In the coexisting — and sometimes colliding — worlds of FinTech and traditional financial services, a bit of collaboration often evolves. At times, that collaboration even moves with a bit of regulatory underpinning. So, it is in far-flung corners of the globe where, in recent days, regulators and cross-border efforts have promoted a bit of cross-pollination between tech-savvy upstarts and more entrenched players in the financial arena.
As reported by Bloomberg, the regulator at the helm of Singapore’s financials has embraced an effort to “bring together” FinTech firms and banks there. The efforts come amid complaints about banking support of that sector. The initiative, as noted by Managing Director Ravi Menon of the Monetary Authority of Singapore (MAS), “is to bring the banks and cryptocurrency FinTech startups together to see if there is some understanding they can reach,” he told the publication, adding that there exists a hurdle between those camps. The emergence of new technologies may still engender wariness from banks and, as the regulator told the newswire, he “would not blame” banks for choosing to not open accounts for cryptos holders.
“Some of these activities are indeed quite opaque,” he added. Bloomberg noted there are no plans by the institution for a licensing system for crypto exchanges, as has been seen in places like Japan, where there are as many as 16 licensed exchanges. Menon told the newswire that he placed cryptos in three categories, ranging from utility tokens to digital tokens (with some characteristics of securities), then there are payment tokens such as bitcoin. In the case of the latter, there remains volatility and price swings, but oversight is relatively relaxed in that initial coin offerings (ICOs) do not resemble securities, even as they are governed by the country’s Securities and Future Act.
In reference to banks, Menon said that for traditional firms eyeing cryptos, “the nature of this business is a bit different, so banks may need to employ other ways in which they can establish bona fide," he said. “I hope we can bring minds together on this so that we can get over this hurdle.” He also noted that when it comes to cryptocurrencies, “you can’t expect the government or the regulator to regulate all manner of [the] items in which people put their money.”
In Europe, joint efforts in FinTech and banking have crossed borders. News came this past week that the Bank of Lithuania and the National Bank of Ukraine, as noted in Emerging Europe, have linked with the aim of developing FinTech landscapes stretching across both countries. The two banks have signed an agreement that provides a cooperative framework.
That signing took place at annual meetings earlier in the month via the International Monetary Fund (IMF) and the World Bank Group. In reference to the IMF-World Bank meetings, FinTech garnered attention, as the IMF trained its sights on financial innovation.
The agreement promotes the sharing of ideas and experience tied to FinTech supervision, and for the banks to explore joint innovation projects. The site said that joint projects will span digital and mobile payments and APIs, to name a few topics of exploration. Innovation within the financial sector is also part of the plan in the Bank of Lithuania’s strategic roadmap for the years 2017 to 2020.
“Given the avid interest from our Ukrainian counterparts, and the knowledge we have acquired as part of our successful cooperation with the Monetary Authority of Singapore, we stand ready to share the best practices in developing a FinTech-conducive regulatory environment, providing consultations to innovation-oriented market participants and paving the way for more convenient mobile payments,” according to Vitas Vasiliauskas, chairman of the board of the Bank of Lithuania.