Finance

The people and businesses of the Bahamas are spread across roughly 30 islands in the Caribbean—and the nation’s banking system is just as fractured as its geography. The Central Bank of the Bahamas came up with a future-focused solution, launching a four-year project to create and deploy a digital version of the Bahamian dollar. When the Sand Dollar debuted in October 2020, it became the world’s first government-backed blockchain-based digital currency. With Sand Dollar, citizens can receive and make payments electronically from a digital wallet using either their mobile phone or a physical payment card they can manage via kiosks across the country. The project also could unlock lessons learned for other countries testing digital currencies.

In the El Zonte village of El Salvador (population 3,000), most residents are unbanked and most businesses are not equipped to take credit cards. But at least half of the people in the coastal community have smartphones, which made it an ideal proving ground for an anonymous donor who wanted to create a parallel economy based on bitcoin. Bitcoin Beach has been going strong since 2019, but the team decided to build an app last year. With the new wallet feature, users can see how much they hold in Bitcoin and U.S. dollars and where they can spend it. In September, El Salvador became the first country in the world to adopt bitcoin as legal tender, though the rollout—met by protests—was not as smooth as on Bitcoin Beach.

Investors don’t just vote with their money—they vote with their votes. U.S. startup hedge fund Engine No. 1 owned just 0.02 percent of ExxonMobil when its activist campaign got other, larger investors to vote three of its four climate-conscious nominees onto the energy giant’s board of directors. For its next act, announced in June, Engine No. 1 launched the Transform 500 fund, a low-cost exchange-traded fund (ETF), with a mission to shake up the leadership of the largest public companies in the United States. When Engine No. 1 takes its next activist stance, any shares held by Transform 500 investors will support its nominees. Reflecting its raison d'être, the ETF trades under the stock ticker VOTE.

Contactless payments can be challenging for restaurants and diners alike: Sharing credit card info over the phone isn’t secure but creating secure accounts at each eatery is a hassle. Enter Paerpay. Launched in 2020, the app allows users to digitally see and pay restaurant bills (as well as split checks) through a single account, while restaurants can easily set up digital menus and integrate the tool into their point of sales systems.

The global LGBTQ+ community boasts an estimated total household wealth of US$23 trillion, according to LGBT Capital. Yet the financial services industry has created few products tailored to the market’s specific needs. Looking to fill that void, Rob Curtis developed Daylight, a digital platform built on the kind of bespoke specs that can only come to light through conversations with LGBTQ+ consumers. The project was developed as part of Visa’s Fast Track program aimed at assisting startups in scaling fintech innovations.

The Monetary Authority of Singapore launched the Singapore Financial Data Exchange (SGFinDex) to help residents get a fuller picture of their financial wellness. Built on Singapore’s National Digital Identity (called SingPass) and developed in partnership with seven banks, SGFinDex is a digital portal that collects financial information from government agencies and private financial institutions, allowing people to view everything from credit card balances to bank deposits, loans and investments in one place. The government also developed a digital financial planning service called MyMoneySense that uses SGFinDex to offer personalized financial planning advice.

Across Sub-Saharan Africa, 570 million people lack access to electricity, relying on gas-burning generators to light their homes and cooking with polluting fuels. The US$900 million Leveraging Energy Access Finance Framework (LEAF) program from African Development Bank aims to fill electricity gaps while promoting adoption of clean energy sources, namely solar. Operating in six countries, LEAF will open local-currency financing options for decentralized renewable energy projects, including mini-grids and home and commercial solar installations. The plan could bring renewable energy to 6 million people and businesses, driving local economies while saving an estimated 28.8 million tonnes in CO2 emissions. In July, Green Climate Fund approved US$170.9 million in financing.

U.S. investment bank Morgan Stanley recognized that combatting major systemic problems like climate change, plastics pollution, public health and social inequality requires systemic investment. Each year, beginning in 2021, the company’s Sustainable Solutions Collaborative will pick five projects that will receive US$250,000 each. But it’s more than just funding. Project leaders will also receive a yearlong collaboration with the firm’s Institute for Sustainable Investing and long-term access to a network of private and public partners to develop and scale their innovations.

A landmark experiment in universal basic income showed the much-talked-about but rarely tested approach to alleviating poverty could have real promise. Critics of universal basic income initiatives—which provide people with money, no strings attached, to help them meet their needs—argue such programs disincentivize work. This year, the city of Stockton, California, USA wrapped up a two-year pilot program that gave 125 residents US$500 each month. An independent report found that the program reduced unemployment among participants, helped many of them pay off debt and improved their emotional and psychological wellbeing. And even before the report was published, the project’s influence was clear: In late 2020, Twitter CEO Jack Dorsey announced a US$15 million grant to a coalition of 29 mayors across the country to implement basic income projects in their cities.

Eight Indian banks—HDFC, Kotak, ICICI, Axis, SBI, IndusInd, IDFC and Federal—rolled out a new system called Account Aggregator. Through a centralized API-based repository, consumers can share their data with banks, insurers, tax authorities and other financial institutions—the speed and accuracy of which promises faster transactions and more informed financial decisions. Debuting in September, the tool “will help in the democratization of data and shift the power over data accessibility and usage to owners of data rather than the holders of data,” said Rajeshwar Rao, deputy governor of the Reserve Bank of India, at the launch. Other banks wanting to offer Account Aggregator will be able to secure licenses through RBI.