Island Fintech - September 2022

Sep 30, 2022

Hey Islanders,

Hope your month went well?

After a smashing first edition, we are organising Round 2 of SEA Fintech Social next week in Singapore 🌏

We’d love to see you (and also get feedback on IFW) - sign up at seafintechsocial.com

Note - If you are looking to raise early stage funding (seed to A), we may be able to help. Reach out via LinkedIn with a quick note on what you’re building, and the help you need.

🐠 Dips

1. Biden wants to build his own NFTs.. and regulate yours

On the 16th of September, The White House released a framework on regulating crypto. The POTUS issued an executive order in March, outlining the ‘first whole-of-government approach to addressing the risks and harnessing the potential benefits of digital assets and their underlying technology.’ The 7 sections in the fact sheet are: (1) Protecting Consumers, Investors, and Businesses; (2) Promoting Access to Safe, Affordable Financial Services; (3) Fostering Financial Stability; (4) Advancing Responsible Innovation; (5) Reinforcing Our Global Financial Leadership and Competitiveness; (6) Fighting Illicit Finance and (7) Exploring a U.S. Central Bank Digital Currency (CBDC).

Perhaps the most interesting part of this framework is the country’s intention to build its own CBDC - many countries have toyed with this idea, but widespread adoption still remains to be seen.

2. Do Kwon, now a wanted man, is likely to be in Singapore

When news of the Terra collapse broke out, disgruntled $LUNA holders and bystanders called for the arrest of Do Kwon, with South Korea launching an investigation into Terraform Labs in May, the developer of the Terra blockchain network and Anchor. This week, it was reported that a South Korean court has issued an arrest warrant against Do Kwon, co-founder of Terraform Labs. This news comes just a few weeks after this interview of him was released - where he has repeatedly maintained that he will provide full cooperation with the relevant authorities 👀. Do Kwon currently resides in Singapore, but reports state that his employment pass (EP) is set to expire on 7 December.

3. Binance ups the ante in building a lucrative USD stablecoin

Binance announced on 5 September that it would introduce an auto-conversion scheme to BUSD for users' existing balances and new deposits of USDC, USDP and TUSD stablecoins at a 1:1 ratio. This is an interesting move to make to promote usage of BUSD - Binance CEO CZ tweeted that the move merges all liquidity into only one pair, therefore providing users with the best price and lowest slippage.

🐋 Dives

Digital bank offers rice 🍚 to sign up… what the Trust is going on?

Trust Bank, the new digital bank formed by Standard Chartered and NTUC (Singapore national labour movement) launched earlier this month. Ten days following its 1 September 2022 opening, Trust Bank says it hit 100,000 clients. Users between the ages of 18 and over 90 signed up across a wide spectrum of demographics.

Trust says that this is because they did a great job of designing the product with the Singaporean in mind, and that it’s a testament to what they’ve built. They didn’t mention the expensive freebies you’ll get for signing up. From what it seems like, the role these freebies play seems to have been vastly underplayed. We all know that this is not true - Singaporeans are true freebie enthusiasts. When one gets a chance to get a sack of 1kg rice to sign up, how can you refuse? Think of all the meals that will supply for the week - fried rice, yellow rice, curry (and) rice…

I’d be interested to know how many monthly active users (MAUs) they have acquired. I’m willing to bet that less than 5% of the new 100k cohort of customers would have signed up to actually use the product. Sorry guys. I’m not sold on what they claim is a unique spin on family personal accident insurance, a savings account, and credit card services. It’s not like we don’t have enough of these features already - but I’m interested to see how they’ll add a fresh twist to these battle-worn products.

A hint of where this might come into play is how Trust plugs itself into the FairPrice Group supermarket ecosystems, such as with the Link Rewards programme. I’m cautiously pessimistic - I know that these points don’t mean much to the MPD club, but equally, I am aware that there is a cohort of Singaporean consumers who may greatly appreciate the additional access and familiarity within the FairPrice ecosystem.

We also saw a smaller announcement from Trust’s friend at GXS (Singtel and Grab), curiously, on September 6th. They claimed that they’ve launched a savings account product. Interestingly - this came without an actual product (which was a little disappointing). GXS brands itself as a true Gen-Z first bank, akin to Current in the US. It’s interesting to see two differing takes at digital banking in Singapore, which I do hope will bring competition and (hopefully) innovation into the space.

We’ve merged - here’s what the Ethereum Merge was really all about.

Merging… merge… merged!

The MERGE has been the talk of crypto town for months - and it finally happened on September 15. There were online and offline watch parties organised by local Eth communities all over the world (I mean… how do you actually watch code being shipped?).

But amidst all the buzz about the technicality of it, and how the merge would affect the ether price action, a question that stayed on may people’s minds was this - what actually is the merge, and why do we need it? Why should I care?

Before the merge, Ethereum was a proof-of-work chain, and now with the merge, it has transitioned to become a proof-of-stake chain. This development is important - to all the skeptics out there criticising blockchains for being energy inefficient, the merge has eliminated the need for mining, and instead now relies on staked ether to secure the network.

What exactly are we merging? Short answer: the Ethereum mainnet and the Beacon Chain. Long answer: the Ethereum chain (Mainnet) has been secured using the proof-of-work consensus mechanism since the beginning, with an aim to eventually transition into a proof-of-stake consensus mechanism. In 2020, the Ethereum developers launched Beacon Chain, a separate blockchain to Mainnet running in parallel.

However, none of the transactions on Mainnet were running on Beacon yet - after the Merge, the Beacon Chain is now officially where blocks are produced, effectively transitioning Ethereum from a proof-of-work chain to a proof-of-stake chain.

Energy consumption has dropped 99.5% since the Merge, and an estimate says it is similar to Finland shutting down its power grid 😳.

If you are reading this and you’re panicking about your ETH held in your wallets, fret not - your ETH is still ETH, and there is no need for a merge or migration to a new coin from your side.

🍹 Twitticisms

(P.S. Again, if anyone has SEA or Asia focused fintech Twitter accounts I should be following, tweet me. The accounts I see on my feed are overwhelmingly 🇺🇸 focused)