Fintech in Europe: Promises and Threats
This IMF paper finds that fintech companies’ reach and development in Europe are lower than in other regions but are on the rise. The low penetration can be partly explained by the high preexisting banking presence and financial inclusion, strict regulation and, in some countries, a strong preference for cash-based transactions. But fintech lending and payment tools are growing rapidly. While start-ups are pursuing platform-based approaches under minimal regulation, there is a clear trend for fintech companies to acquire balance sheets and, relatedly, banking licenses as they expand. Meanwhile, competition is pushing many traditional banks to adopt fintech instruments, either in-house or by acquisition, thereby causing them to increasingly resemble balanced sheet-based fintech companies.
As DeFi Grows, Investors Look to Polkadot to Be the Next Ethereum
The price of Ether (ETH) is up 266% this year – twice as much as that of bitcoin (BTC). But a lot of digital-asset investors are hedging their bets, buying tokens associated with upstart blockchains that could potentially grab market share from the Ethereum network, often referred to as a “world computer” due to its versatility and programmability. One such token is dot (DOT), of the Polkadot blockchain, whose co-founder Gavin Wood was a co-founder of Ethereum. At the heart of Polkadot is the concept of “parachains,” which are blockchains that can run higher transaction throughput than Ethereum.
South Africa ditches paper cheques
The South African Reserve Bank (SARB), Financial Sector Conduct Authority (FSCA), Payments Association of South Africa (PASA) and the Banking Association South Africa (BASA) are jointly communicating to the public that the issuing and the acceptance/collection of cheques will cease, effective from 31 December 2020.