Blockchain-based technologies may one day change the worlds of finance and payments.
But so far, they haven’t. At least, not in the sweeping and transformative manner that early proponents of Web3 and cryptocurrency at first promised.
Still, each week, small advances are successively made across the digital asset and blockchain-based landscape, bringing with them further inroads into traditional financial processes and services.
Take for example the news Tuesday (June 4) that Deutsche Bank and cryptocurrency broker Bitpanda formed an expanded partnership in which the bank will provide real-time payment solutions for the incoming and outgoing transactions of Bitpanda customers in Germany.
Deutsche Banke will provide German Bitpanda users with local bank account numbers, and against a backdrop where the crypto sector has historically struggled to find banking partners, the move could signal a growing, yet cautious, embrace of digital asset platforms.
That’s why PYMNTS keeps an ear to the ground, listening for all the latest initiatives driving the on-chain economy forward, and this is the pulse check on the top Web3 news and innovations we’ve been tracking this week.
In a sign that the institutional finance space may be starting to thaw its icy shoulder toward the crypto industry, venture fund Bain Capital filed Tuesday to register a new crypto-focused investment fund with the Securities and Exchange Commission.
The vehicle, Bain Capital Crypto Fund II Series, will be Bain’s second. The first Bain Capital crypto fund was launched in March 2022, right before the crypto market was struck by successful scandals and failures that evaporated trillions of on-chain dollars.
For cryptocurrencies to scale and gain wider adoption across payments, focusing on ease of use across targeted use cases rather than technology and engineering capabilities, is crucial, PYMNTS reported Monday (June 3).
Web3 terms like hashing, public/private keys, digital signatures and zero-knowledge proofs are complex and not intuitive for most users, while words such as nodes, miners, consensus algorithms and smart contracts can be confusing without a technical background, and could lead to confusion around things like what a payment token versus a crypto token is. Traditional payment systems like credit cards and digital wallets are already easy to use and are built atop established, almost invisible transaction behaviors. To compete or augment, cryptocurrencies need to match or exceed the ease of use of these established systems.
Against that backdrop, crypto’s product-market fit within cross-border payments is becoming harder for firms seeking an operational edge to write off as they look to grow internationally, PYMNTS reported Tuesday.
For crypto to mature and scale, it needs to be understood by lawmakers. The House Financial Services Subcommittee on Digital Assets held a hearing Wednesday (June 5) titled “Next Generation Infrastructure: How Tokenization of Real-World Assets Will Facilitate Efficient Markets.” The group discussed the potential for tokenization to transform today’s financial markets through further automation, increased efficiency and lower costs.
As the crypto sector looks to move past one of its most glaring and fraudulent failures, the new leadership of FTX asked a U.S. judge Tuesday to stop class-action complaints and other lawsuits that target company insiders and venture capital firms accused of being involved in the collapse of the cryptocurrency exchange, saying it puts at risk its efforts to repay customers impacted by the collapse.
In other FTX news, the former exchange’s convicted co-founder and CEO, Sam Bankman-Fried, is reportedly back in prison in Brooklyn after the Bureau of Prisons began moving him to a facility in California, the state in which his parents live. Judge Lewis Kaplan asked that the BOP hold Bankman-Fried in Brooklyn until his appeal “has been fully briefed.”
At the same time, a dozen members of Congress are calling on the President Joe Biden administration to work to free Binance executive Tigran Gambaryan from detention in Nigeria, saying he is being wrongfully detained and may have contracted malaria.
Elsewhere in Washington, the cryptocurrency sector has reportedly stockpiled funds for this year’s election. The latest cash injection came from Coinbase, which gave $25 million to crypto political action committee Fairshake.
The donation follows an additional $25 million in contributions last week by Ripple and Andreessen Horowitz, giving Fairshake and its associated PACs around $161 million to spend on the elections in the United States.
Still, the sector’s hopes of a more lenient regulatory environment were dashed Friday (May 31) when Biden vetoed a resolution limiting the SEC’s authority over the cryptocurrency sector.
Meanwhile, the SEC closed its Salt Lake City branch, its smallest regional office, as a result of a failed case it brought against cryptocurrency platform Digital Licensing, also known as Debt Box.