Značka: Payments

Reddit partners with FTX to enable ETH gas fees for community points

After moving away from Bitcoin (BTC) payments years ago, online forum Reddit now seems to be inching closer to embracing cryptocurrency payments via a new partnership with the FTX exchange.Sam Bankman-Fried’s crypto exchange FTX and Reddit announced in a joint statement on Tuesday that the platform intends to integrate Reddit’s Community Points in the United States, the European Union, Australia and other markets.The partnership features the integration of FTX Pay as a payment and crypto exchange solution to unlock new crypto-enabled perks for Reddit Community Points. Introduced in May 2020, Reddit Community Points are a measure of reputation in communities or subreddits, allowing users to own a piece of their favorite communities.“As a unit of ownership, points capture some of the value of their community. They can be spent on premium features and are used as a measure of reputation in the community,” Reddit said when launching the Community Points two years ago. Reddit Community Points are based on Arbitrum, one of the most Ethereum scaling solutions.With the new integration, users will be able to purchase Ether (ETH) from supported Reddit apps via FTX’s payment and exchange infrastructure platform FTX Pay. The cryptocurrency can be used to pay blockchain gas fees, or network fees for their Community Points transactions on-chain.“We’re always working to empower communities and introduce new ways to use Reddit, and decentralized, self-sustaining blockchain technology allows us to do that. By working with FTX, we’re able to do this at scale,” Reddit staff software engineer Niraj Sheth said. Bankman-Fried noted that the partnership with Reddit marks FTX s commitment to empower online communities to harness the power of blockchain. “FTX Pay’s payment and exchange infrastructure integrates with Reddit Community Points, making the customer experience a more seamless process,” he added.The news comes amid Arbitrum developer Offchain Labs launching the Arbitrum Nova chain on Tuesday. Arbitrum Nova, the second chain launched in the Arbitrum ecosystem, is designed to serve as the premier solution for Web3 gaming and social applications. Apart from Reddit and FTX, other firms like Google Cloud, Consensys, P2P and QuickNode participated in the launch by becoming inaugural members of Nova’s “Data Availability Committee.”Related: Reddit announces new blockchain-backed ‘Collectible Avatars’One of the most popular websites in the United States, Reddit has been largely involved in the crypto and blockchain industry for many years. The discussion platform is known for once allowing users to pay for their premium membership in Bitcoin but removing the opportunity in 2018.Reddit co-founder Alexis Ohanian has been widely involved in crypto, launching a $100 million Web3 investment fund last year. Ohanian subsequently launched another $200 million Web3 and social media fund in collaboration with the Ethereum scaling solution Polygon.

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European Central Bank bets on CBDCs over BTC for cross-border payments

A recent study conducted by the European Central Bank (ECB) on identifying the ultimate cross-border payment medium crowned central bank digital currencies (CBDCs) as the winner against competitors, including banking, Bitcoin (BTC) and stablecoins, among others.ECB’s interest in identifying the best cross-border payment solution stems from the fact that it serves as the central bank of the 19 European Union countries which have adopted the euro. The study, “Towards The Holy Grail of Cross-border Payments,” referred to Bitcoin as the most prominent unbacked crypto asset.EBC’s opinion of Bitcoin as a bad cross-border payment system boils down to the settlement mechanism of the highly volatile asset, adding that:“Since the settlement in the Bitcoin network occurs only around every ten minutes, valuation effects are already materializing at the moment of settlement, making Bitcoin payments actually more complicated.”While the study highlighted Bitcoin’s inherent scaling and speed issues, it failed to consider the timely upgrades — Taproot and Lightning Network — that improve the network performance, concluding that “The underlying technology (and in particular its “proof-of-work” layer) is inherently expensive and wasteful.”On the other hand, the ECB recognized CBDCs as a better fit for cross-border payments owing to greater compatibility with forex exchange (FX) conversions. Two major advantages highlighted in this regard are the preservation of monetary sovereignty and the ease of instant payments via intermediaries such as central banks. Related: Australian central bank governor favors private sector crypto technologyContradicting the ECB’s reliance on CBDCs, Australian central bank Governor Phillip Lowe believed that a private solution “is going to be better” for cryptocurrency as long as risks are mitigated through regulation.Mitigating risks related to crypto adoption can be fended off by strong regulations and state backing, stated Lowe, adding:“If these tokens are going to be used widely by the community, they are going to need to be backed by the state or regulated just as we regulate bank deposits.”In Lowe’s view, private companies are “better than the central bank at innovating” the best features for cryptocurrency.

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Croatian retail giant sees rise in crypto payments despite the bear market

Payments in cryptocurrencies like Bitcoin (BTC) have been on the rise at Croatia’s largest supermarket chain Konzum this year despite the ongoing bear market.After debuting crypto payments in 2021, ​​Konzum has seen an increasing trend for this type of payment, the firm’s director of business applications Ines Barbir told Cointelegraph.​​Konzum officially started accepting cryptocurrencies as payment for its products in December 2021, allowing customers to pay online with nine cryptocurrencies like BTC and Ether (ETH) as well as Tether (USDT) and USD Coin (USDC) stablecoins.The supermarket chain has since expanded the crypto payment option to several self-checkout cash registers in physical pilot stores. Konzum is also still working with the local crypto payment firm Electrocoin to bring crypto payments to all 700 physical stores across Croatia.According to Barbir, the rollout of the new payment method has been implemented successfully, and Konzum has actively been working on expanding its crypto payment option. The executive didn’t specify the exact numbers of payments’ volume growth since debuting crypto payments.A spokesperson for the firm pointed out that rising crypto payments on Konzum come in line with the growing adoption of crypto in Croatia, stating:“Regardless of the bear market, we are satisfied with the interest which keeps on growing. The overall interest in cryptocurrency payments continues to increase steadily as well as the interest for the implementation of cryptocurrency payments in Croatia.”The representative noted that Croatia is “at the top in the European Union” when it comes to the level of crypto adoption. That is “partly thanks to the rise of fintech companies like our partners at Electrocoin,” the spokesperson added.The representative still mentioned some uncertainty around crypto payments, stating: “The reason for this is mainly due to the insecurity and suspicion in new technologies, but also due to the state of regulation of the crypto industry.”Related: European banking regulator sees ‘major concern’ in retaining staff to handle crypto: ReportThe government of Croatia has been somewhat silent about cryptocurrency regulation in recent years, while local crypto advocates have been working towards self-regulation. In 2018, the National Bank of Croatia emphasized that cryptocurrencies were not legal tender in the country, nor were they recognized as foreign currency or payment instruments.Despite some level of apparent uncertainty around crypto, Croatia has emerged as one of the most crypto-prepared countries in the world. According to a report by the forex education platform Forex Suggest, Croatia has a crypto-readiness score of 6.2 out of 10, alongside countries like the United Arab Emirates, Georgia and Romania.

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The Costa’ Bitcoin on the rise: Major chains give Gibraltar a BTC boost

“But you can’t buy a coffee with Bitcoin,” the Bitcoin (BTC) critics chanted. Gibraltar, a tiny British Overseas Territory in Europe just blew a hole in that FUD as popular coffee chain Costa Coffee now accepts Bitcoin over Lightning. Hotel Chocolat, the Card Factory and the Gibraltar bakery also accept Bitcoin as a currency in the British Overseas Territory. The well-known franchises take advantage of Bitcoin’s Lightning Network (LN) to accept customers’ money. The LN is ideal for microtransaction cappuccinos, postcard payments or ice cream investments as reporter Joe Hall found out during a Gibraltar shopping spree.Lightning-enabled Bitcoin merchants in Gibralatar. Source: CoinCornerPayments are instant, frictionless and charge merchants less than the typical Mastercard or Visa payment rails. Neil Walker, managing director at Sandpiper GI — the group managing the retail franchises — told Cointelegraph that when using a Lightning-enabled card, “It’s no different to using a contactless credit card.”“It is just as quick you can tap and pay contactless credit cards, you can tap and pay lightning, scan a QR code. And whilst I haven’t timed it, I reckon it’s almost exactly the same speed.”CoinCorner, a Bitcoin exchange on the Isle of Man, partnered with Sandpiper GI, to help in equipping merchants with Bitcoin Lightning point of sale (PoS) devices.RACE OF THE RAILS ‍♂️ Bitcoin #Lightning payments vs #fiat contactless payments at the #Gibraltar Bakery. £2.20 loaded up on both PoS. WHO WINS?? ⚡️ ⚡️ ⁦@CoinCorner⁩ ⁦@CoinCornerMolly⁩ pic.twitter.com/b3ezy7FIeq— Joe Hall (@JoeNakamoto) July 25, 2022Walker shared that even for Bitcoin naysayers, the ease with which customers and merchants can transact is a no-brainer. He told Cointelegraph, “whether you believe in Bitcoin or not, you can use the lightning network to cut your transaction costs and to pay via mobile.” Given that it’s a neutral payment rail, he said that customers can traverse currencies easily:“For a long time, the idea of paying with bitcoin seemed alien to both businesses and individuals, but with the launch of The Bolt Card and the ability to “tap and pay” via lightning, the user experience is quick, easy and familiar to everyone.”Gibraltar welcomes 8 million tourists onto the rock per year, from countries including the United States, Canada, South Africa and the United Kingdom. Plus, Walker estimates that roughly 15,000 cross-border workers cross over from Spain to work in Gibraltar on a daily basis. Gibraltar uses the Gibraltar pound while Spain uses the euro, so currency conversion, remittance and tourism could be strong drivers for adopting a global, borderless currency.To pay for a coffee in Gibraltar, customers can now scan a QR code or simply tap to pay using an NFC-enabled Bitcoin Lightning card. The most popular payment choice among Satoshi spenders is the Bolt Card, a CoinCorner innovation. Molly Spiers, head of marketing at CoinCorner told Cointelegraph that the “Bolt Card has been a driving factor for Bitcoin adoption.”Bitcoin adoption in British Overseas Territories is booming, boosted by the ease of tap-and-go payments. Over on the Isle of Man, an island whose population doubles Gibraltar’s 35,000, Bitcoin adoption “has exploded over the last 6 months,” Spiers told Cointelegraph. “We’ve gone from around fi businesses accepting bitcoin, to now nearly 10x that!”Related: Busking on Bitcoin: How Lightning Network outperforms Ethereum for tippingWhile the Isle of Man has made itself the mantle, “Bitcoin Island,” Walker quips that Gibraltar could be called “Bitcoin Rock.” Indeed, the household names of Costa Coffee and Hotel Chocolat join a growing list of merchants that accept Bitcoin in Gibraltar. Essardas Luxury, for example, has accepted Bitcoin since early 2021, while smaller independent shops accept Bitcoin and sometimes cryptocurrencies including stablecoins upon request.

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Workers in volatile economies most likely to take pay in crypto: Report

Residents in nations with volatile economies are more likely to receive their pay in crypto, according to global hiring platform Deel. In its “State of Global Hiring Report” shared with Cointelegraph on July 21, the firm found that despite the 2022 bear market, crypto represented 5% of all global payments withdrawn from the platform every month, up from 2% in the second half of 2021. Residents in nations with volatile economic situations and currencies were most likely to take their payments in crypto, according to the report. These included countries in Latin America (LATAM) and Europe, the Middle East, and Africa (EMEA).Crypto withdrawals in the LATAM region represented 67% of the total, with EMEA countries at 24%. Those from the North American region represented just 7% of the total for crypto payments. The Asia Pacific region was even lower with just a 2% share of the whole.In terms of asset type, Bitcoin (BTC) remained the crypto of choice, making up 47% of the total. The second choice of digital asset for payments was Circle’s USDC with 29%, followed by Ethereum (ETH) at 14%. Tether’s USDT did not make the list.Deel sourced the data from over 100,000 cross-border worker contracts on the platform between January and July 2022. The firm helps businesses compliantly hire, onboard, and pay people in different countries. It noted that LATAM tops the list of regions hiring internationally.Related: Crypto education can bring financial empowerment to Latin AmericansSurging inflation is a concern for many countries in the Latin American region. Venezuela, Argentina, Chile, Brazil, and Paraguay all have double-digit inflation, according to Trading Economics.Diminishing purchasing power using their own fiat currencies is likely to have influenced the increase in crypto payments to regional workers.

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Technicals suggest Bitcoin is still far from ideal for daily payments

It is no secret that a vast majority of investors, both from the realm of traditional as well as crypto finance, view Bitcoin (BTC) as a long-term store of value akin to “digital gold.” And, while that may be the dominant narrative surrounding the asset, it is worth noting that in recent years the flagship crypto’s use as a medium of exchange has been on the rise.To this point, recently, the central bank of El Salvador revealed that its citizens living abroad have sent over $50 million in remittances to their friends and family. To elaborate, Douglas Rodríguez, president of El Salvador’s Central Reserve Bank, announced that $52 million worth of BTC remittances had been processed via the country’s national digital wallet service Chivo through the first five months of the year alone, marking a 3.9%, $118 million increase in value when compared to the same period in 2021.Bitcoin as a payment medium has been on the rise, as is made evident by the noticeable increase in the adoption of layer-2 payment protocols such as the Lightning Network. To this point, BTC transaction volumes are currently up by a whopping 400% over the last twelve months. Therefore, it is worth delving into the question of whether Bitcoin’s utility as a daily transaction medium is actually feasible, especially from a long-term perspective, as when compared to other networks like Ethereum, Solana or Cardano, Bitcoin still lags behind in key areas including scalability and transaction throughput.Is Bitcoin’s utility as a payment method overrated?According to Corbin Fraser, head of financial services for Bitcoin exchange and cryptocurrency wallet developer Bitcoin.com, Bitcoin has lost its first mover advantage as peer-to-peer (P2P) cash. This is due to the fact that, since 2016, the Bitcoin community has done everything possible to explain to its users that they should absolutely not use Bitcoin for payments or remittance-related purposes. He added:“Use cases of remittance and P2P cash payments have moved to other blockchains with higher throughput, lower fees. Bitcoin will be hard pressed to re-introduce the concept of daily payments to its users and other communities focused on these use cases which have found a home under various other banners.”Fraser stated that when one takes into consideration the difficulty side of things, such as the hassles involved with ordinary crypto users deploying layer-2 solutions like the Lightning Network to process payments, the situation becomes all the more complex. “Competition in low fee, high throughput chains has increased considerably in the past two years. Bitcoin is on its heels when it comes to shifting focus back to using it for daily payments,” he added.Recent: Will intellectual property issues sidetrack NFT adoption?On a technical note, he highlighted that Bitcoin’s limited throughput of five transactions per second means that as people start to flock to the blockchain for daily transactions, its memory pool will fill up, causing the fee market to expand, pricing out more and more users and creating a negative experience for users intending on using it for daily payments. He said:“Even in the event of a mass exodus from layer-1 BTC to layer-2 BTC protocols, the system will struggle both due to deposits and withdrawals to and from the Lightning Network. That said, Bitcoin’s core devs could make some changes to further enhance utility for payments. If the BTC community can rally behind the payments use case, it is possible consensus could be reached.”A somewhat similar opinion is shared by Toya Zhang, chief marketing officer for cryptocurrency exchange Bit.com, who told Cointelegraph that even though Bitcoin was initially designed as a payment currency, the development of different protocols and stablecoins has made it highly unlikely that it will ever be used as a payment token anytime soon, even with the implementation of layer-2 solutions. She further explained:“In the long run, limitations related to confirmation times or price volatility are not an issue. The reason for Bitcoin to not be able to fulfill its role as a remittance medium is very simple, Bitcoin is too pure of an asset. It will only fulfill its original mission if all payment-centric cryptocurrencies fail, the possibility of which has most likely sailed.”BTC transaction numbers appear shakyAndrew Weiner, vice president of VIP services for cryptocurrency exchange MEXC Global, told Cointelegraph that while BTC does tend to be used for large payments, technically and philosophically, it is difficult to make micropayments using Bitcoin’s layer-1 blocks, which is the very reason why so many developers are pushing micropayments on Bitcoin’s layer-2 network. To this point, he noted that from 2018–2021, Bitcoin’s micropayments remained absolutely flat, with a public capacity of less than $5,000. However, things went to a whole new level last year, when the network went from 10 million users to approximately 80 million from October 2021 to March 2022. In this regard, Weiner highlighted:“The main reasons for this are the reduction in the complexity of layer-2 networks (such as the Lightning Network) and the gradual maturity of infrastructure for setting up nodes and utilizing networks. More and more wallets and payment processors continue to grow. Node cloud hosting and node management software companies support BTC’s Lightning payments, enabling enterprises to integrate more into these products and services.”That said, he conceded that BTC becoming a means of daily payment depends on the asset fulfilling three core conditions: whether its infrastructure is mature enough to achieve low cost and convenient use, whether there is enough use such that large enterprises, institutions and national governments are willing to use the asset and lastly, whether it can deliver a good enough level of security and privacy. A pawn shop in the Philippines, a common location for sending and receiving remittances.Yohannes Christian, research analyst for digital asset exchange Bitrue, noted that despite being one of the most secure networks in existence today, Bitcoin’s remittance capabilities are one of the worst in terms of speed and fees. He pointed out that the asset can only process 5-7 transactions per second (which works out to 3,500 to 4,000 transactions in a 10-minute block). Furthermore, when this transaction number peaked, Christian noted that it could take up to an hour to settle a payment, adding:“In terms of fees, the Bitcoin network follows the Supply and Demand Law, with a low of $0.20 per transaction and as high as $50 per transaction during the height of the 2017 bull run. This congestion issue can create a systematic problem for day-to-day Bitcoin payments.”And, while the development of layer-2 solutions may help solve some of the scalability problems in question, he believes the network still needs some time before it can become ready to be used for daily transactions. To put things into perspective, the Bitcoin network currently has a 10-minute block transaction with only a 1MB block size. In comparison, its close alternative, Bitcoin Cash (BCH), has a 2.5-minute block transaction and 32MB block size, which is 128 times faster than BTC.The future of Bitcoin lies within a layered approachMuneeb Ali, CEO and co-founder of Trust Machines — an ecosystem of Bitcoin-centric applications and platform technologies — told Cointelegraph that once you have a decentralized base as good as Bitcoin, it is easy to build additional utility and scalability on top, adding:“That’s what we’re seeing in other blockchain ecosystems and what we can expect for Bitcoin as well. When it comes to global remittance capabilities Bitcoin presents the strongest capability given its decentralization, long term durability, uptime and accessibility. The remittance can be in BTC, or through stablecoins built on Bitcoin layers.”Ali said that despite there being a decade worth of Bitcoin development, we’re still in the early innings of the growing ecosystem. This is because building on the Bitcoin ecosystem has traditionally been hard given the base layer was very simple and lacked advanced programming features. Recent: Burdensome but not a threat: How new EU law can affect stablecoinsHowever, now with various Bitcoin layers like the Lightning Network, Stacks and RSK, developers can build more complex applications with relative ease. “Developer traction is an early indicator of increased app development and usage by mainstream users and we’re beginning to see this now starting 2021 or so,” he concluded.Therefore, as we head into the decentralized future of digital finance, a growing number of countries, institutions and businesses appear to be willing to use Bitcoin as a settlement currency due to a variety of different factors. However, owing to the fact that BTC still experiences great volatility in its day-to-day price action, it is still limited in its overall scope of usability, especially as a payment medium. Thus, it will be interesting to see how the future of the digital asset plays out from here on end.

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Vladimir Putin signs bill banning digital assets as payments into law

Russian President Vladimir Putin has signed a bill into law prohibiting digital financial assets as payments more than a month after it was introduced to the country’s lower chamber of Parliament.In a Thursday update, the Russian State Duma noted that Putin signed a bill suspending certain parts of an existing federal law “on banks and banking activities,” effectively making it illegal for people to use cryptocurrencies to pay for goods and services. The initial draft of the bill from June 7 specified the “prohibition against the introduction of other monetary units or monetary surrogates on the territory of the Russian Federation.”The Duma chair approved the draft bill on June 8, and following revisions and other considerations, the upper chamber of Parliament, the Federation Council, approved the legislation on July 8. Under the Constitution of the Russian Federation, all bills need to be approved by both chambers before being signed into law by the president.Cointelegraph reported in June that the bill introduced the concept of an “electronic platform” — a financial platform, investment platform or information system in which digital financial assets are issued. Under the recently passed law, these platforms will likely be required to submit transactions and actions to the Russian central bank’s registry as part of the national payments system.Related: Russian Duma passes bill to remove VAT, lower income tax rates on digital asset salesRussia’s Parliament is currently considering two other bills related to digital assets. One will potentially regulate crypto miners’ activities in the country, requiring them to follow a certain procedure to register as sole proprietors or self-employed. Another, named “on digital currency,” proposed requirements for firms handling digital asset transactions, including licensing and disclosure about risks and data privacy.

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Crypto payments gain ground thanks to centralized payment processors

The cryptocurrency market has grown beyond many people’s expectations over the past decade. The nascent industry has managed to change mainstream perception quite significantly, especially in 2021, which saw many traditional financial institutions adopt crypto in one form or another.Some of the biggest public companies such as MicroStrategy started using Bitcoin (BTC) as a treasury hedge, while the likes of PayPal, Mastercard and Visa paved the way for the common public to use crypto as a form of payment. While many experts are still skeptical about the use of crypto as a form of payment, given its price volatility, recent market trends and data indicate that crypto is increasingly being used to buy daily-use items.A recent report from fintech payment infrastructure provider checkout.com that surveyed 33,000 business leaders revealed a rise in consumer interest in paying in crypto. The report indicated that 40% of 18–35-year-old consumers want and plan to use cryptocurrencies to pay for goods or services within the next year. That’s up from less than 30% last year.The rise of digital payments aided by the COVID-19 pandemic has only made it easier for crypto to become more mainstream. People are more familiar with QR code payments today, which makes it easier for mainstream payment processors such as Visa and Mastercard to introduce crypto payments on its network without having to build a separate infrastructure.Miles Paschini, CEO at fintech bank FV Bank, told Cointelegraph:“The use of cryptocurrencies as a form of payment has progressed in the past year but primarily into the area of settlement layers, advancements have been made with stablecoins, in particular with USDC and to some extent XRP. The developments we have seen in the settlement layer are not exactly visible to the retail customer. I think we will see more of this type of settlement layer integration in the future as stable similarly similar become more efficient and programmable than traditional settlement systems.”The growth of crypto payment networks and public interestAccording to a report from Visa, its network processed over $1 billion in crypto transactions in the first quarter of 2021, which increased to $2.5 billion by the first quarter of 2022. The report highlighted that crypto payments have become increasingly popular with the rise in the use of stablecoin payments.Mastercard partnered with USD Coin (USDC) stablecoin issuer Circle to facilitate crypto-based payment options for millions of users.With the rise in crypto-linked debit cards, Nexo has come up with its crypto collateralized credit card in association with Mastercard. Nexo has issued 55,000 cards since its launch in April that could be used at around 92 million merchants worldwide, allowing investors to spend up to 90% of the fiat value of their crypto.Antoni Trenchev, co-founder and managing partner of Nexo, told Cointelegraph about the rise of crypto as a form of payment, claiming crypto-linked cards are making it easier for retail customers to spend their digital assets just like fiat. He explained:“The concept of HODLing is well understood in crypto, but with crypto-backed cards, it is now possible to hodl your digital assets while also using these to spend on day-to-day transactions. This, in turn, has carved a pathway whereby crypto can be both an investment and a form of payment, increasing its utility as an asset class.”He added, “Crypto cards offer the possibility of spending your crypto directly, which automatically converts your crypto from a linked wallet into the fiat currency needed to pay.”Many analysts also like to point to the rise in stablecoin adoption as a key metric of crypto payments. Brandon Rochon, a data scientist at Web3 infrastructure provider Covalent, explained how the stablecoin USDC has managed to see over a 10% rise in adoption year-on-year (YoY) despite a downturn in the market. He explained:“Looking at USDC, its supply grew from $373 million in July 2019 up to $1.0 billion in July 2020, representing a ~168% increase in the one-year time frame. This same 168% growth was achieved in the first three months by October 2020. Over the next year, the supply grew at a rate of 2500% to ~$25 billion, at which point Mastercard stepped in and launched its simplified payments card offering with Circle in July 2021. Since this point, stablecoin supply has continued to grow at a pace over 120% YoY despite the market downturns in the -50%+ range, signifying strong utility.”Omid Malekan, adjunct professor at Columbia Business School — where he teaches crypto — believes that stablecoin is a fair metric to measure the payment use of crypto at present. He told Cointelegraph:“One way to measure crypto use in payments is to track stablecoin volumes since those serve a much more limited function than pure crypto coins. On-chain volume for payments has been very strong lately. Most of that is to accommodate speculative activity (people buying and selling crypto, borrowing in DeFi, etc) but payment is a payment, and a substantial part of the traditional system’s payments volume is also related to capital market activity.”Crypto payments beneficial for merchants and consumers alikeWhile the infrastructure side of crypto payment has seen tremendous growth, it would not be possible without the willingness of merchants to accept it. Several surveys and reports have highlighted that merchants have benefited equally from the crypto payment integration despite technical barriers and complexities.Another report from PYMNTS highlighted that more than 75% of the customers in the United States are looking forward to using crypto as a form of payment in 2022. While 85% of businesses with over $1 billion in annual sales are integrating crypto payments to gain more customers, many other merchants have said their overseas transactions increased and they found a new customer base after crypto payment integration.The key reasons listed by merchants for accepting cryptocurrencies as payments include significant cuts in transaction costs, elimination of middlemen and on-boarding of new customer bases from around the world.Stablecoins form a significant chunk of expenditure by consumers. However, many analysts also point toward significant growth of layer-2 networks over the past year. For example, the Lightning Network, the secondary layer on top of Bitcoin, has seen tremendous growth over the past year. Bitcoin Lightning Network capacity grew past 4,000 BTC, first breaking the 1,000 BTC barrier in August 2020 and the 2,000 BTC barrier in July 2021. The capacity has doubled in the space of 18 months.Andry Lebedev, co-founder of Web3 payment infrastructure firm Swipelux, told Cointelegraph:“At the moment, there is a rerolling of transactions from L1 to L2 thanks to the introduction of zk-rollups and optimistic rollups. Consequently, we see significant growth in transactions for the protocols and stabilization of transactions for Ether and Bitcoin at 125,000 and 240,000 transactions per day, respectively.”He added that there has been an “upward trend in the structural change of cryptocurrency, which instead of transfer of value becomes a form of payment in the emerging Web3.”Crypto payment’s popularity depends on the overall adoption of cryptocurrencies; the more people that are aware of and understand the nascent financial asset class, the more people will adopt it, as proven by several studies mentioned above. The volatility aspect of cryptocurrencies could be further dialed down by converting them into stablecoins.

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Tether fortifies its reserves: Will it silence critics, mollify investors?

There is an old Arabic proverb: “The dogs bark, but the caravan moves on.” It could summarize the journey to date of Tether (USDT), the world’s largest stablecoin. Tether has been embroiled in legal and financial wrangling through much of its short history. There have been lawsuits over alleged market manipulation, charges by the New York State attorney general that Tether lied about its reserves — costing the firm $18.5 million in fines in 2021 — and this year, questions voiced by United States Treasury Secretary Janet Yellen as to whether USDT could maintain its peg to the U.S. dollar. More recently, investment short sellers “have been ramping up their bets against Tether,” the Wall Street Journal reported on June 27. But, Tether has weathered all those storms and seems to keep moving on — like the proverbial caravan. On July 1, the company announced that it had dramatically reduced the amount of commercial paper in its reserves, which has been a sore point with critics for some time.Embracing U.S. Treasury reserves?Tether’s commercial paper reserves are expected to reach a new low of $3.5 billion by the end of July, down from $24.2 billion at the end of 2021. The company added that its “goal remains to bring the figure down to zero.” Many stablecoins like Tether are stand-ins for the U.S. dollar, and they are supposed to be backed 1:1 by liquid assets like cash and U.S. Treasury bills. But, historically, as much as half of USDT’s reserves were in commercial paper, which is generally seen as less secure and more illiquid than Treasuries. Hence, the potential significance of the commercial paper statement.It raises questions too. On the positive side, does it signal a new maturity on the part of Tether, embracing more of a leadership position in favor of “increased transparency for the stablecoin industry,” as the company declared in its announcement? Or is this rather just more distraction and obfuscation, as some believe, given that Tether continues to avoid a more intensive, intrusive and comprehensive audit, in favor of a more limited “attestation” with regard to the firm’s reserves? Is it telling, too, that Tether’s “independent accountant reports” are issued by a small Cayman Islands-based accounting firm rather than a Big Four audit group? Finally, what if the short sellers are right and there is less to Tether’s collateral than meets the eye? What would happen to the crypto and blockchain sector if USDT, like TerraUSD Classic (USTC) two months earlier, were to lose its peg to the United States dollar and collapse? Why commercial paper mattersHistorically, “The market’s concern about Tether’s commercial paper is that Tether would not disclose what paper they were holding,” Bruce Mizrach, professor of economics at Rutgers University, told Cointelegraph. There can be large variations in the creditworthiness of commercial paper. This may be more of an issue now because “some short sellers say they believe that most of Tether’s commercial-paper holdings are backed by debt-ridden Chinese property developers,” the Wall Street Journal reported, a charge that Tether has strenuously denied.For that reason, this latest announcement in which the company declared that “U.S. treasuries will now make up an even larger percentage of Tether’s reserves” than commercial paper and certificates of deposit share “could be reassuring to investors,” Mizrach said. In its accountant’s March 31 report “To the Board of Directors and Management of Tether Holdings Limited,” U.S. Treasury bill reserves were $39.2 billion, almost double the $20.1 billion from “commercial paper and certificates of deposit.”On the other hand, Tether’s stablecoin circulation could be trending downward as a result of the crypto sector’s continued slump. If that is the case, “there will be fewer Tether in circulation and therefore less reserves needed as a result of the decline in value and volume of Bitcoin and other crypto transactions,” Francine McKenna, faculty lecturer at the Wharton School and publisher of The Dig newsletter, told Cointelegraph. Is Tether really turning over a new leaf then? “Changes in the composition of reserves does nothing to change the modus operandi of Tether,” Martin Walker, director of banking and finance at the Center for Evidence-Based Management, told Cointelegraph. It remains an unregulated entity that is economically equivalent to a money market fund or a bank. “Regulators really should look to regulate economically equivalent activities on the same basis, whether crypto related or not.”Martin wasn’t particularly impressed by the Tether’s May 18 attestation, either, i.e., its Independent Accountant’s Report signed by MHA Cayman, a small firm based in the Cayman Islands, which noted: “We considered and obtained an understanding of internal controls relevant to the preparation of the CRR [Consolidated Reserves Report] in order to design procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of such internal controls. Accordingly, no such opinion is expressed.”Recent: A brief history of Bitcoin crashes and bear markets: 2009–2022Attestations of this sort, Martin said, are limited to checking the composition of reserves at a given moment in time — in the case, cataloging USDT’s reserves on March 31, 2022 — but “to get real assurance” an audit firm must be allowed to go deeper, examining the process by which reports are generated, said Martin. “The March statement from MHA Cayman explicitly said they had no opinion on the controls in place on generating reports,” a significant omission, he told Cointelegraph.Meanwhile, investors have been placing bets against Tether for the past year, and the pace has quickened since the May collapse of TerraUSD, the algorithmic stablecoin, with more hedge funds joining the shorts, according to the Wall Street Journal. USDT briefly lost its peg to USD during the Terra fiasco, falling to $0.95 before fully recovering. Big Four Audit: An effective solution?Recently, John Reed Stark, an SEC lawyer for 18 years, suggested on Twitter that a “fast/effective/guaranteed way” way for Tether to quell short sellers would be to “Engage a Big 4 accounting firm to conduct an audit which finds a rock-solid balance sheet.” “It’s such an easy thing to solve,” Stark, president at John Reed Stark Consulting LLC and former chief of the SEC’s Office of Internet Enforcement, later explained to Cointelegraph. Moreover, it’s “laughable” that a company with Tether’s market capitalization — $66 billion on July 10, according to CoinMarketCap — is using a small audit firm in the Cayman Islands for its “attestation(s),” which by the way, are no substitute for an audit, in his view.A Big Four audit carries some weight with the SEC, and many larger companies “want to be audited by a Big Four firm,” because it makes their enterprise more attractive to investors and others. In the case of Tether’s reserves, “we don’t know what the assets are,” added Stark. One source suggested that a Big Four firm may not want to take on Tether as a client given its controversy and opaqueness, but “I think they would take the engagement,” commented Stark. But, if they did refuse, that in itself would be a red flag, a sign that “the company was really in trouble,” he said. McKenna doesn’t believe that a giant accounting group would make a meaningful difference now, however. “It really does not matter which firm signs the opinion since it is not an audit but a validation of information that is based on management representations.” The accounting firm is limited to the information that Tether is sharing with it, in other words — and it doesn’t really matter under such circumstances whether the accounting firm is small or large.Along these lines, a smaller accounting firm “could do a great job on a fuller scope audit if its partner had integrity and insists that no value is delivered by just checking a discrete balance against management’s reports on one day at the end of each quarter and then delivering that report 90 days later.” Kudos for surviving the drawdown?In its May 19 statement, Tether noted that it had “maintained its stability through multiple black swan events and highly volatile market conditions” and has “never once failed to honor a redemption request from any of its verified customers.” Shouldn’t the firm be praised for the resilience shown during the recent crypto market plunge and others before?“Tether has responded to the digital asset crisis by shrinking supply by over $15 billion,” said Mizrach. “They appear to be trying to make their collateral more liquid. Both are reasonable steps to take in a crisis.”McKenna, by contrast, can’t quite see lauding a firm for simply honoring its withdrawal requests. This is just “the minimum expected by customers who trust a broker to execute its trades, custody its assets on account and honor its requests to transfer funds on a timely basis,” she said. “You shouldn’t expect applause for not being exploitative, fraudulent, or not yet bankrupt.”Elsewhere, Tether has been losing ground to its closest competitor, USD Coin (USDC), and it was recently reported that USDC may be “on track to topple Tether USDT as the top stablecoin in 2022.” USDC’s market capitalization has increased by 8.27% since May, while USDT’s has plummeted more than 19%.It sometimes seems that all the powers that be are arrayed against Tether, yet the stablecoin remains popular in many parts of the world, including Asia, especially among those without bank accounts or access to USD. “I wonder what the average Lebanese or Nigerian who relies on Tether as a dollar instrument would think of these super-rich short sellers who are trying to destroy it for their own financial gain,” tweeted Alex Gladstein, chief strategy officer at the Human Rights Foundation.The company, for its part, appears to view itself as a responsible leader of the stablecoin movement. Its July 1 announcement carried the assertion that the company’s recent move “Solidifies Its Position As The Most Transparent Stablecoin” — though perhaps the firm is over-reaching here? Mizrach told Cointelegraph:“When Tether — or any other stablecoin — provides a CUSIP level detail of their collateral and domiciles the assets in an FDIC insured institution, they might be able to make this claim.” A Committee on Uniform Securities Identification Procedures (CUSIP) number is a unique identification number assigned to stocks and registered bonds, and CUSIPs would provide granular detail about the reserves backing the USDT’s stablecoin. Recent: NFTs become physical experiences as brands offer in-store mintingAsked if Tether has reformed itself, former SEC lawyer Stark said it is generally not good practice to take a company’s word alone on anything: “Trust but verify is the operative phrase here.” Or, as he put it on June 28, “Without a proper audit, everything else Tether’s CFO says is just noise.”“It always comes back to life”In the unfortunate event that Tether does implode — as some critics anticipate, but which is mere speculation at this point — what would that mean for the larger crypto and blockchain industry? According to Martin:“The collapse of Tether would have a pretty devastating effect, but the crypto industry is a bit like the villain in slasher movies. It always comes back to life in the sequel no matter how it gets destroyed.”“Tether is critical for maintaining any confidence in the cryptocurrency and blockchain sector,” said McKenna. “If Tether collapses, I would venture that it’s all over but the whining and lots of futile appeals to regulators and courts.”

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VC Roundup: ‘Web5,’ Metaverse sports and Bitcoin monetization startups generate buzz

A lot has happened in the Bitcoin (BTC) and cryptocurrency markets since our last edition of VC Roundup. The monumental collapse of the Terra ecosystem spilled over into other segments of the digital asset market, exposing over-leveraged traders, lending platforms and venture capital funds. In the process, Bitcoin’s price plumbed new lows, falling below the previous cycle’s peak for the first time in its history. Despite macro headwinds inflicting pain on the crypto markets, venture capital firms are still investing in the industry’s most promising startups. The latest edition of VC Roundup highlights funding deals for digital asset infrastructure providers, non-custodial crypto protocols, payment solutions and decentralized identity management companies.[embedded content]Digital asset infrastructure provider closes $53M roundPolySign’s quest to bring institutional-level crypto custody solutions to investors has received backing from several venture capital firms. The firm recently raised $53 million in Series C financing backed by Cowen Digital, Brevan Howard, GSR and more. In addition, the company secured a $25 million credit facility from venture firm Boathouse Capital. Although PolySign didn’t specify how the funding will be allocated, the Series C was closed around the same time that the firm acquired digital asset fund administrator MG Stover. Related: Goldman Sachs downgrades Coinbase stock to ‘sell’Bitcoin startup raises funds to monetize creator economyBitcoin and Lightning Network payments platform Mash raised $6 million in seed funding in June as part of its ongoing efforts to remonetize the internet for developers and content creators. The funding round was co-led by Nic Carter’s Castle Island Ventures and Whitecap Venture Partners, with additional participation from Maple VC, Strategic Cyber Ventures, Aquanow and Spacecadet Ventures. The Mash platform allows developers and content creators to offer customers so-called “pay-as-you-enjoy” pricing options facilitated by BTC and Lightning Network.NFT app Floor raises $8MNonfungible token application Floor has closed a Series A investment round valued at $8 million to advance its mission of making NFTs more accessible to mainstream users. The funding round was led by 6thMan Ventures, with additional participation from B Capital, Worklife Ventures, Collab+Currency, Crypto.com and others. Floor said it will use the funding to accelerate development and bring more utility to NFTs.New crypto projects often depend on Venture Capital firms to help them get off the ground. The real question is, are VCs in it for the community and fundamentals, or for their own benefit? (Via @CointelegraphZN)https://t.co/92Gjt4ZlRI— Cointelegraph (@Cointelegraph) July 8, 2022Euler receives major backingNon-custodial crypto protocol Euler has closed a $32 million funding round that was led by Haun Ventures and included participation from FTX Ventures, Coinbase Ventures, Jump Crypto, Jane Street, Uniswap Labs and others. The funding will be injected into the treasury of Euler’s decentralized autonomous organization, or DAO, which is being rolled out in three phases. Euler is a decentralized finance protocol built on Ethereum that allows users to lend and borrow crypto assets. “Web5” and decentralized identity attract VC interestDecentralized identity protocol Trinsic recently closed an $8.5 million seed round to continue building its so-called user-controlled identity products. A spokesperson for the company said Trinsic’s products give real-world utility to Jack Dorsey’s “Web5” ambitions. A vocal critic of Web3, the former Twitter CEO announced in June that he is bypassing the third iteration of the internet in favor of “Web5”, a new Bitcoin-centric model for identity management. Related: VC Roundup: The rise of blockchain gaming, DAO management and asset tokenizationKYVE closes $9M raise ahead of mainnet launchWeb3 archiving protocol KYVE has raised $9 million in funding ahead of a planned mainnet launch slated for the fourth quarter of 2022. The funding round, which had participation from Distributed Global, Wicklow Capital, IOSG Ventures, Blockchain Coinvestors, Huobi Incurabor and others, will be used to integrate more ecosystems into KYVE’s so-called decentralized data lake. Several blockchains currently use KYVE, including Avalanche, Zilliqa, Cosmos and Polkadot. Nobody thought that 2022 would bring this.Check out the latest moves in the world of crypto and business in our Crypto Biz. https://t.co/gEIx0PTxXq— Cointelegraph (@Cointelegraph) July 2, 2022

Atmos Labs targets Metaverse sports with seed raisePlay-to-earn developer Atmos Labs has closed an $11 million seed round to continue building Metaverse-focused sports games. The investment round was led by NFT-focused venture firm Sfermion, with additional participation from Animoca Brands, Collab+Currency, FBG Capital, CoinGecko Ventures and several others. Atmos Labs is looking to bring e-sports to a global audience by creating immersive gameplay in the Metaverse.

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5 events that could put an end to the current crypto bear market

Much to the chagrin of cryptocurrency investors across the ecosystem, the bear market has officially set in and brought with it devastating price collapses that have left relatively few unscathed. As the popular topic of conversation now centers on bearish predictions of how low Bitcoin (BTC) will go and how long this iteration of the crypto winter will last, those with more experience on the matter know that it’s virtually impossible to predict the bottom and it would be wise to apply those energies elsewhere. Instead of focusing on the when of the end, perhaps it’s more constructive to explore what events might help pull the market out of the bear market depths and put it on a path to its next up cycle. Here’s a look at five potential catalysts that could pull the crypto market out of its current malaise.A successful Ethereum mergeOne of the most highly anticipated developments of the past five years has been the ongoing transition of the Ethereum network from proof-of-work to proof-of-stake. While the process has been a drawn-out one that has faced numerous setbacks, the official switch is now closer than ever following the successful completion of the Merge trial on the public test network Sepolia. Another big day for Ethereum as Sepolia testnet merges succesfully with the beacon chain!Sepolia = Merged✅Goerli = nextAnd then… Mainnet!The Merge is coming— Metis (@MetisDAO) July 6, 2022It’s possible that the building hype around the Ethereum Merge could help pull the crypto market out of its bearish state should the transition go off without a hitch, especially if it helps lead to more scalability and a faster user experience. As it stands right now, the Merge is set to take place in August 2022. It should be noted that a successful Merge could also lead to a “buy the rumor, sell the news” type of event where prices briefly pump due to the euphoria of crypto holders, only to fall back down once the dire state of the global financial system comes back to the forefront. Approval of a spot Bitcoin ETFAnother event that has been rumored for years that could spark a crypto revival is the passage of a spot Bitcoin exchange-traded fund (ETF) for United States markets. Ever since 2017, when the first BTC ETF proposed by the Winklevoss twins was denied by the U.S. Securities and Exchange Commission (SEC), there has been one rejection after another for any physically-backed Bitcoin ETF proposal put forward. SEC’s resistance to a spot #Bitcoin ETF is becoming almost legendary,” SEC Commissioner Hester Peirce Hint: she hates it as much as we do. — Bitcoin Archive (@BTC_Archive) July 7, 2022

Reasons for the rejection typically revolve around the charge that cryptocurrency markets are easily manipulated and the proper safeguards are not in place to protect investors. If a spot ETF were to be approved, it would render this long-running objection moot and bring a new level of legitimacy to Bitcoin and the crypto asset class as a whole. This has the potential to usher in a new wave of institutional adoption that could bring about the end of the crypto winter as new funds flow into the market. The Fed reverses course“Don’t fight the Fed” is a common expression investors use to explain one of the most influential forces on global financial markets. After multiple years of easy money policies and near-zero interest rates, the U.S. Federal Reserve approved an interest rate hike of 0.25%, the first-rate hike in more than three years.Since then, the Fed has implemented two additional rate hikes of 0.5% and 0.75%, bringing the current benchmark interest rate to a range of 1.5% to 1.75%. During the same period of time, risk assets around the world have been falling in price, with Bitcoin declining from $48,000 at the end of March to its current price, which is trading near support at $20,000. The historic rise in the cryptocurrency and legacy markets that was witnessed in 2021 was largely driven by the easy money policies of the Fed, and it’s highly likely that a return to such policies would once again see funds flow into the crypto ecosystem. Major adoption of Bitcoin as legal tender2021 saw El Salvador become the first country in the world to adopt Bitcoin as a legal tender for use by its citizens. In April of 2022, the Central African Republic (CAR) became the second country to do so, pointing to a growing trend. While the use of BTC as a legal form of tender has been a long-running goal of crypto proponents and the decisions by El Salvador and CAR are worth celebrating, its adoption by such small players on the world stage has done little to promote more mainstream acceptance. These countries are considering making #Bitcoin legal tender: 1. #Mexico 2. #Panama 3. #Honduras 4. #Portugal 5. #Brazil 6. #Argentina 7. #Paraguay Countries where #Bitcoin is already legal tender: 1. #ElSalador 2. #CentralAfricanRepublic #BTC — ₿itcoin Xoe (@Bitcoin_Xoe) July 3, 2022

That would likely change, however, if a larger market such as Japan or Germany were to open up to officially promoting the use of BTC by their citizens for their daily purchases. Recent developments on the global stage, including conflicts and food shortages, are pushing governments to do things they never considered, and it’s not outside the realm of possibility that a larger economy could turn to Bitcoin as a currency of last resort as fiat currencies continue to lose their purchasing power. Related: EU-regulated firm Banking Circle adopts USDC stablecoinIntegration as a payment option by a large companyA common excuse as to why people don’t use Bitcoin or cryptocurrencies for their everyday purchases is because it’s not really accepted anywhere. While there are options available for accessing the value held in crypto, such as debit cards and online payment integrations with platforms like Shopify, the ability to make purchases by conducting transactions directly on a blockchain network is relatively limited. On several occasions, Elon Musk has demonstrated that the mere mention of integrating blockchain-based payments can spark a market rally for the token in question. JUST IN: Elon Musk’s Boring Company will accept #Dogecoin as a payment method for Loop rides.— Watcher.Guru (@WatcherGuru) July 6, 2022

Based on this and other examples of price pumps that followed speculation about a major adoption announcement, it’s likely that crypto payments being integrated by a major company such as Amazon or Apple could spark a bullish wave of momentum. Want more information about trading and investing in crypto markets?The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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EU-regulated firm Banking Circle adopts USDC stablecoin

Banking Circle, a European bank focused on cross-border payments, is adopting a major U.S. dollar-pegged stablecoin for payment rails.The firm officially announced on Friday the adoption of the USD Coin (USDC) on its platform as a payment acceptance, processing and settlement method.The new payment feature is enabled as part of Banking Circle’s new service targeting banks and payment providers, allowing them to facilitate payments outside traditional bank rails.Coinbase, a major cryptocurrency exchange in the United States, will be one of the crypto liquidity providers for Bank Circle, the announcement notes.The USDC adoption by Banking Circle is positioned as a “key step in democratizing global finance” as it provides significant “reconciliation, speed and cost advantages,” the firm said.Mishal Ruparel, head of virtual asset services at Banking Circle, told Cointelegraph that the USDC integration is the bank’s first move into the digital asset market. “Some of our clients have been serving the crypto space for the past year or two, and we want to support their growth,” he added.Banking Circle has chosen USDC as their first proposition because it has the “biggest relevance to our clients at this point,” Ruparel noted. “We will be adding other USD pegged stablecoins and those for other currencies in the future,” he said, adding that the firm is targeting a limited number of asset-backed stablecoins in Q3 2022.Ruparel also predicted that asset-backed stablecoins like USDC will become more mainstream payment instrument in the future, stating:“This will allow a lot of companies who sell goods, services, or creative content online the ability to sell, collect funds, and receive their earnings almost anywhere. It also removes a lot of the friction and time needed to transfer internationally.”Banking Circle was launched in 2016 with a mission to help payments businesses reach new global markets, avoiding the process burdens of traditional banking. Headquartered in Luxembourg, operates as a credit institution under the regulations of the Luxembourg Commission for the Financial Sector.The firm also offers services in other European countries such as the United Kingdom, operating under limited supervision of the U.K. Financial Conduct Authority.Related: Circle’s USDC on track to topple Tether USDT as the top stablecoin in 2022USDC is the world’s second-largest stablecoin by market capitalization, following only Tether (USDT). The USDC stablecoin was launched in 2018 as a joint project between the Coinbase crypto exchange and Circle, a U.S.-based blockchain payment firm founded by Jeremy Allaire and Sean Neville in October 2013.

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