What do bank robberies and tax evasion have in common? Other than the most logical crime-related responses, both are more common in cash-based societies.
Denmark is case in point – or rather, a lack thereof. As the country shifted away from offering cash services in branches, the number of bank robberies fell to zero last year. That’s not to say these criminals are unemployed though – just as with any industry, they’ll need to adapt their tech skills to keep up with the broader workforce amid the rise of internet banking and cyber fraud.
Meanwhile, other countries are still susceptible to more traditional approaches. Americans have exercised their stubbornness once again in refusing to shift away from their affinity for cash. Unlike Denmark, the US saw a rise in bank robberies, burglaries, and attacks on armored cars last year.
In many cases though, governments have their own agendas. As witnessed in Italy, Prime Minister Giorgia Meloni attempted to stand with small businesses and allow them to reject digital payment methods for transactions under €60, although this was ultimately reversed after pressure from the European Commission to honor their pledge to fight tax evasion. Facing a shortfall of €100b per year in taxes and social contributions, the benefits of shifting to digital are tough to dispute.
Nigeria is making a push to fight fraud as well, announcing this week that any cash withdrawal from government accounts would trigger money laundering investigations, in an effort to curb the $2.4b withdrawn from public accounts since 2015, as well as the arbitrage between the country’s dual exchange rate regime.
Despite these changes, the days of financial crime are far from over, and the shift to digital will inevitably expose a host of new challenges to confront.
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Cash Is No Longer King
Denmark’s bank robbers count the cost of cashless society - Denmark has discovered an unexpected benefit of a cashless society after bank robberies in the Scandinavian country fell to zero. Figures from Finans Danmark, an industry association, show the number of attacks has collapsed in recent years as the shift towards online transactions has led many Danish banks to abandon cash services in branches. Read more
Italy, India, and the bumpy road to cashless payments - Italians still use cash more often than the eurozone average — for around 69% of in-person transactions, but that too is down 13% since 2019. The ECB found 58% of Italian consumers preferred cashless payments, compared to just 18% that strongly prefer physical money. But consumers’ growing enthusiasm for digital payments is not shared by Italy’s small business owners. They complain bitterly about the high bank fees for processing card payments. And cash sales are also far more easily hidden from tax collectors. Read more
Nigeria to ban cash withdrawals from government accounts - Nigeria will ban cash withdrawals from government accounts from March 1 to tackle illicit activity and push toward a cashless economy. About 1.1t naira ($2.4b) has been taken out of public accounts in cash since 2015, with most transactions exceeding legal thresholds, Nigerian Financial Intelligence Unit Chief Executive Modibbo Tukur said. Read more
Sam Bankman-Fried pleads not guilty as trial is set for October - Prosecutors have accused him of stealing billions of dollars of customer funds from FTX and of defrauding investors and lenders to his trading firm, Alameda Research. He also evaded campaign-finance contribution limits and reporting requirements when he made millions of dollars in illegal political contributions funded by Alameda, prosecutors said. Read more
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Ant gets approval to expand its consumer finance business - The China Banking and Insurance Regulatory Commission said it approved Ant Group’s request to increase the amount of registered capital for the company’s consumer unit, to 18.5b yuan from 8b yuan. Ant will still hold a 50% stake in the consumer finance company, according to the announcement and new investors in the other half of the company include an entity backed by the Hangzhou government and Sunny Optical Technology. Read more
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Coinbase settles with New York state financial regulator for $100m - Coinbase will pay a $50m fine and invest a further $50m into strengthening internal compliance programs after regulators found that Coinbase had failed to thoroughly vet new customers. Read more
Crypto lender Genesis considers bankruptcy, lays off 30% of staff - Massive crypto lender Genesis Global Trading laid off 30% of its staff and is considering filing for bankruptcy, the latest sign of financial turmoil at the crypto lender. The layoffs weren’t confined to one department and were across the company. Genesis has 145 employees left after Thursday’s layoffs. Read more
ChatGPT creator in investor talks at $29b valuation - OpenAI, the research lab behind the viral ChatGPT chatbot, is in talks to sell existing shares in a tender offer that would value the company at around $29b, making it one of the most valuable U.S. startups on paper despite generating little revenue. Read more
Ant: digital renminbi poses big risk to payments business - The FT writes that Alibaba investors should be wary of China’s enthusiasm for the digital renminbi. This central bank digital currency poses a threat to Alipay, the payments business of Alibaba affiliate Ant Group. Groups such as Alipay risk becoming providers of plumbing in a government-controlled financial system. Read more
Akulaku - Indonesia based banking and digital finance platform raised $250m in growth funding led by Mitsubishi UFJ Financial Group. Read more
KreditBee - India based lending platform raised $100m in new Series D funding led by Advent International. Read more
Liberate - Palo Alto based platform enabling P&C insurers to fully automate claims and underwriting journeys raised $7m in Seed funding led by Eclipse. Read more
Manafa - Saudi based SME financing company raised $28m in Series A funding led by STV. Read more
Momentum Safe - California based wallet company raised $5m in Seed funding led by Jump Capital. Read more
Money View - India based personalized credit company raised $75m in Series E funding led by Apis Partners. Read more
SarvaGram - India based rural digital lending platform raised $35m in Series C funding led by Elevar Equity. Read more
SirionLabs - Washington based contract lifecycle management company raised $25m in Series D funding led by Brookfield Growth. Read more
FinTech Collective Newsletter
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