August 13, 2021
Photo: Andrew Harrer/Bloomberg via Getty Images
Hello and welcome to Protocol | Fintech! This Friday: Inside the mind of Gary Gensler, the mysterious crypto heist and Plaid's payroll-data hiccup.
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It was a big week for crypto, with Coinbase's blockbuster results and a report that football superstar Lionel Messi will be paid by Paris Saint-Germain partly in crypto tokens.
Then there was the real superstar of the cryptocurrency world: Gary Gensler.
Crypto insiders are among the Genthusiasts who have viewed the former MIT professor's "Blockchain and Money" course introduction more than 3.8 million times in an attempt to glean clues about his crypto views. Now the guessing game is over. The SEC chairman, who took over just four months ago, has made clear his plans for reining in the biggest, most earth-shaking trend in financial services.
Gensler, a former Goldman Sachs executive, had made it clear that he is "intrigued" by the potential of crypto and blockchain, but his focus is on mitigating the harms it can cause to consumers and the financial system.
And he's not holding back.
"There's a lot of hype masquerading as reality in the crypto field." That's how Gensler described the industry in a speech at the Aspen Security Forum on Aug. 3, kicking off a barrage of pronouncements that has rocked the crypto world.
The SEC boss has taken his message to Twitter. It's 2021, so Gensler won't be sticking to letters, speeches and congressional testimony to explain his thinking on key issues. He launched a Twitter account in late July.
Gensler has said many times that he sees promise in crypto and blockchain. But clearly, the SEC boss is not going to let the industry define what a more decentralized financial system is supposed to look like. He stressed the same point three years ago. Blockchain and crypto, he told his MIT students, "could be a catalyst — but we're not sure yet — for a change in the world of money and finance." We're getting surer all the time.
— Ben Pimentel
Singapore is fast becoming a global hotbed of tech innovation. It's easy to see why. Nearly 80 of the world's top 100 tech firms have set up outposts there, including Google, Facebook, Stripe, Salesforce and homegrown unicorns like the super-app Grab.
Plaid's big payroll-data offensive hit a speed bump. The fintech company has hit pause on its Deposit Switch product in a setback to a major expansion move.
A new crypto trading firm got a thumbs-up from FINRA. Prometheum got the green light from the brokerage industry's self-regulatory body to run an alternative trading system focused on digital assets including blockchain-based securities.
Coinbase shares soar on strong earnings. The crypto marketplace beat Wall Street's revenue estimates as bitcoin and ether prices rose sharply.
Robinhood is buying Say Technologies. The online brokerage is acquiring the maker of software for shareholder communications for $140 million.
What fintech trend are you most excited about?
I'm excited about what's happening in the payments space, especially the emergence of crypto payments. Making the dollar truly digital is the next wave of fintech innovation and, with that, gives consumers more control over how they spend their money. This also gives business owners an opportunity to lower their fees — a major benefit for small to midsize companies. The pandemic has made cash increasingly obsolete.
What problem would you like to see a fintech company solve?
I think one of the biggest problems we face is a lack of financial education at the high-school level. By age 18, most people have opened a bank account, had their first job and often already started accruing debt. I would like to see a fintech company, or a group of fintech companies, solve this by fostering financial education for kids. I think we can creatively find ways to embed financial literacy not only into the school curriculum, but also through gaming, social media and more.
If Protocol gave you $1 billion to start a new fintech company from scratch today, what would you do?
This may sound a bit morbid, but I would start a new fintech company that streamlines the process of consolidating someone's financial accounts and information after they pass away. When my father-in-law passed away, I watched my wife try to manage all of his accounts. It was really tough. Because our financial lives have become so incredibly fragmented with multiple accounts across banks, brokerages, retirement accounts, etc, taking charge of a family member's finances after death turns out to be a very challenging process.
Business leaders say they choose Singapore for its modern tech infrastructure, strong government support, robust pipeline of talent and pro-business regulations (the World Bank ranks it No. 2 in the world for ease of doing business). Plus, its location in the heart of Southeast Asia serves as a launchpad into the bustling Asian-Pacific market.
That's the amount of a settlement agreed to by crypto exchange BitMEX, which was sued by the CFTC for not following rules allowing Americans to trade on its platform.
Thanks for reading — see you Tuesday.