Weekly News Highlights – 16 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!

UK, Bank of England facilitate sale of SVB UK to HSBC (The Reuters)
Britain’s finance minister Jeremy Hunt said the government and the Bank of England had facilitated a private sale of the UK arm of Silicon Valley Bank to HSBC (HSBA.L), in a move which would protect deposits without taxpayer support. The Bank of England said the wider UK banking system remained safe, sound, and well capitalised. “This ensures customer deposits are protected and can bank as normal, with no taxpayer support,” Hunt said in a statement on Monday. “I am pleased we have reached a resolution in such short order. Read more

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. Crypto companies like Coinbase and Galaxy Digital raced to cut ties with Silvergate last week after the bank warned that it was unsure whether it could stay in business. Silvergate has been struggling for months. In addition to laying off 40% of its workforce in January, the firm reported a nearly $1 billion dollar net loss in the fourth quarter following a rush for the exits at the end of last year that saw customer deposits plummet 68% to $3.8 billion. To cover the withdrawals, Silvergate had to sell $5.2 billion dollars of debt securities. Read more

HyperPay to go public in Saudi Arabia (The Paypers)
Payments service provider activating in the MENA region HyperPay has planned to go public through an initial public offering (IPO) in Saudi Arabia within the next two years. Based on the information provided in the press release, this announcement is part of the company’s expansion plans within the Saudi Arabian and MENA fintech markets, as it aims to become the preferred payment tool for organisations throughout the world by having its products and service offerings diversified. Read more

U.S. Lawmakers to Reintroduce Crypto Tax Reform Bill: Report (Coindesk)
U.S. lawmakers are planning on reintroducing a bill that will reform the way crypto is treated for tax purposes, Punchbowl news said on Tuesday. The bill, called the Keep Innovation in America Act and co-sponsored by U.S. Rep. Patrick McHenry (R-N.C.) and Ritchie Torres (D-N.Y.), would narrow the definition of a crypto broker for tax purposes to “any person who (for consideration) stands ready in the ordinary course of a trade or business to effect sales of digital assets at the direction of their customers,’’ a draft document of the bill said. Lawmakers want to put this reform forward because they believe the current reporting requirements for companies are hindering innovation in the crypto sector. Read more

OpenAI partners Stripe to monetise ChatGPT Plus and DALL·E (The Paypers
US-Based OpenAI has partnered Stripe to enable the monetisation of its flagship services such as ChatGPT Plus and DALL·E. The company behind ChatGPT and DALL·E has chosen financial infrastructure platform for businesses Stripe to commercialise its generative AI technologies. The collaboration between the two entities works both ways, as Stripe will embed OpenAI’s new natural language technology, GPT-4, into its products and services.   By leveraging Stripe’s product suite, OpenAI will be able to launch a global payments system for multiple product lines in a matter of weeks. For instance, the premium subscription service of ChatGPT Plus will be powered by Stripe Billing and Stripe Checkout.  Read more

Central Bank of Nigeria approves Open Banking guidelines (The Paypers
The Central Bank of Nigeria has approved the operational guidelines to Open Banking in Nigeria kickstarting a new era in the banking industry in Nigeria. The guideline was released via a circular by Musa Jimoh, the Director of the CBN’s Payments System Management Department on 7 March 2023.  The Open Banking regulation would usher in a transformation time for financial innovation and financial inclusion in Nigeria and Africa as a whole. The release of the final guideline is a culmination of a long journey for Open Banking in Nigeria. On 1 June 2017, a group of industry veterans decided that Nigeria needs to accelerate its payments innovation industry and formed an Open Banking working group which ultimately became formalized as Open Banking Nigeria. The group engaged with banks, fintechs, CBN, and other international stakeholders. Read more

UK government puts open finance at the forefront of new data legislation (Global Fintech)
The UK Department for Science, Innovation and Technology has put forward a new version of the Data Protection and Digital Innovation Bill. According to Finextra, the new version of the Bill takes feedback from the industry and focuses more on consumer rights, privacy in electronic communications, and a step up of information standards when it comes to data protection and sharing. The Bill also proposes regulation for digital IDs, a UK GDPR and smart data management of consumer information. The updates to the Bill also put down new groundwork for processing personal data, automated decision-making, and international transfers of data. Some of the new additions include amending the oversight of biometric data, creation provisions to introduce ‘smart data’ schemes and requiring a new framework for digital verification services. Read more

Bloomberg to acquire fintech solutions provider Broadway (Fintech Futures)
Bloomberg has signed an agreement to acquire Broadway Technology, a provider of front-office fintech solutions, for an undisclosed sum, subject to regulatory approvals. The firm says there is a “commensurate need” for solutions that cater to a range of client workflows and trading, including across fixed-income asset classes, as electronic trading volumes in rates and credit markets grow. The acquisition will enable Bloomberg to provide a low latency execution management offering optimised for rates trading, and deliver further innovations in multi-asset software. Read more

Swift Makes Strides in Interoperability Testing of CBDCs Across 200 Countries (The Fintech Times)
As increasing numbers of CBDC pilots worldwide are announced, digital currencies continue to dominate the discussion. However, as public interest levels soared, so too have questions about the central bank-backed digital currencies. Privacy issues and potential use cases of different CBDCs have become hot topics, and these concerns have been well documented. Regardless of concerns, many governments and central banks have gone full steam ahead into technical preparations for CBDCs. The value of payments through CBDCs could reach $213billion annually by 2030, according to a recent study by Juniper Research. This forecast represents a growth of over 260,000 per cent from the current value of just $100million in 2023. Read more

The Collapse Of Silicon Valley Bank (Holland Fintech
Silicon Valley Bank‘s sudden collapse in recent days has sent shockwaves through the tech industry and financial markets alike. The lender, which provided funding to many of the biggest names in tech, was caught off-guard by rising interest rates and its unique structure, which included a significant number of uninsured depositors. The bank’s need for fresh capital to shore up its balance sheet ultimately proved too great, as startup clients withdrew deposits to keep their companies afloat. Read more

Stripe Raises New Funding That Values It at $50 Billion (The New York Times)
Stripe, a San Francisco payments provider and one of the world’s most valuable private companies, said on Wednesday that it had raised new funding that values it at $50 billion, down from $95 billion in 2021, in a sign of how the air has come out of start-up dealmaking. The start-up, which provides payment processing software to companies including Amazon, raised $6.5 billion in its new financing from investors including Andreessen Horowitz, Founders Fund and Thrive Capital. Stripe, which said it didn’t need the money to run its business, plans to use the funding to help employees sell their company shares and cover the taxes related to their stock compensation. Read more

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