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

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

“Eventually,” A Digital Dollar Could Be Issued But Fed Is Still A “Long Way” From Deciding On It

“Eventually,” A Digital Dollar Could Be Issued But Fed Is Still A “Long Way” From Deciding On It, Says A US Central Bank Official

Dallas Federal Reserve Robert Kaplan said the US central bank could see it eventually issuing its own digital currency, calling it the “last mile” in the digitization of the payment system.

“I would imagine in the years ahead — it’s something the Fed is actively working on now — and I can see reasons why that will eventually get developed; China is already doing their own experiment with it,” Kaplan said in a virtual appearance at Texas Tech.

Still, the US Fed is a “long way” from deciding on a digital dollar and is currently studying the issues such as its potential impact on banks.

The US central bank is working with the Massachusetts Institute of Technology for a digital dollar, which Chair Jerome Powell said is “far more important” to get right than fast.

“I think that’s one of the stronger arguments in its favor — that … you wouldn’t need stablecoins, you wouldn’t need cryptocurrencies if you had a digital U.S. currency,” Powell said recently.

Meanwhile, Fed Governor Christopher J. Waller is skeptical of central bank digital currencies (CBDCs) and believes it is rather a solution in search of a problem.

Other central banks are also taking similar steps with the European Central Bank starting a two-year investigation into the feasibility of the digital euro.

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Author: AnTy

Bloomberg and Galaxy Digital Launches DeFi Index; SEC Chair Gary Gensler says DeFi is “A Bit of A Misnomer”

Bloomberg and Galaxy Digital Launches DeFi Index; SEC Chair Gary Gensler says DeFi is “A Bit of A Misnomer”

Bloomberg and Galaxy Digital have collaborated to launch the Bloomberg Galaxy DeFi Index (ticker: DEFI).

The benchmark owned and administered by Bloomberg Index Services Limited and co-branded with Galaxy will measure the performance of the largest decentralized finance (DeFi) protocol by market value.

“Decentralized finance is growing as the next major investment theme within crypto,” said Alan Campbell, Head of Product Management for Bloomberg’s Multi-Asset Index business.

“As liquidity and institutional custody solutions continue to grow, DeFi has become an increasingly compelling option for institutional investors, and we’ll continue working with Galaxy to expand our crypto index offering.”

The benchmark will consist of DeFi blue chips, including Aave (AAVE) making up 18% of the Index, Maker (MKR) 12.7%, Compound (COMP) 10%, Yearn.Finance (YFI) 5.4%, Synthetix (SNX) 5.0%, SushiSwap (SUSHI) 4.3%, 0x 2.8%, and UMA (UMA) 1.8%.

The index will mainly consist of Uniswap (UNI), having a weightage of 40%. The popular DEX is currently having another governance issue with a proposal for “Community-Enabled Analytics” that would have analytics firm Flipside Crypto managing $25 million worth of UNI tokens.

Dune Analytics opposed the proposal arguing that “grants should go to community members, not service providers,” while others argued that the issue is such a proposal would have passed without notice to the community.

Along with the index launch, the fund manager is now also offering Galaxy DeFi Index Fund, a passively managed fund tracking the performance of DeFi.

Meanwhile, US Securities and Exchange Commission (SEC) Chair Gary Gensler said these peer-to-peer networks are not immune from oversight this week. Some DeFi projects have features that make them look like the type of entities the SEC oversees, he added.

Calling DeFi “a bit of a misnomer,” Gensler said in an interview with WSJ, “These platforms facilitate something that might be decentralized in some aspects but highly centralized in other aspects.”

Gensler said projects that reward participants with digital tokens or similar incentives could cross a line into something that should be regulated no matter how “decentralized” they are.

“There’s still a core group of folks that are not only writing the software, like the open-source software, but they often have governance and fees.”

“There’s some incentive structure for those promoters and sponsors in the middle of this.”

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Author: AnTy

Another Futures-backed Bitcoin ETF Filed for “Significant Investor Protections”

This time it’s from Mike Novogratz’s Galaxy Digital under the Investment Company Act of 1940.

Mike Novogratz’s Galaxy Digital has filed for a Bitcoin futures exchange-traded fund (ETF) with the SEC.

The Fund will not invest directly in Bitcoin rather in the futures trading on the regulated platform CME.

This prospectus has been filed under the Investment Company Act of 1940, much like four other applications from VanEck, ProShares, Valkyrie, and Invesco, after SEC Chair Gary Gensler signaled openness to futures-based ETFs that provides “significant investor protections.”

The SEC, however, has yet to approve a single crypto ETF while several, in double digits, have been filed with the US regulator.

Unlike the physically-backed ETF that would track Bitcoin more closely, “Bitcoin futures ETFs, if approved by the SEC, could cost investors 5-10 percentage points in annual returns by rolling contracts from one month to the next, potentially limiting their appeal,” wrote ETF Analysts for Bloomberg, Eric Balchunas and James Seyffart in a note.

Galaxy also filed for a Bitcoin ETF in April and is the sub-advisor to the CI Galaxy Bitcoin ETF, which has $256 million in assets along with the CI Galaxy Ethereum ETF, which has almost $510 million in assets.

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Author: AnTy

Jamaica’s Central Bank Begins Minting Country’s Digital Currency (CBDC)

Jamaica’s Central Bank Begins Minting Country’s Digital Currency (CBDC)

Central Bank Digital Currencies (CBDCs) have become a hot topic in the last year, with Asian giant China leading the charge.

However, Caribbean nation Jamaica is now at the forefront following its roll-out of its first wholesale digital currency in a recently concluded ceremony.

BOJ To Issue $1.5 million CBDCs By December

The Bank Of Jamaica (BOJ) is planning to issue a total of 230 million Jamaican dollars (JMD), worth approximately $1.47 million in CBDCs, to deposit-taking institutions and authorized payment service providers. This, according to the announcement, is part of the digital currency pilot program ending this December.

The first batch of digital currency was minted to demonstrate the process of creating this digital version of fiat. This was done before the Minister of Finance and Public Service Nigel Clarke Jamaica, BOJ Governor Richard Byles, and the management team from blockchain firm eCurrency Mint.

Commenting on the ground-breaking achievement, Minister Clarke highlighted the pivotal role CBDCs play in the creation of a digital economy for the island country. The minister also promised that necessary legislative structures would be implemented to provide a legal basis for the Jamaican CBDC by the end of 2021.

Clarke has previously emphasized CBDC’s influence in helping Jamaica transition into a digital society. He said it could greatly improve financial inclusion by making financial services available to the unbanked population.

BOJ Governor Richard Byles also believes that Jamaica’s next CBDC adoption step would be to ensure widespread access and acceptance by bringing it closer to users.

Also speaking in the ceremony was eCurrency CEO, Jonathan Dharmapalan who commended the nation for its commitment towards creating a more inclusive financial landscape for its citizens. He also noted that Jamaica has the fastest-moving CBDC project in the world.

Jamaica’s Rapid Progress In CBDC Project

Jamaica has been working on developing a CBDC since early 2020. The bank had originally planned to begin its pilot program in May but was delayed due to unstipulated reasons.

Last year, BOJ disclosed that it was researching CBDCs internally and introduced its new Fintech Regulatory Sandbox. The following month, the apex bank formally invited interested CBDC providers to develop and test potential CBDC solutions in this controlled environment.

The Jamaican Central bank then announced a partnership with eCurrency Mint in March 2021. The technology provider was chosen to support BOJ in testing its CBDC solution. eCurrency Mint was also revealed as the major provider when its national CBDC eventually roll-out begins in early 2022.

Other countries have also been picking up the pace of their CBDC research as no apex bank wants to be left behind when it comes to cross-border payments.

Countries like India already have plans to pilot their CBDCs soon. Last month, Reuters reported that the Reserve Bank of India (RBI) was considering a phased introduction of its CBDC. The Central Bank of Venezuela is also planning to launch a CBDC in October.

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Author: Jimmy Aki

Amazon Is Hiring A Product Leader to Develop its Digital Currency

Amazon Is Hiring A Product Leader to Develop its Digital Currency

Amazon is hiring a Digital Currency and Blockchain Product Lead as it progresses into the cryptocurrency sector.

With $1.83 trillion market capitalization, the tech giant is looking for an experienced product leader to develop Amazon’s Digital Currency and Blockchain strategy and product roadmap.

Based in Seattle, Washington, the position is part of Amazon’s Payments & Experience team.

According to the job posting on the company’s website, the person must understand the digital cryptocurrency ecosystem and related technologies to “own the vision and strategy” for its digital currency and its roadmap.

They will be leveraging the domain expertise in cryptocurrency, blockchain, distributed ledger, and Central Bank Digital Currencies (CBDC) to develop the capabilities and drive the overall vision and product strategy.

Earlier this year, there has been chatter about the company working on an Amazon Coin when it posted a job for “Software Development Manager – Digital and Emerging Payments” with Mexico’s prime members chosen for the new payment product.

Back in 2019, when Facebook announced its stablecoin project Diem previously known as Libra, Patrick Gauthier, vice president of Amazon Pay, said it wouldn’t be creating its own cryptocurrency anytime soon.

“At Amazon, we don’t really deal in the speculative,” Gauthier said at the time.

Earlier this month, Jeff Bezos stepped down as the company CEO and is now exploring space. Andy Jessy is the new CEO who previously ran Amazon’s cloud-computing division (AWS).

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Author: AnTy

India Central Bank, RBI, Considers Rolling Out Digital Rupee In A ‘Phased’ Manner

India Central Bank, RBI, Considers Rolling Out Digital Rupee In A ‘Phased’ Manner

The Reserve Bank of India (RBI) is working on a phased implementation strategy for its central bank digital currency (CBDC) program.

India Considers Running CBDC Pilot Programs

The Deputy Governor of RBI, T. Rabi Sankar, said the bank is investigating the issuance of a CBDC and may consider running a series of pilot programs to that effect.

While speaking at a conference organized by the Vidhi Center for Legal Policy, Sankar said introducing a CBDC would help protect the Indian populace from volatile private digital assets.

According to the deputy governor, a phased introduction of a digital Rupee would allow time for needed legal changes to the country’s foreign exchange rules.

Sankar said that several issues would be examined before CBDC implementation could be considered. He added that security or privacy concerns and how retail payments would be organized would also be looked into.

“Some key issues under examination are – (i) the scope of CBDCs – whether they should be used in retail payments or also in wholesale payments; (ii) the underlying technology – whether it should be a distributed ledger or a centralized ledger, for instance, and whether the choice of technology should vary according to use cases; (iii) the validation mechanism – whether token-based or account-based, (iv) distribution architecture – whether direct issuance by the RBI or through banks; (v) degree of anonymity etc.”

While the Indian government has shown signs of interest in CBDC previously, that has not been the same with cryptocurrencies. The country has exhibited various attempts to ban cryptocurrencies outrightly.

Earlier this year, the government hinted at its plans of introducing a law to ban private cryptocurrencies. The legislation had sought to prohibit cryptocurrencies while allowing for certain exceptions to promote blockchain technology.

However, the mood has somewhat changed in recent months, with signs of the country taking a moderate approach and regulating the crypto market.

CBDCs Making Progress In Different Countries

CBDCs have gained a lot of attention over the past year. Several countries have moved forward to study and implement CBDC pilot tests in the wholesale and retail segments.

South Korea recently chose Ground X, a blockchain subsidiary of a local internet company Kakao, as the technology provider for the pilot tests of its digital Won.

According to local media agency Korea JoongAng Daily, Ground X would participate in the South Korean CBDC project alongside US-based blockchain company ConsenSys. Other Kakao affiliates like KakaoBank and Kakao Pay would also participate.

The European Central Bank is also making progress. Last week the bank approved an investigation phase for a CBDC, which would last for 24 months. This stage would focus on addressing issues surrounding design and distribution.

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Author: Jimmy Aki

China Has No Final Date for Launch of e-CNY, the ‘Cash Substitute’ with Smart Contract Feature

Declining use of cash and rapid rise in crypto, especially stablecoins, drove POC’s digital fiat development, which will coexist with physical RMB. In its whitepaper, e-CNY claims to offer anonymity for small value and collects less transaction information than traditional electronic payment unless, of course, “stipulated otherwise in laws and regulations.”

China’s central bank has released the whitepaper of its digital fiat, e-CNY detailing the progress in its research and development. While People’s Bank of China aims to continue the advancement of the pilot in line with its 14th Five-Year Plan, there is “no preset timetable for the final launch” yet.

According to the whitepaper, it is seeking public comments on its digital fiat that is driven by the development of the digital economy, which calls for new retail payment infrastructures.

“As the Chinese economy is shifting from high-speed growth to high-quality development, technological innovation represented by the digital economy has become an important driver of development.”

The bank noted that in China, there is a significant decline in the usage of cash, with the number of transactions done via mobile accounting for 66%, those paid in cash 23%, and cards making up 7%, as per the PBOC survey in 2019.

Also, during the survey period, 46% used no cash.

Besides the foundation of money changing, the “rapid” rise of cryptocurrencies, especially global stablecoins, is another factor driving the need for digital fiat.

Claiming to be decentralized and entirely anonymous, their lack of intrinsic value, acute price fluctuations, low trading efficiencies, and huge energy consumption can hardly serve as currencies used in daily economic activities, wrote the central bank.

As for commercial institutions launching their global stablecoins, it will bring risks and challenges to the international monetary system, monetary policies, and cross-border capital flow management, it added.

The Digital Version of Fiat

“E-CNY is the digital version of fiat currency issued by the PBOC and operated by authorized operators,” notes PBOC as he explains just what exactly is digital fiat.

e-CNY is China’s legal tender with all the basic functions of money, which adopts a centralized management model and a two-tier operational system. This means the right to issue e-CNY belongs to the state with PBOC at the center, which issues e-CNY to authorized operators, which are commercial banks that exchange and circulate e-CNY to the public.

It is simply a “substitute for cash in circulation” and will coexist with physical RMB, which the PBOC will continue to supply as long as there is demand for it, the country’s apex bank wrote.

With e-CNY, the central bank’s objective is to diversify the forms of cash and satisfy the public’s demand for digital cash.

While mainly serving domestic retail payment demands, the PBOCs objective is also to explore the improvement of cross-border payments.

Cross-border payment involves various complicated issues, but “the internationalization of a currency is a natural result of market selection,” it said. Given that e-CNY is “technically ready for cross-border use,” the central bank will explore a cross-border pilot while upholding the principle of having a two-tier and risk-free system “to meet regulatory and compliance requirements of various countries,” it said.

PBOC also claims to offer anonymity in its e-CNY but only for small value and traceable for high value. For this, it will set up a firewall for related information.

“The e-CNY system collects less transaction information than traditional electronic payment and does not provide information to third parties or other government agencies unless stipulated otherwise in laws and regulations.”

The digital fiat also features programmability, deploying smart contracts that don’t impair its monetary functions, enabling self-executing payments according to predefined conditions or terms agreed between two sides.

When it comes to a wallet, there are different types based on the strength of a customer’s personal information, which the PBOC, together with authorized operators and relevant organizations, jointly build, own, and share.

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Author: AnTy