greetings islanders,

hope 2026 is treating you well so far. the year is barely into its second quarter and the region is already moving fast - nexus is building toward its live phase, the digital bank profitability race is tightening, singapore’s stablecoin framework is about to get real, and agentic ai is becoming both the region’s best compliance tool and its most dangerous new threat vector. plenty to dig into.

quick reminder: island fintech is your biweekly dose of high-signal fintech updates from across southeast asia. if you’ve got tips, insights, or want to contribute, just reply to this email.

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dips 🎣

• project nexus enters its live build phase, and indonesia makes six

  • the philippines is nearing its formal linking to project nexus, with BSP deputy governor mamerto tangonan confirming that key executives have been hired, the company established in singapore, and a technology operator selected, meaning the platform is currently being built.

  • crucially, indonesia recently joined as the sixth central bank partner, expanding the network beyond its original five. on the european front, the ECB has been in an exploratory phase, with testing expected later this year, and if successful, that alone would bring the potential user base of nexus-connected markets to 2.15 billion people across india and the EU.

  • 🏝️ if insight: nexus is past the concept phase. the procurement of a technical operator, capital formation of nexus global payments as a not-for-profit, and indonesia’s formal accession all signal that 2026 is when theoretical infrastructure becomes operational plumbing. the ECB involvement is the subplot worth watching - a eurosystem connection would transform nexus from an ASEAN-plus-india play into something genuinely global. for regional fintechs and banks, the question is no longer “will this happen?” but “which use cases do we build first?” remittances are the obvious unlock. treasury and trade flows are the bigger prize once transaction limits lift.

• grab’s digital banking machine crosses $1.6b in deposits - and the profitability clock is ticking

  • (Fintech News Singapore, Turtle Investor). grab’s Q4 2025 results showed customer deposits across GXS bank in singapore and GX bank in malaysia reaching $1.6 billion, up from $1.2 billion a year earlier, while its net loan portfolio doubled year-on-year to $1.18 billion. grab also delivered its first full year of net profit overall. the broader digital bank landscape in singapore is entering a critical reckoning: trust bank is closest to profitability, spending just $1.62 per dollar earned… a product of lower costs and high-frequency ecosystem stickiness via FairPrice. GXS has improved but is still burning through $5.15 for every dollar it earns, despite those 82 job cuts in december 2025. GXS is targeting EBITDA breakeven in the second half of 2026 for its financial services division.

  • 🏝️ if insight: the digital bank experiment in singapore is entering its make-or-break year. the deposit and loan numbers for grab are genuinely impressive… doubling loan book in a year is not trivial. but the cost structure story is where the real drama lies. trust bank’s numbers reveal what embedded finance done right looks like: build distribution into daily habits (groceries, transit, linkpoints) and your customer acquisition cost collapses. GXS’s acquisition of validus capital earlier this year - buying an SME lender to accelerate revenue is a smart pivot, but adds credit risk at exactly the moment they need clean books to hit breakeven. we should watch Q3 2026 results closely - whoever hits profitability first shapes how MAS thinks about the next wave of digital banking licenses.

• singapore’s stablecoin framework is about to get teeth, and xsgd is already moving

  • MAS finalized its tailored stablecoin framework in august 2023, requiring 100% reserves, segregated accounts, monthly independent attestations, and redemption at par within five business days; with secondary legislation expected to come into effect in 2026.

  • in the meantime, the market isn’t waiting: in november 2025, StraitsX partnered with grab to embed xsgd - a 1:1 SGD-backed stablecoin - into grab’s payment network, allowing users to hold and use it for payments. separately, MAS announced a 2026 pilot for tokenized government bills to be settled using a wholesale CBDC, with project guardian now including over 40 financial institutions.

  • 🏝️ if insight: singapore is threading a needle most regulators fumble: enabling stablecoin innovation while insisting on institutional-grade reserve standards. the xsgd-grab integration is the proof-of-concept that actually matters, not because of the product itself, but because it demonstrates a regulated stablecoin finding real distribution at consumer scale. the CBDC pilot for MAS bills is the institutional mirror: tokenized settlement rails for the wholesale market. these two tracks; consumer stablecoin distribution and institutional tokenized settlement, are converging. the firms that understand both will own the plumbing of singapore’s next-generation financial system. everyone else is building on sand.

• agentic ai: the region’s best new compliance tool is also its fastest-growing threat

• the money20/20 future of fintech in APAC 2026 report found that 63.5% of leaders now identify fraud prevention as their top operational priority, with regulators and industry players investing heavily in real-time risk intelligence and AI-driven security measures

• the urgency is driven by what’s on the other side: fraud teams warn that in 2026 agentic AI systems can maintain believable, contextually coherent fraud attempts for hours across multiple channels - probing defences, identifying thresholds, and iterating in real time

• on the defensive side, IDC predicts that around 70% of APAC organisations expect agentic AI to disrupt their business models by the end of 2026

🏝️ if insight: for SEA specifically, this is a bigger deal than the global headlines suggest. the region is mobile-first, high-velocity in transaction volume, and still building out its fraud infrastructure… which means the attack surface is vast and the institutional muscle to defend it is still developing. the asymmetry is stark: a well-resourced fraud operation can deploy agentic AI today, while most regional banks are still running batch-model fraud detection from last decade. the firms investing in behavioral baseline modeling understanding what genuine customer behavior looks like at a device and session level - are building the only moat that scales. compliance-as-competitive-advantage is the frame that clicks for boards. if you can’t explain your fraud architecture to your CEO in a ten-minute briefing, you’re behind.

dives 🐋

southeast asia leads expansion as APAC fintech prioritizes AI, inclusion and fraud resilience (blockhead, march 5 2026) — money20/20’s annual APAC report, based on 130+ senior leader interviews. 22.9% of respondents identify SEA as their primary growth target, 61.2% have already adopted AI or ML, and 90.6% say financial inclusion is now embedded in corporate strategy. useful benchmark piece for the start of the year.

top fintech trends reshaping SEA in 2026 (tech collective SEA, jan 2 2026) — strong synthesis of the embedded finance, agentic AI and digital banking themes with a regional lens. good on why BNPL adoption is led by convenience, not underserved populations.

global stablecoin regulations 2026: what enterprises need to know (BVNK, jan 2026) — thorough breakdown of how singapore’s MAS framework compares to the US GENIUS act, EU MiCA, and hong kong’s stablecoin ordinance. useful for compliance teams navigating multi-jurisdictional operations.

project nexus: instant payments without borders (red compass labs, feb 2026) — clean explainer on the current state of nexus, the ECB’s exploratory involvement, and what the technical operator selection process means for the live launch timeline.

which singapore digital bank is closest to profitability? (turtle investor, dec 2025) — granular financial breakdown of trust bank, MariBank, and GXS. cuts through the headline narratives with actual revenue-to-expense ratios.

stablecoins in 2026: regulatory landscapes in singapore, japan, taiwan and beyond (XREX, dec 2025) — good on the XSGD-grab integration and how the global “stablecoin war” is playing out as a financial sovereignty contest, not just a product story.

thanks for reading. feedback, tips or just want to say hi? reach out!

greetings islanders,

hope you’re wrapping up 2025 strong! as we head into the final stretch of the year, southeast asia’s fintech scene continues to prove it’s not slowing down. singapore fintech festival wrapped last month with some big announcements, project nexus edges closer to launch, and the region’s payment rails keep evolving. plenty to unpack.

quick reminder: island fintech is your biweekly dose of high-signal fintech updates from across southeast asia. if you’ve got tips, insights, or want to contribute, just reply to this email.

Subscribe now

dips 🎣

• project nexus moves toward 2026 launch (bis innovation hub, the asian banker), marking the shift from bilateral to multilateral cross-border payments infrastructure. the nexus scheme organisation was established in singapore in late 2024 to manage the platform’s live implementation, connecting india, malaysia, philippines, singapore, and thailand through their domestic instant payment systems. banks and fintechs connect once to their local ips, then access the entire network—no need for separate bilateral integrations with each market. when fully operational, payments are designed to complete within about 60 seconds end-to-end, with remittance costs targeted below 3% (versus the global average of 6.2% for sending $200).​

  • 🏝️if insight: this is the infrastructure moment everyone’s been waiting for. bilateral payment links were the proof of concept; nexus is the scalable solution. the clever bit is avoiding the n-squared integration problem—one connection to nexus gets you the whole graph. expect remittances, trade, and even treasury flows to be rebuilt on this once it launches. watch which fintechs move first versus which banks wait for “phase two”.

• indonesia’s qris hits escape velocity (qris official, voi). in q3 2025, qris recorded 147.65% yoy growth with transaction value reaching idr 3,024 trillion (around $190 billion), cementing its position as the backbone of indonesia’s digital payments. the system now processes over 50 million merchants (heavily weighted toward umkm/smes) and 57+ million users. with nfc tap-to-pay enabled, transaction times dropped to 0.3 seconds. cross-border connectivity extends to 9 countries including thailand, malaysia, singapore, japan, and south korea. growth is concentrated in jakarta (166% yoy in q1) but spreading rapidly across tier-2 cities.​

  • 🏝️if insight: the nfc upgrade and merchant ubiquity mean qris is becoming the default retail payment rail. speed and coverage now rival or beat cards, especially for low-ticket everyday spend. the more interesting story is the merchant density…. 50 million merchants means qris has achieved true ubiquity, not just coverage at major retailers. the next frontier isn’t domestic adoption but resilience in 3t regions (terdepan, terluar, tertinggal) and whether banks and fintechs can layer credit, loyalty, and fx on top of qris without breaking the elegant “one code” simplicity.

• sea’s digital economy crosses $300b as embedded finance matures (e-conomy sea, bain / temasek). the e-conomy sea 2025 report (google, temasek, bain) shows the region’s gross merchandise value crossing the $300b mark, with digital financial services among the fastest-growing revenue pools. all 10 asean markets now operate national unified qr systems, with 8 enabling cross-border qr interoperability. embedded lending—where ecosystem players use in-app behavioral data for underwriting—and digital wealth management (several platforms now exceed $1b aum across 6 sea markets) are driving monetization. the killer insight: embedded finance has reached critical mass with consumers seamlessly using e-wallet payments, bnpl, installments, co-branded cards, and insurance across e-commerce, food delivery, and travel without thinking about it.

  • 🏝️if insight: embedded finance has moved from buzzword to business model. the winners aren’t building standalone products—they’re embedding financial services into existing digital habits. what’s changed in 2025 is that this is now table stakes, not differentiation. if you’re not thinking about distribution through super apps and platforms, you’re already behind. the trust gap mentioned in the report is real though—consumers use embedded finance but don’t always trust it. whoever solves for trust at scale (through transparency, security, brand) captures disproportionate value.

• finvolution’s juanscore pushes localized ai underwriting in the philippines (buyte / sff 2025). following its credit bureau license secured in 2024, finvolution showcased juanscore at singapore fintech festival as an ai-powered risk infrastructure built specifically for the philippines. the system deploys 50+ localized risk models and integrates alternative data covering approximately 70% of the country’s unbanked or underserved population. the platform offers real-time credit decisions, automated fraud detection, and precision risk scoring under credit information corporation (cic) supervision. indonesia’s online lending sector alone reached idr 80 trillion in q1 2025, reflecting 31% yoy growth.​

  • 🏝️if insight: ai in credit decisioning isn’t future tech anymore—it’s table stakes. the differentiator is localization. generic models trained on western data won’t cut it in markets where formal credit history is thin. firms that invest in local data infrastructure and market-specific models will capture the underbanked opportunity. the smart move here was getting the credit bureau license—that’s regulatory moat plus data access in one shot. expect copycats across vietnam, indonesia, and thailand within 18 months.

• mas finalizes dtsp framework with zero-tolerance for offshore-only models (allen & gledhill, reed smith). singapore’s digital token service provider regime under fsma came into effect june 30, 2025, requiring all dtsps operating from singapore—even those serving only overseas clients—to obtain licenses. mas explicitly stated it will “generally not issue” licenses for offshore-only business models due to higher money laundering risks and supervision challenges. no transition period was granted; unlicensed providers had to cease operations by june 30. licensed dtsps must maintain minimum capital, appoint singapore-based compliance officers, conduct annual audits, and meet strict aml/cft and cybersecurity standards.​

  • 🏝️if insight: while other jurisdictions are still figuring out if crypto is good or bad, singapore is building the rulebook that the rest of asia will copy. but this move is more restrictive than it initially appeared—the “offshore-only = no license” stance effectively kills the business model where singapore entities operate exchanges serving non-singapore customers. this is regulatory clarity, yes, but it’s clarity that says “if you’re not serving singapore customers, we don’t want you here.” the message: singapore wants to be a hub for compliant institutional crypto, not a licensing jurisdiction for offshore retail operations. institutional money will keep flowing here; retail-focused offshore players need to relocate.

dives 🐋

investors are getting picky about asia fintech (forbes, dec 8 2025) – fresh take on why asia’s fintech boom is fading as funding drops, investors grow cautious, and ai hype rises across singapore, india, and china.​

southeast asia’s fintech slowdown is real — and tracxn data shows singapore winning the long game (asia tech daily, oct 21 2025) – deep dive into the 39% yoy funding decline and why singapore captured 84% of all fintech funding in 9m 2025. argues this isn’t a meltdown but a market reset toward profitability over growth-at-all-costs.​

funding for fintech in south-east asia in 2025 drops to lowest level since 2016 (business times sg, nov 12 2025) – uob/pwc analysis showing decade-low funding but larger deal sizes, suggesting flight to quality. singapore continues to dominate.​

southeast asia’s $180b fintech revolution goes global with embedded finance and gen ai (insignia ventures, jun 15 2025) – thesis piece arguing embedded finance will hit $72b by 2030 (40% of digital finance market), growing at 57.7% cagr. explores how super apps and platforms are becoming the dominant distribution model.​

unpacking singapore’s financial services and markets act: what crypto firms need to know (trm labs, jun 25 2025) – explains the territorial scope expansion under fsma and why mas won’t license offshore-only models. good on the “why” behind the policy.​

cna explains: singapore’s tightened crypto licensing rules – ‘closing the door’ or ‘raising the bar’? (channel news asia, jun 19 2025) – accessible explainer on the loophole mas was closing and what it means for firms operating from singapore.​

thanks for reading. feedback, tips or just want to say hi? reach out!

greetings islanders,

hope you’re having a great week! we’re just two weeks out from singapore fintech festival 2025 (nov 12-14), which marks the event’s 10th anniversary. if you’re attending, let me know. would love to connect over coffee and talk all things payments and fintech. happy to also share that island fintech is an official media partner for sff - please use code SFFMPISLAND for 20% off delegate passes!

quick reminder: island fintech is your biweekly dose of high-signal fintech updates from across southeast asia. if you’ve got tips, insights, or want to contribute, just reply to this email. if you haven’t already done so, subscribe below:

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dips 🎣

• the funding squeeze is real. southeast asian fintech startups raised just $839 million in the first nine months of 2025—a 39% year-on-year drop and down 56% from 2023 levels. early and seed-stage funding took the biggest hit, falling 66% and 63% respectively. late stage firms attract the majority of venture funds today, and singapore continues to dominate, capturing 84% of all regional fintech funding.
  🏝️if insight: the market’s shifting from “growth at all costs” to “show me profitability.” if you’re pre-revenue and burning cash, this is the hardest fundraising environment in years. but if you’ve got unit economics figured out, you’re suddenly the hottest deal in town. quality over quantity is back.

• thunes (full disclosure: my employer) just launched instant stablecoin payouts across 130+ countries, unifying fiat and digital assets in a single api. this is a major step toward bridging traditional banking rails with crypto infrastructure for faster, cheaper cross-border transfers.
  🏝️if insight: this is what the next wave of cross-border payments looks like… hybrid rails that let you move between fiat and crypto seamlessly. the winners won’t be pure crypto or pure banking - they’ll be the infrastructure players who can do both without friction.

• hashkey exchange is expanding into southeast asia through a partnership with malaysia’s hata, bringing together two licensed digital asset platforms. the mou focuses on building secure frameworks for digital asset services, leveraging regulatory strengths in hong kong and malaysia.
  🏝️if insight: malaysia’s betting hard on becoming a regional crypto hub, and these partnerships show the strategy is working. watch for more hong kong-sea partnerships… regulatory arbitrage between markets is the new competitive advantage.

• indonesia’s digital payments continue their explosive trajectory. the market hit $94.5 billion in 2025 and is expected to double to $194 billion by 2030. cash usage has dropped from 70% to 51% since 2020, with qris now reaching over 30 million merchants. bank indonesia’s bi-fast real-time payment system now connects 135+ banks and payment providers.
  🏝️if insight: qris is quietly becoming the blueprint for regional payment unification. 30 million merchants means this isn’t just e-commerce anymore. it’s street vendors, warungs, and the entire cash economy digitizing. the infrastructure opportunity here is massive.

• vietnam passed its groundbreaking digital technology industry law in june 2025, effective january 2026. it’s the world’s first law of its kind, classifying ai, semiconductors, and digital assets as strategic sectors. the law introduces import-duty exemptions for r&d equipment, tax incentives up to 50%, and recognizes virtual and tokenized assets for the first time.
  🏝️if insight: vietnam is quietly playing the long game while everyone’s fixated on singapore and indonesia. this law creates regulatory clarity that venture capital desperately needs. expect more institutional money flowing into vietnamese tech in 2026.

• italian fintech startups are heading to singapore as part of the italian trade agency’s global startup program. nine fintech companies will spend four weeks (oct 21 - nov 14) in singapore through a partnership with plug and play apac, marking increased european interest in southeast asian expansion.
  🏝️if insight: european fintechs are waking up to sea’s growth potential, but they’ll need to localise fast - what works in rome won’t work in jakarta. the real test is whether these startups can adapt to fragmented markets, different regulatory frameworks, and hyper-local payment preferences.

dives 🐋

deep dive: cb insights’ fintech 100 2025 — decoded for builders (finextra, oct 25) - how fintech shifted from flashy consumer apps to building financial infrastructure, with ai agents, stablecoin maturation, and mega-rounds dominating funding.

asia fintech and payments regulatory update - october 2025 (linklaters, oct 8) - comprehensive regulatory roundup covering hong kong’s virtual asset framework, singapore’s deepfake risks, thailand’s digital asset pilot, and indonesia’s crypto offering regulations.

southeast asia’s fintech slowdown is real — and singapore is winning the long game (asia tech daily, oct 21) - deep analysis of the 39% funding drop, singapore’s 84% market capture, and how early-stage funding collapsed while late-stage players thrive.

fintech global fs regulatory round-up - w/e 17 october 2025 (herbert smith freehills, oct 17) - global fintech regulatory developments including fsb recommendations for cryptoasset activities and service providers.

reassessing southeast asia’s growth outlook amid singapore’s mixed economic signals (ai invest, oct 12) - comprehensive economic analysis examining singapore’s q3 2.9% contraction, regional growth projections, and tech sector valuations hitting $250b.

q1 2025 southeast asia venture capital update (j.p. morgan, oct 21) - quarterly deep dive into southeast asia’s venture capital landscape highlighting regional opportunities and emerging trends.

dbs overtakes petronas to become asean’s most valuable brand in 2025 (brand finance, oct 14) - analysis revealing top 500 asean brands valued at $306.6 billion with dbs taking the crown as the region’s most valuable brand.

🎏 some tweets

thanks for reading. feedback, tips or just want to say hi? reach out!

hey islanders,
hello from singapore, where it feels like every week brings something seismic to asia’s fintech scene. after a (long) hiatus, island fintech is back on a biweekly cadence, aiming to make sense of what matters in southeast asian finance, with just enough context and colour to keep things punchy.

if you could do me a favour, please vote on the poll at the end of the page to let me if you’re finding this useful 🙏🏽

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🐠 dips

• is the crypto dream collapsing? the elephant in the room that we must start with is the most recent crypto plunge, which follows singapore’s massively well-attended token2049 crypto festival. this crash was historically large, with nearly $20 billion in leveraged positions liquidated in a single 24-hour period - over ten times the liquidations during both the 2020 covid crash ($1.2 billion) and the 2022 ftx collapse ($1.6 billion). this liquidation event set a new record in crypto history for sheer volume and number of affected traders (over 1.6 million). bitcoin prices dropped sharply but later partially recovered.

  • 🏝️if insight: this meltdown serves as a reminder that speculative digital assets will always carry volatility, underscoring the critical need for reliable infrastructure and robust regulatory frameworks. rather than rattling investor confidence, southeast asia’s crypto market is staying resilient. with strong institutional interest, many see this turbulence as part of the maturation process in building a sustainable digital asset ecosystem. to me, this highlights why true infrastructure is more important than ever.

• phonepe’s quiet ipo march india’s phonepe, arguably the subcontinent’s payments juggernaut, has confidentially filed for a massive ₹12,000 crore (about us$1.5 billion) ipo. in classic fintech fashion, their approach shields key details from public view until launch. still, the numbers that have leaked are sizeable: fy25 revenue soared 40% to ₹7,115 crore.

  • 🏝️if insight: with walmart, tiger global, and microsoft in the cap table, this is one to watch for regional cross-pollination and capital flows

• singapore’s stablecoin moment: the only singapore dollar-backed stablecoin, xsgd, just hit coinbase. straitsx, its issuer, is touting instant crypto-to-sgd transactions for everyone from tourists to big local businesses. okx pay is also piloting scan-to-pay merchant services using xsgd.

  • 🏝️if insight: this isn’t just fintech tinkering - singapore’s ambition to become a leader in digital assets is getting international backing and infrastructure. distribution is the surest moat!

• singapore’s going to freeze your fund transfers: from october 15, singapore is set to require banks to hold or even reject digital transfers that cross new thresholds. designed to curb scams and boost safeguards, the regulation has sparked debate over efficiency versus security

  • 🏝️if insight: this is a classic singapore conundrum in keeping the market safe but nimble. time will tell, but methinks that it’s worth a shot - especially if we can prevent life savings from being lost. if over cumbersome, the restrictions can always be released.

• stablecoins are going to be regulated in singapore with clarity: mas’s framework on stablecoin issuers is finally trickling into real-world application. mas’s stablecoin framework, focused on single-currency stablecoins pegged to the singapore dollar or g10 currencies, requires issuers to fully back coins with high-quality reserves, maintain minimum capital, and provide users with guaranteed redemption at par value. these clear rules aim to boost trust and safety in stablecoins issued in singapore, setting a global standard for regulated digital assets.

  • 🏝️if insight: the roadmap involves new legislative tweaks coming up soon, which should cement singapore’s reputation as one of the world’s clearest regulatory environments for digital assets.

• sea digital payments are still just at the tip of the spear : according to a recent 2c2p commissioned report, indonesia’s mobile wallet transaction volume jumped from us$18.27 billion in 2023 to us$25.2 billion today; vietnam saw an 88% hike in mobile payments for e-commerce.

  • 🏝️if insight: makes you think - with the market penetration currently just sitting at where it’s at - there’s still so much more to be done! for some context, indonesia’s unbanked population is around 100 million people, roughly 40-50% of the population unbanked. similarly, vietnam’s unbanked or underbanked population is also sizeable, with estimates around 44% lacking access or being underbanked.

• hsbc will take your tokenized deposits: hsbc rolled out a blockchain-based tokenised deposit service in singapore last week, enabling real-time, 24/7 settlement of multi-currency deposits across borders. this service addresses a key pain point for treasurers dealing with volatile fx and interest rates by offering instant liquidity management, greater transparency, and operational efficiency.

  • 🏝️if insight: watch this space as both incumbents and challengers chase the joys of ledgered liquidity for their customers.

🎏 twitticisms

Hey Islanders,

First up, thank you for being so patient with us for the past 8 months - we last greeted y’all in December, and while life happened and we both took a break from writing for awhile, we’re back and up and running!

We’re also planning to shake things up a little here, so keep your eyes peeled for any new stuff in the future. In the meantime, please enjoy today’s edition.

P.S. We also have Instagram and Linkedin pages now, so do follow us there and reach out with thoughts anytime!

🐠 Dips

1. The MAS finalises its stablecoin regulatory framework, after a public consultation

• The framework covers and regulates single-currency stablecoins pegged to the Singapore Dollar or any G10 currency that are issued in Singapore.

• The framework lays grounds for stricter requirements for stablecoin issuers in terms of value stability, base capital maintained, redemption at par requests and disclosure of information of the stablecoin’s value.

🏝 IF Insight: Great news from Singapore and is a huge step towards embracing and building up the crypto industry here! While governments around the world are still trying to choose their stance on crypto (ps. read below for how badly the U.S. has fumbled the bag), Singapore has decided to accept that crypto is here to stay, and instead of stopping innovation in this area, chose to lay out a clear regulatory framework so that all participants can take part safely. I truly believe we are one step closer to becoming the crypto capital of the world - Joyce

2. Thai bank Kasikorn launches a billion dollar bid to buy Home Credit Vietnam

• In an aspiration to become a top 20 bank by 2027, KBank is in talks to buy Home Credit Vietnam for $1 billion

🏝 IF Insight: If successful, this deal would contribute to the ongoing trend of consolidation in Asia's financial sector and mark one of the largest mergers and acquisitions in Vietnam's financial industry in 2023. It is clear that KBank’s desire to buy a loanbook in Vietnam shows that there’s saturation in a more mature market like Thailand where Bangkok Bank has a clear lead, with KBank in the second spot. Interestingly, in March, Grab and a number of Japanese banks were also interested in acquiring Home Credit’s entire SEA book - it’s interesting that they haven’t followed through just yet - allowing KBank to take a more focused and strategic investment opportunity. For me personally, it also reflects the growing “Southeast-ification” of SEA financial services - remember Citibank exiting their corporate banking presence in the region and selling to regional banks like OCBC? Truly a shifting of the tides - I might call it the share-buyback equivalent of a successful FS industry - Vinay

3. Paypal launches USD stablecoin, issued by Paxos

• Paypal USD stablecoin is fully backed by U.S. dollar deposits, short-term U.S. treasuries and similar cash equivalents, and can be redeemed 1:1 for U.S. dollars.

• The stablecoin is an ERC-20 token, meaning it can be used not only within the PayPal ecosystem, but also external exchanges and wallets

• Currently, only PayPal customers in the United States are able to purchase PayPal USD.

🏝 IF Insight: Paypal’s move comes at a time where the U.S. has taken a hostile stance towards crypto entities operating in the country, most famously the Coinbase and Binance SEC cases. Paypal USD would enable cheaper cross-border costs, and also open the platform to interoperability with crypto exchanges, marking Paypal’s first big leap into the world of decentralisation and web3 - Joyce

4. Grayscale wins court battle against the SEC

• On Tuesday, the U.S. Court of Appeals delivered a crushing interpretation of the SEC’s logic for denying an ETF, finding the agency acted “capriciously” and “arbitrarily.”

• This means that the SEC would have to review Grayscale’s previously rejected ETF application.

🏝 IF Insight: Move aside Gary Gensler, you don’t always have the final say. The court ruled in favor of Grayscale, showing us that the SEC is not the ultimate arbiter of crypto. Bitcoin had a large green candle and jumped 5% upon news of the court’s ruling, and crypto-related stocks had a field day as well. Why are we so concerned about the potential of a Bitcoin ETF? Are Wall Street and Main Street even supposed to be together? In my opinion, the launch of an ETF would unlock massive amounts of liquidity sitting at the sidelines right now, waiting for a regulated product to be launched - something that’s deemed safe. If we’re truly in it for mass adoption, maybe it’s time to actually walk the talk. - Joyce

5. Coinbase’s Layer 2 network Base goes live on mainnet after initial testnet frenzy

• Base is an Ethereum L2 network incubated in Coinbase. Its testnet launched in February this year.

• Coinbase launched a campaign called Onchain Summer in conjunction with its mainnet launch, where big brands collaborate with Coinbase to launch their NFT collections and run on-chain events on Base.

• The mainnet launched with $142M TVL, surging another 10.9% to $240M TVL in just 7 days.

🏝 IF Insight: A few weeks before the Base mainnet launch, degens went crazy on the chain speculating on its first memecoin, Bald (yes, it’s a play on Brian Armstrong’s hair, or lack thereof). Many memecoins and DEXs followed soon after, with a majority of them ending up as rugs. Users started complaining that the chain was like a honeypot; you could only bridge in, not out. Bald itself rugged for a hot minute before the deployer was pressured to add liquidity back in and the speculating continued. In this cruel bear market the degens have truly had fun with this one. We’ll see what holds in store for Base, as its TVL has now surpassed Cardano, crypto normies’ beloved chain - Joyce

🐋 Dives

Friend.tech - the new OnlyFans for crypto bros?

Joyce Lee

How much do you think your friends are worth?

Oof, hard hitting question. But what if you could trade the value of your friends… in public…?

A few weeks ago, CT (crypto twitter) started circulating invite codes for a new mysterious socialfi app called friend.tech - it calls itself the marketplace for your friends. Very apt way to put it.

You basically sign up with your Twitter account and your friends can buy and sell ‘shares’ (now called keys) of yourself. What made it interesting was the fact that friend.tech is mobile first, instead of being an annoyingly web-only product that we are all accustomed to in web3.

Within 24 hours of launch, trading volume surpassed 4,400 ETH. Bots started sniping up shares of newly joined accounts to flip - it soon became the playground for MEV bots sniping each others’ shares. But more interestingly, an unexpected group of people started joining the platform - OnlyFans creators.

And it makes sense. Shareholders of an account get to be in an exclusive group chat with the account owner - many CT influencoooors have taken this opportunity to shill their bags in the group chat - while OnlyFans creators have shared photos to their shareholders (and also probably at the expense of some crazy simp messages).

Looking at the friend.tech Dune dashboard, we see that activity on the protocol has fallen off sharply, in both buy and sell transactions. For awhile in the first two weeks it generated even more fees than Uniswap and Lido, two of the biggest protocols on Ethereum.

Such is the fate of a crypto app nowadays - the attention span in the space is getting shorter and shorter, as evident in the duration of rugs happening everyday. The friend.tech team did a great job of taking a stab at launching a great socialfi app, but time will tell if it can sustain the initial hype. Or will we all go back to good ol’ Uniswap to speculate on memecoins and OnlyFans to simp for girls?

🍹 Twitticisms

https://twitter.com/modestproposal1/status/1695177654822191184?s=20

https://twitter.com/NorthRockLP/status/1695172393747239118?s=20

https://twitter.com/fintechjunkie/status/1696328109111288129?s=20

Hey Islanders,

I’ve been trying to be thoughtful about the small role Island Fintech can play in this time of fundraising doom and gloom. Could we do more to put a spotlight on the progress we are still making, despite the headwinds? ☀️

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. Also, if you’re on the lookout for a new gig, I want to help. Check out wise.jobs and drop me a note if you find something interesting.

🐠 Dips

1. Hackathon heroes: East Ventures to invest $500k in laid-off tech talent

• Indonesian venture capital firm East Ventures will invest $500,000 in the winners of its hackathon aimed at laid-off tech talent.

• The hackathon, which will be held in January, is open to Indonesian residents who have been laid off or furloughed due to COVID-19.

• The winning team will receive a cash prize and the opportunity to work with East Ventures to develop their idea into a full-fledged startup.

🏝 IF Insight: This hackathon is a great opportunity for laid-off tech professionals in Indonesia to turn their skills and ideas into a new business venture. It's awesome to see a venture capital firm like East Ventures recognising the challenges startup folks face, and providing support to help them get back on their feet.

2. New Amex Innovation Center set up in lion city

• American Express (Amex) has established an innovation center in Singapore, with a focus on fintech and big data.

• The center will also host Amex's Singapore Data Science team and its Singapore Innovation Lab, which aims to "co-create and pilot" new products and services with fintech partners.

• Amex aims to leverage Singapore's strong fintech ecosystem and talent pool to drive innovation in the Asia Pacific region.

🏝 IF insight: Singapore's fintech ecosystem continues to attract major players like Amex, and highlights the huge potential for collaboration and partnerships with local fintech firms in the region.

3. Amber raises $300m from Temasek and acquires Sparrow

• Singapore-based cryptocurrency firm Amber has raised $300 million in Series C funding.

• The funding round was led by Temasek, a Singapore-based investment firm, with participation from other investors. Amber plans to use the funding to expand its business and further develop its platform.

• Amber has also acquired Sparrow, a Singaporean cryptocurrency exchange, and laid off a significant portion of its workforce

🏝 IF insight: This move shows the continued interest and investment in the cryptocurrency space, even amid challenges such as layoffs and acquisitions. It will be interesting to see how Amber utilizes the funding to grow and differentiate itself in a competitive market.

5. Binance increases stake in Tokocrypto, laying off 58% of workforce

• Binance, a leading cryptocurrency exchange, has increased its stake in Indonesian unit Tokocrypto. As part of the deal, Binance will lay off 58% of Tokocrypto's workforce.

• The move is part of Binance's efforts to expand its presence in the Indonesian market.

🏝 IF insight: It's not uncommon for acquisitions to result in layoffs, as companies look to streamline their operations and eliminate duplication of roles. In this case, Binance's decision to lay off a significant portion of Tokocrypto's workforce may be an indication of the company's confidence in its own capabilities and its strategy for entering the Indonesian market.

6. Finaccel boosts its board with Slack's former CFO ahead of IPO plans

• Indonesian fintech company, Finaccel, has appointed Allen Shim, Slack's former CFO, to its board. This appointment comes as Finaccel is reportedly preparing for an initial public offering (IPO).

• Finaccel provides online lending services in Southeast Asia and has raised over $150 million in funding.

🏝 IF Insight: It's always good to see fintechs expanding their leadership teams as they prepare for future growth, and the appointment of an experienced CFO like Allen Shim could certainly help Finaccel as it looks to go public in the future. It also highlights the attractiveness of the Southeast Asian fintech market to experienced executives.

7. ZA Bank and Wise team up for online money transfers in HK

• Hong Kong-based virtual lender, ZA Bank, has announced a partnership with online money transfer platform, Wise, to offer international money transfers to its customers.

• They will be able to send money from Hong Kong to 10 countries and territories in Southeast Asia, including Indonesia, the Philippines, and Vietnam.

• The partnership will also enable Wise to expand its services to Hong Kong, which is one of the world's largest remittance corridors.

🏝 IF insight: Partnerships between fintechs are becoming more common, especially when one brings something special to the table. With ZA Bank, it is the class leading virtual banking experience, and with Wise, it the speed and efficiency of its cross border payments. Together, there’s a better single experience in the ZA App - which means happier Hong Kong customers!

Share Island Fintech

🐋 Dives

• The ‘jockeys’ traversing Indonesia’s fintech wilderness - Putra Musika

• A Fintech good news: story Wise is hiring! What if Twitter did Payments? SBF Interview & BlockFi bankruptcy - Simon Taylor

• Google’s Browser Tokens Payments - Tom Noyes

• The internet economy is everywhere - Stripe

🍹 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)

Share Island Fintech Weekly

The opinions and views posted above are solely personal and are not indicative of the views of the authors’ employers.

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

1. 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.

2. 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)

Share Island Fintech Weekly

The opinions and views posted above are solely personal and are not indicative of the views of the authors’ employers.

Hey Islanders,

Joyce and I caught up for dinner recently and we’ve decided to make Island Fintech a monthly - splitting between Crypto and Fintech. All the while, remaining honest about our growing sector in Southeast Asia 🌏 We’d love to hear feedback - reach out to Joyce or myself!

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.

🐋 Dives

1. The Philippines isn’t banning crypto, but halts permits for new Virtual Asset Service Proviers (VASPs)

The Central Bank of Philippines is encouraging caution, but not restricting behaviour when it comes to crypto. Rather than putting them in a currency bucket, it seems like they intend to regulate them more like assets, given the volatility.

However, the Bangko Sentral ng Pilipinas announced on August 10 that it will stop accepting new applications on Sept. 1, 2022 for VASP licenses for three years. Applications that have completed or passed the second stage of the licensing process on or before 31 August 2022 will be processed and assessed for completeness and sufficiency of documentation.

2. Southeast Asian crypto firms hit hard

It’s been a rollercoaster ride for the crypto scene in SEA, particularly for Singapore-based Zipmex and Hodlnaut.

Zipmex first announced that it had filed for bankruptcy protection in July, for protection against any legal claims or proceedings for a period of up to six months. This came after a revealed exposure to troubled lender Babel Finance, which suffered losses of about 8,000 BTC and 56,000 ETH and was forced to liquidate due to a severe market downturn.

Hodlnaut announced on August 13th that it had filed an application with the Singapore High Court to be placed under judicial management. Layoffs proceeded as the firm confirmed that there were legal proceedings with the police going on, and Twitter user FatManTerra spilled some tea on Hodlnaut’s alleged $190M in the TerraLuna crash in June. Rumors had been circulating back then on their exposure, but there was never any proof to back those claims up.

3. Fei Protocol might be shutting down

It’s hard to believe that a protocol with $188M might shutdown, but here we are.

Fei Protocol and Rari Capital had merged in December last year, with the aim of solving the liquidity bootsrapping problem in DeFi. In April this year, a hack happened and Fuse pools (lending pools in Rari Capital) were hacked for $80M. After the hack, the CEO of Rari Capital stated that he would resign.

On August 20, a proposal was made by Fei Labs:

• FEI redeems for $1 (1 DAI)

• Fuse hack victims receive payment making most victims whole

• TRIBE holders can redeem for pro rata share of remaining DAO controlled assets

• All Governance powers are removed

An outrage poured in in the comments section, as well as on Twitter. General sentiments were anger over the lack of transparency and hard numbers shown in the proposal, as well as skepticism over DAO governance, and the efficiency of it. There have also been allegations that in the weeks leading up to this proposal, the founder of Fei Protocol was uncontactable, leading to more confusion, and anger on Crypto Twitter.

This might be one of the highest profile DeFi protocol shutdowns we’ve seen in awhile, and everyone’s just waiting to see if this proposal will actually go through, or will the team listen to the woes of their users and do the right thing?

4. Indonesia’s OJK introduces new regulatory framework for online lenders

The regulation has received pretty favourable feedback from industry players. For one, it was announced jointly by the industry group for Indonesia's online lenders, AFPI, with the regulatory body, the OJK - which kinda suggests they buy into it. It makes sense, because the sector has been expanding perhaps a bit too rapidly with the previously easy-to-exploit regulation. As of May, outstanding loans sat at 40.17 trillion rupiah (US$2.7 billion), representing a 54% rise year on year.

Here are the highlights:

• Lenders must have paid-up capital of 25 billion rupiah ($1.6 million).

  • This is greater than the 15 billion rupiah (US$1 million) that was first suggested and is a 10x increase over the 2.5 billion rupiah (US$167,000) under the previous POJK 77 law.

• A company must have at least one controlling shareholder and two directors, up from the previous requirement of one director.

• Directors and commissioners must now obtain a work competence certificate from an OJK-registered professional fintech certification provider.

  • Nice (Anyone wants to start a fintech certification business with me?)

• A single super lender cannot make up more than 25% of an online lender’s total outstanding loans.

  • This encourages diversification of default risk

  • It also discourage international lenders from taking up a supermajority of lending, and opens up to more local players.

The fourth point is the most notable change. With this, it becomes simpler to track where the money comes from, because the offshore-deposits of international lenders has been a question mark for a while.

🍹 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)

Share Island Fintech Weekly

The opinions and views posted above are solely personal and are not indicative of the views of the authors’ employers.

Hey Islanders,

Malaysia recently issued the digital bank licenses.. but they sure took their time though. The applications closed in Jun '21. So naturally, lots of folks expected the state regulator BNM to share the results in the first quarter of 2022. Instead, nearly a year later, we've finally gotten the results - and they do not disappoint!

Share Island Fintech Weekly

Note - If you are looking to raise early stage funding (seed to pre-A), I 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 On digital banks, lending, and profitability in Indonesia

Bank Jago, or as I like to call it, the 🟡yellowest🟡 bank in the world, has posted a record 8x jump in revenue to $24m for Q1 2022. Before you start to talk about revenue-is-nothing-without-profitability.. Jago became profitable in Q3 2021 and has not produced a loss making quarter since. One of the key reasons appears to be Jago's push towards lending, including newly-launched Shariah compliant loans.

Lending is one of the most profitable lines of business in financial services. In Indonesia, profitability really depends on your license. As a digibank, you can collect deposits so, lending is cheaper. But as a pure P2P lender, you cannot collect customer deposits. You must use either P2P loans or use wholesale lines of credit - so the cost of capital is generally higher. That's why Jago can command the profitability that it has. I just wonder how other digital lenders, especially like those who remain firmly in the VC-backed + P2P reliant space, can compete when true depository lenders continue offering great rates with sustainable margins.

② Singapore's payment schemes tries to level up

Ah, EZ-Link. Singapore's quintessential transport card. Come to think of it, this is has been my OG wallet - except that topping up and knowing your balance has always been a chore, and never really adopted the “e” that typically comes with e-wallet. Perhaps consequently so, in recent years, EZ-Link has lost much of its commanding presence in Singapore's transportation payments, with the advent of Google and Apple Pay. As buses and trains have modern terminals that support these services, this removes the need for an EZ-Link.

In an effort to stay relevant, EZ-Link has now tied up with MasterCard to offer an product called Pay by Wallet, that apparently goes beyond transportation, and makes your EZ-Link usable for online spend. It appears that there are some sign up incentives to try and get you through the door. Given that I'm not quite sure how the feature itself is useful, I wonder if EZ-Link is able to find its feet by simply becoming another e-wallet.

In other news, Stripe now offers Singapore's PayNow as payment method for its merchants. This is pretty cool, as it opens up access for faster and more convenient payments than say, your typical card transaction, and also costs much less. Stripe's extra value add is the tech - when a customer chooses to pay with PayNow, Stripe generates a dynamic QR codes for that transaction. This automatically populates the PayNow app with the exact payment amount and unique transaction reference. No manual errors! Amazing - especially if you're an accountant.

③ Nium acquires Socash

Money transfer player Nium has entered a deal to acquire Socash, a platform for turning cash into digital payments. The deal for Nium to acquire Socash will provide local payment acceptance for digital commerce, particularly in emerging markets. Socash’s network lets its customers deposit, withdraw and make payments in cash from more than 30,000 local merchants. Cash usage is higher in emerging markets, where financial inclusion can be low. For example, cash accounted for 89 percent of total transactions by volume in 2020 in India, 96 percent in Indonesia and 87 percent in Argentina, according to the 2020 McKinsey Global Payments Report. [ Finews ]

While the cash-collection angle is lucrative, it's often very risky when it comes to cross border payments - the lack of clarity when it comes to end-user KYC, transfer screening and fraud controls means that there is an additional risk associated with cash-driven transfers. If you ask me, this deal is testament to Nium's risk appetite and ambition.

🐋 Dives

1. Acceptance Hurdles (Starpoint LP)

2. Dune: the data must flow (Mario Gabriele)

🍹 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)

Share Island Fintech Weekly

The opinions and views posted above are solely personal and are not indicative of the views of the author’s employer.

Hey Islanders,

Been a while. How’s life been for you? I took a break over Christmas. That break - well - it went on for a little longer than expected. Anyways, I’m back!

I attended a fintech meetup while I was in London last week called Fintechila.

It was really cool to meet likeminded folks on similar, yet quite different, paths in the fintech space. When I lived in NYC, there were similar events that brought people together, where I really saw the power of community. Let me know here about the community events you may want to see in Singapore. If the idea takes off, we could try expanding this regionally - Jakarta, KL, Bangkok, infinity and beyond 🚀

Share Island Fintech Weekly

Note - If you are looking to raise early stage funding (seed to Series A), I 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 BNPL competitors band together to influence regulation in Singapore

So, it appears that competitors can be friends! Especially when it means moving the regulatory needle toward a comfortable point. Atome, Grab, and Hoolah are working together to establish a “Buy Now, Pay Later Working Group” under the local trade body for fintech, SFA. This makes strategic sense, as the clock is ticking. MAS has now spent a year (since 2021 Feb) reviewing the appropriate regulatory approach for BNPL, which has been relatively unregulated - folks have criticised the industry’s hidden fees and lack of credit checks. In similar Singapore BNPL news, Pace (a 2020 founded upstart) acquired Rely (Singapore’s first BNPL - a 2017 vintage).

② WadzPay’s brush with TechInAsia

The Singapore-based WadzPay claims to be a lot of things, and takes me back to a famous 19 year old’s brief brush with fame (and later infamy) in 2021. The article I hoped to reference was titled “WadzPay tried to fake it to make it. Then we found out”. The caption was even juicier - the crypto startup says it's a Mastercard and Visa partner. Then things got weird. I was excited to write about it.. but, when I opened my browser, it showed up, and then disappeared! Seems like there are threats of legal proceedings. Well, let’s see where this goes. I shall reserve comment (for now!)

③ GCash’s strategy: expand, then IPO

Phillipines’ favourite e-wallet, GCash, is planning to IPO at some point. But before it goes there, Ernest Cu, its CEO, wants to grow its ecosystem, and one would assume, it’s valuation. The most recently reported figures for GCash was $2 billion in 2021.
Ernest is looking to include crypto and stock trading to its current service which now include loans and insurance. In Ernest’s words - “We now have a fintech business and a telecommunications business. Eventually, we will have a health business, an e-commerce business. So it’s turning into a group of digital companies that feed on each other.” The platform enables money transfers and even online betting on cockfights. 🐓 If GCash does well, then so does Singtel - Singapore’s (almost) national telecom provider. Singtel owns about 47% of Globe Telecom’s common shares.

🐋 Dives

1. The Case for Open Finance in Southeast Asia (Diego Rojas, Finantier)

2. Singapore fintech startups take off amid financial sector boom (Fumito Akiyama, Nikkei Asia)

3. FinTech continues to be a hot sector in Southeast Asia after a booming 2021 (Yimei Yong, Technode Global)

🍹 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)

Share Island Fintech Weekly

The opinions and views posted above are solely personal and are not indicative of the views of the author’s employer.

Greetings Islanders,

What a crazy month October has been! Bitcoin made a new ATH at $67,276.79, with Ethereum and the rest of the altcoins following suit.

We saw some cray pump and dumps too - most notably $SQUID, which quite honestly already felt quite fishy to me from the start. In other news - we’re seeing some crypto news coming from SEA (exciting!) - definitely much more coming in the next editions!

If you would like to chat about crypto, reach out to me on Twitter! DMs always open :)

🐠 Dips

• Siam Commercial Bank (SCB), Thailand’s oldest bank, announced that it acquired a 51% stake in local digital asset exchange Bitkub for 17.85 billion baht - about $500m. The deal is expected to be complete by Q1 2022. Other Thai banks and financial companies are following suit foraying into the digital assets space.

• ENS Domains recently announced that it plans to issue a token ($ENS) and form a DAO. A snapshot of .eth addresses was taken on 31st October, and 25% of all $ENS supply will be airdropped to all holders of the addresses, with allocation formulas found here. Do you have an ENS domain? I almost bought 0xjoyce.eth but did not end up doing so, I’m ngmi 🥲

  side note: Vinay just asked me what ngmi means - he’s ngmi.

• On November 1st, the US Treasury Department published a report on stablecoins. If it is too long for you to read, here’s my best attempt at a TLDR; the Report recommends that only bank-like institutions should be allowed to issue stablecoins, and federal oversight should be required for custodial wallet providers. There seems to be concern over regulatory gaps relating to stablecoins and DeFi.

• Coinbase announced in a blog post that they will be launching an NFT marketplace, where users can create, buy and sell NFTs. Within a week, over a million users signed up for the platform waitlist. They are not the first exchange to launch an NFT marketplace - Binance, FTX and Crypto.com have all launched their own.

🐋 Dives

Anubis DAO raises $60m in a day, then loses it all.

3,3 (explanation here).

Today on DeFi news I am reporting on yet another DeFi hack, this time on an Olympus DAO fork, Anubis DAO. According to the site, Anubis Dao is ‘a unique protocol built on KCC.’ KCC is a decentralized public chain built by the fans of KCS and KuCoin's fan communities.

Anubis DAO launched a token sale on Copper, raising over $60m. Then it all vanished.

About 13,556 $ETH was sent to a single address - view the transaction details here.

So what really happened?

The co-creator, which goes by the username beerus on Twitter, seems to be the main suspect here. Another founding member of the team, Sisyphus, tweeted that they are fairly certain that this was in fact not a rug pull, but a doing of someone on the team.

There were two main reasons for this suspicion:

1. beerus deleted his Twitter account after the exploit happened (at time of writing it is still up, but the account does not seem to have been active since 29th October, the day of the ‘hack’).

2. beerus’ own wallet was unaffected at all during this hack.

However, Twitter user cryptofan777, which is apparently beerus’ alt account, tweeted that he/she had been hacked by opening an email with malware, which resulted in the loss of all funds (my best guess is the private keys to the wallet was stolen).

Is the saga over? In the most recent tweet published by cryptofan777 on 31st October, he/she is currently complying with all investigations with the police and has handed over their computer.

This may be the first time I have heard of the police being involved in a DeFi hack - will beerus / cryptofan777 be able to clear their name? Will the stolen $ETH ever be returned? Hopefully we’ll soon see a resolution to this, and I could write about it in the Dips section of the next crypto edition.

🍹 Twitticisms

Share Island Fintech Weekly

The opinions and views posted above are solely personal and do not reflect the views of the author’s employer.

Greetings Islanders,

Hope you’ve had a great week! Here’s my round up of all things fintech this week to round off the weekend. Also, I could use this view.. couldn’t you? 🏝

Share Island Fintech Weekly

Note: Are you looking to raise angel funds for your fintech? Have any questions or thoughts around Wise’s Platform API? Reach out to me via LinkedIn.

🐠 Dips

1️⃣ Bank Jago turned profitable!

• Indonesia’s favourite yellow bank, Bank Jago, managed to swing around its 6 year loss streak this third quarter of 2021.

• The bank’s new management, backed by Goto, has been helping drive partnerships and distribution efforts, as well as adding new products - the key here in enabling profitability being tech-enabled loans. Loan disbursements rose 72% in a mere quarter to roughly $263m from around $153m. Directly as a result of this - interest income jumped to $25m.

• Like most banks, the loan-book is still one of the most profitable bits of the biz - something that digital banks typically cannot offer. Jago, however, was once a traditional licensed bank going by the name of PT Bank Artos Indonesia Tbk - so the capability has always existed. Now that it has a shiny new face and a better distribution strategy, it seems like sky is the limit for Bank Jago.

2️⃣ UOB and Fave launch a rewards program

• UOB is working together with Fave to offer a unique rewards platform on its banking app, TMRW. Customers will be able to have a wider number shopping options as well as savings when they pay for exclusive deals from merchants with their credit card reward points on UOB TMRW.

• Fave is good at acquiring merchants. They have already integrated as a payment option in many retail and F&B outlets, including mom and pop stores. So this would make for an interesting way for UOB to distribute the typical credit card-like loyalty programs that are reserved for, well, credit cards. It makes sense, as it seems like credit cards are increasingly losing relevance with BNPL - so UOB is staying in the loop by offering rewards for what’s essentially an e-wallet.

3️⃣ Nium launches Crypto-as-a-Service

• Nium recently announced the launch of a new crypto-as-a-service offering. The offering will be via API, and will allow financial institutions to support five cryptocurrencies in the U.S. in 2021, with the list of supported currencies growing to 20 in 35 countries in 2022.

• It’s clear that crypto is coming to the mainstream. Digital bank platforms that can offer crypto typically have the opportunity to make a lot of money - nearly half of Robinhood’s revenue came from its fairly recent crypto sales, of which Dogecoin accounted for 62%. Digital banks would then realise that offering crypto is a major bonus - but the integration against an exchange can be difficult. Working with an API like NIUM’s makes sense - this is something that Bitstamp and Coinbase Cloud already offer in differing flavours, but mostly looking at the US. I would be intrigued to see how this is solved for SEA. How do KYC problems get resolved, and how do we get regulators comfy?

4️⃣ NTUC Income expands across SEA.. for ride hailing rain insurance

• NTUC Income is dipping its feet into the rest of SEA to help insure against literal rainy days. Yes, you read that right. I didn’t know this myself, but Droplet is essentially NTUC insurance to provide a consistent fare for days you’ll expect to call a cab, and if it rains (and the price surges), NTUC will reimburse you right into your PayNow wallet. Check out the site, it’s actually pretty cool.

• Apparently some insurers in Indonesia, Vietnam and Malaysia also thought that this was pretty cool. The cooperative announced that it is expanding into these regions with distributed partnerships with insurers - effectively insurance as a service.

• This could be a good way for NTUC start working with known insurers on a novel insurance product, before finding ways to perhaps distribute other products through the region, such as their Snack micro-insurance platform.

5️⃣ Zolve raises a $40m Series A

• Zolve, a 10 month old digital banking startup that aims to help immigrants in the U.S. gain access to financial services, raised $40m in a new financing round as it begins to roll out its offerings.

• This is a really large amount to have raised for such a young company. Zolve, who counts the Indian immigrant community as its core audience, rolled out its credit card to 2,000 customers (and amassed a waiting list that has surpassed 70,000) last months.

• For some context, the two largest neobanks in the US raised comparatively much smaller Series A’s - back in 2016/7ish era. Chime, which currently has 13.1m customers, raised a $9m series A. Current, at 4m customers today, raised a $5m Series A. We are truly in a new era of fintech funding.

🐋 Dives

• 4 key stats from Finder’s report on digital banking adoption (KR Asia)

• Making Financial Services Easy to Code (a16z)

• Banking sucks, so we made it great. Now let’s fix carbon. (Pledge)

🍹 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)

Share Island Fintech Weekly

The opinions and views posted above are solely personal and are not indicative of the views of the author’s employer.

Greetings Islanders,

Island Fintech Weekly is nearly half a year old! Scrolling through past editions, I must say I really have enjoyed writing. But doing it consistently - sourcing content, keeping things original, and getting inspiration - this has been a ton of hard work. Nik writes the OG fintech newsletter, This Week In Fintech, something I have read for years now. Nik did a nice interview on how he keeps consistent. This tweet hit home 😮‍💨

So thanks for sticking around. Your support makes it all the more worthwhile! We’re only just getting started - you may also notice the format’s a bit different today, let me know what you think.

Share Island Fintech Weekly

Note: Are you looking to raise angel funds for your fintech? Have any questions or thoughts around Wise’s Platform API? Reach out to me via LinkedIn.

🐠 Dips

1️⃣ Atome gets an atomic deal with SC

• Who says you can’t buy BNPL as a feature in SEA? Standard Chartered seems to be taking inspo from Square’s Afterpay acquisition, having announced a $500m financing deal with Atome.

• SC will use this investment to be able to anchor its strategic partnership in offering BNPL services across SEA, targeting a roll out in Indonesia, Malaysia, Singapore and Vietnam in the next few months, and later expanding to include digital lending products.

  • Benefits to SC: Offering BNPL, a strategically important product that SC currently does not offer at a competitive level 🤺

  • Benefits to Atome: Cheap line of financing 💰 + merchant acquisition via SC introductions 🏬 + additional distribution channel through SC’s client base 👩‍👩‍👦‍👦

• Seems like a win for both sides, but especially so for Atome!

2️⃣ PayMaya is selling insurance

• Bolttech (who just closed a $210m Series A funding round) partnered with the Philippines e-wallet platform PayMaya to offer affordable micro-insurance products within its app, in a service named PayMaya Protect for cover typical health insurance (underwritten by a legacy insurer, Pioneer Insurance), providing approx $~15k coverage at rates that go as low as $2 monthly, and with added flexibility - PayMaya said the products allow a subscription model so that customers can choose when they need cover. PayMaya also offering mobile phone insurance - protecting against liquid damage and cracked screens for as low as $1 a month. After all, without its customers having working phones, how can PayMaya process its payments?

• It’s interesting to me that a platform (Bolttech) is working with another platform (PayMaya is a financial superapp) to distribute a fairly tricky service to sell - insurance. PayMaya and Bolttech are both examples of Online-to-offline (O2O) platforms. O2O platforms facilitate transactions among users with both online and offline components (e.g. online purchase of physical goods that are then delivered offline). These Platforms are unique in which they require both physical and digital infrastructure to function.

• The beauty of O2O platforms in fintech is that they allow financial services to be sharpened and distributed in a way to meet the individual needs of customers. In this case, the clunky insurance policy has been tapered into a neat, affordable package with plenty of flexibility - and also protecting the things that matter - things like their phones. The other superpower of distribution is that reaching consumers who perhaps, were not able to afford or know about insurance services without the distribution capabilities within the PayMaya universe.

3️⃣ The state of cross border eCommerce in Singapore: 📈📈📈

• The annual value of business-to-consumer (B2C) eCommerce exports from Singapore is heading up and up. According to a recent report from Amazon, Singapore based sellers are raking in $1.03b in 2021, and this value could reach $2.6 billion in 2026 if these sellers, who are primarily SME businesses, keep selling at this pace.

• What is interesting is that of these businesses, 90% of them are selling outside Singapore - so money is essentially moving back into Singapore in SGD from various currencies.

• That process of collecting money from foreign customers can be tricky. You have various payment portals, invoicing, tax, withholding and payroll complexities. Amazon is trying to coach growing sellers with with bootcamps focused on ‘starting local, going global’. Along with training programs, navigating the mechanics of cross border commerce can help sellers save cost — here is an in depth Forbes article describing some of the challenges in Cross-Border e-commerce.

🐋 Dives

• The New Era of Credit Cards (Prince Jain)

• McKinsey 2021 Global Payments Report (McKinsey)

• The Platform Economy: Southeast Asia’s Digital Growth Catalyst (Tech for Good Institute)

• BaaS served three ways: A closer look at a rapidly evolving market (TechCrunch)

• How fintech can bridge the credit gap for first-time borrowers (Financial Express)

🍹 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)

Share Island Fintech Weekly

The opinions and views posted above are solely personal and are not indicative of the views of the author’s employer.

Greetings Islanders,

Venture-backed fintechs raised a record $30.8 billion in the second quarter of this year, up 30% over the same quarter last year. And they’re raising more, and faster, than ever — the average deal size stands at $47 million this year. Just a reminder that you’re reading the right newsletter today 😉

Today is also 10/10, a mega discount shopping day in Asia. I’m sure a lot of BNPL activity happened today. And with that, I’m very excited to highlight today’s Buy-Now-Pay-Later themed Special Dive - written by Adan, a BNPL pro!

Note: Are you looking to raise angel funds for your fintech? I may be able to help. Reach out to me at vinay.palathinkal@gmail.com.

If you have any questions or thoughts around Wise’s Platform API, reach out at vinay.palathinkal@wise.com. You can also do all of the above via LinkedIn.

🎣  Dips

• The big Indonesian banks are partnering with fintechs to get into the BNPL arena. Traveloka, with their PayLater product, is currently partnered with BRI, Mandiri and BNI. ShopeePay has also partnered with BNI. Instead of partnering, some are building in-house solutions - Bank Mandiri (possibly shedding their Traveloka partnership), CIMB Niaga and BCA are creating proprietary BNPL products. It makes sense, commercially - earlier this year, it was reported that in 2020, 55% of new e-commerce users chose to use BNPL options when they made purchases on e-commerce platforms in Indonesia.

• Fino Payments Bank became one of the first Indian fintechs to get approval to list on the national stock exchange, SEBI, and is expected to raise ~$173 million. Compatrior fintechs, Paytm and MobiKwik, had also filed applications but haven’t heard back from SEBI just yet. In India, IPO approvals are contingent on a number of things, including profitability.

• Stripe has been planning to launch in Indonesia for a while, but that might be delayed due to regulatory hurdles. Indonesia is a challenging market for foreign entrants, who have to navigate local regulation, like getting relevant approvals and licenses from Bank Indonesia and OJK. While challenging, it’s obviously a valuable market - fintech investment in Indonesia totalled approximately $178.48 million, accounting for approximately 20% of SEA’s total fintech investments.

• Avengers, assemble! Singapore’s local banks are working together with Singapore's local financial regulator, MAS, to create a fincrime-focused platform called COSMIC. It is a very exciting sounding name, and they’re basically agreeing to share data on customers and transactions, in the hope that this will help provide more predictability when it comes to reducing money laundering and terrorist financing. In most jurisdictions, a common challenge that financial institutions face is being unable to warn one another about unusual activity in customers’ accounts, according to MAS.

• Singapore may not be regulating BNPL in Singapore anytime soon, because it’s too small. In a recent parliamentary reply, MAS’s notably eloquent chair Tharman Shanmugaratnam noted that BNPL is still a pretty niche area right now and is not at a level of regular consumer adoption just yet. For some context, BNPL currently sits at just 0.12% of the volume occupied by Singapore’s credit and debit card market. Minister Tharman sounds fairly pro-BNPL, noting that the current features of BNPL schemes in Singapore are actually effective in mitigating the risk of excessive debt accumulation by consumers.

“For example, BNPL users’ accounts are subject to credit limits. They will typically be suspended by the BNPL provider – that means no further use of that BNPL scheme, once a payment is overdue. Late payment fees apply, but these are typically capped. As BNPL schemes do not charge compounding interest on the outstanding amount, the risk of rapid debt accumulation is also not large. As of end 2020, the total outstanding value of BNPL transactions was about S$12 million. This includes the value of instalments that had yet to fall due.”

Nonetheless, he did mention that transparency is an important principle for BNPL vendors to provide - so the regulators may enforce this so customers are clear about the repercussions of not paying your bills on time.

MAS is nonetheless assessing whether a regulatory framework is necessary to guide the evolution of BNPL schemes as they become more widely used in Singapore…. for instance, clear disclosure at the point of account opening is helpful in ensuring that consumers are fully aware of the late fees chargeable if they do not pay on time.

🐋 ✨ Special Dive✨🐋

Buying now, paying later: a business model for acquiring risk

Adan Vielma, Product Director @ Hoolah

Inspired by Joyce who wrote the first crypto edition of IFW, I'd like to introduce you to a hot area of fintech that sprung up in recent years - Buy Now, Pay Later (BNPL) - with the likes of hoolah, Atome, Klarna, and Afterpay to name a few.

These companies have their roots in a layaway concept that was inverted to suit today's craving for instant gratification and provide consumers, merchants, and partners an offline/online ecosystem to meet in.

Fundamentally, BNPL is a business model for acquiring risk. 

Consumers typically receive 0% interest as merchants pay for the privilege. Consumer fees do exist, but don’t consider them as a primary source of revenue. Rather, consumer fees are used as a deterrent to one of the key challenges listed below.

Since an ecosystem is only as valuable as the network, partners are a necessity to double or triple the size. However, creative providers like Afterpay came up with a unique open card that allows transactions outside of the network. To be clear - interchange fees make open network cards a loss-leader designed to supplement retention and provide data on new merchants to pitch.

Let’s dip into a few challenges:

🏃‍♂️ Customers who don't pay it back 

Fraud, identity theft, and defaults are real problems the industry faces and made worse by the difficulty in obtaining historical financial data on each new customer. 

New entrants are stuck hedging risk with guesstimates or better yet, purposely affording less risk upfront. Banks are better suited for this challenge due to the scale of information they hold.

🛍  Merchants that confuse inherent value

Shoppers of all income levels share an emotional desire to afford quality products, however some may not have the financial capability to fulfill this responsibly such as gig workers in SEA. 

BNPL allows this segment to selectively "borrow" from their future and helps merchants convert window shoppers to customers, or even purchase bundles of complementary products they couldn’t previously afford. 

However, heavy marketing emphasis on rewards and coupons has attracted customers outside of the ideal segment and influencing merchants to view this as a cannibalizing model.

🔍 Regulatory scrutiny

Every new innovation in fintech encounters regulations sooner or later. 

Right now, BNPL lies in a regulatory gray area essentially because the model doesn’t actually loan money directly to consumers but rather acquires debt from the merchant. Often there’s no need for credit checks or other requirements that licensed payment institutions adhere to.

Yet disturbing trends led the Australian Securities and Investments Commission (ASIC) to publish a report regarding the state of the industry after they discovered an equivalent of 30% of the Australian adult population could have had an open account. Even more shocking, 21% of the users they surveyed missed a payment in the preceding 12 months. 

Expect a shake up of the industry soon.

📈 Future growth

Presently discounts, coupons, and other marketing activities around pricing are effectively turning new customer acquisition into a net negative game of chicken between competitors.

Sustainable growth of the industry in SEA is dependent upon achieving a healthy balance of products and services that serve the lifestyle needs of repeat customers which find inherent value without heavy discounting.

Take a deeper dive

Iching to learn more? Prince Jain, another building in this space, has a great write up here that discusses the industry in more detail.

🍹 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)

The opinions and views posted above are solely personal and are not indicative of the views of the authors’ employers.

Greetings Islanders,

It’s a new month (and a new quarter, iykyk). Island Fintech Weekly will be crypto-focused every first Sunday of the month, and I am super pumped to present the second edition!

For the dives section in the crypto editions I will be doing something different - I shall be focusing on DeFi and will do my best to break down the largest news happening in the crazy world of DeFi every month.

If you would like to chat about crypto, reach out to me on Twitter! DMs always open :)

🐠 Dips

• China declared all crypto transactions as illegal, prompting a 9% dip to $41,000 in the price of Bitcoin after the announcement was made. This comes after China’s plan to launch its digital yuan in the 2022 Winter Olympics. Cryptocurrency exchanges have already started banning Chinese users from their platforms following the announcement.

• In response to the announcement by the Public Bank of China (PBoC) on cryptocurrency ban, Alibaba said that it will stop selling crypto mining machines on October 8th, but the company claims that this decision was also made with the “instability of laws and regulations” of crypto in mind.

• In happier news, Visa recently published a paper about a “Universal Payment Channel” (UPC), which is what the company calls its blockchain interoperability hub. TLDR; the hub acts to connect multiple blockchain networks which will enable transfers of digital assets from different protocols and wallets, and engineers at Visa have been working on this initiative since 2018. In short, Visa is trying to build a stablecoin network on Ethereum L2. I personally am pretty excited to see how this rolls out, as if this succeeds, it could mean a big push for crypto going mainstream.

• Twitter announced in a blog post last Thursday that users can now tip other users using not only fiat, but also crypto! More specifically, with Bitcoin over the Lightning Network. Tipping with Bitcoin will only be available to users in El Salvador and most of the U.S., while the overall tipping function is currently available for iOS users first, before Android (which means that ya girl’s gotta wait 🥲 ).

• AngelList tweeted that it will now allow LPs to invest via USDC in any USDC-enabled syndicate or fund. The move was also announced in the AngelList Confidential 2021 Keynote event, where Avlok Kohli, the CEO, explained that USDC will be displayed as an option during the closing flow, where users can scan the QR code or copy the ERC-20 wallet address shown and transfer their funds over.

🐋 Dives

A single missing character bug costed Compound Finance $80m.

Ever wondered what difference one keyboard character could make?

Well, if you are a programmer, you know that one pesky missing semicolon or underscore will prompt your compiler to spew all kinds of error messages, keeping you up all night. Well, what about mistakes that your compiler cannot catch?

One such mistake led to a smart contract bug which costed Compound Finance $80m. What was the cause? A difference between ‘>’ and ‘>=’ .

Compound Finance had recently implemented Proposal 062, where the aim was to split COMP rewards distribution and fix bugs. The comptroller contract was updated and can be found here.

The error can be found on line 1217, where there is supposed to be:

if (supplierIndex == 0 && supplyIndex >= compInitialIndex)

instead of:

if (supplierIndex == 0 && supplyIndex > compInitialIndex)

When a user supplies tokens for a market that gives 0 COMP rewards like cSUSHI before the market is initialised, the supplyIndex will still be equal to compInitialIndex, resulting in the if block shown above to not be triggered.

When the if block is not triggered, value of supplierIndex will remain as 0, and supplyIndex will be 1e36, thus triggering rewards payouts for 1e36 indexes rather than zero rewards.

This resulted in Compound distributing more rewards than intended. Founder Robert Leshner mentioned in a tweet that there would be at most 280k COMP tokens impacted, which at the time of the tweet would be about ~$83,776,000.

In an ugly turn of events, Robert Leshner tweeted asking for any beneficiaries of the unintended COMP rewards payout to return the tokens to the Compound timelock. He ended off the tweet by saying that it would otherwise be counted as income to the IRS, and “most of you are doxxed”. This tweet was not received positively by the community, and he followed up with a tweet clarifying that he had only wanted to help the community get the tokens back and admitted that it was a “bone-headed tweet / approach.”

At the time of writing, nearly all 280k COMP tokens have been drained.

🍹 Twitticisms

Share Island Fintech Weekly

The opinions and views posted above are solely personal and do not reflect the views of the author’s employer.

Greetings Islanders,

Thanks for the overwhelmingly positive support for Island Crypto Weekly last week. Joyce has kindly agreed to become a permanent fixture to IFW and will be jumping in for the first week of every month’s edition, wrapping up a monthly update in the world of crypto. I would love to tackle some other verticals too, such as lending (credit decisioning, open banking, etc.) If anyone else is interested in joining this motley crew of writers, let me know. We also hope to build an open source community around SEA fintech amongst many other things - keep you posted about this!

Meanwhile, enjoy this picture of a beach.

Note: Want to get in touch with me about content or angel investing? Reach out to me at vinay.palathinkal@gmail.com. If you have any questions or thoughts around Wise’s Platform API, reach out at vinay.palathinkal@wise.com. You can also do all of the above via LinkedIn.

🎣  Dips

• Xendit, an Indonesia based API platform, recently became a unicorn with a $150m round led by Tiger Global. Xendit is really interesting in that they want to become a full-stack digital payments platform for their merchant partners - they see this as a way to get them to find a more attractive package to step out of the physical world and into the digital-first reality. in Tessa (COO)’s words - “For merchants to come online, they don’t just need payments, they need to be able to do things like subscribe to Shopify or subscribe to Google Suite, to be able to support being digital-first.”

• India and Singapore’s central banks have agreed to integrate their local instant payments networks. This move is expected to go live in July 2022, and if similar to the PromptPay and PayNow (Thailand and Singapore) integration - will be instant, yes, but not exactly class leading in terms of cost. Currently, there are pretty hefty (and non transparent) FX spreads charged by the banks managing the payouts from PayNow. I just checked right now and the spreads are about 1.6% of the transfer value. So essentially - convenience : ✅ but cost:❓

• Singapore Exchange (SGX) is set to launch a depository exchange linking program with Stock Exchange of Thailand (SET). Is it just me or did all these SEA finance brass suddenly start a WhatsApp group to collaborate on projects? Depository receipts (DRs) basically represent shares in a security listed on an exchange - so Singapore investors will have access to Thai stocks and vice versa. It’s a great move in enhancing liquidity and will also improve access for retail investors. With SGX also set to relax restrictions for SPACs, this is certainly helps with the ‘more-readily-available-liquidity’ argument.

• Singapore is setting up a new $1.5bn fund for jettisoning new listings on the SGX. The funds will be call 65 Equity Partners, managed by Temasek, Singapore’s sovereign wealth fund. The strategy is to make major late stage growth investments in Singapore and the region and eventually take them public on the SGX - most likely to be encouraged to be done on a SPAC model, essentially test-driving the newly launched framework here.

• Pluang, a wealthtech firm from Indonesia, just closed a $55m Series B round. Retail investing is all the rage in Indonesia, and Pluang provides access to various investment instruments, including gold, mutual funds, and crypto assets. The platform allows users to invest as little as IDR 10,000 ($0.70) in its products. Other investment startups that raised significant funding this year are crypto exchange Pintu, which bagged $35m in August; Bibit, which raised $65m in May; and Ajaib, which also snagged $65m in March.

🐋 Dives

• Digital Banking in Asia-Pacific (BPC downloadable report)

• I Have Summarised the Most Recent CBDC Experiments So You Don't Have To (Luca Prosperi)

• Vertical Fintech is Reimagining Community Banking with the Help of Next-Gen Infrastructure (Redpoint)

🍹 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)

Share Island Fintech Weekly

The opinions and views posted above are solely personal and are not indicative of the views of my employer.

Greetings Islanders,

Welcome to the first crypto edition of IFW!

While crypto continues to take over the world, the space in Southeast Asia has only started getting interesting, with a huge opportunity for growth. As this newsletter summarises everything that has gone on the past week in the world of fintech, this edition will be a mixture of what is going on in the crypto industry in Southeast Asia, along with what’s going on in other parts of the world. Without further ado, let’s dive right in!

Subscribe now

Note: If you’re interested in contributing content or getting involved with Island Fintech Weekly, reach out! 

🎣  Dips

• Binance.com halts some product offerings in Singapore after a MAS warning: Crackdown comes after regulators said that the company may be in breach of the country's Payment Services Act.

• MasterCard acquires leading cryptocurrency intelligence company CipherTrace, in a move to integrate CipherTrace’s operations into its own cyber security solutions for digital assets.

• Bitcoin has become legal tender in El Salvador, but there are mixed feelings about it: People love them for remittances, but economists think it is a threat to economic stability.

• Paypal acquires Paidy, the Japanese BNPL player for $2.7 billion, with the aim to gain more market share in Japan, the third largest e-commerce market in the world.

🐋 Dives

🐋 NFT market blows off steam after a record-breaking month of sales.

NFTs were all the rage in the past month of August. All of a sudden the crypto world was flooded with NFT projects on various chains, as people looked to other chains like Solana and Fantom for their affordable gas fees. If you would like to learn more about NFTs, The Verge has an interesting article on the chronology of the release of different NFTs here.

However, price floors and volumes have seen a decline since the start of September, which can be seen in the charts below:

Sales volume started declining at the beginning of September. Source: Dune Analytics

Overall approximate NFT floor prices on OpenSea started declining at the beginning of September as well. Source: Dune Analytics

As with most projects or inventions in its early stages, prices and sales volume tend to be volatile and unpredictable. In fact, we have actually seen a similar NFT market frenzy cooldown back in April and June.

But if you are truly in it for the art, the price action of NFTs should not bother you so much. After all, aren’t we all in it for the art (and the tech)? 😉

🐋 Robinhood rolls out recurring buys for crypto.

Robinhood is back again with more advancements in the crypto markets. In a blog post published on 8th September, the company announced that the new feature would allow for users to set up buys on their favorite coins on a daily, weekly, biweekly, or monthly schedule of their choice.

The purchases can be as low as 1 dollar, and like other purchases on the app, are commission-free. Considering that users do not need to pay any transaction fees, setting up a recurring buy would be an extremely attractive offering to users who are less trader-like, and who would like to buy and hold regardless of how the markets are doing.

This move seems only logical for Robinhood - crypto accounted for almost 50% of transaction-based revenue in the second quarter of 2021, with 62% of this crypto revenue coming from dogecoin. 

 🏝 Twitticisms

Share Island Fintech Weekly

The opinions and views posted above are solely personal and do not reflect the views of the author’s employer.

Greetings Islanders,

As you may know, I’ve been away for a while! I had national service obligations in Singapore, as well as some life ones. A lot of exciting things coming up for IFW, including a guest writer! Anyway, I hope you haven’t missed me too much 👋🏽

The term ‘first mover advantage’ was a popular one to describe how entrants in a space were able to ride an initial wave of change. The term ‘last mover advantage’ was popularised by Peter Thiel, but I saw it recently being used by Jungle Ventures to describe the opportunity in SEA - where companies have the benefit of learning from the successes and failures of their peers in the U.S., China and India. One of the many advantages of operating in SEA 🌏

Also, I am going to curate a collection of Island Fintech appropriate pictures to accompany every post now, to add some colour to this fairly B&W newsletter. Here goes the first one!

Note: Want to get in touch with me about content, angel investing or anything to do with Wise? Reach out to me at vinay.palathinkal@gmail.com or connect via LinkedIn.

🎣  Dips

• Singapore startups raised $5.3b in the first half of 2021, up from $3.4b in 2020. Recent Singapore unicorns like Carro, Nium and Patsnap are among the drivers of this 60% growth in the country.

• The Central Banks of Indonesia and Thailand have introduced a cross border payments linkage initiative. It is fairly niche - focused on merchant payments for residents of one country who would like to buy goods or services from the other, doing the linkage with a QR code. The catch is that it involves banks setting the FX rate and marking up a spread.

• Hong Kong-based brokerage platform, Futu Holdings reported that total client assets hit $64.8b at the close of Q2 - more than triple last year’s figures. Futu operates under a custodial scheme and provides access to US securities amongst others, and has relied on sign-up incentives to grow traction - I am interested to see how it may build its existing base with more sustainable initiatives.

• Singapore’s stock exchange, SGX, is looking to clear the path for SPACs in the country. Special Purpose Acquisition Vehicles have been a popular model for companies to indirectly list on exchanges, and Asian exchanges have typically not held favourable ground for SPACs to grow. Among some of the modifications promised by MAS, the minimum $223.2m market value proposal for SPACs may be relaxed - simplification of such regulation can be a great step forward for fintechs and indeed, other fast growing companies in the region who often see Singapore as a stable base to grow from.

• Ayoconnect, an Indonesian open finance platform, has raised a total of $15m in its Series B round, following successful deals with banks like Bank BRI, Bank Mandiri, as well as wallets and platforms like DANA, Indomaret, Bukalapak, Home Credit and Pegadaian. The news is encouraging as we’re seeing more actual deals being done with banks, fintechs and lenders in the region who are accepting alternative data models for providing underwriting for loans in Indonesia. As Ayoconnect mentions, this movement is a step forward towards the 90% population financial access target set by the Indonesian government, and for financial inclusion on the whole.

• Not exactly SEA, but interesting… Paidy is a new Japanese unicorn in the BNPL space. If you don’t know what BNPL is, pray tell, which rock have you been living under? Buy Now Pay Later is probably the hottest thing in fintech right now and the valuations reflect this. Paidy was born out of the challenges in acquiring credit in Japan, a tricky place for foreigners especially to get access, a firsthand problem for their founder, Russell Cummer. It’s notable that Cummer was also able to be cognisant of the Japanese preference to cash as a payment method, and also decouple Japanese payment regulation to build out a compliant solution. As we keep seeing, simplification + awareness + product compliance = win!

🐋 Dives

• The ‘Grab effect’ is inspiring a new generation of Asian entrepreneurs (Fortune)

• Better on the Cloud: Financial Services in Asia Pacific 2021 Report (Google)

• God, Money, YOLO: How Cathie Wood Found Her Flock (New York Times)

• Does decentralized finance really help the underbanked? (American Banker)

🍹 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)

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The opinions and views posted above are solely personal and are not indicative of the views of my employer.

Something that has been on my mind this past week has been the infamous AirAsia townhall video. If you’re not sure about what I’m talking about - the link is here. Tassapon Bijleveld, CEO of AirAsia Thailand, uses expletives while speaking to his staff, while other colleagues simply grinned on the split screens. AirAsia's CEO Tony Fernandes, who also happened to be on the call, issued a public apology that seemed reflexive at best - perhaps a hint at the sort of culture that the company espouses.

Workplace bullying can still happen with remote work. If you see this happening, I hope you will have the courage to 1) defend whoever is being spoken to in such a manner and 2) take the relevant steps for escalation. Ok, that's it from me. Peace ✌🏽

Note: Want to get in touch with me? Reach out to me at vinay.palathinkal@gmail.com or connect via LinkedIn.

🎣  Dips

• Afterpay, the Australian BNPL platform, is being acquired by Square for a $29b deal. Square is offering a 30% premium in a share-swap deal. The deal is interesting, combining complementary consumer (Cash App) and merchant (Square, Afterpay) ecosystems - providing significant cross-sell opportunity.

• Nium, a Singapore-based payments platform, raised a landmark $200m round, pushing them out as first B2B payments unicorn from Southeast Asia. Interestingly, the company is using the round to push its focus into the United States, where the company is relocating to, post-raise.

• Xero has partnered with UOB Bank to offer an integrated accounting experience for SME customers. It is interesting to see UOB partnering with Xero - many neobanks such as Aspire and Finaxar in Singapore have already partnered with the accounting platform. There is a strong need from SME platforms in Singapore to enable integrated accounting solutions. Incumbent banks are now realising that this is the case.

• UnionDigital in Philippines became the fourth licensed digital bank in the country after the Philippines banking regulator, BSP, gave the green light. Union Digital will be a fully virtual bank and will be a wholly-owned subsidiary of the Union Bank of the Philippines (UBP).

• Singapore's regulator, MAS, is in final stages of reviewing cryptocurrency applications submitted for state licenses in the country. There have been 480 crypto service license applications submitted under the Payment Services Act.

• The founders of Airwallex, an Australian payment service provider, are launching a $200m fund called Capital 49. The fund is focused on investing into the types of companies that supports its payments ecosystem - from e-commerce to SaaS.

• DBS Bank and Temasek in Singapore are launching a $500m debt financing fund. EvolutionX Debt Capital will provide non-dilutive financing to growth stage tech companies across Asia, with a focus on China, India and South-east Asia.

🐋 Dives

• The Next Generation of Fintech Infrastructure: How API Platforms are Disrupting Banking & Payments (Sebastian Garcia)

• Marqeta is turning to an industry outsider to take on fintech’s challenges (Protocol)

• Open Banking Will Be Good for America (Forbes)

• Burn Some to Earn Some - GrabPay's Monetisation Conundrum (The Ken)

• Grab Financial Group's Senior MD on Scaling a Tech Company from Singapore (Protocol)

🍹 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)

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The opinions and views posted above are solely personal and do not reflect the views of my employer.

© 2021 Vinay Palathinkal. See privacy, terms and information collection notice

Publish on SubstackIsland Fintech Weekly is on Substack – the place for independent writing

I took a break last week - a few days off work as well as time off from writing. I took the time to practise some mindlessness 🙂

I would encourage you to do the same, from time to time!

In the words of Mehnaz Ansari:

Mindfulness is contrary to mindlessness, yet both fit quite well in the spectrum of ways to recharge the human brain.

Note: Want to get in touch with me? Reach out to me at vinay.palathinkal@gmail.com or connect via LinkedIn.

🎣  Dips

• Grab has partnered with Adyen, the Dutch payments company, to expand its Buy Now, Pay Later offering, PayLater. Now more merchants who have already connected via Adyen’s API can offer PayLater to their consumers, allowing Grab to have a broader reach. This falls in line with Grab’s partnership with Stripe in May - where GrabPay was enabled as a payment option to Stripe merchants - and is all part of Grab’s strategy of increasing the ubiquity of its financial products.

• Jago has partnered with Gojek, to have Jago Bank as an accepted source of funds for transactions made on Gojek. This is basically the same update I wrote in the above paragraph, but for an Indonesian landscape. With Jago as an accepted form of payment, they tout ‘many new benefits’ such as a dedicated ‘pocket’ for their Gojek expenditure to easily track their transactions. The main one I see, once again, is the increased ubiquity of the payment method. More payment acceptance => more usefulness.

• OY! Indonesia raised a $45m series A round recently, allowing it to double down on efforts to improve interbank transfers. Interestingly, OY! and its competitor, Flip, are the only main players who compete in the free, domestic interbank fund transfer space in Indonesia - most other players play in the remittance market, according to the Indonesian business journal Dailysocial. Remittances could also be a potential place for OY! to consider as an area of expansion that could be fuelled by the new funding round.

• SGX will be acquiring MaxxTrader for $125m, which will help the exchange expand its offerings FX-linked financial products such as FX futures and OTC solutions.

• Syfe, the Singapore based roboadvisor, raised a $40m Series B. According to its CEO, they weren’t really looking to raise a round, but investors offered them terms that seemed to have been too good to refuse. My guess is that, hot in the heels of the fundraises by Endowus ($23m Series A) and StashAway ($25m Series D), roboadvisor companies (sometimes known as wealthtechs) have become hot commodity for venture cap investors.

🐋 Dives

• MAS: The Future of Money Is Too Important to Be Left Entirely to Central Bankers (Fintechnews Singapore)

• The State of Faster Payments in the US (Dana Kivis)

• BNPL's Next Phase: Shakeout and Profitability (Prince Jain)

🍹 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)

Share Island Fintech Weekly

The opinions and views posted above are solely personal and do not reflect the views of my employer.