Technology
Fintech entrepreneurs are using stablecoins to break into the payments industry, with startups such as MassPay and Rain forging new pathways that incorporate or bypass traditional rails. While legacy players like Visa and Fiserv also embrace the trend, their infrastructure may hinder adaptation. Investors like Verda Ventures see stablecoins as enabling easy, fast, and cheap payments. Rain, which has raised about $338 million, provides stablecoin infrastructure and recently launched a consumer wallet, while MassPay processes tens of billions annually, with about 10% in stablecoins. The Genius Act has provided regulatory clarity, boosting confidence. Both companies continue to expand through acquisitions and new services.
Upgrade has applied for an industrial loan company charter with the FDIC and the Nevada Financial Institutions Division. The fintech plans to establish Upgrade Bank, with Virginia Varela as proposed CEO. Varela, a former regulator and SoFi executive, brings over 40 years of banking experience. Upgrade, which has delivered about $53 billion in credit to roughly 8.5 million customers, currently partners with Cross River and Celtic Bank. An ILC charter would reduce that dependence. The application comes amid a surge in new charter applications, but some lawmakers and the ICBA oppose ILC charters, citing regulatory gaps.
JPMorgan Chase has been building a network of payments partners over the past three years, now totaling about 120 companies, to help the bank integrate with clients' software and monitor industry trends. Todd Manning, who joined JPMorgan this year as managing director and head of corporate development and partnerships for the bank's payments arm, said the network, formed in 2023, includes partners such as Visa, Ingenico and Epic Systems. The bank has about 30 people focused on new partnership origination, venture investments and M&A opportunities. JPMorgan typically makes non-controlling investments of under 5% equity ownership in less than one-third of its partners, and while acquisitions are possible, they are not frequent.
AI agents and IoT devices expand the attack surface in banking, making fragmented security unsustainable. The article argues for fusing security into the network to provide visibility, action control, and continuous compliance, turning infrastructure into a competitive advantage.
Anchorage Digital announced Tuesday it has acquired payout platform Routable; terms were not disclosed. The deal pairs Anchorage's regulated infrastructure for stablecoin issuance, custody and settlement with Routable's payout distribution layer, which connects clients' ERP systems to money-movement rails. Routable, backed early by OpenAI CEO Sam Altman, offers payee onboarding and verification, tax and compliance automation, and high-volume payouts via a developer-first API. Anchorage CEO Nathan McCauley said the company anticipated demand from Big Tech and Fortune 500 firms, while Routable CEO Omri Mor said clients gain a regulated bridge into digital assets. Routable will be branded 'Routable by Anchorage Digital,' with native stablecoin and tokenized deposit settlement embedded. Anchorage, which gained a national trust charter from the OCC in 2021 and completed a three-year consent order, sees stablecoins becoming core financial plumbing. Integrated offerings are planned over coming quarters.
Banking conferences in 2027 will offer leaders a chance to gauge the industry's direction amid anticipated changes such as increased M&A and tailored regulation, while areas like cryptocurrency frameworks remain uncertain. Events like Acquire or Be Acquired, ABA Conference for Community Bankers, Fintech Meetup, ICBA Live, ABA Washington Summit, CBA Live, The Financial Brand Forum, National Credit Union CEO Roundtable, and ABA Risk and Compliance Conference provide opportunities to connect with peers, explore emerging technologies like AI, and navigate evolving compliance expectations.
A new report from Evident reveals that banks are accelerating their AI adoption while prioritizing governance and responsible AI. Nearly all 50 surveyed banks have responsible AI principles, up from 16 in 2023, and more than two-thirds have detailed controls. Banks advanced their AI use three times faster last year than the previous three, citing over 1,100 use cases since 2021. JPMorgan Chase leads Evident's maturity index, followed by Capital One and Royal Bank of Canada. AI governance talent grew 33% year over year, and 12 banks report ROI on AI projects, up from eight last year. The report highlights that banks are embedding AI deeper into workflows and focusing on risk mitigation, with over half of IT executives expecting AI agents fully embedded in risk, compliance, and audit functions.
Fiserv had planned to launch its FIUSD stablecoin by the end of 2025, but now says timing is uncertain. The payments processor has instead launched a digital-asset platform, initially hosting Bank of North Dakota's Roughrider stablecoin. Sunil Sachdev, head of embedded finance, explains the pivot: Fiserv moved away from partners Paxos and Circle to build a proprietary coin, influenced by the Roughrider project and the acquisition of StoneCastle. The company remains committed to FIUSD, citing its vast network of over 300 million bank accounts and 5-6 million merchants as key advantages. Other factors include a CEO transition and pressure from activist shareholder Jana Partners. Fiserv is also part of the Open USD stablecoin effort and is working with Fireblocks and Solana for its platform.
Two U.S. senators, Elizabeth Warren and Chris Van Hollen, sent a letter Wednesday calling on nonbank lender OppFi to withdraw its application to acquire Arizona-based bank holding company BNCCORP and its subsidiary BNC National Bank. The lawmakers allege OppFi's business model relies on predatory lending, including personal installment loans with APRs up to 195%, and cite high charge-off rates and aggressive refinancing tactics. They point to Enova's recent decision to terminate its bid for Grasshopper Bank as a precedent. OppFi pushed back, saying its bank charter application is being politicized and that its business model is compliant and would be subject to rigorous federal oversight. The letter follows opposition from 20 state attorneys general in July.
Mercury Bank CEO Jon Auxier said at the Federal Reserve Bank of Philadelphia's annual fintech conference that pursuing a bank charter must be a fintech's top priority to succeed. Mercury applied for a national bank charter in December and aims to launch Mercury Bank by late 2027. Auxier, who helped lead SoFi's charter implementation, emphasized that charter preparation affects every function. SoFi Bank EVP Eric Schuppenhauer and Square Financial Services CEO Richard Rosenthal also shared insights on mindset, hiring, and the benefits of strong supervision.