Hello TWIF UK & Europe friends,

Bit by bit, my internal framing of Stablecoins has edged from, “stupid and pointless and a solution in search of a problem”, to “it's interesting but ultimately doesn’t solve any real world problems”, to “well it's a regulatory arbitrage rather than technical innovation” to, “OK the Stripe guys are pretty smart, what am I missing?” to finally, “well like it or no, I need a strategy.”

And the thing is, that framing isn’t a recycling and reviewing of my own thoughts. It’s not me changing my mind, it's me expanding the number of things that I can think of as true in equal measure at the same time.

I still think in one sense they are stupid and pointless (in a technical sense). I still think they were built as a solution in search of a problem. I did (and still do) think it’s interesting but that it doesn’t solve a problem that hasn’t been already solved (I can in fact pay money in most places instantly). I still think it's a regulatory arbitrage. The places that I can’t send payments to instantly are, by and large, not technical obstacles but political and regulatory obstacles. They are governmental grips on economic veins that for one reason or another, remain tightened to this day. 

I’ll be the first to hold my hands up and accept that my Irish brethren, the Collison brothers are far far smarter than I. And that their analogy of Stablecoins to ‘room temperature superconductors’ is a thoughtful one. And it’s this kind of commentary shift and the (obvious and undeniable) rate of Stablecoin adoption that makes one pause, think and be forced to accept it's not a flash in the pan. It's not NFTs and if I'm going to participate in this industry then they deserve my consideration.

The battle between traditional payment rails and newer rails does feel like the industry is at somewhat of a crossroads. You’d never know to think of it now, but there was a similar cross roads in the early days of automobiles. Between 1890 and 1910, there was fierce debate on whether cars should be powered by steam, gasoline, or electric. You could argue steam was the TradFi of this analogy. And so why didn't steam win. Why did Gasoline win out and Electric take a back seat for over a century? It was non-obvious then even if it feels obvious in retrospect. Contrversially perhaps, I'm of the mind that we took a wrong turn. I think the test of time will prove that the electric was the way forward. But taking a wrong turn doesn’t mean there was no progress to be had at all. There are wrong turns that turn out to be dead ends and then there are ones that turn out to be scenic routes. You get progress, just not as fast.

For reasons I’m not an expert in, the early 20th century world chose gasoline. And for a century, technology was still able to innovate down the ‘scenic route’. Yet, had electric won out in those formative industry years, we might now have 2000 mile range, electric planes and a Power Grid for the gods, but thats another debate.

The point I’m trying to make is that I think Stablecoins are useful. And they will likely result in a generational advance for the way money is moved and stored. But that doesn’t make it the right innovation. I think there are better pursuits for our finest minds. Especially in payments. Nonetheless, necessity is the mother of innovation. And the regulatory strangling of certain economic arteries, the stifling of minnows’ economies and the perennial fear of losing correspondent relationships has pushed adoption in this direction. And this the route cause of the necessity that forces adoption. 

And adoption is a hell of a drug in industry.

Whilst I don’t believe Stablecoins are the be all and end all, a lot of people do. And I think it was the sociologist D.S. Thomas in 1928 who said something (along the lines) of ‘What people believe to be real, will be real in it’s consequences’. 

So much so that they are now being discussed in the very centre most corridors of power, the Whitehouse. And they are touching/threatening the very core of capitalism. What the bank’s and banker’s hold in dearest regard. Your Deposits!

And on that note!

Please find another week of fintech news, financings and exits below!

- Daniel Cronin

👍 👎 Have feedback or news to share? Let me know on Twitter and LinkedIn.

Funding/Financing 💸

Highlights below of deals since the last post in the fintech space across the UK & Europe. Deal data powered by Dealroom.

🇬🇧 Stream (fka Wagestream) raise €76m to accelerate realtime access to capital for workers

🇪🇺 Lunar raised €46m to expand Nordic business banking and lending, including growth in Norway/Finland.  

🇬🇧 Raylo raised £30m (equity + debt), with equity led by Citibank and debt from NatWest, to support UK growth and a planned US launch.   

🇪🇺 Bleap raised a $6m seed round (EU-focused stablecoin-linked card/payments proposition).  

🇬🇧 LendInvest announced a £250m forward-flow style funding partnership with Castlelake for residential mortgages.  

🇬🇧 Sokin secured a $100m long-term debt facility from Oxford Finance to fund expansion and embedded payments capabilities. Former Manchester United and England defender Rio Ferdinand will be delighted!

Challenger Banking 🚀

🇬🇧 Monzo: Battle of the Board - Monzo board’s love hate relationship with its’ Leadership continues as planned departure of TS Anil results in a return with “expanded role”

🇬🇧 Revolut launched full banking operations in Mexico (not UK/EU geography, but a major UK fintech product/market expansion

🇬🇧 Plum partner for worldwide travel protection to its Max plan, powered by Qover.

Digital Assets ₿

🇪🇺 KuCoin EU launched a MiCAR-compliant crypto platform across 29 EEA markets, supervised by Austria’s FMA

🇪🇺 ECB paves way for acceptance of DLT-based assets as eligible Eurosystem collateral

🇪🇺 The bridging of TradFI and DeFi continues: Ripple launches platform for managing Traditional and Digital Assets

🌍 White House Sets Crypto-Bank Meeting on Stablecoins

Traditional Banking 🏦

🇪🇺 “Bankers” Bonuses - Dutch Parliament votes scrap bonus caps some Banking and Fintech staff - a reversion to the mean after the Bankers bonus caps following the 2009 financial crisis

🌍 HSBC “Mancially” focussed on winning back their place in the IPO market leadership says - which should make it easier again for fintechs to mop up retail deposits

🌍 Dastardly move by evil bank JP Morgan to shutdown bank branches on… a Bank holiday

Infrastructure 🚧

🇪🇺 Wero powered by EPI continues to add vendor after vendor across the EU

🌍 Mastercard Launches Agent Suite to help power agentic commerce future

Payments 💰

🌍 Apple Pay continues to expand globally with plans to launch into world’s most populous country India

🇪🇺 Archax selects OpenPayd to streamline multi-currency settlement for digital asset trading

Regulatory Corner 🔎

🇪🇺 Nate Dawg and Warren G ‘bout to (de)regulate… Turn’s out if it’s broke you do actually have to fix it. European Leaders increasingly release soundbites suggesting a period of pursuing deregulation. And for Fintech we hope that might mean a path to scaling.

🇬🇧 FCA to deliver ‘long term review’ of AI and its impact into financial services

🇪🇺 Digital Euro - Weapons of economic destruction - Europe continues to pursue ‘Digital Euro’ as a means of securing itself against over-dependence on other countries

Longer Reads 📜

“Airbus of Payments” - Aurore Lalucq

Three Ways the EU’s Payment Sovereignty Strategy Undermines European Consumers - Matthew Kilcoyne

And Lastly!

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