Will every P2P lender become a digital bank?

In The Top Up this week, we examine why P2P lenders are becoming digital banks and discuss the mobility firms driving mass crypto adoption. [Read from your browser]( The Top Up 💵 Welcome to The Top Up! Delivered every Wednesday via email and through the Tech in Asia website, this free newsletter breaks down the biggest stories and trends in fintech. If you’re not a subscriber, get access by [registering here](. Written by Melissa Goh Fintech Journalist Hello {NAME} In 2019, Angela Strange, general partner at venture capital firm Andreessen Horowitz, gave a [famous address]( outlining why every company will become a fintech company. We’ve certainly seen how that has unfolded in Southeast Asia, with firms such as super app Grab, travel giant Traveloka, and AirAsia parent firm Capital A plunging into the financial services space. In Indonesia, we’re seeing this play out in another way: peer-to-peer lenders in the country are becoming digital banks - or at least some of them are for now. My colleague Budi lays it out in this week’s big story. For online lenders, the cost of funding continues to be one of their biggest operational costs. Being a bank provides access to deposits for cheap, which can fund lending businesses in a more sustainable way. Akulaku and Kredivo, both consumer credit companies that also offer buy now, pay later services, for instance, have taken stakes in local banks. The former became a shareholder in Bank Neo Commerce in 2019, while Kredivo completed its [acquisition of a majority stake in Bank Bisnis]( earlier this month. Arguably, this also subjects them to increased regulation. That said, others like Investreeswear by a more hands-off partnership approach, which the lending firm says keeps it agile. Over in Singapore, I look at the recent flurry of crypto announcements by carpooling platform Ryde and a new crypto wallet launched by ride-hailing service Tada. The introduction of tradeable NFTs, ride-to-earn mechanisms, and integrated crypto wallets for mobility services offers real-life utility for digital tokens, but will that be enough to drive mainstream users to adopt crypto? I explore these topics in this week’s Hot Take. -- Melissa THE BIG STORY [As digibanks rise, will Indonesia’s online lenders become obsolete?]( Image credit: Timmy Loen The lines between online lenders and digibanks are blurring, but there are signs that coexistence is possible. THE HOT TAKE Driving crypto adoption through mobility services Photo credit: Ryde Here’s what happened: - Singapore ride-sharing platform Ryde last week launched RydePals, an NFT project that gives token holders exclusive benefits such as priority bookings and cashbacks in RydeCoins. - It also expanded acceptance of crypto payments beyond Bitcoin to over 70 cryptocurrencies. - Meanwhile, MVL, the subsidiary of the MVLLabs group which operates ride-sharing app Tada, launched a cryptocurrency wallet called Clutch which will integrate with its mobility services. Here’s our take: Mobility startups Ryde and Tada have become the latest to jump on board the Web3 bandwagon. Up until now, mainstream attention on NFTs has lasered in on profile picture projects that have had little real-life utility beyond bragging rights on Twitter. But players like Ryde and Tada are promising something different. RydePal NFTs, for instance, will serve almost as an exclusive membership pass for holders of the digital token, giving them perks like faster trip matches and cashback in the form of RydeCoins. To earn NFTs, users can accumulate rides, match their NFTs with their drivers’ to breed new NFTs, or stake RydeCoins in the Ryde wallet. RydePals can also be traded on secondary exchanges like OpenSea, effectively allowing token owners to sell and liquidate their memberships. Launched in 2015, Ryde is a platform founded on Web2 roots. But platforms like it could hold the key to driving crypto adoption among mainstream folk. As a mobility service, Ryde has a decent reach too - it claims to have 200,000 monthly active users. “We want to deploy NFTs in a way that generates more real-world value, especially for the rapidly growing crypto-native communities in Singapore and the rest of the world,” Ryde lays out in a [white paper](. Another mobility service, the ride-hailing platform Tada, also has its sights set on this space. The platform, which has 1.2 million passengers and drivers in Singapore, Vietnam, and Cambodia, will be integrated with MVL’s user-friendly crypto wallet [Clutch]( which could also lower friction for new crypto users. Crypto adoption in Singapore remains low despite a high awareness of digital assets. The city-state ranked 0.03 on a Chainalysis [Index]( that tracks countries by total crypto activity. (Vietnam topped the index with a score of 1.) About a [third]( of 800 respondents surveyed in an FIS survey, however, expressed interest in using crypto payments in the future. That could happen as more use cases for crypto emerge. Beyond ride-hailing, some luxury retailers are beginning to accept crypto payments through a payments [solution]( introduced by Fomo Pay earlier this month. But combining crypto with mobility services makes sense for several reasons. Millions of people use mobility services daily, making mobility platforms a natural entry point for introducing blockchain-based services. The value of digital assets tied to mobility services, a “cornerstone of modern society,” is potentially more sustainable and less volatile than assets tied to other sectors, notes Tada general manager Jonathan Chua. For a few years, Tada has been trialing a system that lets drivers of the platform earn MVL tokens alongside cash incentives. In the future, users can also earn MVL tokens when they use Tada or through staking. Clutch can thus become an access point through which token holders can receive and claim their rewards, Chua tells us. Driving mainstream crypto adoption, however, is just a step toward achieving Tada’s vision of a ride-hailing system that fairly compensates drivers. Like [Drife]( a decentralized ride-hailing app that recently launched a pilot program in India, Tada does not charge commissions on every ride, only a nominal transaction fee on credit card payments. As the MVL ecosystem expands, MVL tokens can be used to make payments for various services, such as payments for gas, repairs, vehicle rentals, or insurance. -- Melissa NEWS YOU SHOULD KNOW Check out Tech in Asia’s coverage of the fintech scene [here](. Photo credit: Reuters 1️⃣ [Ant Group to become majority shareholder in 2C2P]( The deal connects 2C2P’s merchants with Alipay+, increasing the payment options offered by 2C2P to include e-wallets and local payments services such as Touch ‘n Go, KakaoPay, GCash, and Alipay HK. It also gives 2C2P access to a larger merchant base. 2️⃣ [Exclusive: Y Combinator leads $2.1m round of Indian fintech firm]( Founded in 2021, Koshex helps users manage their finances by providing services like budgeting, expense tracking, and customized investment solutions. 3️⃣ [Neobank Fi finalizing funding at $700m valuation]( According to sources cited by Techcrunch, Singapore’s Temasek is also in talks to invest in the Bengaluru-based firm’s new round. 4️⃣ [WeChat tests in-app digital yuan payments]( Called “Tencent e-CNY Wallet,” the mini program will allow users to transact using the digital currency through WeChat QR codes. Users can also conduct fund transfers and payments collection, among others. FYI [The infuriating reality of traveling with Bitcoin in the world's crypto capital]( El Salvador was the first country to declare Bitcoin as legal tender last September. But spotty internet signals, problematic point-of-sale Bitcoin processing devices, and a dose of skepticism have led to low adoption by merchants, a Bloomberg journalist finds. That’s it for this edition - we hope you liked it! Do also check out previous issues of the newsletter [here](. Not your cup of tea? You can unsubscribe from this newsletter by going to your “edit profile” page and choosing that option in our preference center. In the meantime, if you have any feedback or ideas, feel free to get in touch with Terence, our editor-in-chief, at terence@techinasia.com. See you next week! P.S. Don't miss out on the biggest tech news and analysis. Add newsletter@techinasia.com to your address book, contacts, or safe sender list. Or simply move us into your inbox. Too many emails? Switch to a different frequency or get new content through our [preference center]( or [unsubscribe](. You can also break our hearts and remove yourself from all Tech in Asia emails over [here](. 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