Treasury News Network

Learn & Share the latest News & Analysis in Corporate Treasury

  1. Home
  2. FX Management & Crypto
  3. Crypto currencies

UK bank Starling bans crypto-related purchases and deposits citing high risk – Industry roundup: 28 November

Starling Bank bans cryptocurrency transactions, while other retail giants limit crypto deals

Starling, a London-based digital bank, has prohibited all incoming and outgoing transactions to crypto exchanges and other crypto platforms, reiterating its opposition to these high-risk, unregulated investments. The decision was reportedly reached in the midst of the growing oversight surrounding cryptocurrency and in the wake of FTX's bankruptcy, which left billions of dollars in unclaimed customer funds, as well as ongoing liquidity crises in the entire industry. Additionally, with recently tightened restrictions on incoming and outgoing card and bank transfer transactions, clients who have conducted similar transactions in the past but not recently are urged to refrain from further transactions, according to a spokesperson from Starling.

The bank further commented that despite the innovative technology and benefits from cryptocurrency, they currently pose a high risk and are reportedly widely used for illegal activities. Customers of Starling will reportedly no longer be able to use their accounts to withdraw or deposit funds into or out of cryptocurrency exchanges.

Reports indicate that large retail banks are steadily restricting the movement of funds into cryptocurrency exchanges, with Santander implementing a £1,000 limit on single transactions and a £3,000 limit on monthly transactions earlier this month. Other banks, such as Lloyds, Barclays and RBS, have all implemented measures to limit crypto investments, such as blocking credit card transactions and bank transfers to cryptocurrency exchanges. In contrast, neobanks, such as Revolut, provide cryptocurrency trading as well as upscale cards branded with cryptocurrency, and Monzo reportedly has no restrictions on cryptocurrency exchanges.

GlobeTopper and Knox Wire announce a US $50 million global payment alliance

GlobeTopper, a US-based B2B firm, and Knox Wire, a cross-border payment company that combines SWIFT’s messaging capabilities with real-time gross settlement (RTGS) capabilities, have announced a global payment partnership to enable global pay-out capabilities.

GlobeTopper assists clients in navigating the constantly changing world of digital payments by accepting currencies such as USD, EUR, GBP and CAD. They are also expanding their business by providing API access to a vast catalogue of brands from all over the world and a wide range of sectors. With Knox Wire's RTGS system, every transaction is reportedly monitored in real time, ensuring quick payments and secure exchange of information throughout the global economy. Knox Wire reportedly processes payments to approximately 30,000 financial institutions in 190 nations.

The collaboration, which is powered by Zed Network, a Toronto-based global payments tech firm, is expected to enable GlobeTopper to initiate same-day pay-outs in over 190 countries, while also using Knox Wire's pay-out system and FX services to add new providers and broaden the range of product offerings.

Airwallex collaborates with Atome to facilitate BNPL payments

Airwallex has partnered with Atome, an Asian BNPL provider, to enable its merchants to accept BNPL from customers in Singapore, Hong Kong, Indonesia and Malaysia. The announcement was revealed at the Singapore Fintech Festival this year.

The alliance, which marks Airwallex's first collaboration with a BNPL provider, offers merchants the chance to boost sales while expanding their selection of accepted payment methods with adaptable deferred payment options. Additionally, Airwallex reportedly provides its merchants with over twenty local payment options across Hong Kong, Indonesia, Malaysia and Singapore, as well as multi-currency card-based payment solutions with Visa, Mastercard and UnionPay.

Airwallex plans to broaden its partnership with Atome so that its merchants can accept BNPL as a payment method from customers in Japan, the Philippines and Thailand. This collaboration comes on the heels of Airwallex's official launch in Singapore earlier this year, as well as the subsequent product deployments to further enhance in its global payment suite. The company also recently raised US $100 million in its Series E2 fundraising round and plans to expand its global reach and product offering.

ClearBank plans strategic expansion into Europe and M&A due to revenue growth

ClearBank, a cloud-based clearing bank in the UK, has reported profit in October, with revenues totalling £45.4 million to date in 2022. ClearBank's interim and unaudited 2022 annual results reportedly illustrate the bank's profitability, driven by growing transaction volumes, a customer base of over 200 institutions ranging from financial technology firm, Chip, to an open banking fintech company, Raisin, and sustained interest income from £3 billion in deposits.

Reports indicate that ClearBank plans to develop its footprint further into Europe in 2023, beginning with ClearBank Europe in the Netherlands and followed by expansion in the United States. Charles McManus, CEO of ClearBank, commented that “ClearBank's largest embedded banking clients are moving to Europe, where there is a capability and service gap across technology, commercial know-how, and critically a full banking license, similar to the gap ClearBank has closed in the UK.” Additionally, ClearBank plans to deliver innovation globally, as noted with its £175 million funding round led by Apax Digital in March 2022.

The CEO predicts that developing new products will be essential to expansion into Europe, including improved multi-currency accounts, API access to interbank payment systems like SEPA, and more FX services. Furthermore, McManus states that the funds from Apax's strategic investment could offer the bank access to M&A opportunities. Profitability, global growth and potential acquisitions are all factors that McManus states may bring the bank closer to Unicorn status.

Unicorn PhonePe seeks to purchase ZestMoney, demonstrating a significant convergence in the lending segment

PhonePe, a Walmart-backed online payment unicorn, is seeking to acquire ZestMoney, an India-based BNPL platform that has reportedly been searching for a buyer to raise additional capital. Reports state that, if successful, PhonePe's acquisition of ZestMoney would represent the most significant consolidation effort in the new-age lending industry.

The BNPL platform, Zest Money, has reportedly been struggling to raise new funds from tech investors. Furthermore, the Reserve Bank of India recently introduced a set of regulations that have placed the BNPL sector under intense regulatory scrutiny. Despite ZestMoney maintaining a merchant network of over 10,000 online partners and 75,000 physical stores, as well as a registered user base of 17 million merchants, ZestMoney's losses tripled to Rs 398.8 crore for the fiscal year ended March 31, 2022, up from Rs 125.8 crore the previous fiscal year.

The PhonePe-ZestMoney transaction sale could reportedly result in a much lower valuation for ZestMoney than its previous financing round, which was estimated at a value of approximately US $400 million. Reports indicate that PhonePe is in discussions to raise capital from General Atlantic at a valuation of $12 billion, potentially becoming India's most valuable fintech company. Additionally, ZestMoney has received approximately $142 million in equity funding, with Goldman Sachs, Ribbit Capital and Xiaomi among its other backers, aiming to concentrate on high-ticket items.

Both PhonePe and ZestMoney will reportedly have access to new use cases if the acquisition is successful. PhonePe expects to monetize payments by enabling users to pay regular bills with credit, while ZestMoney plans to expand its usability to include offline payments. According to a fintech executive, ZestMoney can grow to serve a much wider range of offline retailers with the potential to be used on a daily basis rather than just as a checkout service for big ticket purchases. Negotiations are expected to conclude in a few weeks, and the BNPL platform aims to operate independently following the acquisition, said reports.

Crypto firm, Paycoin, introduces cryptocurrency payments in Korea

Paycoin, a cryptocurrency payments company, has partnered with TripleA, a Singapore-based crypto company that reportedly enables businesses to pay and receive payment in digital currencies without volatility. The partnership is expected to launch crypto payment services to over three million users and 150,000 merchants in Korea, a significant expansion into the global crypto payments market.

Reports indicate that Payprotocol AG, which is the Paycoin (PCI) issuer, has publicly stated a Memorandum of Understanding with TripleA. The collaboration would enable Paycoin users to pay with PCI to TripleA merchants. The companies will reportedly collaborate with government agencies and global financial regulatory authorities to comply with anti-money laundering regulations.

Due to the strong crypto regulatory frameworks available in Singapore, Paycoin opted to expand its footprint into Singapore as its first global market. With TripleA’s fully licensed digital payment token service in Singapore, Paycoin aims to create a global payment system similar to the one it has built for the Korean market.

El Salvador unveils a digital securities legislation, laying the foundation for Bitcoin Bonds

The Ministry of Economy in El Salvador has reportedly proposed legislation to the Legislative Assembly to regulate digital securities, indicating that the country intends to proceed with plans to issue Bitcoin-backed bonds. The 33-page document, which was reportedly reviewed by CoinDesk, aims to create a National Digital Assets Commission to oversee the regulation of digital asset issuers, service providers and other participants involved in the "public offering process" of digital securities.

The Central American country became the first in the world to legalize the well-known cryptocurrency Bitcoin in 2021. Despite the country purchasing Bitcoin during price drops and IMF warnings, El Salvador reportedly disclosed plans to raise US $1 billion through Bitcoin-backed bonds.

Reports indicate that if the new regulations are enacted into law, they would require the establishment of a Bitcoin Fund Management Agency, which would manage, protect and invest funds as well as any proceeds from public offerings of digital assets conducted by the State of El Salvador and its autonomous institutions. Additionally, before the bond can be issued, El Salvador's congress would need to approve the legislation.

Like this item? Get our Weekly Update newsletter. Subscribe today

About the author

Also see

Add a comment

New comment submissions are moderated.