FedNow, a new payment facilitation system which might mitigate the need for a CBDC (Central Bank Digital Currency), is reportedly being prepared for launch by the Federal Reserve.

FedNow is hence an instant payment method that allows for real-time transactions between U.S-based households, businesses, and financial institutions.

The service is built with cloud technology, which enables the payment system to scale without sacrificing resilience. This scalability applies to both the systems throughput and geographic coverage, ensuring continuous service even in highly remote areas.

The FedNow Service is scheduled to go live between May and July 2023, according to Lael Brainard, Federal Reserve Vice Chair. Brainard also stated that the system would begin technical testing this September.

Brainard has therefore urged financial institutions and software providers in the United States to update their systems ahead of time. He also claims that the transition to real-time payment infrastructure will require concentrated effort but is nevertheless unavoidable, and that the time is now for everyone to devote all necessary resources to make this inevitable transition both seamless and effective.

After WW1 the economy was alive the workforce was back from war, paused projects were resumed and with the scent of victory still fresh in the air, innovation and inventions were rampant. 

How did the banks respond? 

By dishing out loans. 

And how did the people react? 

By not just taking these loans, but by investing them. They didn't just want to earn an income, they wanted to double it. And this is when stocks shot through the roof. The people, however, weren the only ones dumping borrowed money into the market. Banks themselves were also borrowing customer money to gain a piece of the pie. 

The excitement and promise shielded many individuals from seeing some of the early warning signs of the Great Depression. The hype of the stock market led many amatuer investors to simply, follow the crowd, instead of doing proper research - and holding companies accountable to promises. Which is why, the events of Black Thursday on October 24th 1929 were so devastating and led to a crash that would go down in history as the start of the Great Depression. 

Voltaire said, History doesnt repeat itself. Man does. 

Perhaps, what were seeing now in the crypto market is less a prediction of the future and more a reflection of the past. 

Ryan Rasmussen understands this better than most. 

As a traditional banker with a background in Finance - including work with the prestigious Cetera Financial - Rasmussen saw the structures of traditional banking and wondered if DeFi could be the solution. Up until 2020, much of the crypto conversation was evolving around Bitcoin, but when COVID arrived, so did the discussion of decentralized finance. This sparked Rasmussens curiosity on the topic.

The system of banking is 100% in crypto - from trading, lending, borrowing and staking. Its the same. But DeFi is far safer, much easier and incredibly more powerful." 

As with many early investors, the incentive to get involved in cryptocurrency was motivated by the earning opportunities - much like the behavioral patterns we saw back in the roaring 20s. However, as his industry knowledge increased, Rasmussen saw the unique value blockchain technology would bring - to both the provider and the person. 

Many have identified 3 consistent ethics that make DeFi the way of the future. 

1. Truthlessness 

By moving banking to the blockchain, exchanges are made through Smart Contracts, not intermediaries, thus creating complete transparency. The precoded contract cannot be changed and both parties know exactly whats happening - and when. 

2. Accessibility 

While banks have introduced lengthy processes for loan approvals and geographical locations have contributed to wealth gaps, DeFi levels the playing field and makes its technology available to all. 

3. Efficiency 

Blockchain transactions happen 24-7, 365 days a year. Users are empowered to make their own decisions without needing to schedule a time with a teller and can access and evaluate their funds whenever, wherever. 

In response to the current crypto conditions, Rasmussen notes that the drag in crypto value is hugging the prices in stocks, bonds and risk assets as well. The plummet is not exclusive to crypto. As paradoxical as it might seem, the crash is a positive sign for those that understand the natural pattern of finances - and the public behavior that influences these fluctuations. 

Much of the hype surrounding the blockchain was driven by fan-based consumerism with little inspection and consideration for its true potential, utility and overall value. The dip were seeing now will expose the possibilities Web3 brings into the future. 

Once people understand the technology, they dont walk out. Even in a bear market. 

As an Asset Manager at Bitwise (a DeFi company), Rasmusen speaks about the unique strategies that havent just enabled the company to survive the difficult bear markets, but grown 3x the size during them. 

We focus on using the bull market to prepare and build for the bear market. We have to stay sustainable.

This system of preparation is similar to what weve seen with the crypto-marketing agency, Influx Group. Both companies have turned to educational material and continual support for their customers when the market slows down. While more than 2,000 Web3 workers were laid off in one of the hardest weeks in the crypto market, both Influx Group and Bitwise breezed through with ease.  We just move people from 0 to 1 when the market is slow. Thats it. The effectiveness of keeping things simple speaks for itself, as Bitwise - like Influx - has been able to show up for their clients even in rough times. These two companies understand the technology of the blockchain and recognize its advantageous resilience in comparison to traditional institutions. And while all markets appear to be in a slump, if the past holds any fortune-telling for the future, the rebound of crypto will be amongst the fastest in the market. 

The consumer space is ripe. 

While no one wants to be quoted for trying to predict the future, those that understand traditional financial patterns and behaviors - like Rasmussen - have an optimistic outlook for the days ahead. 

For those hoping to successfully build communities, educate audiences and keep their network alive and engaged, Influx Group has prepared a unique software for guiding companies through current market conditions. You can learn more about it here. 

By Savannah Holmes

Comm, a Web 3.0 messaging app, has successfully raised a $5 million seed round, which was led by CoinFund, in an attempt to compete with Discord. To that end, the company hopes that it can provide a revolutionary new messaging and communication experience for the Web 3.0 era.

Comm may hence best be defined as a consumer privacy startup that works on scaling E2E (End-to-End) encryption, which is currently only available for chat-based applications like Signal or Whatsapp, with the goal of eventually replacing centralized backends.

Why does this matter?

Comms founder and CEO, Ashoat Tevosyan, stated that he wanted to create an application which was truly independent, end-to-end encrypted, secure, and private. There has since been plenty of interest in what Comm is trying to achieve, with Electric Capital, Shima Capital, LongHash VC, Slow Ventures, and Eniac Ventures being among the various investors in the aforementioned seed round.

Comm is therefore being designed in such a way that community members will host their own backend servers and that only users would be allowed access to their data. Moreover, the keyserver software is open source and was designed to be forked, which means it was meant to be copied and implemented by various other compatible projects.

But is it safe?

While encrypted messaging and communication-based applications can help protect personal information, many of them have unfortunately fallen into the hands of fraudulent entities like gangs, hackers, and organized criminals.

According to Tevosyan, whether or not Comm exists, criminals will undoubtedly always find a way to access online networks. As a result, his team is developing software that puts the user in control and prioritizes safety. In any case, the CEO wants Comm to be a software which actively supports larger communities and is thus skeptical of the notion that a large-scale social platform would only attract undesirable characters.

What about future goals?

The founders long-term goal for the company is still unclear. Users will be able to log in to Comm using their cryptocurrency wallets, which will reportedly control their overall identity in the application. However, it is not yet known as to which blockchains would be supported. Despite this, Tevosyan stated that he intends to expand his team in New York City after the raise, with a few employees working remotely, and that Comm certainly has a place in Web 3.0 even if it will take some time for all of the details to be ironed out.

Former SEC Chair Jay Clayton recently acknowledged that reaching consensus on cryptocurrency regulation within the United States would appear to presently remain elusive for all parties involved, but he has nonetheless challenged the government to take the initiative.

Clayton stated that the government should first try and fully comprehend the benefits and potential of crypto and what it can do for the countrys financial system before enacting any kind of regulatory policies.

Jay discussed certain benefits of crypto like the ability to power quick payments as well as digital asset custody and urged the SEC to issue viable guidelines for the custody of tokenized assets. He further stated that in order to truly move forward, the United States must first embrace the efficiencies provided by tokenizing well-known services like payments and asset custody in digital form.

According to Clayton, the U.S should therefore move forward on stablecoin rules, identifying the various characteristics which distinguish stablecoins as a means of payment rather than a commodity or security.

According to a recent report citing people familiar with the situation, liquidators of 3AC (Three Arrows Capital) shall reportedly be able to access records of the cryptocurrency hedge fund's assets. A petition by the advisory firm Teneo was recently granted by the Singapore High Court.

Teneo will be capable of requesting access to financial records kept locally, according to the sources, and they hope to see bank accounts, properties, cryptocurrency assets, non-fungible tokens, and stakes in other companies. Overall, they will prioritize asset preservation.

Thus far, the liquidators have control over $40 million in crypto hedge fund assets. Nevertheless, this is insufficient to meet the claims. Moreover, 3AC allegedly received a $2.36 billion loan from Genesis Trading alone.

Creditors attended a liquidating meeting on July 18th, and it was discovered that the claims totaled approximately $2.8 billion. As more creditors file claims, this figure could rise even higher. Su Zhu, 3AC Co-Founder, has also filed a million-dollar claim against his own company.

This is yet another significant development in what is turning out to be one of the most controversial cases of the year. The crypto winter has not been kind to many crypto companies and 3AC is no exception, with countless customers still scrambling to recover their lost funds.

In an attempt to try and dispel long-held concerns about the assets massive energy consumption and threat to the environment, Texas Senator Ted Cruz has indicated that Bitcoin (BTC) mining does infact have environmental and business-related benefits.

Senator Cruz suggested that crypto mining is advantageous to the environment, particularly if miners use renewable energy sources. Cruz, interestingly, proposed that Bitcoin mining could lead to the prosperity of families involved in the activity by breeding entrepreneurs and providing an alternative source of income.

He added that, in light of the criticism leveled at Bitcoin mining, the activity could coexist with various other forms of energy utilization by sharing the grid.

Moreover, as BTC mining has the ability to be switched on or off instantly, if there is a power shortage or a power crisis, whether it's a freeze or another natural disaster where power generation capacity may drastically decrease, Senator Cruz believes that this could create an opportunity to instantly redirect that energy and put it back on the grid.
 

Alphabet Inc., Googles parent company, has invested over $1.5 billion in blockchain companies so far. By doing so, it has surpassed the likes of Goldman Sachs, Samsung, Blackrock, and Morgan Stanley to become the leading organization investing in the burgeoning sector.

Institutional interest in crypto remains high

Although the cryptocurrency market has yet to reach its previous heights, the fact of the matter is that numerous institutional investors including some of the top companies, businesses and firms across the world have nevertheless repeatedly expressed an interest in crypto. This is in part due to the sheer amount of mainstream attention being given to the industry, as innovative technologies such as Web3, NFTs, blockchain, and the metaverse are quickly becoming regular topics of discussion.

Whereas Samsung is mainly relying on blockchain services, NFTs, social networks and development platforms, both Alphabet and Blackrock are adopting a slightly different approach by concentrating their efforts on a smaller group of companies like Circles and Fireblocks. Samsung even previously announced that it was creating its very own metaverse, a development which the blockchain community was only too happy to see as it meant that the underlying technologies behind DeFi were indeed finally becoming mainstream.

Banks are adopting a more proactive approach towards crypto

For the longest time, various banks around the world scoffed at the idea of decentralized digital currencies and assets and believed them to be nothing more than a trend that will dissipate over time. However, as these digital assets gradually became more popular and a rising number of big names started investing in crypto, banks had little to no choice but to adopt a more progressive perspective. Perhaps the most famous examples of this would be the introduction of CBDCs and Warren Buffet infamously calling Bitcoin rat poison years ago, only for him to later invest a billion dollars in a crypto-friendly bank.

Additionally, 40 corporations invested in blockchain and crypto companies between September 2021 and June 2022, according to a study that observed the top 100 banks with such investment behavior.

Moreover, across 71 investment rounds, 61 blockchain and crypto companies received funding, with a vast majority of these companies reportedly being involved in rapidly growing fields like arts and entertainment, gaming, and distributed ledger technology.

Sundar Pichai, Alphabets CEO, acknowledged the growth that the industry was experiencing as of late and spoke about Web3 developments in February, disclosing the companys position on revolutionary blockchain technology, monitoring developments, and investigating how Googles parent company could indeed start contributing to Web3 development going forward.

Bitcoin, Ethereum and futures linked with the S&P 500 are currently trading weak whereas the safe haven known as the U.S dollar is rising against other international currencies.

Investors are therefore trimming their bullish exposure on risky assets, as the Federal Reserve of the United States could possibly utilize the minutes of its July meeting to counter expectations of slower rate hikes along with eventual liquidity easing.

The dilemma is whether the Fed intends to use these minutes as a communication tool to counter the view of an easing cycle beginning in 2023. The Fed usually examines market reactions following meetings and utilizes minutes to clarify misconceptions. Former Fed trader Joseph Wang tweeted that there is plenty to correct today.

Still, markets appear to have gotten ahead of themselves right now, as the central banks continuing battle against inflation will not end anytime soon, according to several Fed officials following last weeks CPI release. Interest rate hikes may thus continue into 2023, but Bitcoin on the other hand has a tendency to move in the opposite direction of the dollar index.

Nevertheless, many risk assets could experience renewed volatility if the minutes go further against the dovish expectations. According to ING analysts, further rejection of this market pricing has a high chance of helping the dollar.

In the aftermath of heavily criticized U.S government sanctions against cryptocurrency mixer Tornado Cash, Zac Williamson, CEO of the Aztec Network Ethereum privacy layer, recently discussed what the future of Web3 privacy may end up being.

The CEO claims that future networks would most likely not conform to existing regulatory structures but shall instead be consistent with regulators goals while simultaneously protecting user privacy. Essentially, he believes that regulators went about banning Tornado Cash incorrectly and that an alternative solution could have been explored.

A foresighted government would therefore contemplate directly issuing base money onto networks such as Ethereum, which, when combined with hyper-fungible real-world assets, private self-custody as well as low barriers to entry from open networks, would usher in a new financial golden age, according to Williamson.

He contended that, despite the current sanctions regime, cyber criminals from North Korea or elsewhere would continue to use Tornado Cash or a replica. According to the CEO, suspicious entities will thus undoubtedly provide off-ramps to fraudulent entities who have done the bare minimum for plausible deniability.

 

The United States Federal Reserve has publishing its final guidance for new financial institutions to gain access to its master accounts, which are required for these firms to partake in the global payment system.

The announcement seems to be indicative of the countrys central bank inching closer to potentially permitting Wyoming SPDIs (Special Purpose Depository Institutions) such as Custodia and Kraken Bank to gain access to these accounts without the need for any intermediary banks.

In 2021, the Federal Reserve issued its first guidance, inviting public comments and discourse. Approximately 300 people responded, prompting a second public feedback process which took place earlier on in 2022.

The guidance is broadly similar to what was initially proposed last year, as it shall reportedly establish a multi-tiered system that will enable the Federal Reserve to tailor its evaluation process for giving access based on the type of financial institution applying. Also, each tier would correspond to a more stringent review procedure.

As such, Tier 1 banks will be federally insured under the guidance. Although Tier 2 banks would not be federally insured, prudential supervision would still be applicable for these via a federal banking agency. Finally, Tier 3 includes firms which are not federally insured and are not subject to prudential supervision, which most likely includes Wyoming cryptocurrency banks.
 

Given the rapid growth of the crypto and blockchain sector, governments all over the world are searching for viable ways to regulate the industry, including the European Union which recently provided their contribution to solving the issue via the MiCA (Markets in Crypto Assets) bill. Also, both the SEC and CFTC agree that cryptocurrencies are not going anywhere and that it is high time to regulate these assets properly, with the CFTC chairman even claiming that the agency is prepared to begin regulating crypto as soon as possible.

This increase in the number of regulatory policies is the result of various factors, including the recent market crash and the mainstream attention being given to crypto and digital assets in general.

Why is the new bill important and what can it do?

According to the European Commissions Cybersecurity Policy and Technological Innovation Advisor, Peter Kerstens, if the bill is passed then it shall bring numerous changes to the market, including the implementation of stringent standards designed to avoid situations like the Terra disaster, in addition to viewing NFTs as digital assets similar to cryptocurrencies.

Peter stated that the $40 billion Terra ecosystem meltdown would not have occurred if the MiCA bills provisions, which necessitate stablecoin projects to become more transparent as well as enable client withdrawals on request, had been in place. Due to this, MiCA would reportedly be able to prevent such schemes from entering the market, according to the advisor.

It should also be noted that the proposed rules and regulations outlined in the MiCA bill are set to become law in 2023, but are not expected to be fully implemented throughout the EU until at least 2024.

What about NFTs?

The MiCA bill outlines regulations for cryptocurrencies but it does not ignore NFTs either, as Peter pointed out that EU legislators have a very narrow definition of what an NFT actually is. According to the advisor, in the event that a token may be issued as a series or collection, even if the issuer calls it an NFT and every individual token within that particular series is indeed unique, it is still not considered as an NFT and the requirements would therefore still be applicable.

To put it another way, should the bill be passed, NFT issuers would be required to publish a whitepaper detailing all of the specifics concerning the underlying protocol as well as all relevant details. Additionally, it would prevent the issuers from making misleading or overly optimistic claims regarding the NFTs future worth.

Ultimately, many in the crypto and NFT community believe that this is a positive development as MiCA has the potential to finally eliminate scams and other kinds of fraudulent entities which would hence shift the focus to worthwhile and profitable projects which provide real value.

FTX.US President, Brett Harrison, recently explained why he believes the ongoing crypto winter could be ending sooner rather than later.

According to him, the new Coinbase and BlackRock partnership is a strong indicator of the crypto winter coming to an end, citing the huge impact of rapidly growing institutional demand regarding cryptocurrencies and other digital assets.

Moreover, Brett strongly believes that now is the time to continue building and developing the crypto and blockchain sector so as to have the necessary tools and capital for when investors eventually resume trading heavily in cryptocurrencies once more.

Lastly, when asked about the number of layoffs made by notable companies like Google, Microsoft, Robinhood and Coinbase, Brett stated that having additional employees does not necessarily lead to more growth, and that this is a lesson that every company should learn prior to the market finally getting back on track.