Insights > News > Weekly News 27/10/2021: US banks soon to be crypto-asset custodians?

Weekly News 27/10/2021: US banks soon to be crypto-asset custodians?

28 October 2021

temps de lecture 4 minutes

avatar-auteur Elodie Messeant

Banks and Institutions

Tesla considers accepting Bitcoin as payment for cars again

Elon Musk’s firm Tesla is likely to start accepting Bitcoin again in exchange for its products and services, the electric car company indicated on Monday. Tesla had suspended cryptocurrency transactions in May citing environmental concerns. A quote in a quarterly report says the company ”may in the future restart the practice of transacting in digital assets for our products and services”.

The SEC should obtain a key role to regulate stablecoins in the U.S

The Wall Street agency lobbied to play a key role in a debate among U.S. regulators on how to control stablecoins. The Treasury Department and other agencies will specify in a highly-anticipated report – expected to be published this week – that the SEC has significant authority over tokens like Tether (USDT). The report will also urge Congress to pass legislation specifying coins should be regulated similarly to bank deposits. Early versions of the report called for lawmakers to pass legislation that would create a new type of bank charter for companies issuing stablecoins.

US regulators to explore how banks could hold and deal with digital assets

According to a Reuters report, regulators are working to create clearer rules for banks to facilitate crypto trading as well as holding crypto on their balance sheets. ”If we don’t bring this activity inside the banks, it is going to develop outside of the banks. The federal regulators won’t be able to regulate it.” said Jelena McWilliams, Chair of the Federal Deposit Insurance Corporation (FDIC). Several regulators including the Federal Reserve are hurrying to regulate crypto in the U.S and are looking for path for banks to be able to act as custodians.

Tether commence trials to apply with the Anti-Money Laundering compliance obligation

Tether, the company behind the issuance of the most important stablecoin in the crypto market, will have to comply with the travel rule proposed by the Financial Action Task Force (FATF). Tether’s actions are directed to thwart bad actors using USDT to move funds coming from illicit or going to illegal sources. This solution aims to make Tether more friendly to law enforcement agencies all around the world.

30 members from the ”Digital Euro Market Advisory Group” will advise the European Central Bank

Appointed by the European Central Bank (ECB), the Digital Euro Market Advisory Group members will advise the eurosystem on designing and distributing a central bank digital currency (CBDC). Now the group has been created, quarterly meetings will be held. The investigation phase will last 24 months. It aims to address key issues regarding the digital euro design and distribution.

German government gets rich with BTC

Following the recent auction in France on March 17, during which the price of one bitcoin (BTC) reached 278,500 euros in a matter of seconds, German law enforcement agencies are launching a sale of 215 seized BTC. The Ministry of Justice said it had seized most of the bitcoins auctioned off during darknet market investigations. At the current price, this organized crime hoard is estimated to be worth around 12 million euros.

Crypto ecosystem

PlanB, founder of the Stock to Flow (S2F) model, announced that the bull market second phase has begun

According to PlanB on Twitter, the S2F and S2FX models predict a second leg in the current bull run that will bring new highs for BTC. As the name may suggest, the Bitcoin S2F or stock-to-flow model is based on the ratio between the stock (supply) and the flow (supply). Higher the S2F value, more scarce is the asset. According to this model, the current bull run isn’t over and a peak is yet to be reached.

Will the lack of utility result in unsustainable growth for NFTs?

While the NFT market is booming and some NFTs give their owners some social status, most projects have no real use, meaning buyers can’t leverage their NFTs after they buy them. Gary Vaynerchuk, a world-renowned entrepreneur and now NFT expert, commented on the recent digital boom saying 90% of NFTs will have little or no value in 3-5 years. The market is looking forward to a paradigm shift in the current NFT market, still largely dominated by hype, pure speculation and a group of niche collectors and investors looking for short-term profits.

Twitter is working on experiments to integrate NFT

Known for the maximalism of its CEO, Jack Dorsey, Twitter is reportedly looking into the integration of non-fungible tokens (NFT). NFTs have seen unprecedented growth since the beginning of 2021. They total an average volume of over $2 billion monthly. Mada Aflak, a Twitter developer, is working on experiments. The first one would be to upload NFT from OpenSea and add it as a profile avatar and banner. A demo should be available very soon.

Technology

Moonbeam, a promising project of the Polkadot ecosystem

Moonbeam is a smart contract platform fully compatible with Ethereum and Polkadot. Parachains will start being deployed on Polkadot on November 11. Each parachain connected to Polkadot will have to be active and prove its usefulness. They will be done via crowdloans, a way of funding a parachain launch project.Moonbeam will have its own utility token, the Glimmer (GLMR). Moonbeam’s crowdloan will allow participants to receive GLMR as a reward. We note that Moonriver is a Kusama clone project with already 93 million in total locked value.

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