Kazakhstan ready to legalize crypto as Russians flock to the country
A major bank in Kazakhstan has completed its first purchase of crypto for fiat and the president is ready to approve exchange activities.
Kazakhstan is ready to legalize a mechanism for converting cryptocurrencies to cash if there is demand, said President Kassym-Jomart Tokayev, per local news agency Informburo on Sept. 28.
Speaking at the international forum Digital Bridge 2022, Tokayev emphasized that Kazakhstan aims to become an international leader in the field of digital technology, cryptocurrency ecosystem and regulated mining. He noted that the government of Kazakhstan has drafted amendments in national law to pilot a mechanism for converting crypto at the Astana International Financial Centre.
“We are ready to go further. If this financial instrument shows its further relevance and security, it will certainly receive full legal recognition,” Tokayev stated.
The country’s president reportedly visited a joint booth of the major local lender Eurasian Bank and the Intebix crypto exchange at the Digital Bridge 2022 event.
According to local reports, the Eurasian Bank and Intebix announced that they jointly completed the bank’s first regulated crypto purchase for fiat. The precedent has marked a major milestone in Kazakhstan’s crypto adoption, allowing the Kazakh people to legally buy crypto for the national currency tenge.
Other companies in the pilot crypto projects include crypto exchanges like ATAIX as well as Kazakhstan’s largest bank, Halyk Bank and Altyn Bank.
The news comes as thousands of Russians enter Kazakhstan just a week after Russian President Vladimir Putin announced a partial mobilization of reservists to fight in Ukraine. On Sept. 21, Halyk Bank suspended the use of Russia’s Mir payment cards amid sanctions warnings by the United States Treasury Department.
Kazakhstan is not the only country that has emerged as a popular destination for Russians leaving the country and has been working to boost crypto adoption. Neighboring Georgia has also been moving to introduce new crypto regulations in order to become a global crypto hub.
While countries like Georgia and Kazakhstan appear to welcome crypto alongside Russians fleeing mobilization, Europe has been growing increasingly concerned about Russians turning to crypto to access their money. After restricting Russian payments to European crypto wallets to 10,000 euros in April, the European Union now also reportedly plans to ban Russian nationals and entities from holding any assets in EU crypto wallets.
As previously reported, Russia has been largely relying on foreign crypto infrastructure to conduct cryptocurrency operations. The Bank of Russia has repeatedly argued that the country should not legalize any local crypto exchanges.
Ethereum Merge was ‘executed flawlessly,’ says Starkware co-founder
Starkware co-founder Eli Ben-Sasson told Cointelegraph that none of the things that people feared about the Merge happened, and everything happened as it should.
As the dust settled over the Ethereum network’s highly-anticipated transition to proof-of-stake (PoS), Eli Ben-Sasson, the co-founder of Starkware, gave his thoughts on its execution and potential for the future.
Speaking to Cointelegraph’s Gareth Jenkinson at the Token2049 event, Ben-Sasson shared his thoughts on the current situation post-Merge and how it affects layer-2 projects like Starkware. In addition to that, the executive also gave his thoughts on the adoption and interest for layer-2 products and the crypto winter.
Looking back at the Ethereum Merge’s execution, Ben-Sasson rejoiced that the transition was flawless and said things happened as they should. The executive explained that:
“The most important thing is that it was executed flawlessly. Everything that was supposed to happen did happen. And none of the things that people were worried about did happen. And that’s terrific news.”
Additionally, the executive also highlighted the importance of the new Ethereum network being better for the environment. “It reduces the carbon footprint. That’s the big thing, and it also bodes very well for the potential of future improvements,” he said.
According to Ben-Sasson, the Merge also makes Ethereum a better settlement layer and a more friendly platform for layer-2 solutions. The executive highlighted that this is a very important development for their products at Starkware as they could then offer scaling, compression of computation and other improvements that their technology can deliver.
Apart from the Ethereum Merge, Ben-Sasson also shared that most of the adoption and interest in Starkware solutions are with projects that were also successful in the layer-1 Ethereum. This includes nonfungible tokens (NFTs), blockchain gaming and decentralized finance (DeFi). In addition to that, the executive shared his expectations for the future. He said that:
“I expect that at some point, the ability to run much more massive computation with very low gas footprint will lead to completely new and unforeseen applications that are going to be far more important.”
With everything that’s happening, the executive also shared his belief that despite many people describing the crypto and blockchain space’s current situation as a crypto winter, their team feels different. “We feel it as spring towards the balmy summer,” he said.
Those 6% gains were a welcome relief after heavy losses earlier in the week, but it no clear direction, market participants were still uncertain over how Bitcoin would handle the September monthly close.
“Can certainly build a case for local support holding in this range, at least until the monthly and quarterly close on Friday, unless, of course, we get the mother of all rug pulls,” on-chain analytics resource Material Indicators summarized.
Material Indicators referenced order book data which suggested that $18,000 could provide range support in the event of fresh market weakness.
More broadly, however, popular trading account Doctor Profit argued that rangebound behavior was still the trend on BTC/USD, this in place for multiple months.
“Interesting, $BTC usually moves between 30-50 days in a sideway movement before a leg down. For the first time within two years, BTC decides to move more than 108 days in a sideway movement,” it wrote on the day:
“This is how accumulation cycle looks like.”
Dollar back on the up after brief retracement
Macro triggers remained firmly on the radar in crypto circles the day after the Bank of England enacted a major policy shift, bringing back quantitative easing (QE) by buying long-term government bonds — a move to be worth $65 billion.
For veteran investor Stanley Druckenmiller, while the time was not right to own risk-on assets such as crypto, the writing was on the wall.
“I don’t own Bitcoin… I — it’s tough for me to own anything like that with central banks tightening,” he told CNBC host Joe Kernen in an interview on Sept. 28:
“But yeah, I still think — if the Bank of England, what they did is followed by stuff like that by other central banks in the next two or three years, if things get really bad… I could see cryptocurrency having a big role in a Renaissance because people just aren’t going to trust the central banks.”
His words caught the attention of Arthur Hayes, the former CEO of derivatives giant, BitMEX, who earlier this year predicted a “doom loop” taking hold of the world’s major fiat currencies.
The euro, he claimed this month, had already commenced its doom loop.
Elsewhere on the day, the U.S. dollar index (DXY) was recouping recent losses after hitting its latest two-decade highs.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
The key difference between APY and APR is compound interest. Before investing, compare their potential returns.
APR vs. APY: Which is better?
The APY provides a clear idea of an account’s earning potential. The APR shows what will be owed. Both are calculated over a single year, which provides a more accurate picture than calculating the interest rate alone.
Because the APR is calculated at an annual rate, it can be more advantageous for borrowers seeking the best rates, instead of investing in crypto assets and hoping for a return.
However, because the APY is based on an annualized rate that includes compounding earnings, it’s more beneficial for investing crypto assets—it provides a more accurate representation of what will be earned when money is invested and compound interest kicks in.
Understanding whether profits or payments are based on an APR or an APY is crucial when investing or borrowing. Given the nature of the crypto market, returns are often high compared to the traditional finance sector but so, too, are the risks.
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APY vs. APR: Key differences
Both the APY and the APR are used to calculate interest for crypto investments and loans. However, they are not the same.
The annual percentage yield refers to the amount of interest earned over a year, while the annual percentage rate is the amount that needs to be paid as interest. When comparing the APR and APY returns, considering that all other factors such as the principal amount, interest rate and period of investment are the same, the key difference is the compound interest.
It represents the total return, including the amount earned on the interest and principal investment. Because the APR does not account for compound interest, the APY always yields a larger sum.
Crypto investors can fund liquidity pools on exchanges, keep crypto in savings accounts, stake their coins or invest in yield farms. The difference between the APY and the APR is crucial to understanding where money is best invested. Practically speaking, APRs are advantageous to borrowers. However, individuals wishing to invest funds should consider APY rates to maximize their profits.
Given that more DeFi tools and cryptocurrencies use APRs, investors have to do manual compounding, where they have to reinvest their gains, either daily or weekly, to get a more significant compound interest.
How is the APY calculated?
The compound interest can be set to daily, weekly, monthly, annually or continually.
Calculating the APY is a bit more complex than the APR since interest is added to the principal, and then the interest on that total is calculated, considering the number of periods the amount is adjusted.
To calculate the APY, you can use the following formula:
For example, an investment of 1,000 coins is made at a compound interest of 10% and daily compounding. The following calculation indicates that a total of 1,105 will be collected after one year. In the following year, it should be 1,221. The earnings increase the longer it is held and at higher interest rates.
Every time the computation is updated, the interest should be added to the sum comprising the initial investment and the accrued interest profits. But what does a 10% APY mean in crypto?
Most cryptocurrency projects offer only 1% APY, but some offer 7% on flexible accounts, such as Phemex for Tether (USDT). In the case of fixed saving accounts, they can go as high as 10%. There are also DeFi platforms like PancakeSwap (CAKE) and SushiSwap (SUSHI), which are said to offer very high APYs of over 100% to investors.
What is APY in crypto?
The APY, short for Annual Percentage Yield, is a way to measure how much money can be earned on an interest-bearing account in a year. In crypto, the APY is the rate of return made on an investment.
Unlike the APR, which only considers ordinary interest, the APY includes compound interest. Compound interest is the amount earned on the interest and the principal investment. This is why the APY is more profitable than the APR.
Investors can earn an APY by staking their coins and using yield farming to supply liquidity to liquidity pools. They can also earn an APY from holding their coins in savings accounts.
Investors can use crypto exchanges, crypto wallets or DeFi protocols to start earning an APY on their Bitcoin. Interest is often paid in the same cryptocurrency invested; however, there are instances where a different currency is paid.
How to calculate APR
Here’s how to calculate the total final amount based on APR:
Following the earlier example, this would go as follows:
The calculation changes if the investment is retained for a shorter period. For example, holding for three months is equivalent to a quarter of a year (0.25), which means the calculation will be:
Holding for three months will earn only 1.06 Ether on top of the initial investment. Another formula to calculate APR is:
So, what does a 10% APR mean in crypto?
A 10% APR means 10% is earned on the initial investment after a year.
Using the above calculations, an investment of 10,000 coins at a 10% APR will accrue 1,000 coins in interest after a year.
What is APR in crypto?
In cryptocurrency, the APR is the percentage investors can expect to earn as interest on their investment, for lending their crypto or making it available for loans. It considers other fees a borrower needs to pay but does not include compound interest.
Essentially, the APR is the ordinary interest rate applied to the principal amount of an investment or loan. Since the APR is an annualized rate, prorated interest will be charged if an investment or loan is held for a shorter period. For instance, a six-month investment with a 5% APR will yield only 2.5% of the principal amount.
The APR is very straightforward. Take, for example, an investment of 1.0 Ether (ETH) in a lending pool on a decentralized finance (DeFi) network. If the expressed APR is 24%, then 0.24 Ether should be earned on top of the initial investment if it is locked in the pool for exactly one year. As a result, the investment should now total 1.24 Ether, made up of the 1.0 Ether principal and the accrued 0.24 Ether in interest (based on 24 % APR).
What is APR in general?
According to the Consumer Financial Protection Bureau (CFPB), the APR or annual percentage rate is the amount paid to borrow money. It’s also known as a credit card interest rate and is generated yearly.
For instance, if the APR is 5%, a $100 investment will provide a $5 return a year later. In contrast, if $100 is borrowed at the same interest rate, the initial $100 loan plus $5 in interest must be repaid after a year.
Understanding APR provides an overview of how much will be owed when borrowing money or how much an investor will get paid. In the context of credit cards, APR is typically not charged when the card is used, but the balance is paid each month by the due date. However, if there is an outstanding balance and the due date passes, the interest is added at the end of each billing period.
Robinhood and Circle Partner to Let Exchange and Wallet Users Utilize the Stablecoin USDC
After Robinhood Markets launched the company’s beta Web3 wallet on Tuesday and listed the stablecoin usd coin on the exchange platform Robinhood Crypto last week, the company announced a strategic partnership with Circle Financial. The deal revealed on Wednesday will provide Robinhood Crypto and Robinhood Wallet users with the ability to purchase and sell usd […]
Crypto Trader Says One Altcoin That’s Exploded 120% This Month Is About To Nuke – Here’s His Target
A widely followed digital asset trader and analyst is predicting a massive fall in price for a heavily traded cryptocurrency. Pseudonymous crypto analyst and trader Altcoin Sherpa tells his 183,500 Twitter followers that the original utility token of the collapsed Luna ecosystem, Luna Classic (LUNC), is “going to nuke.” According to Altcoin Sherpa, he can […]
Analytics Firm Santiment Says Crypto Whales Getting ‘Very Active’ on One Ethereum-Based Altcoin
An Ethereum (ETH)-based altcoin is seeing whale activity surge, according to the crypto analytics firm Santiment. Santiment notes that the decentralized oracle network Chainlink (LINK) earlier this week witnessed its most active day in terms of whale transactions since mid-June. The analytics firm says upticks in whale activity are “often the key to sustained rallies.” […]
WSJ: Terraform Labs claims case against Do Kwon is ‘highly politicized’
A spokesperson for the company behind Terra said it believes prosecutors heeled to public pressure and expanded the definition of a security after its associated cryptocurrencies collapsed.
Terraform Labs, the company behind the development of the Terra (LUNA) blockchain said South Korea’s case against its co-founder Do Kwon has become political, alleging prosecutors expanded the definition of a security in response to public pressure.
“We believe that this case has become highly politicized, and that the actions of the Korean prosecutors demonstrate unfairness and a failure to uphold basic rights guaranteed under Korean law,” a Terraform Labs spokesman said to The Wall Street Journal on Sept. 28.
South Korean prosecutors issued an arrest warrant for Kwon on Sept. 14 for violations of the countries capital markets laws, but Terraform Labs laid out a defense arguing Terra (now known as Terra Luna Classic (LUNC)) isn’t legally a security, meaning it isn’t covered by capital markets laws.
The spokesman alleged prosecutors of expanding the definition of a security due to intense public pressure from the collapse of Terra and its connected algorithmic stablecoin TerraUSD (UST), now known as TerraClassicUSD (USTC).
“We believe, as do most in industry, that Luna Classic is not, and has never been, a security, despite any changes in interpretation that Korean financial officials may have recently adopted.”
The argument by Terraform Labs’ stems from the unclear regulatory status of cryptocurrencies and the companies who create and issue them.
Currently, capital market and electronic securities’ systems in the country don’t include a legal definition of non-standardized securities issued through a blockchain.
Kwon’s whereabouts remain unknown and Terraform Labs did not comment on his location citing physical security risks, but Kwon says he’s not making an effort to hide even after a notice was sent to global authorities by Interpol.
Nexo ‘surprised’ by state regulators’ actions, says co-founder
Kalin Metodiev emphasized that Nexo has been navigating through conversations with regulators for the past couple of years to ensure compliance, and was surprised that this news was “thrown out there in public.”
Kalin Metodiev, the co-founder and managing partner of crypto lender Nexo stated his firm was “surprised” by the way in which eight state regulators publicly took action against it for securities violations.
Earlier this week the California Department of Financial Protection & Innovation (DFPI) filed a desist and refrain order against Nexo’s Earn Interest Product, claiming the company was offering a security product that had not been cleared by the government for sale in the form of an investment contract.
The DFPI also stated that it was joining regulators from seven other states in taking action against the company, including Kentucky, New York, Maryland, Oklahoma, South Carolina, Washington and Vermont.
Speaking with Cointelegraph at Token2049, Metodiev explained that Nexo was caught off guard with the latest regulatory push back, as it has been “trying to be responsible” by engaging in direct conversations with the regulators such as the Securities and Exchange Commision (SEC) for quite some time.
“We were a little surprised by this news being thrown out there in public, you know, because this isn’t a process that just started this week,” he said, adding that:
“We have worked with our legal advisors in the U.S. that we have used for the last couple of years to navigate us specifically through these waters in these conversations.”
Metodiev said Nexo also communicated to the SEC earlier this year that it was “voluntarily” discontinuing services for new U.S. customers, suggesting the firm was working in good faith and aiming to be compliant with local regulations.
The product has not been available to new users in the United States since Feb. 19, and existing U.S. account holders were unable to make new deposits into their accounts.
“The event that made us make the decision was actually the SEC ruling against BlockFi in February. The moment we saw that we established contact with the SEC, and we communicated that we’re voluntarily discontinuing, taking money from U.S. customers. And we haven’t been working with new customers for our interest generating product.”
Ultimately this hasn’t put Nexo off over providing services in the U.S. however, as the firm will continue to remain in conversations with regulators over its crypto offerings.
Metodiev also highlighted that the company is looking at U.S. expansion through other avenues, pointing to Nexo acquiring a stake in Hulett Bancorp this week, a holding company that owns the federally chartered Summit National Bank.
Nexo has also been out on the look out for crypto company acquisitions, with Metodiev noting that the firm has had discussions with a lot of liquidity troubled firms in the bear market, even the likes of Voyager Digital and Celsius.
While he stated discussions had been going well with various firms, he didn’t provide any concrete details on any deals that could be in the works. Metodiev suggested it had been priced out of a Voyager deal, as its $1.4 billion asset valuation that FTX snapped it up for, became too high for Nexo.
“If the opportunity becomes too rich for us, as I mentioned, our risk management, kicks in and we say, you know, we’re not sure that we can break even on this. We want to help the people and the platform, but at the same time, it needs to be a normal business assessment for us,” he said.
Chainlink and CF Benchmarks to Bolster Onchain Transparency via CF Bitcoin Interest Rate Curve Product
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UAE Ministry of Economy opens up new headquarters in the Metaverse
The UAE Ministry of Economy continues its push into the Metaverse with the announcement of a “third address” located in a virtual world.
The United Arab Emirates (UAE) Ministry of Economy has announced a new headquarters located where anyone in the world can visit — the Metaverse.
According to Gulf News, the announcement was made on Sept. 28 by UAE Minister of Economy Abdulla bin Touq Al Marri during the Dubai Metaverse Assembly, with the minister stating “this is not a proof of concept, this is our third address” before giving a live tour of the virtual headquarters.
The headquarters will feature a multiple story building, each serving a different purpose. Visitors will be able to take a ticket, which will prompt a “customer happiness center employee” to join the Metaverse and interact with the visitor.
Footage from the Dubai Metaverse Assembly. Source: Gulf News
The new headquarters will complement the ministry’s two existing offices in Abu Dhabi and Dubai, allowing the ministry to make digital services a bigger part of its operations following directives to do so from UAE leadership.
Visitors to the virtual headquarters will be able to sign legally binding documents, which eliminates the need for signatories to visit one of their physical locations in order to provide their signatures.
The headquarters also contains an auditorium that can facilitate virtual conferences and other events and meeting rooms that allow users to share a screen.
The announcement follows Dubai’s government’s Metaverse strategy revealed on Jul. 18, which aims to create virtual 40,000 jobs by 2030 and support the government’s vision of increasing the number of blockchain companies to five times the current number.
HistoryDAO’s Mission to Take History From the Victors and Give It to the Masses
Humans have sought to preserve memories since prehistoric times, etching images into cave walls and tying knots into a crudely fashioned cord. Tribes and clans gave birth to language that could preserve the past in words, and words found their way into print forms, thereby conceiving history. In the information age, the Internet has become […]
Institutional appetite continues to grow amid bear market — BitMEX CEO
Institutional appetite for Ethereum will grow now that the network is ESG compliant, according to the BitMEX boss.
In a recent interview, BitMEX chief executive Alexander Höptner shared his thoughts about institutional investors who, in his view, still have an appetite for crypto and Ethereum.
Speaking at the Token2049 conference in Singapore on Sept. 28, the crypto executive told Cointelegraph that there has not been a “single slowdown of institutional push into crypto” during this bear market.
He added that institutions and finance industry players typically use bear markets for innovation. There is a lot more pressure to deliver in a bull market, but bear markets offer the luxury of more time.
Höptner also commented that adoption for the finance industry has a long horizon which is why institutions will be buying and holding crypto assets while the opposite can currently be said for the retail sector.
When asked whether institutions or retail will end the bear market he said that retail is still pulling out whereas institutions are still making a push, before adding:
“I think that the institutions are making themselves ready now to provide the services and retail will come back and push it up again.”
The BitMEX boss is also convinced that institutions will start piling back into Ethereum now that it has switched to proof-of-stake and satisfies the Environmental, Social, and Governance (ESG) concerns.
“Ethereum is the ideal protocol to build stuff on,” he commented before adding “this is the ideal public event to build financial products for ESG conformity,” in reference to the recently deployed Merge.
At the moment, ESG conformity is paramount, he said, adding that institutions “can offer products that are really for a wide audience once again while checking one of the boxes that they have for their compliance.”
The $3,000 figure was mentioned regarding ETH prices by year-end and Höptner sees this as a possibility especially now that the network is more environmentally friendly and big banks are using it. At the moment, ETH is trading up 3.8% over the past 24 hours at $1,336 so it has a long way to go in the next three months.
Last week, Cointelegraph reported that liquid staking products such as Lido’s stETH are more profitable and capital efficient than holding regular ETH. As such, they will increase in popularity while hodling ETH could become obsolete.
F1’s Daniel Ricciardo cruises into crypto at Token2049
Formula 1 driver Daniel Ricciardo cruises into crypto as OKX performs a first-ever livery takeover of McLaren’s racing cars ahead of the Singapore and Japanese Grand Prix.
McLaren’s Australian driver Daniel Ricciardo sat down with Cointelegraph during the Token2049 conference in Singapore, discussing his recent involvement in crypto ahead of the 2022 Singapore Grand Prix.
Alongside OKX CMO Haider Rafique, the duo delved into a new partnership between McLaren Racing and the crypto exchange, exploring a variety of entertaining marketing moves between the two brands.
Ricciardo featured in a new OKX advert launched earlier this year standing alongside the McLaren MCL36 F1 racing car while his “spirit animal” honey badger sat in the cockpit of the vehicle. The tongue-in-cheek advert highlights the relatively unknown status of the cryptocurrency world, which continues to seek avenues to drive wider adoption of the space.
As the first point of order, Ricciardo admitted that he’d first explored the world of cryptocurrencies in 2021 and told Cointelegraph that friends had first piqued his curiosity.
“Last year I first got involved, I got my OKX wallet and it was really through a lot of curiosity. A lot of my friends were into it and then through the relationship with the team I got on board and I’m learning every day,” he explained.
Formula 1 drivers are known for their propensity to push the boundaries in various aspects of their life and Ricciardo joked that his foray into crypto accelerated fairly quickly. The 33-year-old said he was trying to increase his knowledge of the space and saw the value of diversification that cryptocurrency markets offer.
“I was actually starting to get pretty involved to a point where a few people on my team were like ‘alright you spending a bit too much time on here.’ It’s great and I am certainly curious in terms of diversification and trying to understand more about the space.”
OKX meanwhile has explored creative marketing efforts through the multi-year partnership with McLaren, announcing a livery takeover for the next two stops on the F1 calendar. Bold, orange OKX branding is front and center for the Singapore and Japan Grand Prix races and Ricciardo believes the efforts will draw more fans into the world of cryptocurrencies.
Ricciardo said the new livery in Singapore and Japan is about “fan engagement” and bringing them on board.
“OKX is at the forefront, like we are with Formula 1, trying to innovate and be forward-thinking. It’s cool, I think this it’s the first time this has been done with a livery takeover,” he said
Rafique highlighted synergies between the cryptocurrency industry and Formula 1, with the “velocity of innovation” from the sport in parallel with the speed at which the blockchain and cryptocurrency ecosystem has continued to develop:
“Ultimately the fun that we are all having comes from being creative together. Just with this livery the two design teams worked really closely together and we’re just so excited we got to work with the McLaren F1 team, with Daniel and now we have this amazing design that we’re excited for the world to see.”
Formula 1 marks its return to the Singapore street circuit for the first time since 2019. The build-up to the race has coincided with the Token2049 conference, with the street circuit slowly being pieced together until full road closures took effect on Sept. 29.
Before Covid-19, Ricciardo had enjoyed success at the track and hopes to emulate his previous podium finishes in the city:
“It’s good to be back, 2019 was the last time and I’ve always loved street circuits and before it’s all up you’re on the track trying to figure it all out because it does look different when it’s not all put together. I’m really happy to be back, I’ve had some podiums here in the past so let’s just say I am coming in hot.”
Formula 1 continues to attract marketing and advertising deals with the biggest firms in the world of cryptocurrencies. OKX was the latest cryptocurrency exchange and trading platform to pen a deal with a major team, signing up as the primary partner of McLaren in May 2022.
French Central Banker Warns Complex Crypto Regulations Could Create ‘Uneven Playing Field’
The governor of France’s central bank, François Villeroy de Galhau, has urged EU regulators to “avoid adopting diverging or contradictory regulations, or regulating too late.” He warned that “To do so would be to create an uneven playing field, risking arbitrage and cherry picking.” French Central Bank Governor Warns About Adopting ‘Unduly Complex’ Crypto Regulations […]
Circle Product VP: USDC chain expansion part of ‘multichain’ vision
Speaking with Cointelegraph, Circle’s vice president of Product Joao Reginatto emphasized that devs soon won’t care what blockchain they build on, as interoperability will be key.
USD Coin (USDC) issuers Circle have announced that it will soon roll out its stablecoin across five additional networks including Polkadot, Optimism, NEAR, Arbitrum and Cosmos.
The firm first dropped the news at the Converge22 event on Sept. 28, and noted that support for most of these blockchains will be rolled out by the end of 2023, while USDC on Cosmos will go live at the start of 2023.
In a Sept. 28 statement, Circle’s vice president of Product Joao Reginatto emphasized that the expansion of USDC will provide “greater liquidity and interoperability within the crypto economy,” especially for the commercial sector.
“Extending multi-chain support for USDC opens the door for institutions, exchanges, developers and more to innovate and have easier access to a trusted and stable digital dollar,” he said.
3/ Upon launch, developers will be able to use Circle APIs for fiat on/off-ramps to and from USDC in their products, as well as programmable wallets infrastructure.
In a follow-up interview with Cointelegraph, Reginatto outlined that while Circle initially built USDC on Ethereum as move of the development and activity was happening there, it always had a vision that the future would be a “multichain world.”
“We knew already at the time that there were a lot of interesting things happening in other ecosystems, and we thought that over time developers and application builders; they are not going to be so much concerned about the Layer 1 or the Layer 2 infrastructure that they’re using.”
“They will want interoperability, they will want flexibility to be able to port their solutions across ecosystems,” he added.
Reginatto did note however, while Circle is pushing ahead with expanding USDC support, given the current size of the stablecoin — with a market cap of $48.9 billion — the firm won’t just jump behind any network. He outlined that Circle conducts a lot of due diligence before it selects the next blockchain to work with.
“There’s a lot of risks that we have now that we perhaps didn’t have two or three years ago. So we take it with a lot of diligence. We have a team of folks across all the functions in the company kind of assessing all these ecosystems and prioritizing them over time.
Once the extra support is officially rolled out, USDC will be available on a total of 13 blockchains. In comparison, Circle’s main competitor Tether currently lists USDT support for eight networks on its website.
“Upon launch, developers will be able to use Circle APIs for fiat on/off-ramps to and from USDC in their products, as well as programmable wallets infrastructure,” Circle stated on Twitter.
Commenting on the use cases for USDC and stablecoins in the current context of crypto, Reginatto highlighted key avenues such as marketplace payouts, remittances, and global settlements for financial institutions.
“There’s no real good interoperability across all these banking systems and regional rails. Stablecoins have a really, really good value proposition for that.”
“Stripe utilizing USDC rails for marketplace payouts. Embedding that as part of their marketplace payouts products, just being able to reach people that their customers need to pay out, that with traditional rails they can’t reach. So that there is clear concrete value that the substrate can deliver for those kinds of use cases,” he added.
CTFC commissioner proposes office focused on retail crypto investors
The commissioner said the potential of blockchain and cryptocurrency to change existing markets necessitates a new retail investor protection office similar to that of the SEC.
Commodity Futures Trading Commissioner (CFTC) Caroline Pham has proposed the creation of an “Office of the Retail Advocate” aimed at expanding the CFTC’s consumer protection mandate.
Pham referred to the office as a “voice for the people” in a speech given at an event hosted by blockchain project Corda on Sept. 27, suggesting recent events in crypto make retail protection a more pressing issue, noting:
“The crypto crash, risk management failures, and substantial retail losses, gives urgency to the need to balance innovation with retail protection and appropriate regulation.”
Pham has modeled the proposed office on the Security and Exchange Commission’s (SEC’s) Office of the Investor Advocate, stating it’s a “tried-and-true way” to advance customer protection.
The SEC’s office has four core functions according to Pham, which are to provide investors a say in policymaking, assist retail investors resolve problems with the SEC or self-regulatory organizations, support advisory committees, along with studying investor behavior and conducting research and economic analysis.
Pham highlighted the potential of digital assets and blockchains to change existing markets outlining “ten fundamentals for responsible digital asset markets,” noting:
“It might still be early, but there are promising use cases if we can achieve blockchain stability and scalability across layer 1, 2, or whatever’s next.”
These fundamentals include initially determining whether something is a security, mitigating systemic risks such as the cascading liquidations due to the collapse of Terra, protection of customers and the retail public, ensuring transparency, and addressing conflicts of interest.
SWIFT partners with Chainlink for cross-chain crypto transfer project
The project will connect SWIFT’s network to nearly every blockchain to allow traditional finance players access to digital and traditional assets on the one network.
Interbank messaging system SWIFT has partnered with price oracle provider Chainlink (LINK) to work on a proof-of-concept (POC) project which would allow traditional finance firms the ability to transact across blockchain networks.
Chainlink co-founder Sergey Nazarov announced the project at its SmartCon 2022 Conference in New York on Sept. 28 alongside SWIFT strategy director Jonathan Ehrenfeld Solé.
SWIFT is using the Cross-Chain Interoperability Protocol (CCIP) in an initial proof of concept.
At the conference, Solé said there is “undeniable interest from institutional investors into digital assets” adding these traditional finance players want access to digital and traditional assets on one platform.
The POC utilizes Chainlink’s Cross-Chain Interoperability Protocol (CCIP) allowing SWIFT messages to instruct token transfers across nearly every blockchain network which, according to Nazarov, will accelerate adoption of distributed ledger technology (DLT) blockchains across capital markets and traditional finance.
The SWIFT interbank messaging system is the most widely used platform for traditional cross-border fiat transactions, connecting over 11,000 banks around the world. In August the system recorded an average of 44.8 million messages per day.
Chainlink added this collaboration with SWIFT allows financial institutions to gain blockchain capability without replacing, developing, and integrating new connectivity into legacy systems, something it said would require substantial modifications with an “exceptionally high” cost.
Fed Chair Jerome Powell Updates Work on Digital Dollar — Says US Central Bank Digital Currency Will Take ‘at Least a Couple of Years’
Federal Reserve Chairman Jerome Powell says the U.S. central bank is looking at whether to issue a digital dollar with a “very broad scope.” He noted that the Fed is collaborating with Congress and the executive branch on whether to issue a central bank digital currency. Fed Chair Powell on Digital Dollar Progress Federal Reserve […]
Maple Finance CEO: Separating risk from lending saved DeFi from market crash
DeFi crypto lending has operated as intended through the crypto winter because transparency kept it in line and business activities were siloed, according to Maple Finance’s Sid Powell.
Maple Finance co-founder and CEO Sid Powell says that transparency has been the saving grace of decentralized finance (DeFi) amid the prolonged crypto market slump.
Speaking to Cointelegraph on the sidelines of Converge22 conference in San Francisco, Powell noted that throughout the crypto winter, DeFi has continued to operate as intended while centralized finance (CeFi) has become “pretty inactive.”
Powell suggested that during the market crash, CeFi lenders hadn’t properly “battle-tested” and weren’t “prepared to liquidate clients,” wanting to maintain client relationships.
“As the price of Bitcoin was tumbling, they didn’t want to be sending out margin call letters or email hundreds of clients because they wanted to maintain client relationships,” Powell explained.
“So you give them a little bit longer, a little bit longer — well, suddenly a lot of these loans are underwater, particularly the ones that started on or [were] undercollateralized.”
He notes that where CeFi firms are still lending, “they’re doing so on a 1:1 collateralization.”
On the other hand, “DeFi is much more transparent,” he explained. In overcollateralized DeFi models, “people just got liquidated as BTC and ETH dropped. That happened automatically.”
“In DeFi you can’t get away with letting one borrower be half of a lending pool because people see that and they question the risk management there.”
“All of the loans are visible, so you had to be much more careful of who you underwrote and how you underwrote them,” Powell said.
Powell also added that CeFi businesses were diversified with trading and prime brokerage, which they thought was a strength, but all of their business lines impacted each other:
“But if a CeFi lender ran a pool on Maple, that pool would not be affected by what is happening in the trading part of that business […] It’s restricted and siloed to just the lending activity.”
Maple is a decentralized finance credit platform that claims to hold 50% of the institutional crypto lending market as measured by total loans outstanding and has issued close to $1.8 billion worth of loans since its inception in May 2021.
The Maple loan book “seriously outperformed CeFi,” Powell said, “with only one $10 million default on $1.8 billion of loans originated and 900 [loans] outstanding at the time.”
Powell described Maple Finance as “a venue for people to run lending pools,” but said there has been a reduced appetite to lend since June, causing prices for lending to go up from 8-9% to 10-13%, and thus crypto whales and yield aggregators have started to allocate again to lending platforms like Maple.
Illuvium co-founder shares plans for new ‘interoperable blockchain game’ model
Illuvium’s co-founder says they want to build a series of blockchain games connected to each other, forming an ecosystem of interconnected titles which share NFTs.
Kieran Warwick, co-founder of the blockchain role-playing game Illuvium has lifted the curtain on a gaming concept he says has never been done before — the interoperable blockchain game (IBG).
Speaking to Cointelegraph during Token2049 in Singapore, Warwick said Illuvium has three games currently being built which will be underpinned by the same economy, governed by a single token (ILV), and connected by the blockchain — making it an interoperable experience.
“We’re building something that has never been done before not in the mainstream and not in Web3.”
IBG, a term coined by Illuvium, is a series of blockchain games connected to each other, forming an ecosystem of interconnected titles which share NFTs, a common in-game currency, or both.
He hopes the shift in focus could be the key to attracting players from the mainstream market.
“In our genres that we’re hitting, there might be roughly 500 million people that we can bring in that literally won’t know that they’re playing a crypto game.”
The first game is a city builder, one that Warwick says is a “combination of Sim City and Clash of Clans” where players can build and mine resources for use in the second game, “Overworld.”
Overworld focuses on exploring and capturing creatures called “Illuvials”, which Warwick compares to Pokemon, that can then be battled in the third game, which will be similar to online battle arena titles such as “Teamfight Tactics or DOTA.”
Warwick says they might not stop at three games though, adding at some point they want to “build another six games on top.”
“Imagine taking one of those assets and then going over to the racetrack and playing a Mario Kart Game, but you’re not buying a new Nintendo game, it’s just one asset that’s usable across an entire universe of games.”
At this stage, Illuvium still doesn’t have a formal release date but Warwick hopes to have a working beta in the next two or three months, with plans to publish on mobile, PC, and Mac.
“I reckon probably sometime really early next year is when we’ll have open Beta with yields and all the aspects that we need, but not fully polished.”
Illuvium is governed by the Illuvium DAO, a decentralized autonomous organization. Warwick said they originally were going to raise $350 million in funding during the bull market, but the ongoing crypto winter has seen them scale back to between $10 and $20 million.
Warwick also revealed he made the Australian Financial Review’s Young Rich List again this year — but the market conditions mean the billion dollars he was worth last year are a distant memory.
Warwick jokingly noted that this was not a concern as his main motivation is only to be richer than his brother, Kain Warwick, the founder of Synthetix, who also made the Australian Financial Review’s Young Rich List in 2022.
Biden’s cryptocurrency framework is a step in the right direction
Cryptocurrency guidelines released by the Biden administration this month show that officials are considering the benefits of crypto. That’s a step in the right direction.
The White House released its first comprehensive framework this month for the Responsible Development of Digital Assets following President Joe Biden’s March 9 executive order. The order called for regulators to assess the industry and develop recommendations to safeguard investors while simultaneously promoting innovation. While more work is needed, the framework is a step in the right direction as it shows the willingness of regulators to provide the industry with the much-needed regulatory clarity it seeks.
The framework’s recommendations addressed six key areas to protect market participants, offer access to financial services, and promote innovation. While Biden’s administration has focused more on just the protection of consumers in the industry in the past, it is encouraging to see the framework focus on all three groups in the industry — consumers, investors and businesses. The framework cited a 2018 Wall Street Journalstudy that showed nearly a quarter of coin offerings had red flags such as plagiarized documents and promises for return on investment. To encourage protection, the framework encouraged regulators to “aggressively pursue” unlawful practices in the industry, redouble enforcement efforts, and increase public-awareness efforts to promote education in this area.
Additionally, the framework provided steps for both the Biden administration and Congress to fight against illicit finance, such as amending the Bank Secrecy Act, monitoring transactions, and exposing and disrupting illicit actors.
The framework also discussed promoting access to safe and affordable financial services. This is one of the key positives for the cryptocurrency industry, as it has provided access to financial services to millions around the world. It mentioned the fact that nearly 7 million Americans have no bank account, and another 24 million rely on nonbanking services, which can be costly. By encouraging payment providers to have increased instant access to payment systems, prioritizing the efficiency of cross-border payments, and supporting research in technological and socio-technological disciplines, the framework can help provide much-needed financial services to those in need.
Biden will also consider creating a federal framework to regulate nonbank payment providers, some of which now offer cryptocurrency services. The framework will also provide financial stability by having the Treasury bolster financial institutions’ capacity to identify, track and analyze emerging strategic risks and mitigate cyber vulnerabilities.
The recommendations promote the advancement of responsible innovation in digital assets. Biden does this by having the Office of Science and Technology Policy and the National Science Foundation (NSF) develop a Digital Assets Research and Development Agenda, as well as providing regulatory guidance and technical assistance to innovative American firms in the industry. The NSF will also back social sciences and education to promote safe and responsible digital asset use.
This is a step in the right direction for regulators as it allows them to first understand both the technological benefits of this technology while also tracking the environmental impacts in order to provide a clear strategy for the industry to move forward. This will allow the United States to reinforce its global financial leadership and competitiveness by helping innovative technology and digital asset firms to become stronger in international markets as well as assist foreign and developing countries in building out their digital asset infrastructure with U.S. values intact.
The area where the framework has received the most resistance is related to exploring a U.S. Central Bank Digital Currency (CBDC). While at face value, CBDCs seem to be the best of both fiat and cryptocurrencies, the implications can have widespread negative effects. The recommendations note potential benefits of a U.S. CBDC, such as a more efficient payment system, faster cross-border transactions and environmental sustainability.
While these certainly are positives, a CBDC’s main flaw stems from centralization. Having a centralized system governing CBDCs means they are much more easily tracked, have more vulnerable systems when compared to that of Bitcoin, and can lead to a potential increase in data breaches.
With that said, Biden’s officials are simply exploring the use case for CBDCs, meaning that he and his regulators are gathering feedback to determine the best course of action.
Cryptocurrencies have existed for over a decade. Yet, despite the industry looking to the government to provide the regulatory clarity needed to remove much of the uncertainty and doubt, it has not been until this year that the industry finally received an indication of what that clarity may look like.
Biden and the regulatory agencies that submitted nine reports to him have created the first-ever comprehensive regulatory framework for cryptocurrencies. It does a commendable job targeting the areas that are most in need of regulation and by increasing research in this area along with listening to market experts, what is a great first step can become exactly what the industry needs to continue to grow and innovate without a looming threat over its shoulder.
Mitesh Shah is the founder and CEO of Omnia Markets, an artificial intelligence firm providing expertise on financial analytics, trends and insights in the cryptocurrency industry. He specializes in finance and technology and holds an MBA in finance from St. John’s University-Tobin College of Business, as well as a certificate in machine learning from Stanford University.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Stablecoin Economy Continues to Deflate — USDC’s Market Cap Shed $6.7 Billion in 83 Days
Just over two months or approximately 83 days ago, the stablecoin usd coin (USDC) had a market valuation of around $55.52 billion and since then, USDC’s market capitalization has lost 12.05%. For most of 2022, the second largest stablecoin by market capitalization, USDC has been above the $50 billion mark, but this week the crypto […]
Polkadot (DOT) and Kusama (KSM) Leading Cardano (ADA) in This Metric, Says Crypto Analytics Firm Santiment
Polkadot (DOT) and Kusama (KSM) are leading the crypto market in the past month in terms of development activity, according to the analytics firm Santiment. Santiment notes that over the past month, both Ethereum (ETH) challenger Polkadot and its canary test network Kusama have had more non-spam GitHub submissions compared to the third most-active project […]
FTX US President Brett Harrison Steps Down, Says Crypto Industry at Major Crossroads
Brett Harrison of FTX US has announced that he will be stepping down from his position as president at the crypto exchange. Breaking the news on Twitter, Harrison tells his 56,000 followers that he will be taking on a role as an advisor to FTX. Harrison says that as he leaves FTX, the industry is […]
NFT trading volume plunges 98% from January despite rise in adoption
During the same period, the number of wallets owning NFTs has increased by about 2.8 million.
According to data compiled from Dune Analytics, the weekly trading volume of nonfungible tokens, or NFTs, across the blockchain realm has plunged to $114.4 million.
This represents a decrease of 98% from the $6.2 billion witnessed around the end of January. Weekly NFT trading volume rose to an all-time high of $146.3 billion in early April before falling off a sharp cliff in May with the start of an ongoing crypto bear market.
At the same time, however, the number of wallets owning at least one NFT has skyrocketed to 6.14 million, compared to 3.36 million at the end of January. NFT marketplaces also saw a massive change from the beginning of the year, where LooksRare was responsible for most of the dollar trading volume. That has since switched back to OpenSea.io.
The price of NFTs has also fallen sharply as part of a broader plunge in the price of Ethereum (ETH), the most common crypto used to buy and sell digital collectibles. Currently, an NFT only fetches about $285 per sale on average, compared to around $2,000 in early January.
In an interview with Cointelegraph, Tony Ling, founder of NFTGo, said that innovation will continue to drive NFT adoption despite the market downturn. Recently, post offices in Austria have experimented with NFT stamps, while Mastercard has rolled out NFT customized debit cards.
Luxury jeweler Tiffany & Co has also unveiled a customized pendant experience for CryptoPunk NFT holders. Month over month, however, the NFT market continues to worsen as the average NFT weekly trading volume has fallen by about 30% versus the same time in August.
Chainlink Is Building a Token Infrastructure for SWIFT
Chainlink and SWIFT have announced a proof-of-concept that will allow the international bank cooperative to transfer cryptocurrencies across almost all blockchains. Chainlink Partners with SWIFT SWIFT could soon interact with…
JPMorgan’s CEO feels threatened by disruption in payment systems: Kevin O’Leary
At Converge22, the Shark Tank host said stablecoins are set to lead to a reduction in friction and fees worldwide.
JPMorgan Chase’s CEO Jamie Dimon feels threatened by how the crypto space is disrupting the payment systems, stated the Shark Tank host and multi-millionaire venture capitalist Kevin O’Leary speaking at a Converge22 panel on Sept 28.
Still on the panel, O’Leary explained that friction is one of the major problems in the traditional financial system and, plus, it’s how banks profit on transaction fees, adding that stablecoins could lead to a reduction in fees throughout the world. He stated:
“This isn’t about speculation on asset price. This is about reducing the fees of how the world’s economies work, more transparent, more productive, completely auditable, regulated, but less expensive. So, does Jamie Dimon feel threatened? You are damn right, he does. That is a big part of how he makes money.”
Regarding the regulatory environment in the US, the venture capitalist explained that sovereign wealth and pension funds are waiting for regulation before adding digital assets to their portfolios, noting that:
“If you are a sovereign wealth fund or a country that is oil rich, perhaps you are generating a quarter of $1,000,000 in the 12 hours. The only place on earth you can plot that is in the S&P. The only way you can do that is to be compliant with the SEC rules. They are never going to make a move against the SEC in any way until these rules are determined.”
According to O’Leary, a regulatory shift in the US approach to digital assets would lead to a 10% appreciation for all crypto assets overnight. US lawmakers are working on a bill to regulate stablecoins that could be approved by year’s end.
Stablecoins are a class of cryptocurrencies that attempt to offer investors price stability, either by being backed by specific assets (such as the US dollar) or using algorithms to adjust their supply based on demand.
Bitcoin Trend Reversal? (Chainlink RALLIES Against Current)
Today we will be discussing the expected incoming volatility for Bitcoin as $2.2 Billion in BTC options are set to expire on Friday, what should we expect from the markets!? Next we’ll talk about Chainlink showing some surprising performance during the bear market, and last we’ll look at the recent MetaMask adoption of NFT custodial […]
Genesis director to step down and move into advisory role
“My line is always open and I can’t wait to continue building and learning with all of you,” says Ballensweig.
On Wednesday, Matthew Ballensweig, managing director of cryptocurrency broker Genesis, announced via Linkedin that he was formally leaving his post after over five years of tenure. Ballensweig is also the co-head of sales and trading. As told by Ballensweig, he has been transitioning his core responsibilities to a handful of trusted colleagues who will be taking the front-line role.
“I am forever thankful to both Digital Currency Group [Genesis’ parent company] and Genesis for giving me the opportunity to build a capital markets business from the ground up. We built an eight-person company huddled in a small office in New York City back in 2017 to a sell-side trading behemoth doing billions in volumes in multiple countries today.”
Ballensweig will stay with the firm in the foreseeable future as an advisor and will “take some time to travel and enjoy the holidays with friends and family before delving into my own next chapter.” Previously, Genesis’ CEO Michael Moro stepped down in August as the company began a transition period.
It appears that Genesis’ bourgeoning business took a tough hit as part of the overall crypto winter. In July, Moro confirmed that Genesis had investment exposure in the now liquidated Singaporean crypto hedge fund Three Arrows Capital (3AC). According to Moro, the firm had mitigated losses but nevertheless issued a margin call to 3AC that fell on deaf ears.
Despite challenging conditions, Ballensweig says that he will “absolutely” be staying in the crypto ecosystem. “My mission will be to help facilitate the next cycle of growth and mainstream adoption through my expertise in capital and information flow, trading and lending, yield, venture, and bridging institutional participants with crypto-native opportunities,” he stated.
9/ I am excited to share more about what I want to do next with anyone who’s interested in chatting. My line is always open and I can’t wait to continue building and learning with all of you.