Kiffmeister’s #Fintech Daily Digest (11/25/2020)

Coinbase Pro disables margin trading

In response to new guidance from the U.S. Commodity Futures Trading Commission, Coinbase Pro disabled its margin trading product. 

Stellar Lumens doubles in price following upgrade

The price of Stellar Lumens (XLM) shot up 60% 24 hours following an announcement by the project’s developers that a new version of the Stellar public network protocol had been implemented by validators. Initially forked from Ripple Labs protocol by Jed McCaleb and launched in July 2014, Stellar seeks to lessen the cost of cross-border payments using blockchain. The project is particularly focused on serving unbanked or underbanked regions of the world where access to traditional financial services is either nonexistent or prohibitively costly. 

Shoppers Who Shun Credit Cards Will Still Borrow $20 for Candy

Consumers are flocking to buy-now, pay-later offers, that let consumers split up their purchases into smaller payments, as online shopping surges in response to the pandemic. Afterpay, Klarna, Sezzle and Quadpay are now featured across thousands of merchants’ websites, with small ads popping up as consumers check out, encouraging them to pay off their purchases in installments. In most cases, Afterpay and Klarna don’t charge interest or fees as long as users keep up with their payments. Instead, merchants give the apps a cut of each sale, which can amount to 6%. But if customers fail to make their payments within a grace period, they are charged a late fee amounting to as much as 25% of the order value. 

Colombian Stock Exchange to use blockchain for OTC derivatives trading

The Colombian Stock Exchange is joining the Consorcio Colibrí, a private initiative that promotes the adoption of blockchain technology within the finance industry. Consorcio Colibrí was formed by major financial institutions such as Bancolombia, BBVA, Santander Caceis Colombia, Deceval, Contrato Marco, Porvenir and Skandia. Via a partnership with member firm Contrato Marco, the CSE will use the Colibrí platform’s blockchain tech to improve operational efficiency in the over-the-counter derivatives market. 

Bank Applications Get a Coronavirus Boost

Ten U.S. companies filed applications for a new national bank charter in the fiscal year through September 30, according to the Office of the Comptroller of the Currency (OCC). That is the most in a single fiscal year since 2010. Consumer lender Oportun Financial filed paperwork to start a bank in California, the second in the OCC’s current fiscal year. A national-bank charter will allow Oportun to offer checking and savings accounts, and certificates of deposits to its customers which it can then use as a cheaper source of funding for loans. Specialty lenders that aren’t banks often sell their loans to money managers or package them into bonds, a type of funding that can become costlier or dry up in a crisis. Other recent applicants for a national-bank charter include fintech startup Social Finance, and HR software-maker Ceridian.