DEX & OTC Brokers Adoption Growing Significantly Since 2019, More Than Centralized Exchanges

DEX and OTC Brokers Adoption Growing Significantly Since 2019, More Than Centralized Exchanges: Report

Decentralized exchanges (DEXs) and OTC brokers are gaining adoption as centralized and high-risk exchanges see their number dip slightly, according to a new report by blockchain analytics firm Chainalysis.

As cryptocurrency adoption grows and attracts institutional investors, the value moving to exchanges is trending upwards to its highest above $750 billion in May 2021.

So has grown the number of active crypto exchanges, which peaked in July 2020 at around 845. Since then, it has been going down and, as of August 2021, sits at 672.

Since the beginning of 2019, the data shows that the number of active DEXes and OTC brokers has actually been climbing significantly, with derivatives exchanges growing as well but only modestly.

DEXs popularity also coincides with the “explosive growth” of the decentralized finance (DeFi) sector, as per the report.

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Centralized exchanges and high-risk exchanges have actually seen their numbers dip slightly after initial increases.

“We see that DEX users carry out much larger transactions than centralized exchange users.”

“This is likely because DeFi is also more popular in countries with bigger, more established cryptocurrency markets, which also tend to be wealthier countries.”

While large DEXs, OTC brokers, and centralized exchanges grew their transaction volume substantially during this period, derivatives exchanges grew the most in value received at 686%.

Total value received by DEXes grew from $10 billion in July 2020 to an all-time high of $368 billion in May 2021 and sat at just under $143 billion as of September 2021. As for why larger exchanges are growing, the number of unique assets available is of significance here as more assets generally correlate with higher transaction volume.

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Author: AnTy

Afghans Embrace Crypto as Fiat Currency Plunges and Banks Severely Limit Withdrawals

The adoption of cryptocurrencies is growing rapidly around the world, especially in developing countries.

Last month, El Salvador became the world’s first nation to adopt Bitcoin as legal tender alongside the US dollar. Following this, many other countries in the LATAM region, like Panama, also started working on adapting cryptocurrency.

As we reported, BitMEX CEO Alex Hoeptner predicts at least five countries accepting the cryptocurrency as legal tender by the end of next year, emphasizing that all of them will be developing countries that are “faced with an inherently unequal financial system” and because they have the “most to lose by continuing the status quo.”

This can already be seen happening in Afghanistan, where banks are severely limiting withdrawals while millions of Afghans currently face food insecurity and severe economic stress set off by cash shortages, rising food costs, and lost income.

“(Bitcoin) was easy to use, cheaper, and more secure than other options,” said Roya Mahboob, founder of the non-profit Digital Citizen Fund.

About a third of almost 16,000 females who learned basic computing skills at her center also learned how to set up a crypto wallet and receive funds. Some of them have left the country after Kabul was captured by the Taliban on Aug. 15, using their crypto wallets to move their money out.

Much like El Salvador, where roughly 70% of them do not have a bank account, the majority of Afghanistan’s population do not have bank accounts either, further accelerating crypto adoption.

According to El Salvador President Nayib Bukele, today, the government’s bitcoin wallet Chivo already has 3,000,000 active users, meaning 46% of the country’s population is using it.

The fiat currency of Afghanistan has also nosedived, and at the same time, Afghan banks and global financial institutions, including MoneyGram, Western Union, and the Central Bank of Afghanistan, lacks enough paper currency to cover withdrawals.

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Back in August, following the takeover by the Taliban, the New York Federal Reserve cut off the country’s Central Bank’s access to its USD assets along with the capacity to settle USD transactions with other banks. Da Afghanistan Bank further lost its ability to purchase paper dollars from the Fed for liquidity and currency stability.

Additionally, the World Bank has stopped the bank from accessing its assets held by the International Monetary Fund (IMF). Mahboob told Reuters,

“I am thinking now – why didn’t we teach about crypto more aggressively, so more Afghans could have crypto wallets and be able to access their money now.”

While regulators around the world point to crypto’s usage in illegal activities despite Chainalysis’ report that the criminal share of all crypto activity fell to a mere 0.34% in 2020, Mahboob, who was named among Time magazine’s 100 most influential people in 2013. said:

“The traffickers and kidnappers will always find a way to abuse a system. But the power of crypto is bigger – especially for women and those who don’t have bank accounts, it is very beneficial and so empowering.”

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Author: AnTy

Crypto Adoption More Pronounced In Struggling Economies: Chainalysis Report

Cryptocurrency Adoption More Pronounced In Struggling Economies: Chainalysis Report

Grassroot crypto adoption is spiking, and more economically vulnerable countries are becoming engaged in the crypto space.

This is according to a recent report by the popular blockchain analytics firm Chainalysis.

Vietnam Tops The List

Chainalysis has been at the forefront of crypto data gathering, and the blockchain firm is a reputable leader in the industry. The New York-based company disclosed in its recent cryptocurrency index report that crypto was gaining mainstream adoption.

According to the report, Asian nations Vietnam, India, and Pakistan took first, second and third positions, respectively. Additionally, six out of the top 20 countries were from the African continent and attesting to the widespread adoption of virtual currencies in these countries.

Commenting on the unusual candidates, head of research Kim Grauer noted that the blockchain company decided to opt for a more targeted approach in its roundup. He said the decision was to quantify the extent of grassroots adoption of digital assets.

It also pointed out a few interesting trends in the nascent industry. According to the report, the African continent constitutes the smallest crypto market globally, with 3% of the total market size.

However, peer-to-peer (P2P) trading, remittance, and saving needs have powered the adoption of cryptocurrencies across the continent. Also, the retail crypto trading market is at an all-time high in the region. Africans account for 7% of the total crypto market, which is in conjunction with a whopping 96% of P2P (peer-to-peer) transaction volume originating from Africa.

Purchasing Power Parity (PPP)

Chainalysis turned to three metrics when ranking countries in its adoption index for 2021. This includes the total value of crypto received by a government, crypto used by newbie crypto investors (transactions less than $10,000), and P2P exchange-traded volume.

However, all three metrics were categorized under the purchasing power parity (PPP) per capita, which measures the purchasing ability of a given individual in a country.

Making a note of this, the Chainalysis blog post noted:

“The higher the ratio of on-chain value received to PPP per capita, the higher the ranking, meaning that if two countries had equal cryptocurrency value received, the country with the lower PPP per capital would rank ahead.”

This enabled countries like Vietnam and Kenya to rank top of the list due to their higher on-chain crypto activity.

Making a case for this approach, Grauer said that if the PPP metric were not used, mega economies like the US and China would likely rank top of the index due to their larger populations and higher purchasing power.

Aside from the PPP, the report also considered the relative correlation between widespread crypto adoption and hyperinflation in these regions.

South American nations like Venezuela, which has seen the value of their local currency hit rock bottom, have since turned to cryptocurrencies. According to a CoinDesk report, P2P trading surged in the aftermath of the pandemic as Venezuelans sought out means to hedge against inflation.

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Author: AnTy

Significant Stablecoin Adoption Could Result in “Excessive Market Power,” says BIS Report on CBDC

Significant Stablecoin Adoption Could Result in “Excessive Market Power,” says BIS Report on CBDC

Central bank money ensures public trust in money and supports public welfare, said the global body policymaker in its latest report on central bank digital currencies (CBDCs).

With new forms of digital money issued by the private sector, such as stablecoins emerging, which has accelerated since the Covid-19 pandemic began, central banks are also ensuring they are able to respond to a digital future system, it said.

But still, private digital assets can coexist with central bank digital currencies, the Bank for International Settlements said in the report, noting CBDcs would rely on banks and other financial institutions to act as intermediaries.

However, significant stablecoin adoption could lead to fragmentation in the payments ecosystem and “excessive market power,” found the report. It further added that private initiatives would have “lower public benefits” because they won’t be interchangeable with other forms of money. According to the BIS, private currencies also lack the protections that come with national currencies.

“Central banks have a responsibility to ensure that citizens have access to the safest form of money — central bank money — in the digital age,” said ECB president Christine Lagarde, who is the chair of this group of central bank governors.

While acknowledging that there were also risks associated with CBDCs, as money and payments develop rapidly, central banks’ plans for CBDC will also evolve, it said.

Currently, seven central banks, the Federal Reserve, Bank of England, European Central Bank, the Bank of Canada, Bank of Japan, Sveriges Riksbank, and Swiss National Bank, are working together with the BIS on retail CBDCs.

These central banks “have already identified that a CBDC could be an important instrument for ensuring that they can continue delivering their public policy objectives even as the financial system evolves,” the study said.

Facilitating international payments with CBDCs would require interoperability or cooperation, where BIS says the IMF would have an important role to play.

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Author: AnTy

1Inch Moves to Arbitrum For Faster Throughput And Lower Gas Fees

Ethereum multi-chain solution, Arbitrum One is seeing major adoption by the day. The latest protocol looking to tap into lower fees and faster transactions is 1Inch Network.

1Inch Moves To Arbitrum

According to a Wednesday tweet, popular decentralized cryptocurrency exchange (DEX) aggregator 1Inch Network announced support to Ethereum layer-two scaling solution Arbitrum.

The move is expected to give 1Inch users and DeFi proponents lower transaction costs, higher transaction speeds, and fast withdrawals.

Much like the former Matic Network, Arbitrum uses roll-ups and sits atop the Ethereum network. It is tasked with bundling transactions together and validating them before adding them to the main Ethereum network.

This technology greatly aids the Ethereum network to continue operating as the older decentralized applications (dApps) platform battles with the twin challenges of network congestion and high gas fees.

Arbitrum’s lower gas fees and higher throughput would benefit 1Inch users known to use the DEX aggregator to search for competitive prices across several exchanges.

Commenting on the recent integration with 1Inch, CEO of the development team behind Arbitrum, Offchain Labs Steven Goldfeder said;

“The Arbitrum One ecosystem is vibrant with many excellent and high volume DEXes, and we’re very excited to have 1Inch users join as a DEX aggregator.”

1Inch also stated in the announcement that a total of seven protocols would be available once it launches on Arbitrum. This includes the 1Inch Limit Order Protocol, UniSwap, BalancerLabs, BreederDodo, SushiSwap, SwaprEth, and WETH, with more expected in the future.

Arbitrum Making Waves Despite Being A Newbie

Like several Optimistic Rollup solutions, Arbitrum is built with the same code that operates on the Ethereum network. This enables development teams to easily cross-compile smart contracts on both networks, and it also ensures full compatibility between the Ethereum network on smart contracts and the Web3.0 interface levels.

Meanwhile, Arbitrum has been a major success since launching on August 31. The layer-two scaling solution has seen growing adoption from major protocols, most especially from the DeFi-facing sub-sector.

Also, its lower fees and faster transaction speed has lured non-fungible tokens (NFTs) enthusiasts who have now shifted their attention to the newcomer. According to data from L2 Beat, over $2 billion total value locked (TVL) have been processed through the Arbitrum protocol.

This has been due to surging interest in viral internet sensation NYAN. The digital meme token, which shows a rainbow-themed Nyan cat, has been in hot demand as digital collectible fans look to farm the ERC-20 token.

Developed by an anonymous developer, NYAN is meant to generate buzz about the Arbitrum network and encourages investors to lock up tokens on Arbitrum to receive rewards, according to a September 8 tweet.

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Author: Jimmy Aki

Brazilian Asset Manager BTG Launches Bitcoin Trading Platform

Brazilian Asset Manager BTG Launches Bitcoin Trading Platform

Cryptocurrency adoption appears to be kicking into high gear in Latin America, with companies and government organizations embracing crypto more.

The latest organization to embrace the industry is BTG Pactual – a top investment banking and asset management firm in Brazil.

BTG Goes For BTC

Earlier today, local news source The Rio Times confirmed that BTG Pactual launched a new crypto trading platform that allows Brazilian traders to buy and sell cryptocurrencies. The new platform is dubbed Mynt and is open to all Brazilians.

The platform would initially support the trading of Bitcoin and Ether, while other digital assets are expected to follow in the future.

Company chief executive Roberto Sallouti explained that the launch of Mynt was in response to increased demand among locals. He added that besides just letting people buy and trade cryptocurrencies, Mynt would also host educational content to inform crypto newbies and help them make better investment decisions.

Mynt’s launch means that BTG Pactual is the first major Brazilian financial institution to allow customers to participate in cryptocurrency markets. The company is regulated by both the Brazilian central bank and the Brazilian Securities Commission, and it will be looking to operate all its crypto services in line with current regulations.

Mynt represents BTG’s further entry into the crypto market. Earlier this year, Brazil Journal reported that the investment bank had started a crypto investment fund -c allied the Bitcoin 20 Multi-Market Investment Fund. The fund was approved in March, and it was the first Bitcoin fund launched by a Brazilian investment company.

The fund invests20 percent of its assets under management into Bitcoin, while 55 percent is allocated into treasury bonds. 20 percent is allocated to bank deposit certificated, and the other 5 percent to repo operations.

BTG’s Bitcoin fund also partnered with American crypto giant Gemini earlier this year for custody. The partnership will see Gemini Fund Solutions and Gemini Custody – two of Gemini’s subsidiaries – offer custody for BTG’s crypto assets.

South America Opening Up to Crypto

BTG has explained that its objective is to make crypto truly democratized and offer avenues for everyone to invest in the assets, regardless of their purchasing power.

Now that BTG is moving deeper into crypto, it would appear that the industry is finding a home in South America. This year has already seen several developments come from the region, with the most prominent being El Salvador’s decision to accept Bitcoin as an acceptable means of payment in the country.

VISA has also announced plans to integrate Bitcoin payments in Brazil. Earlier this month, Eduardo Abreu, the company’s vice president of new business, told local news source Seu Dinheiro that they plan to integrate crypto as both a store of value and a means of payment. This could be an avenue for even greater crypto adoption in the country.

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Author: Jimmy Aki

Jack Dorsey’s Square Chooses Non-Aggression Patent Pact With OIN Membership

Continuing in its stride to engender the adoption of blockchain and cryptocurrencies in general, payment facilitator Square has joined the Open Invention Network (OIN).

Square To Engender OSS Growth

In a Tuesday release, Open Invention Network (OIN) – an organization focused on ensuring open-source software (OSS) – announced the recent addition of Square to its community.

According to OIN, Square’s interest in the foundation shows that it is committed to patent non-aggression in OSS.

The cross-licensing platform boasts major backers like Google, IBM, NEC, Philips, Sony, Toyota, and SUSE, enables community members to access patented tech inventions without paying and without the lawsuit.

Commenting on its decision in a Bloomberg special, the US payment giant noted that the step was necessary to avoid the legal challenges that almost toppled the smartphone industry some years earlier.

“We’re in just such a rapid time of growth, so many amazing things are happening without patents,” counsel at Square Max Sills noted.

“We want to avoid long-drawn-out legal battles.”

Square is not new to patent alliances and is a front-runner in the blockchain industry’s first Cryptocurrency Open Patent Alliance (COPA) formed a year ago. Similar to OIN, member platforms and companies promise not to go the legal route if a fellow member peruses their technology.

Crypto big wigs like Coinbase, Kraken, ARK Investment, SatoshiLabs, and several others have pledged their support for the initiative with the foundation solely focused on engendering blockchain technology.

Square Leaning Towards Crypto, Especially Bitcoin

Although Square has been forthwith in its intent to enable a blockchain-driven society of the future, principal founder and CEO Jack Dorsey has been leaning more on the top premier digital asset. A Bitcoin maximalist, Dorsey has not been shy in publicly supporting the high volatile asset and has added Bitcoin to Square’s corporate treasury.

Not satisfied, the social media owner of Twitter has also sought to engender enterprise adoption via conferences, with the most popular being the B-Word which took place last month.

Also, Square is reportedly weighing up launching a Bitcoin decentralized exchange (DEX) platform. According to the payments giant, users will choose from multiple payment options and exchange their traditional fiat for Bitcoin.

The DEX platform is expected to be managed by the company’s Bitcoin division called TBD. Commenting on the company’s DEX plans, project lead Mike Brock noted that stablecoins – digital assets meant to track fiat currencies – would play a crucial role in supplementing payments on scaling solutions like the Lightning Network.

Also, Square is planning to build a Bitcoin hardware wallet. Following a tweet by head of product development Jesse Dorogusker on making Bitcoin custody more mainstream, Dorsey retweeted with a short reply that Square will build a Bitcoin hardware wallet.

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Author: Jimmy Aki

Jump Trading Launches Crypto Division to Build the “Plumbing” Necessary for Widespread Adoption

Jump Trading Launches Crypto Division to Build the “Plumbing” Necessary for Widespread Adoption of Crypto & DeFi

Secretive Wall Street firm Jump Trading has officially announced the launch of Jump Crypto; a dedicated team focused on the growth and development of cryptocurrencies and blockchain ecosystems.

After more than six years of “deep involvement” across the crypto space, Jump Crypto has been introduced, which will be headed by the 25-year old Kanav Kariya.

“We believe that current DeFi applications are only the tip of the iceberg. These new, open rails have the capacity to enable innovation and product models that stretch far beyond the realms of traditional financial systems.”

Kanav Kariya President of Jump Crypto

He further said that Jump Trading Group, which is a data and research-driven trading business, will be bringing its decades-long experience to crypto with an aim to “contribute to the construction of the ‘plumbing and the railroads’ necessary for widespread adoption of crypto.”

With its crypto division, the idea is to venture beyond trading and delve into venture capital investments, decentralized finance (DeFi), and on-chain governance.

Jump Crypto is already a founding code contributor to Solana-based Pyth Network, an oracle for real-time on-chain market data, and Wormhole, which is an interoperability protocol.

Last month, the company also announced the acquisition of blockchain development firm Certus One as part of its expansion into crypto.

Jump Trading has a team of more than 90 people and has deployed billions of dollars of capital across the crypto ecosystem.

Along with the launch, Jump Capital closed a new $350 million fund, the seventh since inception, which will focus on crypto and has already invested in PayPal acquired Curv and BitGo, which is to be acquired by Galaxy Digital.

“The finance industry is undergoing one of the biggest paradigm shifts in its history propelled by innovations in decentralized ledger technologies that will significantly enhance legacy systems and facilitate connectivity across financial service firms, and institutional and retail investors globally.”

Dave Olsen President and CIO of Jump Trading Group

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Author: AnTy

LATAM’s Crypto Adoption: Panama Introduces Bill to Regulate Crypto and Recognize BTC and ETH as Payment Methods

LATAM’s Crypto Adoption: Panama Introduces Bill to Regulate Crypto and Recognize BTC and ETH as Payment Methods

With crypto law, the country seeks to become “compatible with the blockchain, crypto assets, and the internet” along with smart contracts and DAOs.

On Tuesday, El Salvador officially adopted Bitcoin as a legal tender, and on the same day, another Central American country Panama joined the crypto revolution.

With this move, the Republic of Panama will regulate the use of cryptocurrencies throughout the country.

Congressman Gabriel Silva announced on Twitter that Panama had drafted a cryptocurrency law that would recognize both Bitcoin and Ethereum as payment methods. The bill will allow individuals and legal entities to freely use digital currencies as a means of payment not prohibited by the law.

“Today we present the Crypto Law. We seek to make Panama a country compatible with the blockchain, crypto assets, and the internet. This has the potential to create thousands of jobs, attract investment and make the government transparent,” reads the translated version of the bill.

Furthermore, the draft proposes that taxes and fees may be paid using crypto. Following the worldwide trend, cryptocurrency will be subject to capital gains tax but excluded from the value-added tax (VAT).

The country’s lawmakers are also supporting the use of the underlying technology blockchain in the public and banking sector.

The project seeks to “expand the digitalization of the state” through the technology by digitizing the entity of individuals and legal entities, according to the draft. This digitization process will make Panama compatible with smart contracts and DAOs, the bill adds.

“The country has all the potential to be a digital identity provider for the rest of the world.”

The proposed legislation will further allow the use of distributed ledger technology, blockchain, or cryptocurrencies by issuers of securities to represent those releases.

The bill talks about Bitcoin as a hedge against inflation and its divisible nature, much like Ethereum and other crypto assets.

According to a local publication, Silva, a member of an independent and opposite party Bancada Independiente, said that the bill does not seek to impose digital currency or forced means of payment but rather goes for the freedom to use them.

Over the last two months, Silva met with public institutions like the National Bank, the Superintendency of Banks, and the Ministry of Finance that would be involved in this operation of crypto and said both the ruling and opposition benches are willing to deal with the bill.

While the use of cryptocurrencies is not illegal in the country, with this bill, lawmakers seek to bring certainties in the fiscal rules.

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Author: AnTy

Japan’s Financial Services Agency (FSA) Looks to Step Up Crypto Oversight: Report

Japan has always been seen as a shining light in the Asian market for crypto adoption, with favorable regulations and a pang of hunger for digital assets.

However, recent events have caused many in the industry to rethink this stance, especially with the regulator now looking towards imposing stricter rules against companies in the space.

Keeping Close Tabs of Crypto and DeFi

Earlier this week, Jiji Press – a local news source – confirmed that the country’s Financial Services Agency (FSA) had started looking into imposing stricter regulations on cryptocurrencies. The report explained that the regulator is looking to optimize investor protection, even if it means putting exchanges in a tougher operating position.

The news source explained that the FSA established a dedicated panel of financial experts to help the government gain better oversight of the crypto and decentralized finance (DeFi) spaces. Besides oversight, the agency will also monitor developments in cryptocurrencies and the Japanese government’s efforts to build a central bank digital currency (CBDC).

The FSA is looking to overhaul its current crypto regulations and implement new rules by the middle of 2022. With the new rules in place, the agency hopes to bring more stability to the crypto space in Japan while encouraging innovation and development.

The current crypto laws in Japan were instituted in 2019 following the hack of Bitpoint – one of the country’s top exchanges at the time. The rules implemented strict Anti-Money Laundering (AML) policies on local Bitcoin exchanges at the time, marking the first time the FSA will step in to regulate crypto.

Interestingly, the current move appears to have been inspired by another security breach. Last week, Liquid Global, another exchange based in the country, was a victim of a cyber attack that saw it lose $80 million in assets – almost three times the losses racked up in the Bitpoint hack. While the exchange is looking to remediate things, Jiji Press claims the FSA is using the incident to further its agenda.

The agency particularly believes that the Liquid hack means exchanges have still not implemented safe AML policies. So, it is time for things to change.

A Long Road to Get Here

Japan’s regulatory environment has been quite challenging for exchanges. Earlier this year, the FSA announced the planned adoption of the Travel Rule from the Financial Action Task Force. The Travel Rule primarily requires that crypto service providers and asset custodians share transaction data for recipients and senders. Despite being decried by the crypto industry bigwigs, the rule has slowly gained adoption across the world. As the FSA’s announcement explained, the agency is now looking to adopt the rule by April 2022.

The agency also asked the Japanese Virtual Currency Exchange Association (JVCEA) – a self-regulatory crypto organization – to prepare for the Travel Rule’s implementation soon. The JVCEA had largely been free to regulate the Japanese crypto space, but things are about to heat up significantly.

Last month, Reuters also reported that the Japanese Ministry of Finance is strengthening its efforts to regulate crypto on a global scale. The report explained that the ministry and several other regulatory bodies are now upscaling to impose stricter rules on crypto.

Besides the staff increase, Reuters also reported that Tokyo is open to engaging with global financial regulators to develop private crypto rules. With agencies like the G20 and G7 groups already calling for regulations for private fiat-pegged stablecoins, Japan is looking to take the lead.

With new regulations coming and the Travel Rule breathing down their necks, crypto companies in Japan are about to have a rough ride.

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Author: Jimmy Aki