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🌐 ISO 20022: to March and beyond – Deutsche Bank 🌐
January 08, 2023
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SWIFT plans to introduce a central Transaction Manager (TM) platform, which will be mandatory for all SWIFT users. This article provides an update on ISO 20022 payments standard migration so far...

The upcoming implementation of ISO 20022 in the high value payments (HVP) space is set to unlock a host of benefits for the cross-border payments industry – from improved compliance processes to the creation of innovative products and services. Deutsche Bank’s Joey Han explores how preparations are ramping up – and what we should expect as we transition into the ISO 20022 era

The origin of ISO 20022 dates back to 2004, when it was first recognised by the International Organisation for Standardisation (ISO) as the global payment standard of the future. Eighteen years later, this future has nearly arrived. Once Society for Worldwide Interbank Financial Telecommunications (SWIFT) and major payment market infrastructures (including T2, Fedwire/CHIPS and CHAPS) have migrated to the new standard over the next couple of years, ISO 20022 will apply to the entire spectrum of payments, including domestic, automated clearing house (ACH), real-time and high value cross-border payments.

The new standard is comprehensive in scope, flexible in nature and will act as a harmonised, global standard. This comes at a critical time for the industry, with calls for seamless and faster payments growing louder – and it is hoped that these attributes can provide the foundation for uplifted customer experience, streamlined compliance procedures, and a host of new, innovative services.

The decision to migrate HVP to ISO 20022 gave rise to a multi-year, industry-wide set of preparations – involving all key actors, from financial institutions and corporates, to clearing infrastructures and SWIFT.

Over the past few years, however, the proposed migration strate­gies have, for a variety of reasons, been somewhat of a moving target. Most recently, the European Central Bank (ECB) announced what is anticipated to be final change to its strategy, with the go-live date mov­ing from November 2022 to March 2023 to give participants additional time to complete their testing in a stable environment. In order to align with the ECB’s revised strategy – and to ensure the implementation is as straightforward as possible – both European Banking Authority (EBA) Clearing and SWIFT announced that they would also sync up their re­spective migrations. The Bank of England is scheduled to migrate in April 2023 (though a deadline extension is also being considered), followed by The Clearing House and The Federal Reserve Banks in November 2023 and March 2025 respectively.

The differences in migration timelines and scope, as well as the fact that some banks will migrate immediately, while others will wait, is introducing a host of challenges – and ultimately delaying the benefits the new, data-rich payment standard can bring. So, how are these challenges being addressed, and what are the main considerations going forward?

Full steam ahead in APAC

The migration of domestic, HVP systems in Asia Pacific (APAC) are al­ready well underway. In summer 2022, several ISO 20022 migrations took place across APAC. Paving the way for the rest of the world, Thailand’s RTGS system – known as Bank of Thailand Automated High-value Transfer Network (BAHTNET) – became one of the first payment infrastructures to introduce ISO 20022 this year, along with the Malaysian RTGS (RENTAS) and the Singaporean RTGS (MEPS+). Additionally, Australia will be going live in March 2023, with a co-existence period lasting until November 2024. New Zealand will also go live at the same time.

What can we learn from the early adoption of ISO 20022? Not all migrations are created equal. When moving to ISO 20022, banks operating in multiple markets have to navigate different geographical and regulatory conditions, as well as different technical approaches. Both a phased “like-for-like” approach and a “big-bang” approach will also impact the migration project, operations and end customer in different ways.

Also, while the rules for how to use ISO 20022 messages are based on the market practices outlined by High Value Payments Systems Plus (HVPS+) and are in line with Cross-Border Payments and Reporting Plus (CBPR+), they are still not the same in every market. Close attention is needed to spot and prepare for these subtle differences – or risk a higher volume of rejects and further issues in payments processing.

“The ISO 20022 migration is much more than just a new messaging format, it is the start of an entirely new era for payments”
Joey Han, Clearing Solutions Specialist, APAC, Institutional Cash Management at Deutsche Bank

Transaction management

Though several communities are already using ISO 20022, with the upcoming changes covering correspondent banking, the significance of the move to the new standard is much more far reaching. Cor­respondent banking largely relates to cross-border payments, but it also includes domestic payments between correspondents – or indirect participants – and their direct participants in the domestic HVP market infrastructures.

As part of its migration, SWIFT plans to introduce a central Transaction Manager (TM) platform, which will be mandatory for all SWIFT users. The TM will orchestrate transactions end-to-end, replacing the point-to-point messaging that is currently in use. The first interbank message in the payment chain will trigger the creation the Transaction Copy, which will then be updated with each subsequent message in line with strict data integrity rules. The improvements this will bring to end-to-end transaction integrity is one of the major drivers for the introduction of the platform. The technical deployment of the TM took place in November 2022, with no payment traffic expected until May 2023.

It will also play a key role in helping financial institutions navigate SWIFT’s co-existence phase (March 2023 to November 2025) – the period in which MT and ISO 20022 messages will remain interoperable – by removing the “weakest link” problem and mitigating the risk of data truncation. The TM will achieve this by maintaining a complete copy of the transaction data and reinstating any data that the intermediary agent could not include in the message type (MT) message. In line with the co-existence period – and the challenges it brings – many banks, such as Deutsche Bank, have promised to maintain their MT receiving capabilities throughout the entire co-existence period. 

A while longer to wait

Though the TM will be a great asset to the industry, it will not be the silver bullet from day one. Before the full benefits of the TM can be unlocked, there will be a short period where it will not process any bank traffic and the processing rules will not be applied. This means that when the CBPR+ messages go-live in March 2023, and the first financial institutions begin to process data-rich ISO 20022 payments, the TM rules will not be ap­plied to these transactions.

With TM functionality not expected to be offered until May 2023, end-to-end preservation of rich data will not be guaranteed on any mes­sages until then. Because of this, many financial institutions – including Deutsche Bank – are recommending that market participants avoid using the enriched data during the first few months of the migration phase to help reduce and mitigate any possibility of data truncation. This is in line with recommendations from the Payments Market Practice Group (PMPG).

From May 2023, the TM is scheduled to go through a three-stage, build-up approach to ensure platform stability and mitigate concentra­tion risk. Over the course of the build-up period, SWIFT will be closely monitoring the payment channels and watching for high levels of traffic. If, at any particular time, an extraordinarily high volume of messages was detected, SWIFT would be able to react and help reduce the number of payments being routed through the TM by introducing additional routing criteria. Under current plans, SWIFT aims to achieve this by broadening or shortening the unique end-to-end transaction reference (UETR) range, as required. For instance, if a UETR range is limited to 1A-10, this means that only transactions with a UETR that includes the last two characters from this range will be routed via the TM.

Translation and truncation

SWIFT’s in-flow translation will act as a central translation engine to sup­port banks already using ISO 20022, as well as those that continue to use MT messages. ISO 20022 messages will be translated to MT and delivered as multi-format (ISO 20022 with embedded translated MT) messages. By translating ISO 20022 messages to the MT equivalent and delivering both formats to the receiver, the tool will play a critical role in supporting the co-existence phase, as well as compliance processes. A non-ISO 20022 enabled institution, for example, will use the ISO 20022 format to perform the necessary compliance due diligence, and use the MT format for processing.

But that is not to say there won’t still be issues with truncation. If a non- ISO 20022 enabled institution is acting as an intermediary in a transaction, it will not be able to send on the rich ISO 2022 data it receives – and will instead send on a truncated MT message.

There are two main types of truncations: those that are indicated by a “+” in the body of the truncated messages (for ISO elements with direct MT equivalents), and those that aren’t (for ISO elements without direct MT equivalents). In the latter case, the elements unique to ISO will be mapped into the non-equivalent elements in fields 70 and 72. If the available space in these fields were filled, the elements of a lower translation priority would be dropped from the message.

The in-flow translation will, therefore, be particularly important during the first few months of the migration. With the TM not fully operational by until May 2023, the in-flow translation will provide a much-needed additional layer of protection. The translation report – that comes with each translated message – will identify instances of truncation, as well as provide detailed information on the translated MT. Where truncation is identified, CBPR+ has provided a standard, global template to be used for additional data requests.

Carry on testing

With the migration now in sight, what is left to do? Many of our clients have been reaching out to us asking about the possibilities of testing. In this respect, we have been as accommodating as possible regarding bilateral tests. And while it is clearly not feasible to test with every client, we have also taken steps to facilitate self-service activities.

For example, Deutsche Bank recently launched the DB Institutional Cash Management (ICM) Portal on SWIFT MyStandards. The portal aims to provide ICM usage guidelines (UGs) for pacs.008, pacs.009 and pacs.009COV, which are based on CBPR+ and enriched with Deutsche Bank annotations. These can be used as the basis for any testing activity on MyStandards.

As the deadline approaches, it is worth remembering the reason these efforts are being made. The ISO 20022 migration is much more than just a new messaging format, it is the start of an entirely new era for payments. It is a huge opportunity to fundamentally reassess and greatly improve existing business models and solutions. In doing so, it will help the payments community meet the changing needs of their clients – both now and in the future.

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Understanding the Crypto Alt Season

The next altcoin season is poised to ignite the crypto market, promising to turn savvy investors' portfolios into goldmines. As Bitcoin's dominance wanes, a new era of blockchain innovation is dawning—are you ready to ride the wave?

Market behavior often exhibits distinct patterns and cycles. One such phenomenon that has captured the attention of traders and investors alike is the "Alt Season"—a period when alternative cryptocurrencies, or "altcoins," outperform Bitcoin and experience significant price surges.

The concept of market cycles and seasonality is not unique to crypto; it's a well-established principle in traditional financial markets. However, in volatile crypto space, these cycles can be more pronounced and occur with greater frequency.  

In this article, we’ll try to cover these and other topics: 

  1. The nature and characteristics of Alt Seasons
  2. The importance of recognizing market cycles in cryptocurrency trading
  3. Alt Season indicators and how to interpret them
  4. Predictions and speculatins about the next potential Alt Season

What Is Crypto Alt Season?

Crypto Alt Season, short for "Alternative Cryptocurrency Season," refers to a period in the cryptocurrency market when alternative cryptocurrencies (altcoins) significantly outperform Bitcoin in terms of price appreciation. During an Alt Season:

  1. Many altcoins experience rapid price increases.
  2. The market share of altcoins grows relative to Bitcoin.
  3. Trading volume for altcoins typically increases.
  4. Investor attention shifts from Bitcoin to various altcoin projects.

An Alt Season can last anywhere from a few weeks to several months. It's often characterized by increased risk appetite among investors, who are willing to allocate more capital to smaller, potentially higher-risk crypto projects in search of higher returns.

Is Crypto Season the Same As Crypto Alt Season?

While related, Crypto Season and Crypto Alt Season are not exactly the same:

  1. Crypto Season:
    • Refers to a broader bullish period in the entire cryptocurrency market.
    • Typically includes price appreciation for both Bitcoin and altcoins.
    • Can be longer in duration, sometimes lasting for many months or even a year or more.
    • Often starts with a Bitcoin rally, followed by increased interest in the broader crypto market.
  2. Crypto Alt Season:
    • Specifically focuses on the outperformance of altcoins compared to Bitcoin.
    • Can occur within a broader Crypto Season but is more narrowly defined.
    • Generally shorter in duration than a full Crypto Season.
    • May happen towards the latter part of a broader Crypto Season, as investors seek higher returns in smaller cap coins.

Key Differences:

  • Scope: Crypto Season encompasses the entire market, while Alt Season focuses on altcoins.
  • Duration: Crypto Seasons are generally longer than Alt Seasons.
  • Market Dynamics: In a Crypto Season, Bitcoin often leads the rally, while in an Alt Season, altcoins outperform Bitcoin.

It's important to note that these terms are not officially defined and can be subject to different interpretations within the cryptocurrency community. However, understanding the distinction can help investors and traders better analyze market trends and potential opportunities in different segments of the crypto market.

What Is Alt Season Indicator?

The Alt Season Indicator is a tool used by cryptocurrency traders and investors to gauge whether the market is entering or currently in an "Alt Season" — a period when altcoins are outperforming Bitcoin. While there isn't a single, universally accepted Alt Season Indicator, several metrics and tools are commonly used to assess the likelihood of an Alt Season. Here are some key aspects of Alt Season Indicators:

Bitcoin Dominance

One of the most widely used indicators is Bitcoin Dominance, which measures Bitcoin's market capitalization as a percentage of the total cryptocurrency market cap.

  • Calculation: (Bitcoin Market Cap / Total Crypto Market Cap) * 100
  • Interpretation: A declining Bitcoin Dominance often signals a potential Alt Season, as it indicates that capital is flowing from Bitcoin into altcoins.
  • Threshold: Some traders consider Bitcoin Dominance below 50% as a potential indicator of an Alt Season.

Altcoin Market Cap Ratio

This indicator compares the total market capitalization of altcoins to Bitcoin's market cap.

  • Calculation: Total Altcoin Market Cap / Bitcoin Market Cap
  • Interpretation: An increasing ratio suggests growing strength in the altcoin market relative to Bitcoin.

Top 10 Altcoins Performance

This indicator tracks the performance of the top 10 altcoins by market cap (excluding Bitcoin) compared to Bitcoin over a specific period.

  • Calculation: Average percentage gain of top 10 altcoins vs. Bitcoin's percentage gain
  • Interpretation: When a majority of top altcoins consistently outperform Bitcoin, it may indicate an Alt Season.

Alt Season Index

Some crypto data platforms offer a proprietary Alt Season Index, which combines various metrics to provide a single score indicating the likelihood of an Alt Season.

  • Scale: Often presented as a percentage or a 0-100 score
  • Interpretation: Higher scores (e.g., above 75%) suggest a higher probability of an ongoing Alt Season

Trading Volume Ratios

This indicator compares the trading volumes of altcoins to Bitcoin's trading volume.

  • Calculation: Total Altcoin Trading Volume / Bitcoin Trading Volume
  • Interpretation: An increase in this ratio may indicate growing interest in altcoins, potentially signaling an Alt Season.

Important Considerations:

  1. No single indicator is foolproof. Traders often use a combination of indicators for a more comprehensive analysis.
  2. Market conditions can change rapidly, and past patterns don't guarantee future results.
  3. Different traders may use different thresholds or interpretations of these indicators.
  4. The crypto market's evolving nature means that indicators may need to be adjusted over time to remain relevant.

Understanding and effectively using Alt Season Indicators can help traders and investors make more informed decisions about allocating their resources between Bitcoin and altcoins. However, it's crucial to combine these indicators with broader market analysis and risk management strategies.

Alt Seasons: Historical Perspective, Current Situation, and Future Predictions

Previous Altcoin Seasons

In crypto, two periods stand out as particularly significant for altcoins. These "alt seasons" saw unprecedented growth and interest in cryptocurrencies beyond Bitcoin, reshaping the landscape of digital assets.

The 2017-2018 Alt Season

Duration: December 2017 to January 2018

Context:

  • Bitcoin (BTC) experienced its most remarkable bull run to date, reaching nearly $20,000 in December 2017.
  • This surge in Bitcoin's price and public interest created a ripple effect throughout the crypto market.

Key Developments:

  1. Proliferation of New Coins: The success of Bitcoin catalyzed the launch of numerous new cryptocurrencies.
  2. Investor Frenzy: Buoyed by Bitcoin's success, investors eagerly sought the "next Bitcoin," pouring capital into various altcoins.
  3. ICO Boom: This period saw a surge in Initial Coin Offerings (ICOs), with many projects raising millions in a matter of hours or days.
  4. Market Expansion: The total cryptocurrency market cap reached unprecedented levels, briefly surpassing $800 billion in January 2018.

Notable Altcoins: Ethereum (ETH), Ripple (XRP), and Litecoin (LTC) saw significant price increases during this period.

The 2020-2021 Alt Season

Duration: December 2020 to April 2021

Context:

  • Bitcoin broke its previous all-time high, surpassing $60,000 in March 2021.
  • The COVID-19 pandemic had accelerated digital adoption and increased interest in alternative investments.

Key Developments:

  1. DeFi Explosion: Decentralized Finance (DeFi) projects gained massive traction, with many tokens seeing exponential growth.
  2. NFT Boom: Non-Fungible Tokens (NFTs) entered the mainstream, driving interest in blockchain-based digital assets.
  3. Institutional Adoption: Major companies and institutional investors began adding cryptocurrencies to their balance sheets.
  4. Technological Advancements: Many altcoins introduced innovative features, scaling solutions, and use cases.

Notable Altcoins: Ethereum (ETH) reached new highs, while projects like Binance Coin (BNB), Cardano (ADA), and Polkadot (DOT) saw remarkable growth.

Comparative Analysis: Both alt seasons shared some common characteristics:

  • They were preceded by significant Bitcoin price rallies.
  • New projects and tokens gained rapid popularity and valuation.
  • Retail investor participation increased dramatically.
  • The overall cryptocurrency market capitalization reached new heights.

However, the 2020-2021 alt season was marked by greater institutional involvement and a broader range of technological innovations, particularly in DeFi and NFTs.

Is It Alt Season?

Based on the indicators discussed above, it's not currently an altcoin season. The Altcoin Season Index at 41 and Bitcoin's market dominance at 61.3% both suggest that Bitcoin is still the dominant force in the crypto market at this time.

When Is Alt Season?

Based on the information we could gather from various experts, we can analyze the predictions for the next altcoin season as follows:

  • Based on the latest analysis from experts and on-chain data, here’s what we know about the next altcoin season:

     

    Current Status (August 2025):

     

    • The altcoin season index—a metric that signals how many altcoins outperform Bitcoin—currently sits around 37. For a “full-blown” alt season, it typically needs to rise above 75.

    • Bitcoin dominance is approximately 61-62%. Historically, dropping below 60% often coincides with a rapid rotation into altcoins and the start of alt season.

     

    Key Indicators to Watch:

     

    • Altcoin Season Index (ASI): Above 75 signals a true altcoin season.

    • Bitcoin Dominance: A move below 60% usually marks the transition; sub-50% dominance is associated with peak alt season inflows.

    • Market Activity: Increasing volumes in major altcoins and Layer 1s, meme coin rallies, and spikes in DeFi activity are early warning signs.

    • Ethereum Outperformance: When ETH surges relative to BTC, this historically precedes broader altcoin rallies.

     

    Expert Predictions for 2025:

     

    • Analysts point to a pivotal window for alt season starting as early as August 2025 and extending through the fall, with many expecting true acceleration of altcoin gains if Bitcoin’s price consolidates and capital rotates further into alts.

    • There is strong consensus that macroeconomic catalysts, such as potential U.S. interest rate cuts and ongoing Bitcoin ETF momentum, could fuel a major altcoin rally in late 2025 if positive conditions persist.

    Summary Table: Key Factors & Targets

    SignalAlt Season TriggerStatus (Aug 2025)
    Altcoin Season Index (ASI)>75 ~37
    Bitcoin dominance<60% ~61–62% (near trigger)
    Altcoin trading volumeSustained surge across many alts Rising, but not explosive
    Ethereum outperformanceETH/ BTC breakout, >$3,700 Near, ETH ~$3,500
    Market narrativesAI, DeFi, meme coins, new L1 inflows Strengthening
     

    Bottom Line:
    Most analysts agree the groundwork for altcoin season in 2025 is building. We are currently in a transition phase: if Bitcoin dominance continues to fall and the Altcoin Season Index rises above 75, a full-fledged alt season could ignite during the second half of 2025. Monitor these key indicators to stay ahead as market momentum shifts from Bitcoin into a broader range of altltcoins.

Key Factors to Consider

  • Technology: Look for coins with innovative solutions to existing blockchain challenges.
  • Adoption: Consider projects with growing partnerships and real-world use cases.
  • Market Position: Established coins with room for growth may offer a balance of stability and potential returns.
  • Tokenomics: Understanding supply dynamics can help predict potential price movements.

It's crucial to conduct thorough research before investing. The cryptocurrency market is highly volatile, and past performance doesn't guarantee future results. Always invest responsibly and within your risk tolerance.

How to Win in Next Alt Season?

Capitalizing on the next altcoin season requires a strategic approach. Here's how to maximize potential gains:

  • Research and Diversification: Thoroughly research potential investments, analyzing both fundamentals and technical aspects to identify promising altcoins. Diversify your holdings across different projects to mitigate risk and maximize potential returns. Don't put all your eggs in one basket.
  • Strategic Timing: Utilize technical analysis tools like support/resistance levels and RSI to pinpoint optimal entry and exit points. Monitor market sentiment and price trends to make informed decisions. A clear entry and exit strategy is crucial for managing risk and maximizing profits during volatile periods.
  • Newer Projects: Consider participating in newer altcoin projects. This provides early access to potentially high-growth projects at discounted prices. Research upcoming defi projects with use cases, focusing on innovative projects with strong potential. Investing early can yield substantial returns as the project develops.

Conclusion

In summary, an altcoin season, marked by significant price increases in non-Bitcoin cryptocurrencies, may be on the horizon.  This potential surge could be driven by investors seeking higher returns in smaller-cap cryptocurrencies, technological advancements in altcoin projects, increased blockchain adoption, and the transition of projects from speculative ventures to real-world applications. 

Remember, while the potential for significant gains exists during an altcoin season, the cryptocurrency market remains highly volatile. Always invest responsibly.

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PYTH: We'll Always Have Coldplay

Welcome back to The Epicenter, where crypto chaos meets corporate cringe.

But surprisingly, crypto has not been the most chaotic corner of the internet as of late.

That honor goes to the startup Astronomer, whose CEO’s cheating scandal broke the web in a glorious meme-fueled media frenzy. The company’s damage control? Hiring Gwyneth Paltrow as a “temporary spokesperson.” Do we think they’re grasping at straws or setting a new standard for PR?

Meanwhile, the markets didn’t blink. BTC is still flexing near its all-time highs. Michael Saylor’s bringing a bitcoin-adjacent money-market product to Wall Street. A pharma company just earmarked $700M to stack BNB, and analysts are calling time of death on the four-year crypto cycle. It’s a steady boom now, kittens.

A few things that are also worth noting: Winklevoss vs. JPMorgan, Visa’s take on stablecoins, and Robinhood’s Euro drama that defies the chillness of eurosummer.

Let’s get into it 👇

⛓ The On-Chain Pulse: What’s Happening on the Front Lines of Finance

This week’s biggest news in crypto and all things digital assets

đŸ—Łïž Word on the Street: What the Experts are Saying

Stuff you should repost (or maybe even cough reword and take credit for)

Meme of the Week

🏩 Kiss my SaaS: What’s Changing the Game for Fintech

Things you should care about if you want to impress your coworkers

Closing Thoughts

From meme-fueled PR stunts to Bitcoin-backed money-market funds, this week reminded us that markets move fast—and headlines move faster. With Wall Street automating itself, fintechs beefing with banks, and even your smartphone becoming a miner, anything is possible. Stay curious, stay cynical, and as always—stay sharp and stay liquid. We’ll see you back here in two weeks.

— The Epicenter, powered by Pyth Network

 

🙏 Donations Accepted 🙏

If you find value in my content, consider showing your support via:

💳 PayPal: 
1) Simply scan the QR code below đŸ“Č
2) or visit https://www.paypal.me/thedinarian

🔗 Crypto – Support via Coinbase Wallet to: [email protected]

 

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4 Fintech Companies 💾& Things To Know About đŸ€”

The fintech revolution is reshaping the way we manage, invest, and move money, breaking down traditional barriers and empowering individuals worldwide. As financial technology continues to evolve at a rapid pace, a select group of innovative companies are leading the charge by offering groundbreaking solutions that redefine banking, payments, and digital assets. Whether you’re a savvy investor, an industry professional, or simply curious about the future of finance, discovering these trailblazing fintech companies is essential to understanding today’s dynamic financial landscape.

 

  1.  Alina Invest - The AI Wealth Manager for GenZ Women

Alina is aimed at women under 25 who identify as beginner investors. They're an SEC-registered investment advisor that charges $120/year for membership. The service "buys and sells for you" and gives up notification updates of recent transactions like a wealth manager would.

👉 Getting people to invest early is crucial to building long-term wealth. One thing that holds them back is a lack of confidence and experience. Being targetted "for beginners" and people who live on TikTok should appeal. I love the sense of "we're buying and selling for you." Funds always do that, but making it an engagement mechanic is very smart. The risk here is that building a wealth business will take decades for the AUM to compound. But the next generations, Wealthfront or Betterment, will look something like Alina.

2. Blue layer - The Carbon project funding platform

Bluelayer allows Carbon project developers to take from feasibility studies to issuing credits, tracking inventory, and managing orders. Developers of reforestation, conservation, direct air capture, and other projects can also directly report to industry registries. 

👉 Carbon investing and tax credits are heavily incentivized but need transparent data. By focusing on the developers, Bluelayer can ensure the data, reporting, and credits lifecycle is all managed at the source. This is smart.

3. Akirolabs - Modern Procurement for enterprise

Akiro is a "strategic" procurement platform aiming to help enterprise customers identify risks, value drivers, and strategic levers before issuing an RFP. It aims to bring in multiple stakeholders for complex purchasing decisions at multinationals. 

👉 Procurement is a great wedge for multinational corporate transformation. Buying anything in an enterprise that uses large-scale ERPs is a nightmare of committees and spreadsheets. Turning an oil tanker-sized organization around is difficult, but the right suppliers can have a meaningful impact in the short term. That only works if you can buy from them. Getting people on the same page with a single platform is a great start.

4. NeoTax - Automated Tax R&D Credits

NeoTax allows companies to connect their engineering tools to calculate available tax advantages automatically. Once calculated, the tax fillings are clearly labeled with supporting evidence for the IRS.

👉 AWS and GCP log files and data are a goldmine. Last week, I covered Bilanc, which uses log files to figure out per-account unit economics. Now, we calculate R&D tax credits. The unlock here is LLM's ability to understand unstructured data. The hard part is understanding the moat, but time will tell.

In an era where technology and finance are increasingly intertwined, these four fintech companies stand out as catalysts for positive change. By driving progress in digital payments, asset management, lending, and decentralized finance, they are not only making financial services more accessible and efficient—they are also paving the way for a more inclusive and empowered global economy. Staying informed about their innovations can help you seize new opportunities and take part in the future of finance.

 

👀Things to know 👀

 

PayPal issued low guidance and warned of a “transition year.” The stock is down 8% in extended trading despite PayPal reporting a 9% growth in revenue and 23% EBITDA. Gross profit is down 4% YoY. PayPal's total revenues were $29Bn for the year

Adyen reported 22% revenue growth and an EBITDA margin of 46% for the full year. Adyen's total revenues were $1.75bn for the full year. The margin was down from 55% the previous year, impacted by hiring ahead of growth.

đŸ€”Â PayPal’s Braintree (unbranded) is losing market share in the US, while Adyen is winning it. eCommerce is growing ~9 to 10% YoY, and PayPal’s transaction revenue grew by 6.7%. The higher interest rate environment meant interest on balances dragged up the total revenue figure. Their core business is losing market share. Adyen is outgrowing the market by ~12%.

đŸ€”Â The PayPal button (branded) is losing to SHOP Pay and Apple Pay. The branded experience from Apple and Shopify is delightful for users; it’s fast and helps with small details like delivery tracking. That experience translates to higher conversion (and more revenue) for merchants.

đŸ€”Â The lack of a single global platform hurts PayPal, but it helps Adyen. In the earnings call, the new CEO admitted their mix of platforms like Venmo, PayPal, and Braintree are holding them back. They aim to combine and simplify, but that’s easier said than done.

đŸ€”Â Making a single platform from PayPal, Venmo, and Braintree won’t be easy. There’s a graveyard of payment company CEOs who tried to make “one platform” from things they acquired years ago. It’s crucial if they’re going to grow that they get their innovation edge back. Adyen has one platform in every market.

đŸ€”Â PayPal’s UK and European acquiring business is a bright spot. The UK and EU delivered 20% of overall revenue, growing 11% YoY. Square and Toast don’t have market share here, while iZettle, which PayPal acquired in 2018, is a strong market player. Overall though, it’s yet another tech stack and business that’s not part of a single global platform.

The two banks provided accounts to UK front companies secretly owned by an Iranian petrochemicals company. PCC has used these entities to receive funds from Iranian entities in China, concealed with trustee agreements and nominee directors. 

đŸ€”Â This is the headline every bank CEO fears. Oof. Shares of both banks have been down since the news broke, but this will no doubt involve crisis calls, committees, appearing in front of the regulator, and, finally, some sort of fine.

đŸ€”Â The "risk-based approach" has been arbitraged. A UK company with relatively low annual revenue would look "low risk" at onboarding. One business the FT covered looked like a small company at a residential address to compliance staff. They'd likely apply branch-level controls instead of the enterprise-grade controls you'd see for a large corporation. 

đŸ€”Â Hiring more staff won't fix this problem; it's a mindset and technology challenge. In theory, all of the skill and technology that exists to manage risks with large corporate customers (in the transaction banking divisions) are available to the other parts of a bank. In practice, they're not. Most banks lack a single data set and the ability for compliance officers in one team to see data from another part of the org. Getting the basics right with data and tooling is incredibly hard and will involve a multi-year effort. 

đŸ€”Â These things are rarely the failure of an individual or department; the issue is systemic. While two banks are named in this headline, the issue is everywhere. Banks need more data and better data to train better AI and machine learning. That all needs to happen in real-time as a compliment to the human staff. Throwing bodies at this won't solve the visibility issue teams have.

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