5 Tales from the Crypto: Partnerships, Tax Proposals, and the Rise of Perpetual Futures

By David Penn Posted on May 4, 2023
Categories: Coinbase, Cryptocurrency

News that Venmo is now accepting transfers of cryptocurrency is among the top stories in crypto of late. Here are some of the other stories making the crypto headlines.

Paxos Partners with Fierce Finance

Blockchain infrastructure platform Paxos has forged a partnership with financial services app, Fierce Finance. Paxos’ technology will be leveraged to power Fierce Finance’s new digital asset experience. This new offering will combine an FDIC-insured checking account, a no-fee debit card, and fractional stock, ETF, and cryptocurrency trading all in a single app.

“We are the qualified custodian managing the licensing, trading, and technical complexity so that our clients can focus on building a seamless user experience,” Paxos Chief Revenue Officer Michael Coscetta said. “By integrating with Paxos platform, Fierce ensures its users get the best prices with the proper consumer protections in place so that their assets always remain safe and accessible.”

Headquartered in New York, Paxos was founded in 2012. The company reached a major milestone at the beginning of last month when it surpassed ten million active end user digital wallets globally. Earlier this year, Paxos launched an engineering R&D Center in Israel focused on “security and cryptography excellence.” The center will serve as a hub for cryptography researchers and security specialists to develop secure solutions on top of the blockchain.

Paxos has raised more than $540 million in funding. The company’s investors include Oak HC/FT, Declaration Partners, and PayPal Ventures.

Tax on Cryptocurrency Mining Proposed

If the Biden administration gets its way, the electricity used in mining cryptocurrencies could get a lot more expensive. The White House is proposing a 30% tax to offset the impact of cryptocurrency mining on the environment.

A statement from the Council of Economic Advisors (CEA) argues that the “high-energy consumption” of cryptocurrency mining “has negative spillovers on the environment, quality of life, and electricity grids” wherever they are located. A report from the White House released last fall suggested that cryptocurrency mining devours more electricity than the country of Australia. In the U.S., cryptocurrency mining represents between 0.9% and 1.7% of all electricity use. The U.S. is home to approximately a third of the world’s cryptocurrency mining.

Some critics of the proposal believe less in the administration’s concerns over the climate and more in its antipathy toward the cryptocurrency industry in general. Other observers suggest that taxing greenhouse gas emissions from cryptocurrency mining makes more sense than simply taxing electricity use – which can come from clean sources.

If enacted, the tax could yield $3.5 billion over 10 years.

Coinbase Launches International Exchange

Hot on the heels of securing a license to operate in Bermuda, U.S.-based cryptocurrency exchange Coinbase has launched its Coinbase International Exchange. The new exchange will give institutional market participants in eligible jurisdictions outside the U.S. the ability to trade perpetual futures.

Perpetual futures are similar to futures contracts in other assets. But there are important differences. Perpetual futures do not have an expiration period – unlike traditional futures contracts. This enables traders to hold on to their positions for longer periods – or even indefinitely. Trading in perpetual futures is not allowed in the U.S. But the market for perpetual futures is sizable. Almost 75% of cryptocurrency trading worldwide last year was in perpetual futures.

Coinbase International exchange listed perpetual futures contracts for both Bitcoin (BTC) and Ethereum (ETH) this week. The contracts provide 5x leverage and all trades are settled in USDC.

New Digital Asset Venture Fund Coming from Fineqia

Digital asset and fintech investment company Fineqia will launch a new venture capital fund to invest in startups in the digital asset space. The new fund, Fineqia Glass Slipper Ventures (FGSV), will focus on investments in early and growth-stage technology companies. Among Fineqia’s current investments in the industry are digital asset manager Wave Digital Assets LLDC, and blockchain gaming platform company Forte Labs. The fund has identified blockchain infrastructure, decentralized finance, and the metaverse as areas of particular investment interest.

“We have a proven track record of investments that are generating extraordinary returns,” Fineqia CEO Bundeep Singh Rangar said. “An investment fund will give us more firepower to invest in the most promising firms among the scores we see monthly and take advantage of entry valuations not frothy as they were 18 months ago.”

Deloitte Leverages the Blockchain for KYB, KYC

Will the next big thing in decentralized finance come from the underlying blockchain technology or from products like cryptocurrencies? The latest entry in the “innovative blockchain use case” competition comes courtesy of Deloitte Consulting. The firm announced that it has partnered with BOTLabs GmBh to use its KILT protocol to support KYC and KYB processes.

“By offering re-usable digital credentials anchored on the KILT blockchain, Deloitte is transforming verification processes for individuals and entities,” Head of Deloitte Managed Services Micha Bitterli said. “Digital credentials that are convenient, cost-effective and secure have the potential to open new digital marketplaces, from e-commerce and DeFi to gaming.”

Re-usable credentials are stored on the customer’s wallet on their own device. Customers have full control over whom they share their credential with. They can also control which data points on the credential they grant access to. Deloitte digitally signs the credentials and is able to revoke credentials via the blockchain if a customer’s circumstances change.

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5 Tales from the Crypto: M&A, CBDCs, Banks, Bonds, and the Blockchain

By David Penn Posted on April 5, 2023
Categories: Coinbase, Cryptocurrency, List series

Canadian Crypto Combo: A trio of Canada-based cryptocurrency exchanges announced plans to merge into a single entity. Vancouver-based WonderFi, along with Toronto-based Coinsquare and Coin Smart Financial, are the firms involved. Together, they represent more than $600 million CAD in assets under custody and more than 1.65 million users. The merger will create what the companies are calling “Canada’s largest regulated crypto asset trading platform.”

The road to the three-way union had its complications. At one point, Coinsquare had been poised to acquire CoinSmart. At another point, a merger with WonderFi was allegedly on the table. CoinSmart had been both cold and hot to an acquisition by Coinsquare and reportedly was prepared to seek monetary damages in court when the acquisition deal did not work out. But those days are gone, and the three companies have decided they are better off serving cryptocurrency customers together than they are on their own.

UAE and ANZ Get Busy with CBDCs: There have been a few CBDC-oriented stories in fintech and crypto headlines in recent days. First up is news that the UAE has selected technology and legal partners ahead of the launch of its CBDC strategy. The country’s central bank has picked Clifford Chance to provide legal oversight. R3 and G42 Cloud will serve as technology and infrastructure providers. This will enable the central bank to begin Phase 1 of its CBDC project. This initial phase has three components: initiating real-value cross-border CBDC transactions for international trade settlement, proof-of-concept work for bilateral CBDC bridges with India, and proof-of-concept work for domestic CBDC issuance covering wholesale and retail use. Phase 1 is expected to take place over the next 12 to 15 months.

Meanwhile in Australia, ANZ bank reported that it had concluded one of its projects in the country’s CBDC trials. The project involved using the ANZ stablecoin to settle tokenized carbon credit transactions. ANZ Bank is involved in four of the 15 use cases and projects in the country’s CBDC pilot. With regard to this specific use case – applying tokenization to the carbon markets – ANZ Banking Services Lead Nigel Dobson expressed optimism. He highlighted the potential to improve both efficiency and transparency, as well as “preserve the unique characteristics of underlying projects to incentivize investment in climate solutions.”

Speaking of the relationship between crypto and the climate, SEB and Crédit Agricole announced this week that they are jointly launching so|bond, a sustainable and open platform for digital bonds built on blockchain technology. The platform enables issuers in capital markets to issue digital bonds onto a blockchain network in an effort to enhance efficiency and support real-time data synchronization between participants. Additionally, the network is using a validation protocol, Proof of Climate awaReness, that encourages participants to minimize their carbon footprint.

“Crédit Agricole CIB is proud to contribute to the emerging market of digital assets,” Crédit Agricole CIB Head of Innovation and Digital Transformation Romaric Rollet said. “The platform’s innovative approach, both to the blockchain infrastructure and to the securities market, is coupled with the strong commitment to green and sustainable finance that is at the center of our Societal Project.”

And while on the topic of the blockchain use cases, we report that Acre, a blockchain-based mortgage platform, has raised $8.1 million (£6.5 million). The fundraising is the second major capital infusion for the London-based company and brings the firm’s total equity funding to $14.3 million (£14.3 million). The round was led by McPike, an investor in Starling Bank, as well as Aviva and Founders Factory.

Acre helps traditional brokers compete with their digital counterparts by using blockchain technology to enhance the mortgage and insurance application process for advisers. The company’s technology brings together all aspects of the process into a single “record of the transaction.” This, according to Acre founder and CEO Justus Brown, helps brokers deliver “speedy, efficient advice that meets the individual requirements of each case in a dynamic market.”

Acre was founded in 2017. Brown reports that the company grew by 10x in 2022, and processes £10 billion in annual mortgage volume. In the wake of the latest investment, Acre will focus on forging new partnerships with lenders and insurers to enable brokers to recommend the most competitive financial products and services for their clients.

Coinbase Announces Derivatives Exchange Upgrade: Last up for this edition of 5 Tales from the Crypto is news from one of the industry’s banner companies, Coinbase. The firm announced this week that it had partnered with Transaction Network Services (TNS). The partnership is designed to enable faster, more efficient transactions on its derivatives exchange (CDE).

“Crypto has witnessed both volatile and liquid markets, and with institutional adoption remaining strong, we believe the time is right for the offering that TNS brings to the table,” Coinbase Derivatives Exchange CEO Boris Ilyevsky said. “Dedicated cloud infrastructure connectivity coupled with our derivatives exchange represents a mission-critical step toward supporting and maintaining a vibrant and reliable crypto derivatives market.”

Coinbase launched its Derivatives Exchange in June of last year with the goal of attracting more retail traders to its platform. This week’s news shows that the company recognizes the potential attraction its exchange could have for institutional investors, as well. Regulated by the Commodity Futures Trading Commission (CFTC), the CDE will leverage its new TNS-provided financial trading infrastructure to enable institutional investors to grow their storage capabilities and process large data sets with less delay.

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5 Tales from the Crypto: Will Stablecoins Keep Digital Asset Dreams Alive?

By David Penn Posted on March 22, 2023
Categories: Alumni News, Cryptocurrency, Daily news, Marqeta

As the going gets tough for crypto, will the underlying blockchain technology get going?

That was one of the top takeaways from the conversation on cryptocurrencies, digital assets, and the blockchain at FinovateEurope in London last week. We may be in a crypto winter – if not, as author Steven Van Belleghem quipped during his keynote address, a crypto “ice age.” But while the sun may be setting on the initial promise of cryptocurrencies, a dawn of new use cases and novel user interfaces may arrive sooner than we think.

To that end, it is interesting that much of this week’s crypto news revolves around stablecoins and ways that innovative banks and fintechs are using the technology to better serve customers.

Xapo Bank partners with Circle to leverage USDC as Swift alternative

One example of this trend comes in the news that Xapo Bank has teamed up with Circle to become the first licensed bank to integrate USDC payment rails as an alternative to SWIFT. The partnership will enable the Bitcoin custodian and private bank to offer its members the ability to make deposits and withdrawals via the USDC stablecoin without having to pay any fees to Xapo Bank. The institution is offering a 1:1 conversion rate from USDC to USD, further helping its customers avoid both the time and cost of SWIFT-based payments.

“Xapo Bank’s USDC payment rails mark a watershed moment in financial history, combining the speed and cost efficiency of the digital dollar, with the security guarantees of a licensed private bank,” Xapo Bank CEO Seamus Rocca said. “Enabling auto converted USDC deposits and withdrawals at Xapo Bank gives crypto members a safe haven for their savings.”

USD deposits are guaranteed up to $100,000 courtesy of Xapo Bank’s membership in the Gibraltar Deposit Guarantee Scheme (GDGS). The bank noted that all USDC deposits are automatically converted to USD, giving members a 4.1% annual interest rate return on deposits.

Stables issues USDC-to-fiat Mastercard powered by Marqeta

A new partnership between card issuing platform Marqeta and Stables, a stablecoin-based digital wallet formerly known as Tiiik, will enable Stables customers to convert stablecoins into fiat currency and spend wherever Mastercards are accepted, online or in-store. Stables will leverage Marqeta’s dynamic spend controls and Just-in-Time funding capabilities to give its customers broader ability to transact with their stored stablecoins.

“Stables is committed to expanding what’s possible with stablecoins, giving people more flexibility and choice in their payment habits,” Stables co-founder and CEO Erez Rachamim said. “With increasing demand for digital assets, we’re thrilled to work with Marqeta to develop a card that enables more seamless spending on everyday items.”

Headquartered in Sydney, Australia and founded in 2021, Stables rebranded from tiiik at the beginning of this year. In a statement at the company blog, co-founder Bernardo Bilotta wrote, “This update better encapsulates what we can plan to offer to our loyal community. It highlights our dedication to expanding our focus to solve stablecoin related payment problems and any new use cases/services built around stablecoins.”

Circle supports USDC; sets up European HQ in France

We mentioned Circle earlier with regard to Xapo Bank’s new payments offering. Circle also made crypto headlines for its decision to set up its European headquarters in what it referred to as the “crypto-friendly climate” of France. The company, founded in 2013 and maintaining a U.S.-based headquarters in Boston, Massachusetts, has applied to French regulators to become both a licensed Electronic Money Institution (EMI) and a fully registered Digital Assets Service Provider (DASP). Securing these approvals would make Circle the first company to receive full authorization under the DASP regulatory regime.

“France’s comprehensive efforts towards innovation-forward crypto regulation are commendable and closely align with Circle’s vision for the future of the digital payments sector,” Circle CEO and co-founder Jeremy Allaire said. “The DASP registration provides an initial path to support sensible digital asset innovation.”

Circle is the issuer of the USDC stablecoin. The company has come under pressure in the wake of the Silicon Valley Bank crisis as its relationship with another troubled bank, Signature Bank, limited its ability to process minting and redemption of USDC. A de-pegging of USDC, in which the stablecoin lost its one-to-one relationship to the U.S. dollar resulting in investors cashing out of the digital asset by more than $2.6 billion in 24 hours, only added to the company’s woes of late.

Centi launches Swiss franc stablecoin

Swiss fintech Centi, which was founded in 2020, has announced the launch of its Swiss Franc pegged stablecoin. The stablecoin is backed 1:1 by a Swiss bank, and will serve as the foundation for the company’s Global Payment Network. The new offering will enable merchants to get direct payment settlement in their bank accounts in the fiat currency of their choice. Merchants will not need to make any changes to their current accounting processes nor do they need to have extensive cryptocurrency knowledge. Centi noted that its stablecoin will help bring buying power to both buyers and sellers by eliminating the fees and costs charged by credit card companies.

Centi’s Global Payment Network leverages a low-cost transaction model based on a micropayments facilitation foundation. This enables the network to offer the advantages of both cash and electronic payments, as well as seamless integration with online, POS, and cashier payment systems. By leveraging blockchain technology, the network is able to offer fees that are as much as 90% less expensive compared to competing payment services.

“With Centi we have created a new payments universe,” Centi CEO and founder Bernhard Müller said. “Our technology uses the efficiency of the blockchain to lower payment processing fees without requiring users to understand anything about crypto. Our payments solution is a first use case implementation of this technology with many others expected to follow it.”

LiquidStack raises capital to help lower carbon footprint of bitcoin mining

One of the earliest antagonists to the bitcoin and cryptocurrency movement were environmental activists who decried the impact of bitcoin mining on the environment.

This week we learned that LiquidStack, a Massachusetts-based immersion cooling company, has secured Series B funding to build a manufacturing facility in the U.S. Moreover, the firm says that is has a solution, at least in part, to bitcoin mining’s carbon footprint problem. The company boasts the largest install base of liquid cooling for data centers around the world, and has been proven to meet the thermal challenges of cloud, high performance computing, and crypto-mining applications.

The Series B investment came from Trane Technologies, and the amount of the funding was not disclosed. LiquidStack said that it will use the capital to accelerate manufacturing, including the opening of a facility in the United States. LiquidStack CEO Joe Capes noted that the investment from Trane Technologies comes “at a time when demand for sustainable liquid cooling technology has never been greater.”

LiquidStack’s two-phase immersion cooling process reduces data center direct and indirect carbon footprint by more than 1,500 tons per megawatt compared to air cooling. The company’s technology can also be used to reduce the amount of water used to power and cool data centers by more than 300 billion liters per year.

Photo by RODNAE Productions

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5 Tales from the Crypto: Revolut, Paxos, and the Impact of the Cryptocurrency Crisis on Communities of Color

By David Penn Posted on February 8, 2023
Categories: Cryptocurrency, Daily news, Diversity in Fintech, Revolut

Bitcoin While Black: The impact of the cryptocurrency crisis on communities of color

One of the relatively underreported stories of 2022 – at least in the fintech press – was the impact of the cryptocurrency crisis on communities of color – especially African-American communities. At first glance, this might appear to be an odd take: why – and how – would a community that has historically been more un- and underbanked than the population at large end up being especially affected by a crisis in such a niche area of contemporary finance?

As Annie Lowrey wrote in a comprehensive article for The Atlantic back in November, it was years of “neglect” from the traditional financial system that made African Americans especially vulnerable to the appeal of cryptocurrencies as an alternative. Add to this the post-George Floyd “racial reckoning” and renewed emphasis on ethnic identity among many African Americans, and it is easy to see how many came to see investment in cryptocurrencies as a way of building the kind of generational wealth that has eluded black Americans for, well, generations.

And there was no lack of enthusiasts encouraging black Americans to pursue this path, either. For much of 2021 and into 2022, my inbox was filled with queries and requests for interviews from entrepreneurs eager to make the case that cryptocurrencies were the ticket to take black Americans to, if not wealth, then at least a greater sense of financial independence and empowerment. Books like Bitcoin & Black America and Bitcoin for Black People, as well as events like the Black Blockchain Summit all helped encourage African Americans to believe that they could do things with digital assets that too few had been able to accomplish via the world of traditional banking and fiat currencies.

I’ll leave it up to Lowrey to describe what went wrong – though the perennial problem of investors arriving late to a booming market helps explain a lot of it. Whether the cryptocurrency bust of 2022 sours African American investors on digital assets in an enduring way remains to be seen. But Bitcoin won’t be the last boom to come knocking on the doors of the African American community – after it has already visited every other neighborhood in town.

Revolut introduces crypto staking

Revolut announced this week that it is giving its customers in the U.K. and Europe the opportunity to earn cryptocurrency rewards if they allow financial institutions to “stake” their coins as part of a blockchain transaction verification process. Staking, as explained by Revolut’s Kirsty Daniel this week, involves participating in proof-of-stake blockchains which, like mining, help support the security of the overall network. Only certain coins are available for staking – Ethereum, Cardano, Polkadot, and Tezos, for example (not Bitcoin), and individuals who participate in staking can earn a significant percentage return for their (or the blockchain’s) efforts. Daniel noted that cryptocurrency stakers can earn up to 11.65% APY in crypto rewards by staking qualified crypto holdings.

Read more about staking in this extensive explainer provided by Coinbase. What is staking?

Among the risks to staking are the fact that there tends to be a “lockup” or “vesting” period during which the cryptocurrency cannot be transferred. This can be a challenge because holders are not able to trade staked coins during this period – even in the event of a major market disruption. Revolut’s decision was seen by analysts as an affirmation of the company’s commitment to supporting cryptocurrencies as the industry has been rocked by scandal in recent months.

Blockchain infrastructure platform Paxos opens R&D center in Israel

Blockchain and tokenization infrastructure platform Paxos announced last week that it was launching an engineering research and development center for security and cryptography in Israel. The center will house senior, staff, and principal engineers that have specialized skills in enterprise-grade security, applied cryptography, and blockchain technology. Paxos expects the R&D center to serve as an incubation hub for research into building security and cryptography solutions on top of the blockchain.

“We’re redefining financial markets and we believe our next generation of both software and hardware technical experts call Israel home,” Paxos Senior Director of Engineering Vitaliy Liptchinsky said. “As a safe, regulated platform that has continuously and steadily grown amidst all past digital asset market volatility, Paxos offers talented developers the opportunity to join a strong team uniquely positioned to serve some of the most sophisticated global enterprises.”

Paxos’ infrastructure reaches more than 400 million users. The largest issuer of regulated, transparent stablecoins, Paxos uses technology to tokenize, trade, settle, and maintain custody of digital assets. The company has developed blockchain solutions for institutions like fellow Finovate alums PayPal, Mastercard, and Nubank; and has raised more than $540 million in funding. Charles Cascarilla is co-founder and CEO.

Cointelegraph unveils its list of the Top 100 “crypto heroes and villains” for 2023

For the fourth year in a row, Cointelegraph has released its list of the Top 100 most influential people in the cryptocurrency and blockchain industry. The publication will reveal the list in its entirety over the next three weeks.

Starting with #100 through #91, some of the more interesting – and unexpected – entries so far include Russian tennis star Maria Sharapova at number 96 (“Sharapova has been involved in a series of investment ventures in recent years, including in the cryptocurrency and blockchain industries, and is currently an investor in MoonPay, a blockchain payments company …”) and “Artificial Intelligence” at #93.

Writing on request about AI’s presence on the list, ChatGPT opined: “… it is expected that artificial intelligence will have a signifiant impact on the cryptocurrency and blockchain industry … one of the main ways that AI will impact the cryptocurrency and blockchain industry is through the use of smart contracts.”

The rise of AI-focused cryptocurrencies

Speaking of the relationship between cryptocurrencies and AI, CoinDesk published an interesting article this week on the way AI-focused cryptocurrencies have outperformed Bitcoin. “Vastly” in the words of author Shaurya Malwa.

What tokens are we talking about? In recent weeks, tokens for platform like Alethea’s artificial liquid intelligence (ALI) and Image Generation AI (IMGNAI) have turned in the kind of performances that have cryptocurrency investors and traders buzzing. Malwa noted that while Bitcoin and ether have returned a more-than-respectable 30% each over the past month or so, these AI-focused upstarts are producing returns that dwarf those – and in less time.

Malwa seems to suggest that much of what is driving these new assets is the same combination of novelty and opportunity that initially drove Bitcoin and ethereum. Malwa quotes Ravindra Kumar, founder of crypto wallet Frontier, who credited “early interest, potential, and hype” for the outperformance of AI-focused cryptocurrencies, but still observed that there are some “innovative and compelling use cases” emerging.

Photo by Anna Shvets

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5 Tales From the Crypto: Fidelity’s New Offering, Ledger’s Card, Kriptomat’s Exchange, and More!

By David Penn Posted on November 30, 2022
Categories: Alumni News, Cryptocurrency, Daily news, Ledger

Fidelity Brings the Bitcoin

If you’ve been crying over your crypto wallet due to all the negative headlines about digital currencies, then now is the time to dry your eyes and thank Fidelity for giving crypto enthusiasts the greatest sign of approval since BTC and ETH peaked last year.

Fidelity announced this week that it has enabled cryptocurrency trading in retail accounts. Fidelity Crypto, as the offering is called, enables retail accountholders to buy and sell both Bitcoin and ethereum with as little as $1. The new functionality will be available in 35 U.S. states initially – California, Florida, New Jersey, New York, and Texas are among them. Fidelity plans to bring the technology to other states; the company is offering an early-access sign-up to let interested customers know when Fidelity Crypto is approved in their state. Similarly, the company is examining other cryptocurrencies with the potential to “expand trading opportunities over time.”

The fallout from FTX and the collapse of even the most widely traded cryptocurrencies have been only a few of the headwinds that might have convinced Fidelity to wait longer to launch its crypto trading capability. As recently as this month, a group of senators including Elizabeth Warren asked the company to reconsider its plan to enable its customers to invest up to 20% of their retirement savings in Bitcoin. Clearly those eager for signs of spring amid this crypto winter need look no further than Fidelity.

Ledger’s Crypto Card

Meanwhile, on the other side of the Atlantic, French fintech Ledger has launched its crypto debit card in the U.K. and Europe. The new Crypto Life card enables users to transfer crypto between Ledger’s hardware wallets and card accounts via Ledger’s Ledger Live app. Crypto Life offers 1% crypto rewards in both Bitcoin and USDT, as well as offering 2$ in BXX, the native token of Baanx. Baanx is the U.K.-based fintech that developed the technology for Crypto Life.

Ledger users can use Crypto Life at approximately 90 million merchants and online stores across the U.K. and Europe that accept Mastercard. Ledger VP of International Development JF Rochet called the new offering an “easy and secure solution to pay with crypto that also allows you to self-custody until you want to top up.”

Headquartered in Paris, France, and founded in 2015, Ledger demoed its technology one year later at FinovateEurope 2016. The company specializes in trusted hardware solutions for Bitcoin and blockchain applications, which it distributes both directly via online sales as well as through an international network of retail merchants.

Kriptomat Adds Real Time A2A Payments via Volt Partnership

Sticking with the crypto-across-the-pond theme, we read news that Kriptomat, a cryptocurrency platform based in Estonia, has teamed up with U.K.-based payment gateway provider Volt. The goal of the partnership is to give customers the ability to make account-to-account payments, in real-time, to buy, sell, and trade cryptocurrencies.

More than 500,000 cryptocurrency traders and investors on the Kriptomat platform are expected to benefit from the partnership. Previously, Kriptomat customers were required to use methods such as bank transfers, credit cards, and even e-wallets to make their transactions. Integrating with Volt payments will enable customers to be seamlessly directed to their banking app when paying with Volt, where they can authorize payments using their preferred authentication method. The result is a faster, more streamlined, and less costly way for Kriptomat customers to fund their crypto purchases.

“Today’s new crypto users are more like car owners, who expect to turn the key and have it work immediately – without learning the ins and outs of the processes that happen in the background,” Kriptomat CEO Srdjan Mahmutovic said. “Volt’s technology has helped us provide that level of usability to our customer base.”

BlockFi’s “We’re Not FTX”-Based Bankruptcy

The news that many feared was coming to BlockFi arrived this week as the cryptocurrency company, which carved out a niche in the space as a lender for small cryptocurrency investors, filed for bankruptcy. The company’s Chapter 11 filing follows the bankruptcy filings of other cryptocurrency lenders such as Celsius Network and Voyager Digital, both of which tapped out in July. But the far more looming shadow over BlockFi’s misfortunes is clearly the collapse of cryptocurrency exchange FTX, with which BlockFi was financially entangled.

That said, both BlockFi’s bankruptcy declaration and the opening statement from BlockFi attorney Joshua Sussberg in court yesterday were attempts to do as much untangling as possible. Sussberg referred to BlockFi, which FTX both financially supported and – at one point – moved to acquire, as the “antithesis of FTX.” He credited BlockFi for its “focus on creating an opportunity for people that otherwise don’t have access to the financial system.”

Dimon’s Crypto Curious Bank: JP Morgan Gets Crypto Wallet Trademark

If Fidelity can be credited for the “giant leap” in crypto this week, should we salute JP Morgan’s “small step” of securing a crypto wallet trademark?

There’s a certain sport in highlighting any pro-crypto moves by JP Morgan – given the the outspoken crypto-skepticism of the bank’s legendary CEO Jamie Dimon. As a refresher, Dimon has referred to cryptocurrencies as “decentralized Ponzi schemes,” and said that the “notion that (crypto) is good for anybody is unbelievable.”

But that’s not stopping the bank he runs from expressing some crypto curiosity including, this week, news that the U.S. Patent and Trademark Office has approved of the J.P. Morgan Wallet. According to the registered trademark, the J.P. Morgan Wallet supports “virtual currency transfer + exchange, crypto payment processing, virtual checking accounts, and financial services.”

JP Morgan has been open about its interest in launching a digital wallet since October. Despite the disinterest of the bank’s CEO in most things crypto, JP Morgan has worked with Fidelity and New York Bank Mellon to offer various cryptocurrency related services and, earlier this month, completed the first cross-border transaction using decentralized finance (DeFi) on a public blockchain.

Photo by Anna-Louise

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5 Tales from the Crypto: MoneyGram Partners with Coinme, Paxos Earns License in Singapore

By David Penn Posted on November 2, 2022
Categories: Coinme, Cryptocurrency, MoneyGram

MoneyGram Lets U.S. Customers Go Crypto

MoneyGram is enabling its customers in (nearly all of) the U.S. to buy, sell, and hold cryptocurrencies via their MoneyGram apps. Three cryptocurrencies – Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC) – are the digital assets available courtesy of the new service. MoneyGram expected to offer other cryptocurrencies in 2023.

“Cryptocurrencies are additive to everything we’re doing at MoneyGram,” Chairman and CEO Alex Holmes said. “From dollars to euros to yen and so on, MoneyGram enables instant access to over 120 currencies around the globe, and we see crypto and digital currencies as another input and output option.”

The new service is made possible thanks to MoneyGram’s partnership with licensed crypto exchange, crypto-as-a-service provider, and new Finovate alum Coinme. The company’s alliance with Coinme extends back to 2021, when the two firms teamed up to expand access to cryptocurrencies by establishing thousands of U.S. locations where consumers can use cash to buy and sell bitcoin.

Coinme demoed its crypto-as-a-service solution at FinovateSpring earlier this year. MoneyGram made a “strategic investment” in the Seattle, Washington-based company in January. The amount of the investment was not disclosed.

Revolut Enables Crypto Spending for Debit Card Holders

MoneyGram isn’t the only company busy making it easier for its customers to participate in the cryptocurrency market. Revolut debit card customers in both the U.K. and Switzerland will now be able to alternate between crypto and fiat purchases both online and offline.

“This year we have not only increased the number of cryptocurrencies available in the Revolut app to close to 100 tokens and launched Crypto Learn & Earn education courses enjoyed by millions of our customers,” Revolut crypto general manager Emil Urmanshin said. “Now we are making crypto even more mainstream by empowering people to use crypto-enabled cards to spend their tokens for everyday purchases.”

To enable the capability in the Revolut app, customers open the Cards section and select one of their existing physical or virtual cards. Customers then enter the card’s settings function and changes the setting from fiat to one of the nearly 100 supported cryptocurrencies. Once linked, a crypto-enabled card will process the transaction using the preferred digital asset. Revolut’s crypto-enabled cards will offer a 1% cashback on all purchases for a promotional period. Customers are also able to order a dedicated virtual or physical card specifically for crypto payments.

About That Blockchain … Lex Fridman Interviews Balaji Srinivasan

If you’re looking for something to listen to while on your drive from Los Angeles to San Francisco (and halfway back), then this 7+ hour discussion between Lex Fridman and former Coinbase CTO – and current angel investor – Balaji Srinivasan may be just what you’re looking for!

Failing that, skip ahead to 6:40:42 or so in this extended interview to listen to Srinivasan talk about the present and future of cryptocurrencies, AI, AR, and VR.

Blockchain Platform Paxos Gets Green Light in Singapore

Blockchain infrastructure platform Paxos secured a license from the Monetary Authority of Singapore this week. The license will enable the company to offer digital payment token services to companies based in Singapore. The license – made possible courtesy of the Payment Services Act of 2019 – also makes Paxos the first U.S.-based blockchain infrastructure platform to earn regulatory approval in both New York and Singapore.

Paxos Asia CEO and co-founder Rich Teo underscored the company’s commitment to “innovating within regulatory frameworks”. Teo said, “We believe blockchain and digital assets will revolutionize finance for everyone around the world, but development of this technology must have clear oversight and consumer protections.”

Paxos offers tokenization, custody, trading, and settlement of digital assets. The company builds enterprise blockchain solutions for financial institutions such as PayPal, Nubank, and Bank of America. Paxos launched the first regulated cryptocurrency exchange, itBit, in 2012. The company issued the world’s first regulated stablecoin, PAX (now known as USDP) in 2018.

Eswatini’s Central Bank to Explore CBDCs

Did you know that the country formerly called Swaziland is now “Eswatini”? If not, then consider this news that the Central Bank of Eswatini (CBE) has teamed up with Giesecke+Devrient (G+D) to research development of a Central Bank Digital Currency (CBDC), a twofer.

Located in southern Africa and bordered by Mozambique and South Africa, the Kingdom of Eswatini is one of a number of developing economies that has expressed interest in CBDCs in recent years. The country’s central bank inked an agreement with G+D this week that calls for research into the practicality of developing and implementing a CBDC in the country. The CBE will also explore the possibility of issuing digital Lilangeni to complement the country’s banknotes and coins, the dominant forms of payment among the nation of 1.2 million people.

The relationship between the bank and Munich, Germany-based G+D extends back to a time before cryptocurrencies were a significant part of the fintech conversation. G+D Currency Technology CEO Dr. Wolfram Seidemann highlighted the “long history of trusted collaboration” – of more than 40 years – between the Central Bank of Eswatini and Giesecke+Devrient. “The Kingdom of Eswatini is among the first African countries to take the step towards a retail CBDC and we are honored to support this journey towards digital public currency with our expertise,” Seidemann said.

Photo by Garrett Morrow

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5 Tales from the Crypto: NYDIG’s New Leadership, Juno Raises $18 Million, Circle Acquires Elements, and More!

By David Penn Posted on October 5, 2022
Categories: bitcoin, Cryptocurrency, List series

Crypto friendly banking platform Juno has raised $18 million. The Series A round was led by ParaFi Capital ‘s Growth Fund. The fundraising included a sizable number of investors including Greycroft, Antler Global, Hashed, Jump Crypto, Mithril, 6th Man Ventures, Abstract Ventures,, and Uncorrelated Fund.

As part of the investment, Juno announced the launch of a new loyalty token, Juno coin (JCOIN). The program acts similarly to credit card rewards points schemes, and tokens will only be distributed to verified account holders. Juno users can earn JCOIN by spending crypto with their Juno debit card or by taking their paychecks in cryptocurrencies such as bitcoin, Ethereum or USDC. The company says that more than 75,000 customers in the U.S. take and invest at least a portion of their salary in cryptocurrency every month on its platform.

Juno offers cryptocurrency checking accounts that enable individuals to earn, invest, and spend in crypto. The checking accounts are free to open, and both crypto deposits and withdrawals are free, as well. The accounts are FDIC insured, courtesy of a sponsorship by Evolve Bank & Trust. Note that the USD holdings in the account, not the crypto holdings, are covered.

The dust has finally settled from Circle’s big announcement last week that it has accelerated its crypto payments roadmap courtesy of its acquisition of Elements.

A merchant and developer-first payments orchestration platform, Elements was credited for its ability to “take the complexity out of crypto payments,” by Circle Chief Product Officer Nikhil Chandhok. The Elements acquisition will help make it easier for merchants to integrate their current PSP relationships with Circle’s crypto payments solutions. “Providing well-designed payment products that can facilitate seamless, efficient, frictionless and delightful customer experiences are key to empowering merchants to take advantage of these next-gen payment solutions,” Chandhok said.

An issuer of both USD Coin (USDC) and Euro Coin (EUROC), Circle enables companies around the world to leverage digital currencies and public blockchains to facilitate payments, commerce, and financial technology. Founded in 2013, the Boston, Massachusetts-based company recently announced partnerships with GIANT Protocol to facilitate tokenized mobile data and with non-profit Mara Foundation to help developers in Africa build DApps and blockchain solutions.

There are big changes at the top for New York Digital Investment Group – more popularly known as NYDIG. The cryptocurrency investment company began the week with news that both CEO Robert Gutmann and President Yan Zhao were stepping down from their positions. Replacing them will be Tejas Shah, who will become NYDIG’s new CEO, and Nate Conrad, who was promoted to President.

Shah was formerly NYDIG’s Global Head of Institutional Finance. Conrad was previously NYDIG’s Global Head of Payments. Both Shah and Conrad joined NYDIG in 2020. In their new roles, both executives will be tasked with boosting investment in the company’s mining franchise and accelerating bitcoin adoption via solutions like the Lightning Network, which facilitates payment by bitcoin.

Speaking of investment, NYDIG’s C-suite personnel news came at the same time that reporters uncovered an SEC filing revealed that NYDIG had raised $720 million for its institutional digital asset fund. According to the filing, 59 investors participated with an average investment of $12 million.

Founded in 2017, NYDIG is among the industry’s biggest custodians of cryptocurrencies. The company holds more than $1 billion in digital assets for its customers.

As more card issuers authorize cardholders to transact in cryptocurrencies, it becomes increasingly important to make sure that card issuers are up-to-date and compliant with the regulations that govern digital assets. This week, we learned that Mastercard had launched a new solution, Crypto Secure, designed to enable issuers to determine the risk profile of crypto exchanges and other crypto providers, before specifying which purchases of cryptocurrency should be approved.

The new offering will enable issuers to accurately identify the crypto exchanges from which their cardholders are buying crypto, measure transaction approvals and declines, review their exposure to crypto risk at a portfolio level, and compare themselves to a peer group of financial institutions.

“Crypto Secure will provide card issuers with a platform that allows them access to insights which will improve the safety of crypto purchases,” President of Mastercard Cyber and Intelligence Ajay Bhalla said.

Crypto Secure is powered by CipherTrace, a cryptocurrency intelligence company Mastercard acquired just over a year ago. CipherTrace’s data analytics and algorithms provide insight into more than 900 cryptocurrencies, helping companies bring better security to their crypto-related operations. The Menlo Park, California-based company was founded in 2015.

We mentioned the Lightning Network earlier in our look at the goals of the new leadership team at NYDIG. Just recently, a company based in Vancouver, Canada, and Ho Chi Minh City, Vietnam, announced that it has secured $2.25 million in seed funding for its technology that brings the benefits of bitcoin’s Lightning Network to the payments rails of southeast Asia.

Hivemind Ventures led the round for Neutronpay, which disclosed the investment last week despite raising the money in June. Participating in the investment were Republic Cavalry, Ride Wave, Studio, Iterative, Fulgar Ventures, along with individual investors. Among these individual investors is Lisa Shields, founder and CEO of Finovate alum FISPAN.

The company has already put the new capital to work, adding talent with an eye toward boosting its capacity to develop enterprise APIs, soon, a consumer mobile app. ‘”Laying the infrastructure for Lightning across South East Asia would make it very easy for locals to better transact with each other and for the rest of the world to transact in the region – whether while on vacation or for doing business,” Neutronpay founder and CEO Albert Buu said.

Photo by RODNAE Productions

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Miami-Based Milo Unveils its Crypto Mortgage Solution

By David Penn Posted on January 25, 2022
Categories: Cryptocurrency, Daily news

Courtesy of a new offering from Miami, Florida-based digital banking and lending platform Milo, investors can leverage the world’s newest source of value to finance a purchase one of the world’s oldest. The company recently announced that it is offering the world’s first “crypto mortgage” – enabling digital asset holders to use their crypto to help them buy real estate in the U.S.

The program is available to both U.S. and international investors who are seeking to use their Bitcoin holdings as collateral for Milo’s 30-year mortgage loan. Milo allows customers to continue to own their bitcoin, and diversify into real estate ownership, while taking advantage of potential price appreciation of both assets. Customers can finance 100% of their real estate purchase, and no dollar downpayment is required.

“This is an exciting time for the crypto and mortgage industries,” Milo CEO and founder Josip Rupena said. “With our new crypto mortgage, we can expand our offerings to consumers that were previously denied by other banking firms just for having crypto. We have an opportunity to make sure that doesn’t happen anymore and their bitcoin wealth can now help them buy a property.”

In development since 2021, Milo’s crypto mortgage program avoids the problem that cryptocurrency holders often face when trying to use their digital assets to help fund real estate purchases. “The existing way for crypto consumers to access home credit has left them with unintended tax liabilities of selling for a down payment or worse the opportunity cost of seeing their crypto increase in value,” Rupena explained. “There are countless stories of people buying property with bitcoin proceeds only to see it increase in value and be worth millions more.”

Milo’s crypto mortgage innovation says as much about the company’s ability to embrace new asset classes as it does the firm’s commitment to helping individuals with significant assets overcome the hurdles that prevent them from deploying those assets as they choose. The company was founded in part from a need identified by Rupena when he was a financial advisor at Morgan Stanley. A private wealth client with a seven-figure net worth was unable to secure a home loan because of what Rupena called “traditional banks’ domestically focused processes.” He noted that less than a third of prospective homebuyers outside of the U.S. are successful in getting home loans and those that are approved often face high interest rates or, at minimum, a subpar customer experience. In 2020, Milo became the first company to conduct a completely remote digital closing for an international customer.

Founded in 2018, Milo has raised $6 million in funding from investors including 10X Capital, MetaProp, and QED Investors. The company has clients in 63 countries around the world, and has originated $300 million in loans from foreign nationals. The company’s crypto mortgage program has already begun granting loans via its early-access stage and plans to open the service to additional customers on its waiting list in the months to come.

Photo by RODNAE Productions from Pexels

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Crypto Compliance Company TRM Labs Raises $60 Million in Series B Investment

By David Penn Posted on December 7, 2021
Categories: Cryptocurrency, Daily news, Funding

A $60 million investment will enable digital asset compliance and risk management platform TRM Labs to help organizations and institutions better identify cryptocurrency-based financial crime.

“Crypto is moving faster than any sector in our lifetimes,” TRM Labs CEO Estaban Castaño said. “Organizations need a blockchain intelligence partner that can stay ahead of the evolving risk landscape – from ransomware attacks to DeFi exploits. This round enables TRM to continue to offer the most reliable data and most innovative technology solutions in the market to its customers.”

The Series B funding was led by Tiger Global and featured participation from a number of major firms including Visa, Amex Ventures, Citi Ventures, PayPal Ventures, Block (formerly Square), as well as DRW Venture Capital, Jump Capital, and Marshall Wace – among others. Combined with the capital TRM Labs has raised to date, the San Francisco, California-based firm now has total equity funding of nearly $80 million.

TRM offers a cohesive platform to empower businesses to better manage financial crime risk. The company’s technology enables firms to assess the risk profile of Virtual Asset Service Providers – what TRM calls “Know-Your-VASP” – and other cryptocurrency businesses. TRM’s platform provides forensic capabilities that allow organizations to investigate the source and destination of cryptocurrency transactions, and transaction monitoring that helps companies screen cryptocurrency wallets and transactions for AML and sanctions compliance.

TRM supports more than 900,000 digital assets across 23 blockchains, and features cross-chain analytics to enable seamless movement between Bitcoin, Ethereum, other blockchains. This allows organizations to build comprehensive visualizations that enable a more accurate and complete tracking of the flow of funds. Users of TRM’s platform can select from more than 80 different risk categories to establish their own risk scoring criteria.

Founded in 2017 and emerging from the Y Combinator two years later, TRM has since grown revenues by 6x year-over-year and expanded its workforce from four to 60. Cryptocurrency businesses such as Circle and MoonPay currently use TRM’s technology to identify suspicious activity in digital asset transactions and to satisfy AML requirements. Government agencies are using the company’s solutions in order to learn more about advanced cryptocurrency-related financial crime, ranging from hacks to terrorist financing. Last month, cryptocurrency payments company Dash announced an integration with TRM Labs to bolster its ability to monitor transactions on its platform for financial crime.

“By integrating with Dash, we enable organizations, including virtual asset service providers who want to list Dash, the ability to detect cryptocurrency fraud and financial crime and strengthen their compliance with AML/CFT regulations,” Castaño said when the integration was announced in November.

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Visa to Enable Cryptocurrency Trading

By David Penn Posted on February 2, 2021
Categories: Cryptocurrency, VISA

For those still waiting for greater institutional endorsement of digital assets, the news that Visa will enable cryptocurrency trading on its network should come as a welcome sign.

Visa CEO and chairman Alfred Kelly announced the plan in an earnings call last week. Kelly noted that not only would Visa allow buying and selling of cryptocurrencies on its platform, but also that the company was “uniquely positioned” to do so, and to do so safely and securely.

Visa’s plan is to divide digital assets into two categories: cryptocurrencies and digital currencies. Cryptocurrencies, per Kelly, represent the “digital gold” of the digital asset market insofar as they are not typically used as a form of payment. For these assets, Visa plans to work with wallets and exchanges to allow users to buy these currencies using their Visa credentials. Visa also plans to enable users to cash out of their cryptocurrencies onto a Visa credential to make fiat-money purchases wherever Visa is accepted globally.

With regard to digital currencies, Visa defines these assets as “fiat-backed digital currencies including stablecoins and central bank digital currencies.” These assets, per Kelly, could find use cases in global commerce “much like any other fiat currency” and could run on public blockchains as additional networks much like RTP and ACH rails.

Kelly noted that Visa already has a strong relationship with 35 digital currency platforms and wallets, including BlockFi and BitPanda. These partnerships, Visa claimed, represent potentially more than 50 million Visa credentials – a significant size advantage over the company’s rivals. “And it goes without saying,” Kelly added, “to the extent a specific digital currency becomes a recognized means of exchange, there’s no reason why we cannot add it to our network, which already supports over 160 currencies today.”

Visa’s positive news on cryptocurrencies comes on the heels of the company’s announcement that its planned $5.3 billion acquisition of fintech infrastructure provider and fellow Finovate alum Plaid is now off the table. Visa is an alum of both our Finovate conferences, making its Finovate debut at FinovateSpring ten years ago, and participating in our developers conference, FinDEVr Silicon Valley, four years later in 2014.

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Launching: 2,000 Bitcoin/Crypto-currency Startups

By Jim Bruene Posted on April 7, 2014
Categories: Alt Payments, Cryptocurrency

Jacob K. Javits Center (Wikipedia)

Bitcoin first passed the $200 mark a year ago (vs. $450 today). I didn’t know much about it then, figuring it was a fad best left to the speculators to debate. But I was wrong. Bitcoin, or something similar, appears to be here to stay.

Case in point: There is a 2,000-person Bitcoin event in NYC today and tomorrow, Inside Bitcoins, at the Javits Center no less. But don’t worry if you miss it, the event is scheduled to travel the globe with stops in Hong Kong, Melbourne, Tel Aviv, London, Singapore, Berlin, before landing back in NYC a year from now.

In the keynote, Circle CEO Jeremy Allaire estimated 2,000 startups globally are working on crypto-currency products and services. That alone makes it more than a fad (bubble perhaps, but not a fad). There is no putting the crypto-currency genie back in the bottle. The technology is too compelling. The demand for alternative stored value is so huge that I don’t see it being regulated away, at least outside the west.

Relevance for Banks: U.S. financial institutions will steer clear until regulatory uncertainties are cleared up. While regulators ARE paying attention (even the IRS recently weighed in), don’t expect banks or credit unions here to be accepting Bitcoins for deposit anytime soon.

However, I do expect U.S. prepaid-card based “near banks” (Moven, Onbudget) to work with Coinbase and others to make it easy to move Bitcoin value onto their cards (see note 1). For inspiration, check out the Bitcoin debit card launched today by Hong Kong-based Cryptex Card (press release).

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Notes:
1. Both Coinbase and Onbudget will demo separately at FinovateSpring, three weeks from now.
2. For more, see our Feb 2014 OBR report on alt-payments, Money 3.0 (subscription).

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