- Key insights: Lloyds has executed a transaction with its tokenized deposit.
- What's at stake: Banks are adding tokenized deposits as an alternative to stablecoins.
- Forward look: JPMorganChase, which is also offering tokenized deposits, is recruiting other banks to build a network.
Lloyds Banking Group has used a tokenized deposit to purchase a gilt, or a type of U.K. government security.
To make the purchase, the bank issued tokenized deposits on the Canton Network, which is a public blockchain. Lloyds then used the tokenized deposits to purchase a tokenized gilt. "Tokenized" refers to using a blockchain, the technology that underpins cryptocurrency, to make a purchase.
A tokenized deposit is a claim on a deposit at a licensed depository institution, such as a bank. Deposit tokens are issued on a distributed ledger, and are pitched to banks as a less risky alternative to stablecoins.
While tokenized deposits are often compared to stablecoins, they are different.
Among other banks,
Affirm secures distribution deal with Gr4vy
Buy now/pay later fintech Affirm has a new distribution deal with payment-orchestration platform Gr4vy that will allow Gr4vy merchants to offer Affirm loans in online and mobile checkout.
"Merchants want to meet customers where they are, with flexibility and trust," said John Lunn, Gr4vy's founder and CEO, in a statement. "By integrating Affirm directly into our orchestration platform, we're making it easier for businesses to offer transparent payment options that drive sales and customer loyalty without adding operational complexity."
The deal is the latest move by Affirm to expand its reach through a series of platform plays that allow the lender to reach merchants through payment processors and service providers. Affirm has
Klarna shareholder accuses the BNPL lender of hiding risks
A Klarna investor has sued the financial services company, contending investors suffered losses due to a lack of disclosure in filings prior to the Swedish company's
The complaint from the Rosen Law Firm says Klarna omitted "material adverse facts" from its IPO registration statement and the company's prospectus was "false and misleading." Klarna's stock has fallen about 36% since its Sept. 10 public offering. The law firm is also seeking class action status for its suit.
Before its IPO, Klarna said the company may lose income if the loans did not perform up to expectations. The suit says Klarna did not disclose that some of its customers "are not financially sophisticated" and will pay "substantial interest" on BNPL loans for nonessential items. The suit also contends some of Klarna's customers are financially distressed.
"We believe the allegations lack merit. We do not have any further comment at this stage," Klarna's public relations office said in an email.—John Adams
Wirecard scandal fallout leads to jail sentences
A Singapore court sentenced two people for doctoring accounts tied to former German payment company Wirecard, which failed in 2020 after an
Singapore resident R Shanmugaratnam received a ten-year settlement, and U.K. native James Henry O'Sullivan was sentenced to 78 months, according to the
Shanmugaratnam, who was director of Citadelle Corporate Services, incorrectly issued balance confirmation letters saying Citadelle held more than $1.5 billion in escrow for Wirecard for three years between 2016 and 2018. O'Sullivan helped issue some of the letters.
O'Sullivan was also a business partner of Jan Marsalek, Wirecard's former chief operating officer. Marsalek, who is reportedly in hiding, is also accused of being part of a Russian spy ring. O'Sullivan allegedly introduced Marsalek to Shanmugaratnam.
Marqeta appoints ex-Stripe, JPMorganChase exec as CFO
Marqeta named a new chief financial officer on Wednesday.
Payments veteran Patti Kangwankij will take the fintech's top finance role, effective Feb. 9. She will succeed Mike Milotich, who is currently the CFO in addition to the CEO. Milotich was named the company's
"We are thrilled to welcome Patti to the Marqeta team," said Milotich. "She brings deep payments industry expertise, and her leadership will be a critical asset as we continue to execute our strategy, scale our platform and enable customer innovation in card issuing."
Kangwankij has more than 20 years experience in fintech and payments. Most recently, she served as CFO of real-estate technology company Roofstock, an online real estate marketplace and investment platform. Prior to that, she was the head of payments finance and strategy at Stripe, and held several roles at JPMorganChase over the course of nearly 15 years, where she worked in the investment bank before becoming CFO and managing director for both the co-branded credit card and merchant services businesses.
"Ms. Kangwankij seems to be a good hire given her abundance of relevant experience in the payment industry, which we expect to be leveraged to support Marqeta's growth strategy and profitability goals," Keefe Bruyette and Woods analyst Sanjay Sakhrani said in a research note Wednesday. —Joey Pizzolato
Wyoming stablecoin goes live
Wyoming's stablecoin, called the Frontier Stablecoin or $FRNT, went live Wednesday, marking the first U.S. state to issue its own stablecoin.
The Wyoming stablecoin was designed in part to make government processes such as disaster recovery funding, state school funding, disbursements and resource management more efficient, Anthony Apollo, executive director of the Wyoming Stable Token Commission,
Franklin Templeton will act as its reserves management partner, and Fiduciary Trust Company International, Franklin Templeton affiliate will act as custodian of the stablecoin.
"Wyoming has long been at the forefront of financial innovation, and the launch of $FRNT marks a defining moment in our state's continued leadership," Wyoming Gov. Mark Gordon said in a statement. "By introducing the nation's first state-issued stable token, we are demonstrating how thoughtful, transparent regulation and new technologies can be harnessed to expand access, lower costs, and strengthen public trust."
Wyoming isn't the only state that has been considering a stablecoin.
Mastercard adds bank for Syrian digital pledge
ONB Group, one of the largest financial institutions in the Middle East and Africa, has obtained a Mastercard license to expand card issuing and merchant acquiring in Syria. This will allow the bank to offer Mastercard payment products both locally and internationally for consumers and businesses in the country.
Mastercard recently signed a memorandum of understanding with the Syrian central bank to support efforts to modernize the country's payment system, including support for digital payments.
"Our work supports the country's vision for sustainable economic progress, delivered with full respect for regulatory and compliance standards," said Adam Jones, division president for West Arabia at Mastercard, in a release. Mastercard's activities in the region include a
Revolut in talks to buy digital bank FUPS for Turkey debut
Revolut is in talks to acquire Turkish digital bank FUPS to start offering its services in the country, according to people familiar with the matter.
No final decisions have been made and there's no certainty that the fintech behemoth will ultimately buy FUPS, the people said, asking not to be identified to discuss the negotiations. In the event of an agreement between the two banks, the acquisition will be subject to approval by the Turkish banking regulator, known by its Turkish initials BDDK.
A spokesperson for Revolut said the company doesn't comment on "market rumors or speculation." FUPS declined to comment.
Spearheaded by billionaire Nik Storonsky, Revolut has about 70 million users worldwide. In recent months, it's eyed new markets from the Nordics to Mexico. The platform garnered a $75 billion valuation in November, cementing its status as one of Europe's most valuable startups. —Beril Akman, Bloomberg News
