FinTech Futures: Top five news stories of the week – 12 April 2024
Here’s our pick of five of the top news stories from the world of finance and tech this week, featuring Linqto, HSBC, Santander and more.
ECB launches central bank money trials for wholesale transactions
ECB announces participants for central bank money trials
The European Central Bank (ECB) has revealed the first cohort of financial institutions set to take part in its first wave of trials as it looks to explore new technologies for the settlement of wholesale transactions in central bank money.
For this first round of trials, the ECB’s governing council has approved the involvement of ten market entities with access to TARGET (a collection of financial market infrastructure services operated by the Eurosystem) and six distributed ledger technology (DLT) providers.
The project will see participation from the following European central banks: Deutsche Bundesbank, Banque centrale du Luxembourg, Banque de France, Banca d’Italia, and Oesterreichische Nationalbank.
The testing will begin on 13 May this year, with further trials planned for later in the year.
HSBC to sell Argentinian banking arm to Grupo Financiero Galicia for $550m
Global banking heavyweight HSBC has entered into an agreement to sell its banking operations in Argentina to Grupo Financiero Galicia for $550 million.
The deal, which is expected to be finalised within the next 12 months, will see Galicia acquire all aspects of HSBC Argentina’s operations, including asset management, insurance, and banking.
Furthermore, Galicia will take on $100 million of subordinated debt issued by HSBC Argentina and held by other HSBC entities.
HSBC states that the sale will result in a pre-tax loss of $1 billion, to be reflected in Q1 of 2024.
Nubank partners Wise Platform to power new Global Account offering
Nubank to debut new Global Account offering
Brazilian challenger Nubank has partnered with Wise Platform, Wise’s payment infrastructure for banks and fintechs, to power the launch of its new Global Account offering and international debit card.
The digital bank’s Global Account product will offer its high-income Ultravioleta customers a means to access and manage their money when travelling abroad.
Nubank says the offering “will allow users to instantly make balance conversions from real to dollar and euro through the Nubank app without the hassle of managing a new app or transferring money between accounts”. It adds the associated debit card can be used to make payments in local currencies “in more than 200 countries and territories”.
Santander to launch Openbank in the US this year
Spanish banking group Santander plans to launch its digital banking subsidiary Openbank in the US later this year.
Backed by €18 billion in deposits, the group forecasts that Openbank’s state-side debut will take place in the second half of this year, alongside a launch in Mexico “in the same timeframe”.
Established by Santander in 1995, Openbank operates a suite of digital financial services including current accounts, lending, mortgages and open deposits.
Aside from its native market, the subsidiary has been operating in Germany, Portugal and the Netherlands since 2019, and launched in Argentina two years later.
The group anticipates the launch accelerating its push into the US, where it hopes to generate enough deposits to fuel the growth of its auto financing franchise.
Linqto to go public via $700m SPAC merger with BCSA
Linqto to go public via SPAC merger
US digital investment platform Linqto is set to go public via a business combination deal with Nasdaq-listed special purpose acquisition company (SPAC) Blockchain Coinvestors Acquisition Corporation 1 (BCSA).
The deal will see Linqto become a wholly-owned subsidiary of BCSA, which is to reincorporate from Delaware to the Cayman Islands.
Any outstanding common equity in Linqto is to be cancelled, with its shareholders to receive shares in BCSA at an implied enterprise value of around $700 million.
Both parties say they have “unanimously approved” these terms, and expect to close the deal “in the second half of 2024”, subject to the approval of shareholders and other customary closing conditions.
