October 28, 2022
Photo: Joshua Roberts/Bloomberg via Getty Images
Good morning, and welcome to Protocol Fintech. This Friday: the CFPB weighs in on financial data, Revolut pays with crypto, and the OCC elevates fintech.
I’m gripped by nostalgia due to the oddest things — like Stripe’s announcement that is now fully available in Thailand, one of 47 countries where it operates. I remember noticing a Canadian flag in Stripe’s office on Second Street in San Francisco — this was well before it decamped to the Mission District and then the suburbs — and quizzing Patrick Collison about it. He told me his startup was indeed planning to venture north of the border. Stripe is still coy about its IPO plans, but its global expansion tells you everything you need to know. Pair a mature (and hopefully profitable) domestic business with fast-growing international markets and you’ve got a combination that investors are likely to swipe up.— Owen Thomas (email | twitter)
The Consumer Financial Protection Bureau kicked off a rule-making process to give consumers more control over their financial data, a step toward an open-banking concept that director Rohit Chopra told Protocol he hopes initiates a "race to the top."
Consumers benefit when markets are more decentralized, Chopra said in an interview Thursday. “I want a financial market where consumers can switch products more seamlessly, and where financial companies have to constantly compete to keep them,” he said.
The rule is focused on transaction accounts, such as deposit accounts and credit cards. As described in the CFPB’s outline, one goal is to allow consumers to move their data as needed, including pulling transaction history from one account to another.
The rule-making effort comes as the CFPB is facing a significant legal threat. A federal appeals court ruled last week that the CFPB's funding mechanism is unconstitutional, potentially undermining several of its most important rules.
The CFPB also announced this week in a press conference with President Joe Biden new guidance aimed at cracking down on "junk fees," including overdrafts. Chopra said there are connections between the battle against junk fees and the open-banking push. "I think in a world where there's more seamless switching, you'll see a race to the top when it comes to customer care, when it comes to fees, and when it comes to new features that really help people.”
— Ryan Deffenbaugh (email | twitter)A version of this story first appeared on Protocol.com. Read it here.
The news is out! Join the Financial Technology Association’s inaugural Fintech Summit: Shaping the Future of Finance, produced in partnership with Protocol. Taking place in Washington, D.C., on November 16th, the Summit will examine the most pressing issues in fintech.
Shopify got an earnings boost. The company's share jumped 17% after the ecommerce company reported a narrower-than-expected loss for the third quarter and revenue that beat Wall Street’s estimates.
The Treasury is having some tech problems. So many investors are scrambling to buy I Bonds — which pay a 9.62% interest rate if purchased by Oct. 28 — that the Treasury Department is warning its overwhelmed site might not complete all the orders in time.
Revolut will let users pay in crypto. The digital banking firm is adding a feature that allows customers to make everyday purchases with their crypto balance.
Google is building up its Web3 infrastructure offerings. The search giant is launching a cloud-based node engine service for Ethereum developers and projects.
A decision on election betting could come today. The CFTC set Oct. 28 as a target date to rule on whether fintech startup Kalshi can offer prediction contract trading based on the midterm elections.
The Office of the Comptroller of the Currency is launching a new Office of Financial Technology early next year in response to the growth of fintech, the agency said Thursday. The new office will "build on and incorporate" the Office of Innovation, which the agency started in 2016.
"Financial technology is changing rapidly, and bank-fintech partnerships are likely to continue growing in number and complexity," said Michael Hsu, acting comptroller of the currency. "To ensure that the federal banking system is safe, sound, and fair today and well into the future, we need to have a deep understanding of financial technology and the financial technology landscape. The establishment of this office will enable us to be more agile and to promote responsible innovation, consistent with our mission.”
Some progressive senators have been urging the OCC to change its previous guidance, which gives chartered banks the ability to provide crypto custody, hold cash reserves backing stablecoins, and use blockchain and stablecoins to verify bank-to-bank payments. The senators say that the guidance exposes banks to "unnecessary risk." Meanwhile, more Wall Street firms and large banks are moving further into the use of cryptocurrencies.— Tomio Geron (email | twitter)
The ways U.S. households accessed their bank accounts and finances have changed significantly in the last five years. Mobile banking rose sharply, while accessing accounts with the aid of a bank teller or an ATM declined. The change was “consistent with difficulties that households may have experienced in visiting a bank branch since the onset of the COVID-19 pandemic,” according to the FDIC.
At the #FTAFintechSummit, we’re gathering the most important players in fintech, from founders to policy experts, regulators, and industry leaders. You’ll get access to discussions on the fintech transformations driving competition, breaking down barriers to financial services, and shaping the future of finance.
Thanks for reading — see you Monday!