What The FinTech #86: 27 Feb 2022
Medhy Souidi
?? AI, FinTech & Digital Banking Strategist | Gen AI, Payments & Web3 Innovation | Ecosystem & Partnerships Leader | ??? Industry Speaker & Podcast Host
Happy Sunday, 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
LQwD FinTech Corp. an emerging technology company developing payment infrastructure for the Bitcoin Lightning Network (LN), announces strategic deployment of a routing node in Jakarta, Indonesia. The Lightning Network is layer-two technology that solves the issue of mass scaling Bitcoin for global microtransactions. In addition to enabling millions of transactions per second, the Lightning Network dramatically reduces the fees currently charged, and serves up instantaneous settlement times. LQwD's recent node launch in Singapore and Germany, 127 nodes have interconnected with more than 130 transaction channels, routing approximately 10 Bitcoin through LQwD's connected channels since launching our first Lightning Network node in late November 2021.?
Wall Street players including BlackRock, Morgan Stanley and State Street are backing a new consortium led by iCapital that will build a distributed ledger-based system for alternative assets. The partners say that creating a secure, shared, auditable record for each alternative investment will augment the efficiency of the investment creation, management, and exit processes, eliminating the need for each party to take in data, reconcile it to their records and share new versions of the data with others. Apollo, BlackRock, Blackstone, BNY Mellon, Carlyle, KKR, Morgan Stanley, State Street, UBS and WestCap are the first to join the consortium, with iCapital predicting more to follow.?
Purchased by celebrities from Justin Bieber to Gwyneth Paltrow, and exciting cryptocurrency enthusiasts, these digital avatars promise a vaunted place in the metaverse and IP potential. In January, Justin Bieber posted a photo on Instagram of his Bored Ape #3001, sometimes called Lonely Bored Ape, which relates to his song “Lonely”. Bieber paid $1.29 million for it. Bored Ape Yacht Club was born in the heady days of April 2021, when the value of cryptocurrency skyrocketed and the market for NFTs exploded. The concept was simple: 10,000 apes, each with a distinct face and outfit, each able to be individually owned and buying an ape also gives one membership to an elite digital club—owners can hang out in Discord servers with like-minded Bored Ape enthusiasts. A major appeal of Bored Apes is their use as avatars—many owners change their Twitter and WhatsApp and even LinkedIn display pictures to their apes as a representation of them in the digital space.
World's largest NFT (non-fungible token) marketplace, OpenSea on Sunday confirmed that it has been hit by a phishing attack and at least 32 users had lost their valuable NFTs worth $1.7 million. OpenSea Co-Founder and CEO, Devin Finzer acknowledged the phishing attack, confirming that 32 users have lost NFTs so far. He said rumours that this was a $200 million hack are false and the attacker "has $1.7 million of ETH (Ethereum) in his wallet from selling some of the stolen NFTs. While the NFT marketplace was yet to figure out the magnanimity of the cyber-attack, Blockchain investigator Peckshield said he suspects a possible leak of user information (including email ids) that fuelled the phishing attack. This appears to be a phishing attack originating outside of OpenSea's website the NFT marketplace.?
Two of the co-founders of cryptocurrency derivatives exchange BitMEX have pleaded guilty to violating U.S. anti-money-laundering law and agreed to each pay a $10 million fine. Arthur Hayes and Benjamin Delo admitted to violating the Bank Secrecy Act’s anti-money-laundering provisions during a hearing Thursday in New York federal court. Both men entered the pleas after reaching agreements with prosecutors. Prosecutors said the men flouted anti-money-laundering rules. BitMEX failed to perform basic identity checks on customers, and its leadership turned a blind eye to reports their platform was being used to launder proceeds of crime and to move money in violation of U.S. sanctions, prosecutors added.
Articles that may interest you on this subject:
HONG KONG
An upstart group of virtual banks has gained a toehold in Hong Kong, luring consumers from bricks-and-mortar lenders in the Asian financial hub with offerings such as numberless credit cards that promise more security and mobile games that churn out cash prizes. The eight digital lenders, mostly backed by large banks and other corporations, operate only online or via mobile phones and have no physical branches. They have been expanding aggressively in one of Asia’s most banked cities since starting operations in 2020, leading other traditional banks to follow suit with their own digital offerings.?
Hong Kong is quickly catching up with Singapore in the race to be Asia’s leading market for IPOs using special purpose acquisition companies (SPACs), drawing on strong support from corporate giants across the border in mainland China. The Hong Kong Stock Exchange (0388.HK) unveiled its own SPAC mechanism, which took effect on Jan. 1 after three months of consultation. Since receiving its first listing application, the Hong Kong exchange has received five more in just one month, in a more positive response than some initially predicted. A SPAC is a publicly traded shell company filled with nothing but cash after making an IPO.
SINGAPORE
Singapore is a step closer towards building an unhackable Internet for safeguarding citizens and customers' data, with the setting up of the nation's first testbed for quantum cryptography. Quantum cryptography uses the quantum properties of light particles to create an unbreakable cryptographic algorithm to secure satellite or fibre broadband communications. National Research Foundation (NRF) announced the creation of the testbed initiative, dubbed the National Quantum-Safe Network - the aim of the initiative is to test quantum security software and hardware that are already commercially available today. These tests simulate day-to-day operations in the hope of deploying them one day to securely process sensitive functions, including the operation of energy grids and e-banking transactions. Target users include those in the medical, finance and military sectors.
领英推荐
DBS announced will be availing a complimentary cybersecurity training programme to help protect the 280,000-strong SME community in Singapore from the growing threat of cybercrime. At the end of the programme, SMEs will be presented with recommendations for suitable cyber insurance and cybersecurity solutions. This enables SMEs to take immediate steps to protect their businesses from potential cyberattacks. The programme, DBS #CyberWellness, comprises 10 online modules, each covering a different facet of cybersecurity, such as password protection, phishing, digital scams, physical security, and social media security. To make the training even more accessible for time-strapped employees, each module can be accessed on the go digitally through an e-learning platform, with all 10 modules taking no more than 120 minutes to complete.
Singapore’s central bank will not regulate the booming non-fungible token (NFT) market. The decision by the Monetary Authority of Singapore (MAS) comes as the NFT sector saw $25 billion in sales last year, up from $95 million in sales in 2020. While the dramatic rise has captured the attention of regulators who want to monitor the burgeoning industry, Singapore will not be among them. Implementing regulations would involve considering the risks and rights of NFT owners in an industry that is still in its infancy.
FinTech startup M-DAQ has bought B2B cross-border payment provider Wallex to help it expand more in Southeast Asia. This could also pave the way for an initial public listing (IPO). Wallex’s services include customizable application programming interfaces (APIs), competitive exchange rates into more than 180 countries, virtual accounts and a digital wallet, letting merchants collect, convert and store money in different currencies. If this deal goes through, the entity could potentially process over S$15 billion ($11 billion) in gross transaction value (GTV) this year. Wallex would continue in that case as an independent company. The deal is one of the first in a possible series of acquisitions for the Southeast Asian payments space by the company.
Zurich-headquartered private bank Julius Baer is setting up an innovation lab in Singapore in a bid to be at the forefront of digital services and new technologies, The lab recently moved into a ?co-creation space? at Julius Baer’s Singapore office in Marina One. As of December, the bank appointed Jonathan Chan as head of the new lab and he has since led a multi-discipline team with innovation and entrepreneurial backgrounds. Asia accounts for a quarter of Julius Baer’s business which allows for sufficient critical mass to develop solutions with scale and test them immediately.?
CHINA
TikTok owner ByteDance, which is pulling back from some business sectors under scrutiny from Beijing, has sold an intelligent stock market investment product to local brokerage ChinaLin Securities. The deal priced ByteDance’s wholly owned subsidiary Beijing Wenxing Online Technology Co Ltd at 20 million yuan (US$3.16 million). The app “intelligently tracks the market, provides fast information and performance analysis”, according to its website with 12 million users in total and 320,000 monthly active users as of September 2021.?The sale is the first since ByteDance announced last September that it would “scale back its finance-related business and sell the securities brokerage operation” as China’s financial regulators have repeatedly vowed to strengthen oversight of the sector.?
WeChat and Alipay users who occasionally use QR codes to collect small-sum payments will not be subject to business tax or tighter rules. To better facilitate the business environment and offer more convenient, targeted payment services, people can also voluntarily use a separate, individual, business-transaction reception code. WeChat and Alipay both said transaction reception codes for individual use will remain unaffected after March 1. The new clearing and payment requirements came after the central bank asked payment and clearing service providers to prevent individual QR code use for conducting business transactions. The association also said it would improve the payment-reception service experience for individual operators and small and micro-sized businesses.
The People’s Bank of China (PBoC) issued a notice that it would strengthen the management of payment acceptance terminals and related businesses, stipulating that personal payment reception QR codes cannot not be used for business, but can still be used normally for non-business scenarios. The rules will be officially implemented from March 1 this year. Tencent customer service said that the personal collection QR code can still continue to be used after March 1. Some users with obvious business behaviors need to upgrade their codes to dedicated business collection codes in compliance with regulations. The regulatory authorities will announce the standards of “obvious business behavior” in the near future, and the platform will be kept for a period of time as a transition period before users upgrade.
ASIA
Bank Negara Malaysia, the country’s central bank, has announced it will award up to five digital banking licenses out of the 29 applicants enrolled in the programme. For applicants to redeem one of these licenses, they must count for an extensive customer base, and a strong pool of users who will be performing digital banking services. However, as opposed to Singapore where up to 98% of the population over 15 years has a bank account, financial institutions looking to obtain their license in Malaysia must prove they can provide their services to the underbanked and boost the country’s digitisation process.
Tencent Cloud has announced a strategic partnership with KinderWorld to develop a smart campus for schools and accelerate the digitalisation of the private education sector across Southeast Asia. The cloud division of the technology heavyweight has joined forces with the Singapore-based education and training provider to innovate in the areas of campus security, smart technologies and video for teaching and learning, training courses for staff and the potential deployment of a content management system (CMS). Both parties share the mutual goal to further enhance digital innovation in education and training across the region, regional director of Southeast Asia and general manager of Singapore, Malaysia and Indonesia at Tencent Cloud International.
Kyndryl’s Japanese subsidiary has announced a strategic partnership with Japanese telco SoftBank, which focuses on multi-cloud enablement, systems integration and 5G networking to “drive digital transformation projects” for Japan-based customers. Kyndryl and SoftBank will support the “digital evolution of companies and organizations by utilizing public clouds, managed service provider (MSP) services, security solutions and communication networks provided by SoftBank, and Kyndryl’s system consulting and advanced technology services expertise. In addition to cloud and system integration, the companies will also utilize 5G and IoT technologies to work together on providing specialized solutions for industries.
Philippines-based fintech PayMongo, which enables merchants to accept digital payments, new funding will be used to further develop PayMongo’s current payments infrastructure and add more financial services, including disbursements, capital lending, BNPL, and subscriptions and recurring payments. The company works with businesses of all sizes, but targets micro-, small- and medium-sized businesses in particular, enabling them to accept different forms of payments, including credit cards, online wallets and over-the-counter. Its products include PayMongo API and e-commerce plugins.
Data and analytics company GlobalData has said that Swiggy and Zomato are set to benefit by venturing into the growing Indian BNPL space. BNPL has been gaining prominence in India with increasing number of payment and fintech companies vying to get a piece of this fast-growing market. Swiggy’s announcement comes within few days of its rival Zomato’s plans to offer BNPL services. While the concept of BNPL is currently more prominent in categories like travel and accommodation, electronics, clothing and footwear, it is set to penetrate food delivery. Swiggy has a network of around 128,000 restaurants across 500 Indian towns and cities with around 20 million monthly active users, while Zomato has a network of nearly 390,000 restaurants and 32 million monthly active users.
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