Banking turmoil and regulatory crackdowns across the globe have not slowed down the continued convergence of traditional finance and decentralized finance (DeFi). Despite the storm, the on-ramps that connect the two sides appear to be stronger.
Take the USD Coin recently issued by Circle as an example USDC, After Silicon Valley Bank collapsed, it de-pegged from the dollar. Two weeks later, Mastercard boldly integrated the stablecoin into its infrastructure in the Asia-Pacific region, allowing users to spend USDC through its network. Guys, it's happening!
Let's not forget Bitcoin, Digital gold is still rising and decoupling from Wall Street, reaffirming its value proposition and prompting calls to hedge equities over the long run.
This week's Crypto Biz documents the latest developments in global cryptocurrency adoption and how fears in the banking system are affecting the crypto space. Global payments provider Mastercard has made another foray into the crypto space, allowing retail customers in the Asia-Pacific region to spend stablecoins anywhere Mastercard is accepted. The move is made possible through a partnership with Australian stablecoin platform Stables. Users can spend and save USDC by converting USDC to fiat currency and settling on the MasterCard network. The wallet will accept deposits in multiple stablecoins, including Tether and Binance Dollar, all deposits are automatically converted to USDC.
On-ramps of digital assets in Nigeria are on the rise as crypto wallet MetaMask expands direct transactions with local banks. MetaMask’s parent company, ConsenSys, has partnered with crypto fintech MoonPay to enable users in the country to buy cryptocurrencies via instant bank transfers without the need for a credit or debit card. It is estimated that this integration will reduce the decline in the direct purchase of cryptocurrencies in Nigeria from 90% to 30%. Nigeria is MetaMask's main market, ranking third in terms of mobile monthly active users. Chainalysis ranks Nigeria among the top 20 countries for cryptocurrency adoption.
In a "temporary" goodbye, cryptocurrency exchange OKX emailed Canadian users that the company "will no longer provide services or allow users to open new accounts in Canada starting March 24, 2023." OKX Citing "new regulations" behind the move, it said it was only temporary as it worked with regulators. By June 22, OKX clients in the country must close open options, margin, perpetual contracts, and futures positions. Fiat currency or tokens must also be withdrawn by that date. In February, the Canadian Securities Authority issued a notice requiring cryptocurrency exchanges to sign new legally binding undertakings while they await registration with the regulator.
Bitcoin’s value proposition was on full display as concerns over a global banking crisis mounted and its price continued to climb following the collapse of Silvergate, Silicon Valley Bank and Signature Bank. Cathie Wood, CEO of ARK Invest, believes that over time, the current decoupling of BTC prices from the stock market may attract more institutional investors into Bitcoin. As for the impact of institutional interest on bitcoin prices, Wood expects most companies to allocate between 2.5% and 6.5% of their portfolios to BTC by 2030, driving the leading cryptocurrency to $1-1.5 million. How do you analyze a bank and avoid inaccurate market capitalization metrics such as Silicon Valley Bank's $15.8 billion market cap? Cryptocurrency analyst Marcel Pechman takes an in-depth look at the enterprise value metric and how it can provide a better understanding of a bank's balance sheet terms by subtracting net debt from market capitalization. Of course, Pechman started by explaining the relationship between bank valuations and cryptocurrencies, especially the spirit of Bitcoin.
