Member Spotlight: Binance

2021 has been an extraordinary year for the cryptocurrency market; with coins like Bitcoin, Ethereum and Binance coin all reaching record prices that have not been seen before. Decentralised finance, also known as DeFi, has seen record highs with the US dollar value of Ethereum locked in DeFi contracts being around $40 billion as of March 2021. This dollar amount has grown from $674 million since January 2020. Central Bank Digital Currencies (‘CBDCs’) have also seen increased attention as the world economy reels from the effects of the pandemic.

For this week’s Member Spotlight, we caught up with Jeff Yew, CEO of Binance Australia to chat about his views on the recent explosion of DeFi and CBDCs, as well as the trajectory of Binance and its recent fully fledged entry into the Australian market.

“The progression of cryptocurrency and digital assets is inevitable as the world continues to progress digitally,” says Jeff. “Most of the world’s money is already digital, but they come in different forms: some government backed, some backed by other assets like gold. Bitcoin and cryptocurrencies have a very important difference because they are open-source and transparent. They are the freest and most censorship resistant form of digital money that the world has ever seen. That itself gives digital currencies like Bitcoin a unique advantage against other government-backed digital money, like CBDCs. Each having their own pros and cons, but the difference now is that people get to choose what’s best for them.”

CBDCs are digital currencies that are backed and issued by a country’s central bank. An increased interest from the retail market, paired with the economic pressures of the COVID- 19 pandemic has prompted Central Banks all over the globe to consider the implementation of Central Bank Digital Currencies. In a September 2020 paper, the Australian Reserve Bank concluded that while there does not seem to currently be a strong public policy case for the issuance of a CBDC in Australia, the RBA will closely watch the experience of other jurisdictions that are considering the implementation of CBDCs. The RBA also announced a partnership with CBA, NAB, Perpetual and ConsenSys on a wholesale Central Bank Digital Currency Research Project in November 2020 with further research released in the RBA’s Payments System Board Update in February 2021. If you’re interested in reading more about CBDCs, we’ve covered the topic in more detail in a previous Member Spotlight.

 

The Advent of Decentralised Finance

2021 has also been a huge year for DeFi, no doubt prompted by current world events. DeFi is crypto’s answer to traditional financing and lending products, allowing the lending of assets without a middleman.

Most DeFi applications are built on top of Ethereum and Binance Smart Chain with DeFi covering areas such as decentralised exchanges, stablecoins, lending and financing, wrapping crypto-assets to allow for interoperability between crypto such as bitcoin and DeFi, and betting markets.

Lending is by far the most popular use case for DeFi, allowing users to borrow cryptocurrencies, or lend their own to others. Users that lend their cryptocurrency earn interest, and users that borrow cryptocurrency must post collateral. The significant difference between DeFi and traditional lending is that DeFi doesn’t require Know Your Customer checks. This risk,as well as other risks such as market volatility, is often countered by an overcollateralization when borrowing, as is the case in platforms such as Maker DAO.

DeFi lending could not exist without stablecoins, which are cryptocurrency alternatives to traditional fiat currencies. Stablecoins peg their value to a fiat currency, such as the US Dollar, and act as a stable asset to transact with.

Jeff noted that, “Bitcoin is often likened to Gold in that it is a strong store of value but potentially lacking as a means of facilitating regular transactions. For DeFi to function properly, the community needs a way to price products and services that is recognised by everyone and isn’t fluctuating the way Bitcoin might. That’s where stablecoins come in. And equally importantly, the community must continue to work together with regulators to ensure the advent of blockchain and crypto hold benefit for all involved.”

Many users are attracted to the DeFi market due to Yield Farming. Yield Farming is similar to staking, except Yield Farming does not facilitate a consensus mechanism. Instead, it serves as an economic incentive for users to fund a liquidity pool. A liquidity pool is the pool of funds within a DeFi platform that enables the movement of cryptocurrency within a DeFi platform. Upon committing crypto to a liquidity pool, those users are often rewarded with that platform’s governance token, which can be used either within the platform (often to cast votes in its governance mechanism) or sold on the open market. Think of it as a form of interest generated as a result of your deposit into the liquidity pool. These tokens that are granted to users generally only carry a speculative value, but some, such as Uniswap, have gained significant value. While the current boom is reminiscent of the Initial Coin Offering (ICO) craze in 2017, a considerable difference between ICOs and DeFi, apart from the far more mature ecosystem and market, is that ICOs were typically sold on the basis of nothing more than a whitepaper; a promise, while DeFi projects are generally live and functioning systems.

“We’ve seen in a short period of time DeFi open up a range of alternative opportunities for those interested in the space to not just grow the value of their money, but also contribute to the development of DeFi and crypto in a meaningful way”, says Jeff.

 Binance Australia is at the forefront of all things crypto, being a considerable supporter of the DeFi space, particularly in a COVID-19 impacted economy.

 “We’re seeing an increasing number of members of the crypto community look to DeFi opportunities as a way to sustain themselves financially which is fantastic because these opportunities were non-existent five years ago. And in a time where employment, high-interest accounts and traditional income streams have been difficult to come by, it has really highlighted the value DeFi potentially offers. At Binance Australia we are committed to grow the level of education available to the public as well as working with regulators on an ongoing basis to facilitate the growth of crypto in all its facets in Australia.”

COVID-19 has not only been a catalyst for crypto-market growth, but also for how a business pivots in a new digital age. Binance Australia has had an established presence in Australia since early 2019 in the form of Binance Lite Australia and have been actively engaging in local communities through meetups, panels and events. However, COVID-19 forced the Binance mid-2020 launch to become more digitally focused. “Staying close with our users is a challenge in times like these. We’ve switched physical meetups to virtual ones and hosted more regular AMAs throughout our online channels than we did before. But the good thing is that we’ve been able to engage with our users and community more,” said Jeff. “We have a lot of activity planned in the Australian market, including a series of free online courses to help guide beginners into the crypto space safely, and also more advanced content for veteran traders and startups looking to build cool applications within the ecosystem.”

Jeff wrapped up with an update on how Binance is doing in Australia, “We’ve recently revealed our Australian centric homepage, based on the great feedback we have received from our community. The new homepage is beginner-friendly and features quicker access to the features our users love. Be sure to check that out at binance.com/en-AU.”

FinTech Australia Spotlight Article: Monoova

Monoova and Jacaranda Finance partner-up to unlock faster payments and greater financial inclusion

In the first edition of Member Spotlight in 2021, we had a chance to talk to CEO of Monoova, Christian Westerlind Wigstrom, and CEO of Jacaranda Finance, Daniel Wessels, about their recent partnership.

Meet the companies

Monoova, formerly known as Moneytech Payments and founded in 2017, is an end-to-end payments provider that supports scaling businesses with large, and often complex, ongoing transaction flows to automate how they receive, manage and pay their funds through one API integration. In other words, Monoova helps businesses grow by applying their API technology to a businesses’ transaction flows.

The company’s platform is designed to allow businesses to access a variety of payment functions like the NPP and customised real-time data.

The people behind Jacaranda Finance, established in 2013, noticed that there are around three million people in Australia who are deemed ‘unbankable’ by traditional financial. As a result, Jacaranda Finance was created to address a gap in the lending market by offering online, unsecured personal loans that unbankable people could gain access to. 

It is safe to say that Fintechs like Jacaranda are enabling a new era of financial inclusion. During our discussion, Mr Wessels of Jacaranda Finance said: “We pride ourselves on helping customers navigate stressful financial situations by providing fast access to finance. For many of our customers who can’t be serviced by traditional lenders and funding models, we provide a critical service.”

The partnership

The synergies between the two companies in the partnership have brought on a range of positive outcomes.

 Mr Wessels spoke highly of the API technology provided by Monoova: “Integrating with Monoova’s Automated Payment Service (APS) has been game changing for our business and an integral component in allowing us to deliver market leading turnaround times and instant payments to customers”

The APS allows partners to automate how they receive, manage and pay funds across a large number of payment methods. According to Daniel Wessels, working with Monoova has enabled Jacaranda Finance to rely less on manual payments processing, which is crucial for businesses required to operate 24/7. The APS also resulted in faster payments processing times, supporting financial inclusion by enabling Jacaranda Finance to deliver an improved loan experience to thousands of customers. Overall, with the integration of Monoova’s APS, more Australians are now able to navigate stressful financial situations via Jacaranda Finance’s fast access to finance.

Christian Westerlind Wigstrom of Monoova found working with Jacaranda Finance rewarding and enjoyed supporting their noble goal: “We are inspired by Jacaranda Finance’s mission of financial inclusion and are delighted to bring this to life through our services. By enabling fast access to funds, we are supporting Australians who need it most.” 

Christian went on to note that he plans to continue investing in Monoova’s capabilities to ensure the company’s partners can spend more time on supporting customers’ needs and less time on payments administration work in the future.

FinTech Australia Spotlight Article: Verrency

Innovating in financial services is now more important than ever. Disruptive digital use cases are launched by consumer-facing fintechs everywhere and established financial institutions find it difficult to compete effectively. The global pandemic has changed consumer behaviour on a global scale, with the need to digitally differentiate now a ‘need to have’ baseline and no longer the ‘nice to have’ exception. In this week’s Member Spotlight we spoke to Jeroen van Son, Chief Commercial Officer at Verrency about their ability to help Financial Institutions innovate their payments services and infrastructures, their journey through the market, and their recent partnership with eftpos.

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Member Spotlight: Vasco Pay, Digital Payments Accelerator Program

Anyone with experience in payments (including the 47 payment companies in this community) will understand the complexity and costs involved in bringing a payment product to market.

Open Banking has revolutionised the world of payments, resulting in the rise of ‘bank in a box’ and ‘banking as a service’, which provides open access to infrastructure previously reserved for the big end of town.

However, there are still plenty of barriers and challenges – cost, access to payments technology and speed to market. Regardless, the race to create and launch the next best payment solution is on – and Vasco Pay is here to help.

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Member Spotlight: XBert

Against the unprecedented global economic crisis tools that provide financial risk alerts, data accuracy, visibility and real-time insights, like the products offered by SaaS fintech and 2020 Finnies finalist XBert, have proven essential for business owners, accountants, bookkeepers and advisors.

Since launching publicly at leading cloud accounting provider Xero’s Xerocon event in September 2019, XBert’s been making waves in Australia and overseas. Now, XBert’s secured an AusIndustry Entrepreneurs’ Programme Accelerating Commercialisation grant (“grant”) and is ready to go big on a global scale!

For this week’s Member Spotlight, we spoke with Troy Brown, co-founder and co-director of XBert about the grant process (including some helpful tips), the challenges they encountered and what’s on the horizon.  
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Member Spotlight: Assembly Payments and Patona

After starting several successful fintechs, Simon Lee, Managing Partner of Patona, and Co Founder and Board Member of Assembly Payments, has some sound wisdom when it comes to scaling a business and making meaningful connections and partnerships with financial services heavyweights. 

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Member Spotlight: Look Who’s Charging, partnering with financial institutions

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Member Spotlight: ComplyAdvantage, Trust in AML/CTF compliance

Tackling financial crime has been an issue that has repeatedly been the subject of media, government and public attention in the wake of the Banking Royal Commission, and Westpac’s  subsequent 23 million breaches of the AML/CTF Act. 

Some of the worst atrocities on Earth—terrorism, human trafficking and sexual exploitation— are funded by financial crime. Financial crime can only be eliminated when financial institutions have the data and technology necessary to flag and revoke criminals’ access to the financial system. At its core, until organizations have access to a robust and comprehensive database of external risk indicators, technology can only go so far. Significant steps have been taken on the technology side to stop financial crime where it has not been solved anywhere before – but the problem the industry faces remains a significant one for companies like ComplyAdvantage to fix.

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Member Spotlight: Medipass, a Healthtech Fintech

For this week’s Member Spotlight we spoke to Jonathan (Jon) Davey CEO of Medipass. Jon has joined Medipass from NAB where he was Executive General Manager of Digital, Innovation and Customer Experience. Medipass is an e-payments company uniquely positioned at the intersection of Fintech and Healthtech. We spoke to Jon about Medipass’ journey, the impact of COVID-19 and his future plans for the business. (more…)

Member Spotlight: Wisr, Purpose-led lending

Anyone can tell you that the first step to developing a successful fintech business is to identify a problem that needs to be fixed or fill a niche that needs to be filled. However, you need to go beyond the immediate and think about the longevity of your business. What differentiates businesses in the market, particularly in areas such as lending, is that purpose is king.
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Videos

Ep 2: Fintechs Acceleration of Growth Since COVID

Ep 1: The Evolution of Payments

Scaling Product Globally

Podcasts

Lee Hatton – Afterpay: FinTech Australia Podcast

Anthony Jones – Visa AUS/NZ

Tim Cameron – TransferWise