Hello Fintech Friends,

Welcome to the 335 new readers who’ve joined us since last week. You’re joining 232,000+ other subscribers who love a fintech mullet: fintech in the front, stablecoins and decentralized rails in the back.

The annual World Economic Forum convened this week at Davos, and tokenization was the word on everyone's lips in financial services. Of course Binance's CZ, Circle's Jeremy Allaire, and Ripple's Brad Garlinghouse provided strong endorsements for digital currencies, but unlike prior years, they were joined by a chorus of bank and financial services CEOs – from UBS to Blackrock to Standard Chartered to BNY to NYSE – came together to say that tokenization is finally working.

The WEF even published its own research on the topic: "Stablecoins have become the first truly universal blockchain use case, turning a technical breakthrough into something deeply practical."

Stablecoins are, of course, the gateway drug to broader tokenization. When currencies become machine-readable, it makes it easier to convert other assets into a machine-readable format that unlocks speed, transparency, and functionality.

Speaking of Davos, the most powerful speech of the conference by far came from Canadian PM Mark Carney. It's worth watching in its entirety. We've become so acclimatized to political speeches that are either carefully vetted by consultants or naked in their disingenuousness, that it's almost surprising to see a political leader who is clear, lucid, and unafraid to deliver tough news.

And yet, even with data from Artemis showing crypto card spending hitting $18 billion annualized as stablecoin use shifts to everyday payments, we still do not have market structure clarity in the US. The Clarity Bill has turned into a political knife fight between Coinbase, banks, decentralized finance, and the White House.

The issue primarily hinges on whether stablecoins are allowed to pay yield (which, in banking terms, would be Net Interest Margin or APY). While banks have been lobbying strongly to prevent non-bank issuers of stablecoins from offering to pass through yield to their holders (ie. depositors), the logic for doing so is tenuous at best. There is a valid concern about hot deposits leaving the banking ecosystem to chase higher stablecoin yield, and the implied knock-on effect this would have on bank lending given capital requirements, but many compliant high-APY products exist in the US today, and have yet to make much of an impact on bank deposits. Consumer inertia is an underrated force in consumer choice – even with zero switching costs – and my suspicion is that 'hot deposits' aren't really as hot as everyone thinks they are.

Financial institutions should compete on the value of the features they offer on-top of their yield. Not on their ability to restrict competitors from offering yield.

(And, needless to say, stablecoin issuers should be subject to similar safety and soundness requirements, to protect depositors / holders.)

Elsewhere, the White House's deadline to cap credit card interest at 10% interest came and went with no effect, Capital One announced that it will acquire corporate card giant Brex for $5.15 billion in cash and stock (which we'll discuss more in Sunday's newsletter), crypto provider of wallets, validation, trading and custody services BitGo went public this week, trading up 25%, and crypto custody hardware provider Ledger announced that it plans to public in the US this year, eyeing a $4 billion valuation.

How's that for a news week?

And speaking of tokenization – who should we have speak at Stablecon? Our EMEA speaker applications remain open for one more week.

Please enjoy another week of fintech and banking news below.

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

SPONSORED

As crypto, stablecoins, and real-time payments blur the lines between traditional finance and digital-native money, legacy AML stacks are breaking under the speed and complexity of modern flows.

In this session, Oscilar and other experts will unpack what a new AML playbook looks like: unified fraud and AML (FRAML) on a single AI Risk Decisioning™ platform, real-time signal processing across on- and off-chain data, and agentic AI that helps teams surface hidden networks and laundering patterns before they turn into losses.

Learn more

Want to sponsor a newsletter? See our sponsorship information here.

Financial Services & Banking

Product Launches

The NYSE this week announced a new trading venue designed for 24/7 access to tokenized stocks and ETFs, utilizing blockchain technology to modernize traditional market hours.

Other News

The DTCC is prioritizing interoperability across different blockchain networks to ensure that digital and tokenized securities can move seamlessly throughout the global financial infrastructure.

Donald Trump sued JPMorgan Chase and CEO Jamie Dimon for $5 billion, alleging that the bank engaged in "political debanking" by closing his accounts following the January 6 Capitol riot. (JPMorgan denied claims of ideological discrimination, asserting that the bank does not close accounts based on political or religious beliefs despite the President's legal threats.)

The FDIC unveiled a formal application process for stablecoin issuers under the GENIUS Act, establishing a regulatory framework for banks to safely issue payment stablecoins.

The CFTC is seeking to "future-proof" market regulations by moving away from enforcement-led oversight and toward tailored rules for crypto, AI trading, and prediction markets.

Interview of the Week

This week, I interviewed Ram Palanappian, the CEO and Founder of Earnin, a fintech company that is revolutionizing how employees access their wages. Ram shares the origin story of Earnin, which began when he realized that many employees were struggling with cash flow issues, leading to late fees and overdraft charges. Give the episode a listen here.

Fintech

Product Launches

Ramp launched a new "Budgets" feature designed to help businesses control spending in real-time by linking financial policies directly to corporate cards.

Affirm offered a "buy now, pay later" option for monthly rent payments, allowing tenants to spread the cost of housing over several installments.

PayPal introduced a free, do-it-yourself tax filing service within its app to simplify the return process for its millions of U.S. customers.

Monzo launched a free tax-estimate tool for sole traders and freelancers to help them calculate and set aside the correct amount of tax before new regulations take effect.

And WalletConnect partnered with Ingenico to launch stablecoin point-of-sale merchant acceptance for customers.

Want to sponsor a newsletter? See our sponsorship information here.

Jobs of the Week

Visa is hiring across the board for their crypto team, driving smart stablecoin solutions for a variety of users!

• Visa Analyst, Visa Crypto Solutions | SmartRecruiters
• Visa Senior Manager, Visa Crypto Solution Sales | SmartRecruiters
• Visa Sr. Manager, Business Development - Visa Crypto | SmartRecruiters

Other News

The Block reported that crypto payment card daily transaction volumes surged 22x throughout 2024.

ModernTreasury donated millions of dollars to help launch a new credit union, aiming to provide a dedicated financial home for the tech community and startup employees.

Revolut is preparing its payment platform for the rise of "agentic commerce," enabling AI agents to autonomously execute transactions on behalf of users and will offers a new suite of lifestyle and travel perks specifically tailored to attract Gen Z users to its premium subscription tiers.

Partnership Corner

Zero Hash* partnered with Gusto to power instant, global stablecoin settlements, streamlining the payroll process for international employees and contractors. (Mastercard is also reportedly weighing a potential investment in the crypto infrastructure firm after they reportedly ended previous acquisition talks.)

Onepay collaborated with Klarna to allow customers to convert past debit card purchases into "buy now, pay later" installment loans directly through the Onepay app.

The Bad News

The Justice Department opened a criminal investigation into allegations of corporate espionage in Silicon Valley, by Deel into their rival Rippling, centering on the suspected theft of proprietary technology secrets.

JPMorgan Chase is moving to restrict Checkbook's access to its customer data, part of a broader crackdown on platforms that the bank deems to have "questionable" compliance or security standards.

The FTC asked a federal court to hold payment processor Cliq in contempt for allegedly violating a 2015 order by continuing to process high-risk transactions for deceptive merchants.

The Guavapay founder quit his role as a director as Mastercard pursues a winding-up petition against the London-based fintech in the High Court.

SMBC wound down its U.S. digital banking division, Jenius Bank, as the Japanese financial giant shifts its strategic focus away from the American consumer retail market.