Uncle Sean's Update - 1/14/22

Happy Friday!!!
 
Just in case you forgot (LOL) – you can sign up here to have the Uncle Sean Update sent straight to your inbox each week.  Here is the Uncle Sean Update for 1/14/22:
 

• HEY, look who just got access to the Bankers Helping Bankers platform - Congratulations to Community Development Bankers Association (CDBA) for being the first national association to offer access to Bankers Helping Bankers to its CDFI-certified and mission-driven member banks across the United States.  Very EXCITING!!!!!

 

• A group of FDIC insured banks has launched the USDF Consortium to enable banks to mint USDF stablecoins and will facilitate payments on the open-sourced Provenance blockchain (originally created by Figure Technologies) on a real-time 24/7/365 basis .  Check out their Pitch Deck - DAMN THAT’S COOL!!!!
  • The Consortium’s founding banks include New York Community Bank (FDIC #16022; $58B Total Assets), NBH Bank (FDIC #59052; $7.1B Total Assets), FirstBank (FDIC #8663; $11.8B Total Assets), Sterling National Bank (FDIC #30337; $30B Total Assets), and Synovus Bank (FDIC #873; $55B Total Assets)
  • Additional founding members include Figure Technologies and the bank-owned venture fund JAM FINTOP

 
Yep, here it comes - Uncle Sean gives an unsolicited and rather punchy “off the rails” op-ed regarding USDF (which I love):

• This is happening – and it is happening now in mainstream banking.  To me, this was simply a matter of time; and is a massive step forward that I am happy and excited about….  I honestly feel like this could be one of those moments that we look back on where banking fundamentally changed forever – “blockchain enabled RTP 24/7/365 at the FDIC level” (and NOT just the big 4) whereas the stablecoin being issued is by a regulated bank with the added benefit of the collateral reserve backing of FDIC insurance AND covering AML and KYC (aka “TradFI street cred” for my DeFi fans – LOL)…  Welcome to the new breed of correspondent banking….
  • Banker friends, if you think Zelle is expensive (built by the big banks), how much do you think JPM is gonna’ charge you to settle payments in real-time on behalf of your customer using their Onyx blockchain rails???  You didn’t really think that JPM was developing this for the good of all banks (especially community banks), did you???  How’s that saying go – fool me once, shame on you. Fool me twice….  Yep. 

• And of course Visa and Mastercard continue to work feverishly with banks and Central Banks globally to facilitate crypto and blockchain payments including CBDC testing (because legacy payment rails have the most to lose here if they fail to evolve).
• Certainly not inconsequential, the CSBS has dropped their lawsuit against the OCC now that Figure Technologies (yes, the same Figure involved with the USDF above) has amended their charter application to include FDIC insurance (exactly the same reason why Avanti plans to apply for FDIC insurance) – for the stablecoin.
  • Recall the President's Working Group - Report on Stablecoins where the recommendation to congress was to pass legislation stating that stablecoins can only be issued by regulated banks.
  • SEC Chairman, Gary Gensler, gave a speech this week titled "The Future of Crypto-Assets and Regulation" where he again reiterates that stablecoins should be issued by regulated banks.
• So to summarize:  1) Blockchain is here and it allows for real-time payments;  2) Stablecoins are digital assets that are designed to maintain a stable value generally relative to a national currency (i.e. USD) in order to facilitate trading, lending, or borrowing of other digital assets on blockchain networks, and;  3) Regulators are pushing for stablecoins to be issued by FDIC insured banks.  As such, banks are embracing this – so If you aren’t researching this, you probably should be.  WHEW – that was a ton of info – Uncle Sean needs a nap now!!!!! 😊

 

• Not really a surprise – December CPI came in this week at a smoking hot 7% annual basis (monthly CPI was 0.5%) and was the fastest increase since June 1982.  Core CPI came in at 5.5% year over year and 0.6% from last month.  Here is the BLS Detail if you like to get weird like me (you know it - LOL); and CNBC always has a good summary.

 

• Bank of America is the latest bank to reduce overdraft fees due to regulatory scrutiny.  BAC will lower overdraft fees from $35 to $10 and eliminate NSF fees entirely.  BAC is also eliminating transfer fees associated for overdraft protection with other linked accounts (their Balance Connect product).

 

• Coincidentally (yeah, right – cough, cough, cough), Wells Fargo also announced later that same afternoon that they are implementing a series of new actions to limit overdraft related fees and offer customers more flexible options for personal financial needs including:
  • Elimination of transfer fees for customers enrolled in Overdraft Protection from another linked account
  • Elimination of NSF fees when an item is returned unpaid
  • Early access to direct deposit
  • 24 hour overdraft grace period
  • Easy-access, short-term credit (small dollar installment loan up to $500)

 

• During senate confirmation hearings this week, Federal Reserve Chairman Jerome Powell again mentioned that the Fed report on CBDC should be delivered “within weeks”, but tempered expectations by stating it is "an exercise in asking questions and seeking input ... rather than taking a lot of positions."
  • Sounds similar to the previously released (and somewhat lacking in substance) 2-page Joint Statement on Crypto-Asset Policy Sprint Initiative and Next Steps that can pretty much be summarized as “greater clarity will be coming throughout 2022…”  *sigh* 

 

• Current is rolling out a new high-yield product called "interest" enabling account holders to earn a 4.00% APY on up to $2,000 for three different “savings pod” subaccounts.  Current’s free membership only allows one savings pod whereas the paid membership ($4.99 per month) allows for multiple savings pods.

 

• Notable FinTech funding for the week:
  • Checkout.com (full stack global payments platform) raised a massive $1B in Series D funding round at a $40B valuation – DANG!!!
  • JAM FINTOP Blockchain (tech focused VC firm) raised $110M
  • Novo (SMB neo bank) $70M in Series B funding round at a $700M valuation
  • Acorn Finance (embedded lending marketplace for home improvement financing) raised $8.4M in Series A funding
  • Brex announced $300M D-2.  Just to clarify - Uncle Sean previously (and incorrectly I might add) reported this as a series E in Oct.  Fact is that although the term sheet was signed in Oct, it was not publicly/officially disclosed by Brex until now.
  • Fly Now Pay Later (yep, you read that right) raised $75M in debt financing.  Recall a few months back where we
  • Zero Hash raised $105M in Series D
  • Accrue Savings (rewards based savings platform) raised $25M in Series A funding - literally dubbed as the “anti-BNPL” platform that rewards consumers for “saving now to pay later”.  Check them out at accruesavings.com.
  • Merit (verified identity platform) raised $50M Series B funding round
  • Seashell (high-yield investment app) raised $6M Seed round and is launching a high-yield product with up to 10% interest.  Doing some digging shows this is another DeFi application that is investing in a stablecoin.  I am not sure which one (product still shows as a “waitlist”), but custody and settlement services are provided by Prime Trust (a Nevada Regulated Trust).

 
 
Random Uncle Sean Stuff:

• Congratulations to the Georgia Bulldogs for beating Alabama 33 - 18 for their first College Football National Championship since 1980!  What a game – especially that second half!!!!  I have tremendous respect for Coach Saban and Alabama, but it was nice to see Georgia take care of business and avenge the Dec. 4 SEC Championship defeat by Alabama.  GO DAWGS!!!!
• DANG it’s been a busy whirlwind of a year already!!!!  Also – many of you know that Aunt Patty and I are very open people.  So, we wanted to say THANK YOU to all of you who have been inquiring about Aunt Patty (she had knee replacement surgery before Christmas on her right knee – and she gave me permission to post about it).  She is doing FANTASTIC and is already complaining about wanting the other one done ASAP!  She is a tough one!  Not to mention the fact that she really doesn’t like the way that I clean the house – LOL!!!!!  Thanks again!!!  😊

 
 
Have a GREAT weekend and please stay safe!!!
 
Uncle Sean
 
 
Sometimes known as Sean Mayo – contact me directly for scope and pricing of custom reports / analysis projects at smayo@fedfis.com | 214-604-6961 – or you can contact FedFis Sales Team at 512-960-0911 | info@fedfis.com #FedFisHasTheData FedFis
 
FedFis, LLC disclaimer – The views and opinions of Uncle Sean are of his own and may not necessarily represent the views, endorsements, and/or opinions of FedFis, LLC – we all know he’s a little bit different; but that’s why we love him.