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Wealth managers and VCs are helping drive institutional crypto adoption — Wave Financial execs

“Things are much more encouraging, even though this is clearly a time of pain," said Wave Financial’s head of business development Mike Jones.

Two executives at Wave Financial, an asset management firm providing bespoke strategies to high-net-worth individuals and entities, have reported seeing increased institutional demand for crypto products amid the bear market.

Speaking to Cointelegraph at the Blockchain Futurist Conference in Toronto on Wednesday, Wave Financial’s head of business development Mike Jones said institutional investment in crypto could be driven by the high end of wealth management firms including Morgan Stanley, Merrill Lynch and Goldman Sachs looking for ways to allow their clients to get exposure to the space. Jones cited the example of BlackRock partnering with Coinbase on Aug. 4, a move that will give users of the asset manager’s institutional investment management platform Aladdin access to crypto trading, custody, prime brokerage and reporting capabilities.

In addition to wealth managers, the Wave exec said venture capital may see “a lot of growth” in part due to demand for innovative investment vehicles. Wave Financial’s investment and venture principal Gerard Berile added that VCs giving clients exposure to crypto without going through centralized exchanges and still dealing in large scale volume has been a “net positive for the industry as a whole.”

“On the venture side of the house, the bear market has been somewhat of a positive thing,” said Berile. “Over the past year, year and a half, we’ve seen valuations of a lot of different companies get incredibly high — a bit frothy, you could say. In the past six months or so, we’ve seen valuations on companies come down to a bit more realistic valuations, and it’s become a great time to begin allocating capital.”

Blockchain Futurist Conference in Toronto, Canada

“What’s encouraging from a market perspective in general is that you think about the last cycle — a few years ago, a lot of the chatter that was surrounding the ecosystem then was: ‘Is this the end of crypto? Is crypto dead?’” said Jones. “From an institutional adoption standpoint and an institutional demand standpoint, the question now seems to be much more surrounding ‘Is this the right time to get in?’”

He added:

“Things are much more encouraging, even though this is clearly a time of pain. That comes with opportunity as well, particularly for people that are building in the space.”

Related: Bitcoin institutional buying ‘could be big narrative again’ as 30K BTC leaves Coinbase

Data from the blockchain seem to support some of Berile’s and Jones’ claims. Crypto intelligence firm IntoTheBlock reported in March that the number of large transactions on the Cardano blockchain increased more than 50-fold in 2020, suggesting “increasing institutional demand." However, United States regulators have not approved certain crypto investment vehicles like an exchange-traded fund with direct exposure to Bitcoin (BTC) — many have said such a listing could attract new investors to the market.

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Blockchain technology can help create safe and inclusive adult platforms

The adult entertainment industry is known to be one of the first to try new technologies, and the blockchain seems to be the next on the list.

The cryptocurrency market is no stranger to speculation. Consider that despite this industry's growth, many continue to view these assets and associated technologies as a bubble that is about to burst. 

As history has proven, overcoming the technology adoption curve comes down to a major use case, or the so-called "killer app." Although there is no clear frontrunner, the adult entertainment industry has proven to significantly advance new technology iterations in the past and presents an interesting proposition for the future of cryptocurrencies. 

The adult entertainment industry is believed to be worth billions of dollars, giving it significant influence over the world's leading technologies. Although it doesn't create these new technologies, it is often the first to adopt and do so successfully. 

For example, the industry was among the first to make money on the internet, where it continues to rake in over $1 billion a year. In part, this is because, unlike other industries that must go head to head with "big box" retailers, the adult entertainment industry doesn't need to engage in traditional distribution issues. 

Although just one example, this industry has continued to demonstrate a history of adopting the newest forms of media to get their content across to viewers. To illustrate, let us consider the transition from VHS to Blu-ray to internet streaming. 

From Betamax to Blu-ray

Taking a trip back to the 1970s, users will become familiar with the debate between the Betamax and the VHS, two devices that could run a film, thereby presenting a standard in viewing technology. 

In one corner, the Betamax has a wide format that enabled the device to have a better quality recording, although only one hour of video footage could be held. In contrast, the VHS offered poorer quality but with triple the storage capacity (up to three hours.) The result was that the VHS prevailed, with adult entertainment viewers now gaining access to 180 minutes of content. 

In an industry as large as this one, this small transition extended the longevity of the VHS and effectively put an end to Betamax.

Looking forward to a more recent example, consider the technology transition between the HD DVD and Blu-ray. The HD DVD was already largely successful when Blu-ray was introduced, presenting a tough market to compete in. However, Blu-ray had more capacity to hold things like deleted scenes, behind-the-scenes footage and other actor commentaries, a reality that was realized in the adult entertainment industry. Therefore, like Betamax, the HD DVD was dead.

As technology moves past Blu-ray and into Web3, it is only logical to conclude that the adult entertainment industry will once again pioneer a new era of technology evolution.

Ushering in a new era for decentralized payment

Today, the adult industry has evolved far past studio-controlled content distributed by Blu-ray, into a model where creators are in charge of their creations. Despite having more autonomy, creators still face one barrier, how they will receive payment. 

Creators have little choice but to accept funds through traditional banking solutions, subjecting them to high fees, payment cancellations, chargebacks and account closures. Not to mention audience restrictions due to privacy concerns.

Cryptocurrencies aim to resolve this, operating without an intermediary to ensure creators and clients can transact directly with one another. Due to their anonymous nature, cryptocurrencies also enable users to keep their identities concealed.

A metaverse where adults come to play

With a potential solution to the gap in the market, it is not uncommon to see adult entertainment websites incorporating cryptocurrencies as a payment method into their website. However, newer platform releases have taken the application of blockchain technology and utility tokens one step further, creating entire ecosystems to maximize the fan experience.

The Pleasure Network is demonstrating this by releasing a series of safe and inclusive adult platforms, powered by the Pleasure Coin utility token, NSFW. With NSFW, creators can be compensated for their content without the risk of a chargeback. The platform will effectively become a new way for fans and creators to connect, combining some of the highest-quality features from existing platforms.

The token will also gain utility in the adult metaverse, Pleasureland. Pleasureland will include the Pink Tower, the first building in the metaverse, which will double as a place to store NFT assets, play, design, party or enjoy personal space. Users will also have the option to rent out their space to earn NSFW tokens.

NSFW is said to be one of the fastest-growing tokens in the Polygon ecosystem — blockchain technology scaling transactional speeds to degrees beyond traditional credit card processing.

And due to Pleasure Coin being designed as an ERC-20 token, it allows both creators and users to transact freely while keeping their identities and other personal information concealed.

Learn more about HitBTC

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you with all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor can this article be considered as investment advice.

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Bitcoin tackles unique challenges in emerging markets

The adoption of Bitcoin continues to be driven by case-by-case needs as Blockchain Economy Istanbul hones in on emerging markets.

The adoption of Bitcoin (BTC) in emerging markets was a focal point on the first day of the Blockchain Economy Istanbul event, with calls for a focus on the case-by-case use of Bitcoin to maximize its reach.

The two-day summit sees prominent speakers from the cryptocurrency ecosystem converge with the likes of MicroStrategy’s Bitcoin proponent Michael Saylor on the panel list at this year's event.

Cointelegraph caught up with Ben Caselin, vice president of the global market and communications at cryptocurrency exchange AAX, to explore some of the concepts after his keynote address on the Satoshi Standard and emerging markets.

Caselin believes a logic-based focus on emerging markets is crucial, considering it is made up of some six billion people accounting for 85% of the global population. He also questioned the notion of mass adoption, primarily because different countries face drastically different realities:

“The people in Nigeria are dealing with a very complicated banking system that doesn't actually help them. The government may have rolled out a CBDC project but it's not interesting. People care about Bitcoin, people care about non-government money.”

Caselin also highlighted another anecdotal example from Afghanistan, where Roya Mahboob made headlines by paying her Afghan Citadel Software Company employees in Bitcoin as a solution to the obstacles women in that country face in accessing bank accounts.

Emerging markets also offer a unique challenge as cryptocurrency firms and service providers grapple with onboarding people who are unfamiliar with Bitcoin, stablecoins or decentralized finance (DeFi) protocols. A focus on challenges unique to a country or group of people is often the main driver of adoption:

“You are afraid of your government? Okay, maybe Bitcoin is good for you. If your challenge is that your local currency is bad because it is low quality, maybe there’s a different conversation about Bitcoin that we can have.”

Caselin believes the cryptocurrency space has moved out of the decade-long emergent stage of its life cycle from 2009 and 2019. He drew parallels to the early days of the internet, when Jeff Bezos was initially mocked for his online-book store, which eventually became the current ubiquitous Amazon.

Caselin believes that a move into an adoption phase calls for the cryptocurrency industry to shape up. Recent market turmoil, exacerbated by the collapse of the Terra (LUNA) — now renamed Terra Classic (LUNC) ecosystem and the failure of a handful of cryptocurrency lenders and hedge funds, detracts from the greater importance and utility of the space:

“If Bitcoin is not helping women in Afghanistan, or the people in Cuba, or the bankless communities in Nigeria, then Bitcoin is not that interesting.”

Data from Chainalysis backs up Caselin’s assertion that emerging markets are more focused on “legacy” cryptocurrencies like Bitcoin, while institutional investors from major economies have driven recent investment in more complex assets and products powered by DeFi.

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Africa can create an inclusive society with blockchain, says LBank CEO

Allen Wei, the CEO of LBank exchange, told Cointelegraph that blockchain could contribute to the creation of a robust economy in Africa.

As one of the most populated continents in the world, Africa continues to be an important target for blockchain proponents, as adoption in the region could have a significant impact on the broader crypto economy. 

In an interview with Cointelegraph, Allen Wei, the CEO of crypto exchange LBank, explained that blockchain can have a significant impact on Africa. Moreover, Wei highlighted that adoption within the region can have an effect on crypto and underscored the importance of supporting projects throughout the continent.

With blockchain, an opportunity to solve Africa’s economic problems presents itself, according to Wei. With this, the executive emphasized that the technology could create an inclusive society on the continent. He explained that:

“With the help of blockchain, Africa can create an inclusive society with a robust economy and the highest standards of living. A larger economic system might be built where more people will be employed and have access to greater wealth than ever before.”

Apart from blockchain’s impact on Africa, the LBank CEO also highlighted that the region could also have a big impact on the broader crypto ecosystem. Because of the large population in the region, Wei believes that adoption in Africa would make it easier for other regions to accept crypto as well. Wei said:

“With such a large number of people using cryptocurrency, it will become easier for others around the world to accept it too, which will cause a positive turnaround in the crypto economy.”

Furthermore, Wei also expressed that helping the region means that the crypto space will simply have a wider reach. “If we can help Africa become one of the most crypto-friendly continents on the planet, then we will be able to reach a larger audience than ever before,” he said.

In addition, the LBank executive also talked about the importance of funding the growth of local projects in the region. While the region has potential, Wei noted that crypto and blockchain projects in Africa often face challenges in terms of funding.

Related: Lending network enables transparent credit history in Africa via blockchain partnership

The LBank CEO also mentioned that this is one of the reasons why their venture capital arm has launched an accelerator program to help local projects in the continent. Wei believes that through this, more jobs could be created, and the region’s revenue could increase.

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DeFi for financial services: Alex Tapscott’s ‘Digital Asset Revolution’

Alex Tapscott’s new book breaks down key DeFi concepts for business leaders.

Decentralized finance (DeFi) has massive potential to transform traditional financial services. Data from Emergen Research recently found that the global DeFi platform market size is expected to reach $507 billion by 2028. Moreover, the total value locked within DeFi currently exceeds $75 billion, demonstrating fast-paced growth compared to previous months this year.

Yet, DeFi’s potential may still not be realized by business leaders unfamiliar with the blockchain ecosystem. This notion is highlighted in Alex Tapscott’s recent book, Digital Asset Revolution. Tapscott, co-founder of the Blockchain Research Institute and managing director at Ninepoint Digital Asset Group, told Cointelegraph that he believes digital assets are going to be an important building block for a new internet, along with a financial industry that will change business models and markets. However, Tapscott noted that, to date, very few resources have been available to help enterprise leaders understand the relevance of digital assets. He said:

“Words like nonfungible tokens, central bank digital currencies and stablecoins are alien to people who are not involved in the world of crypto and blockchain. It’s our goal at the Blockchain Research Institute to illuminate the potential behind different digital assets, explaining what these are and why people should care about them in language that is easy to understand.”

How DeFi relates to the financial industry

In order to help readers understand the concepts behind DeFi, the first chapter of Digital Asset Revolution gives a broad overview of how decentralized finance could reinvent financial services. Tapscott begins by briefly summarizing how DeFi relates to nine specific functions of the finance industry: storing value, moving value, lending value, funding and investing, exchanging value, insuring value and managing risk, analyzing value, accounting for and auditing value and authenticating identity.

For example, in regard to storing value, Tapscott mentions that individuals and institutions can use noncustodial wallets like MakerDAO to act as their own banks. In terms of funding and investing, Tapscott notes that aggregators such as Yearn.finance and Rariable could potentially disintermediate investment advisers and robo advisers. Given these different use cases, Tapscott points out that the lines between traditional finance and DeFi will eventually blur as adoption rates grow. Yet, this most likely will not be the case in the immediate future, as skepticism around DeFi still remains.

Chapter one also addresses how a new ecosystem of digital assets is emerging from the growth of DeFi. This is an important aspect of the book, as co-author Don Tapscott told Cointelegraph that business leaders are still very much confused about what crypto represents. In order to clarify this, Digital Asset Revolution describes nine different digital asset classes, focusing on cryptocurrencies, protocol tokens, governance tokens, nonfungible tokens (NFTs), exchange tokens, securities tokens, stablecoins, natural asset tokens and central bank digital currencies (CBDC).

Cover of Digital Asset Revolution. Source: Blockchain Research Institute

Cover of Digital Asset Revolution. Source: Blockchain Research Institute

While each of these assets is important, readers may be inclined to focus on the digital assets that are gaining momentum today. For example, the book features an entire chapter on stablecoins, demonstrating how these hold the potential to transform legacy payment infrastructures like SWIFT.

Recent: Crypto payments gain ground thanks to centralized payment processors

This does appear to be the case with some stablecoins, like Circle’s USD Coin (USDC). USDC was recently adopted by Banking Circle, a European bank focused on cross-border payments. But, some stablecoins are proving to be controversial. This was displayed following the collapse of the algorithmic stablecoin TerraUSD Classic (USTC) or Luna Classic (LUNC). As such, readers of Digital Asset Revolution should still conduct their own research when looking into different digital asset use cases, especially since the sector is constantly evolving.

CBDCs are another interesting topic mentioned throughout the book. Chapter four is dedicated entirely to CBDCs and features an edited transcript from a webinar hosted by the Blockchain Research Institute with J. Christopher Giancarlo, former chair of the United States Commodity Futures Trading Commission and co-founder of the Digital Dollar Project.

In this chapter, Giancarlo explains what a “digital dollar” represents, noting that the concept is very different from stablecoins, which are often tied to another asset of value. Giancarlo remarks that a digital dollar, also known as a CBDC, is a thing of value itself. While a number of concerns remain around CBDCs, Giancarlo also details why privacy is important in order for a digital dollar to be successful:

“At the Digital Dollar Project, we believe that developing the jurisprudence around the U.S. government’s approach to commercial activity using the sovereign currency, if it’s done right, could be a feature of a digital dollar that could be superior to other global reserve currencies.”

The chapter on NFTs may also pique readers’ interest, given the hype surrounding these digital assets. Alan Majer, founder of Good Robot — a company exploring artificial intelligence, robotics, blockchain and the metaverse — contributed to the chapter on NFTs, noting that “NFTs breathe life into digital notions of ownership.”

Given this, the author points out that enterprise leaders must start thinking creatively about tangible and intangible property rights. For example, Majer includes a chart here that displays NFT use cases, one being for intellectual property. The chart states that “NFTs could potentially confer licenses or titles not just of copyrighted works but also trademarks and patents as with 3D printing design files.” Another interesting use case displayed relates directly to DeFi, as NFTs have the potential to expand the range of assets to securitize, customize and derive additional value.

Digital assets aside, interoperability is discussed throughout chapter two of the book. According to Tapscott, interoperability is important for enterprise leaders to understand because this essentially allows different blockchain networks to communicate with one another.

“Smart contract platforms must interoperate seamlessly for DeFi and other new blockchain use cases to reach their full potential,” he writes. Tapscott then points out that smart contracting platforms like Cosmos and Polkadot were developed to address this issue. Anthony Williams, co-founder and president of the Digital Entrepreneurship and Economic Performance Center, elaborates on this throughout the second chapter, explaining how Cosmos and Polkadot allow blockchain networks to transfer value in a trustless and efficient manner.

Challenges of DeFi adoption

While Digital Asset Revolution provides an in-depth overview of how different digital assets associated with DeFi can impact traditional finance, Tapscott is also aware of the challenges associated with adoption. The author mentions these dilemmas at the end of chapter one, noting that DeFi is still in its early days and requires growth.

For instance, he explains that blockchain networks powering DeFi applications still require a lot of energy. While a number of DeFi applications are built on Ethereum, statistics show that Ethereum’s annualized footprint in electricity consumption grew during 2021, exceeding the consumption of countries like Colombia or Czechia.

Tapscott also notes that governments may regulate DeFi, which could hamper growth. Additionally, Don Tapscott mentioned that DeFi may become bigger than the billion-dollar fintech sector, but this would require senior executives and intermediaries like banks to understand the value of decentralized finance. “The challenge of course is that leaders of the old middle are typically last to embrace the new middle,” he said.

Recent: Blockchain-based solutions aim to address US disaster relief

All things considered, though, Tapscott ends his overview in chapter one, suggesting that organizations that fail to implement DeFi aspects will be engulfed by “this hot new industry.” Tapscott added that releasing a book on DeFi during a bear market demonstrates a valuable lesson. He said:

“We are in crypto winter, which is actually the best time to drill down on ideas and get educated. Bull markets are for earning while bear markets are for learning.”

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com.

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Spanish Crypto Exchange Bitbase Expands to Latam

Spanish Crypto Exchange Bitbase Expands to LatamBitbase, a Spanish cryptocurrency exchange and crypto ATM operator, has announced its expansion to Latam with the establishment of a store in Paraguay. The company, which had previously opened a store in Portugal, is now bringing its operations to several locations in Paraguay, having its sights on Venezuela as the next destination for its expansion […]

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Germany and the US share the top spot in the global crypto rankings: report

The U.S. climb the rankings to join Germany at the summit as progressive regulations and institutional adoption drive cryptocurrency use in both countries.

Germany and the United States shared the spoils in the latest quarterly global cryptocurrency rankings released by analytics firm Coincub.

The two countries now share the top rankings, with Germany making space for the rising U.S., having topped the first quarter rankings for 2022. Their dominance is due to progressive regulatory environments and major Bitcoin (BTC) investments by mainstream institutions.

Coincub’s rankings tally up points across nine overall categories, which focus on government, financial services, population, taxation, talent development and industry participants, trading, fraud and environmental potential. The current ranking system introduced new sub-categories like crypto education courses and initial coin offerings to create a more comprehensive gauge.

Germany’s move to allow its savings industry to utilize crypto investments and benefit from a zero-tax policy on capital gains of Bitcoin and Ether (ETH) held for more than a year was a key reason for its rise to the top of the rankings earlier this year.

The U.S. moved up from third to share the top rank, driven by president Joe Biden’s executive order on Ensuring Responsible Development of Digital Assets in March 2022. The directive aims to guarantee the responsible development of the space, provide consumer protection and financial stability, and combat illicit activity.

Coincub also cited global investment firm Fidelity’s decision to include Bitcoin exposure as part of select American pension funds in April 2022 as a pivotal role in the country's climb up the crypto rankings. Parallels were drawn with a move by Germany’s financial services firm Sparkasse to enable its 50 million users to buy Bitcoin directly from their bank accounts.

Switzerland sits third on the global crypto rankings, driven by the most recent development in the country which saw the canton of Lugano recognize Bitcoin as legal tender. This allowed citizens in the area to make everyday payments using BTC, including taxes and municipal accounts and services.

More than 1000 blockchain and virtual asset service providers (VASPs) call Switzerland home, and the country ranks highly for its number of Bitcoin nodes and ATMs. VASPs have to be licensed by the Swiss Financial Market Supervisory Authority (FINMA) and abide by anti-money laundering (AML) and Know Your Customer (KYC) policies.

Related: New crypto owners nearly doubled in 3 key regions in 2021: Report

Singapore is ranked fourth after Q2 in 2022, having fallen from its top spot at the end of 2021 due to recent regulatory tightening from the country’s financial regulator and the central bank.

Australia rounds off the top five of Coincub’s crypto rankings, with the firm highlighting a high number of initial coin offerings, exchanges and transaction volumes as well as a number of universities offering blockchain and crypto educational courses.

Coincub’s rankings combine quantitative data including trading or mining volumes with qualitative elements like government legislation and institutional attitude towards cryptocurrencies. Their reports look to provide a consolidated view of a country’s stance by amalgamating qualitative information and quantitative data.

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Banks Representing $2,000,000,000,000 in Assets Now Offering Bitcoin and Crypto Exposure to Clients: Bitwise

Banks Representing ,000,000,000,000 in Assets Now Offering Bitcoin and Crypto Exposure to Clients: Bitwise

One of the world’s largest crypto index fund managers is offering some unique insight into the current state of crypto adoption. In a new interview with Real Vision, Bitwise Asset Management CEO Hunter Horsley breaks down the types of investors and trends that the firm is witnessing as Bitcoin plows through a fresh bear market […]

The post Banks Representing $2,000,000,000,000 in Assets Now Offering Bitcoin and Crypto Exposure to Clients: Bitwise appeared first on The Daily Hodl.

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UN Report: Venezuela Ranks Third Among Countries With Most Crypto Adoption

UN Report: Venezuela Ranks Third Among Countries With Most Crypto AdoptionVenezuela, one of the first countries in Latam to be considered “crypto-friendly” by some standards, has ranked third in adoption rates, according to a report issued by the United Nations. The report, issued last month, states that the cryptocurrency ecosystem has grown by 2,300% between September 2019 and June 2021, and that the Covid-19 pandemic […]

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Russian Parliament Adopts Tax Rules for Digital Assets

Russian Parliament Adopts Tax Rules for Digital AssetsRussian lawmakers have approved amendments regulating the taxation of transactions with digital assets. The legislation concerns business operations with cryptocurrencies and tokens. In some cases, the burden for Russian companies will be reduced as compared to foreign entities. Russian Duma Passes Law to Tax Crypto Transactions A bill amending the Tax Code of the Russian […]

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