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Daily Archives: May 16, 2022

Big Tech in Financial Services

CRS Report – Big Tech in Financial Services, May 16, 2022: “For the past decade or so, “Big Tech”—which hereinafter refers to the large technology companies Amazon, Apple, Google, and Facebook (now Meta Platforms), unless otherwise noted—has been offering a variety of financial services products to retail customers. Big Tech uses advanced data analysis and novel partnerships with traditional financial institutions to redefine financial services. The financial service with unanimous participation among Big Tech companies is payments. In 2021, more than 100 million consumers used mobile payment apps, including those provided by Big Tech. Other offerings include credit cards and lines of credit, value storage, and stablecoin wallets. In addition to these direct offerings of financial services, Big Tech has other significant, albeit less direct, ties to finance. Amazon, Microsoft, and Google account for roughly two-thirds of cloud service in the United States and count banks and other financial institutions as major customers. Big Tech relies on partnerships with traditional financial institutions in some capacity to deliver nearly all of these services. The variation in such relationships accounts for much of the difference both between companies and among products offered by the same company. These complex partnerships can obscure the role of Big Tech and the ultimate provider of the financial service, and they raise the question: Do Big Tech companies provide convenient interfaces, or are they true financial institutions? The answer to that question, perhaps not surprisingly, lies somewhere in between. Big Tech companies are neither pure financial institutions nor solely technology providers. The premise of that debate belies a fundamental issue. Irrespective of the nature of their relationships and current role in financial intermediation, Big Tech companies have demonstrated interest and possess the scale and financial capacity to increase their range of offerings of financial products should they choose to do so. Traditional economic factors such as economies of scale and network effects—and the unique advantages of the Big Tech business model, which relies on access to troves of data and insight into consumers’ behavioral preferences—support this reality. The context in which these developments have taken place raises a host of policy issues. Currently, regulation of Big Tech’s financial services is fragmented. Big Techs hold money services licenses for their role in facilitating payments and are subject to a handful of regulations, but they also rely on the licenses of their partners to facilitate other offerings. Some observers question whether the existing regulatory framework is adequate. Regulation-related policy issues include, as well, consumer protection concerns and evolving data security and privacy laws. Other policy issues include financial inclusion, algorithmic bias, and third-party and cyber risk. How these companies evolve will have consequences for many of these policy issues but perhaps none more so than the companies’ regulatory treatment.”

Why This Computer Scientist Says All Cryptocurrency Should “Die in a Fire”

Current Affairs, May 2022 – UC-Berkeley’s Nicholas Weaver has been studying cryptocurrency for years. He thinks it’s a terrible idea that will end in disaster. “Despite being hyped in expensive Super Bowl ads, cryptocurrency is now having a difficult moment. As the New York Times reports, “the crypto world went into a full meltdown this… Continue Reading

DPLA releases The Covid Archive as free ebook

“Digital Public Library of America (DPLA) is pleased to announce the publication of a free ebook, The Covid Archive: A finding aid to government documents related to the Covid19 Pandemic. The Covid Archive is a digital finding aid for the digital archive of government documents related to the response of U.S. federal and state governments… Continue Reading

Legal Research Demystified, Second Edition

Voigt, Eric, Legal Research Demystified, Second Edition (Table of Contents of Book and Excerpt from Chapter 6 on Secondary Sources) (April 14, 2022). Legal Research Demystified: A Step-by-Step Approach, Second Edition (Carolina Academic Press, 2022), ISBN 978-1-5310-2130-6, Available at SSRN: “Since 2019, Legal Research Demystified has quickly gained adoptions at over thirty law schools.… Continue Reading

Drought in Numbers 2022 – restoration for readiness and resilience

United Nations Convention to Combat Desertification – Drought around the world (1900-2022) “More than 10 million people lost their lives due to major drought events in the past century, causing several hundred billion USD in economic losses worldwide, and the numbers are rising (Guha-Sapir, D. et al., 2021) Severe drought affects Africa more than any… Continue Reading

Open Maps for Europe

EuroGeographics AISBL – Providing easy access to pan-European open data created using official map, geospatial and land information: “Open Maps for Europe provides free to use maps from more than 40 European countries. The datasets are created using official map, geospatial and land information from official, national sources. The project is coordinated by EuroGeographics, the… Continue Reading

A Tale of Two Functions: Business and Legal Considerations after a Data Breach

ABA Litigation Group – “Analyzing how best to preserve attorney-client privilege and work product protections over data breach investigatory reports in light of changing trends. In-house counsel faced with a data breach encounter a difficult balancing act. On one hand, it is critical to determine the cause of the breach and generate a plan to… Continue Reading

Algorithmic Stablecoins and the TerraUSDCrash

CRS Insight, Algorithmic Stablecoins and the TerraUSD Crash, May 16, 2022: “…TerraUSD (UST) stablecoinuses an arbitrage mechanism typical of some algorithmic stablecoin arrangements consisting of two coins or tokens: the stablecoin, in this case UST, meant to maintain a stable value or “peg,” and a balancer token, in this case,LUNA, the value of which can… Continue Reading