weekly roundup – POWELL ON STABLECOINS | VISA CROSS-CHAIN PAYMENTS HUB | EUROPE EMERGES AS LARGEST CRYPTO ECONOMY

Here’s our roundup of the top stories from the past seven days in crypto.

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US FLAG BUILDING

POWELL: I HAVE NO INTENTION OF BANNING STABLECOINS

Powell clarified a previous statement he made about digital assets, saying he does not intend to ban stablecoins. A central bank digital currency would replace the functions of stablecoins, he reiterated.

During testimony before the House Financial Services Committee on Thursday, Federal Reserve Chairman Jerome Powell said that while a central bank digital currency (CBDC) could potentially replace stablecoins, he does not intend on banning the digital tokens. 

The digital tokens still need to be regulated, Powell stressed. 

“I have no intention to ban them, but, stablecoins are like money market funds, they’re like bank deposits, but they’re, to some extent, outside the regulatory perimeter and it’s appropriate that they be regulated,” Powell said. “Same activity, same regulation.”

Crypto markets mostly rose following Powell’s comments.

Source: Blockworks

INVESTOR STUDY

KKR MAKES FIRST BLOCKCHAIN INVESTMENT WITH PARAFI FUND STAKE

KKR & Co., an American private-equity firm, has invested in the flagship fund of blockchain specialist ParaFi Capital in its first foray into the technology that powers cryptocurrencies, according to coverage by Bloomberg last week.

The move is an exploratory step into the world of cryptocurrencies, and meant to be a play on blockchain, not digital coins themselves. 

Source: Bloomberg

COINBASE’S RECENT $2B BOND OFFERING SHOWS VORACIOUS APPETITE OF INVESTORS

On 13th September, Coinbase announced plans to raise $1.5 billion in a junk bond offering, but ended up raising $2 billion on sales of seven-year and 10-year notes, carrying interest rates of 3.375% and 3.625% respectively.

The $2 billion bond sale is part of a greater trend this year of investment in businesses operating in the digital asset industry, a trend which accelerated in September.

“Demand was so high,” wrote Bloomberg on 14th September, that “at least $7 billion of orders poured in,” and yet, just ten days later, following news of the latest China (non-)ban, Bloomberg described the bond offering as a “debacle.”


Unlike MicroStrategy Inc., which has tapped the bond market to fund purchases of bitcoin itself, Coinbase intends to use the cash raised for general corporate purposes.

Source: Blockworks

VISA WORKING ON INTEROPERABILITY PLATFORM FOR STABLECOINS, CBDCS

Payments behemoth Visa has proposed a platform to enable interoperability between central bank digital currencies (CBDCs) and other stablecoins.

The “universal payments channel” (UPC) aims to allow the cryptocurrencies to be transferred between different blockchain networks.

In a white paper, Visa said “the UPC technology can play an important role between private stablecoins and public CBDCs by providing permissioned access for whitelisted stablecoins to be interoperable with CBDCs.”

Source: CoinDesk

ARK INVEST’S LARGEST ETF BUYS MORE COINBASE

Ark Invest has bought more Coinbase for its largest ETF focused on cutting-edge firms as the fund group remains bullish on crypto.

The investment manager bought 184,199 shares of Coinbase, worth about $42 million, for the Ark Innovation ETF (ARKK), according to a firm disclosure on Tuesday. ARK, which has about $21 billion assets under management, holds a 5% allocation in the crypto exchange, according to Ark’s website, making it the fourth-largest holding in the portfolio.

The share purchases come after SkyBridge Capital Founder Anthony Scaramucci told Bloomberg that he predicts a large bank to one day buy a crypto company like Coinbase. The exchange, which went public in April, reported about $2.2 billion of revenue in this year’s second quarter. 

Source: Blockworks

EUROPE BECOMES LARGEST CRYPTO ECONOMY WITH OVER $1T IN TRANSACTIONS

The region of central, northern and western Europe, or CNWE, has emerged as the world’s most active cryptocurrency block, receiving over $1 trillion worth of digital assets over the past year, according to new research from blockchain analytics firm Chainalysis

The report found that the CNWE region accounted for 25% of global crypto activity between July 2020 and June 2021. The region witnessed a sharp uptick in transaction volume across all crypto sub-categories, especially decentralized finance, or DeFi.

Europe has also become a hotbed for institutional investing, with transactions values in this category growing to $46.3 billion in June 2021 compared with just $1.4 billion in July 2020. Perhaps surprisingly, the United Kingdom is the single largest crypto economy in the region at $170 billion worth of transactions. Nearly half, or 49%, of the value was sent via DeFi protocols.

Chainalysis’ data corroborates a growing body of evidence showing that large institutional investors have become a driving force within crypto. Wealth managers, family offices and other institutional players have poured billions of dollars into Bitcoin and Ether investment products offered by Grayscale, CoinShares, 21Shares and others.

Source: CoinTelegraph

MODERATED PANEL: CRYPTO REGULATORY LANDSCAPE

Our Co-Founder and General Counsel, Oliver Tonkin, will be moderating the Crypto Regulatory Landscape panel at Europe’s premier crypto event TOKEN2049 to discuss the remaining challenges for crypto businesses looking to fulfil their compliance obligations. He’ll be joined by Blair Halliday, Head of UK at Gemini, Sendi Young, Europe MD at Ripple, and Mary Beth Buchanan, President, Americas and Global Chief Legal Officer at Merkle Science. 

⏰ 7th October 1pm-1.40pm UK

✅ Register here

BCB publishes a weekly recap of the top crypto news stories and a fortnightly regulatory recap. To sign up, please visit https://bcbgroup.io/contact/

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