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Are banks and fintechs stablecoin skeptics or undercover believers?

    Stablecoins: The Trojan horse sneaking into traditional finance?

    Bitcoin’s been flexing, the government’s nodding, and stablecoins are making new friends.

    Pegged to the US dollar or other assets, stablecoins have evolved from a niche crypto experiment into a $221 billion plus market capitalization (of the top 10 stablecoins) and financial firms are definitely paying attention.

    Fintechs and financial institutions are moving to position themselves in this growing market. The question is: How can stablecoins impact the future of money, and what challenges lie ahead?

    Financial firms’ growing bet on stablecoins

    Stablecoins now represent a fundamental shift in how money moves. Their real-world use cases range from international remittances to corporate treasury management, enabling faster and cheaper transactions than traditional banking systems. Stripe has recently called them the “room-temperature superconductors for financial services,” a fancy way of saying they make payments shockingly efficient without melting down the system.

    The rise: Stablecoin use cases have been fueled by inefficiencies in the traditional banking sector and sticky inflation. Cross-border payments, for instance, remain slow and expensive due to intermediaries and outdated infrastructure. Stablecoins are also increasingly being used as a hedge against currency instability in emerging markets.

    The gray area: Despite their potential, stablecoins exist in a regulatory gray area — a place where innovation can either thrive or be buried under paperwork.

    Stablecoin regulation remains a patchwork of evolving policies. US lawmakers are now focusing on creating clearer, more comprehensive legislation. Proposals like the GENIUS Act and the Clarity for Payment Stablecoins Act are looking to define a legal structure for issuing and using stablecoins.

    Meanwhile, financial institutions that have already introduced their own stablecoins — or fintechs facilitating stablecoin transactions — operate within specific legal frameworks:

    • JPM Coin, launched in 2019, operates within J.P. Morgan’s private, permissioned blockchain network. It is used only for institutional clients, keeping it within regulatory boundaries.

    • PayPal’s PYUSD, launched in 2023, was issued through Paxos, a regulated entity with approvals from the New York Department of Financial Services (NYDFS). This allowed PayPal to offer PYUSD while complying with state-level regulations. By year-end, PayPal plans to make PYUSD available as a payment option for its 20 million+ SMB merchants, enabling them to pay vendors through its upcoming bill-pay service.

    • Stripe doesn’t issue its own stablecoin but facilitates payments and integrations using existing ones, such as USDC, avoiding direct issuance risks. Meanwhile, Revolut reportedly entered stablecoin development last year, while Visa rolled out a platform to help FIs issue stablecoins.

    More FIs are making moves: Bank of America CEO Brian Moynihan shared this month that his bank is prepared to enter the stablecoin business — once US lawmakers permit regulatory approval. 

    This cautious approach reflects broader concerns within traditional finance about compliance, risk management, and integration into existing financial systems. Banks face strict capital requirements and regulatory scrutiny, making their entry into the stablecoin market more complex. So, banks want in, but only when they won’t get a legal migraine for it.

    If banks receive a green light, stablecoins could compete with money market funds, transforming payments and liquidity management. But if regulations become too tight, the momentum could shift to friendlier jurisdictions, leaving US banks looking on like someone who showed up after the game started.

    How FIs and fintechs differ in their approach to stablecoins

    Graphic credit: Tearsheet

    Fintechs — and now banks — are moving more deeply into stablecoins, but their playbooks differ based on their respective strengths and constraints.

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    How banks can stay relevant, not relics: Lessons from BNY & Citi

      Old Guard, New Rules: Who’s keeping up?

      Big banks are playing offense. Fintech competition, tech leaps, and workforce expectations are evolving — so should banks.

      Traditional banks are already trying on a modern fit — experimenting with tech, balancing brick-and-click, rethinking talent, and making new power couple moves in partnerships.

      Two prime examples stood out last week: BNY takes the artificial intelligence route to improve its operations, and Citi continues to use workplace flexibility to navigate talent challenges. While these paths differ, they reflect a shared realization — adapt or risk becoming a museum exhibit.

      Graphic credits: Tearsheet

      BNY: Merging centuries of banking with AI innovation

      Established in 1784, BNY is America’s oldest bank, which has thrived for over two centuries. Yet, instead of clinging to its storied past, the institution is looking forward, betting big on AI as the key to its future.

      In a landmark deal, BNY has entered into a multiyear relationship with OpenAI, a decision that signals more than just technological adoption — it’s an illustration that even the most traditional players should innovate or risk being upstaged by a 25-year-old coder in a hoodie.

      The cornerstone of this AI-driven transformation is Eliza, BNY’s proprietary AI platform, launched in 2024. Initially conceived as an internal chatbot trained on the bank’s vast institutional knowledge, Eliza has evolved into a multifaceted AI tool that empowers employees to build AI-powered applications. More than 50% of the bank’s 52,000 employees actively engage with Eliza, using it for tasks ranging from lead generation to workflow optimization. By integrating OpenAI’s most advanced models launched this year, BNY is supercharging Eliza with next-gen capabilities. These include Deep Research, which can analyze vast amounts of online information to complete multistep research tasks, and Operator, an AI agent capable of browsing the web like a human.

      But why is BNY Mellon making this move now? Necessity. Competition. Strategic vision.

      • Necessity: AI adoption in banking is no longer optional. From compliance to risk management, the financial sector deals with high complexity. AI offers solutions to streamline operations, reduce inefficiencies, and facilitate decision-making. 

      • Competition: Fintech startups and tech giants like Google and Apple are poised to take over market share if they fall too far behind. To hold its ground, BNY likely needs a tech upgrade to offer more AI-driven services.

      • Strategic positioning: With banks emerging as some of the most active adopters of AI, BNY doesn’t want to be a bystander. Partnering with OpenAI gives it access to the latest underlying tech, positioning it as a strong player in the industry.

      However, this transformation is not without its challenges. Integrating advanced AI framework into a 240-year-old institution is like teaching your grandparents to use TikTok. Ensuring compliance with strict regulatory standards, managing the ethical implications of AI-driven decision-making, and upskilling employees to work effectively alongside AI are all significant hurdles. Moreover, cybersecurity remains a major concern — handling sensitive financial data requires strong protective measures to prevent breaches.

      Despite these challenges, BNY is forging ahead, not just out of necessity but out of the foresightedness that AI may likely be a big part of the future of banking. This puts other well-equipped banks on the spot — if the oldest bank in America can adapt, what excuse do the rest have?

      Citigroup’s Hybrid Bet: Why sticking to flexibility might just be its smartest move yet

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      Klarna and Chime eye IPOs in 2025 — But will the market play nice?

        Can fintech’s brightest stars shine on Wall Street?

        Klarna and Chime are finally ready to test the public markets, likely this year. The Swedish buy now, pay later (BNPL) firm and the US neobank have reportedly confidentially filed in late 2024 for IPOs, marking two of the most anticipated fintech public debuts in recent years.

        But with shifting market conditions, a new administration in the White House, and a mix of investor excitement and skepticism, these IPOs could either be fintech’s grand return to Wall Street — or another cautionary tale.

        The possibility of an IPO for Revolut and Stripe has also been brewing since 2023, but neither company is ready to seal the deal just yet.

        The case for going public

        For Klarna and Chime, the timing makes sense — at least on paper. Markets have started 2025 with a bullish streak, fueled by cooling inflation, a rebounding IPO pipeline, and a government that appears friendlier to fintech innovation. However, alongside that enthusiasm come fiercer competition and sharper investor scrutiny.

        After a turbulent couple of years, Klarna has been eyeing a public listing. Its valuation plummeted from a $46 billion peak in 2021 to around $6.7 billion in 2022 before rebounding to an estimated $15 billion. Going public could help Klarna raise fresh capital, expand further into the US, and compete more strongly with rivals like Affirm and Apple’s Pay Later service.

        As for Chime, with over 20 million customers, it is one of the biggest digital banking players in the US. However, it hasn’t raised funds since 2021, when it was valued at around $25 billion. A public listing could provide it with capital to fuel growth and potentially diversify beyond its core product offerings, which include a fee-free digital banking experience. 

        The aspirations and tactical execution

        The post-pandemic era has turned IPOs into a proving ground rather than a victory lap. Companies can no longer bank on hype alone — they need solid profitability, sustainable growth, and a narrative that withstands intense scrutiny. The Federal Reserve’s tighter monetary policies, global market volatility, and the shift from a liquidity-driven to a fundamentals-driven investment climate are creating higher entry barriers.

        Both Klarna and Chime will be entering a relatively less forgiving market and heightened investor concern than in 2021, a year that saw 61 fintech IPOs — far more than the 16 that have launched in the past three years combined.

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        Cupid’s Got a Ledger: Romance and rivalry in finance

          A Valentine’s Month take on banks and fintechs

          Last week, I teased a mystery topic, letting you stew in curiosity about what was coming. Well, the wait is over! Given that Valentine’s Day was just last Friday, I’m leaning toward a theme that fits the season: unions & collaborations.

          We often dive into stories of partnerships that start with fireworks and flawless roadmaps — only to crash and burn for one reason or another. But today, let’s moonwalk through this. Let’s talk about rivals who went from side-eyeing each other to shaking hands (at least in the business world).

          Take banks and fintechs, for example. Their early days were more ‘battle for dominance’ than ‘let’s work together’ — fintechs painted themselves as challengers, while banks saw them as pesky invaders. But time and market realities have a way of reshaping narratives.

          Now, banks and fintechs are increasingly recognizing their strengths. It’s a classic ‘you complete me’ scenario — if corporate romance were a thing.

          Graphic credits: Tearsheet

          But let’s hit rewind for a moment. How did these once-feuding forces go from wary opponents to strategic allies? And where do these kinds of relationships stand now?

          Let’s dig in.

          Block vs. J.P. Morgan Chase: From competition to cooperation

          J.P. Morgan Chase initially saw Square (now Block) as a major small-business payment competitor. In 2014, CEO Jamie Dimon famously warned that Silicon Valley was “coming to eat our lunch.” Square’s success with small business payments and its Cash App product placed it in direct competition with Chase’s merchant services.

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          Payments Pulse: BNPL’s banking glow-up & Hey Block, you there?

            In finance & crypto, today’s misstep might just be tomorrow’s masterstroke

            The payments world is buzzing with fresh developments this week, especially on the BNPL front.

            Let’s talk about two payment-space scenarios where, based on my observations, the game has changed hands:

            • First, we have the rise of banks shaking hands with BNPL providers to supercharge their offerings — something that just a few years ago would have had most banks and regulators clutching their pearls.

            • Second, let’s check in on Block, which was once slammed by analysts for its Bitcoin obsession, but now it’s standing tall with all its chips in play.

            Let’s start with the BNPL scene.

            BNPL + Banks: The new power couple?

            Banks are finally getting cozy with BNPL. Who knew? For a while, BNPL was that rebellious teen that no one quite understood, especially regulators and financial institutions. But now, well, let’s just say it’s making some unexpected alliances.

            Affirm Card opens doors for banks: Affirm is bringing its Affirm Card, which offers both credit and debit features with pay-over-time, to third-party issuers. This means banks can now jump on the BNPL bandwagon with the Affirm Card, which first launched in 2021. 

            Through a partnership with FIS, Affirm is giving banks the chance to offer this pay-over-time service to their customers without asking them to carry around an extra card. Any bank that partners with FIS can now provide its version of the Affirm Card; no new plastic is required. So, in a way, it’s BNPL, but with a side of bank credibility. How’s that for a plot twist?

            Klarna is the chosen one for JPM’s B2B BNPL offering: J.P. Morgan Chase is making a major move in the payments space by teaming up with Swedish BNPL provider Klarna to bring BNPL options to its business customers.

            Through this partnership, businesses using J.P. Morgan Chase’s payments commerce platform will now have access to a BNPL service, giving them the flexibility to break payments over time. The integration is set to launch later this year.

            Block Check: Is Dorsey’s vision finally paying off?

            Switching gears to Block — in 2022, I did a story on Block and asked a question that seemed almost heretical at the time: Should Jack Dorsey’s Block return to its roots? Analysts thought Jack Dorsey was off his rocker for diving headfirst into Bitcoin a few years ago. They believed that he was betting the farm on a volatile digital currency with questionable prospects.

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            Trump, Crypto, and Banks: A love triangle with trust issues

              FIs are unsure whether to swipe right or left on the whole relationship

              As I sifted through the recent Trump and financial world shake-ups for this week’s 10Q installment (trust me, there were plenty), I finally zeroed in on today’s story — how crypto is taking on a new life under the president’s watch and what that could mean for Wall Street banks.

              In a move that has both crypto enthusiasts and traditional bankers adjusting their spectacles, Trump has gone full steam ahead into the world of crypto. From launching his own DeFi platform, Liberty Financial, to embracing meme coins and reshuffling government positions to favor digital assets, Trump’s dive into crypto is a rollercoaster ride, packed with twists, turns, and high stakes.

              For him, these initiatives aim to propel the United States to the forefront of cryptocurrency. 

              Some of his pivotal actions in this direction include:

              ~ From ‘I’m not a fan’ to ‘Let’s make crypto great again’: Rewind to 2019, and Trump was calling Bitcoin a “scam” and tweeting that crypto was “based on thin air.” He’s now one of the loudest voices in crypto, a position solidified by the launch of his World Liberty Financial (WLFI).

              WLFI offers lending, borrowing, and yield farming opportunities in a way that, according to Trump, “keeps financial power in the hands of the people, not the globalists.”

              The platform operates with a strong focus on stablecoins, specifically those pegged to the US dollar, in an effort to solidify the dollar’s role in global digital transactions. Within weeks of launch, WLFI transferred $307 million in crypto assets to Coinbase Prime, raising eyebrows in both crypto and traditional banking circles.

              ~ Meme coins FTW? If WLFI was Trump’s serious play into DeFi, his next move was pure spectacle: embracing TrumpCoin (not officially affiliated with him, but heavily inspired). The meme coin skyrocketed overnight after he gave it a nod during a rally, stating, “I hear there’s a Trump coin. Maybe it’s the best coin. People love it.”

              While most politicians stay far away from meme coins, Trump has leaned in, fueling speculation that he may formally endorse a cryptocurrency of his own. And in the world of meme coins, a simple tweet or soundbite can send prices soaring — or crashing.

              ~ Crypto-friendly faces in high places: Trump’s been appointing pro-crypto figures to key government positions.

              David Sacks, a crypto advocate, was appointed to lead the SEC (U.S. Securities and Exchange Commission) sparking hopes of a more crypto-friendly policy shift that could ease digital asset integration for financial institutions.

              Sacks took to Capitol Hill this week to unveil the administration’s vision for cryptocurrency regulation. The Senate Banking, Senate Agriculture, House Agriculture, and House Financial Services Committees are joining forces to create a bicameral crypto committee. Their main focus is to create a stablecoin bill and set up a federal regulatory framework for digital assets.

              The Federal Reserve and FDIC are also considering pro-crypto policy shifts, encouraging deeper institutional adoption. Travis Hill, the acting FDIC chairman appointed by Trump, noted at the Senate Banking Committee this week that the FDIC is reevaluating its stance on crypto regulation to provide a clear path for FIs. The regulator is also revisiting its stance on insuring crypto-related deposits. If crypto firms get FDIC backing, it could make digital assets more palatable to mainstream banks and investors. 

              Hill also pointed out that the agency had previously made it harder for banks to engage with crypto, referencing past communications that discouraged such involvement.

              Cynthia Lummis, a longtime Bitcoin supporter, was also tapped by Trump for the position of Treasury Secretary. 

              Big Banks: Panic, Adapt, or HODL (Hold On For Dear Life)?

              Earlier, banks were happy with Trump’s pro-business and deregulation policies. But now, with the new president reshuffling the financial deck and rolling out the red carpet for crypto, banks are likely stuck in a corporate identity crisis. Should they dive headfirst into the DeFi space or stick to the tried-and-true methods that have kept them at the top?

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              Is AI your new work buddy or your pink slip in disguise? WEF 2025 Davos has thoughts

                Banks, Bots, and Big Ideas; but what’s the deeper insight we’re missing?

                  Every January, the world’s finance players head to Davos, Switzerland, for the World Economic Forum (WEF). This year was no exception, running from January 20 to 24 under the theme Collaboration for the Intelligent Age.

                  AI was last year’s favorite talking point, popping up in nearly every session. This year it was practically the event’s co-host, sharing the spotlight with American politics — the virtual appearance of the newly elected US President, and his polarizing comments about EU regulations, which didn’t exactly win him any fans.

                  AI: The front and center

                  Image Source: World Economic Forum

                  At WEF 2025, AI wasn’t just a topic — it was the topic. From business to governance, nearly every session revolved around AI’s impact from different angles. Key discussions included:

                  • Can National Security Keep Up with AI? (The risks and rewards of AI in defense)

                  • Who Benefits from Augmentation? (A deep dive into AI-human collaboration)

                  • Industries in the Intelligent Age (Which sectors are evolving — or disappearing?)

                  • Media Briefing: Unlocking the North Star for AI Adoption, Scaling, and Global Impact (Finding AI’s true potential)

                  • State of Play: AI Governance (Balancing innovation and regulation)

                  • The Dawn of Artificial General Intelligence? (How close are we, really?)

                  • AI: Lifting All Boats (Can AI drive growth for everyone?)

                  • Reskilling for the Intelligent Age (Preparing the workforce for what’s next)

                  Figuring out whether AI is a threat, a tool, or a team player

                  AI’s influence in banking and financial services has been a hot-button issue for a few years now, and it’s only getting more interesting. Financial leaders at WEF boiled it down to 3 key takes on AI’s role in banking:

                  1. AI as the job cutter: AI could shake up the job market, with potential job losses in banking as tasks become automated

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                  Inside the mind of Wise’s New Commercial Director for North America and her ambitious plans

                    From startups to stock markets, this new leader is ready to tackle the challenge head-on

                      The start of a new year is often a time for goal-setting and implementing organizational changes. Wise Platform embraced this spirit by appointing Lauren Langbridge as its new Commercial Director for North America.

                      In this role, Lauren will lead the expansion of Wise Platform’s strategic partnerships integrating into financial services firms, growth initiatives, and commercial strategies across the region.

                      Before joining Wise Platform, Lauren worked at Currencycloud, a private UK-based firm that offers a fully cloud-based platform for B2B cross-border payments. She helped the company grow from a startup into a global player in cross-border payments. Visa acquired Currencycloud in 2021 for $963 million (£700 million).

                      I had the opportunity to sit down with Lauren to learn about her career path, her vision for Wise working with banks, and how she’s managing the transition from a private firm to a leadership role in a public company operating extensively across North America.

                      Lauren Langbridge, Commercial Director for North America at Wise

                      How does managing strategies in a public company differ from your experience in a private firm?

                      Lauren Langbridge: Having transitioned from a VC-backed private firm to a publicly traded company, I’ve experienced firsthand the differences and opportunities in managing sales and revenue strategies. One significant shift is the level of scrutiny and accountability. At a public company, there is a broader range of stakeholders — investors, analysts, and even employees — who are closely watching performance.

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                      Big Banks, Big Bucks: After a mic-drop Q4 2024, what’s on the menu for Q1 2025?

                        The 3’D’ Playbook: Dollars, Deals, and Dreams

                          The confetti from New Year’s celebrations has barely settled, but the banking sector is already throwing its own party. This week’s Q4 2024 earnings results have been nothing short of a financial fireworks show, with big banks flexing their muscle in style.

                          Leading the charge was J.P. Morgan, reminding everyone why it’s the heavyweight champion of US banking. Profits skyrocketed 50% to $14 billion for the quarter. Revenue? Up 10% to $43.74 billion, contributed by a net interest income of $23.47 billion that exceeded analyst expectations. J.P. Morgan isn’t just making money — it’s making history.

                          Citi brought home a solid $2.86 billion in net income for the final 2024 quarter. Its investment banking arm stole the spotlight, with revenue rising 35% YoY to hit $925 million.

                          The numbers painted an equally lively picture over at Goldman Sachs, Wells Fargo, Bank of America, and Morgan Stanley.

                          Goldman’s profit roughly doubled from a year earlier to $4.11 billion. Revenue soared 23% to $13.87 billion, driven by strong gains in equities and fixed-income trading, along with improved investment banking results. Wells Fargo posted a 47% surge in net income, reaching $5.1 billion, up from $3.45 billion in the same quarter last year, with revenue hitting $20.4 billion. Bank of America delivered $6.67 billion in net income on $25.35 billion in revenue. Meanwhile, Morgan Stanley more than doubled its quarterly profit to $3.71 billion, fueled by a standout performance in its equities trading division, which saw revenue skyrocket 51% to $3.3 billion.

                          The Sweet Spot

                          Even before the ball dropped on New Year’s Eve, banks were riding a wave of optimism, and here’s why:

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                          The calendar flipped, and so did the market trends

                            Markets are hitting refresh for the new year!

                              Wishing you a fantastic start to the New Year and an amazing journey ahead!

                              Let me ask the question we all know the answer to: “New Year, New Me?” Pfft, we’ve all overused that resolution like a credit card with no limit. The financial services industry has its fair share of those shiny pledges.

                              But here’s something intriguing to kick off my first 10Q Newsletter of 2025: this year didn’t just start on a positive note — the industry’s optimism actually started brewing before the ball dropped. That’s a refreshing change from the gloom and doom of recent years. So, let’s dive into how and why the financial world is stepping into 2025 with a little extra spring.

                              On a broader, behind-the-scenes level, December — when holiday vibes trump work emails — turned into a surprise whirlwind for us. Instead of the usual festive lull, we experienced an inbox overload with a flurry of company news, pitches, and developments. Clearly, this 2024 December decided to break tradition.

                              On the external front, I’m noticing a few key trends emerging in the markets and public firms. The IPO scene for 2025 is gearing up for a surge, AI looks primed for yet another standout year, and Web3 is showing signs of a triumphant return (looks like AI’s got some competition in the ring this year).

                              Let’s take a moment to see what’s taking shape in each of these areas.

                              The 2025 IPO landscape

                              Many big names are gearing up to make their market debut, including:

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