US House Committee to Discuss Stablecoin Regulation

The US House of Representatives Committee on Financial Services will hold a hearing on stablecoin regulation on April 19th, according to an announcement made by the committee. The hearing comes in response to a new draft bill introduced in the House to provide a regulatory framework for stablecoins. The bill aims to protect consumers and maintain the integrity of the US financial system while promoting innovation in the use of stablecoins.

The hearing will include testimonies from experts in the field of cryptocurrency and stablecoins, including Austin Campbell, a managing partner at Zero Knowledge Consulting and adjunct professor at Columbia Business School. In a transcript of his planned testimony, Campbell notes that stablecoins are “mundane” and “look a lot like pretty basic cash instruments”. He believes that stablecoins will increase the reach of the US dollar and enhance financial inclusion, as they provide access to the global financial system to those who are currently excluded from traditional banking.

Campbell’s testimony suggests that the regulatory framework for stablecoins should not be overly burdensome, as stablecoins are similar to traditional cash instruments. He notes that regulations should focus on ensuring that stablecoins are fully backed by reserves and are not used for illicit purposes, such as money laundering or terrorist financing.

The hearing will provide an opportunity for members of the committee to learn more about the benefits and risks associated with stablecoins, as well as to gather feedback on the draft bill. The regulatory framework proposed in the draft bill is expected to be a starting point for discussion and may be amended following the hearing.

Stablecoins are digital currencies that are designed to maintain a stable value relative to a fiat currency, such as the US dollar. They are used in a variety of applications, including remittances, peer-to-peer payments, and international trade. Stablecoins have gained popularity in recent years as a way to access the benefits of cryptocurrency, such as fast and low-cost transactions, without the volatility associated with other cryptocurrencies like Bitcoin.

However, stablecoins have also raised concerns among regulators and policymakers, particularly regarding their potential impact on financial stability and the risks associated with their use. The regulatory framework proposed in the draft bill aims to address these concerns by providing a clear and consistent framework for the regulation of stablecoins.

In conclusion, the upcoming hearing on stablecoin regulation in the US House of Representatives will provide an opportunity for experts to provide testimony on the benefits and risks associated with stablecoins. It will also allow members of the committee to gather feedback on the draft bill proposed to regulate stablecoins. As stablecoins continue to gain popularity, it is important for regulators to establish a clear and consistent framework for their use to ensure that they are used safely and effectively.


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Unchained Capital Raises $60M in Bitcoin Funding

Despite the bearish trend in the crypto market, Unchained Capital, a financial services provider for Bitcoin holders, has raised $60 million in a Series B funding round led by Valor Equity Partners. The funding round also saw participation from NYDIG, Trammell Venture Partners, Ecliptic Capital, and Highland Capital Partners.

Unchained Capital’s approach to Bitcoin custody is different from traditional centralized exchanges or single key solutions. The company uses multi-signature technology to enable clients to share control of their Bitcoin holdings between private keys they hold themselves and private keys held by Unchained or other financial services companies. This approach eliminates single points of failure and counterparty risk by sharing the control of funds between multiple parties. The multi-signature process can be compared to a safe deposit box with two keys, one held by the customer and the other by the bank.

During the 2022 crypto market crashes, centralized solutions such as BlockFi, Celsius, and Three Arrows Capital collapsed, resulting in the loss of users’ funds. This has highlighted the importance of mitigating counterparty risk and eliminating single points of failure, which can be achieved through the use of multi-signature solutions. Unchained Capital has secured over $2 billion in Bitcoin across thousands of keys globally, highlighting the growing demand for more secure custody solutions in the crypto market.

Joe Kelly, CEO of Unchained Capital, noted that multi-signature technology is one of the most important technologies in the Bitcoin ecosystem that can be taken mainstream. He explained that it helps protect individuals from loss and theft, which are two of the biggest issues in the industry. The funding from the Series B round will be used to expand Unchained’s reach and suite of services, allowing the company to enable new entrants to Bitcoin to leapfrog centralized custodians into their safer collaborative custody model.

Unchained Capital’s success in raising $60 million in Bitcoin funding highlights the growing interest in more secure and collaborative custody solutions in the crypto market. Casa, a competitor crypto security company, recently added Ethereum to its suite of products. As greater numbers of Bitcoin and crypto enthusiasts learn to take custody of their assets, multi-signature technology will undoubtedly play a greater role in ensuring their security. Ultimately, Unchained Capital hopes to further the mantra “not your keys, not your coins,” highlighting the importance of taking control of one’s assets in the crypto market.


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Fujitsu Files Trademark for Crypto Brokerage Services

Japanese multinational tech company Fujitsu has filed a trademark application with the United States Patent and Trademark Office (USPTO) for a new branding that intends to offer a range of financial services, including cryptocurrency brokerage services. According to the official document filed on March 16, the proposed mark consists of the stylized word “FUJITSU” with a sideways s-shaped swirl over the “J” and “I.” The new branding would support various financial facilities, such as accepting deposits, financing loans, financial management, and the exchange of crypto assets.

Fujitsu has been increasingly interested in the Web3 technology space, with the launch of its Web3 acceleration platform in February 2023. The platform aims to support startups and partner companies in creating a diverse ecosystem of Web3 applications that span a range of use cases, including digital content rights management, business transactions, contracts, and processes. The move demonstrates Fujitsu’s commitment to driving innovation in the emerging Web3 industry.

The company’s decision to offer cryptocurrency brokerage services comes as financial regulators in Japan call for stricter banking rules for the crypto sector. In January 2023, the Deputy Director General of the Financial Services Agency’s Strategy Development and Management Bureau, Mamoru Yanase, urged global regulators to introduce tighter banking rules to improve the crypto industry’s governance and internal controls. He acknowledged that the issue wasn’t with crypto technology itself but with the “loose governance, lax internal controls, and the absence of regulation and supervision” that led to recent scandals in the sector.

Fujitsu’s move into the crypto brokerage services market signals its recognition of the growing importance of cryptocurrencies and blockchain technology in the financial industry. The new branding could help Fujitsu establish itself as a leading provider of crypto-related financial services, leveraging its extensive expertise and resources in the technology sector.

In conclusion, Fujitsu’s trademark application for cryptocurrency brokerage services and other financial facilities demonstrates the company’s commitment to the emerging Web3 industry and its growing interest in cryptocurrencies. The move could also help Fujitsu establish itself as a leading provider of crypto-related financial services and position itself at the forefront of innovation in the financial technology sector.


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UK Watchdog Proposes Tougher Advertising Rules

According to the United Kingdom’s financial watchdog, newly proposed advertising rules in the United Kingdom could potentially see executives of crypto firms facing up to two years in prison for failing to meet certain requirements around promotion. These executives would be in violation of the rules if they failed to meet any of the aforementioned requirements.

The United Kingdom’s Financial Conduct Authority (FCA) issued a statement on February 6 in which it revealed that if the proposed “financial promotions regime” is approved by Parliament, then all crypto firms within the country as well as those located outside of it would be required to adhere to certain requirements when advertising their crypto services to customers in the United Kingdom.

According to the Financial Conduct Authority (FCA), “cryptoasset enterprises selling to UK customers, including those operating abroad, must be ready for this regime.”

“Taking immediate action will assist guarantee that they can continue to lawfully advertise their products to customers in the United Kingdom.” As a part of their preparations, we strongly advise businesses to get any and all guidance that may be required,” the statement said.

If the FCA’s proposed regulatory framework is implemented, companies dealing in cryptocurrencies would be required to get prior authorisation from the FCA before advertising their services, unless they qualified for an exemption under the Financial Promotion Order.

According to the governing body, a “cryptoasset firm” in the United Kingdom may only advertise and sell its products and services to clients via one of the following four channels:

According to the regulatory body, any marketing that is carried out outside of these channels would be in violation of the Financial Services and Markets Act of 2000 (FSMA), which has a criminal penalty of up to two years in jail for each offence.

“We will take tough action where we detect companies advertising cryptoassets to UK consumers in contravention of the rules of the financial promotions regime,” the Financial Conduct Authority (FCA) stated in a statement. “We will take action against firms that promote cryptoassets to UK consumers.”

Companies found to be in violation of the new regime risk having their websites taken down, receiving public warnings, and being subjected to further enforcement measures. In addition to the possibility of serving time in jail for its executives.

The Financial Conduct Authority (FCA) has said that they would wait until “necessary legislation” is passed before publishing “our final guidelines for crypto asset promotions.” This might perhaps indicate that the financial promotions regime will undergo upgrades or adjustments in the future.

According to the Financial Conduct Authority (FCA), “Subject to any changes in circumstances, we plan to adopt a similar approach to crypto assets to that outlined in our new regulations, which will be in force from February 1 2023 for other high-risk investments.”


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The Federal Home Loan Banks System is lending to cryptocurrency

According to a report that was published by The Wall Street Journal on January 21, the Federal Home Loan Banks System (FHLB) of the United States is reportedly lending billions of dollars to two of the largest cryptocurrency banks in an effort to mitigate the effects of a surge in withdrawals. This move was made in response to the surge in demand for cryptocurrency withdrawals. The Federal Home Loan Bank is a group of 11 different regional banks from all around the United States that work together to lend money to other financial institutions.

The system, which was established in the midst of the Great Depression to provide assistance for home financing, now has over 6,500 members and 1.1 trillion dollars in assets.

According to reports, during the last three months of 2022, the organisation extended a loan of about $10 billion to the commercial bank Signature Bank, making it one of the biggest deals involving a bank borrowing money in recent years.

The Signature’s blockchain-based digital platform was given the go-ahead by the New York Department of Financial Services in the year 2018.

The study compiled by Silvergate indicates that the average deposits made by digital asset customers during the fourth quarter of 2022 were $7.3 billion. This figure represents a considerable decrease when compared to the amount attained during the third quarter, which was $12 billion.

Following the failure of FTX, traditional finance has been immune to crypto contagion; but, according to the paper, FHLB loans to crypto-exposed institutions might raise that risk.

Senator Elizabeth Warren made the following statement to the WSJ: “this is why I’ve been warning of the dangers of allowing crypto to become intertwined with the banking system.” She claimed that taxpayers should not “be left holding the bag for collapses in the crypto industry,” which she referred to as a market that is full of “fraud, money laundering, and illicit finance.” Senator Warren is a member of the Democratic Party.

The bankruptcy of the FTX group produced a ripple effect across the cryptocurrency business, which affected a number of other firms.

The most recent event to take place was on January 19, when cryptocurrency lender Genesis filed a petition for protection under Chapter 11 of the Bankruptcy Code. Genesis is reported to have liabilities ranging between $1 billion and $10 billion.


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Global Blockchain Technology Market in BFSI Sector Expected to Hit $4.02B by 2026

The global blockchain technology market in the banking, financial services, and insurance (BFSI) sector is expected to hit $4.02 billion by 2026, thanks to a surge in FinTech spending, according to ReportLinker. 

The market is expected to record a compound annual growth rate (CAGR) of 36.6% during the 2022-2026 forecast period. 

The advent of artificial intelligence (AI) is anticipated to be a key driver of the blockchain technology market in the BFSI sector. 

Moreover, the growth of blockchain as a service and quantum computing will prompt notable demand in the market. The report added:

“The market is driven by the increase in FinTech spending, easier access to technology, and disintermediation of banking services.”

The report seeks to offer insights companies need when positioning themselves in the market by scrutinizing vital parameters such as promotions, competition, pricing, and profit. 

Some key players in the blockchain technology market in the BFSI sector include Ripple Labs Inc., Tata Consultancy Services Ltd, Oracle Corp, Hewlett Packard Enterprise Co., Microsoft Corp, and Coinbase Global Inc., among others.

The report segmented the market into a consortium, private, and public blockchains by type for enhanced insights.

Meanwhile, heightened demand for the worldwide blockchain in the retail market is expected to drive its value past the $3.27 billion mark by 2028, according to a recent report by market research organization Facts and Factors. 

Since blockchain plays an instrumental role in showing the precise location of different products and their safety and reliability, retailers were anticipated to continue embracing this technology. 

The urge for enhanced transaction transparency-based solutions was expected to spur more growth in the worldwide blockchain in the retail market, Facts and Factors added. 

Image source: Shutterstock


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Google Tiptoes Into Crypto

Key Takeaways

  • Google may be preparing for a foray into the world of cryptocurrency.
  • The company has hired a former PayPal executive and partnered with Coinbase and Bitpay.
  • The specifics of Google’s crypto plans are unclear, but its entry into the industry would have massive implications.

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Google has hired former PayPal executive Arnold Goldberg to run its payments division in a move geared toward broadening its users’ access to financial services, including cryptocurrencies. Despite historically shying away from crypto, now Google is more actively considering the industry, according to statements from the company’s president of commerce, Bill Ready.

Google Mulls Crypto Plans

Per Bloomberg today, Alphabet Inc.’s Google has hired a new vice president and general manager for its payments and emerging markets division, former PayPal executive Arnold Goldberg.

The payments and emerging markets division is part of Google’s Next Billion Users initiative. Bill Ready, Google’s president of commerce who himself used to be PayPal’s chief operating officer, emphasized that the hiring move was part of Google’s broader expansion into more financial services, including cryptocurrencies.

Moreover, Peeyush Ranjan has been promoted to general manager of Google’s consumer payments services. Ranjan is a Google engineer who spearheaded Google Pay’s expansion in India, which is the nation in which Google Pay has been the most successful. 

The company has also joined forces with crypto exchange Coinbase and digital currencies payment provider BitPay to allow users to store their crypto assets in “digital cards,” though users will still spend in fiat rather than crypto. Ready stated that Google has plans for more of these types of partnerships.

Despite the fact that Google still will not accept digital assets as payments, Ready emphasized that “crypto is something we pay a lot of attention to,” and that “as user demand and merchant demand evolves, we’ll evolve with it.” 

Though its crypto plans are still not fully fleshed out, Ready alluded to Google’s ambitions to the be ultimate connector of the entire consumer finance industry. 

In a perhaps unintentional ode to the promise of Web3, the executive said:

“Helping more activity occur on a free and open web—that naturally pays dividends to our overall business.” 

Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and several other cryptocurrencies.

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Tribal Credit raises $40M in ‘hybrid’ debt round funded by dollars and stablecoins

Crypto-focused enterprise payment platform Tribal Credit has concluded a $40 million debt offering that was funded through fiat and stablecoins — giving the company additional capital to expand its business services in Latin America. 

The so-called hybrid debt round was financed by Partners for Growth, a California-based investment firm, and Stellar Development Foundation (SDF), which is a non-profit organization supporting the growth of the Stellar blockchain. Tribal said it will use the capital to fund receivables from its customer base throughout Latin America, particularly Mexico, Brazil, Chile, Colombia and Peru.

Tribal COO Duane Good explained to Cointelegraph that funding receivables from its customer base means that “Tribal can use the debt facility to help customers” in the aforementioned countries. In other words, “this new debt facility will be used to support our customer’s spending on the Tribal platform.”

When asked about the mechanics of the hybrid debt raise, Good explained that “a portion of the debt facility was established with SDF and funded through USDC.” A traditional debt facility, by contrast, “is an agreement with insittutiional lenders that enables a financial services firm to draw on the facility to support the underlying credit needs of their portfiolio.”

Launched in 2016, Tribal Credit provides credit cards and other forms of funding to startups in emerging markets. The company also employs a cross-border payment system supported by cryptocurrency exchange Bitso that allows businesses to convert local currency to Stellar’s USDC stablecoin. Integration with Stellar blockchain began in April 2021 after Tribal received $3 million from the Stellar Development Foundation.

Related: Crypto payments solutions firm Ramp raises $53 million to increase adoption of DApps

Tribal and others have identified small businesses as a major source of growth for crypto payments and remittances, especially in emerging markets where access to traditional financial services is often limited. Data from the World Bank shows that small- and medium-sized enterprises in emerging markets create roughly seven out of 10 jobs, making their access to financing more important.