2021 has certainly hit the ground running, with the seemingly inexorable rise of BTC as one of the main attention grabbers. As we write, BTC has topped $40k, and the cryptocurrency market value has surpassed $1 trillion for the first time (if BTC was a publicly tradable company, it would be the 7th most valuable in the world today).
Institutional affirmation continues to pile on, with JP Morgan saying a price of $146k per Bitcoin is a long-term possibility - matching the total private sector investment in gold via ETFs, bars, and coins. The OCC also issued an interpretative letter outlining how banks may use independent node verification networks (INVNs) and stablecoins - making it a very real possibility that public blockchains will become the foundation of a next generation payments system in the US.
But there has also been trouble in paradise. Major crypto exchanges such as Coinbase are suspending trading in XRP (Ripple), on the back of an SEC complaint against its developer claiming that XRP is an unregistered security. The UK FCA’s ban on the sale of derivatives and exchange-traded notes (ETNs) to retail investors has also gone into effect. Looming in the background in the US is FINCEN and Treasury’s move to require full KYC and data collection on funds sent to self-hosted crypto wallets.
Novelty always entails a degree of uncertainty, and the start of 2021 is suggestive of a continued tug of war among public and private players. Let’s hope the regulators are as cute and cuddly as this fella!
TradeBlock acquired by CoinDesk to service institutional interest in Bitcoin - We are very pleased to share that FinTech Collective portfolio company TradeBlock has been acquired by CoinDesk. Currently, more than $20b of investment products use TradeBlock indexes, and billions of dollars in monthly trading volume is quoted against them. With this acquisition, CoinDesk (which is owned by Digital Currency Group) is positioned to be the leading source of crypto news, information and data for the financial industry. Read more
How Flutterwave saved 2020 for its community - Flutterwave is one of the brands that stepped up to offer a helping hand to businesses and individuals facing the harsh reality of 2020. The brand rolled out solutions to keep small businesses afloat, entered partnerships to provide more leverage for its community and powered several initiatives, all with the aim of ensuring businesses and individuals are well equipped to survive the tragedies of 2020. Read more
Latin America’s workforce is adapting to a new normal — and it’s here to stay - After surveying more than 375 companies with operations in Latin America about the future of work in the region, Courtney McColgan, founder and CEO of portfolio company Runa, writes about the future of work in Latin America - and how it is looking much more flexible and less dependent on human contact than before the pandemic. Several large tech companies are planning to allow remote work indefinitely, while others have long-term plays to maintain high levels of telecommuting. Read more
Franklin Templeton partners with Vestwell to deliver advisor managed account offering in modern record keeping construct - Through the partnership, Vestwell is building Franklin Templeton's proprietary methodology natively into it's recordkeeping infrastructure to provide advisors entirely digital, open-architecture, and cost effective managed account solution. Read more
The Crypto Tug Of War
Crypto market value tops $1t as Bitcoin hits $38,000 - Digital coins are jumping in a world awash with fiscal and monetary stimulus, even as some commentators fear an inevitable bust and others question the basic integrity of crypto markets. Proponents of Bitcoin argue it offers a hedge against dollar weakness and the risk of faster inflation, a bit like gold, while critics decry the intellectual soundness of comparing the two assets. Read more
OCC regulator implements groundbreaking cryptocurrency guidance for banks and the future of payments - Interpretive Letter 1174 explains how banks may use new technologies, including independent node verification networks (INVNs) and stablecoins, to perform bank-permissible functions, such as payment activities. Said simply, a bank may use stablecoins to facilitate payment transactions for customers. In doing so, a bank may issue stablecoins, exchange stablecoins for fiat currency, as well as validate, store, and record payments transactions by serving as a node on a blockchain (INVN). Read more
Square CEO pushes back on FinCEN's proposed crypto rules - Square says its current methods of leveraging blockchain tracing with the wallet addresses has been effective thus far, working to track unlawful activity and resulting in convictions and arrests. But FinCEN's new requirements would instead make it so there's a static requirement for companies to collect names and physical addresses from users who aren't enrolled with the institution allowing the transfers. That, according to Square, will result in “unnecessary friction and perverse incentives” that will force crypto customers to go to unregulated sources to make transactions. Read more
UK’s ban on crypto derivatives goes into effect today - The Financial Conduct Authority’s (FCA) ban on the sale of derivatives and exchange-traded notes (ETNs) passed in October went into effect Wednesday. Read more
JPMorgan says Bitcoin could surge to $146,000 in long term - Bitcoin’s market capitalization of around $575b would have to rise by 4.6 times -- for a theoretical price of $146,000 -- to match the total private sector investment in gold via exchange-traded funds or bars and coins, strategists wrote in a note. But that outlook depends on the volatility of Bitcoin converging with that of gold to encourage more institutional investment, a process that will take some time, they said. Read more
XRP delisted on more platforms following SEC's Ripple complaint - The SEC complaint accused Ripple of effectively running a $1.3b unregistered offering with its sales of XRP, which the regulator deemed a security and not a cryptocurrency. Exchanges and finance platforms including Crypto.com, Coinbase, and OKCoin said they were suspending trading of the XRP token. Wirex, a crypto-payments firm, and Ziglu, an app, followed suit. Read more
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