Banks

Jan 18 2021

China’s BSN to Launch Global CBDC Payment System Beta in 2021

China’s lead in the race for developing a Central Bank Digital Currency (CBDC) is unassailable at this point. The country is making further progress, with the government’s blockchain service network looking to release a CBDC network beta this year.

Safe, Low-Cost CBDC Payments

China’s Blockchain-based Service Network (BSN) has announced plans to launch a public beta for a global CBDC network, per a blog post.

The BSN is a blockchain network that enables digital token and decentralized app (dApp) development.

In the post, the state-sponsored network explained that it would invest a considerable amount in research and development this year. The network plans to focus on digital payments primarily as it is working towards launching a Universal Digital Payment Network (UDPN).

Speaking on digital payments, the BSN pointed out that stablecoins and CBDCs have become more prominent across the world as countries look to embrace e-payments fully. The network plans to launch a payment network based on all developed CBDCs in the next five years.

“This digital payment network will completely change the current payment and circulation method, enabling a standardized digital currency transfer method and payment procedure for any information system,” the BSN explained, adding that a convenient, cost-effective beta will be available in the second half of this year.

With the payment network, the BSN is looking to provide a standard digital currency transfer procedure. It aims to combine systems like insurance, banking, enterprise resource allocation, and mobile apps through dedicated application program interfaces (APIs) to make global payments safe and cheaper.

The payment network is one of BSN’s four objectives for the year. The other three include expanding its network, promoting its new private platform, and expanding its ecosystem. In addition, the BSN reiterated its commitment to enhancing blockchain capabilities to companies and governments worldwide.

China Forges On With Digital Yuan

So far, digital yuan has been one of China’s most ambitious economic and financial projects. Officially launched in late 2019, the project has gone through extensive tests last year and looks to be entering advanced testing phases.

Last year saw several firms and government agencies partner on testing the CBDC in several real-world situations, mainly through giveaways and retail spending. The developers haven’t relented in their efforts this year as they look to strengthen their research and testing base.

Last week, local news sources confirmed that the Agricultural Bank of China, one of the country’s largest state-owned banks, had launched ATMs for the digital yuan. As the reports explained, the machines were installed at specific branches within Shenzhen. Customers at these branches have been able to spend and convert the digital yuan tokens they got as a part of the government’s “red envelope” lottery – a project that saw the government hand out $3 million worth of the asset to 100,000 citizens.

The machines reportedly allow digital yuan deposits and withdrawals via a smartphone app. Users can also convert their savings and cash to the CBDC.

China’s BSN to Launch Global CBDC Payment System Beta in 2021

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Jan 16 2021

JPMorgan Chase execs weigh in on stablecoin regulation, crypto competition

During JP Morgan Chase’s Q4 2020 earnings call, CEO Jamie Dimon and CFO Jennifer Piepszak weighed in on the OCC’s recent approval of banks using stablecoins for payments, as well as whether or not the approval will have any impact on the development of JPM Coin.

During the question-and-answers portion of the call, Portales Partners analyst Charles Peabody asked about the approval from the OCC for banks to use public blockchain networks for payments.

“That guidance enables an offering of stable going on a public blockchain. So that doesn’t impact JPM coin. JPM coin, you should think about as the tokenization of our customer deposits,” responded JPM CFO Jennifer Piepszak, according to a transcript of the call.

However, she did not rule out the possibility of a JPM-backed stablecoin if customers showed interest.

“So, it’s obviously very early. We will assess use cases and — and customers demand. But — but it’s still too early to see where this goes for us.”

JPM CEO Jamie Dimon was also quick to jump in and mention that the bank is “using blockchain for sharing data with banks already and so we are at the forefront of that which is good.”

Debuted in October of 2020, JPM Coin is largely used on the backend of JPM’s payments systems, helping to settle nearly $6 trillion in payments on a daily basis. On the call, Piepszak also described the JPM Coin project as “tokenizing deposits to make payments easier for client.”

Ultimately, Dimon seemed to imply to crypto payments settlement won’t greatly change how JPM operates.

“There is this talk about several banks having digital currencies and stuff like that, right?” Dimon concluded. “[…] So I — I do expect that stuff is coming and it may not change our world that much”

Dimon may be underestimating the impact crypto will have on the payments landscape, however.

Paypal, one of the Fintech giants that Dimon mentioned by name as a payments competitor, confirmed that crypto payments will be available starting in 2021. The CEO — a former noted skeptic of cryptocurrencies — made it clear that payments will become an increasingly crowded and cutthroat field over the next decade:

I expect it to be very, very tough competition in the next 10 years. I expect to win. So help me God.

JPMorgan Chase execs weigh in on stablecoin regulation, crypto competition

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Jan 13 2021

Plaid Has Decided to Terminate Pending Acquisition By Visa & Remain An Independent Company

Plaid, an open banking platform, announced on Tuesday it has decided to terminate its pending acquisition by Visa and will remain an independent company. The latest news on the acquisition was made just a little over two months after it was revealed that the U.S. Department of Justice has filed suit in federal court pertaining to the acquisition.

As previously reported, Visa announced in January 2020 it was planning to acquire Plaid for $5.3 billion. In purchasing Plaid, Visa was reportedly to jumpstart its push for digital prominence. Kelly called the acquisition a “natural evolution” as it connects consumers with digital financial services. At the time Al Kelly, CEO and Chairman of Visa, stated:

“The combination of Visa and Plaid will put us at the epicenter of the Fintech world, expanding our total addressable market and accelerating our long-term revenue growth trajectory.”

At the time of the lawsuit’s announcements, Visa refuted the suit:

“Visa strongly disagrees with the Department of Justice (DOJ), whose attempt to block Visa’s acquisition of Plaid is legally flawed and contradicted by the facts. This action reflects a lack of understanding of Plaid’s business and the highly competitive payments landscape in which Visa operates. The combination of Visa and Plaid will deliver substantial benefits for consumers seeking accessto a broader rangeof financial-related services, and Visa intends to defend the transaction vigorously.  As we explained to the DOJ, Plaid is not a payments company. Visa’s business faces intense competition from a variety of players – but Plaid is not one of them. Plaid is a data network that enables individuals to connect their financial accounts to the apps and services they use to manage their financial lives, and its capabilities complement Visa’s. Together, Visa and Plaid will deliver better digital experiences and more choice for consumers in managing their money and financial data. Visa is confident that this transaction is good for consumers and good for competition.”

Speaking about Plaid remaining an independent company, Zachary Perret, Co-Founder and CEO of Plaid, shared:

“Since founding Plaid 8 years ago, we have been maniacally focused on expanding access and improving financial outcomes for consumers, developers, and financial institutions – and the intent of joining Visa was to accelerate that work. Unfortunately, the pace of a multi-year regulatory review is not compatible with the fast-moving realities of a startup – and delaying close another year or more is not in the best interest of our customers, the financial system, or consumers themselves.”

Perret further revealed despite the struggles that happened in 2020 globally, the past year has been one of exciting growth for Plaid, with hundreds of new banks joined the Plaid platform, and more than 4,000 companies turned to the platform’s service as the infrastructure to support their businesses, including many of the largest Fortune 500 companies who are focused on bringing digital financial products to their customers. In regards to his 2021 predicts, Perret added he expects the year to be more of the same as 2020.

“In addition to our ongoing focus on helping companies of all sizes deliver digital financial products, we have made significant progress in the ways that we work with financial institutions. Delivering on the promise of open finance is in everyone’s best interest, and we’ll be working in lockstep with our customers and financial institutions to bring this to fruition globally.”

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Jan 12 2021

New OCC Regulations Could Be a Double-Edged Sword for Crypto Sector

The latest crypto guidelines from the OCC are being hailed as a win for the industry but Avanti Bank executive Caitlin said that they could prove to be a double-edged sword in the long run. The Office of the Comptroller of the Currency (OCC), a US Treasury Bureau engaged in regulating banks, issued a letter last week which detailed how national banks can use blockchains and stablecoins for making payments.

The news has not received much traction as it got drowned in the noise around Bitcoin’s historic rise and crash and other political events in the country. However, since then, many crypto personalities have shared their views on the letter, some hailing it as a welcome step from the authorities. Circle CEO Jeremy Allaire, whose company backs the USDC stablecoin said,

“The new interpretive letter establishes that banks can treat public chains as infrastructure similar to SWIFT, ACH and FedWire, and stablecoins like USDC as electronic stored value. The significance of this can’t be understated.”

The reality could be more complicated

Crypto supporters suggest that the reality is more complex than what the supporters or detractors of the letter assume. Wall Street Veteran Caitlin Long, who played an instrumental role in creating the blockchain laws of Wyoming said that the OCC letter is a “double-edged sword” for the industry. The guidance could be useful for big banks to remove all crypto startups from the bank. As national banks, they will have an advantage over startups and will not require regulators’ nod before entering into the stablecoin industry.

Crypto companies and smaller banks will need to get approval from regulators before working with stablecoins. This system is unfavorably tiled to provide benefits to large banks. This would allow the big banks in the US to create their own systems more quickly and let the network effect work for them faster.

New OCC Regulations Could Be a Double-Edged Sword for Crypto Sector

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Jan 10 2021

Top 5 cryptocurrencies to watch this week: BTC, ADA, EOS, THETA, AAVE

During an interview with Bloomberg, Grayscale CEO Michael Sonnenshein said that in addition to hedge funds, pension funds and endowments had also started investing in the Grayscale family of products. This suggests that a broad spectrum of institutions are accumulating Bitcoin (BTC).

As this trend gathers speed, investment banks have also decided that they do not want to be left behind. A recent filing from Morgan Stanley shows a purchase of a 10.9% stake in business intelligence firm MicroStrategy, a move that was likely made in order to gain exposure in Bitcoin. With 70,470 Bitcoin in their possession, MicroStrategy has become a proxy play on Bitcoin.

Several analysts suspect that the current demand could also be coming from investors who have been closing their gold positions and buying Bitcoin. On a query about the recent underperformance of gold, CNBC Mad Money show host Jim Cramer speculated that institutional money may be flowing into cryptocurrency.

*Crypto market data daily view. Source:* *Coin360*

While there have been positive reports about institutional purchases, traders should also keep track of the people who have been selling because at some point the rally will lose momentum and investors will look to book profits.

Analysts at Material Indicators suggest that mega whales may have booked profits on Jan. 7 when Bitcoin hit $40,000 and further selling from whales could also be the reason for the price drop seen today. However, aggressive buying at lower levels resulted in a strong rebound.

But that has not deterred the whales from selling. Bitcoin whales in South Korea have been dumping their positions over the past few days, as seen from the multiple $100 million deposits to exchanges. While the selling has not caused a massive rush to the exit, traders should be careful with their positions because even if a couple of large investors in the U.S. rush to the exit, it could result in a sharp fall.

If Bitcoin corrects sharply, most altcoins are also likely to follow suit, but if Bitcoin remains strong, these top-5 cryptocurrencies could outperform in the short term.

Let’s analyze their charts to spot the critical levels to watch.

BTC/USD

Bitcoin has been in a strong uptrend for the past few weeks, but the rally has pushed the relative strength index (RSI) into overbought territory. While markets can remain overbought for a long time, with every rise, the risk of a sharp correction increases.

The first support on the downside is the intraday low made on Jan. 8 at $36,518.73. If the price rebounds off this level, it will suggest that traders are not booking profits in a hurry and are buying on minor dips.

If the bulls propel the price above $41,959.63, the uptrend could resume with the next target objective at $45,000 and then $50,000.

However, if the bears sink the price below $36,518.73, the BTC/USD pair could drop to the 38.2% Fibonacci retracement level of the most recent leg of the up-move at $32,816.03.

This is a crucial support to monitor because if it cracks, several traders may start to panic and dump their positions, which may result in a deeper correction to the 61.8% retracement level at $27,167.10.

*BTC/USDT 4-hour chart. Source:* *TradingView*

The 4-hour chart shows that the price is currently stuck inside a $38,000 to $41,959.63 range. If the bulls can push the price above the range, the uptrend may resume.

On the other hand, if the bears sink the price below the support of the range, it will suggest profit-booking by traders.

The next support on the downside is the 50-simple moving average, which has not been breached decisively during previous corrections in this leg of the uptrend. Thus, if this support cracks, it will signal a possible trend change.

ADA/USD

Cardano (ADA) is currently consolidating in an uptrend. The altcoin has been stuck between $0.2632811 and $0.3542857 for the past few days, which has pulled down the RSI from deeply overbought levels.

The bulls are currently facing stiff resistance near the $0.34 level but one positive sign is that there are no signs of panic selling yet. If the bulls can drive the price above the overhead resistance, the next leg of the uptrend could resume.

The ADA/USD pair has a target objective at $0.449 but the bears are likely to mount a stiff resistance near $0.40. However, if the bulls can push the price above the resistance levels, the pair could rally to the psychological level at $0.50.

This bullish view will be invalidated if the pair turns down and breaks below the 20-day EMA ($0.234). Such a move will suggest that the uptrend may have topped out.

*ADA/USDT 4-hour chart. Source:* *TradingView*

The 4-hour chart shows the formation of a symmetrical triangle, which usually acts as a continuation pattern. The bulls are currently attempting to defend the 20-EMA. If the price rebounds off the current levels, the bulls will try to push the pair above the triangle.

If they succeed, the pair may rally to $0.525. However, if the pair drops below the triangle, the next support is at the 50-SMA, but if this support also cracks, the decline could extend to $0.20.

EOS/USD

EOS has been trading inside a large range between $2.20 and $3.949. The altcoin turned down sharply from the overhead resistance today, which shows aggressive selling by the bears.

However, if the bulls defend the moving averages, the EOS/USD pair may again attempt to rise to the overhead resistance near $3.949. A breakout of this level will suggest the start of a new uptrend that may reach $5.698.

This view will be invalidated if the bears sink and sustain the price below the moving averages. Such a move could result in a fall to the support of the range at $2.20 and that may keep the pair range-bound for a few more days.

*EOS/USDT 4-hour chart. Source:* *TradingView*

The 4-hour chart shows that the price turned down sharply from the overhead resistance and broke below both moving averages. This suggests aggressive selling by the bears.

However, if the price rebounds off the current level and rises above the 20-EMA, it will suggest that the selling may be over. The bulls may then again try to carry the price to the overhead resistance.

Conversely, if the bears sustain the price below $3, the pair may drop to $2.50 and then to $2.20.

THETA/USD

THETA is currently consolidating in an uptrend for the past few days. The price has been making lower highs, which suggests that every attempt to rally is being met with selling from the bears.

However, a minor positive is that the bulls have not allowed the price to dip below the $1.7611 support. The 20-day EMA ($1.74) is just below this level and the bulls are likely to defend it aggressively.

If the bulls can push the price above $2.20, the THETA/USD pair may rise to $2.51. The upsloping moving averages and the RSI in the positive territory suggest bulls are in control.

If the bears continue their selling and sink the pair below the 20-day EMA, it may open the gates for a drop to the 50-day SMA ($1.12).

*THETA/USDT 4-hour chart. Source:* *TradingView*

The 4-hour chart shows a descending triangle formation. The flat moving averages and the RSI just below the midpoint suggest a balance between supply and demand.

If the bears can sink and sustain the price below $1.7611, the descending triangle pattern will complete and that could drag the price down to $1.01.

On the other hand, if the bulls can push the price above the triangle, it will invalidate the bearish pattern. This could push the price to $2.51 and if the bulls can thrust the price above this resistance, the up-move could reach $2.95.

AAVE/USD

AAVE is currently in an uptrend as it continues to make higher highs and higher lows formation. However, the long wick on today’s candlestick shows that bears are aggressively selling at higher levels.

The upsloping moving averages and the RSI near overbought territory suggest the path of least resistance is to the upside. If the AAVE/USD pair corrects further, a rebound off the 20-day EMA ($99.93) will confirm that traders are continuing to buy on dips.

If the buyers can push the price above $135.99, the uptrend could resume with the next likely target at $150.

However, if the bears sink the price below the 20-day EMA, the pair could drop to the 50-day SMA ($85). A break below this support could result in a fall to $70 and then to $60.

*AAVE/USDT 4-hour chart. Source:* *TradingView*

The 4-hour chart shows that the pair is trading inside an ascending channel. The bulls are currently attempting to defend the 20-EMA. A strong bounce could carry the price to the resistance line of the channel.

A break above the channel could result in a sharp up-move but if the price turns down from the resistance line of the channel, the pair may trade inside the channel for a few days.

If the price breaks below the 20-EMA, a drop to the support line of the channel is possible. A strong rebound off this support will keep the uptrend intact but a break below it could signal a trend change.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Top 5 cryptocurrencies to watch this week: BTC, ADA, EOS, THETA, AAVE

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