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Pit Warnings, Crypto Payments, and Usability
Crypto goes up and crypto goes down. Then, many times, crypto goes back up.
It can be a dizzying and volatile cycle.
Customers of cryptocurrency exchange FTX have just collapsed, who once feared they had lost their collective billions can now console themselves with the News Tuesday (May 7) that the FTX bankruptcy team is ready to reimburse them in full, with interest.
That’s because eighteen months after its collapse, the cryptocurrency exchange now claims to have amassed assets valued between $14.5 and $16.3 billion, enough to pay 98% of its creditors. 118% of what is owed to them.
Of course, this “full refund” refers to the valuation of the client’s assets at the time of FTX’s November 2022 statement collapsewhen crypto was suffering a bear market, not the current valuations of these assets, leaving many feel cheated. For example, bitcoin holders will receive $16,871 for each of their old coins – which are now worth more than 400% more, or about $62,000, according to the report.
But FTX turning back the clock isn’t the only crypto news to hit the industry this week. And from the USA Security and Exchange Commission (SEC) for new exchanges, earnings announcements and even hints of the elusive real-world usefulness for crypto assets, these are the top stories from the Web3 landscape that PYMNTS has been tracking over the past week.
Crypto Payments Seek to Unlock Scalable, Real-World Usability
“The internet will have a native currency; It’s only a matter of time. Artificial intelligence systems and agents will have to carry out transactions, and the most efficient way to do this will be a common protocol for moving money,” Jack Dorsey, Block head, Square Block chief, president and co-founder said Thursday (May 2) during his company’s first quarter of 2024 earnings results.
Dorsey emphasized that, in his opinion, bitcoin would be that common protocol for the internet’s native currency.
And he wasn’t the only one to use the company’s earnings call as a platform for crypto payments evangelization.
Also on Thursday, Brian Armstrongthe co-founder and CEO of the largest US-based cryptocurrency exchange, Coin basetold investors that crypto payments were emerging as a key area of opportunity.
“[We’re] driving utility in cryptography. We are doing this… building a better crypto payments experience… moving closer to our goal of making the average crypto transaction take less than a second and cost less than $0.01 anywhere in the world,” said Armstrong on the conference call.
“It still surprises me that every time you swipe your credit card, the merchant loses 2%,” Armstrong added. “It’s really just about moving bits of data around, like sending a WhatsApp message, which is free. And then… why is there still a 2% tax on every transaction in the economy?”
Coinbase stores more than 12% of the total crypto market value on its platform, and the exchange is working to introduce a smart wallet for crypto this summer.
Elsewhere, the Swiss National Bank is carrying out a pilot project which utilized wholesale central bank digital currency (CBDC) and successfully settled four tokenized bond issuances and one secondary market transaction.
It is like News Friday (May 3) that telecommunications giant Vodafone is planning to integrate cryptocurrency wallets and blockchain-based payment solutions directly into mobile phone SIM cards, innovative Web3 solutions that can simplify ease of use for crypto payments are increasingly important for merchants and consumers.
The timeline over which they will reach real-world usability, however, may be a different matter.
Crypto’s Ongoing Regulatory Issues
Crypto’s calling card – at least during its early years – was that it was the “Wild West.” But as the industry matures, regulators are taking some of the sector’s cowboys to court.
Like PYMNTS reportedon Monday (May 6) Robinhood The cryptocurrency business could become the latest target of regulatory action, with the trading platform receiving a Wells Notice of the SEC indicating that they will recommend that the commission take enforcement action against the company.
“After years of good faith attempts to work with the SEC to achieve regulatory clarity, including our well-known ‘go and register’ attempt, we are disappointed that the agency has decided to issue a Wells Notice related to our crypto business in the US”, Dan Gallagherthe company’s chief legal, compliance and corporate affairs officer, said in a blog post.
At the same time, news broke on Tuesday that Nigeria is reportedly intensifying its crackdown on cryptocurrencies with a proposed ban in peer-to-peer (P2P) trading. The move is the West African country’s latest effort to impose tighter controls on the crypto sector, which it blames for the decline of its national currency.
It’s not just about regulatory struggles – crypto companies are also subject to common operational struggles. As reported here, Bakkt is laying off employees after warning earlier this year about the company’s future. The cryptocurrency platform said in an April 29 securities filing archiving which is laying off 13% of its non-call center staff.
Web3 Marketplace Movements
Regulatory struggles aside, the crypto space continues to advance.
On Tuesday, British FinTech Revolution revealed a autonomous cryptocurrency exchange for professional crypto traders. Called Revolut X, the platform is designed to compete with other major exchanges by offering ease of activation and deactivation and low fees.
AND PIMNOS addressed Sunday (May 5) how cryptocurrency startups are reportedly engaging in aggressive fundraising as the digital asset space recovers, as well as how Cripto.com wants to increase its sports sponsorships to reach a Biggest audience.
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