Switching to the Satoshi standard and Lightning Network connectivity makes Bitcoin more tangible and easy to use. AAX has made the first move in the crypto space, already providing BTC to SAT
Crypto miner Core Scientific to go public via $4.3 bln SPAC deal
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Core Scientific Holding Co said on Wednesday it would go public through a merger with a blank-check company backed by BlackRock Inc (BLK.N), in a deal that values the cryptocurrency miner at $4.3 billion.
The deal with Power & Digital Infrastructure Acquisition Corp (XPDI.O) will fetch $300 million in cash proceeds, but the companies did not disclose a private investment in public equity (PIPE) round that typically accompanies blank-check mergers.
Core Scientific said it had mined 928 bitcoins in the second quarter and forecast revenues of $493 million and $1.1 billion for fiscal 2021 and 2022, respectively.
The company said it was 100% net carbon neutral and aims to remain so as it grows. Bitcoin is virtual but mining the asset consumes a lot of energy as it is created using high-powered computers around the globe.
New Jersey orders BlockFi cryptocurrency firm to stop offering interest-bearing accounts
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New Jersey ordered the cryptocurrency platform BlockFi Inc to stop offering interest-bearing accounts that have raised $14.7 billion from investors, the state’s acting attorney general said on Tuesday.
A cease and desist order from New Jersey’s Bureau of Securities said BlockFi’s accounts were not registered with that office or exempt from registration, and their sale violated New Jersey securities laws.
Andrew Bruck, the acting attorney general, said the enforcement action against Jersey City, New Jersey-based BlockFi came amid concern about the growth of decentralized finance platforms for investors in digital assets.
According to the order, investors can buy BlockFi Interest Accounts by depositing cryptocurrencies such as Bitcoin and Ethereum with the company, which uses them to fund lending operations and proprietary trading.
The order said BlockFi offers yields from 0.25% to 7.5%, depending on how much and which assets are deposited.
In contrast, the average interest rate for savings accounts nationwide was 0.06% on June 30, according to Bankrate.com. BlockFi’s accounts lack federal deposit insurance.
“Our rules are simple: if you sell securities in New Jersey, you need to comply with New Jersey’s securities laws,” Bruck said in a statement. “No one gets a free pass simply because they’re operating in the fast-evolving cryptocurrency market.”
The order takes effect on July 22, and does not affect existing BlockFi Interest Accounts. Bruck said BlockFi does not offer the accounts in New York and some other jurisdictions.
Elon Musk: Tesla will ‘most likely’ restart accepting bitcoin as payments
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Bitcoin was up 8% at $32,160.16, while ether surged 11.6% to $1,993.36. Tesla’s shares were down 0.8% at $655.30 in extended trading.
Musk’s comments at the B Word conference come after Tesla said in May it would stop accepting bitcoin for car purchases, less than two months after the company began accepting the world’s biggest digital currency for payment.
“I wanted a little bit more due diligence to confirm that the percentage of renewable energy usage is most likely at or above 50%, and that there is a trend towards increasing that number, and if so Tesla would resume accepting bitcoin” Musk said.
“Most likely the answer is that Tesla would resume accepting bitcoin.”
The use of bitcoin to buy Tesla’s electric vehicles had highlighted a dichotomy between Musk’s reputation as an environmentalist and the use of his popularity and stature as one of the world’s richest people to back cryptocurrencies.
Some Tesla investors, along with environmentalists, have been increasingly critical about the way bitcoin is “mined” using vast amounts of electricity generated with fossil fuels.
More digital currency miners, however, are making attempts to use renewable energy to mitigate the impact on the environment.
“Tesla’s mission is accelerating the advent of sustainable energy. We can’t be the company that does that and also not do appropriate diligence on the energy usage of bitcoin,” Musk said.
Musk added that he personally owned bitcoin, ethereum and dogecoin, apart from bitcoin that Tesla and SpaceX owned.
“I might pump, but I don’t dump,” Musk said. “I definitely do not believe in getting the price high and selling … I would like to see bitcoin succeed.”
US Presidential Advisory Group to Discuss Stablecoins
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The President’s Working Group on Financial Markets plans to discuss stablecoins at a meeting on July 19, the U.S. Treasury Department announced Friday.
Treasury Secretary Janet Yellen is convening the working group, which consists of major financial regulatory agency heads, to examine stablecoin regulation and risks, and to find suggestions for future work around this issue. The President’s Working Group is an interagency entity tasked with monitoring the U.S.’s financial markets.
In the press release announcing the meeting, Yellen said the meeting could help protect users, markets and the broader financial system from any risks that stablecoins pose, while still enabling the government to “assess the potential benefits.”
“In light of the rapid growth in digital assets, it is important for the agencies to collaborate on the regulation of this sector and the development of any recommendations for new authorities,” she said.
The group expects to publish written recommendations in the near future.
The President’s Working Group already published one document about stablecoin regulation in December, which examined retail payments and sought public feedback on how these types of payments are being used.
The December statement warned there may be risks around stablecoins, particularly with regard to end user rights, know-your-customer and anti-money laundering issues, market integrity and monetary stability.
Federal Reserve Chairman Jerome Powell, Securities and Exchange Commission Chair Gary Gensler and Commodity Futures Trading Commission Acting Chair Rostin Behnam will also be part of Monday’s meeting. While the December iteration of the group asked former Acting Comptroller Brian Brooks to weigh in on its report, it’s unclear whether current Acting Comptroller Michael Hsu will be a part of any future recommendations.
The news comes just after Powell told Congress that greater regulations are needed around stablecoins before they can become a significant part of U.S. payments networks.
“Stablecoins certainly have some advantages in terms of faster payment systems and have some attributes of CBDCs [central bank digital currencies] but there are some risks with stablecoins right now,” Powell told the House of Representatives Committee on Financial Services. “I think the issue is that stablecoins are a lot like money market funds or bank deposits or a narrow bank.”
Revolut raises $800 million in Series E funding, valuing the business at $33 billion
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Revolut, the financial superapp with more than 16 million customers worldwide, today announced an $800m series E funding round, valuing the business at $33 billion. The new funding round brings onboard two new investors, SoftBank Vision Fund 2 and Tiger Global Management.
The investment will enable the company to further its growth plans, in particular its ongoing product innovation aimed at meeting customers’ everyday financial needs and aspirations, from quick and easy global transfers, to managing everything from savings to insurance, to democratising wealth and trading. It will also support the expansion of Revolut’s offering to US customers and its entry to India and other international markets.
Commenting on the fundraise, Nikolay Storonsky, Founder & CEO of Revolut said, “SoftBank and Tiger Global’s investments are an endorsement of our mission to create a global financial superapp that enables customers to manage all their financial needs through a single platform. This funding round makes Revolut the UK’s most valuable fintech, demonstrating investors’ confidence that we can deliver products that raise the bar for customers’ expectations across the whole financial services industry.
Mr. Storonsky added, “We want our global superapp to offer our customers 10x better value and 10x better service and security than they can achieve anywhere else. We are building a full financial product suite in a single app, where you will always find the product that best meets your needs. Our services will be increasingly personalised, responding to our customers’ daily needs, always with low and transparent fees. As we expand into new markets we are encouraged by our customers’ enthusiasm for Revolut and we look forward to using this investment to further our mission.”
Karol Niewiadomski, senior investor for SoftBank Investment Advisers, said “Revolut’s rate of innovation has redefined the role of financial services, placing Revolut at the forefront of Europe’s nascent neobanking sector. The company’s rapidly growing user base reflects a sustained demand for Revolut’s expanding suite of services. We look forward to supporting Nikolay and the team in continued product innovation and bringing their services to new markets globally.”
Scott Shleifer, partner, Tiger Global said: “We believe Revolut’s superior customer experience and focus on rapid product development put the company in a strong position to continue scaling in both existing and new geographies. We are excited to partner with Nik and the Revolut team as they build the next generation of financial services.”
The Rt Hon Rishi Sunak MP, UK Chancellor of the Exchequer, said:
“It’s great news that Revolut has raised a further $800m and plans to expand even further – creating more jobs here in the UK.
“We want to see even more great British Fintech success stories like Revolut, which is why I’ve published a roadmap setting out how we will ensure the UK sector remains competitive, forward-looking, and dynamic.”
JPMorgan Chase Survey: Business Leaders’ Optimism, Growth Expectations Soar Past Pre-Pandemic Levels
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Nearly 9 in 10 business leaders (88%) are optimistic about their company’s performance for the next six months, the highest percentage recorded in 11 years of the survey, and up from 56% one year ago at the height of the pandemic in the U.S. Survey participants are also feeling confident about the industry they’re in: 82% are optimistic about their industry’s performance, a significant jump from 45% a year ago.
This rising confidence extends to the broader economy as well. Three-quarters of respondents are optimistic about the local (76%) and national economy (75%), each representing an increase of at least 40 percentage points from a year ago. Optimism about the global economy, which has traditionally been more muted, is at its highest level (53%) since 2018, up from just 17% last summer.
The rosy outlook is driving ambitious growth plans for companies: the majority (80%) anticipate a rise in revenue/sales, and close to half (46%) expect to increase investments in capital expenditures, up from 18% one year ago. In line with these growth plans, nearly 4 in 10 businesses (38%) expect an increase in credit needs for the remainder of 2021.
“After enduring the challenges of the last year and a half, businesses are feeling overwhelmingly positive about what’s ahead,” said Jim Glassman, head economist, JPMorgan Chase Commercial Banking. “The focus now is on navigating growing pains to harness the momentum of the economic recovery, which is comparatively a good problem to have.”
Businesses’ Pandemic-Related Changes Are Here to Stay
The disruptions brought on by the pandemic forced businesses to adapt quickly and evolve their business models, with some of these changes expected to be permanent. The top strategic actions business leaders have taken include:
- Introducing New Offerings: The majority (61%) have diversified and strengthened their offerings by delivering new product and service lines, with many planning to maintain these products and services post-pandemic.
- Digitizing Operations: 39% of businesses expanded their e-commerce capabilities as more customers shopped online, and 38% digitized their accounts payables and receivables processes to boost efficiency.
- Expanding Geographically: In addition to reaching customers via new digital channels, 38% of businesses expanded into new geographic markets.
“Businesses are proving yet again that when put to the test, they adapt, innovate and rise to the occasion – and in many cases, become stronger and gain market share,” said John Simmons, head of Middle Market Banking & Specialized Industries, JPMorgan Chase Commercial Banking. “We’re working with our clients to help chart a path forward and lean into new opportunities, from digitizing manual back-office processes to evaluating strategic transactions like a merger or sale.”
Supply Chain Issues Are a Top Challenge
Businesses’ supply chains were hit particularly hard by the events of the past year and a half, and ongoing supply chain issues top the list of challenges for the year ahead. Companies report having to utilize new suppliers, digitize back-office functions and manage their supply chain remotely, with many of them planning to maintain these changes in the future.
Other challenges cited by business leaders include uncertain economic conditions and sustaining revenue and sales growth. Businesses are also contending with the reality of a tight labor market as the large majority (81%) hope to hire more workers in the next six months, especially as large numbers of experienced Baby Boomers retire.
Cybersecurity is also a growing concern, as one-third of companies report being directly impacted by a cyberattack or fraud since March 2020. Among the businesses that have experienced attacks, 79% say employee education and training has been the most helpful mitigation tactic, and 56% say proactive countermeasures, including deploying new technologies, have been beneficial.
The New Workplace
With pandemic-related restrictions recently lifted or modified in many parts of the country, businesses are reevaluating their working models. Thirty-eight percent expect all employees to return to on-site work, while one in four respondents (26%) are newly implementing a flexible working model. Of the businesses that are taking a flexible approach, preserving company culture is a top concern, followed by maintaining productivity levels.
Looking Forward
Companies should factor the following considerations into their business plans to position themselves for success in the year ahead:
For more information on the 2021 Business Leaders Outlook Pulse survey, please visit jpmorgan.com/2021midyearoutlook.
Survey Methodology
JPMorgan Chase’s Business Leaders Outlook Pulse survey was conducted online from June 7-18, 2021, for middle market companies with annual revenues between $20 million and $500 million. In total, 1,375 business leaders in various industries across the U.S. participated in the survey. For year-over-year trends, current data is compared with data collected in the second quarter of 2020. The results of this online survey are within statistical parameters for validity, and the error rate is plus or minus 2.6%, at a 95% confidence level.
Brazilian Securities Regulator Approves the First Ethereum (ETH) ETF of Latin America
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To track the performance of Ethereum, QETH11 will follow the CME CF Ether Reference rate, the same that is used by the CME Group. The QETH11 will buy Ethereum in the open market and carry out the custody for investors in a safe and secure environment using Gemini’s custodial solutions.The QETH11 provides a gateway for institutional players to gain exposure to Ethereum (ETH) in a secure and regulated environment. The approval for Ether ETF from QR Capital came a month after it launched its Bitcoin ETF (QBTC11) back in June 2021. In a note accessed by Exame, QR Asset Management said:“The Brazilian investor now has the possibility of exposure to the two largest and most valuable digital assets in the world, in a regulated, simple and secure manner. It is no longer necessary to register in exchanges, create private keys or worry about secure custody, since the fund has institutional-level custody in deep cold storage , provided by Gemini – a company specializing in the custody of cryptoactives founded by the Winklevoss twins – a service not very accessible to the common investor”.
Growing Demand for Crypto Derivatives
Brazil is seeing a growing demand for crypto derivative products as digital currencies continue to make faster inroads in the country’s financial system. On the other hand, the country’s struggling economy is pushing investors to investment vehicles like digital assets.Apart from these two ETFs – QBTC11 and QETH11 – Brazil has been investing in ETFs that track a basket of cryptocurrencies HASH11. The positive regulatory approach from Brazil has been welcomed by investors.The approval for QR Capital’s Ether ETF comes when ETH has been trading under pressure. In the last 24 hours, the ETH price has tanked 5.64% moving under $2000.
Paraguay Proposed Bitcoin Law Includes Crypto Registration
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A new bitcoin law expected to be introduced into Paraguay’s legislature tomorrow will require cryptos to be registered with the country’s Undersecretariat of State Taxation, Decrypt reported Tuesday, citing a draft of the bill it said it obtained.
“The purpose of this draft law is to establish legal certainty, financial and fiscal in the businesses derived from the production and commercialization of virtual assets,” a rough translation of the document reads. Decrypt reported that the bill was a leaked draft, without saying how it obtained it.
The bill would also regulate crypto mining as well as trading through exchanges and peer-to-peer marketplaces where participants will be required to register as “obligated subjects,” according to Decrypt’s reporting.
It’s a stark contrast to neighboring Latin American country El Salvador, which last month approved its own version of a Bitcoin Law designed to make the crypto legal tender alongside the U.S. dollar.
“It is important that companies can register these products within their accounting so that they can have their real valuation, additionally [it] helps to optimize the tax collection of this industry, finally giving traceability of what is produced in the country facilitating its tracking by supervisory authorities,” the document says.
Specifically, the rationale of the bill states that crypto mining should be seen as an industrial activity under the purview of the Ministry of Industry and Commerce because of its use of capital, labor, machinery and construction of civil infrastructure.
Congressman Carlos Rejala, who plans to present the bill, told CoinDesk last month that the law would allow crypto mining or exchange companies to finance their Paraguayan operations with digital assets as well as remit dividends abroad and capitalize their crypto profits in domestic banks.
Central Bank of the UAE announces intent to launch a digital currency
The UAE central bank is planning to roll out a digital currency as part of its 2023-2026 strategy, according to state news agency WAM.
Jurisdictions like ADGM and DIFC have introduced crypto regulations, and last year, the central bank had rolled out a virtual asset scheme. When a central bank introduces a digital currency it is expected to support the industry as assets will back it.
The WAM report said the strategy includes supporting digital transformation in the financial services sector by adopting the latest technologies in artificial intelligence and big data, developing a strong and secure financial cloud infrastructure and supporting the green economy in the UAE.
The new strategy also includes the use of technology in regulatory and insurance systems, in addition to the use of a digital identity infrastructure, to enhance financial inclusion and faster access to financial services.
The Securities and Commodities Authority (SCA) of the UAE had released a regulatory framework in 2020 for Crypto Assets. The purpose of this regulation is to regulate the offering, issuance, listing, and trading of crypto assets in the state, as well as associated financial activities. However, it excluded the Central Bank of UAE, crypto assets issued by the government and/or public undertakings, a currency, virtual currency, digital currency, unit of stored value, or any other payment unit issued through a system licensed, approved and authorised by Central bank from time to time.
An annual UBS survey of 30 leading central banks, highlighted the fact that though central bank officials have doubts over private cryptocurrencies, they are certain over the prospect of central bank digital currencies or official coins.
About 60 per cent of the respondents (central bank reserve managers) expect at least one G7 central bank to make digital currencies available to consumers in the next half-decade.
Over 80 per cent of central bank reserve managers said over the period, they expect the launch and accessibility of “wholesale” central bank coins to big financial institutions.
Stripe takes first step toward blockbuster listing
The 11-year-old company, which was valued by investors at $95 billion in a fundraising round in March, has sat out this year’s red-hot market for initial public offerings (IPOs), using private tender offers to allow some of its existing investors and employees to cash out their holdings.
Remaining private has enabled Stripe to keep such financial details as revenue and profitability under wraps. Yet this has also deprived it of using its shares as a publicly traded currency to help finance acquisitions and to incentivize employees.
Stripe has tapped Cleary Gottlieb Steen & Hamilton LLP as a legal adviser on its early-stage listing preparations, the sources said. There has been no decision on the timing of the stock market debut, and the next step would be the hiring of investment banks later this year, the sources added. The listing would be unlikely to happen this year, two of the sources said.
Stripe is considering going public through a direct listing, rather than a traditional IPO, because it does not need to raise money, said two of the sources, cautioning that those plans could change.
The sources requested anonymity because the deliberations are confidential. Stripe and Cleary Gottlieb declined to comment.
Founded in 2010 by Irish brothers Patrick and John Collison, Stripe processes hundreds of billions of dollars in transactions every year for millions of businesses worldwide. Its list of clients includes Alphabet Inc’s (GOOGL.O) Google, Uber Technologies Inc(UBER.N), Amazon.com Inc (AMZN.O) and Zoom Video Communications Inc (ZM.O). Early investors Elon Musk, Peter Thiel and Google’s venture capital arm.
Stripe’s breakneck growth could result in it challenging Chinese technology giants Ant Group (688688.SS) and ByteDance, whose valuations are close to $200 billion, for the title of world’s most valuable startup by the time it goes public.
John Collison told Bloomberg Television in an interview last month that Stripe, which has headquarters in both Dublin and San Francisco, may go public one day but that there were no current plans for a listing.