Bond Markets Unsettled; Chime Acquiring Stride; Latitude’s Series A

Bond markets remain unsettled. Americans gloomy on the economy. OpenReserve, Revolut get conditional charter approvals. Block goes for a second charter. Chime is acquiring its bank partner. EWA startup Immediate raises $13Mn. Latitude announces its Series A. Ramp rumored to be seeking $60Bn valuation.

Identity, compliance, and money are becoming programmable primitives that companies build once and deploy globally, rather than rebuilding for every market. Our Head of Digital Assets, Luca Cosentino, explains the importance behind which primitives are needed and who can carry them across the market. Read the full piece here.  

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Treasury Buybacks Backfire

Treasury Secretary Bessent’s effort to tame rising longer-term yields backfired last week. The Treasury tripled the maximum amount of bond buybacks to up to $6Bn and said future such operations will be at least $4Bn. Historically, Treasury has undertaken such repurchases to buttress liquidity in off-the-run longer-term bonds. But the move had the opposite of the intended effect, spooking markets and sending yields up, not down. Yields on 10-year bonds hit 4.85%, while 20- and 30-year bonds went as high as 5.3%. Rising yields come against a backdrop of other factors that risk stoking inflation, including renewed military action in the Middle East and President Trump’s trade war with Canada. While economic indicators like the unemployment rate and stock market would suggest a resilient economy, many everyday Americans aren’t feeling it. In a recent Gallup poll, just 19% rate the economy as “good” or “excellent,” while 45% rate it as “poor.”  

Charters: OpenReserve, Revolut, Block, Chime

The bank chartering pipeline has continued to be extremely active. Earlier this month, the OCC granted conditional approval of “on-chain” bank OpenReserve, N.A.’s charter application. OpenReserve intends to be a full-service, deposit-taking bank, though its application for deposit insurance remains pending with the FDIC. The company, founded by MoneyLion vets Dee Choubey and Richard Correia are behind the effort. OpenReserve describes one of its goals as bringing “native onchain settlement into the perimeter of federally supervised banking” to power offerings that would include commercial and retail lending products, a treasury management platform, traditional and tokenized deposit products, and stablecoin infrastructure. OpenReserve also announced its seed funding, with Andreessen Horowitz, Jump Capital, Acrew, Coinbase Ventures, and others participating.

Meanwhile, Revolut, which struggled for years to obtain its U.K. charter, has clinched conditional approval of its OCC charter application, though with some caveats. The conditional approval comes about six months after Revolut filed its application. Revolut’s U.S. bank entity must raise at least $95Mn in paid in capital, and it must maintain a tier 1 leverage ratio of at least 10%. Revolut did not win approval of all of the business lines it sought to operate, however. The bank must obtain supervisory non-objection before launching its proposed retail foreign exchange business. Revolut’s corresponding application for deposit insurance remains pending before the FDIC.

In somewhat unexpected news, Block, parent company of Square, announced it has filed an application with the OCC to form a national trust bank. Square already holds an industrial loan company charter in Utah, which the company has begun leveraging as part of its consumer Cash App business. The proposed trust bank, dubbed Builders Bank & Trust, would focus on providing custody infrastructure for crypto and stablecoins, the company said. It would not take deposits nor make loans. Obtaining a trust bank charter would provide federal oversight of certain custody and related activities the company provides, Block said, but otherwise revealed few details about the prospective trust bank’s planned offerings.

Finally, consumer fintech Chime has announced plans to acquire one of its two partner banks, Stride. Chime will pay $590Mn in an all-cash deal to acquire the bank. The company said it expects to realize as much as $100Mn in savings over time as a result of the acquisition. Presently, Chime works with Stride as well as The Bancorp Bank to provide banking and credit products to its more than 10Mn active users. The company’s announcement specified that it intends to keep its consolidated assets below the critical $10Bn threshold necessary to be exempt from debit interchange regulation under the Durbin amendment.

Immediate Raises $13Mn

Earned wage access provider Immediate announced it has raised a $13Mn Series B. The round was led by BankTech Ventures, with participation from BankSouth, Castle Creek Launchpad, and other new and existing investors. Concurrently, Immediate announced an expansion of its working capital facility provided by Always.bank, to facilitate its continued growth. The company did not specify a valuation or the size of the expanded capital facility. Immediate offers a private-label EWA platform, enabling banks and credit unions to better meet their customers’ short-term credit needs. Immediate founder and CEO Matt Pierce commented on the raise, saying, “This funding allows us to continue investing in our core employer business while accelerating our work with financial institutions. We believe the next phase of earned wage access will extend beyond the workplace, and we're excited to help banks and credit unions bring these capabilities directly to their customers while remaining at the center of the financial relationship.”

Latitude Announces Series A

Latitude, founded by alums of Stripe, Uber, and Coinbase, announced it has raised $35Mn in funding. The company aims to solve the gap between the benefits of stablecoins and the needs of international businesses to make payouts in local currencies via existing rails, like national payment schemes and digital wallets. The Series A round was led by Oak HC/FT, with participation from EA, Coinbase, Lightspeed Faction, and OpenFX. The new funding follows an earlier $8Mn seed round. Latitude declined to specify a valuation attached to its Series A. Latitude cofounder Cyril Mathew explained the opportunity in comments to Fortune, saying, “There’s a number of neobanks that are trying to build financial services apps for users across the world. Those end users need ways to get in and out of stablecoins. That neobank can try to do that in 80 countries, or they can plug into Latitude.” The company plans to use the new funding to make necessary hires in sales, compliance, engineering, and legal.

Ramp Rumors

Ramp is raising again, according to reports last week. The business banking startup has continued to make headlines and raise huge amounts of capital, following a distinctly different trajectory than its rival, Brex, which was acquired by Capital One. According to reporting from Bloomberg, Ramp is “in talks” to raise as much as $1Bn in new funding at a valuation of about $60Bn. That would mark a sharp increase from the $44Bn the company was valued at just three months ago. To date, Ramp has raised some $3Bn and passed $1.5Bn in annualized revenue earlier this year. Ramp declined to comment on the reports.