Paypal developing cryptocurrency capabilities and more… | Crypto Market News
Thrilling market news with CoinMetro’s CEO, Kevin Murcko in This Week in Crypto!
Crypto Market News Highlights
10 years late is fashionably late for the G20. It is amazing to Kevin, that while other organisations around the world are focusing on CBDCs and the application of DvP (Delivery versus Payment) with a stablecoin or CBDC and much more broader problems that crypto can actually fix as of today. And the G20 are talking about how to accept a digital payment. As if that hasn’t already been done for more than a decade.
It’s good to see that they’re making comments about it. But Kevin would say they’re late to the party, and nobody really cares. Go back to talking about all the other stuff nobody cares about. G20 never really takes any action on anything they say they’re going to do.
Kevin mentioned that CoinMetro had a conversation with PayPal about two weeks ago. PayPal had a pilot program for the past three years, where they would allow withdrawals from Coinbase. They are expanding that pilot now to include additional crypto exchanges. They want to get more into the cryptocurrency arena.
Kevin thinks they will go down the Libra route. And they will probably allow people to buy or get rebates in cryptocurrency, which can’t be taken off the platform. Similar to what Revolut does. Eventually they’ll probably end up tokenizing more of their infrastructure.
It’s good to see PayPal, with 300 million users, coming into the show.
Off-exchange digital asset swaps. Basically they were creating an OTC market for swaps of digital assets, probably assets that would constitute securities, and/or futures, and/or commodities. And they weren’t registered to do so in the US.
The important thing to note here is that all crypto exchange is OTC. OTC simply means Over-The-Counter. What it means in traditional market terms is that there is no central pricing counterparty. When you buy Apple stock for example, the price is provided from the Nasdaq. If you buy it at a broker, they get the price from Nasdaq. There is a central pricing authority.
Any market that doesn’t have a central pricing authority — like FX, or like crypto — is OTC.
So, the entire market is OTC. There are exchanges in the US that aren’t registered with the SEC or the CFTC, that provide OTC trading for utility tokens. Or things that are not considered regulated, as of yet. Even though the CTFC has said that Bitcoin is basically a commodity, they haven’t officially said it’s a commodity. They haven’t required licensing to be able to trade Bitcoin.
Here, both agencies — SEC and CTFC — are both coming out about violations. That should be important to anyone watching the crypto and exchange space in the US. This could be a very small amount of precedent that will push them forward to where Kevin says they’re going — where Bitcoin trading will be classified, requiring a license and 25 million net capital to offer that service to US residents. Let’s see when and if that happens. Or Kevin would say, when, not if.
Kevin Murcko has shown that that’s bullshit.
ICOs were absolutely amazing at funding companies. Even though the high learning-curve for someone that was outside of crypto and had come in and found out how to buy Ethereum, companies were still able to raise hundreds of millions by ICOs. With a terrible UI/UX.
STOs are better in the way that they are more regulated and can eventually become mass-marketed and used without the regulatory burden of “oh man, they may come and sue me”, but they’re not yet better. The ICOs were inherently better. But with things like Ignium, CoinMetro, and the Montenegro sandbox, our goal is to make STOs much, much better.
But Kevin would say that as of right now, STOs not better, by any stretch of the imagination. He has not seen any big fundraising happen in any significant manner that went from creation, primary, distribution, secondary market trading, and did so in a streamlined fashion.
That is kinda interesting. Kevin’s question would be — where? They’re not licensed to do anything, so they wouldn’t go in any licensed markets. Are they going to go into something even less licensed, less regulated than crypto?
Compared to what? The awesome thing about stats and numbers, maybe the guy who wrote this compared Monday to Tuesday. Monday had 50 mixers being used and Tuesday had 1100 mixers being used. But maybe the Wednesday prior to that Tuesday, there were 3000 used. Kevin doesn’t know the details on where they came up with these stats.
Mixing services in general, especially things like Wasabi wallet and things like that, are being used more and more. That doesn’t necessarily mean for nefarious reasons. Some people are just testing them out, some are trying to see how they work. Some are trying to hide, that’s for sure.
Kevin sees some merit in being able to hide what you’re doing from the mass public. If you’re a company or individual and your Bitcoin address is leaked publicly, do you really want everybody to know where you are moving your Bitcoin? Even if it’s not for nefarious reasons.
There is a myriad of reasons why mixing may or may not be nefarious.
This is actually halfway through. Kevin did a session on Digecon live, breaking news with them about this Twitter hack.
It was Twitter that was hacked. A social engineering hack that gave the hacker(s) access to basically a “God panel”. Admin panels usually have user access, read-only access, admin access, and “God access”, which means you can do anything you want.
Why would Twitter need the permission to tweet on behalf of others?
R3/Corda Blockchain have been trying to court different players in the traditional space. We looked at it for Ignium, in conjunction with CoinMetro for the Montenegro sandbox. Kevin thinks there is still a lot that can be done. When you look at where issuance is happening right now, it’s Ethereum. Where is liquidity for issuances, DeFi and other things — it’s Ethereum.
Yep, it has scaling problems, it has network congestion problems, all those things are true, but that’s still where the clients and liquidity are.
So R3 trying to use some of their technology to better the traditional bond market — Kevin will give them a hint, the reason the bond market doesn’t work as well as it could be, is because of access, not because of cost, streamline capabilities, or the ability to do maybe reconciliation — or not have to. Those things are great, they may save a bit of money, but they won’t save the bond market.
Asia, obviously China, Japan, Thailand, and probably some other Southeast Asian countries looking at CBDC. It’s good that they’re testing. Maybe Asia is the first one that actually will launch something that isn’t in a test.
CBDC won’t generally go to the mass public initially. It is a good thing, as central bank issued digital currencies will allow for a more streamlined banking system. They will eventually allow for instantaneous payments, at a regional level, at a country level, and eventually, at a worldwide level. It will reduce the need for expensive FX, because you will be able to have FX via smart contracts between different central banks which will completely reduce the need for overnight swaps in many instances, it will reduce interest rates, and the cost that you pay.
It will definitely make the world a better place, in one or two ways.
Microsoft has been on a tear trying to get more into the tokenization game. Tokenization of assets for audability, traceability, all that good stuff, is great. Mainly done to reduce costs, and risks a little bit, and it allows the company to streamline themselves a bit and save some money. That’s great for a step one. But we need to get a step two, three, four and five as quick as we can. Which is really about getting people access to things they never had access to, and completely reducing the “human connected fraud” that appears in markets. Tokenization of assets is one step in that direction.
Next “This Week in Crypto” with Kevin is LIVE on our Youtube channel on Friday!