Before we start the weekend, let’s look back at the fintech news stories that made the headlines this week. We look at the crypto market cap as it hits its all-time peak, with bitcoin leading the pack, surpassing the $1 trillion market cap. Staying on the cryptocurrency topic, we will also discuss Robinhood’s outstanding results for Q1 of 2021, cryptocurrency inflows that also hit an all-time high as the interest of the investors is not slowing down, and Coinbase investigating some delays they were dealing with. Apart from the crypto stories, we will discuss the newest fintech unicorn, an announcement from London Stock Exchange, Stripe opening its first Middle East location, and Softbank’s giant investment into OneTrust. Finally, we look at the digital pound and whether it has the chance to bump Britain’s position as a global finance center in the post-Brexit world.
Robinhood announced on Thursday that 9.5 million users traded cryptocurrency on its platform in the first quarter of 2021. The number is almost a six-fold increase, as compared to the last quarter of 2020.
Although it is a huge rise, it does not come as a surprise. Bitcoin has almost doubled in value this year and cryptocurrencies have been enjoying a better performance than ever this year, as investors gain interest and more major institutions start to accept cryptocurrencies as a form of payment.
Robinhood allows its users to buy, sell, and hold cryptocurrencies. As we have reported earlier, the startup also plans to introduce a feature that will allow customers to deposit and withdraw cryptocurrencies for transfers to other wallets.
Robinhood submitted paperwork regarding its initial public offering to the U.S. regulators.
On Thursday, it was announced that SoftBank Vision Fund 2, together with Franklin Templeton led an investment round in OneTrust, currently valued at more than $5 billion. The total investment by both companies amounted to $210 million.
It was the Series C funding round for OneTrust and the full amount raised was $510 million. Other investors included Insight Partners and Coatue and TCV. So far, OneTrust raised $920 million since it was funded.
OneTrust platform is used by more than 8000 companies to operationalize privacy, security, and data governance.
On Thursday, The London Stock Exchange Group said that it was in the process of investigating outage as its newly acquired Refinitiv market data unit.
The outage at Refinitiv’s Eikon platform for market prices began around 0730 GMT. Subscribers of the platform started commenting on Twitter, claiming they could not access prices.
“We’re aware of an issue disrupting our service to customers,” LSEG said in a statement. “We are currently investigating the cause of the issue and working hard to resolve the problem. We apologize to customers for the disruption.”
LSEG completed its $27 billion purchase of Refinitiv on Jan 29.
“Clearly this morning this is bad news for the group not to mention that clients have been left high and dry with no trading and loss of crucial market data,” said Securequity sales trader Jawaid Afsar.
The digital currency manager Coinshares shared on Tuesday that the Q1 2021 inflows into cryptocurrency funds and products are higher than it has ever been. The crypto inflows hit the record number of $4.5 billion.
In the last quarter of 2020, the crypto inflows were standing at $3.9 billion. Thus, we have seen an 11% increase.
On Monday, the crypto sector reached its all-time peak at $2 trillion in market capitalization. Bitcoin market cap alone has surpassed $1 trillion.
“There’s so much momentum that’s building and people are scrambling to see where the other coins, aside from bitcoin, are going,” said Edward Moya, senior market analyst at online FX trading platform OANDA.
The cryptocurrency company, Paxos, announced on Tuesday that it plans to apply for a formal clearing agency license from the U.S. Securities Regulator. The announcement comes after a successful pilot test that involved Credit Suisse and Instinet.
Currently, settling a trade takes two days. However, there have been repetitive calls to shorten this time, especially during moments such as the GameStop frenzy. The Depository Trust and Clearing Corporation (DTCC) said reducing the settlement time to one day instead of two would significantly reduce the risk and lower margin requirements.
Trades at Paxos, however, were not executed in real-time. The company said transactions occurring at 11:00 am Eastern Time (ET) and 3:00 pm ET have settled at 4:30 pm ET.
On Tuesday, the largest U.S cryptocurrency exchange, Coinbase, informed that it was investigating the issues causing delays on its financial platform, Stellar.
Stellar is its secure platform that connects banks, payments systems, and users in a network and has its own cryptocurrency called Stellar Lumen. The platform allows users to turn traditional assets into tokens that can later be transferred to other users.
Users can turn traditional assets and currencies into tokens, which can then be transferred to other users of the platform.
Last week, Coinbase received approval from the U.S. Securities and Exchange Commission to list on the Nasdaq.
The digital payment company Stripe, founded in 2010 by the Irish Patrick and John Collison announced the opening of their first Middle East office.
The office will be in Dubai, the financial capital of the United Arab Emirates.
Currently, the company is servicing customers such as Google, Uber, Amazon or Maersk. In total, more than 50 companies processing more than $1 billion annually are using Stripe to receive payments and bill customers.
The Dubai office is a part of the cooperation with the Dubai-based payments processor Network International. Currently, several UAE companies already use Stripe services.
On Monday, the crypto market cap hit the record $2 trillion, with bitcoin alone surpassing the $1 trillion market cap.
To the surprise of many critics of bitcoin, the most popular cryptocurrency has been trading relatively close to its lifetime peak of $61,000, reached in mid-March.
According to the analysts, as long as bitcoin continues to trade at more than $53 000, its $1 trillion market cap will be safe.
“Momentum and interest have begun to expand beyond bitcoin and ethereum,” said Paolo Ardoino, chief technology officer at crypto exchange Bitfinex.“As the industry continues to mature, we expect more blockchain-based applications to be introduced to the world, and coinciding with that, a surge of interest around other alternative assets… as they become more market-ready.”
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CityUnitedProject announced last Friday that a digital pound should be a priority for Britain that wants the City of London to remain a global financial center post-Brexit.
“A central bank digital currency (CBDC) should be a fundamental foundation for a competitive City after Brexit, otherwise China will steal a long march on us,” Daniel Hodson, the Chairman of CityUnited told Reuters. “The Bank of England is talking about a CBDC but it ought to be a greater priority as this form of technology is the future, and would bring other benefits like real-time regulation to cut costs.”
In a report prepared by the CityUnited, the think-tank outlined that a digital pound would allow fractions of a currency to be spent and traced without costly overheads to help collect and distribute taxes in real-time, and spawn more efficient, real-time supervision of markets.
Today, it was announced that the corporate credit card startup Ramp has joined the FinTech Unicorn Club, after its newest funding round that bumps the company’s valuation up to $1.6 billion.
Ramp was founded only two years ago, by the team behind the consumer finance firm Paribus. RAMP offers card usage analytics that can assist companies in identifying wasteful spending. In the past 6 months, transaction volume on Ramp has increased by 400% and ⅓ of the customers switched over from American Express.
The $115M funding round was led by D1 Capital Partners and Stripe, with support from Goldman Sachs, Founders Fund, Coatue Management, Thrive Capital, Redpoint Ventures, Box Group, Neo, and Contrary Capital.
“Like Square, Paypal, and Stripe, Ramp is rapidly emerging as a generational fintech company. Though it launched publicly just one year ago, Ramp is already viewed as the obvious choice for efficient spend management at the fastest-scaling, highest-performing startups,” says Keith Rabois, partner at Founders Fund. “We are pleased to welcome Stripe, an innovative company that we deeply admire, to the Ramp team.”
The investment raised will be spent on supporting growth and product development and a few new features including sophisticated card controls, automated savings, and accounting automation.