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Kyriba and J.P. Morgan Payments launch new real-time treasury solution – Industry roundup: 30 November

BlockFi, a cryptocurrency lender, declares Chapter 11

BlockFi, a major NJ-based cryptocurrency lender, filed for Chapter 11 bankruptcy protection this week, along with its eight affiliated companies, following the FTX collapse as the latest crypto casualty. The filing comes as cryptocurrency prices are plummeting, with Bitcoin down more than 70% from its peak in 2021.

Reports indicate that BlockFi had ties to FTX, which filed for bankruptcy in the US earlier this month after traders withdrew US $6 billion from the platform in three days and rival exchange Binance abandoned a rescue deal. BlockFi outlined FTX as its second-largest creditor, with US $275 million owed on a loan made earlier this year. Additionally, the company claims to owe funds to more than 100,000 creditors. An agreement BlockFi and FTX reportedly signed in July 2022 outlined that BlockFi was to obtain a $400 million revolving credit facility, with FTX having the option to purchase it for up to $240 million.

Ankura Trust, an enterprise that claims to represent creditors in difficult situations, is said to be one of BlockFi's largest creditors, owed $729 million. Valar Ventures, a venture capital fund affiliated with Peter Thiel, reportedly owns 19% of BlockFi equity shares. BlockFi also designated the US Securities and Exchange Commission as a major creditor, with a $30 million claim. A BlockFi subsidiary agreed to pay the SEC as well as 32 states $100 million to resolve costs stemming from a retail crypto lending firm that was allegedly offered to nearly 600,000 investors. BlockFi had previously halted withdrawals from its platform and disclosed that it had high exposure to FTX and its affiliated companies, which include loans extended by Alameda, financial assets at, and unused credit line with FTX. Additionally, one-third of BlockFi's $1.8 billion in outstanding loans were said to be unsecured at the end of June.

Reports indicate that BlockFi expects that its Chapter 11 reorganization plans will help it to sustain its business and optimize value for all stakeholders and clients.

J.P. Morgan and Kyriba unveil a brand-new real-time treasury solution

Kyriba, a worldwide provider of cloud-based financial services and information technology solutions, has collaborated with J.P. Morgan Payments to unveil a new real-time treasury solution with an innovative API that reportedly provides real-time cash visibility and bank reporting to their mutual clients. Utilizing J.P. Morgan's open banking API capabilities, the end-to-end process automation aims to improve the existing API-based connectivity, powering continuous data retrieval and status updates, aiding in decision making on investing cash balances in real time.

The new API integration aims to provide the firm’s mutual clients with real-time treasury and faster decision assistance to enhance their cash position through accelerated investments, decreased borrowing and more efficient hedging, commented Bob Stark, Global Head of Market Strategy, Kyriba. Furthermore, global businesses can expect to have up-to-date financial mechanisms, immediate cash positioning and corporate-wide management of liquidity, added Santiago Alcaraz, Head of Partnership & Integrations, J.P. Morgan Payments Digital Channels.

The API's significant reported benefits for real-time treasury are noted below.

• Increases efficiencies and cuts payment costs down by approximately 83%.

• Accelerates cash positioning and liquidity planning with its real-time bank reporting.

• Enables end-to-end real-time payment processing to enhance payments governance and fraud detection, thereby lowering operational risk.

HSBC exits Canada, selling its operations to RBC for US $10 billion

The London-based bank, HSBC, has agreed to sell its Canadian operations to Royal Bank of Canada for £8.4 billion (US $10 billion/C$13.5 billion) as part of its ongoing efforts to reduce its global network, placing more emphasis on the Chinese market.

HSBC, noted as one of the world’s largest banking and financial services firms and serving over forty million customers, has reportedly continued to struggle with political pressures from both the west as well as from Beijing. The bank has also been attempting to satisfy key investors, including Ping An, a Chinese activist shareholder who has reportedly been requesting higher returns and has called for the spin-off of its more profitable Asian business, said reports.

Following HSBC’s exit from the retail banking sector in the US and France in 2021, which suffered losses, the company intends to sell its Canadian operation, which has more than 130 branches and 780,000 customers. HSBC reportedly earned C $490 million (£301 million) before taxes from the Canadian business in the first half of 2022.

Noel Quinn, Chief Executive, HSBC, stated that the determination to sell the operation to RBC resulted after a comprehensive examination of its strategic alignment within the broader HSBC portfolio. Furthermore, the bank claims that it had a fairly small market share in Canada, with more room to grow abroad. The completion of this transaction would allocate surplus funds towards investing and expanding the bank’s core businesses, as well as returning to shareholders while also maintaining the group's strategy, stated Quinn.

Mastercard, Block and other PSPs form a coalition to advocate for financial reforms in Canada

Payment companies such as Mastercard and Block are collaborating with fintech firms to urge Canada to pass regulations that could increase competition in the financial services sector. Over forty businesses have banded together to form Fintechs Canada, a lobbying organization that claims to advocate for open-banking rules and other laws that could encourage more innovation in the financial sector, which is reportedly dominated by a small number of domestic banks at present. The group includes Equifax, Wealthsimple, Portage Ventures (a division of Power of Canada), and Block’s Square payment unit.

Fintechs, according to Alex Vronces, Executive Director, Fintech Canada, are struggling to operate and develop in Canada due to the country's high regulatory entry barriers.

Many nations, including Australia and the UK, reportedly provide open banking in some capacity, with the US heading in that direction pending guidance from the Consumer Financial Protection Bureau. The consultations on an open banking framework in Canada have been progressing gradually, said reports. However, privacy and data protection are major concerns. Abraham Tachjian, a legal consultant, was reportedly appointed as the federal government's leader to advance the project in March 2022, yet some businesses have been progressing very slowly.

Freedom Bank and Autobooks collaborate to provide digital invoicing and payment solutions for SMEs

The Freedom Bank of Virginia and Autobooks are partnering to launch a new digital invoicing and payment solution for clients in the business sector. With the new services, small business clients can expect to utilize simple functionalities for invoicing and payments that are fully integrated into and accessible within the bank's online and mobile banking platform.

Business clients will reportedly be able to create and send professional invoices to their clients' inboxes in a simple and efficient manner. Furthermore, each invoice will have a "pay now" button that enables recipients to pay via credit card or ACH quickly and securely. In addition, clients are expected to only pay the merchant fees for credit card transactions and ACH payments made by their customers, with no monthly charges, reports added.

ACI Worldwide and Vendo Services collaborate to enable merchants around the world to accept crypto payments

The global payments system firm, ACI Worldwide, which focuses on facilitating real-time electronic payments, has extended its partnership with Vendo Services, a European payment service provider, to enable the offering of over 127 cryptocurrencies, including Bitcoin, to Vendo’s global merchant clients in response to the growing customer demand for crypto payments.

Vendo Services specializes in e-commerce, content platforms and emerging industries, and is reportedly an ACI client that uses its ACI Secure eCommerce platform in order to provide its merchants with cutting-edge e-commerce capabilities. Additionally, Vendo Services plans to offer cryptocurrency processing capabilities to its merchants worldwide through ACI's strategic partnership with RocketFuel Blockchain, Inc., an international provider of payment solutions for Bitcoin and other cryptocurrencies.

ACI Secure eCommerce reportedly provides the RocketFuel Blockchain solution through a single integration, enabling businesses across the globe to accept cryptocurrency payments without any transaction fees, which is reportedly a first for the industry. Moreover, the solution offers bank transfers to retailers and their customers both online and in-person using smart devices with QR codes or NFC capabilities, including both Android and iOS models.

The Finance Ministry of India endorses cross-border trade in rupees, with bank execs to meet on 5 December

India’s Ministry of Finance is expected to convene a meeting of bank CEOs, along with the top six private sector lending institutions, to analyse ways to promote cross-border trade in rupees rather than US dollars. The summit, which is also expected include other senior officials from the Ministries of External Affairs and Commerce and representatives from the Reserve Bank of India (RBI) and India’s Banks’ Association group, is intended to review the current progress.

The RBI reportedly issued a comprehensive guideline on cross-border trade transactions in local currency in July 2022, and as a result, about nine special vostro accounts have been launched, with two Indian banks promoting rupee trade abroad. Reports show that the largest and second-largest banks in Russia, Sberbank and VTB Bank respectively, are the first foreign lenders to be approved subsequent to the RBI’s release of the guidelines.

In accordance with the regulations, RBI has reportedly decided to implement an additional arrangement for exports and imports invoicing, payment and settlement in Indian rupee. As a result, the UCO Bank in Kolkata has opened an account for Gazprom bank in Russia, which currently does not have a bank in India, said reports. Opening a special vostro account reportedly enables payments to be settled in rupees for trades between India and Russia, facilitating cross-border trade in the Indian currency. Furthermore, the RBI has permitted the special vostro accounts to invest the surplus balances in Indian government securities.

In order to use this framework, Indian importers will pay in rupees against the invoices for the supplies of goods or services from the foreign seller/supplier. Moreover, the RBI previously stated that payment for these imports must be credited into a special vostro account at the correspondent bank of the partner country.

Saudi British Bank partners with Visa via its cybersource payment gateway to promote its digital initiatives

Saudi British Bank (SABB) has partnered with Visa to utilize its Cybersource payment gateway and risk platform, with the goal of accelerating the bank's development in the rapidly changing and evolving e-commerce market. SABB's Payment Gateway is expected to gain more capabilities overall as well as to improve its network system performance, both of which would reportedly strengthen the bank's Payment Gateway offering.

SABB plans to use Visa's payment technology to expand its existing merchant network as well as potential opportunities through a streamlined onboarding process and advanced platform functionalities. This will reportedly offer businesses’ customers a seamless, reliable and secure payment experience. According to Ali Bailoun, Regional General Manager, Visa's GCC Cluster, which includes the Kingdom of Saudi Arabia, Bahrain and Oman, the company is making investments in its global assets, infrastructure and digital capabilities to support businesses as they undergo digital transformations and to help the Saudi government advance in its digital commerce efforts.

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