Recession will be a critical or final test for most FinTechs ☠️; Fed's new guidelines is a giant step to complete the interconnectivity of crypto & TradFi 🤯; Crypto adoption marches on in LatAm🇧🇷

Good Morning FinTech, 18 August

Good evening Everyone,

And happy Thursday! Today’s issue is something you just can’t ignore as we’re looking at the recession, which will be a critical or final test for most FinTechs (& how to pass it + bonus reads), Fed's new guidelines which is a giant step to complete the interconnectivity of crypto & traditional finance (it’s massive!), and marching crypto adoption in LatAm (Brazil is leading the crowd). Let’s jump straight into the interesting stuff:

Recession will be a critical or final test for most FinTech companies ☠️

Lost in translation 🤯 While some countries try to change the definition of recession, it is pretty obvious by now that sooner or later it will inevitably come (if it’s not there already), and it might be brutal.

Spotting the trends 🔍 In addition to tech layoffs, hiring freezes and global macro uncertainties, here’s what we have seen in a more FinTech-specific scene:

• SoftBank, once one of Europe’s most prolific FinTech investors (the backer of Revolut, Klarna, and eToro, among hundreds of others), just lost so much money that all their gains since 2017 have been wiped out.

• Once a stock trading champion, Robinhood announced brutal layoffs and confirmed it will reduce its headcount by approximately 23%, marking yet another red flag for stock trading FinTechs.

• UK challenger banking app Dozens & German crypto-focused digital bank Nuri closed shops almost on the same day.

• On a macro level, Shopify recently reminded us that e-commerce isn’t what it used to be, which means that FinTechs & tech startups will have to adapt to the new environment.

What does this mean? 🤔 In short, this simply means that the upcoming recession will be a critical or final test for most FinTech companies out there. Here’s more on that + what can you do to pass the test: