• The U.S. government recently announced plans to backstop deposits at two failed banks, and also pledged to secure 8% of the collateral for the USDC stablecoin.
• Circle CEO Jeremy Allaire discussed emergency measures his company took, as well as their game theorizing to spread out its cash and turn stablecoins into “straight-through government obligation money”.
• Stablecoins may be a bridge between crypto and the real economy, but should also retain some of the aspects that make crypto unique.

The Banking Crisis Has Been Good for Stablecoin Experimentation

U.S. Government Bailout Benefits Circle

The U.S Treasury Department, Federal Reserve and FDIC recently announced plans to backstop all deposits at two failed banks, which was good news for Circle, who were working overtime last weekend while USDC depegged from the U.S Dollar. In an episode of “Bankless” with host Ryan Sean Adams, Circle CEO Jeremy Allaire discussed how his company took emergency measures during this crisis and how they have played serious game theorizing over the past two years to spread out its cash reserve assets at about six banks in order to eventually turn stablecoins into “straight-through government obligation money” in the future if necessary.

Stablecoins: Bridge Between Crypto & Real Economy

Stablecoins are becoming increasingly popular tools due to their ability to act as a bridge between cryptocurrency and traditional financial systems by allowing users access 24/7 with a different transaction settlement mechanism than fiat currencies often offer; this is why USDC is currently backed by 8% of its collateral from the U.S Government bailout plan mentioned above . However, these digital tokens must also be able to retain some unique aspects of cryptocurrency – like decentralization – in order for them to stay true to both worlds simultaneously without sacrificing either one’s characteristics too heavily in favor of another.

Circle Game Theorizing

Circle has been pushing forward on their game theorizing agenda in order to achieve their goal of turning stablecoins into “straight-through government obligation money” – meaning they will play a role similar CBDCs (Central Bank Digital Currencies). To do this they have been spreading out their cash reserve assets across multiple banking institutions so that if any one fails or experiences difficulty then it won’t affect USDC’s stability too drastically overall since it will still be supported by other banking partners accordingly.. This way users can continue using USDC without worrying too much about it being pegged or not due unforeseen circumstances beyond anyone’s control suddenly affecting its value significantly as has happened before when two banks recently failed despite having deposits backed up by governments previously like outlined above in regards to Circle specifically now taking advantage of this situation going forward with such innovative methods potentially revolutionizing cryptocurrencies even further than what we’ve seen thus far even before then!

Conclusion

Stablecoins may be the key link between crypto and traditional financial systems, but they will only truly thrive if they remain true both worlds – retaining some unique aspects that make cryptocurrency special while offering users 24/7 access and a different transaction settlement mechanism than fiat currency often offers simultaneously without sacrificing either world’s characteristics too heavily in favor of another. With companies like Circle continuing their game theorizing agenda towards achieving goals like turning stablecoins into “straight-through government obligation money” (functioning similarly CBDCs) through innovative means such as spreading out cash reserves across multiple banking institutions then perhaps we’ll see even more revolutionary changes come about within cryptocurrencies soon enough!

• U.S. President Joe Biden’s proposed budget, set to be unveiled Thursday, will include a provision to close tax loss harvesting on crypto transactions.
• The provision would be expected to raise up $24 billion and lower the U.S. deficit by $3 trillion over the next 10 years.
• In 2021, the Bipartisan Infrastructure Framework passed into law a controversial tax provision that would impose certain reporting rules onto brokers facilitating crypto transactions.

Biden Budget Plan Includes Crypto Tax Loss Harvesting Loophole Closure

U.S. President Joe Biden is set to unveil his budget proposal on Thursday which will include a provision to close the tax loss harvesting loophole on crypto transactions. This measure is expected to generate an additional $24 billion in revenue and reduce the U.S.’s deficit by $3 trillion over the next 10 years according to White House officials speaking with the Wall Street Journal.

What Is Tax Loss Harvesting?

Tax loss harvesting is a method of reducing one’s overall taxes by selling any cryptocurrencies at a loss and then claiming it on their taxes before repurchasing them again at potentially lower prices than when they were sold off originally, resulting in a net profit after taxes are paid for those involved in such activities.

Infrastructure Investment & Jobs Act

In 2021, the Bipartisan Infrastructure Framework was passed into law as an Infrastructure Investment and Jobs Act which included a controversial tax provision that would impose certain reporting rules onto brokers facilitating crypto transactions, effectively narrowing down its definition of “broker” from what many in the industry deemed overly broad due to it encompassing miners as well as other types of entities not directly involved in transaction facilitation or personal information collection for taxation purposes .

Passage Through Congress Necessary For Finalization

Any budget proposal must pass through both chambers of Congress before being sent back for presidential signature before becoming fully enacted into law; however, lawmakers have already introduced bills aiming at closing this particular loophole even prior to its inclusion in this budget proposal put forth by President Biden..

Conclusion

The inclusion of this measure within President Biden’s proposed budget further highlights his administration’s desire towards greater regulatory oversight within cryptocurrency markets while simultaneously attempting to reduce government deficits caused by large-scale spending plans like infrastructure investment packages through increasing revenue sources such as these targeted taxation measures against certain cryptocurrency trading practices like wash sale trading via tax loss harvesting schemes

Summary:
• Voyager Digital conducted a single due diligence call with Three Arrows Capital prior to the latter’s bankruptcy filing.
• The call resulted in a one-page net asset value statement that estimated 3AC’s NAV at $2.4 billion.
• Several crypto firms reported substantial losses due to 3AC’s bankruptcy, including Genesis Global Holdco, Celsius Network and BlockFi.

Voyager Digital and Three Arrows Capital

Court documents filed Tuesday show that just weeks before filing for bankruptcy protection, crypto hedge fund Three Arrows Capital (3AC) sent lender Voyager Digital a one-page net asset value (NAV) statement. A single due-diligence call was conducted between the two firms on February 28th, 2022, and lasted either 30 minutes or an hour depending on who was interviewed.

Due Diligence

The document dated May 13th, 2022 gave Three Arrows Capital’s NAV as just under $2.4 billion and revealed the level of due diligence carried out by Voyager Digital with regard to the hedge fund’s financial standing prior to its filing for Chapter 15 bankruptcy in New York on July 1st.

Other Losses

Genesis Global Holdco reported that its Asia-Pacific unit had lent 3AC $2.4 billion in cash and digital assets, while Crypto lender Celsius Network cited loans worth $75 million and BlockFi also said it suffered “material losses” from the bankruptcy because 3AC was one of its largest borrowers. During interviews conducted by court personnel it became apparent that none of these parties had any background in credit risk management or performed any stress testing of 3AC’s liquidity prior to extending their loans to them.

Loan Portfolio Impacted

The loan extended by Voyager accounted for almost 58% of its loan portfolio and totaled $654 million; leading to further financial troubles when 3AC declared bankruptcy shortly afterwards. This caused a wave of collapses among other crypto firms whose investments were bound up with those made by Voyager Digital into Three Arrows Capital’s NAV statement prior to their downfall.

Conclusion

These court documents provide insight into the extent of due diligence undertaken by Voyager Digital when considering an investment into Three Arrows Capital’s NAV statement back in May 2022; which ultimately proved insufficient when it came to protecting against such significant losses upon the hedge funds subsequent bankruptcy declaration three months later in July 2022

• Saudi Aramco, the Near $2 Trillion State-Owned Energy Company, Has Signed a MoU With DroppGroup to Explore Co-Developing Web3 Technologies.
• The Applications Will Be Aimed at Helping Aramco’s Employees and Could Include an On-Boarding, Training Ecosystems and a Tokenized Network.
• DroppGroup is a Web3 Technology Provider With Tech Stack That Includes AI, ML, XR and Metaverse Environments.

Saudi Aramco Signs Agreement with droppGroup

Saudi Arabian Oil Group (Saudi Aramco), the near $2 trillion state-owned energy company has signed a memorandum of understanding (MoU) with droppGroup to explore co-developing Web3 technologies that could benefit its workers. The applications will be aimed at helping on-boarding, training ecosystems as well as tokenized networks and rewards program.

droppGroup’s Technology Stack

DroppGroup is a Web3 technology provider with tech stack that includes artificial intelligence (AI) and machine learning (ML), extended reality (XR), tokenized networks, and metaverse environments. The New York-headquartered firm also has an operational office in Saudi Arabia.

Previous Involvement With Blockchain Technology

This collaboration isn’t Aramco’s first foray into blockchain technology. In early 2020, the company invested $5 million into Vakt, a blockchain-based commodities post-trade processing platform.

What is Web3?

Web 3 is the third generation of the internet driven by blockchain technology that enables users to have more control over their data while still having access to secure platforms for sharing information online. It can also be used for creating digital tokens or cryptocurrencies which can be exchanged for goods or services or stored for future use.

Conclusion

The partnership between Saudi Aramco and droppGroup marks an important step forward in exploring how blockchain technology can be leveraged to benefit employees of large companies like Aramco as well as provide access to secure online platforms for sharing data securely online.

Wirex and Visa Expand Partnership

• Digital payments platform Wirex has partnered with Visa to expand its footprint in Asia-Pacific (APAC) and the U.K.
• The partnership will allow Wirex to directly issue crypto-enabled debit and prepaid cards to over 40 countries, building on their existing relationship of a crypto-linked visa debit card in the U.S.
• With 5 million customers, Wirex is looking to bring more payment options for consumers by connecting digital currencies with Visa’s network of banks and merchants.

Background Information

Wirex is a cryptocurrency payments app that was founded in 2015 as the first company in the world to develop a crypto-enabled card that allowed users to buy or sell multiple traditional and cryptocurrencies. It currently holds principal membership status with Visa in Europe, allowing it to provide services such as issuing crypto-enabled debit and prepaid cards across multiple countries including the UK and APAC region. This expansion will make using DeFi more mainstream by integrating components like Uniswap and Aave into their services.

Visa’s Plans

Matt Wood, Head of Digital Partnerships at Asia Pacific, Visa commented on this new venture saying that they want to offer more payment options for consumers by connecting digital currencies with their network of banks and merchants. He added that this move reflects their commitment to bringing innovative technology solutions into the payments ecosystem which also includes supporting open banking initiatives.

Benefits Of The Expansion

The expansion of this partnership between Wirex and Visa is beneficial for both companies as it provides them access to larger customer base across multiple regions around the world while also furthering their mission towards making using DeFi more mainstream. Additionally, consumers can now benefit from having more payment options available when dealing with digital currencies through this integration of services offered by both companies.

Conclusion

The collaboration between Wirex and Visa marks an important milestone in providing customers with more choices when it comes to making payments using digital currencies while also furthering both companies’ mission towards making DeFi mainstream worldwide. Through this collaboration customers can now benefit from having access to a larger variety of payment options which are tailored towards meeting their needs better than ever before!

• Bitcoin prices are significantly lower than in late 2021, but the market sentiment is as positive as back then.
• Funding rates for bitcoin perpetual futures have jumped to the highest since December 2021, indicating renewed bullish sentiment.
• The higher the funding rate, the more excited traders are about price prospects and willing to pay a premium to keep their upside bets open.

Bitcoin Sentiment Most Bullish in 14 Months

The cost of holding a bullish long position in perpetual futures tied to bitcoin has soared to its highest level since late 2021, signaling renewed bullish sentiment by leverage traders. Perpetuals are trading above spot prices, with an annualized funding rate of 8.491% across major exchanges such as Binance. This marks the highest level seen since December 3rd, 2021 when one BTC was priced at $57,000 compared to today’s market rate of $23,400.

What Is A Funding Rate?

Funding rates are a mechanism that keeps the prices of bitcoin perpetual futures contracts in sync with the spot market price. When perpetuals trade above spot levels, holders of bullish long positions have to pay bearish shorts to keep their positions open – this is known as a ‘positive funding rate’. On the other hand, when perpetuals trade below spot levels shorts pay bulls – this is known as a ‘negative funding rate’. Analysts monitor these rates as an indicator for trader sentiment in markets – when it rises it suggests increased enthusiasm for further upside potential among investors and traders alike.

December CPI Signals Seller Exhaustion

The cryptocurrency picked up strong buying pressure after mid-December last year due to seller exhaustion signaled by U.S consumer price index (CPI) figures which fell 6.5%. Since then Bitcoin has surged over 40%, leading many analysts like Dessislava Laneva from Kaiko crypto data provider suggest that “there has been a clear shift in market sentiment” due to this increase in demand and excitement around further upside potential going forward.

Are Traders Really That Excited?

Market participants often look at other factors such as volatility or liquidity metrics alongside funding rates when trying to gauge investor enthusiasm for any particular asset or currency pair; so while its clear that some degree of optimism exists among traders surrounding BTC’s future performance it remains too soon tell just how far current sentiments will take us without taking into account other market conditions too.

Conclusion

Overall it seems that despite current BTC prices being much lower than during late 2021 there is still plenty of optimism among leverage traders regarding Bitcoin’s future prospects; this has been reflected through recent increases in funding rates across major exchanges signalling renewed confidence from investors and traders alike that further upside could be on the horizon.

• Rep. French Hill (R-Arkansas) is the chair of the newly formed Financial Services Subcommittee on Digital Assets, Financial Technology and Inclusion.
• The committee’s top priority is to draft and pass a stablecoin regulation.
• Hill stated that the committee will also be looking into privacy statutes, digital asset legislation, and how to create better access for consumers.

The United States House of Representatives has recently created a new Financial Services Subcommittee on Digital Assets, Financial Technology and Inclusion. Rep. French Hill (R-Arkansas) is the chair of the subcommittee, and he has outlined the goals and objectives of the committee.

The primary focus of the committee is to create a comprehensive and effective framework for the regulation of stablecoins. Hill noted that the subcommittee plans to use its draft of stablecoin regulation as a model for how to approach digital asset regulation in the future.

In addition to stablecoin regulation, Hill and the subcommittee are also looking into other digital asset legislation, privacy statutes, and ways to improve consumer access. He noted that one of the committee’s goals is to determine which agency, the SEC or the CFTC, should have explicit oversight.

The committee members are currently working on legislation that will give clear guidance to the crypto industry. The legislation will also provide consumer protection and ensure that digital assets are used in a safe and responsible manner.

Hill is confident that the committee can create effective legislation that will help foster innovation and economic growth in the digital asset space. He is hopeful that the committee can provide clarity and guidance to the industry and that the committee can be a leader in digital asset regulation.

Overall, Hill and the committee are attempting to create a framework that will facilitate the growth of the digital asset industry while still protecting consumers. The committee’s ultimate goal is to provide a safe and secure environment for digital asset users and investors.

• Timothy Stranex, the co-founder and chief technology officer (CTO) of cryptocurrency exchange Luno, left the company in December to pursue personal projects.
• Luno, which is owned by Digital Currency Group, has over 10 million customers worldwide and is headquartered in London with offices in Singapore, Cape Town, Johannesburg, Lagos and Sydney.
•Simon Ince has replaced Stranex as the company’s CTO.

Cryptocurrency exchange Luno recently announced the departure of its co-founder and chief technology officer (CTO) Timothy Stranex in December. He and three other co-founders originally launched the company nearly 10 years ago and his departure marks a major shift in the company.

Luno, which is owned by Digital Currency Group (also the parent company of CoinDesk), has over 10 million customers worldwide and is headquartered in London with offices in Singapore, Cape Town, Johannesburg, Lagos and Sydney. The company says that Stranex’s departure is to pursue personal projects and he has been replaced by Simon Ince, who joined Luno just under two years ago as its vice president of engineering.

Stranex’s exit is a significant loss for Luno, due to his long-term involvement with the company. He was one of the four co-founders of the company, alongside Carel van Wyk, Pieter Heyns and current CEO Marcus Swanepoel, who will now lead the company on its own. Over the years, Stranex played a key role in developing the company’s technology and expanding its worldwide customer base.

Ince, the new CTO, brings over 15 years of experience in software engineering, product management, and innovation. He has previously held positions at Amazon, Intel, and Microsoft, and has experience in developing and launching products in the cloud, mobile, and desktop space. He holds a Bachelor’s degree in Computer Science from the University of Washington.

The news of Stranex’s departure has been met with mixed reactions from the crypto community. While some are praising Ince’s appointment and looking forward to what he brings to the table, others are concerned that Luno may struggle without its original co-founder.

Only time will tell how the company will fare without Stranex, but the future is looking bright for Luno, as it continues to expand its customer base and develop its technology. With Ince as its new CTO, the company is poised to reach new heights and continue to be a leading exchange in the crypto space.

-The Certified Financial Planner Board of Standards (CFP Board) and the Chartered Financial Analyst Institute (CFA Institute) have recently made major announcements regarding cryptocurrency investing and advice.
-The CFP Board issued guidelines in November in a “Notice to CFP Professionals Regarding Financial Advice About Cryptocurrency-Related Assets”, which will govern how holders of the CFP certification must conduct themselves when providing advice about cryptocurrencies.
-The CFA Institute also recently announced changes to its curriculum to include a course dedicated to crypto and blockchain, indicating increasing institutional interest in the space.

The world of cryptocurrency and blockchain has been making waves in the financial industry over the past few years. With the emergence of digital assets such as Bitcoin, Ethereum, and others, traditional financial institutions and regulators have had to take notice and adapt their policies to include these new digital assets. Two of the largest and most influential organizations in the industry are the Certified Financial Planner Board of Standards (CFP Board) and the Chartered Financial Analyst Institute (CFA Institute).

The CFP Board recently issued guidelines on how holders of the CFP certification must conduct themselves when providing advice about cryptocurrencies. The guidelines, which were issued in the form of a “Notice to CFP Professionals Regarding Financial Advice About Cryptocurrency-Related Assets” in November, outline the expectations and responsibilities of CFP professionals when offering advice about digital assets. In addition to the CFP Board’s guidelines, the CFA Institute also recently announced changes to its curriculum to include a course dedicated to crypto and blockchain. This indicates that there is increasing institutional interest in the space, and that the industry is moving towards greater acceptance of digital assets.

Both the CFP Board and the CFA Institute have made it clear that they expect financial professionals to be well-versed in the risks and opportunities of investing in cryptocurrencies. They recommend that professionals do their due diligence and research before providing advice on digital assets to their clients. Additionally, the CFP Board has warned advisors to be cautious when dealing with clients who wish to invest in cryptocurrencies, as these investments can be extremely volatile.

Overall, the announcements from both the CFP Board and the CFA Institute demonstrate that the industry is taking digital assets increasingly seriously. As digital assets become more mainstream, it is important that financial professionals understand the risks and benefits associated with investing in them, and that they adhere to the guidelines set out by these two organizations. This will help ensure that investors are making informed decisions when investing in cryptocurrencies, and that they are doing so in a safe and regulated manner.

• Crypto lender Genesis owes its creditors over $3 billion, prompting parent company Digital Currency Group to consider selling its venture-capital portfolio worth $500 million.
• Gemini has terminated its key relationship with Digital Currency Group’s Genesis Global Trading, its partner on a crypto lending product pitched to smaller investors.
• Lumida CEO and co-founder Ram Ahluwalia weighs in on the latest tensions escalating between DCG and Gemini.

The crypto lending market is in turmoil as Genesis Global Trading, the Winklevoss twins’ crypto exchange Gemini’s partner on a crypto lending product pitched to smaller investors, is in hot water with its parent company, Digital Currency Group (DCG). Genesis, which is owned by DCG, is reportedly in debt to its creditors to the tune of $3 billion, and has been looking to offload its venture-capital portfolio, worth around $500 million, to help pay the debt.

The news was reported by the Financial Times on Thursday, citing sources close to the matter. The publication also reported that Gemini had escalated its dispute with DCG by terminating a key aspect of their relationship. This move has prompted Lumida CEO and co-founder Ram Ahluwalia to weigh in on the latest tensions between DCG and Gemini.

The news of Genesis’ financial burden has sent shockwaves across the crypto lending market, with many investors wondering how the situation will play out. DCG, which owns both Genesis and CoinDesk, is now looking to offload its venture-capital portfolio in order to help pay its creditors. This portfolio is said to be worth around $500 million, and could help to alleviate some of the debt.

It is still unclear how much of the debt can be paid off by selling this venture-capital portfolio, and what the long-term implications of this move will be for Genesis, DCG, and the wider crypto lending industry. One thing is certain, however; the move has caused tensions to escalate between DCG and Gemini, as the latter has terminated a key aspect of their relationship due to the situation.

Lumida CEO and co-founder Ram Ahluwalia has weighed in on the tensions, saying that, “It’s clear that things have become heated between DCG and Gemini, and it is likely that this situation will have a knock-on effect on other players in the crypto lending market.” He also said that the news of Genesis’ financial burden will likely cause further uncertainty in the industry, and that clarity on the matter is needed as soon as possible.

It is clear that the situation between DCG and Gemini is far from over, and that it could have major implications for the crypto lending market. The ramifications of the news are yet to be seen, but it is certain that the situation is one to watch closely.