Treasury Yields Flip Negative as Crypto Lending Takes Off: Kaiko Report

Real yields that recently hit their lowest levels since 2003 are going down as consumer prices increase at their slowest pace in six months, making fixed-assets in classic portfolios underperform.

The crypto market has been recovering from the July 21 low of just under $1.3 trillion, having reached $2.47 trillion when earlier last week, the market experienced a small hiccup yet again.

In the past week, the market has been trying to make its way back up again but is currently struggling to break out strongly above.

Still, Bitcoin is currently trading around $46,800 and Ether at about $3,400, while the total crypto market cap is now past $2.2 trillion.

Amidst this, as we reported, lending in the cryptocurrency sector has been taking off, with DeFi stablecoins’ interest rates continuing to increase. Stablecoins’ total market cap has also grown to $123.68 billion, from less than $6 billion in March 2020.

“Treasury yields flip negative as crypto lending takes off,” noted crypto data provider Kaiko in its latest report.

image1

US Treasury yields went down on Tuesday after data showed that consumer prices increased at their slowest pace in six months. The consumer price index, a key inflation report, showed a 5.3% year-over-year increase for August, and Core CPI, which excludes volatile food and energy prices, rose 0.1% month over month – both slightly less than the expectations.

In reaction to this, the yield on the benchmark 10-year Treasury note fell to 1.285%, and the yield on the 30-year Treasury bond slid to 1.867%. Yields move inversely to prices.

Nonfarm payrolls, however, grew by just 235,000 in August, well below expectations of 720,000 new positions.

The Federal Reserve is currently monitoring the inflation, which it wants to see hit its 2% target and looking for strong employment results to start paring the monthly bond purchases.

Kaiko noted in its report that the Fed’s emergency monetary accommodation is what has put significant downward pressure on long-term bond returns over the past year.

“As global inflation increased and growth expectations worsened, real yields turned negative hitting their lowest levels since 2003 this past August.”

While fixed-income assets have been offering steady income flows, low volatility, and protection against falling equity valuations in a diversified portfolio over the past years, now that yields are drifting lower, the fixed-income allocation in the classic 60/40 portfolio is likely to underperform.

This combination of the ongoing low yield environment and the rising demand for liquidity in crypto markets is making the nascent crypto lending industry popular among market participants, it said.

In comparison to 0.7% per year paid by a typical savings account, even the centralized options in the crypto offer sizable returns ranging from 3% to 12%, which can get astronomical for big risk-takers.

In DeFi, the popular lending protocols Compound Finance and Aave have already launched their services specifically for institutions.

“Crypto lending allows users to supply cryptocurrencies in exchange for earning an annualized return, even in the absence of price appreciation.”

Read Original/a>
Author: AnTy

El Salvador’s Law Making Bitcoin Legal Tender to Take Effect in September, Paraguay to Follow

El Salvador’s President Nayib Bukele said in a national address that a recently passed law making bitcoin legal tender would take effect on September 7, noting that its use will be optional.

The countries’ Congress has already approved the proposal to embrace the cryptocurrency with a supermajority, making El Salvador the first country in the world to do so. Bukele said,

“The use of bitcoin will be optional, nobody will receive bitcoin if they don’t want it… If someone receives a payment in bitcoin, they can choose to automatically receive it in dollars.”

Salaries and pensions will also continue to be paid in USD, he added.

“One of the reasons we passed the bitcoin law is precisely to help people who send remittances,” said Bukele, adding the usage of crypto for remittance will eliminate the high cost of commissions involved in sending money across borders.

El Salvador relies heavily on money sent back from workers abroad. Remittances to the country made up nearly $6 billion, about a fifth of its gross domestic product (GDP) in 2019, one of the highest ratios in the world, showed World bank data.

According to Kenneth Suchoski, US payments and fintech analyst at Autonomous Research, less than 1% of the volume of global cross-border remittances are currently in cryptocurrency, which is expected to account for a larger share in the future.

On Thursday, Athena Bitcoin said it plans to invest over $1 million to install 1,500 crypto ATMs in El Salvador, especially where residents receive remittances from abroad.

President Bukele “presented us with a tough challenge of 1,500 ATMs, we will go for that, but in phases. We are a private company and we want to ensure that our development in the country is sustainable,” said the firm’s director for Latin America Matias Goldenhörn.

Athena installed its first crypto ATM in the country’s El Zonte beach as part of an experiment called Bitcoin Beach.

Amidst this, Paraguay is working on becoming the second country in the world to accept Bitcoin as legal tender.

Lawmaker Carlos Rejala is leading a bid to implement legislation to make Paraguay the second country to follow in El Salvador’s footsteps. Rejala announced on Twitter that he would be introducing a bill in the national Congress in July.

The bill that will be published on July 14 and seek to establish Bitcoin as legal tender will also introduce measures to make Paraguay a hub for foreign crypto investors.

Rejala first outlined his vision early this year when he said he was working with the crypto community in the country to make it a hub for the crypto investors and “subsequently to be placed among the ones on the cutting edge of digital technology.”

Juanjo Benitez Rickmann, the CEO of crypto exchange Bitcoin.com.py, then confirmed that he collaborated with the congressman to make Paraguay a crypto-friendly country and take “advantage of the renewable and inexpensive energy provided by hydroelectrics.”

Rejala, too, has emphasized Paraguay’s access to renewable energy as an impetus for attracting investment. Nearly 100% of the country’s electricity needs are served by hydroelectric plants, while 90% of all energy it produces is exported to neighbors Brazil and Argentina. Rejala while speaking to La Nación newspaper on Friday said,

“We are proud that since we announced that we are working on a bill that legalizes the use of digital assets… as legal tender in Paraguay for any type of commercial transaction, various Paraguayan companies have already joined and taken a step forward into the new era of transactions.”

Last week, a Paraguay-based large entertainment holding company said that 24 of its businesses would start accepting crypto as payment options from July.

Read Original/a>
Author: AnTy

R3’s Corda Releases Ethereum-Based XDC Bridge for Interoperability

Corda, a decentralized blockchain offshoot of software company R3, recently announced that it had built a decentralized bridge to permissionless blockchains on the Ethereum ecosystem.

XDC To Facilitate Exchange On Corda

The announcement sees them collaborate with permissioned hybrid blockchain protocol eXchange inFinite (XinFin) to improve the global trade finance space. XinFin’s utility token XinFin Digital Contract (XDC) would be used for payment settlement in the Corda network.

The interoperable bridge built by a team of former Royal Bank of Scotland (RBS) employees designated LAB577 will make the Corda blockchain talk to other blockchain networks. This will greatly engender the transmission of private user data on the Corda network. The limited dataset will also make its way to the XDC secure network.

In a press release shared with us, Director of the team Richard Crook noted the importance of this Corda-XinFin interoperable bridge, saying that one of the blockchain’s trilemma would be put to bed.

“The first currency across is XDC, but this lays the groundwork to connect Corda to ERC-20s and other cryptocurrency networks.”

“What you would see here is the age-old challenge of interoperability being solved.”

R3 has been in the crypto space for some years. During its inception in 2015, the R3 team pointed to the potential blockchain technology like Bitcoin would bring to the financial sector. Even though large financial houses initially signed up for the project, fears about competitors getting their hands on company data saw interests wane.

This led to the creation of Corda- a system that enables data and value transfer between parties without giving out vital data. The Corda project has been hugely successful, and they created a payments platform that supported Ripple Labs’ XRP token in 2018.

KYC Will Come To XinFin

This innovation joins a growing number of new generation interoperable blockchains. Cosmos, a permissionless blockchain platform on the Ethereum network, recently launched its Inter-Blockchain Communication Protocol (IBC).

Crook noted that the XDC-powered bridge between Corda and other DLT-based platforms would incorporate more inter-chain enabled assets in the coming months.

But even as the blockchain protocol values decentralization, XDC co-founder Atul Khekade notes that the platform ensures that regulatory guidelines are being followed.

Khekade said that all intending validators would need to undergo regulatory know your customer (KYC) protocols to be eligible. This will see them lock 10 million XDC tokens (valued at $300,000) to become a validator, and they must duly attach a KYC node to the network.

The need for regulatory goalposts is increasing by the day as the crypto industry continues to attract institutional demand. A growing number of criminal elements have become attracted to the crypto space, forcing global regulatory bodies to clamp down on crypto activities in some regions.

Like the US Securities and Exchange Commission (SEC), regulatory agencies have since directed crypto-facing businesses to incorporate necessary security protocols obtainable in the traditional financial space.

Read Original/a>
Author: Jimmy Aki

DEX Aggregator 1inch Raises $12M; Plans to Scale Market Outreach, Products, and Team

1inch, the Decentralized Exchange (DEX) aggregator, has secured $12 million in its recently completed series A funding. This round was led by Pantera Capital and attracted other crypto investment heavyweights, including Blockchain Capital, Spartan Capital Securities, Struck Capital Fabric Ventures, and ParaFi Capital. Alexander Pack, Kain Warwick, and Josh Hannah also contributed to the 1inch series A funding round.

Sergej Kunz, the CEO of 1inch, informed The Block that this funding followed the process of a simple agreement for future tokens (SAFT); basically, this is an investment contract that promises to deliver tokens at a later date.

The 1inch DEX aggregator made its debut in the hallmark DeFi niche as recent as August, launching its Automated Market Maker (AMM) protocol dubbed ‘Mooniswap’ as well. This DEX aggregator serves as a bridge in the nascent DEX markets by connecting several DEXes into one ecosystem.

In doing so, 1inch helps users optimize their DEX liquidity by finding the best trades across AMM protocols, including Balancer and its platform, Mooniswap. The project recently released a v2 for its protocol, which features a new API, ‘Pathfinder,’ to improve routing between DEXes.

1inch’s series A funding comes when DEX aggregators are speeding up their products to solve the underlying challenges in DeFi. Its competitor, Slingshot, also recently secured a $3.1 million funding in a round led by Framework Ventures.

1inch Set to Expand Team, Market, and Products

According to Kunz, the recently raised funds will come in handy for the DEX aggregator, especially with expansion plans. He highlighted that the team is currently working on various initiatives, including a liquidity protocol update for the Mooniswap AMM and its upcoming utility token, 1INCH. This token is still in audit, although everything is already in place for launch and distribution, per Kunz’s conversation with The Block.

“Code is already written, and the 1inch Foundation is also in place, which would issue the token. But we have to stay clean from the regulatory side.”

Kunz also mentioned that 1inch plans to scale its team past the current 28 personnel as part of its expansion plan in the coming future. The DEX aggregator has signaled that it will expand its footprint into the Asian market, focusing on the Asia-Pacific region. Finally, the team will announce a detailed roadmap for the next two years, including new products.

“We are soon going to announce our product roadmap for the next two years. This includes a lightweight, very gas-efficient limit order protocol and an improved liquidity protocol.”

Read Original/a>
Author: Edwin Munyui

Microsoft Warns Cybersecurity Threat Posing as XMR Miners Attempts to Extract Data

A recently released Microsoft report has revealed that threat actors at the state level are now using coin miner techniques to cover their tracks or blend in. The report, which was published on Nov 30, highlights a recent attempt by state threat actor ‘BISMUTH,’ which leveraged Monero coin miners to infiltrate both government and private sector institutions in Vietnam and France.

While crypto-related cyber-crime activity is considered low risk, it appears that malicious attackers are now capitalizing on the nascent technology to advance their agendas. Per the Microsoft report, BISMUTH used the Monero coin miners as a decoy to distract security teams from tracking their real activity, which was data extraction. The report reads,

“The coin miners also allowed BISMUTH to hide its more nefarious activities behind threats that may be perceived to be less alarming because they’re ‘commodity’ malware.”

BISMUTH also used the DLL replacing tactic to further reduce their conspicuousness, given that it takes long time periods to extract information from the compromised applications. The group, famous for blending in techniques, pulled a new one with crypto miners, although the report notes a consistency in their pattern.

“The use of coin miners by BISMUTH was unexpected, but it was consistent with the group’s longtime methods of blending in.”

The report recommends that organizations prioritize reducing surface attacks by elevating and inspecting common threats such as phishing and coin miner techniques in a more advanced manner.

Read Original/a>
Author: Edwin Munyui

Fireblocks Raises $30M to Expand Its Crypto Service Operations; Building a ‘Next-Gen Backend’

To extend its services for larger firms in the crypto sector, Fireblocks recently completed a Series B funding round of $30 million and has a $46 million total raised in cumulative fundraising.

The funding round led by Paradigm, along with several investors, Cedar Hill Capital, Cyberstarts, Swisscom, and Galaxy Digital, to name a few, will enable the firm to expand its global operations to meet the demands of the retail market and institutional traders in the crypto market, according to a press release from Fireblocks.

The firm says it will be offering tools for the transfer and secure storage of digital assets, either for traditional hedge funds or crypto exchanges.

Fireblocks plans to lure more institutional players.

Although Fireblocks will be very active in the crypto-native markets, the company says it still wants to take advantage of the crypto market’s positive regulatory momentum and go after institutional players. The firm also says that the simplistic nature of the Fireblocks platform makes it attractive to many users in the industry, leading to the rush of its integration. The company pointed out,

“Everyone from crypto-native funds to large tech companies and banks is integrating Fireblocks because it’s simple.”

The company is committed to maintaining its market position as the industry leader, supporting customers’ high demands as the mainstream sector enters into massive adoption of cryptocurrency.

In the third quarter of the year, Fireblock’s customer growth increased by 533%, and the company is growing at a similar pace this fourth quarter.

To improve the speed of crypto transactions, Fireblocks launched a program, with crypto derivatives exchange FTX being the first to join the program. Fireblocks wants to increase participation in the program by inviting more exchanges into the program next month.

Paradigm co-founder joins Fireblocks director board

As part of the deal, Fred Ehrsam, the managing partner and co-founder of Paradigm, joined the board of directors at Fireblocks.

Ehrsam is also the co-founder of Coinbase, and chief executive officer of Fireblocks Michael Shaulov has acknowledged his crypto space contribution. “One can say he almost built this space,” Shaulov said in the press release.

Fireblocks intends to double its workforce

Buoyed by the influx of funds, Fireblocks intends to scale its infrastructure and personnel, according to Shaulov. The company wants to hire personnel across the support, marketing, and staff sales department. It also has plans to double its engineering team within the next three months.

The anticipated recruitment will increase its workforce from its present number of 70 personnel to about 130 in the next three months.

Fireblocks wants to meet the increasing demands of customers and clients in the industry. Its main service is directed towards hedge funds, over-the-counter trading desks, exchanges, and institutional clients to transfer funds securely. According to reports, the company serves over 120 commercial clients presently.

With the added funds, it is believed that the number will increase within the next few months.

Read Original/a>
Author: Ali Raza

WEF Report Says Blockchain Is A Core Component in Sustainable Digital Finance

The World Economic Forum (WEF) recently released a new report about the future of digital finance on Wednesday. The WEF report noted that blockchain and Artificial Intelligence, the Internet of Things (IoT), and mobile platforms represent a core element of digital finance’s sustainable future.

The report noted that blockchain combines coming of age technologies with a sustainable environment-conscious business model. In the report, UBS executive Karin Oertli noted that all these nascent technologies could help organizations and governments to meet their sustainability goals. Oertli wrote,

“We believe that sustainable digital finance will play an essential role in efficiently channeling this capital to fuel innovation, growth, and job creation, at the same time supporting the transition to a sustainable, low-carbon economy.”

Currently, many European countries and top silicon tech firms’ save pledged to reduce their carbon footprint to zero in the next decade owing to the growing concern over climate change and global warming. Thus it has become even more important to bring sustainable business models to rescue the planet earth before it’s too late.

New WEF Report In Line With OECD Research

The latest sustainability report from WEF is not the first report of its kind, which has touted Blockchain as the key to sustainable future business models. It reinstates the research conducted by the Organization for Economic Cooperation and Development (OECD). The OECD report had made similar claims regarding blockchain and said,

“The core properties of blockchain and other DLT can enable deeper technological integration, standardization, and the possibility of new business models.”

Carbon dioxide emissions are growing significantly with each passing year. Some of the western countries have taken it upon themselves to make sure to cut their carbon footprint from now onwards.

The emergence of blockchain as key to a sustainable future comes just in time as crypto space has been battling the criticism over Bitcoin’s network electricity consumption and carbon emission.

Read Original/a>
Author: Hank Klinger

Brazil Becomes The Latest Country To Confirm Plans to Launch A CBDC

Brazil’s Economy Minister recently spoke during the celebration of the Caixa Economica Federal’s 100 millionth digital savings account, and he used the opportunity to announce Brazil’s own CBDC.

The Central Bank Digital Currency (CBDC) trend is larger than ever, with countries worldwide announcing their intention to create their own digital currency, one after another. The latest in this long line is Brazil, whose Economy Minister personally confirmed plans to launch digital real.

Brazil announces its upcoming CBDC — digital real.

Brazil’s decision to launch its own digital currency does not come as a major surprise. After all, as soon as China announced digital yuan, many countries started developing their own CBDCs in China’s fear of obtaining too much influence.

As soon as a few nations’ central banks showed their willingness to start creating their own crypto, the rest were bound to follow. Brazil comes as the next one in line, as confirmed by its Economy Minister, Paulo Guedes.

Guedes made his statement yesterday, November 5th, during a special ceremony that celebrated the opening of the 100 millionth digital savings account in Caixa Economica Federal.

He said that the central bank is once again autonomous and that the digital dimension is booming. With that being the case, he revealed that Brazil would have its own digital currency and remain ahead of many other countries.

Brazil was prepared for work on CBDC, but it did not address it before

Interestingly, this was the first time that the country’s Economy Minister addressed this subject. However, he still did not reveal any more details regarding the upcoming digital real.

Of course, Brazil has been keeping an eye on crypto in the past. Its central bank even announced setting up a study group for potential CBDC issuance back in August.

Its president, Roberto Campos Neto, also said that Brazil requires improvement in its currency. However, he expected that this would happen within the scope of a new federal digital payment system, Pix. He said,

“In our case, Pix is very important because from now on, we see the union of an instant, open and interoperable form of payment with an open data system. They will meet somewhere in the future with a currency that has yet to be perfected.”

Brazil’s CBDC to arrive in 2022

As mentioned, there are currently no available details on the digital real, as not even the central bank has released new information about it. However, Campos Neto did reveal that digital real will be in circulation in 2022.

Another interesting thing regarding this announcement is its timing. As some may know, Pix just recorded its first transaction this Monday, and it will be officially available as of November 15th.

According to the central bank’s statement, it will only be used for foreign exchange transactions in and out of the country as for digital real.

Read Original/a>
Author: Ali Raza

Reserve Bank of Australia And ConsenSys Partner On CBDC Research & Development

The Reserve Bank of Australia (RBA) recently announced they have partnered with several financial institutions to research the potential of distributed ledger technology for a CBDC.

Based on the announcement, the partnering financial institutions include software firm ConsenSys, financial services company Perpetual, National Australia Bank, and the Commonwealth Bank.

The financial institutions will research the benefits of using distributed ledger technology on central bank wholesale digital currencies.

The RBA also said the partnering group would be investigating the development of a proof of concept when issuing tokenized CBDC’s.

Partnership on wholesale market participation

The collaboration will be focused on a wholesale market participant who might be utilizing the digital currency for tokenized syndicate loans via a DLT platform. They will also investigate the effect of security settlements between payments and delivery using cross-chain atomic swaps.

According to Deputy Governor of the Reserve Bank of Australia, Michele Bullock, the project will seek to determine the impact of CBDC on innovation, risk management, and efficiency in financial market transactions. Findings may point to how CBDCs will be handled in the future within the Australian financial market.

He also stressed the need to work with industry partners to explore the market to achieve the same goals. He pointed out,

“While the use of a CBDC is still open in these markets, we look forward to working with industry partners.”

The project will be exploring various areas to place a future role for CBDCs in the Australian financial market.

Australia making a U-turn to support CBDC

This project may signify the Australian’s financial authority to pursue more interest in CBDCs. The country’s reserve bank has set various policies that seem to be working against the growth of CBDC in the country. However, the recent partnership to get more involved in CBDC research shows the bank’s willingness to keep things open to CBDCs.

Earlier last month, RBA announced that it would continue to deploy resources towards the research on CBDC, even though the financial institution insists the country has no basis for issuing one in September.

The bank has also pointed to the success of the country’s effective real-time platform for new payments, which has been considered an alternative to issuing a CBDC.

The bank has also revealed that it is set to offer fiat banknotes access if Australians still show the same interest in using them.

The results of the research to be published next year.

The Reserve bank will publish the report next year, once the project has concluded, according to the report on the development.

The RBA also revealed that the partnership might result in other potential automation and programmable financial assets features. Bullock added that the RBA would enable the research team to carry out their exploration. The result of the research is expected to be published during the first half of next year.

Read Original/a>
Author: Ali Raza

Binance Boosts Visa Card Incentives with Auto Top-Up, Daily Cashback & Higher Spending Limits

Binance has added some perks to its recently launched debit card rolled out in the European Economic Area (EEA) one month ago. The crypto exchange is looking to expand its footprint in the retail market as more crypto users opt to have a good part of their portfolio stored in digital assets. Binance’s Visa-branded card is designed to facilitate a seamless conversion to fiat when making payments.

With over 60 million outlets accepting Visa payments, Binance card users can leverage this service to make online payments. The exchange is yet to integrate a prepaid function for PoS payments but is currently in the product pipeline. Notably, the crypto card service by Binance is part of a growing niche as more merchants move to accept crypto payments.

Binance has now increased the incentives for using its crypto card; the exchange introduces a ‘daily cashback’ reward program instead of the ‘one-week’ initial arrangement. This means that users will be getting their rewards daily, making it more attractive to use the Binance card more frequently.

As for cashback reward rates, Binance has bumped the figure to 8% from 7%, which was initially set as the maximum amount. Binance crypto card users whose purchases are eligible for the cashback rewards can expect an 8% cashback that could be cashed out daily. It is quite noteworthy that the cashback reward program favors BNB holders, depending on the amount they hold.

Besides the cashback incentives, Binance raised its crypto card’s spending limit to €870 per day. The crypto exchange anticipates that it will further raise this limit upon scaling the physical card mainstream use in the future. An automatic top-up feature has also been integrated to make daily deposits seamless.

The Binance crypto card touts zero maintenance, subscription, and transaction fees, apart from 3rd party charges where they apply. Users can currently deposit funds into their pre-selected Binance digital wallets to use them via the exchange’s crypto card. However, it remains scanty whether Binance will ultimately feature withdrawals, contactless payments, chip, and PIN tech within the physical card.

Read Original/a>
Author: Edwin Munyui