Hello Fintech Friends,

Welcome to the 1,228 new readers who’ve joined us since last week. You’re joining 232,000+ other subscribers who want to set their own interest rates.

🇲🇽 Where will you be the last week of February?

The TWIF team is headed down to CDMX for Mexico Fintech Week! Come join us for a week of community events centered around the most vibrant fintech ecosystem in Latin America – including our Stablecon Roadshow.

Mexico Fintech Week

Mexico Fintech Week

The week will culminate with the FinTech México Festival 2026, organized by FinTech México who are hosting their own FTMX Week as well.

One Big Thought: Who watches the rate-setters?

A farmer and his farmhand are walking through an empty field when they happen upon an unfamiliar fence across the road.

“This fence makes no sense,” says the farmhand, “I can't understand why someone put it here, so I'm going to remove it.”

The farmer replies, “If you don’t know what it's for, I won’t let you remove it. Go away and find out why it is here in the first place. Then, I'll let you destroy it.”

Chesterton’s Fence is a reminder to understand why something is the way it is before pushing through a change. To discover why systems are built the way they are before we go about changing them.

Last week, the White House put forward a proposal to cap credit card interest rates at 10%, putting banks on the defensive and likely pausing the launch of any new consumer lending products. This is not just the pet project of this administration – senators Bernie Sanders and Josh Hawley introduced a similar bill a year ago, and it has now been reintroduced.

It's unclear that the presidential proposal will pass without congressional approval, but the mandate sent bank stocks plummeting regardless.

The most likely outcome is that

1. The executive order won't ultimately become a law, and will eventually get walked back.
2. In the meantime, issuers will cut down drastically on new credit lines, rein in credit limits, and freeze the launch of new products – all radically reducing consumer credit and liquidity in the interim,
3. If the law does pass, more people will turn to 'shadow banking' for credit issuance – buy-now-pay-later providers, high-rate loan sharks, friends and family, crypto loans, etc.

Credit demand is like air in a balloon: When you squeeze it, the air doesn't escape, it just moves to another part of the balloon. That's why these rate proposals, while well-intentioned (of course it would be nice for people to pay less for credit), ultimately end up hurting the people they're supposed to benefit through unintended consequences. If banks aren't able to profitably underwrite credit card borrowers, they'll restrict credit cards to the wealthiest, leaving financially-stressed borrowers on their own to find other options.

Should the administration (and legislators) make it a priority to help underbanked consumers alleviate debt? Definitely. Debt foregiveness and relief, tax breaks, consumer spend subsidies – there are many tools available to do just that – but price controls will hurt underbanked people in the long-run. We have many natural experiments which show us that, when issuers can't make money off credit rates, they find ways to embed the fees elsewhere (which, they argue, is the only way they can profitably serve low-income consumers).

As Ensemblex's Sean Budde noted, “Texas has a cap of 10% on many types of loans. Customers pay a 10% interest rate (yay!) to the “lender” and a service fee of, say, 20% (oops!) to a Credit Access Business (CAB). The CAB then shares that fee with the lender. Since that brings in another “mouth to feed”, the effective rate of 30% is more than the customer would pay without the cap.”

The only definite interim outcome is that this will chill any upcoming product launches from issuers while they navigate the uncertainty.

Also this week, the Federal Reserve published a video message from Chair Jerome Powell, who received a notice that the Justice Department was investigating the Fed for... reasons.

Powell minced no words: “This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions.”

In a sign of the times, I found myself reading the Fed transcipt from a PDF shared in the TWIF WhatsApp group – like a banned book – because the administration had already forced the Fed to take it offline. This is part of the continued 'assault on expertise' from the presidential administration, spanning everything from vaccine recommendations, to data security, to child education.

Policy in the US is increasingly being treated as a tool of political will rather than an instrument to improve the living conditions of citizens.

The data are pretty clear about what happens when presidents reduce central bank independence and engage in 'personality rate-setting':

Central bank independence is itself an economic good, irrespective of rates. Regardless of whether borrowing costs are high or low, the perception that the Federal Reserve is able to pursue its own measures in order to satisfy the goal of 2% inflation and low unemployment is an economic good that creates market stability and investor conficence.

If the US eliminates the perception that its central bank can set rates independently of political pressure, all US assets will be treated as higher-risk by default – increasing the cost of capital for everything from corporate bonds to treasuries. Fortunately for the US, the 16th Fed Chair has a backbone.

Please enjoy another week of fintech and banking news below.

Have feedback for us? Let us know. Find me at @nikmilanovic, @twifintech, and @ndm

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Financial Services & Banking

Product Launches

BNY launched tokenized deposits to expand its digital asset capabilities for institutional clients.

London Stock Exchange Group started a new digital settlement platform as part of a major blockchain push and unveiled a new market surveillance tool to combat financial crime and market abuse.

Fiserv launched "Unknown Shopper" to help merchants identify and understand in-store customer behavior.

And Bloomberg is reportedly launching prediction marketings...

Other News

In a rearguard action, banks clashed with crypto firms this week over high-yield tokens that outperformed traditional savings deposits. The Senate Banking Committee released a bipartisan manager’s amendment this week – the crypto bill would permit stablecoin-linked rewards programs as a loophole to banning yield-sharing or paying interest in stablecoins. Regulators are scrutinizing the risks associated with these interest-bearing digital assets. The GENIUS Act interpretation would propose banning yield from stablecoins entirely.... Exchanges like Coinbase have pushed back.

Meanwhile, JPMorgan expanded its JPM Coin deposit token to multiple blockchain networks. (And the first question on its quarterly earnings call was about stablecoins.)

Visa partnered with BVNK to power stablecoin payments across the Visa Direct network and unlock new options for cross-border payments by using stablecoins alongside traditional fiat rails.

Standard Chartered is preparing a cryptocurrency expansion through a new prime brokerage service.

Société Générale is working with Swift to settle tokenized bonds using stablecoins and digital cash.

BlackRock accelerated its tokenization strategy by moving more assets onto public blockchains.

And Apple and Goldman Sachs navigated the fallout of their dissolving credit card partnership.

Quote of the Week

Fintech

Product Launches

Google partnered with Shopify, Etsy, Wayfair, Target and Walmart to create the Universal Commerce Protocol, a new open standard for agents and systems to talk to each other across the shopping journey.

Themis* unveiled an AI-powered complaints management tool to automate bank and fintech regulatory compliance.

Xero introduced enterprise-grade analytics tools to help small businesses make faster financial decisions.

Broadridge launched a new automated securities lending solution to improve market efficiency.

Klarna moved into the peer-to-peer payments space by launching a new social money-sending feature.

Revolut pledged to tackle impersonation scams through a new biometric security initiative.

Noah and Nala* launched an instant stablecoin settlement network for cross-border transactions.

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Upcoming Events

México Expansion Series: Why Now? @ Mexico Fintech Week 2026 · Luma

Calling international founders, investors, and operators exploring Mexico. This curated session brings together global builders and local operators to unpack…

This Week in Fintech

Job of the Week

Easy Expense is looking to hire a contract ad integration engineer. Ideally someone who has experience with best practices for integrating Google, Facebook and TikTok with direct mobile (react native) and web (react) to app flows.

Other News

Bilt introduced updated features and redemption options for its popular rewards program, diluting the value of its rent payment rewards program. The company also volunteered to cap interest at 10% as an annual intro bonus for new cardholders.

Dubai banned privacy-focused tokens as part of a significant crypto regulatory reset.

Portage finalized an agreement to manage select fintech assets from the Point72 Ventures portfolio.

PayPal boosted its advertising platform by leveraging cross-merchant purchase data to offer more precise targeting capabilities based on actual consumer spending behavior.

Partnership Corner

Interactive Brokers launched a new feature for 24/7 account funding via USDC, collaborating with Zero Hash* to automate stablecoin-to-dollar conversions.

Microsoft introduced "Copilot Checkout" to enable AI-driven shopping within chat interfaces. Microsoft tapped PayPal and Stripe to process its conversational payments.

Stripe partnered with Crypto.com to allow merchants to accept cryptocurrency payments directly.

Drawdowns, AFT, ACH, 3rd party e-wallets and card acquisition: funding wallets in the US.

People have voted about the next topic for discussion in my last article about ISO standards and I agreed. Today we’ll talk about funding user’s wallets in the US: AFT, Drawdowns (Reverse-Wires), standard ACH and cards (broader than AFT).

LinkedInKonstantin Dubovitskiy

The Bad News

Jason Mikula provided some great reporting on Kontigo, a licensed crypto exchange in Venezuela, which reportedly enabled transactions with sanctioned entities in the country. The company blamed its PEP and SAR failings on its Checkbook integration (Checkbook is itself reportedly in hot water with JP Morgan for numerous related failures).

Interestingly, the company chose to pursue anyone who reshared the article online by threatening legal action against them. (Including threatening to sue the Klarna founder.) 

It will be interesting to see how this story develops.