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Bridge the gap between traditional finance and DeFi

by Blockchain NewsFebruary 20, 2023

The cryptocurrency community is always looking for new methods to use decentralized finance (DeFi) technologies in order to close the gap that exists between conventional finance and fiat currencies. A main means through which consumers may traverse between these two financial ecosystems is via the use of crypto on-ramp services.

In addition, if there are complications throughout the transaction process, there is a possibility that as many as 90 percent of customers would leave their purchases in the middle of the flow.

The research looked at nine of the most popular fiat-to-cryptocurrency exchanges, such as Coinify, MoonPay, Transak, and Wyre, among others.

According to the statistics, the performance of the different onramps varies greatly; nonetheless, the position of the user is one of the primary elements to consider. The transaction success rates in Europe were among the highest in the world, while those in Africa and South America were among the lowest.

Payment methods, the fiat currency that was converted into cryptocurrency, and the available trading pairings are some of the other elements that influenced transactions on cryptocurrency exchanges. The use of bank transfers as a means of payment has been shown to have higher success rates in transaction completion rates, reaching almost 100% success in two separate cases.

In addition, the value of the transaction was a significant factor in determining whether or not it was successful. Transactions ranging from zero to twenty-six dollars had an authorization rate of sixty-six percent, whereas those with a value of more than five thousand dollars had an authorization rate of nineteen percent on average.

The study came to the conclusion that one of the potential solutions to problems with transaction authorisation might be for token service providers to provide as comprehensive a selection as they can manage of aggregated onramps via a single interface. Another solution is to dynamically route transactions in order to provide consumers with the solution that is most suitable for their circumstances.

Paolo Ardoino, chief technical officer of Tether, made this statement not too long ago at the World Economic Forum. He referred to the platform’s stablecoin Tether (USDT) as an on-ramp for Bitcoin (BTC).

The Hong Kong Monetary Authority has identified its soon-to-be-released retail central bank digital money as a possible entry point into the decentralized finance arena.

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Global Efforts to Classify Cryptocurrencies

by Blockchain NewsFebruary 10, 2023

A significant cryptocurrency data aggregator known as CoinGecko and a cryptocurrency investment company known as 21Shares have teamed forces to develop a universal standard for categorizing the many different types of crypto assets.

The Global Crypto Classification Standard study was published on February 8 by CoinGecko and 21Shares. It outlines a standardized technique that can be used to classify cryptocurrency assets. The purpose of this work is to assist investors and regulators in gaining a better understanding of the particulars of each asset class in the cryptocurrency business, including the possibility for failures such as those that the sector experienced in 2022.

“In contrast to conventional financial assets, the nature of crypto assets may have a wide range of variations, both in terms of the asset itself and the protocol that underpins it,”

At the time this article was written, the website of CoinGecko listed more than 12,000 distinct cryptocurrencies, and each coin has its own set of traits and features that marked it apart from the others. The classification method used by CoinGecko and 21Shares is based on three main layers of categorization, which differentiate these hundreds of assets according to stack, market sectors, industries, and taxonomy.

The first level, known as the “crypto stack,” organizes crypto assets into categories such as centralized apps, decentralized applications, interoperable blockchains, and smart contract platforms, amongst others. The technique does not refer to the underlying token at any point in the first two tiers; rather, it exclusively discusses networks and protocols.

The second level is referred to as “market mapping by sectors and industries,” and it further divides cryptocurrencies into categories such as infrastructure, metaverse, and decentralized finance (DeFi), in addition to groups such as payment platform, lending, and developer tooling, amongst other categories. The technique makes an effort to classify the assets according to the category that is the most relevant to their use in situations when certain standards may be applied to more than one industry.

Based on the cryptocurrency taxonomy approach that was suggested by crypto analyst Chris Burniske in 2019, the third level was referred to as the “taxonomy of crypto assets.” Within this level, crypto assets were categorized according to related asset “superclasses.” The methodology developed by Burniske is based on a study written by Robert Greer in 1997 titled “What is an Asset Class Anyway?” Putting crypto assets into their respective superclasses, such as capital assets, assets that can be consumed or transformed, and assets that may be stored as value.

Dogecoin (DOGE), Bitcoin (BTC), Monero (XMR), and Zcash (ZEC) are some of the examples that may be found in the category of store of value assets (DOGE). This particular kind of crypto asset “cannot be consumed,” and it also does not provide any form of revenue. “However, it does have worth; it is a store of value asset,” is how the proposed categorization standard puts it.

The attempt by CoinGecko and 21Shares to bring about a worldwide crypto categorization standard is only one of the numerous efforts being made all around the world to classify cryptocurrencies. The Australian Department of the Treasury issued a consultation paper on “token mapping” on February 3, with the goal of developing its own taxonomy of crypto assets. Prior to this, Belgium’s Financial Services and Markets Authority was also soliciting comment on its categorization of crypto assets as securities, investment instruments, or financial instruments in July of 2022. This was done in order to make an informed decision.

According to Gonzalez, “while the categorization of digital assets is quite prevalent, many classification attempts are one-dimensional and mislead conventional investors by combining crypto assets, the investable tokens, directly with the protocols that are behind them.”

The executive also expressed optimism that the newly suggested standard would be able to appeal to retail and institutional investors, as well as governments all over the globe, as a result of 21Shares’ work with CoinGecko, a leading independent cryptocurrency statistics website.

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Tagged : Bitcoin / Coingecko / Cryptocurrencies / Education / News / Regulation / Research

The White House is continuing to develop its National Digital Assets Research and Development

by Blockchain NewsJanuary 26, 2023

The National Digital Assets Research and Development Agenda is still being worked on by the administration of United States Vice President Joe Biden, who is still in office.

The White House Office of Science and Technology Policy (OSTP) has issued a request for information (RFI) dated January 26 and posted by the Federal Register. The OSTP is inviting comments to assist it in determining which agenda goals should be prioritised.

By the 23rd of March, individuals and groups may submit comments that are no more than ten pages in length. After the “first-ever” Comprehensive Framework for Responsible Development of Digital Assets was presented in September, the White House made the announcement that the formulation of the agenda would be the next step in the administration’s efforts.

The president’s executive order titled “Ensuring Responsible Development of Digital Assets,” which was issued in March, was the impetus for a flurry of research work relating to cryptocurrencies, and the new agenda is a component of that activity.

According to the request for information (RFI), the agenda’s goal was to “shape an effort by the whole government” to create digital assets and distributed ledger technology.

It was also referred to be a method to “kickstart basic research” and “continue to encourage research that turns technology advances into market-ready goods.”

It said there: “Research and development (R&D) in this area has often been carried out in a disjointed fashion, with little thought given to the wider ramifications, uses, and potential drawbacks of the inventions that are at the core of the field. […] A research and development strategy that takes a more comprehensive approach would give tangible areas of emphasis that might be used to realise a holistic vision of an ecosystem for digital assets that symbolises democratic principles in addition to other major concerns.”

The adoption of the Chips and Science Act in August resulted in the creation of a specialised post within the OSTP for blockchain technology.

As part of its mandate, the office investigated the effects that digital assets have on the environment and prepared a report on those effects. Additionally, as part of the ongoing and as of yet inconclusive consideration of a digital dollar for the United States, the office compiled a survey of central bank digital currency design options.

The response to Vice President Biden’s broad framework varied from lukewarm support to vehement expressions of dissatisfaction.

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Tagged : Digital Asset / News / Regulation / Research

Demand for Blockchain and AI Expected to Push Market Value to $980.7M by 2030: Report

by Blockchain NewsNovember 4, 2022

Since blockchain and artificial intelligence (AI) are among the greatest technological innovations, their demand is expected to make the market value soar to $980.7 million by 2030, according to Spherical Insights & Consulting.

The market data intelligence company suggested that the global blockchain AI market is anticipated to record a compound annual growth rate (CAGR) of 24.06%. Per the report:

“Both combined are able to provide robust outcomes, and become highly beneficial to various applications such as financial security, supply chain logistics, creating diverse datasets and many others.”

Since digitization is emerging as a critical driver of transformational change across different industries, AI and blockchain can prompt high-efficiency levels, with the United States already setting the digitizing ball rolling.

Spherical Insights pointed out:

“The blockchain AI accelerates and also connects the ecosystem of artificially intelligent bots and software. The combination of both delivers universal registration, identity validation, bot audit, and compliance capabilities.”

Based on the technical complexity presented by blockchain and AI, experts anticipate that these cutting-edge technologies will have profound business implications soon. For instance, the AICoin project was aimed at enabling investors to harness the power of tokenization by combining the strengths of AI and blockchain.

Spherical Insights added:

“In this project, the developers developed artificial intelligence models that learn to identify and trade patterns that are hidden in the dozen or so most liquid cryptocurrency markets.”

The report also noted that this market can be a game-changer for business leaders, given that it can be deployed in investment management platforms, crowdsourced predictive models for hedge funds, and AI marketplaces.

Spherical Insights also highlighted that cloud-based blockchain AI solutions could play an instrumental role in SMEs because they enhance scalability and are highly applicable.

Meanwhile, Research and Markets disclosed that enhanced blockchain as a service (BaaS) adoption would boost the blockchain in the healthcare market, Blockchain.News reported.

Image source: Shutterstock

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Tagged : ARTIFICIAL INTELLIGENCE / Blockchain / Industry / Innovation / Research / Technology

Demand for Blockchain and AI Expected to Push Market Value to $980.7M by 2030: Spherical Insights

by Blockchain NewsNovember 4, 2022

The market data intelligence company suggested that the global blockchain AI market is anticipated to record a compound annual growth rate (CAGR) of 24.06%. Per the report:

“Both combined are able to provide robust outcomes, and become highly beneficial to various applications such as financial security, supply chain logistics, creating diverse datasets and many others.”

Spherical Insights pointed out:

“The blockchain AI accelerates and also connects the ecosystem of artificially intelligent bots and software. The combination of both delivers universal registration, identity validation, bot audit, and compliance capabilities.”

Spherical Insights added:

“In this project, the developers developed artificial intelligence models that learn to identify and trade patterns that are hidden in the dozen or so most liquid cryptocurrency markets.”

Spherical Insights also highlighted that cloud-based blockchain AI solutions could play an instrumental role in SMEs because they enhance scalability and are highly applicable.

Meanwhile, Research and Markets disclosed that enhanced blockchain as a service (BaaS) adoption would boost the blockchain in the healthcare market, Blockchain.News reported.

Image source: Shutterstock

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Tagged : ARTIFICIAL INTELLIGENCE / Blockchain / Industry / Innovation / Research / Technology

Continuous Crackdown on Crypto by US SEC is a Bullish Factor for Investors – Report

by Blockchain NewsOctober 26, 2022

Investors in the digital currency ecosystem have varying reasons to inject their capital into the emerging industry and the current crackdown from the United States Securities and Exchange Commission (SEC) is one of the main pushes for investors per a recent Bloomberg survey.

The results from the latest MLIV Pulse survey showed that of the 564 respondents surveyed, as many as 60% affirmed that the crackdowns present a positive push for investing in the industry. The SEC has not tapered down its enforcement actions in recent times as it has launched lawsuits against crypto firms, employees, and even celebrities that have contravened the law.

In one of its highest-profile actions, the SEC charged reality TV superstar, Kim Kardashian for non-disclosure of her earnings for the promotion of EthereumMax tokens (EMAX) considered a security by the regulator. When the indictment was brought against her, Kim Kardashian agreed to pay all of the fines worth $1.26 million without admitting or denying any wrongdoing.

According to the survey, around 65% of retail investors say they are more likely to invest in the industry with more enforcement action, a number that compares to 56% for professional investors.

“I’m in the ‘yes’ camp. As a professional investor, you need a regulated investment opportunity and it opens the doors for more professional investors to get involved in crypto, if it’s more regulated,” said Chris Gaffney, president of world markets at TIAA Bank. “The more they can get crypto out of the Wild West and into traditional investing, the better off it’s going to be.”

The rate of fraud and cybercrime in the industry is growing at a frantic pace and the fact that developers in the crypto industry have a watchdog to make them accountable will help in driving additional due diligence that can guarantee peace of mind for investors across the board.

Image source: Shutterstock

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Tagged : Crackdown / KIM KARDASHIAN / Regulation / Research / SEC

92% High-Net-Worth Individuals in SG & HK Are Interested in Digital Assets: KPMG

by Blockchain NewsOctober 25, 2022

To learn crypto perspectives from family offices (FOs) and high-net-worth individuals (HNWIs) in Singapore and Hong Kong, KPMG China and Aspen Digital conducted a study dubbed “Investing in Digital Assets” and discovered that growing interest among this group.

Per the report:

“Despite the volatility in the digital asset market in the past two years, FOs and HNWIs are keen to invest in the sector. The survey found that 92 percent of respondents were interested in digital assets, with 58 percent of FOs and HNWIs already investing and 34 percent planning to do so.”

The growing crypto interest among FOs and HNWIs in Singapore and Hong Kong was being driven by portfolio diversification and high return prospects.

Confidence in digital assets was also being spurred by heightened participation by mainstream institutional investors.

“Family offices and high-net-worth individuals in Hong Kong and Singapore have embraced this new asset class, with more than 90 percent of our survey respondents already investing in the space or planning to do so,” according to the study.

Bitcoin (BTC) and Ethereum (ETH) dominated the group’s investment portfolio. Furthermore, growing interest in decentralized finance (DeFi) and non-fungible tokens (NFTs) was also noted.

Direct equity investment emerged as the primary source of funding for crypto service providers. Matthew Lam, Aspen Digital’s head of research, pointed out:

“We have observed that family offices/HNWIs prefer direct equity investments, while crypto-focused venture capital firms favour equity plus token warrant approach to invest in digital asset service providers.”

Nevertheless, respondents cited inaccurate valuation and the changing global regulatory environment as the biggest hurdles to crypto investment.

For instance, all virtual asset service providers (VASPs) in Hong Kong will be required to apply for an operational license by March 2024. Moreover, Singapore is also eyeing to broaden its crypto regulation scope.

Meanwhile, Hong Kong recently showed its intention to legalize crypto trading after launching several legal initiatives related to emerging technologies in the cryptocurrency industry, Blockchain.News reported.

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Tagged : Asia / Crypto / Family Offices / FO / HNWIS / Hong Kong / Investment / Research / Singapore

69 % Female Crypto Investors in U.S. Adopt Holding Strategy, Survey Shows

by Blockchain NewsOctober 25, 2022

Female Americans continue to be resilient as cryptocurrency owners, despite the broad market turmoil being experienced, according to a survey by global crypto financial services company BlockFi.

Through the latest edition of the Real Talk survey, BlockFi suggested that female crypto investors on American soil had a long-term outlook because they had adopted the buy-and-hold strategy. Per the report:

“When asked specifically what best describes their crypto investment style, the majority of female crypto owners (69%) said they hold crypto and remain hold-only.”

Flori Marquez, BlockFi’s founder and COO, added:

“The crypto landscape and the number of players look completely different than it did six months ago when we last issued this survey and yet the faith in the crypto markets and its potential as a long-term investment strategy remains. This resiliency is extremely promising.”

On the other hand, interest in this asset class has also not significantly decreased among female Americans. BlockFi noted:

“More than one in five women (22%) still intend to buy crypto in the next 12 months, down slightly from 28% the year prior.”

Some of the reasons why female investors in America are attracted to cryptocurrencies is because they believe it’s an inflationary hedge. Per the survey:

“When asked, one in five women believe crypto to be a good hedge against inflation. Even more, 20% of Gen Z women noted Bitcoin as the best long-term investment when presented with a list of options including individual stocks and real estate.”

Nevertheless, the study revealed a generational gap because one in ten women on American soil chose crypto as their first investment.

Meanwhile, an Ipsos survey showed that the intention of investing in cryptocurrencies or using them as a payment option was higher among Americans compared to Canadians, Blockchain.News reported.

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Tagged : America / Blockfi / Cryptocurrency / FEMALE / Investors / Research / United States / Women in Blockchain

Eastern Asia’s Crypto Market Growth Halts, China’s Crypto Transaction Volume Drops by 31% YoY

by Blockchain NewsOctober 20, 2022

Chainalysis, a US blockchain analysis firm, released a new research study Thursday, showing that Eastern Asia is the fourth-largest cryptocurrency market, receiving $777.5 billion worth of crypto between July 2021 and June 2022.

This figure represents just under 13% of global transaction volume during that time period.

As a result, the study identified that Eastern Asia has lost ground to other regions this year. The region saw year-over-year transaction volume growth of just 4%, making it the region with the lowest crypto activity this year, according to the research. Last year, the region was ranked as the third biggest region by crypto transaction volume at this time.

Source: Chainalysis

The biggest reason for this loss is likely due to the decline in cryptocurrency activity in China, the largest market in the region. While the study identified that China saw its crypto transaction volume drop by 31% compared to the previous year-long period, neighbors like Japan more than doubled transaction volume. This is likely due to Chinese government crackdowns on crypto activity over the last year, the study revealed.

Besides the low cryptocurrency trading activities in the region, the data indicates that Eastern Asia has surprisingly low DeFi adoption. Over the year-long time period Chainalysis conducted this study, DeFi made up just 28% of transaction volume in Eastern Asia, less than all but one other region – Eastern Europe – as shown in the figure below.

The data shows that Japan’s crypto market has grown significantly over the year-long period studied, with on-chain transaction volume increasing 113.2% over the previous 12 months, compared to 72% for the next-closest country, South Korea, and 31.1% for China.

To explain Japan’s resilient crypto activities, one of the reasons is due to the relatively high embrace of DeFi. Despite having a smaller overall crypto market, Japan’s DeFi transaction volume is almost double the size of South Korea’s at $56.7 billion and close to China’s total of $67.6 billion, as indicated in the figure below. The research shows that decentralized exchange (DEX) trading may be eating into trading on centralized services, which have not witnessed similar growth.

As the data highlighted above, China has witnessed a huge decline in cryptocurrency activity, likely due to government crackdowns imposed last year. However, despite a 31.1% drop-off in transaction volume, China remains the biggest crypto market in the region, the fourth overall in the world, and ranked tenth for grassroots adoption on Chainalysis’ global crypto adoption index.

While government crackdowns have had a clear impact, China’s cryptocurrency market remains strong, with healthy transaction volumes across both centralized and DeFi services. The figure below shows that China’s trading activity has started to pick back up in recent months, and even mining, which saw a massive fall in activity following the ban, has made a comeback in the country.

Early this month, Chainalysis released a similar study showing that emerging markets, such as the region of the Middle East and North Africa (MENA), dominated this year’s global crypto adoption index. Latin America became the second in transaction volume growth, North America was third, and Central and Southern Asia close behind.

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Tagged : Asia / Chainalysis / China / Crypto / Japan / Market / Research

Nigeria Tops in Global Crypto Ownership, With Nearly Half of the Population Being Crypto Users or Owners

by Blockchain NewsOctober 19, 2022

With cryptocurrencies being one of the technological innovations taking the world by storm, Nigeria takes the lead in terms of crypto ownership, according to Statista Global Consumer Survey.

Per the report:

“Nigeria leads in global crypto ownership, where 45% of the population, or almost every second person, uses or owns cryptocurrency.”

The survey interviewed consumers from nations in South America, Asia, and Africa. The study added:

“Thailand ranked in second place, with 44% of the population that used or owned cryptos in the last two years. Turkey follows with 40%, and Argentina and United Arab Emirates round the top five list, with 35% and 34%, respectively.”

Even though the crypto owners in the United States are three times more than those in Nigeria, this represents 16% of the entire population. As a result, the US comes twenty-fifth in terms of crypto ownership.

On the other hand, India has 134 million crypto users, which is the highest globally. Statista recently estimated that there were 257.2 million crypto users globally, denoting 3.2% of the world’s population. This figure is expected to jump to 293.6 million in 2023.

Nigeria has been gaining the spotlight in crypto due to the trends being witnessed.

For instance, a study by Jack Dorsey-owned Block, Inc. revealed that the nation took the helm regarding Bitcoin optimism levels at 60%, Blockchain.News reported.

Furthermore, a KuCoin study showed that high inflation rates and the lack of affordable financial services drove crypto adoption on Nigerian soil.

The KuCoin survey suggested cryptocurrencies were filling the gap in the traditional currency-based market because Nigerians were using them as an alternative for storing and transferring assets.

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Tagged : Crypto / Crypto Adoption / Cryptocurrencies / Nigeria / Research / Survey