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💥 Call for regulations


This week in fintech

December 13 · Issue #85 · View online

A weekly summary of the latest news in our world of finance, design, and technology.

Also this week:
  • 🥸 False security?
  • 👩‍⚖️ Regulating DeFi
  • 🤓 All them reports

💥 BankID trouble
We’ve written a lot about DNB (trying to) buy Sbanken over the last year. The Norwegian competition authority has stopped the acquisition because of Sbanken’s position in the fund market. This is a trend we’re seeing more of abroad, and regulators are thinking deeply about accelerating their cycle time to catch up with fast-moving industries. The question here is also, ironically enough, that the competition authority is picking winners and guessing about the future. An example is Giphy, which provides all your Gif needs, which Facebook bought in May 2020. Last week the Competition and Markets Authority in the UK stopped the sale because it can harm social media users.
This made me think of another merger that the Norwegian competition authority, strangely enough, didn’t stop: the merger between Vipps, BankAxept, and BankID in 2018. Mixing critical Norwegian infrastructure into a commercial business with growth ambitions internationally might not be the best idea in hindsight. In the wake of Vipps Nordic’s merger with MobilePay and Pivo, Vipps announced that BankAxept and BankID would demerge from the rest of the company. They still haven’t communicated how they are doing this. Still, in the wake of the trouble BankID has had over the last few weeks changing operating supplier, I hope they acknowledge that this is infrastructure critical to the Norwegian society. Over the last few weeks, this has been clear when users report they can’t sign death certificates, save their pensions, book a doctor’s appointment or access their bank. Maybe it’s time we look at Denmark, where the Agency for Digitisation controls NemID (soon to be MitID)?
🥸 False security?
While we’re on the topic of authentication and security, I recently came over an exciting discourse regarding Decentralized Finance and their use of a private key. To recap from Coinbase explanation on the topic:
When you first buy cryptocurrency, you are issued two keys: a public key, which works like an email address (meaning you can safely share it with others, allowing you to send or receive funds), and a private key, which is typically a string of letters and numbers (and which is not to be shared with anyone). You can think of the private key as a password that unlocks the virtual vault that holds your money. As long as you — and only you — have access to your private key, your funds are safe and can be managed anywhere in the world with an internet connection.
This causes tragic stories like James Howells that one evening in August 2013 threw away a hard drive with his private keys for Bitcoin. For years, he has been fighting to excavate the local landfill for his hard drive that now is worth about half a Billion (!!) dollars.
I'm a tech guy and I can say with confidence I've lost every private key I've ever held within three years or so. Excited to see this important technology go mainstream with no recourse and tied to real assets. Please share your own stories in the comments!
Rasmus Andersson
Some interesting discourse.

My 2¢: Asking people to hold on to—and never lose a private key or forget it’s password—won’t work, at least not w/o a central authority. If I lose my wallet or passport today there are ways to get my life back b/c of centralized authority.
Having private keys is like having an authentication solution without a solution for “I lost my password.” Despite the issues with private keys, Jon Ramvi from Symfoni, argues that Decentralized Finance is unavoidable due to the following facts:
  1. Over 14% of the population in the US own cryptocurrencies.
  2. The value of Etherum is larger than all banks globally
  3. Goldman Sachs and Bank of America report that they “expect rapid changes to the current market structure” because of DeFi.
  4. DeFi has grown into 100 billion dollars in record time
  5. VC investments in DeFi has exploded over the last few years
  6. Etherum settled 50% of Visas volume last quarter.
👩‍⚖️ Regulating DeFi
BIS, an organization representing leading central banks worldwide, has lately written about DeFi and its implications. They state that “There is a ‘decentralisation illusion’ in DeFi due to the inescapable need for centralized governance and the tendency of blockchain consensus mechanisms to concentrate power”. DeFi’s inherent governance structures are the natural entry points for public policy.“ Christoffer Hernæs, former CDO in Sbanken, argues for more regulation within DeFi. In the US the process is already started with the Congress Financial Services Committee meeting with leaders from the Crypto industry to discuss what regulations should apply to the rapidly growing industry.
🤓 All them reports
Every year Benedict Evans produces a big presentation exploring macro and strategic trends in the tech industry. This year’s slide deck is titled “Three Steps to the Future”. In the presentation, he dives into tech visions for 2030, that startups are now deploying the ideas of the 2010s and that the “old economy” is now being disrupted by ideas from the 2000s.
We’re still nearing the end of the year, coming over lots of reports:
  • The UX Collective has published their annual State of UX for 2022.
  • Messari, a market intelligence platform for crypto, has published Crypto Theses for 2022 exploring key trends, people, companies, and projects to watch across the crypto landscape, with predictions for 2022,
  • WeTransfer has published their Ideas Report ‘21 where they asked 10 000 people from 135 countries how 2021 transformed their creative worlds.
That's it for this week 👋
Remember, if you’re enjoying this content, please do tell all your (fintech) friends to hit the subscribe button! If you have some feedback you can always just hit reply!
Marius Hauken, partner Stacc X
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