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NEWS
President of Lending Club. “She approached us early this year about planning a transition, and in May the Board and I asked her to postpone her plans until we could navigate recent events.”
The announcement came as the US venture reported a second-quarter loss of $81.4 million, on revenue of $103.4 million, compared with a year-earlier loss of $4.1 million. This included a $35.4 million write-down related to its April 2014 acquisition of healthcare lender Springstone Financial. “Our efforts to reengage investors are working, with 15 of our top 20 largest investors back on the platform today,” says Sanborn. “Despite the unusual disruption to our supply of capital in May, we
facilitated nearly $2 billion of loans to nearly 170,000 borrowers. While we still have a lot of work ahead, the value that we bring to borrowers and investors is stronger than ever, and we believe we have the resources and resolve to execute on our mission.”
The venture has endured a torrid few months following the surprise departure of former CEO Renaud Laplanche in May. He was pushed out after it emerged he had been involved in a sale of loans to a big investor that violated company business practices, whilst also failing to disclose personal interests in a fund that Lending Club was circling as an investment.
Scott Thompson Ripple puts case against BankCoin
startup Ripple, has hit out at an initiative by UBS, Deutsche Bank, Santander, BNY Mellon and broker ICA to create a digital currency called the Utility Settlement Coin. The aim is for this to become an industry standard used to clear and settle financial trades over blockchain. The idea is being pitched to central banks with a launch penciled in for early 2018. “Today trading between banks and institutions is difficult, time-consuming and costly, which is why we all have big back offices,” says Julio Faura, Head of R&D and Innovation at Santander. “This is about streamlining it and making it more efficient.
B rad Garlinghouse, President and COO at DLT
But Garlinghouse (pictured) has labelled the project deeply misguided. In a post on LinkedIn, he says: “A bank-issued digital asset can only really efficiently settle between the banks who issued it. Then, two scenarios can play out. Scenario one: all banks around the world put aside competitive and geopolitical differences, adopt the same digital asset, agree on its rules, and harmoniously govern its usage. Fat chance. Scenario two (the more likely scenario): banks not in the issuing group issue their own digital assets with their own sets of rules and governance.”
We’re seeing this already, he argues, with Citi’s Citicoin and Goldman Sachs’ SETLcoin. “The result would be an even more fragmented currency landscape than what we have today. If banks of different digital asset groups want to settle trades with one another, they’ll have to make markets between their unique digital assets or trade between their digital assets and a common fiat currency. What a mess!”
Another problem is that the Utility Settlement Coin will likely be backed by a basket of currencies. Once backed by cash, it’s no longer an asset; it’s a liability, Garlinghouse claims. Trading liabilities then ultimately requires moving cash across borders, re-creating today’s system but adding more friction.
www.ibsintelligence.com © IBS Intelligence 2016
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