1076. News: US and UK push stablecoins, Flutterwave lands $3.2bn, and Green-Got makes Crowdcube history

0:04This is Fintech Insider News. This week, US and UK move from stablecoin legislation to implementation. Payment startup Flutterwave hits$3.2 billion valuation backed by Ripple. And French neobank Gringo shatters Crowdcube records. We'll be tacking all of this and more on today's news show. So don't go anywhere.

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1:03Hello, and welcome to episode 1076 of FinTech Insider News, brought to you by 11FS, the six-time consultancy of the year that works with financial providers big and small to build the next generation of financial services. I'm Kate Moody, Customer Strategy Director at 11FS. To help me unpack the biggest and most interesting stories from FinTech and financial services from the past week, I'm joined by a brilliant panel of guests. First up we have a welcome back to the show for valerie contour founder of black in fintech welcome back to the show valerie great to see you how things going for you for you and black in fintech yeah that's going really good uh so we're nine months in uh planning our sixth event which is in two weeks time uh so that'll be currency of culture at barclays innovation hub so uh glad to be back awesome yeah great to have you on the show it's also a big welcome back to the show for the one and only matt cooper co-seer of crowdcube matt always a pleasure to have you on the show, how are things going for you?

1:55Hey, Kate, thanks for having me. Going really well. We are busy beavering away on lots of primary funding rounds for companies and increasingly lots of secondary liquidity events for companies and their employees. So all very exciting stuff. Awesome. Looking forward to digging into that in more detail. And last but not least, making the very welcome FinTech Insider debut, we have a welcome to the show for Radhi Elhaj, CEO of RS2. Welcome to the show. Would you mind introducing yourself and RS2, please? Thank you very much, Kati, and nice to meet you, Valerie and Matt, in this event. My name is Rad Elhaj, I'm the CEO of RS2 Group.

2:32RS2 has been building payments and technology over the last 30 years, helping banks, payment processors, fintechs to modernize their platform for issuing and acquiring using one single platform. Today, we operate globally, and we are very fortunate to see payments trends developing across very different markets. And thank you for inviting me today. No, thank you for joining us. Looking forward to picking your brain as we go through the stories. Right, we have a panel. I'm excited to get started, so let's dive in. Okay, our first story comes from the papers, and that is US and UK move from stablecoin legislation to implementation.

3:08Stablecoins took another step towards the financial mainstream this week, with regulators in both the US and UK publishing major updates to their rule books. In the US, agencies including the Federal Reserve, FDIC, and Treasury have proposed identity verification requirements for stablecoin issuers under the Genius Act, bringing airmail and customer onboarding expectations close to those already applied to banks and regulated financial institutions. Meanwhile, across the pond, the Bank of England has published its long-awaited framework for systemic stablecoin issuers, outlining how reserves should be managed, setting a temporary 40-40 billion issuance guardrail and laying the groundwork for regulated stablecoins to begin operating in the UK from 2027.

3:51Radhi, you came out and said the UK has not missed its opportunity, the opportunity has changed. What's your take on this? Maybe you could explain a bit more about your stance on this. Yeah, Katie, I genuinely believe that the UK hasn't really missed anything. I think the opportunity itself has simply evolved and mature. If you look five years ago, we were asking whether Stablecoin could work. Today we are asking how can operate really safely and scale within a regulated financial markets. And I think this is the discussion which we are having today. So we are moving from really innovation into building an infrastructure that institution can actually trust.

4:37So this is a sign that the market is maturing rather than really slowing down. So in case of the UK, I think they are really moving in the right direction and in the right moment. So they haven't missed any opportunity as we speak. Yeah. And what did you make of the fact that both the US and the UK have advanced their frameworks at roughly the same time? Is that just a coincidence or is there sort of like global change happening here? I don't believe it's really a coincidence. If you look in, so we are talking about two major economies, the United States and Great Britain. So if you look into both of them, any regulator today or any country, they would like to really make sure that anything coming that has an impact on the financial industry that they would like to drive in.

5:26And I believe what both of them what they are doing basically is they want to make sure that this type of company is coming and they would like to be regulated for stablecoin as an issuer, etc. That they don't migrate simply to other jurisdictions and they would like to stay there. So therefore, they would like to be the first to put all the regulation around it, which is something I think really very convincing what they are doing. And if you look what the US has been done in terms of the Clarity Act and the Genius Act, the same thing now in the UK, what we are experiencing. I mean, both of them, they would like really to ride on the wave we are having today on a stable coin and they would like to be the first one.

6:11I have been in the payment for 30 years and seeing, for example, where regulators starting something really fresh and new, they want the market big time. And of course, the first mover in the market who can have the regulation around certain type of things, especially something like stablecoins, where we know they are more than 3 trillion in circulation today. That's something I think it's really very important for both countries to start with. Yeah, absolutely. Valerie, what was your take on this story? What should you make of this news? Yeah, I'm probably not the most well-versed person on stablecoins.

6:47And selfishly, I'm probably looking from a diaspora perspective around how we only hold money abroad. So I think it's a great first step in terms of providing regulation and the infrastructure as well. We said I'm just keen to see on a global perspective for people that do have global financial realities, what does that mean from a user perspective. Yeah, I know for sure. And Matt, let's give you the opportunity as well. What was your initial take when you saw these stories? I think there's a couple of interesting things. One is, you know, the City of London and the regulator and the FCA and HMT should be applauded for being progressive and, you know, relatively in lockstep with the US around how they're approaching stablecoin regulation.

7:32So I think that's a positive, like that's pro-UK. like outside looking in, we're not directly involved in with stable coins in the crowd cube business, but it definitely feels like we're sort of, you know, moving into this next phase of growth and adoption where, you know, trust is critical. It feels like it's gone beyond the wild west of the early days where adoption was limited to, you know, the treasury teams talking about it you've got um you know big global businesses who are doing international trade utilizing it um so i think it's a really interesting next phase really and it feels for me that it's all built around trust and how how trust then grows the next wave of adoption yeah absolutely um i mean radice maybe for people that aren't as immersed in the payment space as you i'm conscious we have quite a wide listener base i mean could you maybe explain kind of at a high level, what the main disruption is that stablecoins potentially offer to the payments ecosystem?

8:41What are the kind of use cases that stablecoins could potentially solve that current payment rails are struggling with? So, Kate, I think if you come to a product into the market as a software vendor or as a technology provider, you need to make sure that you are solving a problem. And I think the problem stablecoin is solving in various ways, depending on the size of the institution depending on the use case. But the most important use case today in the industry for stablecoin is really the cross-border payments. So if you look today, especially we deal with markets where you have a lot of fluctuation in effects, etc.

9:19between the different countries. So transferring funds from one country to the other, first of all, if you want to go through SWIFT, for example, it's extremely expensive and sometimes while it takes really one or two days, it takes maybe one day to do it, but if you are using the stablecoin, that accelerates the process. The other thing which we are also noticing that the Treasury Department is extremely happy by using stablecoins because that eliminates a lot of administrative work, etc. And you have the effects fluctuation, it's almost not there. And the other thing is you are eliminating any intermediary, which means by the end of the day, it's really reducing the costs.

9:57So I'm seeing a great use case using stablecoins in cross-border payments. Yeah, I mean, I think that is like the key example, right, that's been cited kind of across multiple years now. That's kind of where people have got most excited. I think, you know, as we've already kind of touched on, it feels like trust is that key part. I thought there was a really interesting quote from Colin Payne at the FCA, Head of Innovation at the FCA, because they announced, I think, earlier on this year, their kind of first cohort of companies moving into the FCA's sandbox for stablecoins. And I think the phrase he used was, stablecoins are no longer a side quest.

10:35They're looking to become financial plumbing. And plumbing has one job, work every day, including the bad days. Which, obviously, it's always nice to get a reference to plumbing into a fintech podcast. But yeah, Matt, how far away do you think we are from people having confidence in stablecoins? Does it still feel to you like quite niche or do you think more people are really starting to see and trust this as a potential way to move money? Yeah, I think we've kind of reached inflection point, right? We sort of shifted from, well, the market and adoption shifted from, I guess, the sort of experimental to like deeply ingrained operational use cases.

11:13You talked about the issues of if you're a UK business selling machine parts in Peru, quite how painful that settlement of moving money is for that organization. I think the real test is can you get treasury departments of big companies to trust it to the extent that, and it's interesting what the FCA said, right, to trust it to the extent of if an FTX or something really bad in the macro environment happens on a Friday night, You know, am I going to have my dollar for dollar funds where I need them on the, you know, that hour, that minute, that day or the following day? But I think the answer to that is yes, you will.

12:04Yeah, no, absolutely. And obviously, you know, like stable coins themselves are not new, right? We've had, you know, private companies offering stable coins for a long time now. What's the main difference that's going to happen when these move inside the regulatory guide rails, when these are kind of offered, not by the likes of Circle or whatever, but offered by other companies? What's the main change, do you think? So, in my view, technology is already there. So we don't need to do anything about it. It's there. The minute the regulator gets involved and try to put the framework around it, that means we are creating now an infrastructure.

12:45And if you look into any type of payment rails we used to have in the past, being cards, being inserts, being account to account, it's becoming by the end an infrastructure. So and the minute the regulator gets involved in that, that means we have trust. And the minute you trust is there, you will have adoption as Matt said. And the minute you have adoption means you have liquidity. And then there where you start building really the infrastructure around the stable coin. So it's very, I think, important that the regulator is really now getting involved because, as you said, everyone can go out, try to issue stablecoin, etc.

13:22But the minute it gets regulated, I will look into it from the consumer perspective, which means my asset is protected because it's regulated. And it's really, it's a different ballgame. Yeah, no, absolutely. Valerie, from where you're sitting, are there any particular use cases that you're excited about? Yeah, I'm also thinking from a market perspective because we are still dependent on third-party currencies. So again, if I'm looking to sell money back abroad, if I'm looking to buy a house abroad, where can I store that money and make sure that there's no kind of liquidity issues? So that's mainly, I'll probably be either somehow or do a recording around this.

13:59That's okay. Yeah, absolutely. Okay, well, one to keep an eye on to see how this regulation shifts the space. Okay, moving on to our next story. This one comes from TechCrunch. And that is payment startup Flutterwave hits$3.2 billion valuation backed by Ripple. Flutterwave has announced a new funding round that values the business at$3.2 billion, with Ripple joining as an investor as part of a broader partnership to expand digital financial services across Africa. Flutterwave now operates in 35 African markets and has been investing heavily in API connectivity, cross-border payments, and stablecoin, hello again, capabilities, all aimed at making it easier for businesses to move money across borders.

14:39The announcement also arrives as global fintechs increasingly turn their attention to Africa. Revolut has confirmed plans to launch in South Africa with nearly 100 ,000 people already on its waitlist ahead of regulatory approval, highlighting growing international interest in one of the world's most dynamic fintech markets. Valerie, we've chatted multiple times on the show about Africa, the potential of it as a fintech market. We're starting to see some of the continent's largest fintechs now reaching pretty chunky scale, right? So you've had a front row seat on this. What does this milestone tell us about the market and how it's evolved?

15:16Yeah, I think it's just proving time and time again that fintech isn't just a bunch of startups, but they are, at scale, transforming the lives of how people move money and how businesses transact on a day-to-day basis. So you have the lights of Flutterwave across the continent, but money wave, money point, check of cash, doing similar things. What we'd love to see is more repeatable cadences of these unicorns coming from the continent, actually transforming the lives of many Africans in Dallas. Does it feel like African fintech is entering a new phase of maturity? I would say so. Earlier this year, we had the launch of the AT50, which is essentially applying private market discipline to African tech companies.

15:53And about 50 % of that index is actually FinTech, which we love to see. But what they're showing is that these FinTechs of South Africa aren't essentially just headlines. They are showcasing the exact same patterns that we saw with FinTechs that have either gone on to less or have had great success across the market. So I think it's a new phase of maturity in terms of infrastructure, but also just proven success that's attracting global capital, attracting global talent as well. So yeah. Yeah. And as you say, attracting global capital, global talent, does it feel like it's just a case the world has just caught up with the opportunity here or is anything sort of changed on the ground that is facilitating that capital, facilitating that talent to redistribute?

16:34I think the narrative has changed massively in the last, I'd say like one to two years. So I heard Kruberjik being part of the first trade mission to Africa, where we had a delegation of fintechs from London go across the continent and actually want to expand out there and trade and do partnerships. So again, that was a massive milestone. And then just recently, we had London Tech Week, we had a delegation of African fintechs come over looking to partner across London. So again, these partnerships happening both on the ground, but also within major fintech cards like London, signals that it's attracting global talent, it's attracting the right capitals, it's attracting the right narratives.

17:07But we still have a long way to go in terms of saying, yes, it's reach for us, yeah. Yeah. Matt, what was your take on this story? Have you been following Flutterwave's trajectory? Not especially, if I'm honest, but I think, and it'll be interesting to hear Valerie's take on this. like how much does the sort of African tech ecosystem slash fintech ecosystem need or require exits in order to give people the opportunity to go start like the next wave of businesses. Like I don't know the backstory of the founders of this company, but I've always been intrigued as somebody who's worked and traveled to Africa lots of times where the next wave of innovation that we see in the UK and Europe, like with the Revolut Mafia or the Klarna Mafia who go off and start other financial technology companies when they've made and exited one successful fintech already.

18:09How much is that happening in the region, Valerie? Yeah, so it hasn't had any successful, I guess, exits by way of IPOs. That's what the 80s, 50s are proving out. So that story is still being told in real time. So that's something that we're waiting to see across the next five to 10 years. We've got O-paying sorts of looking to IPO quite soon. So it's still something that we're working towards and we're all waiting to see how that happens, really. Interesting. Yeah, and I think that's a really interesting point to call out, Matt. Radhi, keen to bring you on this one as well. Obviously, one of the challenges that Flutterwave is trying to solve is fragmentation across Africa.

18:45There are multiple currencies, these multiple regulatory regimes, banking systems, payment networks, etc. How significant is this challenge on the African continent compared to other regions? I think Africa is exactly like Latin America. I will compare it one by one. So the fragmentation which we have in the market, because there is a misunderstanding if you think you are dealing with a continent like we have in Europe, because we have the SEPA and the European Union. A lot of people think that they can take their platforms and go to any continent and implement it as a standard. That will never work.

19:20So localization is the name of the game. And I think if I'm looking at the website of Flatwave, these guys manage really to orchestrate multiple payment rails, paying cars, paying stable coins, account to account, etc. Close multiple countries, which means they need to adhere to the different regulation and compliance in the different country. And I believe their valuation is coming really from that fact that they are managed to do that complexity. And the same thing, we are extremely big in Latin America and very active there. The same thing, a lot of fintech companies from Europe or United States, they tried to go into Latin America and they failed miserably.

19:59Or people from Europe went to United States and they believed that they can implement that standard, what they have there, which is completely wrong. You need always to localize your platform in order to meet the requirements. And you need to see what are the behavior of the consumer and the payments behavior in the country and meet the rules and regulation in that countries to be successful. I think Flatwave managed to do that across what I heard now from Valerie and Matt, they are across 35 countries. It's remarkable. And I can imagine that their valuation went up because of that. Yeah, it's phenomenal really when you think about it, Valerie, like the complexity of operating across that many markets.

20:38What do you think, again for people that maybe don't understand this landscape as close as they should like how how hard is that maybe i don't you have any additional insights into kind of the types of challenges that flutterwave have had to overcome to reach this kind of scale yeah so africa is 52 54 countries 42 different currencies and it like i already said there's no european central bank there's no cetherstein there is the um pan-african payments and settlement initiative that's going on, but that hasn't had real progress and real traction. Every country is very different by way of culture, by way of regulation, and again, entering every single country is down to who you know, and having that localization aspect to it.

21:19And again, countries like Nigeria are massive by concept. They have different languages, their own country. Different regions have very different practices, so again, it's very difficult to look at one continent and generalize practices. So Flottaway have done amazing work in terms of trying to bridge that together trying to get different payment rails and provide one solution on top of that. Yeah, no, it sounds super, super impressive, even from my perspective, like not fully understanding all of the complexity of it. And it seems to be quite a lot of interest around South Africa in particular at the moment, Valerie.

21:51Again, like, have you got any insights into that? Like, is it seen by international firms as kind of like an easier entry point? Yeah, when we look at all the countries in Africa, I mean, South Africa has the foundation of traditional financial services. They have banks established there. They have, I guess, a similar ecosystem to what Europe has, not in the same scale. But I think by way of foundation, such as Fintech in Africa, South Africa has a great base. So it's no shock that Revolut has entered South Africa as their first market. Yeah, I mean, I predominantly just love the South African accent, so I'm always excited for anything, which increases the likelihood of us having South African guests on the show.

22:31It's like my favorite accent. That aside, Matt, from your perspective, looking across ecosystem, do you have any kind of observations about what it takes for companies to successfully scale across different markets? Have you seen any companies that have sort of navigated it better than others? I mean, it was really interesting just talking about the African content there. I haven't fully comprehended quite how complex that must have been in terms of, you know, 50 plus countries and currencies. And I feel like the bottleneck, I think which Baller and Ruddy said is probably not the technology anymore.

23:05It's the sort of fragmentation and friction of all of the local regulations and regulators and legacy infrastructure being different in different countries. I mean, we've taken the CrowdCube business sort of pan-European and we've kind of stopped there on the basis that UK Europe is a really big market for us. It's a really big opportunity. we can be in Paris in two and a bit hours on the train. But the energy and effort we expended just in a pan-European expansion, dealing only, I say only, but we deal with two different regulators, the CM &B in Spain and the UK regulator, the FCA. It was like a huge undertaking.

23:48We got lots wrong and we went down dead ends and we course corrected and did different things. And now the business is purring along quite nicely. But I'm always in awe of CEOs and founders and companies that seemingly navigate international expansion really easily outside looking in, but sort of understand deeply that on the inside, it's probably, you know, complete chaos half the time and everybody's hair's on fire. I mean, when you look at someone like Revolut, right, and just that level of international expansion, across so many different markets, so many different new bets, so many different product types and serving customers in all those countries.

24:31I just, you know, beggars belief, basically. Yeah, absolutely mind-boggling. And Radhi, keen to bring you back in as well. I mean, how significant is Ripple's role in this round? I mean, obviously, we talked about stablecoins in the first story. We've mentioned, obviously, that Flutterwave have been building out their stablecoin capabilities. Is the fact that Ripple has joined in on this round a sign of what's to come for Flutterwave? I mean, for me, to be honest with you, is the way of recognition that they have built really an infrastructure that they're becoming so strategic. To have Ripple investing in them, it says a lot.

25:08And as I mentioned before, these guys, they really managed to solve a big problem, which is the fragmentation in a market where they managed to service customers based on their behavior in the local markets and build the infrastructure and all the compliance and regulation related to that market. And as I said before, it's really something remarkable. So anyone would invest in them because what they have done is they created infrastructure. It's not anymore a company or a fintech. It's becoming an infrastructure where businesses, B2B, etc., they can use their infrastructure in order to transfer funds using different rails, being the cards, being stable coins, being account-to-account, etc.

25:49Yeah, no, it sounds like a super, super interesting move. Okay, on that note, we're going to take a very quick pause here. We'll be back shortly.

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