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Fasanara Bi-Weekly Digest



Chinese Digital Currency And Technological P2P

In This Edition:

  • ​​P2P in 2019: the highs and lows

  • ECN reports two European P2P platforms to the National Conduct Authority

  • SMEs stockpiling £86bn of ‘dormant cash’

  • China poised to launch the first national digital currency

  • A whole new world: how technology is driving the evolution of intelligent banking in Europe

  • What will the future of banking look like?


P2P in 2019: the highs and lows

2019 was a year of milestones, as several P2P platforms reported record lending volumes, secondary market trades and interest earned. The ‘big three’ lenders offered a glimpse into the many possible futures of P2P lending as they each pursued their own expansion plans this year.

The lowest points of the year coincided with the collapse of Collateral, Lendy, FundingSecure, and MoneyThing. A series of stringent new requirements left many platforms paying out hundreds of thousands of pounds as they rushed to get their back-office up to speed. Secondary market liquidity was a huge issue for investors.

ECN reports two European P2P platforms to the National Conduct Authority

The European Crowdfunding Network (ECN) has reported Kuetzal and Envestio, two platforms operating out of Estonia, to the National Conduct Authority after it received a large number of inquiries by concerned investors who have not been able to withdraw funds for their accounts nor claim to have received any communication from the platforms.

There has been no communication at all from anyone at Kuetzal since they blamed various attacks for the need to shut down their operations. Similarly, Envestio’s representatives have not made any public comment since 21 January, when a statement was posted on the company’s Facebook page blaming website issues on a hacking attempt. Since then, the website has completely disappeared .

The day that Envestio claimed to be subject to various attacks was also the day after they had defaulted on their promise to wire funds back to investors within 5 business days. The last known successful withdrawal was requested on 12 January 2020.

Investors are now turning their attention to other websites that offer ‘early exit’ facilities. Platforms Monethera and Wisefund have admitted that they do not have sufficient funds to meet early redemption requests and have both said they would refuse to honour any such requests for the foreseeable future.

SMEs stockpiling £86bn of ‘dormant cash’

Analysis by the Centre for Economic and Business Research (CEBR) on behalf of Shawbrook Bank finds that SMEs are holding an average of 57 per cent of their total capital in current or instant-access accounts paying low rates of interest. While it is prudent for firms to keep some cash within easy reach to cover the daily costs of running a business, having too much money that is earning next to no interest can have an adverse impact on finances. Quicker access to better paying accounts, more innovative and flexible products and improved mobile and online services are just some of the ways providers can help tackle inertia in the market.

China poised to launch the first national digital currency

The crypto yuan may be on offer as soon as 2020. Although little is known about the token that’s been in the works for the past five years, the consensus is that it will be a private blockchain fully backed by the People’s Bank of China, drawing its value from the Chinese state’s ability to impose taxes in perpetuity.

It may start small, but the digital yuan could disrupt both traditional banking and the post-Bretton Woods system of floating exchange rates that the world has lived with since 1973. Other national authorities are bound to embrace this powerful idea.

A whole new world: how technology is driving the evolution of intelligent banking in Europe

The Economist Intelligence Unit’s global retail banking survey identifies new technologies as the primary driver of change for retail banks, overtaking changing customer behaviour and demands for the first time. Launching an "Open Banking" strategy is a top priority for the coming year for 29% of European respondents. But the minds of Europe’s bankers are also occupied by the short-term technical challenges that Open Banking presents. The ability to turn data into insights that customers value and can incorporate into their lives will become all the more pressing as banks and their digital-native rivals develop their artificial intelligence capabilities.

What will the future of banking look like?

Big Tech, Fintech and increased regulation are putting pressure on banking incumbents. The paper discusses the laws and regulations affecting the financial services sector; challenger banks and new fintech companies entering the game; Big Tech’s influence on banking; and outlines strategies banks can focus on to take back their future.  


Thank you for the attention!


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