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Fed’s proposal for faster payments raises question of fraud
‘FedNow’ won’t be available for four years, but how will it handle unauthorized payments?

The Federal Reserve expects to launch a real-time payment service in four years. Fintech experts are already questioning how it will handle fraud. (Caroline Brehman/CQ Roll Call file photo)

The Federal Reserve’s announcement last month that it would compete with private industry to launch a 24-hour-a-day real-time payment service has fintech experts raising an alarm: How will it handle fraud, which they say is inevitable with any financial system.

The Fed’s real-time gross settlement service, to be known as “FedNow,” is not scheduled to be available for at least four more years. Yet some financial services attorneys are already pondering who should bear the loss if it processes unauthorized payments.

Fintech Beat explores the ABC's of fintech investing
Fintech Beat, Ep. 19

Stock market data growth chart graph investment finance analysis fintech financial district

Fintech Beat explores a new way of investing in real estate
Fintech Beat, Ep. 18

A for sale sign advertising a row house on Constitution Avenue, NE, is pictured on Monday, August 26, 2019, in Washington D.C. (Photo By Tom Williams/CQ Roll Call)

Venezuelans use cryptocurrency to bypass corruption, inflation
Some charities turn to digital assets to circumvent government’s chokehold on ecomony

Nurses protest the lack of medicines and medical supplies in Venezuelan hospitals at a demonstration in Caracas last month. Some Venezuelans are turning to cryptocurrency to circumvent the government’s chokehold on the economy. (Federico Parra/AFP/Getty Images file photos)

Faced with hyperinflation and borders closed to humanitarian aid, Venezuelans are turning to cryptocurrency as a workaround of government control of money. Aid providers say digital currencies are becoming an important route to bypassing corruption or repressive regimes.

Digital currencies have no shortage of critics, who point to their use in scams, theft and money laundering. U.S. lawmakers blasted Facebook’s plans for a cryptocurrency, and regulators routinely warn of wild volatility.

The Comptroller of the Currency
Fintech Beat, Episode 17

Joseph Otting, Comptroller of the Currency, prepares to testify during a House Financial Services Committee hearing in Rayburn Building titled "Financial Industry Regulation: the Office of the Comptroller of the Currency," on June 13, 2018. (Photo By Tom Williams/CQ Roll Call)

Fintech Beat explores the relationship between hip-hop and crypto
Fintech Beat podcast, Ep. 16

Grammy award winning hip hop star T.I. (a.k.a. Clifford Joseph Harris Jr.) talks to the media as he arrives on the "green carpet' at the 9:30 Club to participate in the Hip Hop Caucus' event to launch their get out the vote campaign on Monday, July 28, 2008.

IMF embraces new central bank digital currencies
Fintech Beat, Episode 15

IMF officials talk digital currency in the latest Fintech Beat podcast. (Credit: krblokhin/ iStock)

A conversation with Domitille Dessertine, head of fintech in France
Fintech Beat podcast, Ep. 14

The Arc de Triomphe is seen in Paris at night. (Credit: Leo Patrizi/iStock)

Digging further into Libra's origin story
Fintech Beat podcast, Ep. 13

Facebook's Libra crypto coin logo is picture next to gold Bitcoins. (Cheng Feng Chiang/iStock)

Senate Banking members take skeptical look at cryptocurrencies
Blockchain firms have tried selling lawmakers on the potential for dramatically reduced transaction costs.

Senate Banking Chairman Mike Crapo, R-Idaho, sees data privacy as one of the primary risks. (Bill Clark/CQ Roll Call file photo)

Concerns over data privacy and skepticism about just how unique and beneficial cryptocurrencies and other blockchain-based digital assets could be dominated Tuesday’s Senate Banking Committee hearing on regulating the new technology.

“This new digital currency and blockchain technology is a very real — and potentially helpful — innovation,” said Chairman Michael D. Crapo, R-Idaho. “It’s also potentially harmful as there can be some serious risk involved in it.”

Facebook’s currency plan makes fintech a tough sell in Congress
Some members are conflating disdain for Facebook with other, more vital fintech innovation, Schweikert says

House Financial Services Chairwoman Maxine Waters has criticized Facebook’s new cryptocurrency offering, Libra, calling it an “unchecked expansion” into the lives of the company’s users. (Tom Williams/CQ Roll Call)

Members of Congress who support the development of new financial technologies say their job might have gotten tougher after Facebook announced its plan to issue a cryptocurrency.

Lawmakers used hearings in both chambers this month to roundly censure Facebook’s proposed Libra, which the social media company says could provide financial services to people who can’t rely on banks.

How the Bank of England is keeping pace with the surge in fintech
Fintech Beat podcast, Episode 12

(iStock)

Mobile technology may serve underbanked with no cryptocurrency
As Facebook touts a new cryptocurrency, mobile technology companies may provide the same path with dollars

The T-Mobile logo is displayed outside of a T-Mobile store. Facebook’s new cryptocurrency, Libra, could provide banking services to underbanked populations. But some say mobile technology companies may be able to provide those services with government-backed currencies. T-Mobile teamed up with BankMobile, a division of Customer Bank, earlier this year to allow people to bank on their phones through a service called T-Mobile Money. (Justin Sullivan/Getty Images)

As Facebook touts a new cryptocurrency as a way to serve people who are underbanked, mobile technology companies may provide the same path to financial services using good old-fashioned dollars.

The technology would avoid many risks worrying lawmakers and regulators, such as money laundering and undermining the Federal Reserve’s ability to set monetary policy. But some who track these technologies say allowing tech companies to become the bankers for the underserved carries risks of its own.

What counts as ‘foundational’ tech?
As Commerce gears up for export debate, definitions remain in dispute

An attendee participates in a augmented reality demonstration to show how lidar, or light detection and ranging, works during a briefing on autonomous vehicles in June. (Alex Wong/Getty Images file photo)

In the coming weeks, the Commerce Department plans to announce a notice seeking comments on how it should draw up export control rules for so-called foundational technologies, similar to an effort the agency launched in November 2018 for a category called “emerging” technologies.

The rules were mandated after Congress passed the 2019 defense authorization act calling on the Commerce Department to establish export controls on “emerging and foundational technologies” that are critical to U.S. national security. But tech companies, universities, and research labs across the country continue to be alarmed that overly broad export restrictions could ultimately hurt American technological superiority.

Facebook’s cryptocurrency hearing, explained
Fintech Beat podcast, Episode 11

David Marcus, head of Facebook's Calibra digital wallet service, testifies during the Senate Banking, Housing and Urban Affairs Committee hearing on "Examining Facebook's Proposed Digital Currency and Data Privacy Considerations" on Tuesday, July 16, 2019. (Bill Clark/CQ Roll Call)

No issue has generated more concern about Facebook’s Libra than the potential for it to be abused as a tool to finance terrorism or launder money.

In this episode, Fintech Beat talks with data and analytics firm Chainalysis about international regulatory efforts, so-called clustering and blockchain forensics.