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Credit Suisse US $100 billion data breach – Industry roundup: 6 February

Visa takes massive leap into cryptocurrencies with stablecoin settlements

The global payment giant Visa has revealed a foray into a new area of development in the blockchain and digital asset technology space. Cuy Sheffield, Head of Cryptocurrency Division, commented that the company aims to make it possible for platform users to exchange digital assets for fiat money by investing in a global settlement using digital assets and fiat currencies.

The payment company, however, has not been able to transmit money as frequently as preferred due to settlements currently managed through the SWIFT system, said reports. Sheffield stated that Visa has been testing the viability of accepting settlement payments made using stablecoins on the Ethereum blockchain in order to overcome this barrier, with the possibility of replicating its current bank platforms utilizing stable boards and more to incorporate blockchain.

In a recent speech at Visa's annual shareholder meeting, Al Kelly, a former CEO, commented that stablecoins and digital currencies issued by central banks have the potential to play a significant role in the payments space, and Visa is reportedly working on a number of initiatives. In support of this assertion, Sheffield stated that the company is presently working on projects to incorporate these technologies into its platform.

Furthermore, the company is reportedly well-positioned to take the lead in this rapidly evolving industry with its major emphasis on creating “muscle memory” for settlements as well as its commitment to incorporating blockchain technology and stablecoins into its existing networks.

The Treasury of Australia establishes a classification scheme for digital assets

Australia has reportedly begun a public consultation on its own taxonomy of crypto assets in the wake of new worldwide regulations. The regulatory agencies intend to categorize crypto-related products into four major categories.

The Australian Treasury recently launched a consultation document on "Token Mapping", describing it as a key component of the government's multi-stage reform program to regulate the market, aiming to guide policy formation in an efficient manner.

The report put forth a number of fundamental concepts for anything crypto based on the functional and technology-neutral approach, introducing the fundamental ideas of crypto networks, crypto coins and smart contracts at the basic level.

The term "crypto token" reportedly refers to a piece of digital data that can be "exclusively utilized or controlled" by someone who is not in charge of the host hardware on which the token is stored. The idea of "exclusive use and control" is cited in the study as a crucial distinction between crypto tokens and other digital records, said reports.

The study offers its taxonomy of four categories of crypto-related items: 1. Services related to digital assets, such as lending and borrowing, fiat on/off ramping, trading of digital tokens and fund management, among others. 2. Intermediated crypto assets, which are the ones that come closest to a common definition of tokens; rights or licenses pertaining to event access or subscriptions, intellectual property, reward programs, as well as stablecoins and others. 3. Network tokens, a "new type of currency" that reportedly forms the foundation for peer-to-peer payments, such as the first Bitcoin. 4. Various types of smart contracts, ranging from "intermediated" to "public".

The Treasury intends to hold off on making a decision until 3 March. A comparable report outlining a potential licensing and custody structure for cryptocurrencies is expected to be published in the middle of 2023, marking the next significant step in a national regulatory dialogue.

JP Morgan research reveals institutional traders shifting focus from blockchain to artificial intelligence

in a survey of institutional traders conducted by JP Morgan, artificial intelligence and machine learning were reportedly cited four times more frequently than blockchain and distributed ledger technology as having the greatest anticipated impact on trading over the next three years.

The seventh edition of JP Morgan's e-Trading Edit report, based on a survey of 835 institutional traders across sixty worldwide marketplaces conducted in January, aims to identify emerging trends and contentious issues covering a variety of asset classes. Financial industry executives' perspectives have reportedly changed as a result of the turbulent crypto bear market, with added enthusiasm surrounding AI technology such as ChatGPT.

AI was cited as a leading technology by 53%, more than almost every major category of technology today, far beyond API integration (14%) and blockchain (12%). Mobile apps, along with quantum computing and natural language processing, dropped to 7% of the top 2022 technologies.

JP Morgan discovered that 72% of traders had no plans to trade cryptocurrency or digital currencies, with another 14% anticipating that they will do so within the next five years. The survey further revealed that electronic trading volumes for commodities, credit, and crypto and digital coins are expected to expand the most over the coming year, with participants anticipating that by 2024, 64% of their activity will be in the crypto arena.

However, the study also cited that electronic trading will continue to expand during uncertain times, with recession risk (30%), inflation (26%) and geopolitical war (19%) as the three most often cited prospective scenarios expected to have the largest influence on the markets in 2023.

Global mobile commerce platform, Fintiv, collaborates with Geoswift to enable cross-border digital remittances in Asia

Fintiv, a global mobile commerce and digital banking provider, has joined forces with Geoswift, an international payment technology firm that specializes in Asian cross-border payments, to facilitate digital remittance payments into Asia. Through the agreement, Fintiv's clients can expect to initiate B2B or P2P funds transfers directly from wallet accounts into China, India and other Asian nations.

Additionally, the company's payment platform aims to link to a large number of domestic banks or mobile wallets in Asian nations and territories through Geoswift's solution, named GeoRemit, which reportedly includes a large footprint. The instant delivery of payments, for instance, can be made to Chinese recipients' UnionPay debit/credit cards or Alipay wallet.

Zopa Bank secures US $92 million, with potential for additional growth and M&A

Zopa Bank has revealed recently that they have secured US $92 million, the bank's newest investment round, which was spearheaded by existing investors aiming to propel it through its next phase of growth and helping it become "Britain's best bank”, said reports.

Jaidev Janardana, CEO, Zopa, commented that the equity transaction solidifies the support from their investors for the bank’s sustainable lending strategy as well its strategic direction despite the difficult economic climate. Additionally, the bank's revenue has reportedly increased consistently due in large part to the ongoing growth of its financial products that are exclusively available digitally, exceeding 100% YOY. Reports indicate that Zopa’s credit risk approach has enabled them to continue to make loans in an ever-evolving market with record loan origination volumes and solid credit performance, comparable to pre-pandemic levels.

During the first quarter of 2023, the financing will reportedly be utilized to support the company’s merger and acquisitions (M&A) transactions in addition to its growing balance sheet, as valuations have decreased following the continued economic difficulties. Additionally, the company is reportedly researching B2B solutions and expanding its payment options, aiming to boost the number of digital products available to clients through its M&A efforts. Although the investment round officially achieved a total of $92 million, Janardana commented that future purchases may exceed this sum.

Swiss authorities begin investigations into the Credit Suisse US $100 billion data breach

Swiss federal authorities have begun criminal procedures against those responsible for a 2022 data breach involving thousands of Credit Suisse accounts. The breach reportedly exposed more than 18,000 accounts, including those of fraudsters, human rights violators, and businessmen who were subject to penalties, and as a result, Switzerland's largest bank was entangled in a controversy involving questionable financial transactions.

Reports indicate that the accounts, which covered the years 1940 to 2010, were disclosed to Germany's news outlet, Sueddeutsche Zeitung, in February and then sent to media outlets around the world. It is still uncertain who or what organization leaked the information. According to the prosecution, the accused offenses in this case include breaking banking secrecy regulations, causing harm to Credit Suisse, and disseminating private company information to foreign organizations or their representatives.

iwoca, a European fintech, becomes net profitable as demand for SME capital increases

iwoca, a London-based fintech, reached net profitability in Q4 2022, with over 50% upsurge in the number of SMBs financially supported across the UK and Germany, following an increase in its capital line with Pollen Street Capital from £125m to £170m, stated reports.

The total number of customers funded across the UK and Germany, which includes all product lines and recurring clients, reportedly increased by more than 50% in 2022 compared to 2021. Reports indicate that the fintech has funded 15,429 businesses in 2022, an increase of 54% from 2021. Furthermore, in order to accommodate the rising demand from medium-sized firms, iwoca has reportedly nearly doubled the maximum limit of its Flexi-Loan, one of its basic loan products, from £200,000 to £500,000 last year.

With embedded lending technology, which reportedly enables businesses to immediately access loans through a variety of platforms, such as accountancy software apps and digital neobanks, iwoca is reportedly reaching approximately three million enterprises throughout the UK and Germany.

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