Breaking EU funding records, 2019 Bitcoin surge, Banks and Brexit, and more

Financial Well-being

News from around the world

Little-known U.K. fintech startup broke European funding records by raising $230 million (USD) in its latest funding round. Valued at around $2 billion (USD), is a fintech platform that allows companies to process cross-border payments from various sources. Forbes reports:

“We have been fortunate to have some of the world’s leading investors approach us for some time,” said founder Guillaume Pousaz in a statement.

Pousaz, who was born and raised in Switzerland, added: “Bringing world-class investors on board for our first funding round is a validation of everything the team has worked hard to achieve over the years and a way to flag just how serious we are about building a global leader that can serve any business, in any geography. The capital will help us increase the speed at which we roll out new products to address our merchants increasingly complex needs.”

The platform has been fortunate enough to secure sign-ups from large companies such as the money exchange app TransferWise and the food delivery app Deliveroo.

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After its 74% plunge last year, Bitcoin has surged more than 50% in 2019 as new institutions start embracing tokens. It recently climbed to a new high for the year, fast-approaching the $6,000 (USD) level.  Bloomberg reports:


“Bitcoin is testing new near-term highs because the overall institutional involvement is becoming stronger and stronger,” Jehan Chu, managing partner at Kenetic Capital, said by phone from Hong Kong. “We’re just seeing institution after institution lining up to the thesis of digital currency, and Bitcoin is the standard bearer.”

Fidelity Investments, which began a custody service to store Bitcoin earlier this year, plans to buy and sell it for institutional customers within a few weeks, according to a person familiar with the matter.

“Fidelity alone doesn’t move the entire needle, but Fidelity with E*Trade and Ameritrade and Robin Hood and a whole host,” said Chu, whose firm is a blockchain investment and advisory company. “You’re seeing a critical mass of these types of asset managers and brokers providing retail exposure and retail access to crypto.”

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While a second Brexit referendum is being debated in Britain, major global and British banks are steering clear of taking a stance. Most institutions have shifted priorities toward “future-proofing” their business by moving into new markets, and are resigned to continue doing so. Reuters surveyed 17 British and global banks—of which 11 responded—for their leadership attitudes toward a potential new vote.  Reuters reports:

Second Brexit referendum

None of the 11 respondents said they would be prepared to put cash behind a campaign for either a “Leave” or “Remain” outcome at this stage.

To prepare for Brexit, Banks have transferred billions of pounds in client assets to new European Union legal entities and shifted around 2,000 roles away from London to new hubs in cities including Dublin, Paris, Frankfurt and Madrid.

But now the hard graft is complete, the industry biggest players say they would not reverse those changes even if Brexit was scrapped.

Spreading top talent across several European cities has enhanced the banks’ appeal to some EU clients and reduced costs linked to doing business in London, one of the world’s most expensive cities.

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U.K. financial regulator—the Financial Conduct Authority (FCA)—is readying new rules for crypto assets and peer-to-peer lending. Both sectors are two of the most rapidly growing areas of fintech, and have been the subject of numerous regulatory reviews as of late. Financial News reports:

Financial Conduct Authority

Source: Financial Conduct Authority

A review of the cryptoassets sector carried out by the FCA and the Bank of England in 2018 found that “strong action should be taken” to address the risks of the investments…

…The FCA plans to publish a response to its most recent consultation paper on P2P, including final rules for the sector, in a policy statement this quarter.

Beyond crypto and P2P, the regulator will be spearheading the development of the Global Financial Innovation Network, launched in February this year to help fintech companies test solutions across borders, with a small series of trials.

The FCA will continue to explore the regulation-technology space, with planned actions including a cost-benefit analysis on digital regulatory reporting and an international event to test privacy-enhancing technologies.

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