Crypto rising as an alternative for those left out by old-school banking
Re-sharing below the latest edition of #Web3 Weekly, my regular newsletter about decentralization. If you’d like to get it in your inbox every Sunday, subscribe here.
Conventional banking either works great for you or not at all these days. Curiously, there doesn’t seem to be much middle ground.
People on the short end of the situation tend to suffer from high fees, slow transactions, or flat-out unavailability, depending on where they live globally. But crypto is increasingly becoming a viable alternative, as several of the week’s headlines show:
- Tether is now bigger than the vast majority of U.S. banks. The leading dollar-based stablecoin’s market valuation has now topped $50 billion. That figure is greater than the insured deposts of all but 44 of the thousands of regulated American banks, Bloomberg News reports.
- Some Caribbean countries are adopting crypto out of necessity. Euronews reports that a new real-estate development in Bequia aims to be the world’s first fully bitcoin-enabled community, with an eye toward pushing usage through the rest of the tiny country as well. The project’s developer says his embrace of bitcoin is a response to rising difficulty of accessing international banks on small islands like Bequia. Because of “de-risking” during the global economic downturn prompted by COVID, large banks have been cutting off intermediary services to several small Caribbean nations, Euronews reports. The trend also helped spur four island nations — St Lucia, Grenada, Antigua and Barbuda, and St. Kitts and Nevis — to form the world’s first intergovernmental digital currency union recently.
- Checking in on China’s digital currency. Ark Investment Management’s Yulong Cui tweeted a thorough analysis/update of China’s progress so far in launching an official national cryptocurrency. The token has been tested in 10 cities already, Cui says, citing information shared at the recent Digital China Summit.
- The European Union’s lending arm, the European Investment Bank, issued a bond on the Ethereum chain for the first time.
- Iran will allow institutions to start accepting mined crypto as payment for imports. The new rules are effectively a workaround to U.S. sanctions enforced through dollar-based payment networks.
- Crypto funds everywhere. Canada approved three new exchange-traded funds pegged to ether, following on the success of similar bitcoin-related listings. However, regulators in the U.S. have been more reticent to approve such funds, which allow investors to bet on token prices via conventional stock brokerage accounts. Separately, both J.P. Morgan and U.S. Bank are expanding crypto services for corporate and private clients.
- Authorities arrested the administrator of Bitcoin Fog in Los Angeles. The service, which operated for 10 years, was allegedly used to launder $336 million in transactions.
- U.S. payments companies continue to embrace crypto. In a quarterly earnings call, Visa’s chief executive said the company is moving into crypto in a “very big way.” PayPal’s CEO made similar remarks in a new interview with Time magazine.
- The McDonald’s ice cream machine isn’t really broken. Journalist Johnny Harris did a seriously detailed investigation of this delicious topic. Turns out it’s a great illustration of the evils of proprietary tech versus open source in general. Who knew?
That’s it for now. Thanks for spending some time with the newsletter today! A full revision history of it, including earlier drafts, is available here if you’re interested. If you’d like to get updates like this in your inbox every Sunday, please join our email list here.