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Crypto enthusiasts say new products lend bitcoin credibility
Futures considered crucial to gain buy-in from financial industry

The big development at the end of 2019 was the first trading of what’s known as physically settled bitcoin futures, following approval from state and federal regulators. Those bitcoin futures trade through regulated exchanges and clearinghouses. (Avishek Das/SOPA Images/LightRocket via Getty Images photo illustration)

The cryptocurrency industry is hailing the emergence of complex bitcoin investment products as a needed step to attract new investors while lending credibility to the digital asset and building a pathway to regulatory clarity.

The big development at the end of 2019 was the first trading of what’s known as physically settled bitcoin futures, following approval from state and federal regulators. And while the launch of these investment products hasn’t convinced everyone that they will lead to buy-in from a skeptical financial industry, those leading the charge say it’s a crucial step.

Can - and should - an algorithm be ethical when it comes to financial technology?
Fintech Beat, Ep. 35

Can an algorithm be ethical? (iStock, Getty Images)

Algorithms have evolved into to powerful engines of financial technology. But they don’t always live up to the hype, as algorithmic models fail to take account of basic societal concerns like fairness, privacy and bias. Fintech Beat sits down with Michael Kearns to find out what can be done to make algorithms “ethical.”

Fintech Beat sits down with the former chief of the Federal Reserve’s open banking unit
Fintech Beat, Ep. 34

The Federal Reserve building. (Caroline Brehman/CQ Roll Call)

Open banking’s benefits involve using customer consent to develop new financial products to revolutionize financial services. But critics claim open banking can at times bypass customer consent by using digital avatars and other online tools to infiltrate and collect customer data. Fintech Beat sits down with the former chief of the Federal Reserve’s open banking unit to get answers.

The Year in Fintech
Fintech Beat podcast, Ep. 33

LONDON, ENGLAND - OCTOBER 24: A visual representation of the digital Cryptocurrency, Bitcoin on October 24, 2017 in London, England. (Photo by Dan Kitwood/Getty Images)

Fintech Beat sits down for a one-on-one with Maxine Waters
Fintech Beat podcast, Ep. 31

House Financial Services Committee Chairwoman Maxine Waters, D-Calif., departs from a meeting of the House Democratic Caucus in the Capitol on Tuesday. (Caroline Brehman/CQ Roll Call)

Rules, privacy issues loom for fintech industry in 2020
Advocates foresee sparse congressional activity for 2020

Facebook changed the fintech industry's focus this year when the social media giant announced plans to launch its own cryptocurrency called Libra. (Photo by Chesnot/Getty Images)

The nascent financial technology industry started the year faintly optimistic that the 116th Congress would pass bills in its favor. But as 2019 comes to an end without legislation, the industry isn’t even expecting action in 2020. And for that, they’re feeling relieved, not disappointed.

Facebook Inc.’s midyear announcement that it planned to launch a cryptocurrency, Libra, upended the industry’s focus, tilting the legislative strategy from pressing hard for beneficial bills to staying clear of measures aimed at checking the social media giant’s ambitions to transform commerce.

Regulators warn about fraudsters creating synthetic borrowers
Information cobbled together from multiple people used to make fake identities, establish credit

The Federal Reserve has issued warnings about synthetic identity fraud and is expected to release a report in early 2020 outlining ways that financial companies can mitigate the problem. (Caroline Brehman/CQ Roll Call file photo)

The financial technology industry that’s upending consumer finance could be the solution to a kind of identity fraud that’s dogging traditional banks and fintech companies alike.

It’s called synthetic identity fraud, where instead of stealing one person’s information, criminals synthesize a false identity using information from many people — usually those unlikely to monitor their credit, like children, the elderly, prisoners or the homeless. Fraudsters then establish a credit history for the fake person over time until they can trick banks or financial technology companies into lending them money.

The transfer agent: A deep-dive into how blockchain technology can help capital markets
Fintech Beat, Ep. 31

Public blockchains such as those that underpin cryptocurrencies like bitcoin are most at risk because anyone can participate. (Dan Kitwood/Getty Images file photo)

Curing the Small Business Recession
Fintech Beat podcast, Ep. 30

Big data poses big problems for banks, experts say
Risks to security and privacy cited as products and services develop rapidly

Minnesota Rep. Tom Emmer says big data systems generate “astounding” amounts of data. “This is the future, and there’s no going back from here,” he said at a Nov. 21 hearing. (Bill Clark/CQ Roll Call file photo)

The financial services industry’s use of big data and data aggregation tools has the potential to benefit millions of consumers but also could disproportionately affect the privacy and security of vulnerable populations.

That’s the take of experts who testified to the House Financial Services Committee’s Task Force on Financial Technology last month, hoping to convince lawmakers that more attention is needed on the issue.

Banks see Fed payments proposal opening door to fintech rivals
Banking industry pushes for tight rules on companies moving into banking-like services

Prompted by the Federal Reserve’s plan to build an instant payment system, banks are pushing for tight rules on tech firms moving into banking-like services. (iStock)

A plan by the Federal Reserve to build its own network to transfer funds quickly has pitted technology firms seeking a foothold in the financial sector against banks that have traditionally dominated the payments business. 

Tech firms see the new payment system as an opportunity to get into the payments business, and banks, facing a new rival, are pushing for tight rules on companies moving into banking-like services, according to advocates on both sides of the issue.

Proposed foreign investment scrutiny adds to fintech deal risk
New rules would expand the types of transactions that come under CFIUS jurisdiction

New foreign investment rules proposed by the Treasury Department are compounding regulatory risks for mergers and acquisitions in the global fintech market. (Bill Clark/CQ Roll Call file photo)

New foreign investment rules proposed by the U.S. Treasury Department are compounding regulatory risks for mergers and acquisitions in the global financial technology market, analysts say.

The proposed rules, which are expected to be finalized and in force by early 2020, expand the types of transactions that come under the jurisdiction of the Committee on Foreign Investment in the United States, a Treasury-led interagency panel that probes national security issues in cross-border deals.

Fintech Beat explains how open banking is poised to revolutionize financial services
Open Banking 101, Ep. 28

Open banking is shaking up financial experiences for customers across the globe (iStock).

Open banking is set to shake up financial experiences for customers across the globe, enabling customers to allow third parties to access financial information needed to develop new apps and services. Fintech Beat sits down with the head of policy at Plaid, a unicorn fintech sitting in the middle of the revolution, to discuss the process of information sharing and how regulation shapes it.

Libra’s regulatory hurdles appear taller after House hearing
Still to be decided: How the cryptocurrency would be regulated

Libra, known as a stablecoin, would be backed by a basket of dollars, euros and other traditional currencies called the Libra Reserve. (iStock)

Facebook CEO Mark Zuckerberg provided only a few additional details about the company’s proposed cryptocurrency to a House Financial Services Committee on Oct. 23 that generally didn’t like what it heard. 

Zuckerberg said Facebook wouldn’t proceed with the proposed Libra until it had satisfied regulators’ concerns. That pledge and the harsh criticism from lawmakers on both sides the aisle appears to narrow, if not eliminate, the company’s path to approval, at least for a project as sweepingly ambitious as Libra is.