By Gregory Bilecki
TWIDW 2/22/22: Russia & Ukraine updates, the SEC takes a tougher stance on crypto with the CFTC, and…why aren’t you spending your Bitcoin? Intel makes headway into the crypto mining space, CBDC action in Wyoming, Securitize speeds up the convergence of the stock market and blockchain with a recent acquisition, SMB’s will soon see a new capital infusion across Southeast Asia, and BNPL news.
Fed News & Market Impacts
After an extremely volatile week, Russia and Ukraine are still at the forefront of everyone’s minds within the global community right now and for good reason – any acts of maliciousness inflicted by Russia are poised to send markets worldwide into a free fall at the cost of human capital. Activity in the region has almost rendered the entire digital asset space so volatile that as of the end of the week BTC was seen pegged below $40k. The last time the popular token saw below 40k was earlier this month on February 3rd, when it seemed crypto markets were on a road to recovery following the political turmoil in Kazakhstan. UK Prime Minister Boris Johnson quoted Russia as having plans for the “biggest war in Europe since 1945”, along with US President Joe Biden stating that diplomacy was “still possible”.
SEC Chairman Gary Gensler is wearing many hats these days. As the state of depressed US financial markets lags on, he stated this week that part of his mission is to restore the public’s “trust” back into the stock market, as well as the crypto space. Due to its lack of any real definition in US law books based on its unique characteristics, more money is actively being spent to protect investors. In response, Commodity Futures Trading Commission Chairman Rostin Behnam asked for an increase of approximately $100 million to the department’s annual budget of $300 million in efforts to fight blockchain-related fraud, and protect crypto-related derivative markets, all while helping promote clarity between exchanges, and the government. This comes shortly after Senator Elizabeth Warren’s request to a response of her concerns regarding crypto markets by July 28th of this year. With encroaching regulation within global digital asset markets, time will tell just how long the “wild west” era that this realm is currently experiencing will play out.
As if the possibility of war and expanding US regulation wasn’t enough to depress crypto markets this week, Glassnode released another key metric explaining the sudden drop in the price of BTC. The blockchain analytics firm revealed that of all BTC currently in circulation, only 40% is actively spent, with the remaining 60% of circulated tokens going unspent for over a year. While there are many reasons for this, judgment can be made for a few of them.
First, the digital asset sector still faces too much friction overall. Gas fees are still too high and transferring tokens between addresses simply still takes too long. While these times may vary, most often a simple transfer of fractional satoshis can take over 30 minutes to complete due to the necessary network confirmations required.
Second, financial institutions cannot move forward with new product offerings to consumers merely due to the regulatory hurdles that they face. Crypto-based ETF’s specifically for example have made recent headlines only due to losing SEC approval status. The result of this is stockpiles of tokens – quite possibly in the billions – just sitting in reserves.
Finally, more people need to adopt and access needs to be more easily provided. Crypto isn’t merely a trend, and it’s not going anywhere. Money provides a certain power to those who otherwise may not have it, otherwise certain world leaders wouldn’t restrict access in such a way to such a unique ecosystem as the landscape of finance changes.
Since the blockchain itself cannot be inherently simplified, advancements with blockchain-related tech have become increasingly more important. In quite possibly what can be considered a major bombshell this week, Intel announced the launch of its new ASIC (Application Specific Integrated Circuit) processor aptly titled, the “Bonanza Mine BZM2” chipset. The largest creator of chipsets globally, and first in its class to enter the mining space, claims the BZM2 which they’ve designed specifically for blockchain-related functionality is 1,000 times more powerful (per watt) than the GPU’s currently supporting many of the mining operations happening at the moment. This means that yes – it’s even more energy efficient, effectively cutting crypto’s carbon footprint, which is one of the many ongoing concerns surrounding the digital asset space.
GRIID, who went public last year in a $3.3 billion SPAC deal, is touted as the reason for one Intel’s biggest purchase orders of the new chips, with Jack Dorsey’s Block (formerly known as Square) coming in close behind. Intel plans for the “big reveal” at the International Solid-State Circuits Conference on February 23rd.
The CBDC Experiment
Introduced this week was Senate File SF0106, also known as the “Wyoming Stable Token Act”. The bill, issued by Chris Rothfuss and Tara Nethercott, both Wyoming state senators, along with House of Representatives members Jared Olsen and Mike Yin, would authorize the state treasurer the ability to issue a stablecoin pegged to the US dollar which would then be redeemable for traditional fiat currency within the state. While still moving through the approval process, this is a large step within the regulation arena and another aim at clarity within the crypto realm. If signed into law, the target date of December 31st will be given for the state to issue its own stablecoin under the guide of a committee implemented strictly for this purpose.
Securitize announced this week in a press release its acquisition of Pacific Stock Transfer. As one of the leading stock transfer agencies in the country, Securitize is also the first agent to digitally manage shares whose capabilities also include handling the tokenization of shares for their clients. As the convergence of the stock market as we once knew it as happens with blockchain, Pacific Stock Transfer clients will now have even more flexibility in raising capital than they’ve had before. This synergy will allow the new company to expand their portfolio more efficiently, while meeting the needs of their current client base providing them the market exposure needed much more efficiently.
A fresh infusion of $100 million should help Akulaku expand further throughout Southeast Asia. The funds, provided by Thailand-based Siam Commercial Bank will help the company serve customers in emerging markets providing them full access to much needed banking services digitally in the form of lending, investing, and brokerage services. Akulaku recently posted a record year in 2021, issuing approximately $2.2 billion in loans, doubling the amount lent in the previous year.
Sweden-based Klarna who currently has over 21 million US-based users, has officially opened a waiting list for its Visa credit card in its fastest growing market. Customers can expect a streamlined experience that in addition to new features such as real-time credit checks and their loyalty “Vibes” program tie-in, buyers will now have the ability to take advantage of the “pay in 4” feature with any in-store or online purchase.
Delta has landed into the BNPL space along with Amex. Current Amex card holders will soon be able to pay for any Delta flight using Amex’s “Plan It” BNPL service. Costs of flights purchased will split into equal monthly installments with a fixed fee for flights valued at $100 or more when purchased on delta.com.
Gregory Bilecki is a freelance editor at Digital Wealth News, as well as full-time finance, digital marketing, and sushi aficionado. Follow him on Twitter and Instagram at @omgreaktmedia.