July 9, 2021

Photo: Heidi Gutman/CNBC/NBCU Photo Bank/NBCUniversal via Getty Images
Hello and welcome to Protocol | Fintech! This Friday: Circle's going SPAC, Square commits to a hardware wallet and Google's moves in Japan.
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Stablecoins are bitcoin's boring kid brother — all the cryptographic wonkiness, none of the thrilling potential for speculative price appreciation! But as the cryptocurrency industry matures beyond just mining and trading into payments and commerce, the digital tokens designed to maintain a steady price are looking hotter and hotter.
The latest sign of the rise of stablecoins is Circle's announcement of a deal to go public via a SPAC. Circle is the main company behind USD Coin, or USDC, the second-largest stablecoin with a market cap of $25.9 billion, according to CoinMarketCap. The SPAC deal, with Concord Acquisition Corp., values the company at $4.5 billion. Circle and Coinbase back USDC through a consortium called Centre.
Circle is offering investors a way to bet on the rise of stablecoins. Stablecoins are useless to speculators. But for those who believe in the transformative potential of cryptocurrencies, they're an attractive concept.
A controversy over stablecoins: How stable are they? The question could be critical for Circle.
But the real money for Circle is in transaction services. That highlights the utility of stablecoins for payments and enabling other forms of financial services — as well as brand-new businesses like NFTs, the digital art certificates that collectors are flocking to.
Still, Circle's business depends on the growing acceptance of stablecoins. The regulatory outlook for stablecoins is still not clear, and USDC could be swept up in concerns about other coins. It will be a while before we know how stable Circle really is.
— Tomio Geron
Companies need to transform technology into opportunity. Broadridge helps you drive the innovation roadmap by simplifying the complex. It's time to accelerate the adoption of AI, blockchain, the cloud and digital to transform your business. See how you can stay ahead with next-gen technologies that deliver on what matters most.
Join Protocol's David Pierce for a conversation with Smart Columbus' Jordan Davis, Sidewalk Infrastructure Partners (SIP)'s Jonathan Winer and Microsoft's Jeremy Goldberg on what it takes to build smart cities right. July 13 @ 11 a.m. PT / 2 p.m. ET Learn more
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China's crypto crackdown widens. Now regulators' targets include software companies, Ben reports.
What fintech trend is most troubling for you?
Fragmentation. The rise of fintech startups over the past few years has introduced much-needed innovation into the space, but it comes with a major cost that not enough people are focused on. There are now dozens of corporate cards and expense management products, countless one-off reporting tools, planning tools, and budgeting systems. Business owners have no single source of truth, and the data they are getting from each of their systems is often incomplete or flat-out disagrees. I believe that a consolidation war is coming.
What fintech company — besides your own — have you been most impressed with this past year?
ScaleFactor, for its ambition. It recognized a huge opportunity — the need to bring modern software and innovation to the accounting landscape — and pursued it aggressively. Unfortunately, it chose the wrong model and made the mistake of taking on both the software and the services businesses under one roof, but I don't fault them for trying.
What problem would you like to see a fintech company solve?
Real-time finance. For almost every business owner today, their finances are stuck in the past. The accounting-industry reality is a 15-21 day close. That means that by the time you find out how June went, July is more than half over! As a business owner, you're no longer worried about June! You're focused on August!
Companies need to transform technology into opportunity. Broadridge helps you drive the innovation roadmap by simplifying the complex. It's time to accelerate the adoption of AI, blockchain, the cloud and digital to transform your business. See how you can stay ahead with next-gen technologies that deliver on what matters most.
That's the total invested in London-based fintech companies in the first half of 2021, up from $2.1 billion year-over-year, and the biggest total ever for the period.
Thanks for reading — see you Tuesday!
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