Weekly news highlights 25 September 2020

Weekly news highlights 25 September 2020

Weekly news highlights 25 September 2020

The European Commission aims that by 2022 a new set of legislation frameworks will be in place regarding the open finance landscape. The new initiative aims at monitoring the progress made on the Payment Services Directive (PSD2) and further developing it. The Digital Finance Package was adopted yesterday and consists of new rules and regulations for digital finance and retail payments strategies, and legislative proposals on crypto-assets and digital resilience. Read more

Kraken, a US-based cryptocurrency exchange that offers a feature-rich trading platform for individual cryptocurrency enthusiasts as well as large trading firms, has become the first US crypto bank. With the new approval, Kraken will begin to operate with local clients, planning on expanding globally as well. According to David Kinitsky, CEO of Kraken Financial, this milestone will change the way consumers interact with cryptocurrencies: “New and existing clients will have the opportunity to apply for our traditional financial accounts […] they will be able to take advantage of the seamlessness and ease of use that comes from the first all-in-one service provider that can offer and expertly manage sophisticated crypto-products.” Read more

The financial sector faces further scrutiny due to activities adding up to  $2tn, exposed by the FinCEN Files. Given the leaked files, many journalists and supervisors are currently investigating how some of the world’s biggest banks have allowed criminals to move dirty money around the world. On the top of the list, the files show how HSBC allowed fraudsters to move millions and JP Morgan did not report a client company moving more than $1bn. However, the US is taking action and is in the process of overhauling its anti-money laundering programs to take initiative against such fraudulent transactions. Read more

Tink, an open banking platform, acquired OpenWrks, a platform that helps product providers to create the groundbreaking apps and services customers demand by allowing them to connect to every bank through one secure API. With this acquisition, OpenWrks will power its suite of applications through Tink’s platform connectivity and make its MyBudget product and data services available for the European market by the beginning of 2021. Read more 

Volt Bank, an Australian consumer neobank, launched a partnership with Microsoft in order to implement a new Banking-as-a-Service (BaaS) platform. The new product: Volt 2.0, will offer business partners full-service banking and payment possibilities to their own customers and act as a follow-up of Volt’s current partnership network. With the new collaboration, Volt plans on delivering a product which will support various brands and also types of consumers, and also further expand its client base, by adding banks to the list. Read more

With the new plan set up by the European Commission, the cryptocurrency sector sees further regulations. For the purpose of shifting finance towards digital transformation, the new legislation plans on reducing the risks for investors and also on giving legal certainty to the issuers of cryptocurrency. However, for stable coin issuers, stricter rules might apply in order to minimize the volatility of the price and hold their value. With the proposal expecting to gain its approval in a year’s time, German Finance Minister Olaf Scholz pledged to accelerate the EU’s financial reforms for regulating cryptocurrency. Read more

Chime, an American neobank, which provides fee-free financial services through a mobile app, has currently reached a $14.5 billion valuation. After a recent investment gained in a series F funding of $485m, Chime has become the most valuable US-based consumer-focused privately owned fintech, overthrowing Robinhood. With the newly received sum, Chime plans on further developing its products and services in order to serve its American customer base, reaching 10 million users. Read more

Yandex (the Russian “Google”) is a technology company that builds intelligent products and services powered by machine learning. As part of their newest transactions, Yandex is in the process of acquiring online bank Tinkoff from TCS Group Holdings. The agreement for the sale is based on a cash-and-shares offer, which puts Tinkoff at $5.48 billion, or $27.64 a share. This deal has implications for the Russian banking and tech ecosystem, leading to direct competition with Sberbank, the largest bank in Russia. Read more

With its latest draft – the Digital Operational Resilience Act (DORA), the European Commission aims to improve the current regulations and requirements for technology. The highlights of the proposal cover an introduction of 3rd party providers for cloud services within the regulatory landscape, setting a common EU framework for digital operational resilience testing, presenting a holistic ICT risk management regulatory system and also harmonising ICT incident classification and reporting. Read more

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