Fintech Savings App, Acorns, Plans to Introduce Crypto Assets to Its 4 Million Subscribers

Fintech Savings App, Acorns, Plans to Introduce Crypto Assets to Its 4 Million Subscribers

In an interview with CNBC, Noah Kerner, CEO of fintech firm, Acorns said the startup plans to introduce cryptocurrencies and other digital assets on its platform. This will give users the ability to invest and learn more about cryptocurrencies. The move represents a switch from the conservative nature Acorns has adopted in previous years.

Additionally, the savings app has appointed former Amazon employee David Hijirida as president to lead the company’s day-to-day operations. Hijirida started his journey in traditional finance companies before spending 12 years in management roles at Amazon, including its global payments division. He also held the CEO position at digital bank, Simple Finance from 2018 before unexpectedly shutting down operations in May this year.

According to Kerner, introducing Bitcoin and other digital currencies will be launched on the app in the coming weeks. This will allow users to diversify their portfolios and learn how to manage their crypto assets, he added during the interview.

“We are going to let people customize their portfolios and add individual equities and crypto into a slice of their diversified portfolios, much the way a money manager would advise you to behave.”

The fintech startup is preparing for its expected public listing later in the year by appointing seasoned managers such as David, Kerner explained. Following a merger with Pioneer Merger Corp., a special purpose acquisition company (SPAC), Arcons was valued at $2.2 billion, preparing for its public sale launch in May. David is the second high-ranking manager appointed in the last two months after it named Twitter executive Rich Sullivan its new chief financial officer.

“David obviously has a great depth and breadth of financial services and technology experience.”

“He has a great combination of fintech, payments, operations, and also product development experience.”

The growth of Arcons is nothing short of impressive, having reached over 4 million paying subscribers with a plan to reach over 10 million subscribers in the next four years.

Unlike fintech startups such as Robinhood, which went public last year, Arcons offers savings and long-term investment options rather than a short-term trading service that offers gamified stock and crypto trading.

“Everything Acorns does about long-term saving and investing for the everyday consumer.”

“It’s why our subscription model is so important because it decouples the business from behaviors that aren’t necessarily customer-aligned, like driving trading or driving spending or driving borrowing.”

The platform is yet to release a launch date for its planned crypto assets inclusion, Kerner concluded.

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Author: Lujan Odera

ECB President Says, Cryptocurrencies Are Highly Speculative Assets That Claim Their Fame As Currency

ECB President Says, Cryptocurrencies Are Highly Speculative Assets That Claim Their Fame As Currency

Christine Lagarde says, “we have to stand ready” for CBDC, which will be available side by side with paper currencies while calling for stablecoins to be regulated.

“Cryptos are not currencies. Full stop,” said Christine Lagarde, President of the European Central Bank (ECB).

In an interview with Bloomberg this week, when asked if she thinks cryptocurrencies are a plus for the global economy or if it’s too early to tell, Lagarde blasted cryptos, saying while they possibly can be, cryptocurrencies are not currencies.

“Cryptos are highly speculative assets that claim their fame as currency.”

She then talked about the need to distinguish between cryptos that are highly speculative, even suspicious occasionally, and have high intensity in terms of energy consumption.

Lagarde also talked about stablecoins during the interview, which she said are “beginning to proliferate.” The total market cap of stablecoins has now surpassed $124 billion, with USDT, USDC, and BUSD leading the market with their respective market share at 58.5%, 23.65%, and 10.27%. Stablecoins, she said,

“need to be regulated where there has to be an oversight that corresponds to the business that they are actually conducting irrespective of how they name themselves.”

Lagarde also noted that some big techs are also trying to promote stablecoins and push along the way, which she said are “a different animal.”

Tech giant Facebook first announced its stablecoin Diem in 2019 with a plan to be backed by a wide mix of fiat currencies and government debt and instantly ran into regulatory scrutiny. Last month, David Marcus said they seek necessary regulatory clearances and have already secured approvals for its digital wallet Novi in nearly every state in the US.

Central banks are also “prompted” by the demand of customers to produce digital fiat money, “something that will make the central bank and central bank currencies fit for the century we’re in,” she said.

This is why every central bank, including the ECB and the Federal Reserve, is looking into central bank digital currency (CBDC) so that instead of having banknotes and cash, “we can have exactly the same thing. But in a digital form.”

“So all of us are working on this and certainly always keen to push the CBDC issue on our agenda because I believe that we have to stand ready for that.”

When launched, they will be available side by side with paper currencies,

“because we want customers to have their preference. If they still want to hold those banknotes and cash, fine. And it should continue to be available in the long run.”

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Author: AnTy

Fidelity Digital Assets Exploring the Possibility to Offer Yield Funds, Stablecoins, and DeFi Tokens

Fidelity Digital Assets Exploring the Possibility to Offer Yield Funds, Stablecoins, and DeFi Tokens

Fidelity Digital Assets also plans to increase its employee headcount by up to 70% by the end of the year. Meanwhile, its survey reveals over 60% of US investors are neutral to positive about a Bitcoin ETF.

Fidelity Investments is growing its digital assets team to expand its cryptocurrency-related products in response to the increasing interest from financial advisors, family offices, and other institutional investors.

Tom Jessop, president of Fidelity Digital Assets, said in an interview that the company is planning to increase its employee headcount by up to 70% by the end of the year.

Fidelity’s digital asset arm that provides institutional services including trade execution and custody is also exploring the possibility of offering yield funds and other products that may involve stablecoins or DeFi tokens, said the managing director, Peter Jubber.

“All of these are candidates for us as we begin this exploration.”

“Could they result in actual products? Early days.”

Fidelity also published a survey this week that showed that in the US, 79% of family offices have a neutral, positive view of digital assets. The survey of 1,100 professionals was conducted between early December and early April.

It further showed that factors such as fear of inflation due to financial stimulus was a catalyst for many investors to enter the crypto market.

“A catalyst for a lot of industries was the start of the pandemic.”

“Our clients said the factor to get them off the fence were the macro economic issues in the pandemic.”

For the first time, Fidelity surveyed Asian investors and found them to be the most accepting of digital assets, with more than 70% of those surveyed currently invested in them.

Investors are particularly looking for institutional investment products to hold digital assets. More than 60% of U.S. investors express a neutral to positive view about a potential Bitcoin exchange-traded fund (ETF). Fidelity itself has filed an application with the SEC for a Bitcoin ETF.

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Author: AnTy

House Democrats Planning to Hike Tax on Crypto Assets in Infrastructure Bill

House Democrats Planning to Hike Tax on Crypto Assets in Infrastructure Bill

The trillion-dollar infrastructure bill has moved to the House to pass, and after fighting and losing in the Senate, another big fight is at the crypto industry’s door.

Citing sources with the knowledge of the plans, Politico reported that Richard Neal, chairman of the House Ways and Means Committee, is the one preparing to add these measures.

On Monday, House Democrats released a package of proposed tax increases to help pay for the White House’s $3.5 trillion spending package. Part of the $2 trillion tax hike is a proposal to add currencies, commodities, and crypto assets to the wash-sale rule, which is estimated to raise about $16 billion over a decade. The Ways and Means explainer document notes,

“This section includes commodities, currencies, and digital assets in the wash sale rule, an antiabuse rule previously applicable to stock and other securities. The wash sale rule in section 1091 prevents taxpayers from claiming tax losses while retaining an interest in the loss asset. The amendments made by this section apply to taxable years beginning after December 31, 2021.”

Under US rules, a taxpayer can’t deduct the losses from wash sales which is defined as when a security is sold and within 30 days, “substantially identical” security is then purchased. Cryptocurrencies aren’t currently subject to these rules.

The document further talks about applying constructive sales rules to digital assets, “anti-abuse rules previously applicable to other financial assets.” This rule treats “the adoption of certain offsetting positions to previously owned positions as sales of the previously owned position,” preventing taxpayers from “locking in investment gains without realizing taxable gain.”

House Democrats are also targeting wealthy Americans by proposing raising the tax rate on capital gains and qualified dividends to 28.8%, applied to stock and other asset sales that occur after Sept. 13, 2021.

According to this, starting next year, taxpayers would incur a top federal rate if their taxable income exceeds $400,000 (single), $425,000 (head of household), and $450,000 (married joint), in line with the Biden administration pledging to not raise taxes for households making less than $400,000.

The bill is expected to be revealed before the end of the month.

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Author: AnTy

Ukraine Passes the Law to Regulate Virtual Assets With Nearly Unanimous Vote

Ukraine Passes the Law to Regulate Virtual Assets With Nearly Unanimous Vote

This is a step in the direction of Ukraine’s plan to open a cryptocurrency market to businesses and investors by 2022.

The Ukrainian Parliament passed a law this week that legalizes and regulates virtual assets in the country.

The bill was drafted in 2020 and was passed on Sept. 8 with support from 276 lawmakers, while only six were against the legalization of bitcoin and cryptocurrencies.

For the first time, the bill also provides clarity on digital wallets and private keys in Ukraine.

With this bill, the country aims to provide clarification on this asset class and protect those who own them. While crypto-assets were previously illegal in the country and citizens could buy and sell them, the law enforcement agencies treated the virtual assets as a scam. They conducted raids, often confiscating expensive equipment.

Just last month, the Security Service of Ukraine (SBU) blocked a network of what it called “clandestine cryptocurrency exchanges” running in Kyiv and claimed that these exchanges were facilitating money laundering and providing transaction anonymity.

But the law will allow crypto businesses to work officially in the country. To register a crypto business, a company is needed to prove that it is transparent and has an excellent reputation.

‘It will reduce stereotypical attitudes towards cryptocurrencies and will help them to become normal financial instruments,” said Oleg Kurchenko, CEO of virtual asset exchange platform Binaryx.

While Ukraine’s Ministry of Digital Transformation, the National Bank, and the National Securities Commission are the main regulator of the virtual asset market, as per the law, the government wants to have another regulator to issue permits to crypto companies.

If signed by President Volodymyr Zelensky, where it is now headed, the law will protect the crypto owners and exchange platforms from fraud and determine how it will regulate the cryptocurrency market in the future, according to the local publication.

The country further plans to open a crypto market for investors and businesses by next year, a spokesperson of the Ministry of Digital Transformation told the Kyiv Post. Mykhailo Fedorov, Ukraine’s Minister of Digital Transformation, himself has said previously that the country was modernizing its payment market so that its central bank would be able to issue digital currency.

On an official state visit to the U.S. in August, President Zelensky also spoke of Ukraine’s budding “legal innovative market for virtual assets” as a selling point for investment.

But this would first require the parliament to pass the laws and amend the Tax Code and the Civil Code. Jeremy Rubin, CEO of bitcoin R&D lab Judica said,

“Ukraine’s improved legal status for bitcoin is a laudable symbolic measure that we progress towards a world that respects individual rights universally.”

“But it is only symbolic — bitcoin seeks neither permission nor forgiveness in its mission to protect persecuted communities from unjust governments.”

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Author: AnTy

94% Financial Industry Pioneers say Digital Assets will Replace Fiat in 5-10 Years: Deloitte Report

“Participation in the age of digital assets is not an option—it is inevitable,” says the report, as digital assets have a fundamental impact on deposits and with organizations’ current business models at stake.

An impressive 97% of the financial services industry (FSI) Pioneers and more than three-quarters of all respondents see blockchain and digital assets as a way to gain competitive advantage reports Deloitte 2021 Global Blockchain Survey.

The survey was conducted between late March and early April 2021 as a way to gain insights into overall attitudes and investments in blockchain and digital assets. It polled 1,280 senior executives and practitioners in the US, the UK, Mainland China, Germany, Japan, Hong Kong, Singapore, South Africa, and the United Arab Emirates.

According to the survey, nearly 80% of respondents said that digital assets would be “very/somewhat important” to their respective industries in the next 24 months.

“The business imperative of adopting blockchain and digital assets is growing noticeably, as organizations increasingly accept that their current business models are at stake,” noted the report.

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There is also a consensus among the FSI people that digital assets will replace fiat currencies in the next five to 10 years, with 76% believing the changeover will occur. This number jumps to 94% for FSI Pioneers.

With the growing interest of major institutions and individuals in the cryptocurrency industry, funds also continue to flow into the digital assets market. According to Deloitte, “the fundamental impact on deposits creates an important opportunity for banks and all industries that hold assets.”

As such, nearly half (47%) of FSI survey respondents said that custody of digital assets represented a “very important” role for crypto assets in their respective organizations, ranking as the top role. Safe custody, too, ranks as the top concern around holding or transacting in central bank digital currencies (CBDC) at 57%.

Custody is followed by new payment channels, diversifying investments/portfolios, access to decentralized finance platforms, and tokenization of assets in terms of the role of digital assets in the respondent’s organization or project.

Approximately six in 10 respondents saw regulatory barriers among the biggest obstacles to the acceptance of digital assets.

Meanwhile, nearly 70% identified data security regulation as the greatest need of modification and 71% cybersecurity among the biggest obstacles to acceptance of digital assets — “suggesting that even the most dedicated believers in digital assets have legitimate security concerns.”

Still, there is “shared optimism” about future revenue opportunities from crypto solutions, with 80% strongly or somewhat agreeing.

Coming onto decentralized finance, 83% of FSI respondents said they believe digital assets will play a very or somewhat important role in it.

When it comes to which digital asset types will have a significant positive impact on their organizations, 42% said stablecoins or CBDCs, 38% algorithm-driven stablecoins, and 33% enterprise-controlled coins.

“Participation in the age of digital assets is not an option—it is inevitable,” concludes the report adding, “Leaders are left only to decide how and when their organizations should start—and how to use digital assets and the new global financial service infrastructure to their greatest advantage.”

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Author: AnTy

Genesis Digital Assets Secures 20,000 ASIC Miners in Expansion Play

Genesis Digital Assets Secures 20,000 ASIC Miners in Expansion Play

North America-based Bitcoin miner Genesis Digital Assets is ramping up its mining capacity.

Earlier this week, the company announced the successful purchase of 20,000 mining rigs from Canaan Creative as it looks to continue scaling up its mining activities.

Additional 180k ASIC Miners Up For Grabs

In its official statement, Genesis explained that the purchase is just a step in its current expansion phase. Besides these rigs, Canaan has also allowed the company to purchase an additional 180,000 mining rigs.

Both parties didn’t reveal the specific make of the rigs or how much they cost in total.

Meanwhile, this recent acquisition continues a long-standing relationship between Genesis and Canaan, with both companies entering into a partnership in Q1 2021 after Genesis purchased Avalon miners for $93 million. Most recently, Genesis bought 10,000 Bitcoin miners from Canaan in June.

Genesis co-founder and executive chairman Abdumalik Mirakhmedov explained that these rigs will be deployed primarily in North America as well as its outlets in several Nordic countries.

“Genesis remains committed to its goal of hitting a power generation rate of 1.4 gigawatts at the end of 2023 The company’s current levels stand at just over 143 megawatts – or a total of 2.6 exahashes (EH/s),” he added.

The purchase is coming after Genesis closed a $125 million equity funding round, led by British investment firm Kingsway Capital. At the time, the company had said that it would direct the funds towards its expansion efforts in the Nordic region and the United States.

Competition Heats Up

Genesis is just one of the mining companies that have ramped up expansion efforts in the wake of China’s ban on all crypto mining activities. But, it is currently facing stern competition.

Last month, the top US mining operation, Riot Blockchain, published its quarterly results, showing record revenues for Q2 2021. The results showed that Riot netted an impressive $31.5 million from mining-related activities throughout the quarter – up 1,540% year-on-year (YoY).

Net incomes also hit record levels for Riot, with $19.3 million compared to the $10.6 million loss suffered in Q2 2020.

The company is expanding aggressively as well, with the purchase of 42,000 s19k Antminers from Bitmain. Riot’s chief operations officer explained that the deal, valued at $138.5 million will position Riot as the foremost mining company in the United States.

Riot also plans to get a minimum of 3,500 s19j Antminers monthly from November 2021 to October 2022, and it recently purchased Whinstone U.S. Inc, a Texas-based data facility, for a record value of $650 million.

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Author: Jimmy Aki

Digital Assets “Not Regulated by the CFTC,” Even if They Are A Commodity: CFTC Commissioner

Digital Assets “Not Regulated by the CFTC,” Even if They Are A Commodity: CFTC Commissioner

One of the Commissioners of Commodity Futures Trading Commission (CFTC), Dawn D. Stump, released a statement on Monday detailing the agency’s regulatory authority over digital assets. She said,

“The CFTC’s regulatory oversight authority, as well as the application of our enforcement authority, must be well understood by the public. Only then can proper regulatory compliance be demanded.”

With the growth in cryptos’ popularity raising the question of how this new financial asset class is regulated in the US, Stump said, “there has often been a grossly inaccurate oversimplification,” regarding either categorizing them as securities regulated by the SEC or commodities regulated by the CFTC.

This misunderstanding about “US regulatory delineations has grown to a point” that Stump believes it now requires correction. In response, she has laid out ten points as to how and what the CFTC regulates.

These basics by Stump covers that commodity’s definition under CFTC is “extremely broad” and does not regulate cash commodities. So, “Even if a digital asset is a commodity, it is not regulated by the CFTC,” however, the CFTC does regulate derivatives on digital assets, it said.

She further states that when it comes to CFTC’s regulatory authority concerning crypto-assets, instead of considering whether a cryptocurrency is a commodity or security, the focus should be on whether a futures contract or other derivatives product is involved.

“The CFTC does not regulate commodities (regardless of whether or not they are securities); rather, it regulates derivatives—and this is true for digital assets just as for any other asset class.”

CFTC Chair Brian Quintez, a notable crypto advocate meanwhile, is preparing to spend August 31st as his last day in the office. In his statement upon departure, he said,

“During my term, the CFTC has overseen the listing of Bitcoin futures contracts; the custody of digital assets within the traditional clearing infrastructure; the proliferation of blockchain technology; the creation of cryptographic, tokenized commodities; and the rapid expansion of decentralized finance (DeFi), which purports to realize the ultimate transparency-competition-innovation-reward dynamic of a true free market.”

US president Joe Biden is reportedly planning to nominate acting CFTC Chair Rostim Behnem to serve as the full chairman.

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Author: AnTy

Swiss Companies to Offer Institutions Tokenized Assets Built on Tezos (XTZ)

Swiss Companies to Offer Institutions Tokenized Assets Built on Tezos (XTZ)

A trio of Swiss-based crypto-friendly banks has announced plans to offer regulated tokenized assets using the Tezos blockchain. The banks are Crypto Finance, InCore Bank, and Inacta.

Regulated Trio Team Up with Tezos to Create Tokenized Assets

Tezos was chosen because of its unique blockchain. The network is self-upgrading, which enables the activation of essential consensus updates without splitting the network.

The banks plan to integrate financial products for their institutional clients using a new token standard on the Tezos blockchain.

The new standard dubbed “DAR-1” was created based on Tezos’ FA2 design. The DAR-1 token standard enables smart contracts necessary to support the modern financial markets in compliance with regulations.

Crypto Finance would serve as the infrastructure provider on the project, while InCore Bank would handle the tokenization using the new DAR-1 token standard, which Inacta developed.

In addition to the joint partnership, InCore Bank has also introduced institutional-grade storage, staking, and trading services for XTZ, the native cryptocurrency of the Tezos blockchain.

This would make InCore Bank the first Swiss business-to-business bank to launch staking services for the Tezos network, unlocking new yield earning products for institutional customers.

The XTZ staking with InCore Bank can be initiated directly via embarking, unlike the traditional staking method. Clients will receive periodic statements regarding staking payouts.

Tezos is quite popular in Switzerland, which is not surprising as the network’s founders, the Tezos Foundation, is based there. Last year, Swiss-based digital asset firm Sygnum Bank launched trading and custody services for Tezos.

More recently, Crypto exchange Gemini announced the listing of the Tezos token on its Gemini Earn platform. Gemini Earn is a passive income program where tokens are locked with world-class security and interest accrued daily.

Tezos Rolling Out Upgrades On Network

In recent times Tezos has welcomed integrations from different protocols as it continues to upgrade its network.

Tezos is an open-source proof of stake blockchain network that powers applications and tools behind leading financial institutions, central banks, NFTs, DeFi platforms, and so on.

The network’s seventh successful upgrade called Granada went live this year. Granada contains numerous bug fixes and minor improvements for the Tezos protocol. The update cuts block times in half and decreases smart contract gas consumption by 3-6x. It also introduces liquidity banking.

The upgrade, which is the third to occur this year, was named after a Spanish city. Granada goes live less than three months after the previous one, dubbed Florence.

The Florence upgrade was the update that doubled the size of maximum operations (from 16kB to 32kB), reduced gas in smart contract execution. It streamlined the amendment process by deactivating unused test chains on the Tezos protocol.

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Author: Jimmy Aki

Financial Industry Is Witnessing A Seismic Shift in Adoption of Crypto Assets: Deloitte Survey

Financial Industry Is Witnessing A Seismic Shift in Adoption of Crypto Assets; Could Replace Cash Within 10 Years: Deloitte

Satoshi Nakamoto’s original plan of revolutionizing the financial landscape is gradually coming to the fore. According to a report by one of the Big Four accounting firm Deloitte, more businesses and professionals are open to the idea of digital assets playing a role in their operations in the future.

Crypto May Rival or Replace Fiat In A Decade

The research titled Global Blockchain Survey polled over 1,280 financial service industry (FSI) professionals across several regions. The respondents were from the United States, the UK, Brazil, Germany, China, and others. The FSI professionals all agreed that there was a seismic shift in how financial services are being carried out since the advent of blockchain technology.

This prompted 76% of respondents to admit that crypto assets could serve as a strong substitute or outrightly replace traditional cash within ten to ten years. 73% noted that businesses should begin to adopt blockchain-based assets to avoid losing the competitive edge in the fast-paced crypto environment. 97% of a subset labeled FSI Pioneers with active blockchain-focused products noted that leveraging blockchain technology keeps their business competitive.

A total of 81% of respondents acknowledged that distributed ledger technology (DLT) is “scalable and has achieved mainstream adoption.”

Deloitte is a global professional services network operating out of 150 countries. It is part of the Big Four accounting firms, including KPMG, EY, and PwC. Deloitte has been hugely interested in the blockchain space for several years now. The firm has been keeping tabs on the nascent industry for the last four years.

Cybersecurity A Threat For Widespread Crypto Use

Aside from the positives, several participants who were questioned also pointed out a few barriers to its adoption.

71% of respondents said cybersecurity risks were a huge barrier to high-stake industries openly embracing the industry. According to them, the recent offshoot of cybercrimes has greatly curtailed investments in the burgeoning industry.

73% of the FSI Pioneers felt that regulatory uncertainty was the cloak on crypto’s shining armor. According to them, legacy-based financial institutions are still uncertain on regulatory stance given the general lack of regulatory goalposts for good practices in the emerging space.

A further 65% noted that the current financial infrastructure was not rightly positioned to tap into the revolutionary way of doing business that blockchain has facilitated.

Meanwhile, 43% of respondents noted that their businesses are exploring accepting crypto assets as payment methods. Another 45% said they would tokenize their assets as a means to stay up-to-beat with the fast-changing financial space.

Decentralized finance (DeFi) also got a worthy mention, with 44% of participants noting that exposure to cryptocurrencies would enable them to tap into the $85.94 billion industry.

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Author: Jimmy Aki