We are back with the weekly update on the tech stories. This week, we will cover India finally making a decision about crypto; FCA making life easier for the fintechs and removing the re-authentication rule; Square changing its name; Nasdaq moving all of its North American market to Amazon Cloud; GDFA launching the first green fintech taxonomy globally; Premas Biotech testing its oral vaccine against Omicron Covid-19 variant, UAE banks going for profit rather than growth, as shown in the new report; Bitcoin continuing to fall down, and US Federal Trade Commission blocking the Nvidia proposed giga-merger of Arm.
The Indian government decided to regulate the cryptocurrency sector rather than outright banning it, as was expected by many. According to the decision by the government, crypto will not be seen as legal currency, but rather “crypto-assets” that will be under India’s markets watchdog, the Securities and Exchange Board of India (SEBI). All citizens holding crypto in India will have to declare it and will not be allowed to keep their crypto assets outside of the country. Once the bill becomes official legislation, the citizens will be given a certain amount of time to transfer the assets.
Jay Hao, CEO of cryptocurrency exchange, OKEX.com, said: “Media reports around the Indian government planning to regulate are extremely satisfying. When OKEx entered the Indian market early this year, we were optimistic about India’s strong policy framework. We are now finally witnessing India’s crypto policy taking shape to ensure a better future for the country’s entire crypto ecosystem. We can now expect more foreign exchanges to enter India and invest in building the required technical infrastructure and hiring manpower to run their operations. The global crypto community will be closely monitoring the situation as we learn more about the finer details of India’s crypto law.”
Shivam Thakral, the CEO at BuyUcoin, added, “We are extremely delighted but not surprised to see media reports regarding the government’s plan to regulate crypto assets, instead of banning them. Since the beginning, we have supported the classification of cryptocurrency as an asset class, similar to gold, stocks, and real estate. It will be interesting to see the timeline and manner in which the crypto bill is implemented across the diverse crypto industry in India.”
In their efforts to boost open banking, the Financial Conduct Authority (FCA) has decided that fintechs will not be obligated to re-authenticate their customers every ninety days. The rule has been modified and the companies will now need to prove customer consent instead.
Currently, all clients that access account information through a third-party provide need to authenticate their information when they want to access their data for the first time, and every three months thereafter. However, this has shown to cause significant drop-out rates, with FCA claiming third-party provides are losing from 20% up to 40% of customers exactly at the 90 days mark when the re-authorization is required from the customers.
“We consider that these measures are proportionate, taking into account the level of risk. They balance the need to protect consumers from TPP access without explicit consent, and unwittingly sharing data, with reducing friction for customers,” the FCA claimed.
The Open Banking enthusiasts and fintechs have welcomed the news enthusiastically. Jack Wilson, head of public policy at TrueLayer, says: “While the ‘90-day’ rule was introduced with good intentions it was causing some significant issues for open banking-based services. Now there will be no need for customers to jump through the credential sharing hoops with each of their connected banks every 90-days. Instead, it will be for the AISP, such as TrueLayer, to manage the customer’s data sharing, by asking the customer at 90-day intervals whether they wish for data sharing to continue. This strikes a balance between continued access with the important right for consumers to withdraw their consent at any point in time.”
The well-known payments company Square has decided to change its name right after the CEO, Jack Dorsey, stepped down from Twitter. The company is now called “blocks”, symbolizing the several “blocks” that have been added to Square’s initial offering, including Cash App, Tidal, and crypto and blockchain-focused services. Moreover, Square’s crypto initiative, Square Crypto, will also be changing its name, going for Spiral.
“The name has many associated meanings for the company — building blocks, neighborhood blocks and their local businesses, communities coming together at block parties full of music, a blockchain, a section of code, and obstacles to overcome,” the statement from the company reads.
Dorsey added, “Block is a new name, but our purpose of economic empowerment remains the same. No matter how we grow or change, we will continue to build tools to help increase access to the economy.”
Nasdaq made a decision to move the North American markets to Amazon Cloud, starting next year with MRX.
“This landmark partnership with AWS seeks to power a truly cloud-based market infrastructure that is more resilient, scalable, and accessible for all market participants,” says Adena Friedman, president and CEO, Nasdaq. “For over a decade, Nasdaq has used the elasticity and high security of AWS to deliver client-driven solutions. Our innovative, new collaboration with AWS creates a bridge to the future for our markets and represents the next major step forward in Nasdaq’s cloud journey.”
At the end of last week, an interesting launch took place. The Green Digital Finance Alliance (GDFA) together with Swiss Green Fintech network launch the first green fintech taxonomy during the Building Bridges Summit in Geneva. The plan behind the taxonomy is broadening and accelerating the growth of the green fintech market by ensuring the alignments of regulators, investors, and market actors to assess green fintechs.
In the report issued by GDFA, the green fintechs are classified into: Green digital payment and account solutions; Green digital investment solutions; Digital ESG-data and -analytics solutions; Green digital crowdfunding and syndication platforms; Green digital risk analysis and insure-tech; Green digital deposit and lending solutions; and Green digital asset solutions.
In the following pages of the report, GDFA provides an overviews of datasets that could potentially contribute to green fintech innovation. The GDFA is currently seeking feedback to the report and plans to have the final taxonomy ready early next year.
Alvarez & Marsal‘s (A&M) issued the latest UAE Banking Pulse report that shows significant earnings growth for the UAE banks. This may be surprising considering that the balance sheet has seen a decreased growth. However, it shows that it was the profitability rather than growth that the UAE banks were going for. The report analyzed the data from the 10 biggest UAE banks, comparing the results from Q3 of 2021 with those of Q2 of this year. The report included 16 different metrics in order to research areas such as liquidity, income, risk, capital, profitability, size, or efficiency. The banks analyzed included First Abu Dhabi Bank (FAB), Emirates NBD (ENBD), Abu Dhabi Commercial Bank (ADCB), Dubai Islamic Bank (DIB), Mashreq Bank (Mashreq), Abu Dhabi Islamic Bank (ADIB) or Commercial Bank of Dubai (CBD).
Asad Ahmed, Managing Director, Alvarez & Marsal commented: “This quarter saw better-than-expected profits. However, the growth in profitability appears uneven, and is leaning more towards the larger banks than the mid-sized banks. Sound capital buffers, a stable funding profile, and expected government support should continue to uphold banks’ creditworthiness
“However, asset quality may deteriorate over the medium term as forbearance measures are gradually withdrawn. It is expected that the economic boost from Expo 2020, continued economic recovery and digital transformation will continue to drive the UAE banking sector growth. An interesting outcome of the current IPOs would be to see how they impact the earnings of the local banks; it is probable that this may highlight the need for some of the banks to build better capabilities that broaden their fee income capabilities and hence diversify their income streams,” he added.
Premas biotech announced that it will start testing of the oral vaccine candidate that could be effective against the Omicron variant. The vaccine was created in cooperation with Oravax and is the virus-like particle (VLP) vaccine.
“We have generated well-characterized VLPs with earlier mutations – alpha, beta, gamma, and delta variants into the triple antigen VLP framework within 8 weeks. We are hopeful that the Oravax oral vaccine candidate will pass the preclinical challenge studies being designed for Omicron,” the statement by the company reads. The company received clearance from the South African Health Products Regulatory Authority to start enrolling patients into the Phase I trials. If the oral vaccine gets approved, it could be supporting the other vaccine in form of a booster or be approved as a standalone. The vaccine is easily transferable and there is no need for special temperature storage.
“Oravax’s virus-like particle vaccine candidate was designed knowing the high probability for mutations occurring to Spike protein, which we are witnessing now. Our oral vaccine candidate is a triple antigen vaccine which besides the Spike protein also includes Membrane and Envelope proteins, both of which are not known to mutate. We are now initiating preclinical in-vitro testing and challenge studies for our oral vaccine candidate against the recently defined variant of concern (VOC) Omicron,” stated Prabuddha Kundu, PhD, Co-founder and MD at Premas Biotech.
Bitcoin has been on a bit of a downward spiral and it is continuing to lose its value, as it lost a fifth of it on Saturday. On Saturday morning, the most popular crypto was down by 12%, standing at $47,495. Later during the day, it fell to $41.967, which resulted in a total losses of 22%. This closes a rather volatile week in terms of markets.
Justin d’Anethan, Hong Kong-based head of exchange sales at cryptocurrency exchange EQONEX, said “Whales in the crypto space seem to have transferred coins to trading venue, taken advantage of a bullish bias and leverage from retail traders, to then push prices down.”
A big reason for bitcoin and other cryptocurrencies going down is the nearing testimony before the U.S House Financial Services Committee. On December 8th, the eight major crypto firms will testify before the lawmakers as the US government tries to come up with the best way to regulate the crypto.
“If anything, this is the opportunity to buy the dip for many investors who might have previously felt like they missed the boat. We can see tether bought at a premium, suggesting people are getting cash ready, within the crypto space, to do just that,” D’Anethan added.
As expected, The US Federal Trade Commission decided to block the Nvidia’s acquisition of Am on competition grounds. This does not come as a big surprise to anyone who has been following the proposed M&A worth $40 billion. As we have reported earlier, Arm is the dominant provider of semiconductor designs for specific environments and its services are used by all chip designers and manufacturers, Nvidia included.
“The FTC is suing to block the largest semiconductor chip merger in history to prevent a chip conglomerate from stifling the innovation pipeline for next-generation technologies,” said FTC Bureau of Competition Director Holly Vedova. “Tomorrow’s technologies depend on preserving today’s competitive, cutting-edge chip markets. This proposed deal would distort Arm’s incentives in chip markets and allow the combined firm to unfairly undermine Nvidia’s rivals. The FTC’s lawsuit should send a strong signal that we will act aggressively to protect our critical infrastructure markets from illegal vertical mergers that have far-reaching and damaging effects on future innovations.”
The FTC has specified that several markets such as High-Level Advanced Driver Assistance Systems for passenger cars; DPU SmartNICs; and Arm-Based CPUs for Cloud Computing Service Providers would all be threatened if the merger was cleared.