JPMorgan pioneers blockchain collateral settlement with BlackRock & Barclays ????; PayPal teams up with Apple Pay to break down its walled garden ????

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1. The Most Comprehensive Financial Health Monitor & Forecasting Template ?? [use this and transform financial management from a daunting task into an empowering journey]
2. Is Banking-as-a-Service over? ?? [what happened to Synapse & what should others expect + some bonus reads]
3. Will Rainforest give Stripe a run for its money? ?? [why it’s a company you must keep your eye on + some solid bonus reads]
4. The Great FTX Heist: how executives looted $8B in customer funds ??
5. FinTech M&As don't stop: 3 deals in a single day ??
6. The cryptocurrency bull market is already here ??
7. BNPL - a blessing in disguise? ??
8. Block cuts staff ??

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Last week (9-13 October) was another super exciting and hot week in the world of Blockchain and Cryptocurrency. We will look at JPMorgan pioneering blockchain collateral settlement with BlackRock & Barclays (what happened & why it could be HUGE + more reads on how JPM is dominating); PayPal that teamed up with Apple Pay to break down its walled garden (what it’s all about & why it’s a win-win for both parties + a closer look at PayPal), and other interesting news and developments.

Without further ado, let us dive into what happened in the Blockchain & Crypto sector last week. Let’s connect the dots.

JPMorgan pioneers blockchain collateral settlement with BlackRock & Barclays ????

The BIG news ??? Banking giant JPMorgan has executed the first live blockchain-based collateral settlement transaction involving other two finance giants BlackRock and Barclays.

This pioneering move utilizes J.P. 摩根 's Ethereum-based blockchain network Onyx and its new Tokenized Collateral Network (TCN) application.

Let’s take a look at what this means and why it’s important.

More on this ?? The transaction involved BlackRock using TCN to tokenize shares of one of its money market funds. The tokenized shares were then transferred to Barclays as collateral for an over-the-counter derivatives trade between the two companies.

The tokenization process took just minutes, compared to the traditional settlement process which can take a full day. The near-instantaneous transfer of collateral between BlackRock and Barclays thus represents a major efficiency gain in an industry plagued by cumbersome settlement infrastructure.

The USP ?? 摩根大通 states that TCN unlocks capital trapped in traditional assets and enables new utility for these assets, like using them as tokenized collateral. The application has the potential to drastically reduce settlement failure rates and asset underutilization.

Clients connect to TCN through their own node, enabling decentralized, peer-to-peer collateral transfer and settlement. JPMorgan plans to onboard more clients and expand the network.

?? THE TAKEAWAY

Looking ahead ?? This is kinda historic as some of the world’s largest financial institutions have started using the blockchain to settle transactions. Also, the commercialization of TCN signals JPMorgan's confidence in blockchain technology and institutional adoption following years of internal testing (it’s the institutions, remember?). But more importantly, the bank aims to bridge traditional finance with decentralized finance (by enabling trillions in assets to be tokenized). Aka TradFi meets DeFi. And this is where the BIG money is. Not only does this prove that blockchain can solve real-world problems in collateral settlement. But as adoption grows, tokenization can dramatically transform how assets are transacted. According to BCG, real-world asset (RWA) tokenization is estimated to reach a $16 trillion global tokenized market cap by 2030 (conservative estimate):

Hence, the tokenization of everything is closer than you think. And speaking of JPMorgan, their blockchain leadership yet again reaffirms JPM‘s motto: get in the game or get run over.

ICYMI: JPMorgan is going after N26’s lunch ?? [+ more reads on how JPM is crushing it]

PayPal teams up with Apple Pay to break down its walled garden ????

The news ??? FinTech giant PayPal is now allowing users to add their PayPal and Venmo debit and credit cards to Apple Wallet for use with Apple Pay.

This move marks a shift in strategy for PayPal, which has previously operated within its own closed ecosystem.

Let’s take a quick look at this.

More on this ?? By opening up to 苹果 Pay, PayPal gives its users more payment flexibility. With Apple Pay's growing user base - estimates expect 45.8% of iOS users to use it this year - allowing PayPal cards enables the company to capture more of this spend.

While PayPal loses out on some transaction fees, the potential loyalty boost by having its cards top-of-wallet could make up for this over the long term.

For Apple, the partnership brings incremental revenue through fees, as well as valuable new spending data. This data could help Apple better understand users who split purchases between Apple Pay and other wallets like PayPal.

?? THE TAKEAWAY

Looking ahead ?? Going forward, we may see PayPal continue to break down its walled garden by enabling more third-party digital wallets. The company likely hopes these moves will increase engagement with its own cards and services. However, PayPal must be careful not to erode too much differentiation. Striking the right balance will be key to growing its user base while maintaining competitive edges.

ICYMI: PayPal launches a stablecoin ?? [can it be a game-changer & define the future of finance? + more bonus reads]

Extra Reads & Quick Bites for Curious Minds ??

• Klarna loves AI ???? BNPL giant Klarna has unveiled an AI tool that allows shoppers to take a picture of things and styles in their surroundings, instantly find out where to buy them, and get the best deal in the firm's app. The shopping lens tool can visually identify over 10 million items - from clothing to home décor and electronics- and match these with over 50 million store offers in Klarna 's search and compare tool. The feature is available in the US, UK, Germany, Sweden, Denmark and Norway. It builds on the company's previous use of AI for a discovery shopping feed in the Klarna app which recommends products based on personal interest. ICYMI: Klarna's strategy that nobody’s talking about ?? [closer look + more about Klarna + AI]
• Apple’s OB Play in the USA ???? 苹果 Wallet’s new integration has enabled it to show the card’s details and transaction history for 发现金融服务公司 US credit card customers. With the new functionality, tapping on a transaction will deep-link into the Discover app or website, so users can act accordingly. This integration is rolling out as part of the just-released iOS 17.1 developer beta 3. In the UK, the Wallet app supports the Connected Cards feature with many different banks. This is enabled through a UK-standardised Open Banking API. No such API exists in the US, so Apple has partnered specifically with Discover to enable this feature for Discover US credit cards. The company did not comment on whether other US banks will add support in the future. If a customer is running the iOS 17.1 beta and has a Discover credit card in the Wallet app, taping on it and pressing the button to opt-in and begin the connect card flow will enable the new functionality. This will involve securely authenticating with Discover. Once set up, one can see his card’s balance in the Wallet app. Following Apple’s usual privacy standards, any data fetched through the Connected Cards feature remains on the device and is not shared with Apple. When other cards? ICYMI: Apple Makes a BIG Play into Finance with Open Banking integration ?????? [+ more reads]
• Pet insurance in real-time? ?? FinTech company CRIF has announced the launch of its real-time pet insurance service in the UK, allowing companies to simplify the validation process for pet details.?The new service enables insurers to instantly verify the age, breed, sex, species, and pre-existing conditions, as well as their policyholders’ claims history. Pet Check provides a broader understanding of what insuring a pet could entail, aiming to improve the loss ratio, and policy underwriting process, and address the risk of potential fraud and misrepresentation.?

Money Moves ??

• Germany-based startup Kodex AI has announced it raised EUR 1.6M in a funding round led by Signals VC to empower financial professionals with its AI solution.
• Barclays among potential Metro Bank mortgage book buyers. The bank secured a ￡925M rescue deal and is looking to sell up to ￡3B of residential mortgages.
• Upvest, a Berlin-based startup offering a plug-and-play API for FinTechs entering the investment market, has raised €30M and secured a deal with BlackRock to make investing more accessible for millions of people across Europe.

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P.S. You might enjoy my earlier pieces as well:

?? Top 10 FinTech predictions for 2023 ??

?? Top banking trends to watch in 2023 ??

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About: I am a business developer, sales professional, FinTech strategist, as well as Cryptocurrency and Blockchain enthusiast. I'm highly passionate about Financial Technology and Digital Innovation, and strongly believe that it will change the world for the better. Apart from my daily job at a global payments startup where I'm leading the company's expansion into Europe, I'm an active member of the FinTech community and a TechFin evangelist.

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