1078. News: FCA unveils crypto rules, Airwallex hits $11bn valuation, and Jet Bank launches Albania's first digital bank

0:04This is Fintech Insider News. This week, the UK's Financial Conduct Authority unveils a new framework for crypto firms. Airwallex targets agentic commerce after hitting an$11 billion valuation. And JetBank launches as Albania's first digital-only bank. We'll be tackling all of this and more on today's news show. Hey folks, David Breer here, CEO of 11FS. Here's something you might not know about me. I get a lot of people trying to impersonate me online, fake profiles, scam emails, the lot. And a big part of that comes from data brokers, hundreds of them quietly collecting and selling your personal information, your phone number, email, home address, job title, all out there and all fueling identity theft, scam calls, and spam.

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1:50Hello and welcome to episode 1078 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 Benjamin Ensor, Director of Research and Strategy. To help me unpack the biggest and most interesting stories from fintech and financial services in the past week, I'm joined by a brilliant panel of three guests. First up, we have Fatbada Reno, chief executive of JetBank. It's great to welcome you onto the show. Can you please introduce yourself and tell us a little bit about JetBank?

2:27Oh, thank you, Benjamin. It's great to be here, actually. And I mean, I can start Amphat Bardarino, the CEO of JetBank, which is the fully digital bank in Albania. The first one, not only in Albania, but for the Western Balkans as well. me personally have spent more than 24 years in the banking sector now and what convinced me to join this journey and this experience it was that how to make the banking more simple and obviously what is the bank of the future so with keeping that in mind we built the bank from scratch which obviously, you know, takes more than technology. It takes like to have a clear vision.

3:19It takes to have very extraordinary people or with a different mindset and plus trusted partners. So we, together with our team and with BigBase AI Native Banking OS, we brought that vision into life in a very short time or remarkable speed, I will say. so I'm very happy to be here and looking forward to this conversation It's very exciting and may I just say in passing it's always great to see more female chief executives there aren't enough in banking so that's an extra bonus point Thank you Me too And we also have a welcome back to the show for the one and only Veronica Glab, a strategic partnerships lead at Juice Veronica, it's always fantastic to have you on the show.

4:10Can you remind listeners who've not, well, can you tell listeners who've not come across you before who you are and what you do at Juice, please? Sure. Well, thank you for such a warm introduction. So I'm Veronica. I am a fractional fintech strategist working with early stage startups like with Juice Ventures, who are an SME lender based here in the UK. Other than that, I also do a few other things, including my new sub-stack, FinTech at the End of the World. And I'm typically based between London and Lisbon. So always happy to connect with some of the FinTech community on either side of the Tagus or the Thames.

4:52Fantastic. I would say the Tagus has better weather, but actually the weather by the Thames has been quite good for the past few weeks. And I'm also delighted to welcome our next guest, Daniel Taylor, who is Head of Policy and Research at Zumo. Welcome to the show, Daniel. Can you tell our listeners a little bit about you and a little bit about Zumo, please? Yeah, thanks, Benjamin. Great to join you all today. My background is crypto strategy and regulation, and generally anything blockchain and fintech. I've been in the crypto industry just over five years now, and honestly, it feels like crypto years are basically dog years at this point.

5:34As for Zumo, we're a UK crypto as a service provider. So our purpose is to give businesses of all types crypto capability that's tailored to the UK market. The UK crypto market's in a pretty interesting spot right now, as I'm sure we'll get into. Personally, we're seeing a ton of interest on two fronts. One from the global crypto players that are now looking for that UK business continuity. And then again from UK businesses, especially in wealth management and TradFi, who are now perhaps finally getting the confidence to switch on embedded crypto services. So I'm very much looking forward to today's conversation.

6:10Fantastic. Well, welcome. Welcome to all three of you. Okay, well, let's jump into our first story. And I think, Daniel, we're probably going to come to you first on this one. Which is that the UK's Financial Conduct Authority has unveiled a new regulatory framework for crypto and digital assets, setting out how firms will be supervised as the sector moves further into the financial mainstream. Under the new regime, firms offering crypto trading, custody and related services will need to meet requirements around financial resilience, capital, governance and stress testing, while new rules will also target market abuse and insider trading.

6:47The framework also includes updated proposals for stablecoins. The new rules themselves won't come into force until October 2027. haven't. So, Daniel, regulation is generally a good thing, I think, because it's generally better to have clear guidance than no guidance or unclear guidance. And so, presumably, this has been broadly welcomed by many firms in the crypto industry. Is that right? Is that what you've sort of seen and the kind of response you've seen? I think that's probably right. I mean, we've been here for some time right I think the framework's unfolded in a bit or let's be fair a lot of a slow motion style but I think the UK was always quite clear in what it wanted to do it specifically didn't want to go down the EU Mika route and build a sort of a bespoke standalone regime.

7:43The play has always been to bring crypto activity under the FSMA financial services umbrella and take that sort of integrative approach. So I think we do have at least that clarity and that clarity is good. It does also, of course, mean challenge as well. I mean, practically speaking, it now means hauling crypto firms up to meet that quasi-regulated investment firm bar. There's been a lot of talk about uplift and that's exactly what this is, I think. You're taking the existing crypto registration regime, which has already proven quite a bar to challenge crypto business in the UK. And you're taking it that one notch further.

8:29And it does raise some interesting questions of where the winners and the losers are at that, I think. Veronica, I'd love to bring you in from a slightly European perspective as someone who moves back and forth between the UK and the EU. You know, there was a lot of talk 10 years ago about all the benefits of Brexit, and one of them was going to be regulatory divergence. So here's an example of regulatory divergence where the UK is not following the European lead. Do you think that's helpful for crypto firms? Do you think that creates an opportunity for the UK to sort of differentiate from the European Union?

9:06Or is that an impossibly unfair and complicated question for someone who's perhaps not a deep crypto expert? Well, I don't think it's an unfair question, but I think it just underpins the complexity of the issue. I actually don't know if you know this, but in a past life, before I was in fintech, I was in an international agency as a Brexit negotiator. got a lot of gray hair. So FinTech ended up being so much better. But, you know, there have been several examples, even in industries outside of FinTech, where the UK has, by virtue of not belonging to a larger, let's say, federalized union or collective, been able to negotiate bargaining power or certain advantages for itself and for civil society.

9:52And this could be one of those. It could be one of those examples. You know, I'm a very pro-European Union person, both personally and professionally, but the UK, if they manage to provide a framework of clarity, could establish an advantage for themselves here as a market. You know, by not belonging to a larger group of states, they have less regulatory complexity to deal with. and it's a clarity that will really give them the advantage. Not necessarily about having the best or even the lightest regulatory framework for digital assets, but again, I'm just going to say that word one more time.

10:32It is the actual clarity because that's when private firms know what they're working with and then hopefully it will also get some of the institutional players, especially pension funds, to potentially allocate more capital into that sector and continue to drive forward the confidence into the market. So it's a start, that's for sure. Fat Bader, I have no idea whether you're a crypto expert or not. But on the point that Veronica is just making about regulatory clarity, as you've been building a new digital bank from scratch in Albania, how important is that clarity? How much time do you sort of sometimes lose, whether sort of ambiguous or unclear or uncertain regulation?

11:11Is Veronica right that clarity is what you really want? I could not agree more with Veronica what she was saying. I mean, I have some bias because I'm coming from a very regulated industry that is banking. But I think that this is a very positive development because when regulation becomes clear, obviously it creates a safer environment for innovation and faster decision making. And it makes more room for building meaningful products. This is, yes, it definitely makes the conversation around digital asset much easier for us, for banking and for the collaboration between different sectors. So, because really moves this discussion from uncertainty to a very structured collaboration.

12:02Thank you. Daniel, I'd love to come back to you because the FCA sort of says it's trying to strike a balance between supporting innovation and protecting consumers or customers. And that's always quite difficult to get right. And, you know, sometimes people have this perception that crypto is actually about making a small group of people very rich. I mean, today's the day we just saw sort of, you know, President Trump's finances and the huge amount of money he's made from crypto, which is fantastic for him. do you think the FCA's sort of managed to get that balance right between sort of innovation and protecting customers it's gone too far do you think it's getting it getting it broadly right I would say to FCA's credit it's been very consultative through this process we've had a long series of consultation papers now and there have been some substantive amendments to policy along the way.

12:58For instance, reversing of the initially proposed ban on crypto borrow lend for retail. More recent developments, the headline Bank of England lifting of the proposed stablecoin cap. And another bit of good news for stablecoin issuers, a reduction in the operational capital requirements for issuers there. So I think FCA has been quite open to listen to industry and take feedback on board. But of course there is a limit to that and it is clear in the rules that it's made is that it's taking as its default point of reference really the sort of regulation we've got in financial services at large and it does want to keep that level of protection, which can be a good thing in the UK market.

13:52I mean, we talk to investors and it's often, there's a certain badge of confidence that still comes from the UK in terms of the financial services sector we've got. So I think the regime can be a good thing in that sense. I think from the consumer perspective as well, it does make the conversation easier. the situation we've had in crypto land really is we were obviously early to the anti-money laundering framework and we've had risk warnings under financial promotions what we've not necessarily had are the tangible investor protections but with this framework that is now changing because there are an array of things that are good for consumers in terms of prudential capital businesses have to hold the reporting and disclosures, they have to make governance that has to be put in place.

14:47And perhaps given what has transpired in the industry in the past and sort of concerns about custody in particular, I think the rules around segregation of assets and trust structures is very positive and probably gives you as a consumer more confidence to be going to a platform to invest in crypto assets. Of course, as you say, it's also always a balancing act. And on the other side, there is a cost to business, a significant cost that that brings. And that means, I think, inevitably, there will be a certain element of cost that filters down to the consumer. And I suspect just this story of consolidation, that there will be probably fewer players to choose from in a narrower product breadth, not quite the asset universe we might have seen before.

15:39but that may be an inevitable part of the maturation process here. Yeah, to your point about maturation, it does seem as if crypto, the UK's approach here is to really just fold crypto into the way other financial products are regulated and really treat crypto as, in a sense, just another financial asset, which in some ways is a very good thing and in other ways is a bit ironic given the origin of crypto and given that crypto or a number of cryptocurrencies and so on were set up as explicit alternatives to traditional financial things. Veronica, do you think, is that right? Is that what the UK is trying to do here is just sort of essentially just treat crypto just like more or less any other type of financial asset or financial instrument?

16:30I think in a way, yes. But I think what the opportunity that the UK regulator really sees here is not necessarily treating digital assets as just another asset, but in itself becoming that hub for global assets or for digital assets, excuse me. and I think it's more about positioning the UK as a market for financial services overall how different institutions that operate within the UK it will really be up to them and I think it's also about UK connectivity to the rest of the world because we do see you know when we say digital assets that could cover Bitcoin, Ethereum but it could also cover stable coins as well which have massively different implications and use cases So I really see it as a play on financial services in the UK being interconnected with financial services across the world.

17:29Fat Bader, perhaps the last quick question to you. As a sort of chief executive of a bank, what do you want to see from sort of crypto assets or digital asset regulation to feel confident to promote them to your customers? I don't know whether they're on your roadmap for JetBank in the short term anyway, but what would you want to have in place to feel confident about? promoting cryptoassets to your customers? Look, as it was discussed, I mean, regulation is a big part of the equation. I mean, it's regulated, but it's not the only one. Obviously, to work closely with digital assets, we need clear licensing, we need strong compliance in practice and full kind of operation transparency.

18:14So beyond the regulation, it's trust at scale. So how we can trust a digital asset firm and ensure that the system are robust or strong enough that can support long-term integration, because that was always a question about who to partner with. And now I think that the market itself is maturing in a way that that Y is creating some regulation. And this is really giving some trust into some players because obviously some of them. So that's why it's important the long-term relation. Thank you. okay well let's move on to our next story then which is that airwallex is targeting agentic commerce after hitting an 11 billion dollar valuation so airwallex recently raised 320 million dollars in series in a series h round which has taken its valuation up to 11 billion up from 8 billion just six months ago the business payments platform says the funding will accelerate its push into AI-powered financial services, including autonomous finance and agentic commerce.

19:34Airwallex now serves more than 676 ,000 businesses globally. Alongside the funding, Airwallex has unveiled two new AI-focused products. Probably going to get these wrong, but it's T-naught or T-zero, which is an AI-native finance platform designed to automate everything from bookkeeping and forecasting to tax compliance and reporting. And Aerie is an AI-powered wallet that aims to support AI agents making purchases on behalf of customers with features such as delegated payments, spend limits, and permission controls. Now, we spoke to Christo Chamberlain, General Manager of the UK and Europe at our Wallachs, and he shared his thoughts with us about the Rays.

20:18we've just announced our series h funding round at an 11 billion dollar valuation we raised it because we believe this is an important moment for global finance ai's collapsing the operational gap between a well-resourced company and someone with a laptop and a strong idea at airwallux we're building the ai native financial operating system for global businesses and the foundation for a more agentic future in banking. So alongside this round, we announced some of our most important AI products. T0 is an AI native platform that autonomously runs the full finance function end to end. Think bookkeeping, forecasting, taxes, and reporting from day zero.

21:05Aerie is our one-click checkout. It's already delivering a 14 % conversion and uplift in early testing with a clear path to becoming the wallet layer for agentic commerce. Our agentic commerce suite helps merchants get discovered by AI agents and safely accept and manage agent-initiated payments. And AgentOS is our toolkit for any AI agent to operate an airwallets account end-to-end. The foundation that we spent 10 years building turns out to be precisely the kind of infrastructure that the agentic economy needs. And thanks to AI, the answer to who gets to build a global company is anyone. We're building the infrastructure to make that true.

21:51Very interesting. Veronica, Airwallex has gone from an 8 billion valuation to an 11 billion valuation in just six months. 3 billion increases is pretty nice. And it's still a long way off somewhere like Stripe, of course. But that's pretty impressive. Do you think investors are signaling a lot of confidence in Airwallex through that, in payments infrastructure and fintech more globally? Or are they just looking at Airwallex and saying, hey, Airwallex, it's just a well-run, exciting company? Yeah, so this is a really good question, actually. So I'm actually about to publish a report tracking VC investment into fintech around the world.

22:30And what a lot of the data is showing is that investment is really, especially at that later stage, especially in deals over$100 million, it's really contracting around a small subset of companies that have absolutely proven their track record in solving a very real problem and then being able to copy paste scale that solution across jurisdictions. So Aerolix is just one of those cases. And I think it's kind of a reflection of two really big things. So one, it is that investors are going to back those fintechs with the really, really strong fundamentals. They will have probably the brand and the recognition behind them and that track record.

23:13And then it's the growing confidence around AI. You know, AI, we overuse the word AI so much, but I think we're really starting to see that AI is not just another feature, but it's actually part of the operating infrastructure. And I think that's going to be particularly true in payments and in Agentec Commerce. I'm really keen to see what Airwallets do in new jurisdictions, because even if you look at markets as big as the US, you'll see how far they are behind on things like real-time payments or even contactless payments in different parts of that country. So let's see what Airwallex can do on the commerce side to automate some of the obstacles that consumers are seeing and make payments so seamless that maybe consumers are not even noticing that they're happening and businesses actually start to see either recurring payments or more seamless transactions as well.

24:12Yeah, people talk about making the payment sort of invisible because the agent's just dealing with it, provided the agent actually orders the right thing. I think there's more concerns around there. That's the other question for it, isn't it? I'm not quite sure how I stand on someone doing or an agent doing my payments for me, but it would be really interesting to see how that's going to evolve from a tech perspective and what the level of adoption is going to be with consumers. Daniel, I'd love to bring you in too. I mean, Airwallex is a big chunk of Airwallex's business, maybe almost all of it is about cross-border, cross-border money movement and cross-border payments and so on.

24:53And obviously that's also one of the great use cases for crypto assets in general and stablecoins in particular. Are you similarly sort of excited about the potential for sort of agentic commerce and sort of autonomous transactions and the potential for combining AI with sort of stable coins and so on to help businesses all around the world, and indeed individuals, move money and run more efficient processes. Are you seeing a lot of that sort of coming through at Zumo? Yeah, I mean, I think there's the sense that everything is merging into everything else. So crypto and AI, there's always been the thesis that, you know, blockchain is a substrate, it's kind of a machine-readable.

25:35machine-readable money is kind of the perfect match in principle. And, you know, if you look at the big names, without naming names, they are moving in that agentic commerce direction. And not just AI, it's kind of the merging is between crypto and, you know, TradFi investments as well as AI. But I think they are, yeah, in some ways it's a natural alliance. and perhaps some of the same problems, to be honest, in terms of the same questions you have with a smart contract and what happens if that's exploited or how you take back transactions or what happens when things go wrong. These are equally well questions you could ask in a kind of agentic commerce kind of environment.

26:24So I wouldn't be surprised if AI is kind of treading a similar path in some ways to crypto where you end up at a state where people realize that kind of the verification part, verifying what's authentic and security and trust around that is something that's far harder to figure out than the technology itself, which is, I think, undeniably quite exciting. Definitely. For Bader, one of the things that was interesting in what Chris To was talking about when we heard from him was sort of two different things. One was the sort of autonomous concept, the concept of sort of using AI to help, in Airwallex's case, businesses manage their finances and simplify and streamline.

27:09But obviously, you know, you can apply that concept to sort of retail customers as well. And then the other one is the agentic thing that we were just touching on about having AI systems manage payments on your behalf. do you see sort of one or other of those as sort of more promising? I mean, do you think we're going to see, you know, customers making more use of AI to sort of manage their finances to start trying to sort of automate parts of their finances? Do you think, to Veronica's shock and horror, they're going to start using agents to buy things for them? Look, I believe that it's very much so.

27:49I mean, we will see this development coming more and more. And, you know, advantage, I mean, it was for us as a bank when we built it, we started building. We built it with banking from scratch, but with a very AI native banking OS. So it is to make the bank ready for any kind of, you know, new models that are coming that are related to AI. Look, for me, the biggest opportunity, I mean, I'm a banker in here and what I see most of the people don't wake up in the morning and think about the banking. So this is like, for me, autonomous financial management is like the bigger opportunity in the future.

28:36while agentic payment are exciting, but they are kind of enabler. So they are supporting and they do an enablement, but giving like better financial, you know, recommendation or helping customer to improve their financial decisions or to make it for them because not all of them have the literacy in the financial or background to do that. It creates the real value for the future. When it will be the future? I mean, we have to see it because with AI, it's important to trust and how it is built and what are the permission and transparency and how the customer is controlling it. So there are a lot of discussion over it.

29:27What we know the banking of today, they are all built under AI-netics banking systems because to make it ready. So we are not building or designing AI into a legacy system and on the top of it. So personally, this is a personal thing. Autonomous financial management will be something, a very big opportunity in the future. Yeah, I think you're right. I think you're also absolutely right about making sure that any systems you're building are ready for AI.

30:05Daniel, perhaps coming back to you, you made a very interesting point earlier about sort of everything converging with everything. I think it's true. Where do you think the competitive advantage comes from? It's not necessarily from mastering any individual technology. perhaps then it's from integrating multiple technologies or creating value from the integration of those technologies to simplify things for customers. Where do you think the competitive advantage lies? I think it is about integration, but I think it always sounds easier in practice to kind of do everything everywhere all at once.