Daily Tearsheet: How banking CEOs are focusing on sustainability, and the impact of instability of Terra and GYEN stablecoins
- External pressures are going on banks to adopt new sustainability measures. Is it working?
- Also, putting the meltdown of Terra -- a large stablecoin -- into context.
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How banking CEOs are focusing on sustainability, in 4 charts
Banking and financial markets CEOs are increasingly responding to external pressures and have begun recognizing the value of sustainability in their operations in order to drive business performance. However, they are not prioritizing sustainability as much as their peers in other industries.
Many executives highlight the pressures coming from board members and investors, as well as customers, to speed up the process towards net-zero operations.
But the path to sustainability is not a clear one – many executives reported that there are still many uncertainties around what the bottom line benefits would be, making it hard to determine which strategy would be best, according to an IBM study.
Sounds unstable: fluctuations in Terra and GYEN stablecoins make billions disappear
Coinbase’s customers have recently filed a lawsuit against the company over the alleged loss of billions of dollars due to their role in promoting and trading the GYEN stablecoin. According to the suit, GYEN was promoted by Coinbase and the stablecoin’s issuer GMO-Z as a 1:1 peg to the Japanese Yen, despite its vulnerability to breaking. When the peg broke soon after trading started, multiple investors bought GYEN assuming a 1:1 peg, when in fact the stablecoin had become several times more expensive.
We take a look at the instability in some stablecoins and its impact on the market.
Just look at the charts
1. Growth of B2B card spend
Source: Marcel van Oost
2. JP Morgan outlined its plan for increased spending on tech and fintech products
Source: Spiros Margaris
JP Morgan's tech and product investments to ramp up in 2022
Supplemental slides from JP Morgan’s investor day show that tech modernization efforts will top $2.8 billion in 2022, up from $1.8 billion in 2019 -- which will support more than $5 trillion in payments volume and will result in an 18% reduction in card and retail call volumes per account in 2019 (PYMNTS)
Cryptocurrencies have taken a prominent role at the WEF's annual
The World Economic Forum’s annual meeting postponed from earlier in 2022 formally kicks off in Davos, Switzerland, while crypto advocates opened the parties up on Sunday with bitcoin pizza stalls and blockchain pavilions with flashy banners lining the famed promenade (CoinDesk)
Why Meta is bullish about Web3
The metaverse has big implications for the future of financial technology and could enable a digital economy that supports millions of people, creators, and businesses (Meta)
Wells Fargo catches up with the UX provided by rival robos
Wells Fargo has relaunched its robo-advisory product, Intuitive Investor, making it available to customers with just $500 to invest, in an effort to attract millennial investors (Finextra)
Klarna to fire 10% of its workforce amid valuation crunch
Swedish payment giant Klarna is going to cut hundreds of jobs in the coming days -- the news comes a few days after it was reported that the company was going to cut its valuation to raise fresh capital (TechCrunch)
OakNorth the Fintech vs. OakNorth the Bank
OakNorth Bank originates SMB loans in the UK while its fintech sibling distributes loan software to PNC, Capital One, and other U.S. banks. Less than a decade old, the bank is profitable, a rarity among neobanks (The Financial Brand)
Did DoorDash hush up its earnings in the latest report?
Readers interested in hearing the results of DoorDash’s foray into MCA funding were disappointed by the last earnings call, as it didn’t come up -- the product was formally announced by DoorDash on February 9th, when the company said that it was offering DoorDash merchants MCA through a partner company named Parafin (deBanked)
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