This week’s tech weekly news update will look at the US financial watchdog asking big techs to hand over their payment system data. We will also look at a collaboration that aims at extracting gold from old mobile devices and laptops. What other interesting partnerships were announced last week? Goldman Sachs and American Express will partner on cloud-based payments. It is not all good news, at least not for Credit Suisse that has been hit with a hefty fine because of due diligence failures. What other stories made the headlines? Cboe makes its grand entrance into crypto, France tests CBDC in a recent trial, Google launches its own chip, HM Treasury opens consultation for BNPL regulation, the newest report shows AI and blockchain are winners in the financial sector, Stealth BioTherapeutics is rejected by the FDA, and Princeton & MIT researchers make a discovery that could be a game-changer for CRISPR.
The US Consumer Financial Protection Bureau (CFPB) announced that it will require the payment system plans data from the big techs in order to analyze how customer data is being gathered and used. Orders have been sent to six big techs – Amazon, Apple, Facebook, Google, PayPal, and Square. The CFPB has also revealed it is considering targeting the Chinese big players, with Alipay and WeChat Pay opening up that list.
“Big Tech companies are eagerly expanding their empires to gain greater control and insight into our spending habits,” says CFPB director Rohit Chopra. “We have ordered them to produce information about their business plans and practices.”
Royal Mint announced that it has partnered with the Canadian tech start-up Excir and will use the latter’s technology to extract gold from used laptops and mobile devices. The technology that Excir has patented is able to recover over 99% of gold from electronic waste.
In the current phase of the partnership, the engineers at Royal Mint are busy planning out how the technology can be grown from laboratory scale to mass production. The initial use of Excir’s technology has produced gold with a purity of 999.9. According to the reports, in the later stages, the process will also allow for recovering other precious metals such as palladium, silver, or copper.
Anne Jessopp, chief executive, The Royal Mint, says: “The potential of this technology is huge – reducing the impact of electronic waste, preserving precious commodities, and forging new skills which help drive a circular economy.”
Goldman Sachs announced it will be collaborating with American Express, aiming at developing and deploying a cloud-based payment solution for corporate clients. Back in June, Goldman Sachs has launched its Transaction Banking in the US and in a few short months alone, the offering has attracted over 250 clients. That has resulted in more than $35 billion in deposits, with trillions of dollars being processed through the Goldman Sachs system.
Now, with the newly formed partnership with American Express, the virtual cards of the latter will be embedded into the Goldman Sachs platform.
“A major pain point for our large commercial card clients is managing multiple platforms and myriad time-consuming, costly, and complex processes to make, track, and reconcile thousands of payment transactions every day,” says Dean Henry, EVP of global commercial services at American Express. “We are pleased to partner with Goldman Sachs to modernize these outdated legacy B2B payment processes. Together, we are setting a new standard in transaction banking for big business by offering access to faster payments and real-time tracking that can increase efficiency and reduce costs.”
As a pilot run, the offering is only available to a limited number of clients. According to initial reports, the launch for the general public is expected at the beginning of next year.
Cboe Global Markets just made a big move to enter the cryptocurrency sector, as it announced it will buy ErisX Digital Holdings, which operates a digital asset spot market, a futures exchange, and a clearinghouse. No financial details regarding the deal have been announced to the public. Cboe comes well-prepared as it has already secured support from a range of big players in the sector, including crypto companies, sell-side banks, and retail brokers. The experts from the field will create a Digital Advisory Committee that will advise Cboe on the development of the Eris spot markets.
The committee will include DRW, Fidelity Digital Assets, Galaxy Digital, Interactive Brokers, NYDIG, Paxos, Robinhood, Virtu Financial, and Webull.
“We believe our acquisition of ErisX, coupled with broad industry participation and support, will help us bring the regulatory framework, transparency, infrastructure, and data solutions of traditional markets to the digital asset space.” Ed Tilly, CEO of Cboe Global Markets, says, “ErisX has shown an unwavering commitment to improving spot and derivatives crypto trading, and I am confident that together we can not only meet the growing demand for institutional and retail trading solutions but also push the boundaries of digital asset innovation and unlock its next phase of growth.”
The Financial Conduct Authority (FCA) has hit Credit Suisse with a £147 million penalty, a part of the $475 million global resolution agreement. Reason? Due diligence errors related to loans that sum up to more than $1.3 billion, arranged for the Republic of Mozambique. The FCA spoke out about the fact that the loans that were issued between 2012 and 2016 by Credit Suisse to the Republic of Mozambique were “tainted by corruption”.
In addition, Credit Suisse will also forgive the $200 million debt by the Republic of Mozambique.
Mark Steward, executive director of enforcement and market oversight at the FCA, says: “The FCA’s fine reflects the impact of these tainted transactions which included a debt crisis and economic harm for the people of Mozambique. The fine would have been higher if not for Credit Suisse agreeing to provide the debt write-off of $200 million.”
Several French financial institutions led by Euroclear have recently closed a test of using CBDC on a blockchain. The pilot used IBM’s technology and was commissioned by the Banque de France. It included Agence France Trésor, BNP Paribas CIB, Crédit Agricole CIB, HSBC, Societe Generale. The project focused on core securities settlement operations such as primary and secondary market trades, liquidity optimization mechanisms, and securities issuance.
This test has just been a beginning of a large project that Banque de France announced back in March 2020 to explore the integration of CBDC.
Isabelle Delorme, the deputy CEO of ESES CSDs Euroclear, comments: “Together, we have been able to measure the degree to which the issuance of CBDC can offer a fast and secure settlement of tokenized securities. We are well aware that there are still challenges that need to be overcome before we can envisage the implementation of blockchain platforms in production as we continue to investigate all routes to drive efficiencies for our clients.”
With Tensor SoC, Google became yet another giant to produce its own chips. Perhaps to some, it may not come as a surprise, as Google’s biggest competitors – Samsung and Apple have been using their own chips for several years. However, many did not expect that Google’s own chip will debut so soon, with the first models with Tensor being Pixel 6 and 6 Pro.
‘Google Tensor is a milestone for machine learning. Senior Director at Google Silicon, Monika Gupta announced. “With Google Tensor, we’re unlocking amazing new experiences that require state of the art ML — including Motion Mode, Face Unblur, Speech enhancement mode for videos and applying HDRnet to videos.”
HM Treasury announced the creation of a public consultation on the BNPL regulation. So far, the BNPL sector has been unregulated and recently, more and more experts have drawn attention to the fact that with the increase of popularity of BNPL, there needs to be a regulatory framework covering this part of the market. Recently, it has been rumored that the Financial Conduct Authority is working on new regulations to the BNPL sector that will be protecting consumers.
The HM Treasury consultation’s aim is to gather evidence supporting the creation of a proportion approach. The HM Treasury has published the objectives followed, including BNPL activities being subject to intervention depending on the level of risk, consumers being protected in an adequate manner, any future regulation not negatively impacting the innovation, and minimizing the burden on merchants that offer BNPL. Thus, with those objectives in mind, the HM Treasury will have to consider the scope of the new regulations. The consultation will last until the 6th of January next year.
Anthony Drury, the Managing Director of Zip said: “As with any new, innovative financial product, it’s important that customers are protected by regulation, ensuring that there is clarity and consistency across the industry. This will give consumers confidence, provide retailers the opportunity to grow, and allow businesses like ours to invest and innovate in the UK. We welcome the opportunity to contribute to the development of the new regulatory framework, and we look forward to working with HM Treasury.”
“If implemented effectively, it’s likely we’ll see more people using Buy Now Pay Later as a convenient part of their personal finance toolkit. In the meantime, we’ve not waited for regulation and have already put in place measures aimed at protecting and supporting customers, based on our experience of operating in other countries,” he continued.
Visma | Onguard’s Fintech Barometer just issued a report based on four years of data on digital transformation. Based on the report, finance professionals have been valuing AI and Blockchain increasingly more, with 47% of organizations included in the study choosing AI as the top three trends that will impact the sector in 2021. This is a substantial growth from 2018 when AI was chosen by 31% of respondents. Blockchain was another big winner, with 65% of respondents stating they have either already adopted it or work on adopting it. This is another big spike from 2018, where only 51% of the study participants answered that.
“We’ve been conducting our Fintech Barometer over the last four years, and the insights we’ve gained with clear trends emerging over this period have been fascinating. Four years ago, nobody could have predicted the kind of world we’d be living in today, and our findings have really demonstrated just how much of an impact the challenges of the last year have had on the attitudes of finance professionals towards issues like innovation and fintech. This translates to a growing trend towards digitization, data-driven insights, and a growing revolution in fintech adoption, with more organizations enthusiastically undertaking digital transformation initiatives within shorter timeframes than in previous years. We expect this to continue over the coming years and as always, we’ll continue to monitor progress,” said Raymon van Viegen, CFO at Visma | Onguard.
The FDA rejected the application submitted by Stealth BioTherapeutics. The biotech asked for clearance for its Barth syndrome drug elamipretide. Barth syndrome is a rare condition that weakens the heart muscle and causes a series of other health problems. The company was in discussions with FDA already a few months ago and back then, the FDA asked for another phase 3 trial. However, after FDA’s request, Stealth said “neither the FDA nor the company has identified a feasible trial design due to the ultra-rare nature of this disease.” Thus, they decided to file for clearing and unsurprisingly, were rejected. According to Stealth, the FDA informed the company their application “was not sufficiently complete to permit a substantive review.” and did not include “an adequate and well-controlled trial”
“Stealth and the FDA have previously discussed the challenges of conducting additional clinical trials in Barth syndrome, which is an ultra-rare genetic disease affecting fewer than 130 individuals in the U.S.,” the statement said.
We have not been informed of the next steps that Stealth is planning to take, however, the biotech informed the public they will reveal their plans in early November. The FDA has not specified what was wrong with the phase 3 trial but expressed their willingness to work with Stealth on a way forward.
“We submitted our [new drug application] at the request of the Barth syndrome patient community, which petitioned us and the FDA to gain access to elamipretide and shared with the FDA its tolerance of risk of uncertainty of benefit based on the data from the small clinical trials we were able to conduct in this ultra-rare disease,” said Stealth CEO Reenie McCarthy.
Although CRISPR has been a buzzword for quite some time, the current gene editing technologies are still faulty and often result in unwanted mutations or inadequate results. However, the newest discovery by Princeton University researcher Britt Adamson, MIT Professor, and Whitehead Institute member, Jonathan Weissman, as well as the former Editar Medicine Cecilia Cotta-Ramusino can be a game-changer for CRISPR.
Their work on an innovative method called Repair-seq shows in an extraordinarily detailed way how genome editing tools work.
“We’ve known for a long time that the mechanisms involved in fixing broken DNA are essential for genome editing because to change the sequence of DNA you first have to break it,” said Britt Adamson, senior author of the study. “But those processes are incredibly complex and thus often difficult to untangle.” In order to repair DNA, cells use a number of various and complex mechanisms. Thanks to Repair-seq, researchers would be able to repair specific DNA.
“Editing with double-strand breaks has been the bread and butter of genome editing for a long time, but making intended changes without unwanted mutations has been an enormous challenge,” said the study’s first author Jeffrey Hussmann. “We set out to understand the mechanisms behind as many of the induced mutations as possible, reasoning that this could help us optimize the system.”
“Repair-seq is a beautiful marriage of technological savvy and biological insight,” said John Doench, director of research and development in the Genetic Perturbation Program at the Broad Institute, not involved in the study. “And for the work on prime editing, what a wonderful example of collaboration! Prime editors have often proven difficult to work with, and this paper starts to understand why, while also kickstarting novel solutions.”
More Tech Stories Connected To CBDC, CRISPR, and BNPL: