Daily Dash: Elon Musk Wants X To Replace Bank Accounts

October 31, 2023
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Elon Musk has set his sights on replacing bank accounts, the Bank of England has said stablecoin regulation is coming, and the Bank of Lithuania has fined e-money institution Demivolt.

In 2024 Elon Musk Wants X To Replace Bank Accounts

In an audio clip obtained by The Verge, Elon Musk said that in 2024 he wants X users to start porting “their entire financial life” to the micro-blogging platform.

“If it involves money, it will be on our platform,” he said. “Money or securities or whatever. It’s not just like I send $20 to my friend. I’m talking about, like, you won’t need a bank account.”

The clip was recorded during one of X’s now-private earnings calls. Linda Yaccarino, CEO of X, confirmed in a public blog post that 2024 is the goal for a new payment system launch on the platform.

“We want money on X to flow as freely as information and conversation,” she said. “We have already secured our first money transmitter licences in several states, and we are moving toward launching a global payment system — more soon!”

UK Needs Stablecoin Regulation, Says Outgoing BoE Deputy Governor

Jon Cunliffe, deputy governor for financial stability at the Bank of England (BoE), has said in his final speech that the UK needs regulation of “systemic payment system stablecoins”.

“The Bank expects very soon to issue a Discussion Paper setting out its proposed regulatory regime for systemic retail payment systems using stablecoins,” he said.

Although Cunliffe said he was unable to set out the proposed regime in detail during his speech, he said it will use the new Financial Services and Markets Act that became law in June.

“The act extends the Bank of England’s existing powers to regulate conventional systemic payment systems,” he said.

“The Financial Conduct Authority (FCA) will regulate the issuance and custody of stablecoins for conduct and market integrity purposes.”

Bank Of Lithuania Fines E-Money Institution For Non-Compliance

Lithuania's central bank has fined Demivolt, an e-money institution, for failure to comply with equity capital requirements. 

According to the regulator, the institution has since rectified and eliminated the issue. 

Due to this mitigating factor, Demivolt institution was fined a more lenient fine of €3,000. 

The latest public censure for non-compliance with capital requirement rules comes after the Bank of Lithuania publicly censured, but did not fine, NomuPay, a fortnight ago.

Credit Cards Cost Americans $130bn In 2022, Agency Says

The US Consumer Financial Protection Bureau (CFPB) has found that credit card companies charged consumers more than $105bn in interest and more than $25bn in fees in 2022.

Consumers who carried a balance paid about 20 percent of their average balance in interest and fees over the year, while cardholders with subprime scores paid 30 to 40 cents in interest and fees per dollar.

Total outstanding credit card debt exceeded $1trn for the first time since the CFPB began collecting this data, the agency said.

It noted that the remarkable profits, which surpass pre-pandemic levels, “potentially signal a lack of competition in a market consistently dominated by the top 10 credit card companies”.

In a biennial report to Congress, the CFPB also raised concerns that nearly one-tenth of credit card users have “persistent debt”, where they are charged more in interest and fees than they pay toward the principal.

Klarna Staff Threaten Strike Over Salary Audit 

Swedish staff at Klarna, the multinational buy now, pay later (BNPL) firm, have threatened to go on strike over the right of employees to an annual salary audit.

Two of Sweden’s trade unions, Unionen and Swedish Engineering, handed a strike notice to Klarna on Thursday (October 26) last week. If talks fail, then staffers at the fintech giant could walk out on November 7. 

According to Unionen, work to reach an agreement with Klarna has been going on for several years, and a collective agreement has been on the table since April.

“It is deeply regrettable that Klarna's management does not listen to the employees' needs and desire to participate in decision-making processes at the company and have the right to an annual salary audit,” Unionen said in a statement.

“It feels surprisingly out of date for a company that wants to appear modern.”

Taiwan Passes First Reading Of Major Crypto Regulation

Taiwan’s Legislative Yuan has passed the first reading of a new bill that seeks to introduce a comprehensive regulatory framework and strengthen oversight of the crypto industry.

The Virtual Asset Management Bill was co-authored by 17 lawmakers and was introduced by Chiang Yung-chang, a member of the ruling Democratic Progressive Party (DPP).

If adopted, the bill will mean all virtual asset platforms that wish to operate in Taiwan will need to obtain a licence to do so.

They will also be subject to new rules on virtual asset listing criteria, separation of client funds, rules on fair advertising and marketing, and standards for information security and anti-money laundering (AML).

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