TronWeekly

Crypto World News

You are here: Home / Archives for digital bank

digital bank

German Digital Bank N26 Raises $100m in Extension of Series D round

by

German digital bank N26 today announced it has raised an additional $100 million in its Series D funding round. Overall, the highest valued Fintech firm to date has raised almost $800 million at a valuation of $3.5 billion.

The Berlin-headquartered bank, founded in February 2013 by Valentin Stalf and Maximilian Tayenthal, now has 5 million customers worldwide. The investment, backed by global investors such as Peter Thiel’s Valar Ventures, Li Ka-Shing, Battery Ventures, Greyhound Capital, Earlybird Venture Capital and Horizons Ventures.

In the announcement N26 notes the funds will be used to facilitate the growth of N26’s product and expand its presence in its core markets, where mobile banking demand is higher than ever before.

With shifts in consumer banking preferences and banking preferences in the face of the COVID19 turmoil, the mobile bank expects a long-term shift in overall acceptance of digital banking.

“With banking from home now more important than ever, we want to make sure that everyone can open a bank account in minutes to explore the freedom and safety of mobile banking,” says Valentin Stalf, Co-Founder and CEO of N26”

N26 is one of the online-only banks which has grown in Europe, drawing millions of users despite any physical branches. The mobile bank continues to aim to invest in the near future in expanding its presence across its 24 European and US markets.

The Covid-19 has a significant effect on the mobile payment industry as customers and companies have been forced to change their spending habits dramatically and the banking sector is struggling to retain cash accessibility while keeping clients safe.

Large numbers of companies and people around the world have stopped using banknotes in the fear that the handling of physical cash handled by different people may be a source of coronavirus spread. This has encouraged the adoption of electronic payments in many countries. ‘

The French Bank is Planning an Experimental Program on Central Bank Digital Currency

by

Several countries have already begun or finished testing their Central Bank Digital Currencies across the world. The French Central Bank has recently revealed that it is looking to test the CBDC for inter-bank settlements. The Central Bank has invited all interested parties to submit their applications.

According to a document published by the Bank of France on 30 March, the Bank invited applications to test the use of a virtual euro. The aim of the central bank is to explore the potential solutions that CBDC can provide to clear and settle digitized financial assets.

CBDC will not necessarily be using blockchain technology

However, despite the Bank of France advocating for blockchain-based solutions to settle payments across the continent before, the bank has claimed that it has not established any particular technology in its proposed CBDC test.

According to the document, ten CBDC-related applications will be selected by the French central bank between firms or individuals. The bank says that this approach would help to create an “innovative nature” as a critical selection benchmark.

In addition, the Bank of France emphasizes, according to another detailed document, that applications should be submitted by persons within the European Union; or in a State Party to the Agreement on the European Economic Area. Interested applicants have to file their applications until May 15, 2020. The selection process of the applications will commence on July 10.

Key objectives of the CBDC testing program

The CBDC testing program focuses on three key objectives, which include forming the CBDC solution for inter-bank settlement; highlighting its benefits; and exploring the potential risks involved. The Bank of France has outlined three CBDC use cases such as payment against financial instruments, as a method of settlement against other CBDCs; and as a method of settlement against cryptocurrencies.

The bank has pointed out that it will not participate in the creation of money during its Central Bank digital currency test program. In addition, the bank has made it clear that the token displaying the figures in Euro in the virtual form will be destroyed after the accounts on which the transactions are settled.

The central bank also stated that it would not apply whichever program at a broad scale. The bank noted:

“These experiments will act as a contribution by the Banque de France to a broader discussion within the Eurosystem, which will make any decision on whether to set up a CBDC. The tests are not intended to be continued on a long-term basis or applied on a wide scale by the Banque de France itself.”

France allegedly plans to issue CBDC by Q2 2020

The Bank of France’s latest CBDC program marks the first time that the Central Bank has been speaking about CBDC since December last year. Bank of France Governor François Villeroy de Galhau back on 4 December last year reported that the bank is planning to begin the pilot phase of the CBDC in Q2 this year.

On the other hand, the deputy governor of the central bank, Denis Beau, has formerly noted that blockchain-based payments; can be used to enhance several payments and financial processes.

In conclusion, back in March, the French market watchdog, the Autorité des Marchés Financier suggested a regulatory sandbox; to test and investigate the potential advantages of using virtual assets within the EU.

 

 

Revolut Becomes UK’s Most Valuable Fintech Startup, Officials Still Wary of CEO’s Kremlin Connections

by

The cryptocurrency industry has gone through multiple phases since the massive bull run of 2017. Since then, the industry has been hit with speculations, price drops then a renewed interest shown by institutional investors.

Out of all the cryptocurrency companies out there, Revolut, based in the UK, has come out on top. The digital bank recently revealed that they had become the country’s most valuable financial technology startup.

Revolut received a massive boost in valuation after its latest funding round which elevated its value to 4.2 million pounds. The latest number is almost triple than that of its earlier valuation, prompting many to believe that the cryptocurrency industry was only thriving.

The latest funding round has allowed Revolut to usurp its rivals Monzo and OakNorth, both holding valuations of EUR 2 billion and EUR 2.2 billion respectively. The two rival companies were also trying to enter multiple markets across the world but regulatory frameworks have been an issue. Monzo and OakNorth can, however, take solace in the fact Revolut has also not turned a profit till now. If anything, Revolut’s losses had more than doubled in 2018 to settle at $33 million.

Revolut’s latest valuation boost was provided by the US Technology Crossover Ventures Fund, which pumped $500 million into the company. Investors have a tendency to invest in a growing business, as they also own shares in Spotify, Netflix, and Airbnb. The digital bank was also in the news recently when it launched a feature to allow users to aggregate other bank account data within its application.

The feature would allow customers within the United Kingdom to connect their individual UK bank accounts to Revolut. This was created to create a more wholesome banking environment where customers can see all their spending in one place. The update seems to have worked for the startup as the company is now worth three times more than its valuation in the spring of 2018.

Nik Storonsky, the Chief Executive Officer [CEO] of Revolut gave his two cents on the latest partnership:

“Going forward, our focus is on rolling out banking operations in Europe, increasing the number of people who use Revolut as their daily account, and striving towards profitability. TCV has a long history of backing founders who are changing their industries on a global scale, so we are excited to partner with them as we prepare for the next stage of our journey.”

Despite recent news, Revolut found it difficult to maintain a positive face in the industry. This comes as a result of multiple reports from overworked staff and the CEO’s connection to Russia. Although the official has denied any links with the Kremlin, lawmakers still remained wary. The first tip-off came in 2014 when investigators discovered that Storonsky’s father was a director at the much-maligned Gazprom.

RBS’s Digital Bank Bo Makes Strong Claims as Investors Raise Doubts

by

In the past month, major banks have taken drastic steps to save both reputation and fend off attacks from competitive markets. Alison Rose, the current head of the Royal Bank of Scotland, has said the New Year has brought with it a new set of challenges.

The RBS honcho recently claimed that the bank needs to shift its focus to its digital branch Bo as it plans to elevate it in the midst of a revamp. Rose added that the current watch needs to be conducted due to the issues related to the NatWest Markets.

Bo works as the digital arm of the bank with its Chief Executive Officer Mark Bailie set to quit this coming week. In the recent time frame, Bo has had to issue 6000 customer cards to ensure that they comply with newer regulations on the digital finance front.

With Alison Rose now heading the company, shareholders have projected a renewed interest in digital commerce. This comes after issues were raised about Bo since its launch three months ago. A source close to RBS added:

“Bo remains a key part of the bank’s innovation strategy, along with other brands we have launched such as Mettle and Tyl. We are focusing on the areas where we can have the biggest positive impact on our customers.”

Despite the hype created by RBS, financial experts have yet to give it a solid thumbs up. They feel that Bo has a lot of ground to cover before it can make a significant impact on the financial industry. Vincent Vinatier, a porfolion manager at AXA Framlington opined that RBS was not even on his radar. He admitted that Bo did not rank very high in the fintech list as well.

Many proponents of the fintech space have admitted that the real key challenge was to keep customers with the main bank brand ie. RBS. Bo has functioned as an attractive model for RBS and at the same time has not resulted in major losses for the company. Some others believe that the digital bank’s functionality was on the road to improvement while making the industry more competitive.

At the moment, Bo was seen as a savings tool for current customers. Analysts were open when stating that Bo does not compare with existing tools in the market. Some have reported that customers see Bo as just an extension tool and not just a mainstream feature. Another investor stated:

“These new competitors are not yet gaining a great deal of traction as main accounts for many customers – many seem to be using them for specific limited purposes and retaining current accounts with the big incumbents.”

The last time RBS was in the news was when the bank ordered its customers to shred their cards to comply with EU rules. The reissued cards come with multiple capabilities such as chip and pin transactions.

 

 

Source: Reuters