaijan:

The news agency Trend has prepared an overview of the most important events of 2022 in the information and communication technology sector of Azerbaijan.
Azerbaijan participated in Istanbul Fintech Week, Turkey’s largest fintech event.
The International Finance Corporation (IFC) and the Azerbaijan Financial Technology Association have signed a memorandum of understanding that is expected to result in local fintech companies being more easily able to expand and offer cost-effective, fast and quality services in the country.

Armenia:

Durov’s Code has published information on how to buy cryptocurrency in Armenia.
The Google Pay electronic payment system is now available for Unibank customers.
Crypto entrepreneur Andranik Togramajyan discusses the development of the digital asset market in Armenia

Georgia:

International company SOFTSWISS, which has an office in Tbilisi, was recognized as the crypto company of the year by International Gaming Awards.
Georgia ranks 1^st in the world in the penetration of contactless payments made through the Visa payment system, with nearly 100% of Visa card transactions in Georgia now being contactless.
Online publication CoinsPaid Media has prepared an overview of the regulatory framework that regulates digital assets in Georgia.
Binance is implementing several educational and charitable initiatives in Georgia, including those related to the generation of new startup ideas and commercialization initiatives.

Moldova:

Mobile operator Moldcell has entered the financial services market with the launch of the Moldcell money service, which allows subscribers of any mobile network to easily transfer money and pay for services directly from a mobile wallet.
Estonian fintech startup Fagura.com, which was first launched and tested in Moldova in 2019, has attracted EUR 780,000 in investments on the London-based platform Seedrs.
Specialists of the National Bank of Moldova have received training within the Cambridge University SupTech Innovation Leadership Program.