What do you get when you cross traditional banking with a centralized crypto exchange?
You get the next step in the merging, or the migration, from old finance to new finance.
We’re going to peek into what this might look like, the latest development in DeFi
and a bit of good Tezos news. All this and more on this week’s Exodus Crypto News.
Welcome back everyone, and if you’re watching for the first time I’m Kris
with Exodus and every week we cherry pick crypto news highlights and wrap
them up with a nice little bow for delivery into your YouTube feed.
The big news this week is that very soon, residents of 49 states
(sorry New York) will be able to use a United States bank for their everyday
crypto transactions like buying groceries from the store or putting gas in their car.
Wednesday morning, Kraken exchange was awarded a license in the state of Wyoming to operate as a
“Special Purpose Depository Institution”, which really just means a Bank that can hold custody
over digital assets, operate payment systems such as issuing debit cards and provide frictionless
on and off ramps for fiat and crypto. If you’re thinking you’ll just be able to walk into a branch
of “Kraken Financial” you’ll be a bit disappointed because this type of bank is different than
a community bank in what is categorized as a “custody” bank. So while you can’t go through
the drive-through ATM, Kraken financial will now provide services, which they used to use 3rd
parties for, now in house, which is how banks make money. Through fees and service charges. What
Kraken Financial cannot do is issue loans and the license requires them to hold 100% of its assets
in reserve in transparent auditable accounts. There’s a lot more meat to this story and
I’m including a link for some resources in the description if you would like to know more. An
interesting aside from this and the report from the Wyoming Division of Banking says they are
currently working with six other companies who are currently applicants or potential applicants for
this same license. Although I’m personally an advocate for financial sovereignty and
moving away from custodial solutions, this move is bullish for crypto because it will help
increase mainstream adoption and once crypto is mainstream, it will be truly unstoppable.
Kind of appropriate the first out of the gate is named Kraken.
Are crypto exchanges the banks of the future, or will traditional banks catch up and support crypto? Let us know what you think in the comment.
Uniswap, not to be outdone by community upstart SushiSwap issued its own community
governance token on Wed night called UNI, and UNI token was quickly picked up for trading on
Binance and Coinbase. A governance token allows holders to vote on network and project proposals
and they’re all the new rage in DeFi. The Yearn Finance token is currently trading at over
$30,000. Our friends at Decrypt made the analogy of a governance token being like a
loyalty program mixed with company shares. UNI token was slated for launch early next year but
seems to have accelerated its plans in direct response to the Sushiswap fork,
which split because the creators said Uniswap was too centralized, this move by Uniswap put more
control in the hands of the people who use the protocol the most. Here’s the breakdown. UNI is
capped at 1 billion tokens over the next 4 years, 60% will be distributed to Uniswap community
members for participating in the platform, 21 and a half percent will go to Uniswap employees,
and the remaining 18.5% will be reserved for investors and advisors. The initial distribution
on Wed was 150 million tokens airdropped to wallet addresses which were active on the platform before
Sept 1st. As an unfortunate side effect of the popularity of this token, the ETH network ground
to a halt Wed evening as the gas prices to send a transaction on the ETH network reached the third
ATH in a month and topped out at about 650 gwei. That equals about $5 to make a transaction.
Omar Bham from Crypto news said on twitter, “That’s it, UNI broke Ethereum, It’s officially the new CryptoKitties”
What’s your take here? Is the DeFi governance token the new ICO in different clothes or is this really
the beginning of something bigger based on completely permissionless transactions?
Join the conversation and share your thoughts below.
It’s no secret that many central banks around the world are looking to the blockchain to create their own Central Bank Digital Currencies
affectionately known as CBDC. We did a short piece last week about Mastercard opening up a
testing sandbox for just this purpose, and this week news dropped from France’s Societe Generale,
a French startup formed by a multinational investment bank, that they
have chosen none other than Tezos as the French national CBDC experiment.
Tezos is a decentralized public blockchain with plenty of speed and proof of stake governance, and a
premiere Tezos developer, Nomadic Labs, is also based in Paris. The French govt has been at the
forefront of developing a national CBDC since late 2019 and wants to be the first out of the gate
with a working product. Whoever is first here will have a tremendous advantage in the adoption game
as worldwide finances move to the blockchain.
The SEC made news last week when they changed long-standing rules governing who is considered an "accredited investor", qualified to purchase
the riskier unregistered securities and private equity sales offered in the United
States. SEC Chairman Jay Clayton stated, "For the first time, individuals will be permitted
to participate in our private capital markets not only based on their income or net worth,
but also based on established, clear measures of financial sophistication."
In other words, it's no longer necessary to show a $1 million net worth, or a consistent
income exceeding $200,000, to achieve accredited status. Citizens can now qualify as accredited
investors based on certain professional certifications, designations, or credentials.
This change alone is not expected to dramatically shift the people purchasing unregistered stocks
and securities; the rules are not in place yet, and more details are forthcoming. But from my
point of view, this is a clear step in the right direction. It shows that the SEC is capable of
adjusting its guidelines formed generations
ago for protection during the devastation of the Great Depression, to serve the investing public.
Overall, this action from the SEC is evidence of a more flexible approach
towards unregulated investments than we saw in 2017 and 2018. At that time, the SEC issued
a major ruling that a $100 million ICO called “The DAO” did in fact constitute a security offering,
causing great doubt and fear amongst blockchain investors that other projects and blockchain
markets would also be affected by regulation. This restrictive ruling, along with strong enforcement
actions against new crypto projects selling tokens to U.S. citizens, were a major force
in putting the brakes on the overall crypto market during an era of rapid expansion.
All these stories point to the bright future crypto has as we emerge from our age of obscurity.
And finally, Exodus has some news of its own. Click the link above to subscribe to the Exodus
newsletter where you’ll receive crypto articles and the latest Exodus highlights delivered
straight to your inbox. That’s all the news that fits today, thanks for joining us for the ride,
share your thoughts about any of this week’s stories in the comments, and if you enjoyed this
video, please give it a like and subscribe to the channel for more crypto videos from Exodus.
Until next time, HODL on!