19 posts tagged with "Fintech"

The CFPB put out a proposal last fall for what's being called open banking, and it has been on my mind since. The idea is that clients should be able to share their financial data with third parties through secure APIs, and that banks should be required to make that possible. I read most regulatory proposals trying to picture what I'll eventually have to build. This one I read as someone who has spent years building data plumbing, and from that angle it's the most interesting thing to cross my desk in a while.

FTX is gone. Filed for bankruptcy on November 11, and within days the picture went from bad to catastrophic. Roughly $8 billion in client funds, not lost to a market crash or a hack, but moved. Transferred to Alameda Research, a trading firm also run by Sam Bankman-Fried, and spent on trades, investments, and who knows what else.

I've spent time thinking about stablecoins, the Terra collapse, and the regulatory questions surrounding both. It gave me a better sense of where the industry might be headed and why regulators are taking a careful approach. But it also highlighted something I'd been noticing. The conversations happening around banking and the conversations happening inside a bank are very different.

Less than a year ago, I was genuinely optimistic about blockchain. The technology had real properties, real use cases, and I wanted to understand it properly before forming opinions. Then $40 billion evaporated in a week, and the picture changed.

When I first dug into blockchain, I focused on the technology. Distributed ledgers, consensus, immutability. What I didn't spend enough time on was the most obvious problem with Bitcoin as actual currency. It moves too much. Accept $100 in Bitcoin today, and it might be worth $85 by Friday. I built a payments company. That kind of volatility makes a currency useless for commerce. So people built something to fix it.

I used to think banks were just slow. When I was pitching mobile payments to bankers years ago, I couldn't understand why they didn't see what seemed obvious to me. Working inside a bank, I've had to revisit some of those assumptions.

Understanding how banks make money turned out to be more interesting than I expected.

I've spent years building tech startups and, at various points, pitching them to banks. Now I'm on the other side of that table, working as CTO of a community bank. The view is different from here, and I want to share what I'm learning along the way.

I've spent the last two posts explaining what blockchain is and how it works technically. The natural question is: what can you actually do with it?