Daily Briefing – 16 July 2018

European regulators are falling over themselves to become first to offer banking licences to cryptocurrency exchanges. Not long after arriving in Malta from Hong Kong, crypto exchange Binance wants to establish a decentralised community-owned bank. The concept, dubbed Founders Bank, has been thought up by Binance, which is set to make up to $1bn in profit this year. “Obviously, they’ll have to meet anti-money-laundering regulators. The question will be, how do regulators view this?” Marc Ostwald, global strategist at ADM Investor Services International in London told Bloomberg. Binance is expected to conduct the bank’s sale of equity tokens later this year.JPMorgan Chase and Citigroup reported higher earnings on Friday, beating analyst expectations, while Wells Fargo did not fare as well. JPMorgan’s revenue was up eight percent year-on-year (pre-tax profit jumping some $823 million), including a strong showing from its retail banking area — its consumer and community banking experienced a 53 percent increase in net income on the back of Federal Reserve interest hikes. Wells’ second quarter earnings were down from $5.9 billion to $5.2bn, with consumer lending falling by $2.8bn and the bank spending $481m on an income tax bill. Citigroup’s pre-tax profit rose five percent thanks, in part, to an increase in global consumer banking’s net income. Bank of America is expected to see earnings rise, while its retail banking also looks positive (paywall) according to the Wall Street Journal with customers bringing in “more money to the bank despite its low deposit rates”.Worldpay and Mastercard have signed a partnership to expand acceptance options and improve security of digital offerings. In the first quarter of 2019, Worldpay will offer Mastercard’s Pay By Bank app to merchants, making it easier for them to receive online payments directly from business clients’ bank accounts. “[The] ‘Pay by Bank’ app is set to play a big role in UK digital commerce, as more banks and merchants offer this as a payment option to millions of their customers”, said Mark Barnett, President of Mastercard in UK, Ireland, Nordics & Baltics.Indeed, the Nordics has become a real battleground for fintechs and banks: relatively nimble footwork by the banks may enable them to put together a cross-border Nordics digital payments network that its banks hope will enable consumers to bypass the big US tech giants.Lafferty BenchmarkingWells Fargo, Bank of America and Citi were each given two stars in Lafferty’s 2017 Benchmarking report, while JP Morgan was given three. The maximum possible is five stars.