Daily Tearsheet: The institutional adoption of crypto assets, BNPL as a form of cash flow underwriting, and insiders on the impact of the UST collapse

  • As banks consider their role in Web3, some are honing in on custody as a strategic and functional move.
  • Also, we look at the implications of the UST stablecoin demise.

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Daily Tearsheet: The institutional adoption of crypto assets, BNPL as a form of cash flow underwriting, and insiders on the impact of the UST collapse

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“Digital assets are effectively cybersecurity problems”: Anchorage Digital on the institutional adoption of crypto assets

The financial services industry is marching towards the mainstream adoption of digital assets, fueled by an increasing number of companies and investors who want to own cryptocurrencies and other crypto assets.  

As the institutional adoption of digital assets continues to grow, so does the opportunity for companies to offer safe storage and transactions with these assets. Custodial services, in particular, are an essential part of the ecosystem as it combines security with flexibility and is critical for the expansion of digital asset investments. 

Speaking at Tearsheet’s inaugural Bankchain Conference 2022, Diogo Monica, co-founder, and president of Anchorage Digital gave an overview of the complexities of digital asset custody in the crypto era. 

Read more

Cash flow underwriting: A BNPL solution

By Sarah Davies, Chief Data & Analytics Officer, Nova Credit

This is the third of a three-part series addressing some of the major challenges in our current credit system – and how we can fix them.

BNPL has seen some pretty impressive growth these past few years, and so far it doesn’t look like it’s slowing down – the adoption of BNPL is expected to grow at a CAGR of 32% between 2022 and 2028.

Consumers want to use credit products. The ones without the traditional creditworthy file are finding ways of doing so outside the traditional credit scoring paradigm. 40% of consumers use BNPL, and on average, each consumer uses four BNPL products. Those are typically younger and less financially secure households. 

While BNPL shows promises of inclusivity, it also brings a slew of new challenges for the industry, and more specifically for lenders, who now have to figure out how to conduct credit risk analysis on these types of loans.

Read more (sponsored by Nova Credit)

The latest briefing

Bankchain Briefing: ‘Don’t invest in something you don’t understand’: Insiders on the implications and impact of the UST collapse

When South Korean crypto firm Terra’s now-highly-controversial UST stablecoin collapsed, it caused panic and confusion in many parts of the industry, as well as among financial firms that had been watching the space from the outside with cautious curiosity.

There’s been a great deal of coverage about the reasons behind the collapse, as well as the differences between algorithmic and collateralized stablecoins, and why they play an important role in helping us make sense of this entire episode.

But a few weeks on, as the dust slowly begins to settle — we take a look at how people from within the crypto world think this event will impact the adoption of stablecoins, as well as the future of the industry as a whole.

Read more (exclusive to Outlier members)

Just look at the charts

1. Despite metaverse buzz, 60% of consumers have zero interest in virtual shopping

Source: Chris Gledhill | gledhill.eth

2. Rethinking the concept of money

SourceDavid Jimenez Maireles

Today’s stories

JPMorgan’s always wants to win in payments
JPMorgan Chase is amping up its investments in payment processors, and — according to the global bank’s head of innovation and corporate development — everyone else in the financial services industry should follow suit (Blockworks)

Affirm and Stripe are embedding BNPL in lots of checkout experiences
Affirm is making its BNPL tech available to businesses that use Stripe’s payments tech — this means Stripe can offer prospective and current, customers more payment flexibility. The deal is significant for Affirm because Stripe has “millions” of customers that result in processing hundreds of billions of dollars annually for every size of business (TechCrunch)

Republic Bank rolls out The Banktech Incubator program
Kentucky-based small bank Republic Bank & Trust Company is launching a new BankTech Incubator, aimed at supporting technology companies and their innovative products that complement the Bank’s strategic goals through investments in the companies and their products, and through knowledge-sharing (The Lane Report)

Who needs a standalone PFM? Introducing Tiller for Microsoft Excel
Tiller, the budgeting app, announced support for Microsoft Excel, delivering a complete personal finance service built on the industry-leading spreadsheet software program — Tiller’s newly upgraded service connects 21,000 banks to Excel and imports daily financial data with a click (PYMNTS)

Fidelity Digital Assets is on a hiring spree
Fidelity Digital Assets, a subsidiary of the financial services giant Fidelity Investments, plans to double its headcount this year to meet the growing demand for crypto trading from institutional investors (CoinDesk)

Stay ahead of the game with Outlier — Tearsheet’s exclusive members-only content program and join the leading financial services and fintech innovators reading us every day.

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