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Weekly News Highlights – 10 March 2023

Stay up to date with the latest news from fintech! This week, we bring you updates on regulations, legislation, partnerships, and more. Enjoy reading!

Crypto-focused bank Silvergate is shutting operations and liquidating after market meltdown (CNBC)
Silvergate Capital, a central lender to the crypto industry, said on Wednesday that it’s winding down operations and liquidating its bank. The stock plunged more than 36% in after-hours trading. Silvergate has served as one of the two main banks for crypto companies, along with New York-based Signature Bank. Silvergate has just over $11 billion in assets, compared with over $114 billion at Signature. Bankrupt crypto exchange FTX was a major Silvergate customer. “In light of recent industry and regulatory developments, Silvergate believes that an orderly wind down of Bank operations and a voluntary liquidation of the Bank is the best path forward,” the company said in a statement. Read more

FACTBOX – How will China’s financial regulatory framework change? (Market Screener)
China will set up a new regulatory body consolidating financial supervision, according to a plan that the State Council, or cabinet, submitted to the rubber-stamp parliament meeting this week. Analysts said regulatory loopholes could be bridged with the changes proposed. Financial regulation overlap especially at the local government level should also be reduced as well, though some investors are concerned it will usher in tighter control over financial and economic activities. Read more

European lawmakers secure agreement on green bond standards (Fintech Global)
Lawmakers in the European Parliament and the European Council have unveiled an agreement on the creation of standards for European Green Bonds. According to ESG Today, under the new proposed standard, issuers wishing to use the EuGB designation – described as the ‘gold standard’ for green bonds – will need to follow a strict set of investment and transparency criteria. These include ensuring all proceeds are invested in activities aligned with the EU Taxonomy. The European Commission launched its EuGB regulation proposal in July 2021, as part of a series of initiatives by the group aimed at promoting a more sustainable financial system and helping to facilitate the necessary investments to advance the EU’s and global climate goals. Read more

Republican-led House of Representatives passes anti-ESG investing rule (Fintech Global)
The US House of Representatives has approved legislation aimed at blocking a new law allowing the consideration of climate and ESG factors by retirement plan fiduciaries. The legislation passed with a 216-204 vote in the House, with the resolution sponsored by Congressman Andy Barr (R-KY). The bill will now go to the Senate. If approved, President Biden has said he would veto the legislation. According to ESG Today, the resolution is aimed at disapproving the Department of Labor’s ‘Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights’ rule passed back in December. Read more

Brazilian central bank gives Meta the go-ahead to launch WhatsApp business payments feature (Fintech Futures)
Tech titan Meta has received authorisation from the Central Bank of Brazil to launch a new feature that will enable customers to make payments to small businesses via its messaging service WhatsApp. Announcing the news on Twitter, Meta’s head of WhatsApp Will Cathcart writes: “Soon, Brazilians will be able to browse products, add them to a cart and make secure payments to small businesses right from a chat with your credit or debit card.” Meta’s head of commerce and financial technologies Stephane Kasriel adds that the firm has “prioritised an open model” and is currently testing the feature with “several partners”. A definitive date for the rollout has yet to be confirmed. Read more

White House launches National Cybersecurity Strategy (Fintech Global)
The US White House has released its National Cybersecurity Strategy as it looks to firm up its armour against a growing number of cyberattacks. According to Security Week, the strategy pushes mandatory regulation on critical infrastructure vendors and green-lights a more aggressive ‘hack-back’ approach to dealing with foreign adversaries and ransomware actors. The government said it plans to use existing authorities to set necessary cyber requirements in critical sectors, where there are often legal gaps around authority. The document argued, “[While] voluntary approaches to critical infrastructure cybersecurity have produced meaningful improvements, the lack of mandatory requirements has too often resulted in inconsistent and, in many cases inadequate, outcomes,” the document argues, calling for a dramatic shift of liability “onto those entities that fail to take reasonable precautions to secure their software.” Read more

Weavr swoops for fellow London FinTech (Business Cloud
Fast-growth company says customers will be able to make payments through accounts that offer richer controls and payment options than banks. Weavr has acquired fellow London FinTech and B2B open banking platform Comma Payments in a ‘first-of-its kind deal within the world of embedded finance’. The acquisition, which is largely equity-based, will see Weavr retain most of Comma’s current workforce, including CEO and founder Tom Beckenham and chief technical officer Gianluca Pengo. Weavr says the acquisition will result in an embeddable payment solution for B2B applications ranging from payroll, accounts payable and other forms of mass payments. Read more

In Crypto: Bankrupt Alameda sues Grayscale over £1.3bn fees (Business Cloud)
FTX sister firm seeks to unlock $250m+ for debtors, alleging that asset manager is preventing shareholders from redeeming shares. Bankrupt cryptocurrency trading firm Alameda Research is suing asset manager Grayscale in a bid to unlock more than $250m of assets for debtors of sister company FTX. Filed in the Court of Chancery in Delaware, the suit accuses Grayscale of mismanagement of its Bitcoin and Ethereum trusts, allowing shares to trade at around 50% discount to their net asset value. Alameda alleges that Grayscale and its owner Digital Currency Group has “in the past two years alone… extracted over $1.3 billion in exorbitant management fees in violation of the Trust agreements”. It added: “Grayscale has for years hidden behind contrived excuses to prevent shareholders from redeeming their shares.” Read more 

Griffin secures UK banking licence with restrictions from PRA (Fintech Futures
London-based Banking-as-a-Service (BaaS) provider Griffin has received an authorised with restrictions (AwR) banking licence from the Prudential Regulation Authority (PRA) and is now officially in mobilisation as it pushes to become the UK’s first full-stack BaaS platform with a full banking licence. Receiving the authorisation means Griffin is now listed on the Financial Conduct Authority (FCA) register and can operate as a bank subject to certain restrictions. During this period, Griffin will be able to hold a limited amount of deposits and carry out a limited amount of payment services. The new bank says it will work on further developing its systems and controls and plans to grow its team during this phase. Mobilisation can last up to 12 months and exiting mobilisation to become an authorised bank without restrictions will be subject to approval by the PRA and the FCA. Read more

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