Kraken becomes first cryptoexchange to win US bank charter [17 Sept 2020]
San Francisco cryptoexchange Kraken has becomes the first of its kind to win a US banking charter. The state of Wyoming has approved Kraken’s application to become the world’s first Special Purpose Depository Institution , tentatively called Kraken Financial. This new vehicle will be regulated by the Wyoming Division of Banking and under state law is required to maintain 100% reserves of its deposits of fiat currency at all times. Wyoming passed House Bill 74 in 2019 which built this structure specifically for cryptocurrency companies. It allows Kraken to offer banking functions to clients and means the exchange no longer needs to rely on reluctant third-party providers for wire transfers, an issue which has scuppered the growth of other cryptoexchanges over the past decade. Read more here.
Ethereum smashes transaction fee records under DeFi hype [18 Sept 2020]
Miners collected a total of 42,763ETH in transaction fees in a single day, according to new data from Etherscan. That’s a massive all-time record, and testament to the way the white-hot DeFi sector is transforming cryptocurrency. Activity on DeFi products, which are mainly built on Ethereum, has skyrocketed in the past year. Total value locked in DeFi, as measured by data aggregator DeFiPulse, has surged from $675m at the start of 2020 to nearly $10bn nine months later. Read more here.
Regulated cryptoasset sector could save Europe, EU research finds [20 Sept 2020]
A properly regulated cryptoasset sector could vastly improve Europe’s economic outlook, says new research from the EU’s Parliamentary Research Service. The report notes: “The overall broadening of the cryptoassets market…would go hand in hand with digital financial innovation [and] could increase high skill employment, innovation and investment.” Of chief importance is the creation of a digital assets regulatory framework to protect investors, it says, as well as continually assessing this fast-moving market to see if products can be regulated under existing rules. Read more here. Read more here.
Gibraltar updates DLT framework to comply with FATF rules [21 Sept 2020]
Gibraltar is again leading the way when it comes to cryptocurrency and blockchain regulation by updating its existing rules to fit controversial FATF ‘Travel Rule’ guidance. Under the new rules from the Gibraltar Financial Services Commission, virtual asset service providers are now required to capture and maintain “robust and accurate records of transactions” as well as updating investors on the risks around virtual assets and add additional onboarding tests. Read more here.
Bitcoin on track to hit $3trn market cap by 2025 [22 Sept 2020]
New research by CoinMetrics suggests that Bitcoin is on track to hit a vast $3trn market cap over the next five years. The research analyst notes: “With little more than a 10-year price history, bitcoin has been the best performing asset of the 21st century. Five years ago, a $10,000 investment in bitcoin would have delivered a 119% compound annual rate of return and would be worth roughly $500,000 today. In fact, during any yearly holding period since inception through September 1, 2020, bitcoin’s return has been positive, significantly so in most cases.” Despite these significant gains to date, Bitcoin is still early on its path to monetization, says CoinMetrics, with much more appreciation potential. Read more here.