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FinTech Giants PayPal, Intuit and Square Capital Approved to Digitally Distribute US Govt COVID-19 Small Business Stimulus

PayPal, Square and Intuit have received the US Government’s approval to take part in the Small Business Administration’s (SBA) Paycheck Protection Program(PPP) which was established in response to the COVID-19 pandemic triggered global financial crisis.

The approval was granted following an appeal to Congress by Financial Innovation Now (FIN), on March 19, for FinTech companies to help distribute the loans digitally, citing concerns that many small businesses would run out of working capital before they received any of the $350 billion stimulus package.

FIN is a FinTech alliance which includes Square, PayPal, Intuit and Stripe. In the letter addressed to lawmakers they argued that they had “the reach, relationships, and digital capabilities to reach those businesses most vulnerable” in a more timely fashion while the traditional US insititutions were left wanting in this regard.

PayPal First Non-Bank Participant

Paypal was the first of the non-bank institutions to announce they had received official approval to help distribute the funds under the SBA program, which is part of a larger US Congress approved economic stimulus relief package totalling $2 Trillion USD.

The global payments giant has been offering small businesses loans and cash advances since 2013.

In a Linkedin post on April 11, Dan Schulman, President and CEO of PayPal said, “We are eager to deploy our capital and expertise to do our part in helping small businesses survive this challenging period.”

Shulman also revealed that the first loans have been applied for and issued. He said,“ We expect more loans to be issued in the coming days. Thanks to Congressional leaders and the Administration for ensuring the CARES Act allowed companies like PayPal to help distribute funds quickly to those businesses that are most impacted.”

Square Capital Joins In

Jack Dorsey’s newly founded Square Capital also announced it had received SBA approval as a PPP lender in partnership with Celtic Bank.

Jackie Reses, Capital Lead and People Lead at Square took to Twitter yesterday to announce, “Square Capital has received U.S. Treasury and SBA approval to be a PPP lender, and we will start rolling out our PPP loan applications this week. We continue to work with our partner Celtic Bank as they have existing expertise as a leading SBA lender.”

The announcement also stated that sellers would be notified through the Square Dashboard when their applications are available.

Intuit Demystifys Stimulus Programs and PPP

Joining PayPal and Square Capital, Intuit has also received approval as a non-bank lender for the SBA’s PPP via its QuickBooks Capital.

Intuit appears to be taking things a step further in demystifying the whole process for American citizens. Their software simplifies the application process and offers guidance on which relief funds the small business owner’s are eligible to claim. Intuit automates the application in coordination with the SBA to distribute the PPP funds quickly.

On Monday, Intuit also announced the details of several of its new programs launched in response to the COVID-19 global financial crisis and the resulting US federal government aid programs. The FinTech company set up Intuit Aid Assist as a free website designed to help small business owners and those who are self-employed assess how much federal relief they’re eligible for under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Image via Shutterstock

Texas Man Charged for Using COVID-19 Small Business Relief Funds to Buy Crypto

A Texas resident named Joshua Thomas Argires has been charged by US authorities for using funds from a COVID-19 relief program to trade cryptocurrencies.

The criminal charge was announced by Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division. Argires was taken into custody for fraudulently securing more than $1.1 million in a Payment Protection Program (PPP) which he invested in a cryptocurrency account.

Violation of the CARES Act is a Crime

The Coronavirus Aid, Relief and Economic Security (CARES) Act is a Federal law enacted on March 29. It was enacted to help Small Business Administrators (SBA) to access emergency financial assistance to combat the negative economic effects of the COVID-19 pandemic. One major source of relief the CARES Act provides is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding. These funds were approved to be digitally distributed to qualifying small businesses back in April.

Joshua Argires is one of many US citizens that has been charged in recent times based on violations of the CARES Act. He claimed the funds through the companies Texas Barbecue and Houston Landscaping. According to the statement issued:

“Neither Texas Barbecue nor Houston Landscaping has employees or pays wages consistent with the amounts claimed in the PPP loan applications. The complaint further asserts that both of these loans were funded, but that none of the funds were used for payroll or other expenses authorized under the PPP. Rather, the funds received on behalf of Texas Barbecue were invested in a cryptocurrency account, while the funds obtained for Houston Landscaping were held in a bank account and slowly depleted via ATM withdrawals, according to the charges.”

Following these questionable allegations, Argires made his first appearance before the US Magistrate Judge Peter Bray on Monday.

Blockchain Firms Also Benefited From COVID-19 Relief Funds

Besides the role that blockchain technology is playing to help fight the COVID-19 pandemic, blockchain inventions were also considered as a potential channel for the disbursement of the funds. In addition to these, blockchain firms (particularly Tron) also benefited from the US government COVID-19 relief funds as it was awarded $2 million.

Democrat Nancy Pelosi Says $1.8T COVID-19 Stimulus Package Talks at Standstill, How will Bitcoin react?

Democrat Nancy Pelosi said yesterday that discussions over a new $1.8 trillion stimulus package have ground to a halt, which President Trump is blaming on the Democratic House Speaker. What could the stimulus delay mean for Bitcoin and the crypto market?

According to a report from the Wall Street Journal on Oct. 11, Democratic House Speak Nancy Pelosi has opposed the Trump administration’s proposed $1.8 trillion COVID-19 stimulus relief package, arguing that the proposal lacks adequate funding and has no strategy for contact tracing or national testing.

President Trump has responded saying that the impasse has been caused by Pelosi herself. The WSJ quoted Trump from his Fox News Interview as he said:

“Republicans want to do it. We’re having a hard time with Nancy Pelosi.”

Despite the President’s claims, it was reported by the Financial Times on Oct.10 that many in the GOP were not enthusiastic about backing the Trump administration’s proposal and voiced support for a much smaller relief package.

The new White House proposal would effectively expand the Affordable Care Act’s provisions to people who have lost their employment and insurance throughout the pandemic. Extending the ACA is one point of contention within the GOP as many of its members have been vocal about scrapping the act altogether.

What Does this Mean for Bitcoin?

Bitcoin has seen a huge increase in value this year, largely based on the bet by investors that the trillions in government and central bank money printing and relief spending globally in response to the COVID-19 market disruption will likely lead to very high inflation and US dollar debasement.

In theory, high inflation and the US dollar losing purchasing power will send the Bitcoin price surging as it solidifies its position as a hedge investment and store of value.

For now, the impasse between the Republicans and Democrats on reaching a stimulus amount agreement could see the Bitcoin price stall or even fall slightly. However, should the two sides reach an agreement soon, the price of BTC should rise consequently.

The Bitcoin price is currently trading at $11,395 at the time of writing, up 0.8% over the last 24 hours according to CoinGecko.

Stimulus Checks and Gary Gensler: Is President-elect Joe Biden Long on Bitcoin and Altcoins?

Is President-elect Joe Biden long on Bitcoin and cryptocurrency?

President-elect Joe Biden has named a former blockchain professor from MIT, Gary Gensler, to head up the United States Securities and Exchange Commission (SEC) to replace Jay Clayton only a week after a new dollar depreciating plan for $1.9 Trillion in economic stimulus.

Gary Gensler Next SEC Chair

President-elect Biden’s transition team to takeover financial policy of the United States includes former Commodity Futures Trading Commission (CFTC) Gary Gensler who will assume the SEC chair position vacated by Jay Clayton.

Along with his extensive experience in regulating financial markets, Gensler also has a long history in public policy and finance. Gensler is a senior advisor to the MIT Digital Currency Initiative and lectures on blockchain technology at MIT sloan.

The announcement is truly exciting for cryptocurrency advocates as the SEC are desperately in need of a more refined and a balanced approach to crypto regulations in the US—and Gensler has publicly stated that the nascent industry needs public policy to succeed.

Host of CNBC’s Crypto Trader, Ran Neumer posed the question on Twitter:

“I think @JoeBiden is Long BTC and ALTS. Why else would he print so much money and appoint a blockchain professor for MIT as the new chair of the SEC?”

Stimulus and Bitcoin

President-elect Joe Biden also unveiled the details of a $1.9 trillion coronavirus rescue package last Thursday, with several stimulus measures to fight against the COVID-19 pandemic.

With the new US President Joe Biden coming into office, he appears set to continue flooding the market with trillions of dollars of unbacked freshly printed fiat currency, which is exciting news for the Bitcoin bulls.

The new stimulus plan will almost certainly include a provision to increase the amount of the second round of direct payments (that is, stimulus checks) from $600 to $2,000, and there will be more money for vaccine distribution, schools, rental assistance, small business aid, and tax credits.

$1.9 Trillion is a gigantic number, as even all of the circulating Bitcoin added up it is just $711 Billion, which is more than 2.5 times that of Bitcoin’s market capitalization.

From the chart above, we can easily observe that when the M1 Money Stock supply increases, Bitcoin Price also follows. If history repeats itself this time, we may see another surge in Bitcoin price after Biden’s administration plan comes into effect.The Bitcoin price is $37,427 at the time of writing showing an increase of 3.8% in the last 24 hours.