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Mobile payments up but pace of growth slows
23 percent of smartphone owners used a mobile wallet app in 2018

U.S. consumers spent $64 billion through mobile wallet apps or dedicated apps from a retailer last year. (Courtesy iStock)

Payments made through mobile apps like Apple Pay are rising, but at a slower rate than in past years, according to a report by the Electronic Transactions Association.

U.S. consumers spent $64 billion through mobile wallet apps or dedicated apps from a retailer last year, up from $45 billion in 2017, the ETA said. The 42 percent rate of growth in 2018 was down from 51 percent in 2017. The pace is expected to slow to 37 percent in 2019, resulting in $88 billion in consumer spending by such means.

Global regulators divide on fintech impact on financial system
New reports highlight inability to reach consensus on best approaches

A new report says regulators of the world’s leading economies need to watch how they oversee cryptoassets and be wary of gaps that could undermine investor protections and anti-money laundering efforts. (Dan Kitwood/Getty Images file photo)

Regulators are divided on the potential impact of financial technology on the global financial system and the need for better coordination and oversight.

As leaders prepare to gather for the G-20 meeting in Japan in late June, their finance ministers and central bankers are getting conflicting advice from regulators on the risks and benefits of fintech.

Regulators confront technology that may upend securities trade
Distributed ledgers may remove the need for intermediaries such as stock exchanges.

Distributed ledger technology, including the blockchain system that backs bitcoin, could remove the need for such intermediaries as stock exchanges, regulators and experts say. (Jack Taylor/Getty Images file photo)

New technology could change the way the securities industry has worked for decades by removing the need for trusted central parties such as stock exchanges.

The potentially disruptive technology is known as the distributed ledger, a decentralized database run by its users rather than a single authority. Current and former financial regulators, academics and trading industry experts said during a recent financial technology panel that these ledgers, which in theory can’t be changed, may remove the need for such intermediaries as stock exchanges.

Report to Congress ponders a future of cryptocurrency over cash
Migration away from cash transactions leaves an opening for digital currencies

A man purchases bitcoin from a bitcoin ATM in Boston in 2014. The use of cryptocurrencies to make payments in the U.S. is still “quite rare relative to cash and traditional systems,” a new CRS report says. (Darren McCollester/Getty Images file photo)

Congress may be beginning to contemplate a country where cryptocurrency — not cash — is the coin of the realm.

The Congressional Research Service examined the decline in cash usage in the United States and the potential rise of alternative payment systems, including bitcoin or other digital assets, in the purchase of goods and services.

Futures product to test Wall Street taste for cryptocurrencies
Startup company plans to start trading futures contracts in bitcoin

Senate Agriculture Chairman Pat Roberts, R-Kan., and ranking member Debbie Stabenow, D-Mich., have sought clarity from the Commodity Future Trading Commission on guidelines for cryptocurrencies on the futures market. (Tom Williams/CQ Roll Call file photo)

Cryptocurrencies have been viewed skeptically by some old-guard financial institutions — the head of one bank famously called bitcoin a fraud a few years back — but there’s a new plan to offer derivatives based on bitcoin that may show how deeply Wall Street is adopting new financial technology.

A startup company plans in July to start testing futures contracts in bitcoin, and begin trading them shortly after. The products, unlike cryptocurrencies themselves, aren’t designed for the masses. Bitcoin futures are meant for financial firms that want to find new ways to profit from fintech, and launching the futures contracts is essentially a bet that there’s enough demand from the big players.

This government agency wants to partner with fintech firms. But a gift rule is blocking it
U.S. is falling behind in fintech innovation, regulators warn

Commodity Futures Trading Commission Chairman Christopher Giancarlo says current rules prevent his agency from working closely with fintech companies. (Alex Wong/Getty Images file photo)

If government employees need new software to test how a financial technology project might work — software they lack expertise to write themselves — they can’t get it from the industry because rules deem such software as a gift and block the government from receiving it.

The result, according to regulators, is the rules are slowing down U.S. innovation in fintech, leaving the country to fall behind others.

2 minutes with CFTC Chairman Christopher Giancarlo
Fintech Beat's Chris Brummer talks blockchain, derivatives and Hollywood

Chris Brummer (left) of Fintech Beat interviews CFTC Chairman Christopher Giancarlo in Washington. (Jinitzail Hernández/CQ Roll Call)

New York regulator’s conflict with fintech firm spills into view
Tensions grow over enforcing rules designed for traditional financial institutions

New York state regulators in April denied applications by Bittrex for licenses to run a virtual currency business and to engage in money transmission activity. (Dan Kitwood/Getty Images file photo)

The battle over the benefits and risks of new financial technology is escalating, in the form of a dust-up between New York state and a Seattle-based virtual currency business that, to the surprise of fintech followers, took the fight public.

The disagreement between regulators at the New York Department of Financial Services and Bittrex Inc., a cryptocurrency exchange, highlights the growing tension between fintech innovators and regulators enforcing rules designed for older, traditional financial institutions.

Fintech lobby spending targets cryptocurrency taxation
Firms lobbying on fintech spent more than $42 million in first quarter

More than half of the 80 firms that reported lobbying on fintech in the first quarter of 2019 listed blockchain and cryptocurrencies among their biggest concerns. (Dan Kitwood/Getty Images file photo)

Lobbying disclosures for the first quarter of 2019 show a wide swath of industries and advocacy groups focusing on financial technology issues, including the Association of National Advertisers, Intuit, Mastercard, Alibaba, FreedomWorks, IBM, the Entertainment Software Association and U.S. Public Interest Research Group.

More than half of the 80 firms that reported lobbying on fintech in the first quarter listed blockchain and cryptocurrencies, including tax elements of the latter, among their biggest concerns. Combined, more than 80 firms lobbying on fintech reported spending more than $42 million in the first quarter of 2019.

What is jawboning, explained
Fintech Beat

Fintech Beat takes a look at what jawboning means to the financial technology industry. (Nathan Ouellette/CQ Roll Call)

A blockchain bill, backed by industry, may tie SEC’s hands
The bill would provide a safe harbor from federal securities regulations for digital currencies and other blockchain-based products

Rep. Warren Davidson, R-Ohio, leaves the House Republican Conference meeting at the Capitol Hill Club in Washington on Wednesday morning, June 13, 2018. (Bill Clark/CQ Roll Call file photo)

Even as the nation’s infant blockchain industry lines up in support of a new bipartisan bill to exempt digital tokens from Securities and Exchange Commission oversight, others warn about the dangers of Congress making the situation worse.

The bill from Reps. Warren Davidson, an Ohio Republican, and Darren Soto, a Florida Democrat, would provide a safe harbor from federal securities regulations for digital currencies and other blockchain-based products. But outside of the young sector’s backers, some worry that the bill goes too far in its current form.

4 fintech regulation issues to keep an eye on in the U.S. and abroad
 

Privacy ‘poisoning’ poses threat to companies using blockchain
Public blockchains face a one-two punch, with data privacy laws another factor

Public blockchains such as those that underpin cryptocurrencies like bitcoin are most at risk because anyone can participate. (Dan Kitwood/Getty Images file photo)

A new type of cyberattack that can render blockchain technology unusable may become a major headache for organizations that depend on it.

Known as privacy “poisoning,” the attack involves loading private data, such as names, addresses and credit card numbers, or illegal material, such as child pornography, into a blockchain, therefore putting the network in conflict with local laws. The result is that the affected chain with all of its contained data cannot be used unless expensive and time-consuming steps are taken.

Financial technology is changing how we do business, and regulators are trying to catch up
Fintech Beat

Whether you’re paying a friend for drinks on Venmo or logging in to your online banking, you’ve probably engaged with fintech.

Hunting money launderers? There’s AI for that
Banks explore artificial intelligence to better detect fraud after go-ahead from federal regulators

Last December, federal regulators issued a joint statement encouraging bankers to consider “innovative approaches” to rooting out money laundering. Above, a man walks by the headquarters of the Federal Reserve System in D.C. (Tom Williams/CQ Roll Call file photo)

Encouraged by a recent green light from regulators, the financial services industry is exploring new ways of using artificial intelligence to help them comply with banking regulations and to better detect fraudulent transactions used by criminals and terrorists.

This move toward new approaches to banking compliance comes despite growing concern that more government scrutiny could force the United States to fall behind similar efforts already underway overseas.