The Financial Stability Board Met in Paris to Discuss Issues Facing Global Financial Industry Including Fintech

The Financial Stability Board (FSB), an international organization that monitors and makes recommendations regarding the world’s financial system, recently met in Paris in order to discuss key issues facing the global financial industry, including potential vulnerabilities, various Fintech developments, and the agency’s 2020 work program.

The key topics of discussion included addressing vulnerabilities in the world’s financial ecosystem. These include the potential impact that certain structural changes in the global interest rate environment might have on financial stability. The FSB also aims to address the vulnerabilities that may be associated with collateralized loan obligations and leveraged loans.

The FSB further discussed the ability of financial institutions in certain jurisdictions to raise funds at affordable costs following adverse economic conditions.

The agency went over the FSB surveillance framework, which aims to support a review of vulnerabilities. The organization says it is planning to finalize the key parameters of the framework by next year.

The FSB also went over Fintech developments, including those in the crypto-asset industry, which were discussed by the Plenary. The agency recommended an augmented framework for monitoring financial stability risks, including those found in stablecoin platforms. The FSB also looked at the wider regulatory and supervisory issues associated with stablecoins.

[easy-tweet tweet=”The FSB recently reviewed #Fintech developments, including those in the crypto-asset industry ” template=”light”]

The FSB says it is planning to release a consultative report next year on regulatory issues involving stablecoins.

The agency also discussed potential effects on financial reforms, and said it will release a consultation report on “too-big-to-fail” reforms for systemically vital financial institutions in June of next year, and also plans to introduce an evaluation and review of the effects of financial market fund reforms by next year.

Additionally, the FSB talked about its work program. The agency said that its main focus for next year will be to identify and address new vulnerabilities in the global financial ecosystem. The organization is planning to finalize and operationalize post-crisis reforms, while also reviewing  the effects of implementing the reforms.

Smart Lenders AM Launches New Investment Fund Specialized in Marketplace Lending

Smart Lenders AM announces the upcoming launch of a new fund dedicated to financing loans to European SMEs issued through marketplace lending platforms (crowdlending).

Smart Lenders AM is an asset management firm that specializes exclusively in financing loans issued by online marketplace lenders. Established in 2014 in the UK, the firm moved to Paris in 2018.

To date, it has financed a total of €600 million worth of consumer and SME loans issued by online lending platforms.

The new fund will be a Specialized Professional Fund (SPF) regulated under French law by the Autorité des marchés financiers (AMF). It will be launched on 1 February 2020 with a target size of €150 million.

Smart Lenders’ investment approach will build on the company’s experience in investing in the US and European crowdlending markets for the past five years. Through their use of technology, online marketplace lending platforms can extend a multitude of smaller loans to a larger number of small businesses. It is an economical distribution channel that benefits all stakeholders. To investors, it offers higher yields and better diversification.

Having successfully launched a €200 million investment fund regulated in Luxembourg three years ago, Smart Lenders AM now offers a new investment vehicle to institutional investors who wish to lead in financing the real economy and helping create jobs in Europe.

“The European crowdlending market, whose growth we have been following for several years, now offers to institutional investors increased volumes of loans of increased quality. With this new fund, we are meeting a demand from our institutional clients for a reliable and efficient solution to funding the real economy,” declared Erich Bonnet, founder and CEO of Smart Lenders AM.

Therese Torris, PhD, is a Senior Contributing Editor to Crowdfund Insider. She is an entrepreneur and consultant in eFinance and eCommerce based in Paris. She has covered crowdfunding and P2P lending since the early days when Zopa was created in the United Kingdom. She was a director of research and consulting at Gartner Group Europe, Senior VP at Forrester Research and Content VP at Twenga. She publishes a French personal finance blog, Le Blog Finance Pratique.

Monetary Authority of Singapore Boosts Fintech Cooperation with Canada, Tightens Relationship with Banque de France

The Monetary Authority of Singapore (MAS), the leading financial regulator and central bank of Singapore, has announced renewed cooperation on Fintech with Canadian Securities Regulators while simultaneously announcing a tighter relationship with the Banque de France. The announcements were released during Singapore’s annual Fintech Week event.

MAS and eight members of the Canadian Securities Administrators (CSA) signed a cooperation agreement regarding Fintech. In Canada, there is no federally defined securities regulator with each province hosting their own regulator. The CSA members are the securities regulatory authorities in Alberta, British Columbia, Manitoba, New Brunswick, Nova Scotia, Ontario, Québec, and Saskatchewan.

The framework with the CSA includes setting up a referral and support mechanism to make it easier for Fintech firms to access each other’s markets.

The CSA members and MAS have also committed to regularly exchange views and best practices on the regulatory sandbox, and share information on latest FinTech trends.

Louis Morisset, CSA Chair and President and CEO of Quebec’s Autorité des marchés financiers, stated:

“This agreement with MAS will allow innovative businesses in Canada and Singapore access to new regulated markets. Flexible regulatory environments with appropriate investor protection measures are best-placed to support the rapidly growing Fintech industry.”

Regarding the relationship with France, MAS stated that the Banque de France will open a second overseas office in Singapore in early 2020. This will be BDF’s second office abroad after New York, opened in 2010. BDF is expanding its presence in Asia in response to the growing importance of the region in the global economy and financial markets.

BDF’s office in Singapore seeks to provide enhanced monitoring of Asian economies and financial systems, and forge closer relations with central banks and financial authorities in the Asia-Oceania region. Additionally, BDF will also set up a dealing room to strengthen its operational capacity to better serve international official sector entities in the Asian time zones.

The French Autorité de contrôle prudentiel et de résolution (ACPR), BDF and MAS will sign a Memorandum of Understanding (MOU) to enhance cooperation in cybersecurity. The MOU will also provide for staff exchanges to deepen working relationships and mutual learning.

François Villeroy de Galhau, Governor of BDF, commented:

“MAS and BDF & ACPR have a very good and close relationship: our presence, this year again, at the Singapore FinTech Festival, with the start-ups that we support, proves it. The future opening of a permanent office in Singapore will be a key step in strengthening our link with the Asian continent, which is highly important in today’s globalized world.”

Ravi Menon, Managing Director of MAS, said they are delighted that the BDF is setting up an office in Singapore.

Sopnendu Mohanty, Chief Fintech Officer at MAS, stated:

“Singapore and Canada are no strangers to Fintech collaboration. MAS and The Bank of Canada had successfully collaborated on Project Ubin to explore cross-border payments transactions using blockchain technology. With this agreement, I look forward to seeing stronger ties and cooperation between Singapore and the eight-member jurisdictions of the CSA, specifically in developing innovative solutions for the securities sector.”

Equisafe and Masteos Plan Rental Investment Platform Facilitated by Blockchain

Tokenization platform Equisafe and Masteos will soon launch a marketplace for pooling rental investments between individuals via the blockchain, according to a note from Equisafe.

The platform named RENT was created by Equisafe and by Masteos, a consulting and rental property management company.  Equisafe explained the transactional process with a test as follows:

  • Florian, a full-time lawyer with a permanent contract, owns an apartment in Rennes bought on credit to make it a self-financed rental investment (i.e. the rents received should be higher than the monthly payment of his loan). He needs equity to finance other projects but did not want to sell his apartment.
  • Paul, a freelance graphic designer with regular customers and making a comfortable living, sought to invest, but could not get the appropriate bank loan.
    Equisafe and Masteos offered them a simple solution: that Florian could “monetize Paul’s borrowing capacity.”
  • For this process, Florian created a Simplified Joint Stock Company (SAS) to which he sold his apartment via a traditional notarial act carried out by the law firm Thésée Avocats Notaires. The SAS, managed by the real estate expert Masteos, was then numerically divided into a thousand actions (tokens or digital tokens) via blockchain technology on the Equisafe investment platform.
  • On November 6, 2019, Paul bought 41% of the shares of the company, thus becoming co-owner of the apartment with Florian.

Equisafe emphasizes that the apartment was “auto-financed.” Rents are higher than the monthly credit payments and additional charges. Florian can, therefore, benefit from his loan investment, as well as recover a share of the sale when the loan is paid off in full. The entire transaction was said to take about 6 minutes in contrast to the traditional process that would have taken months.

Blockchain technology was chosen to carry out this operation because it greatly facilitates the management of real estate assets.

Equisafe states that a digitized asset can be virtually divided into an infinite number of shares, making it possible to set a very low investment amount and multiply the number of potential investors in the same property.

Tokenization makes it possible to ensure simplified and automated management of the life cycle of the investment. Each token is, in fact, comparable to a digitized security containing all the property rights linked to a share allowing flow management (dividends, reinvestments), and provides a clear vision on rental management.

Supervision is provided by Masteos, who will guarantee the solvency of the assets and ensure their rental management through the companies holding the apartments.

In the end, management of the investment is said to be easier for everyone: individuals can register in just a few clicks on Equisafe who will (or will not) validate their profile. Then, the information entered will be immutable and verification of profile’s eligibility to invest can be checked automatically on the blockchain. Thus, the mutualization of rental investment (even with individuals who do not know each other) can become much easier.

Equisafe notes that in France more than 25% of the population is neither employed nor holds a permanent employment contract (CDI), this means nearly 7 million people.

These individuals are unable to justify a continuity of income even though some earn a very good living. These individuals are “abandoned by traditional banks that make it difficult for them to invest in rental real estate.”

Equisafe and Masteos seek to democratize the rental investment for people holding equity but who are neglected by these banks.

In the coming months, RENT is expected to be opened up to the general public.

Crowdfunding Cap in France Officially Increased to €8 Million

Good news for investment crowdfunding platforms in France. Last week, it became official that the effective crowdfunding cap was increased from €2.5 million to €8 million (~$8.9  million).

The change came with the finalization of Decree No. 2019-1097.     The Decree was part of the Loi Pacte (Pacte Law) which was enacted earlier in the year. The same law also legalized initial coin offerings that are not deemed to be securities (IE utility tokens).

The €8 million aligns with a European Union prospectus requirement. For an issuer of securities over this amount a prospectus must be provided – a substantial undertaking. Of note, the UK, the most robust securities crowdfunding market in Europe, has utilized the €8 million cap for some time now.

Like the UK, investment crowdfunding offerings have trended higher over time in France. Much of the activity is in real estate and online lending platforms. Early-stage crowdfunded offerings have remained flat.

Bilal EL-ALAMY, founder and CEO of tokenization platform Equisafe, lauded the news:

“It’s great, we were waiting for it since last summer.”

EL-ALAMY added that the rest of the Loi Pacte should be adopted within the end of the year thus adding more trust for both investors and Fintech players.

Currently, the European Commission is reviewing harmonized crowdfunding rules. One of the items which is being debated is the funding cap. With France moving forward at the €8 million level this may help encourage policymakers to seek a pan-European regulation that matches France’s decision.

Neo Investment Bank Equisafe Updates on First STO AnnA, Plans 15 Security Tokens in the Next 9 Months

This past June, France saw its first security token offering based on a real estate transaction. The process was managed by Equisafe, a platform that describes itself as a “neo investment bank.” The digital securities raised €6.5 million.

In a blog post from August, the AnnA transaction was explained as follows:

“the property rights of the company holding the building are now fully encoded in the blockchain, encrypted on EquiSafe virtual registry. Each token contains the terms and conditions for the purchase, sale and exchange of the securities, as well as the rights to which it gives access (dividends, vote, etc). This information is tamper-proof, unfalsifiable and permanently accessible, 24/7 thanks to blockchain. The cherry on the cake, it took us 30 min to do what takes [normally] ~2months and cost at least 20.000€”

Equisafe aspires to be a platform that is a full-stack operation providing primary issuance, shareholder management, and secondary transactions. By leveraging technology, Equisafe can streamline this process reducing friction and cost.

France, as a country, is targeting blockchain development as a sector of Fintech and innovation that is strategically important. It is the first big European country to create bespoke rules for initial coin offerings for utility tokens. France hopes to attract more blockchain startups with its crypto-friendly regime. Security tokens, while regulated just like regular securities, fits well into this vision.

Equisafe was founded by CEO Bilal El Alamy. As a digital investment bank, Equisafe provides traditional services you would expect combined with a blockchain-based platform to manage all of the transactions. Crowdfund Insider recently connected with El Alamy to hear about platform status and expectations for Equisafe in the coming months. Our discussion is below.

You completed your first security issuance with the purchase of a mansion in Paris (EUR 6.5M). What is the status of this transaction?

Bila El Alamy: The AnnA mansion, a superb Mansart-style building built at the beginning of the 20th century, first followed a classic sales process: a notarial deed validated the value of the building and marked the transfer of the latter to a simplified joint-stock company (AnnA).

Equisafe then registered this company as an issuer in its system on the blockchain, before dividing it into a hundred digitized shares (also called “tokens”).

On June 25, 2019, all the shares issued by AnnA were transferred via blockchain to the Real Estate developer SAPEB Immobilier. The shares have a lock-up period of one year intended to be used for renovation and to find a renter. Then, they might be offered again on our platform if SAPEB Immobilier decides so. The purpose of the operation was to demonstrate the capabilities of the EQS Platform. Now we are building new use cases based on the same structure.

When is your next offering due? What does your pipeline look like today? Are you focusing mainly on real estate? Early-stage firms? Or esoteric securities?

Bila El Alamy: We have exciting projects coming up (real estate and others) and investors should soon receive positive news!

For us, company size is not important. It’s a matter of project, team & network. Our goal remains to make financial securities more accessible to the greatest number through blockchain. We are focused on financial inclusion projects and our pipe is constituted of more than 15 tokenizations over the next 6 to 9 months, beginning with a real estate use case that we plan to announce on November 6th in Paris.

You describe Equisafe as a “Neo Investment Bank”. What does this mean? How do you plan to compete with traditional boutique investment banks?

Bila El Alamy: Equisafe’s main goal is to make financial assets accessible to as many people as possible through blockchain technology. In order to do so, we have created what we call a “neo-investment banking infrastructure:” this means you will have access to financial instruments and investment opportunities on our platform, without any trusted third party thanks to blockchain. Transactions will be facilitated and faster than what traditional investment banks usually offer.

The emphasis on « Infrastructure » is threefold.

First, we are a Tech Company and we provide such infrastructure for our clients, eager to modernize their processes;

Second, the platform provides an ecosystem for issuers, investors, custodians, regulators, financial intermediaries to interact within the same product. Indeed, we have replicated the financial ecosystem on blockchain.

And third: we provide this infrastructure on Tezos, Hyperledger Fabric with the Ownera Network and Ethereum.

At Equisafe, we don’t believe blockchain is just to remove the middleman or intermediary but rather to make intermediaries permission-less.

[easy-tweet tweet=”Equisafe’s main goal is to make financial assets accessible to as many people as possible through blockchain technology” template=”light”]

What are your thoughts on the ICO market in France, according to the Loi Pacte? Do you see this boosting blockchain innovation in France?

Bila El Alamy: The loi PACTE is definitely a step forward for any company wishing to launch an ICO. The law now clearly defines what constitutes a token and creates an optional visa for both ICOs and digital assets management services providers delivered by the French Financial Services Authority (AMF) which has been doing a great job over the past years to attract companies and foster our ecosystem. These dispositions should reassure investors and help them take decisions with more confidence.

I would say however that in the end, it’s just a matter of the project. Indeed, some projects didn’t wait for the AMF’s visa to succeed. Now that we are in a consolidation phase, both in terms of use cases and adoption, I’m confident we will see great projects emerging and the French blockchain community grow.

[easy-tweet tweet=”I’m confident we will see great projects emerging and the French #blockchain community grow @bilalelalamy” template=”light”]

What are your expectations for the digital asset sector in France? What about the EU?

Bila El Alamy: I see a bright future for the digital asset sector in France, and the same for the EU.

For multiple reasons, these institutions have never been that business-oriented. They take the topic very seriously, unlock governmental funding, reach out to the companies evolving in the ecosystem to understand the needs for the companies to develop. I do wish, however institutions, both French and European, would move faster to create and implement the regulations we need. It’s going the right way in France, but as an entrepreneur, I, of course, think it’s never fast enough.

Do you expect the European Commission to set specific rules to facilitate digital assets?

Bila El Alamy: I really do hope that the European Commission comes up with specific rules, specifically to homogenise them among EU countries. The next step would be to put forward a specific legal and fiscal framework to both endorse and allow traditional investors to better apprehend blockchain technologies.

Europe has a unique chance : becoming the first harmonized crypto-regulated block! I want our continent to take the lead in this industry, worldwide.

[easy-tweet tweet=”Europe has a unique chance : becoming the first harmonized crypto-regulated block! I want our continent to take the lead in this industry, worldwide @bilalelalamy” template=”light”]

Smart Lenders Asset Management Celebrates 5 Years of Operation

Smart Lenders, an asset management company specialized in managing portfolios of loans issued through online lending platforms (marketplace/crowdlending), is celebrating its fifth birthday. Founded in 2014 in London by Erich Bonnet (now based in Paris), Smart Lenders is now providing some data points regarding its operations:

  • $ 600 million of loans purchased / 60 000+ loans in the US
  • $ 300 million raised from investors across its vehicles
  • $ 185 million AUM in a SICAV launched in July 2016

Smart Lenders now has a team of 11 professionals.

The company moved to Paris in January 2018 with the “proactive support of the AMF and the Paris Region services who helped the team to relocate to France.”

Smart Lenders explains its process:

“Our approach depends on the rigorous selection of the partnering platforms and the scoring of the borrowers through our proprietary algorithms and models, that use statistical methods and artificial intelligence. Our effort in research and development has allowed us to be granted the “Jeune Entreprise Innovante” (JEI) status this spring, which is granted by the French state to young and innovative firms.”

A new fund is planned for early 2020 which will be dedicated to funding European SMEs.

Smart Lenders says it aims to boost its development with a large panel of French and European investors in 2020, through several fund projects adapted to a wide spectrum of investors, while aiming to bring robust and trustworthy solutions to the search for yield.

“We validated the relevance and sustainability of our business model since our launch in 2014. We are now starting the expansion phase to bring our know-how and a simplified access to this new asset class to a larger scope of investors,” explained Bonnet.

French Home Finance and Savings Firm 570easi to Launch Challenger Bank, SOeasi

570easi, a French home finance and savings solutions company, has introduced its own challenger bank, called SOeasi, in order to establish the world’s first Islamic ethics-focused neobank.

The challenger bank aims to leverage 570easi’s existing customer base as a foundation to help grow its business.

Established in 2010, 570easi currently has over 90,000 customers. The company says its clients have been “waiting for a banking and payment solution to hit the market.”

Younes Elbya, SOeasi’s new director and former Societe Generale executive, said the challenger will be working with 570easi’s customers as a base for its product ambassadors, noting that they’re “really involved” with focus groups to develop the new solution.

Elbya stated:

“[The new bank] will address a massively underserved community of clients, who express a strong need for reliable financial services, with an ethical and socially responsible drive.” 

He hopes the company’s new offering will attract other customers as well (not only Muslim communities).

The company aims to provide a payment card, banking, savings and wealth management services. SOeasi is currently in the development stage of its challenger journey. The initiative was launched during the summer months of this year, however, Elbya revealed that the research and development for the project began “long ago.”

Elbya added:

“The next steps are for us to get an alpha version in [our customer’s] hands as soon as possible, so that we can start testing and tailoring our solution.” 

He confirmed that the company is prepared for SOeasi’s planned launch next year. He also mentioned that he wants to make sure that the firm’s customers’ expectations are met.

Elbya points out that the company’s client’s expectations can be traced back to the 2008 global financial crisis, which he refers to as “a singularly painful and destructive occasion for the world.”

He further noted:

“[The crisis] has provided a contemporary case study for why Muslims – as monotheistic religions and a number of socially responsible intellectuals, more generally – consider interest rates, or ‘Riba’ in Arabic, as a negative source of finance.”

This is due to the economically disastrous effects of the financial crash, which were against the core principles of Islamic banking. According to Islamic scholars, the banking system should help grow and create financial value by using proper risk-taking measures while making real-life economic decisions.

Elbya states that SOeasi aims to provide equal access to “interest-rate free, speculation free and socially responsible sources of finance.”

When questioned about whether SOeasi is planning to compete with other challengers at it works toward becoming a profitable company, Elbya said

“Our hope, really, is to set realistic expectations and then beat them. However socially and ethically sensitive we hope to be, we are still a company, so we have designed a business model which will allow us to grow and scale up.”

Elbya also mentioned that the project’s leaders have a strong professional background that includes working with top tier banks, asset managers and consulting firms.

Payment Fintech Lemon Way to Receive €25 million Investment from Toscafund Asset Management

European payment Fintech Lemon Way has announced a signed agreement to receive a €25 million investment from Toscafund Asset Management LLP. Details of the investment were not provided. The investment is subject to regulatory approvals.

Toscafund is a London-based multi-asset alternative investment management firm with over $3.5 billion in assets under management. Founded in 2000 by Martin Hughes, Toscafund has established itself as one of Europe’s leading investors in the financial services sector. Toscafund has invested in other notable Fintechs such as Atom Bank and OakNorth.

Antoine Orsini, CEO and co-founder of Lemon Way, said they were pleased to have found a strong and internationally experienced partner which compliments earlier investors Breega and Speedinvest. “The investment provides us with substantial additional resources, allowing us to bring the company to the next level,” said Orsini.

This investment follows the company’s €10 million Series A fundraising in July 2018 led by VC funds Breega and Speedinvest.

“Toscafund is a leading investor in financial services and has a great understanding of the benefits of operating within a regulated framework. This funding round will help us improve our technological platform and finance our geographical expansion,” added Damien Guermonprez, Executive Chairman of Lemon Way.

Founded in 2007, Lemon Way offers a regulated payment solution dedicated to marketplaces, crowdfunding platforms and e-commerce sites as well as financial services companies requiring payment and fundraising services on behalf of third parties within a secure and regulated framework. This includes KYC and anti-fraud/AML services. Lemon Way was licensed by the ACPR/Banque de France as a Payment Institution in 2012 and has a “financial passport” in 29 countries. The company is based in Paris with offices in London, Madrid, Milan. It currently employs 70 people representing 14 different nationalities. Lemon Way claims over 7 million payment accounts.

In 2018, the company handled total volume of €1.9 billion inflows. Lemon Way expects to process transactions in excess of around €3 billion by the end of 2019, a 58% increase.

Lemon Way services complex online platforms that require payment processing, wallet management and third-party payment services in a regulated framework. Lemon Way differentiates itself by offering an all-in-one solution of modular and proprietary API-based services ranging from onboarding to cash pay-out flows.

Lemon Way says it plans to collaborate with banks, forging strategic partnerships aiming to provide flexible cutting-edge customized solutions to banks’ marketplace and e-commerce customers. The company currently has active partnerships with several major European financial institutions and aims to broaden its scope in the next few years.

Today, over 1400 European marketplaces, including 200 crowdfunding platforms use Lemon Way’s services.

Since December 2012, the company has registered 120 platforms as payment agents with the ACPR – Banque de France.

The additional capital will be utilized to develop its products, through proprietary APIs and new payment services in line with the complex requirements of its clients. Lemon Way is established in France, Italy and Spain, and said it will strengthen its presence in the United Kingdom and Germany to become one of Europe’s leading payment institutions for marketplaces.

Fabrizio Cesario, Partner at Toscafund, commented on the announcement:

“We are delighted to join Lemon Way’s existing shareholders and support the founders with our capital and expertise in European financial services. Building on Toscafund’s established track-record in providing capital to successful entrepreneurs, this investment is perfectly in-line with our mission to support companies taking advantage of technological change to disrupt the financial services industry.”

George Koulouris, Partner at Toscafund, said the Lemon Way’s target market is booming. Specifically, B2B, B2C and other financial online marketplaces including.

“Lemon Way’s technology, strong partnerships and differentiated expertise give the company a head start.”

Deputy Governor of France’s Central Bank Says Lawmakers Should Develop Standardized Crypto Regulations

Denis Beau, deputy governor of Banque De France, the nation’s central bank, says that lawmakers should develop a comprehensive global regulatory framework for digital assets.

Beau, whose comments came during a speech at an Official Monetary and Financial Institutions Forum (OMFIF) conference in London on October 15, noted:

“There is indeed a need for overall consistency to prevent regulatory arbitrage under the ‘same activities, same risks, same rules’ principle.”

He added that the only way to ensure that is with standardized regulatory guidelines for crypto assets.

Beau’s comments have come following several warnings issued by authorities regarding the Facebook-led stablecoin project Libra, which has seen several major corporations withdraw from its Association due to regulatory pressure.

While comparing Libra to central bank-issued digital currencies (CBDC), Beau noted that the social media giant’s cryptocurrency “may achieve significant market power, thus posing risks to security and financial stability.”

Although he did not provide any specific comments regarding Libra’s challenge, he did emphasize the need for standardized global regulations and wants to encourage central banks to experiment with their own CBDCs.

He pointed out that the existing global financial system depends on costly and cumbersome funds transfer platforms. He believes that distributed ledger technology (DLT) could help resolve many of the problems faced by the current financial ecosystem.

However, he said that crypto tokens will not be able to serve as an effective replacement for the global financial system. Cryptocurrencies are highly volatile and it costs too much to effectively transfer money, Beau said. He also noted that cryptos are not backed by governments, which is necessary in order to become a trusted store of value.

Beau stated:

“[Cryptocurrencies] can also bring material risks to our payment systems which, if unaddressed, might introduce new sources of fragmentation, instability and fraud.”

He went on to add:

“The potential role of a wholesale CBDC is, in my view, worth considering, if not desirable.”

[pdf-embedder url=”” title=”Banque de France 2019_10_15_discours_d._beau_omfif”]

N26 Milestone: Digital Bank Now Has More Than 1 Million Customers in France

Digital-only bank platform N26 announced this week it now has more than one million customers in France. The banking group reported it launched its services in the country less than three years ago with a goal to become the first bank that the French “like to use.”

At the time, 30,000 people had already joined our waiting list to be among the first to discover a new banking experience, with no paperwork and no hidden fees. And today, we’re proud to announce that we now have more than 1 million customers in France.”

N26 then revealed that since its launch in France it has implemented other services and features such as N26 Credit, in partnership with Younited Credit. N26 also revealed that it has integrated 3D Secure technology to provide extra secure transactions, launched discreet mode to let customers access their account in complete confidentiality when in public places, enabled Two-Factor authentication, and mobile payments.

N26 shared that 51% of its customers connect to their N26 mobile app from an iOS phone and 49% from an Android device. All age groups are represented:

  • 25% are between the ages of 18 and 25.
  • 37% are between the ages of 25 and 35.
  • 38% are over 35 years old.

N26 then added:

“The fact that N26 has now exceeded 1 million customers in France is all thanks to you! We are incredibly proud of this tremendous milestone and are grateful to you for continuing to bank with us, as well as for supporting us in building the bank that the world loves to use.”

The milestone in France comes less than two months after N26 announced it has made its mobile banking app available to U.S. consumers nationwide. U.S. residents may now download the app and apply for an N26 account and Visa debit card in five minutes. Nicolas Kopp, U.S. CEO of N26, stated at the time:

“We are excited to now open up N26 to the millions of US consumers who are frustrated with their current banking experience. We give users a banking app and Visa debit card that matches their lifestyles. We created a mobile, fast and easy way to bank.”

Apple CEO Tim Cook Says No Interest in Creating Cryptocurrency Similar to Facebook, No Plans on Becoming a Bank

Tim Cook, CEO of Apple, told French business newspaper Les Echos that Apple (NASDAQ:AAPL) has no interest in creating a cryptocurrency similar to Facebook. Cook blessed the front page of Les Echos October 4th print version with the headline “Apple est le premier contribuable mondial.” (Apple is the world’s largest contributor).

As has been widely reported, Cook stated in a response to a question about an Apple Coin:

“No. I really think that a currency should stay in the hands of countries. I’m not comfortable with the idea of a private group setting up a competing currency … a private company should not be looking to gain power this way. Money, like Defense, must remain in the hands of the State, it is at the heart of their mission. We elect our representatives to assume government responsibilities. Companies are not elected, they do not have to move into this area.”

Apple has long been at odds with several big tech firms in the US such as Facebook where the user is the product. Apple has notably been adamant about protecting users’ data and privacy. This cannot be said about Facebook, a company that is well known for leverage user data to sell ads and more.

Meanwhile, both France and Germany have come out with statements indicating their opposition to Facebook’s Libra stablecoin launch. A crypto that is effectively a non-sovereign global currency.

But while Apple may not be interested in challenging the US Dollar or the Euro, the big tech firm has been closely watching the cryptocurrency sector as was indicated in a recent interview.

Last month, Apple Pay Vice President Jennifer Bailey had this to say about cryptocurrency:

“We’re watching cryptocurrency. We think it’s interesting. We think it has interesting long-term potential.”

Most likely, Bailey is referencing the underlying tech without stepping into the policy trap of calling something a cryptocurrency.

Apple has quietly been lobbying the halls of Congress on various aspects beneficial to Fintech and big tech – a group of businesses that are moving quickly into financial services. In fact, the launch of Apple Pay, Apple Cash, and the Apple Card in partnership with Goldman Sachs makes Apple a solid contestant in the realm of Fintech innovation.

[easy-tweet tweet=”the launch of Apple Pay, Apple Cash, and the Apple Card in partnership with Goldman Sachs makes Apple a solid contestant in the realm of #Fintech innovation $AAPL” template=”light”]

In the Les Echos article, Cook was asked if the Apple Card was coming to France and he said Apple needs to “find a retail bank that is particularly agile. The world does not need a new credit card. He needs to rethink the credit card.” Cook said they are considering launching the Apple Card in several countries but want local partners.

What’s in a Name?

Cook also said Apple does not intend to become a bank but that belies the bank like services the tech firm is already offering to hundreds of millions of users. Today, you do not need to be a bank, to provide digital payments, and more.

It is only a hop, skip and a jump, before Apple starts launching a broader portfolio of bank-like services to its billion + global customers – all available on an iPhone or Apple Watch. It is going to happen, it is just a matter of time. Minus a cryptocurrency that challenges sovereign nations and angers governments, of course.

[easy-tweet tweet=”It is only a hop, skip and a jump, before Apple starts launching a broader portfolio of bank-like services to its billion + global customers – all available on an iPhone or Apple Watch $AAPL #Fintech” template=”light”]

October and 5 Confidi Launch Direct Lending Fund for Italian SMEs

Leading European marketplace lending platform October has joined with 5 Confidi entities belonging to Federconfidi and Rete Fidi Italia and with the European Investment Fund (EIF), to launch a €30 million fund to back Italian SMEs. Confidi are cooperative, non-profit guarantee consortia that facilitate access to capital for small and medium-sized Italian companies.

The fund is part of the Investment Plan for Europe or the “Juncker Plan.” The Juncker Plan focuses on boosting investments to create jobs and growth by making smarter use of new and existing financial resources, removing obstacles to investment and providing visibility and technical assistance to investment projects.

The contribution of Confidi and the guarantee provided by InnovFin, will lower the cost of borrowing for SMEs, according to October.

The first closing of the fund has been subscribed by the following Confidi entities: Neafidi, Confidi Systema!, Fidimpresa Italia, Confidi Sardegna and Confidi Centro. More investors are expected in the coming months.

October explains that the fund will lend alongside existing institutional and retail lenders on their platform.

The InnovFin guarantee agreement signed with October was due to the support of the European Fund for Strategic Investments (EFSI), part of the EC’s Investment Plan for Europe.

Carlos Moedas, European Commissioner for Research, Science and Innovation, issued a comment on the announcement:

‘This new InnovFin agreement will give Italian entrepreneurs an additional financial boost, supporting their efforts in creating jobs, growth and innovate. The Investment Plan for Europe is already expected to provide more than 65,400 Italian small and medium businesses with better access to funding.”

Pier-Luigi Gilibert, Chief Executive of the European Investment Funds, described the fund as demonstrating the capacity of the EIF to help finance all kinds of SMEs regardless of their size by supporting innovative finance providers such as October.

Sergio Zocchi, CEO of October Italia, stated:

‘This project is a perfect example of what cooperation between different actors within the financial ecosystem means. Fintech can be a powerful driver of digital transformation when it creates positive synergies among those who embrace it. October Fund is a great opportunity for SMEs as they will get better funding and for existing October lenders as they will get access to better companies while maintaining their returns.”

Online lender October has financed in excess of €345 million. October currently operates in France, Germany, Spain, Italy, and the Netherlands.

Payment Processor Receives E-Money Institution License in France, a global payment solutions provider based in the UK, announced on Wednesday has been awarded its E-Money Institution license in France by the Autorité de Contrôle Prudentiel et de Résolution (ACPR). reported that with the license it will be able to issue, manage and provide payment services to European businesses from a French-regulated and autonomous entity. While sharing more details about the license, Guillaume Pousaz, chief executive of, stated:

“France is one of the most critical eCommerce markets in Europe and of great strategic importance to the continued success of our business. We are thrilled to be licensed as an E-Money institution at a time when French businesses have proven themselves as leaders in the ever-changing eCommerce space. As a company whose own leadership team has meaningful connections to the French community, we look forward to being a part of that growth.”

Pierric Bonnard, Directeur du bureau de Business France au Royaume-Uni, went on to add:

“At Business France, we help to attract some of the world’s fastest-growing fintechs to set up here, employing people from our highly skilled tech and startup community. We are thrilled that a forward-thinking, global company like has been granted a licence here to further its mission of building the future of banking. We look forward to working closely with them to continue growing a tech ecosystem in France with global reach and influence.”

Founded in 2012, helps companies accept more payments around the world through one integration. Its global payment processing platform features in-country acquiring, relevant payment methods, feature parity across geographies, fraud filters, and reporting features, through one API.

French Minister of Economy Says No to Libra. Libra Association’s MD is Unfazed

On September 12, the French Minister of Economy and Finance Bruno Le Maire did not mince words. Libra should not be allowed in Europe, he said. Later, on the same day, Bertrand Perez, the newly appointed managing director and COO of the Libra Association was asked to react to this public rejection. He appeared reasonably confident that the Libra could prove itself and change the Minister’s mind.

[easy-tweet tweet=”The French Minister of Economy and Finance Bruno Le Maire: Libra should not be allowed in Europe” template=”light”]

It’s a No-No

At the OECD’s Global Blockchain Policy, in the morning of September 12, Minister Bruno Le Maire started his speech by reiterating its strong belief in blockchain as a technology “of major importance for France, Europe, and the rest of the world.” The French government is determined to support blockchain and cryptocurrency developments and lead regulation in this domain. He recalled that France was the first country to allow the recording of financial assets on the blockchain and to adopt a positive regulation of ICOs involving utility tokens.

He went on to say that the French government does not condone what he called “libertarian” claims that new technologies should enjoy regulatory and tax exemptions. New technologies must abide by the State’s authority which protects the public interest, he said.

This led him to the topic of Libra which he firmly and unambiguously opposed.

According to Bruno Le Maire, Libra is a private currency which threatens to breach the financial sovereignty of Nation-States:

“Libra would be a global cryptocurrency held by a single company which has more than 2 billion users. The financial sovereignty of the National States is at stake. […] If a country has a weak currency, and there are many such countries, […] Libra will replace these currencies and call into question these nations’ sovereign independence.”

The Minister cited additional risks: risk of abuse of dominant position, [privacy] risk for consumers and businesses, and failure to comply with anti-money laundering and with regulations combatting the financing of terrorism.

Most importantly, in the Minister’s eyes, Libra presents a systemic risk for the global financial system because of the size of Facebook and its 2+ billion users:

“Any failure in Libra’s operations, in how its reserves are managed could wreak financial havoc.”

He concluded with a clear rejection of Libra:

“In these conditions, we cannot allow the development of Libra on European soil.”

He then conceded that the creation of Libra was born from inefficiencies in current financial systems and invited banks and regulators to accelerate their improvement. He then concluded:

“As human beings, we must control technology, and not let technology control us.”

We’re Not a Bunch of Crypto-anarchists

On the same day, in the evening, Bertrand Perez, who was appointed managing director and COO of the Libra Association in May this year, was invited to speak at the prelaunch of the next edition of the Paris Blockchain Week.

It was Bertrand Perez’s first public appearance. Bertrand Perez comes to the Libra Association from PayPal and, before that, Zong – two payment-tech companies formerly led by David Markus, Libra’s driving force and the CEO of Facebook’s Libra wallet company, Calibra. In these companies, Bertrand Perez held senior executive positions in engineering and operations. He is based in Geneva where the Libra Association is headquartered.

Bertrand Perez’s managing director position is an interim position. The statutes of the Libra Association, which are being finalized, stipulate that the association’s managing director will be elected by its members.

When asked to react to the rejection of Libra uttered by Bruno Lemaire, Bertrand Perez was unfazed:

“Bruno Le Maire is playing his role as a regulator. […] We are confident in our technology and in our processes, in our capacity to deliver adequate reassurance. […] We are not a bunch of crypto-anarchists […] Our goal is not to launch Libra underhand but to make it a legal cryptocurrency.”

In answer to the concern about national financial sovereignty, Bertrand Perez stressed that Libra is not intended to replace national fiat currencies but to complement them with a payment token.

The Libra Association intends to respect the regulations of the countries where it will operate. The project was made public way ahead of the official Libra launch planned for mid-2020 precisely in order to collaborate with authorities and achieve regulatory compliance in countries which will accept it. The association is in the process of getting a license as a payment services company from the Swiss regulator, FINMA.

If a country does not accept it, Libra will simply not serve customers in that country. In terms of privacy, Libra’s blockchain will not hold any personal information. Personal information will be held at the level of the wallet providers, of which Facebook will be only one among many.

Concerning anti-money laundering (AML) and counteracting terrorism financing, Bertrand Perez claimed that Libra was proposing to integrate innovative AML and “financial intelligence” tools and was collaborating with the Financial Action Task Force (FATF) on these issues.

On the issue of systemic risk, Bertrand Perez argued that Libra was designed to be a means of payment. Consequently, the reserves of fiat currencies which back the Libra as a stable coin are not supposed to inflate into the trillions of dollars.

Nine Months!

This latest point was not refuting Bruno Le Maire’s concerns too convincingly. If Libra is as stable, as cheap to transact, as widely accepted as means of payment, and as easy to hold and convert as it claims it will be, what could prevent customers from hoarding it?

But Libra still is a product in the making and Bertrand Perez should not be expected to have all the answers. Still, one cannot help but be baffled by the magnitude of the challenges he and his team in the association are supposed to solve within the 9 months remaining until the middle of 2020.

Libra, as a stable coin, is protected from volatility by its one-to-one backing by reserves held in five stable currencies, the US dollar, the euro, the yen, the British pound and, probably, the Singaporean dollar and low-risk government bonds.

The Libra Association must, therefore, besides all the issues raised above, set up an entire legit financial value chain of investment managers, custodian banks, market makers, exchanges, wallet providers … and to do so in a way compatible with Libra’s goals of instant and cheap payments.


[easy-tweet tweet=”French Minister of Economy Says No to #Libra. Libra Association’s MD is unfazed #Blockchain” template=”light”]

Therese Torris, PhD, is a Senior Contributing Editor to Crowdfund Insider. She is an entrepreneur and consultant in eFinance and eCommerce based in Paris. She has covered crowdfunding and P2P lending since the early days when Zopa was created in the United Kingdom. She was a director of research and consulting at Gartner Group Europe, Senior VP at Forrester Research and Content VP at Twenga. She publishes a French personal finance blog, Le Blog Finance Pratique.

French Minister: Facebook’s Stablecoin Libra Challenges “Monetary Sovereignty” of States, Must Be Blocked

France’s government is reportedly planning to block the ongoing development of Facebook’s controversial stablecoin project, Libra. 

French authorities said the launch of the crypto-related Libra initiative must not be permitted in Europe because it challenges the “monetary sovereignty” of states, according to CNBC.

The report stated that France’s finance minister Bruno Le Maire believes the concerns raised around Facebook’s crypto plans are quite serious. While speaking at the OECD Global Blockchain Policy Forum 2019 (held in Paris), Le Maire noted:  

“So I want to say this with a lot of clarity: I want to be absolutely clear: in these conditions, we cannot authorize the development of Libra on European soil.” 

In June 2019, the minister had said he would request that Facebook guarantee that Libra would be properly regulated, in order to prevent the cryptocurrency from being used to finance illicit activities such as money laundering terrorist activities. 

Le Maire also noted that the social media giant’s stablecoin is an “attribute of the sovereignty of the State,” which must “remain in the hands of the States and not of the private companies which answer to private interests.”

US regulators have also raised concerns about the Libra project, stating that large tech firms should not be allowed to issue “a privately controlled, alternative global currency.”

In July 2019, a bill titled, “Keep Big Tech Out Of Finance Act,” recommended that giant tech companies should not be permitted to launch their own cryptocurrency or serve as financial institutions. 

The proposed bill was reviewed by democrats who oversee the US House Financial Services Committee.

Shortly after Switzerland’s Financial Market Supervisory Authority (FINMA) released guidelines on stablecoins, the Libra Association, a non-profit entity based in Geneva, said it would move towards acquiring a license as a payment service provider.

Smart Spend Management Software Company Spendesk Secures €35 Through Series B Investment round Led By Index Ventures

Spendesk, a France-based smart spending management software company, announced on Monday it secured  €35 million through its Series B funding round, which was led by Index Ventures, who previously led the company’s €8 million Series A round.

Founded in 2016, Spendesk describes itself as a smart spend management software designed for both finance teams and employees. The company noted that with flexible payments, approvals, automated receipt capture and real-time spend insights, finance can decentralize operational spending across the business without any loss of control or visibility.

“Employees benefit from streamlined expense and invoice management through the Spendesk website and app. So if you’re spending at work, you need Spendesk.”

Rodolphe Ardant, Founder and CEO of Spendesk, spoke about the company’s growth and development by stating:

“As a founder and CEO, this is especially important to me. Spendesk started as three people around a table with an idea. Today, we are over 100. At this point in our journey, it’s critical to ensure that we foster our culture of excellence, hard-work, commitment to customers and ownership we’ve built together as we start this new chapter. My commitment to our people: at Spendesk we’re building something valuable and great together. Our people and culture will always come first, even as we continue to scale.”

Funds from the Series B round will be used to continue the growth and development of the Spendesk’s platform.

Update: Whoomies’ Equity Crowdfunding Campaign Nears €400,000 During the Final Days on Seedrs

Whoomies, a France-based home-sharing mobile app, is now nearing €400,000 during the final days on equity crowdfunding platform Seedrs. The app’s campaign was launched earlier this summer and quickly secured its initial €300,000 funding target. More than 150 investors have invested in the funding round and Whoomies is offering 11.40% at a €2,332,044 pre-money valuation.

As previously reported, Whoomies is focused on delivering digital tools to improve the shared living experience on both tenants and real estate owners. The company claims its mobile app is the first mobile app to help users match with their perfect roommate while allowing them to deal with their ideal accommodations.

Whoomates, our B2B solution (live in June 2019), is empowering co-living & student accommodations by automating their room allocation processes. Our customized smart-matching algorithm and resident application forms are time savers and create unique opportunities to grow both revenues and resident satisfaction through big data analysis.”

Funds from the Seedrs round will be used for the following:

1) Product improvement and monetization.

Whoomies App [V2 & V3 Launch + Web-based platform]:

  • Improved User Experience.
  • New tech components (AI, new chatbot, video).
  • Enhanced room applications (application form assistance…)
  • In-app services.

2) Team expansion.

Key Recruitments (2-4 full-time):

  • Grow its tech development resources.
  • Scale up its business development efforts.

3) Customer Acquisition.

Whoomies noted it has been successful at customer acquisition since the very beginning of its journey by doing the following:

  • Keep on using communication and acquisition tools as a leverage for expansion and revenue.
  • Expanding to the entire UK & launch trials in new highly targeted markets.

The campaign is set to close this month.


French Cyber Police Take Down Monero Botnet Big Enough “To Bring Down All…Websites on the Planet”

“Cybergendarmes” from France’s C3N anti-cybercrime centre have dismantled a botnet that infected 850 000 computers worldwide with a virus to mine the privacy cryptocurrency Monero, BBC reports.

The botnet (a network of “zombified” computers commandeered by a virus to proliferate viruses) is believed to have generated millions of Euros in Monero since it was set up in 2016.

In this particular surreptitious cryptomining exploit, hackers used a server located in France to send out a virus dubbed “Retadup” in “phishing emails” (featuring erotic photos, for example), and also somehow proliferated infected USB drives.

Clicking on a link in a malicious email or opening the contents of dirty thumb drive injects cryptomining malware onto a computer. From there, the malware can move out onto any computer networked to the infected one.

Many enterprises, including Starbucks, have had their networks commandeered for cryptomining, which can slow down and run down hard drives and eat up prodigious amounts of electricity. Proceeds of the cryptomining are sent directly to hackers.

The extent of the viral infection in this case, C3N chief Jean-Dominique Nollet told France Inter radio, was very dangerous:

“People may not realise it but 850,000 infected computers means massive firepower, enough to bring down all the (civilian) websites on the planet.”

The cybergendarmes first located and dismantled a malicious pirate serve in Paris that functioned as the nerve centre of the botnet. They then moved on to disinfecting computers around the world by making a “replica server that rendered the virus inactive on the infected computers,” according to the BBC, and, “the FBI in the US also helped… he French…to block traffic and direct it towards their replica server.”

Notably, the BBC reports, “Viruses are usually redirected (by cybersleuths) to dead areas of the internet rather than being disabled.”

This Retadup infection affected, “hundreds of thousands of Windows-operating computers, in over 100 countries but mainly in Central and South America,” and was even used to, “extort money through ‘ransomware’ and even steal data from hospitals in Israel,” including patient data.


Alternative Finance is Experiencing an Unprecedented Boom Worldwide

Ten years after the financial crisis, Alternative Finance continues to exhibit strong growth. The sector is estimated to account for nearly €300 billion of inflows worldwide, a market exhibiting 25% annual growth and largely dominated by the Chinese (75%), which percentage was already recorded in 2015 by a study conducted jointly by KPMG and the University of Cambridge.

The United States takes second place with 19% of the market, while Europe currently represents just 6%, 60% of which comes from the United Kingdom. In France, alternative finance raised €1.4 billion in 2018, a year-on-year increase of 39% according to the annual report of KPMG and the non-profit group Financement Participatif France (FPF).

The popularity of alternative finance is global and shows no signs of waning. Granted, the 2008 financial crisis pushed both individuals and companies towards alternative solutions for refinancing, and that lenders rallied to the banner in a context of low-interest rates. According to the KPMG study, there were already 43 million investors worldwide participating in alternative finance at the time. In six years, my company has opened 6.8 million payment accounts in Europe, demonstrating the success of this form of investment, which offers attractive returns for both individual and institutional investors.

No area of financing is spared. Peer-to-Peer lending represents the majority of alternative finance volumes in the world, at 58%, and heavyweights such as LendingClub and Prosper in the United States are leading the way. In France, there is a banking monopoly, which explains why the only player in this field, Younited Credit, is also a bank.

The second-largest market, contributing around a third of the total volume, is business loan financing or ‘Crowdlending’. These include Spanish players such as Zank, Arboribus, Lendmarket, Loanbook and the French Wesharebonds or October. Indeed, the latter has a footprint covering five European countries. Specialists in renewable energy project financing are especially prominent, as, for instance, the French Lendosphere, Climateseed, or AkuoCoop and the Spanish Fundeen.

With 5% of global volume, the real estate crowdfunding market is growing rapidly with a multitude of players appearing to finance real estate developers experiencing difficulties obtaining competitive refinancing from banks. The French Wiseed, German companies Green Rocket and iFunded, the Austrian Reval and Rendity, the Spanish Housers, Strockcrowd all stand out for their momentum.

The equity crowdfunding market represents only 2% of total collection volume but features French representatives such as Finple, Happy Capital, and Sowefund.

Similar in size, the charitable sector is not to be outdone, as the Swedish Trine, the Icelandic Karolina Fund and the French Commeon attest.

Finally, the last segment, factoring services or ‘Invoice Trading’, is also the smallest, with 1% of total inflows. However, it is also that experiencing the strongest growth, particularly in Italy and Spain, where, unlike France, there is no banking monopoly. Institutional investors refinance the invoices of SMEs registered on platforms such as Finanzarel and Novicap in Spain, Work Invoice, Cashme, CashInvoice, Anticipay in Italy.

By 2023, the global alternative finance market could reach €500 billion of funds collected per year, a significant sum, but still a small amount compared to the financing granted by banks.

[easy-tweet tweet=”By 2023, the global alternative finance market could reach €500 billion of funds collected per year, a significant sum, but still a small amount compared to the financing granted by banks” template=”light”]

Damien Guermonprez is Executive Chairman of Lemon Way, a payment solution dedicated to marketplaces, crowdfunding platforms, and e-commerce sites as well as companies requiring payment and fund collection services on behalf of third parties within a secure and regulated framework (KYC, anti-fraud…). Lemon Way has been licensed by the ACPR/Banque de France as a Payment Institution since 2012 and ‘financial passport’ privileges in 29 countries. The Fintech is based in Paris, with offices in London, Madrid and Milan. Lemon Way employs 75 people representing 14 different nationalities. Follow LemonWay onTwitter @LemonWay