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August Wrap-Up: AI’s Ethical Challenges, Fintech Innovations, and Crypto Controversies

August has seen a whirlwind of technological developments, including the ethical implications of artificial intelligence, fintech partnerships, and crypto developments. Here’s a look at the most impactful stories of the month.

PayPal Launches US Dollar Stablecoin

The biggest story of the last news cycle has been the launch of PayPal’s US dollar-denominated stablecoin, PayPal USD (PYUSD). The digital asset is fully regulated and allows users to venture into the crypto world without navigating any legal rough waters.

PYUSD allows its holders to access Paypal’s network of merchants (touted at 29 million) and make transactions in a single click.

Ethics Take Center Stage at the WEF

A recent report from the World Economic Forum highlighted ethical dilemmas surrounding AI, including data privacy and algorithmic bias. The discussion has emphasized the need for transparent and auditable systems.

That said, the international consensus is that AI tech will continue to see capital inflows in the short-to-mid term, as speculations point to a total market capitalization of around $1.8 trillion by the end of the decade.

Nvidia’s Revenue Soars on the Back of Growing Demand for AI

Nvidia, a supplier of AI-oriented hardware and software, has reported significant revenue growth since the start of the year — thanks largely to the rising demand for AI technologies. The firm has seen its stock price increase by 40%, with reports showing that global machine learning and data science applications increasingly use Nvidia chipsets.

Revolut Halts Crypto Services in the US

Global neobank and fintech giant Revolut has announced that starting September 2, it will halt its US-based crypto services. Users will no longer be able to buy, sell, or transfer cryptocurrencies associated with their accounts, with access to be fully disabled on October 3.

In a recent interview, a Revolut representative attributed the move to “the evolving regulatory environment” in the country and crypto market uncertainties.

Global Fintech Funding Drops Drastically in 2023

Global auditing giant KPMG has released a report revealing that fintech funding dropped drastically in H1 2023. Investors have poured $52.4 billion into fintech startups in the first six months of 2023, 17% less than in the last half of 2022. Reasons cited include growing inflation rates, spiking interest rates, geopolitical tensions, and other factors like the collapse of various US banks.

Apple Card’s ‘Savings’ Feature Sees $10+ billion in Deposits in Just 4 Months

Apple’s high-yield savings account service, developed in collaboration with Goldman Sachs, has accumulated more than $10 billion in deposits in the four months following its launch. The service, accessible through Apple’s digital wallet, allows users to deposit rewards from Apple’s Daily Cash program automatically.

The service launched in April and garnered $1 billion in deposits within its first week. This achievement underscores the appeal of Apple’s financial offerings, which have expanded to include credit cards and tap-to-pay features in the UK.

Banking Giant HSBC Partners with Tradeshift

HSBC has poured $35 million into a venture with cloud-based supply chain platform Tradeshift. The investment is part of a larger funding scheme to develop inroads into the payments and fintech arena. Over the next few months, Tradeshift expects to raise $70 million for the venture, which reportedly will be released early next year.

Prime Trust Loses $8 Million to Shady Investments Deals

Fintech giant Prime Trust’s parent company reported a loss of $8 million as a result of its investments in TerraUSD. This incident sparked concerns about the stability and reliability of algorithmic stablecoins, often touted as safer alternatives to traditional cryptocurrencies.

Curve Finance Exploit Shakes DeFi Ecosystem

Last month, bad actors delivered a blow on the decentralized finance as leading DeFi platform Curve Finance reported a hack resulting in a $62 million loss. The exploit has raised serious questions about the efficacy and security of the platform’s protocols.

Saudi Arabia and UAE Heavily Invest in AI Tech

Saudi Arabia and the UAE governments have lapped up huge portions of Nvidia processors to bolster their AI adoption efforts. Saudi Arabia alone has acquired 3,000 flagship H100 processing chips specializing in generative AI processes. The likes of Google and Microsoft have also initiated similar large-scale acquisitions.

Ethereum Turns 8 Years Old

The Ethereum network marked its 8th birthday last month, reflecting on its journey from a small startup to the second-largest crypto asset with a market capitalization of more than $225 billion. The network has undergone significant upgrades since its debut, including its transition from proof-of-work to proof-of-stake, considerable energy consumption reductions, and the introduction of its staking incentive feature.

Legal Problems Mount for Tornado Cash’s Founders

The co-founders of Tornado Cash are facing severe legal challenges, including allegations of money laundering and sanctions violations worth over $1 billion. These charges carry a maximum sentence of 45 years in prison, and the case could set a precedent for litigation against similar companies.

Mastercard Introduces Pilot for New CBDC Partner Program

Financial juggernaut Mastercard has announced the launch of a new central bank digital currency partner program to foster collaboration among key industry players. The project will see participation from Web3 software company Consensys, CBDC and token solution provider Fluency, and blockchain firm Ripple.

The program aims to understand CBDCs better and explore their long-term viability within mainstream markets.

$3 billion BTC Whale Sighted

Arkham Intelligence has identified the mysterious Bitcoin wallet that accrued over $3 billion in just three months as Robinhood: Jump Trading Custody. The wallet first received Bitcoin in early March but gathered nearly 120,000 BTC in just three months. The wallet is now the third largest Bitcoin holder in the world, following Binance and Bitfinex.