🇺🇸 Trump Administration's Crypto Moves

• Trump Treasury Pick Opposes CBDC: Scott Bessent, Donald Trump's nominee for Treasury Secretary, sees no reason for a U.S. central bank digital currency (CBDC), aligning with conservative skepticism of government-backed digital money. Read more
• Trump's Executive Order on Crypto: A Bloomberg report suggests Trump plans to make crypto a national priority with an upcoming executive order, signaling a potentially friendlier regulatory approach. Read more

🌍 CBDC & Stablecoin Developments

• UK to Test Digital Pound: The Bank of England is launching a "digital pound lab" to explore CBDC innovations, reinforcing the UK's commitment to digital finance. Read more
• Swiss Bank Offers Ethereum Staking: PostFinance, a government-backed Swiss bank, is introducing Ethereum staking services, offering customers a regulated avenue for passive income. Read more
• Philippines Launches PHPX Stablecoin: Major Philippine banks have collaborated to launch PHPX, a stablecoin designed for cross-border payments, aiming to modernize the country's financial infrastructure. Read more
• Cambodia Regulates Stablecoins, Excludes Bitcoin: Cambodia’s central bank has approved stablecoins and backed digital assets but explicitly excluded Bitcoin, highlighting a selective regulatory stance. Read more

🏦 Crypto-Friendly Banking & Investment Trends

• Coinbase Launches Bitcoin-Backed Loans: Coinbase is introducing a Bitcoin-backed loan service for U.S. users, expanding crypto-based financial products in the market. Read more
• U.S. States Consider Bitcoin Reserves: Several U.S. states are exploring holding Bitcoin reserves, reflecting increasing government interest in crypto as an asset class. Read more
• UK Exempts Crypto Staking from CIS Rules: The UK has removed crypto staking from collective investment scheme regulations, reducing compliance burdens for staking service providers. Read more
• FV Bank Adds PayPal’s PYUSD: U.S.-based FV Bank has integrated PayPal’s PYUSD stablecoin for deposits and payments, furthering the adoption of digital assets in banking. Read more

🇪🇺 European Crypto Expansion

• Italy’s Largest Bank Embraces Bitcoin: Intesa Sanpaolo, Italy’s biggest bank, is reportedly exploring Bitcoin-related services, signaling growing institutional acceptance in Europe. Read more
• 1Money Raises $20M for Stablecoin Payments Network: The startup is building a Layer-1 blockchain tailored for stablecoin transactions, highlighting investor confidence in payment-focused blockchain solutions. Read more

🌏 Asia's Regulatory and Market Moves

• South Korea Plans Second Crypto Law in 2025: South Korea is set to introduce a second crypto regulatory framework in late 2025, aiming to refine oversight and investor protections. Read more
• Thailand Weighs Bitcoin ETFs: The Thai government is considering approving locally-based Bitcoin ETFs to stay competitive in the global crypto market. Read more
• Hong Kong Introduces Blockchain Banking Incubator: Hong Kong has launched a supervisory incubator to help banks adopt blockchain technology, showcasing its commitment to fintech innovation. Read more

🌍 Africa's Crypto Policy Shift

• Kenya Prepares to Legalize Crypto: Kenya's Treasury has announced plans to introduce a regulatory framework for cryptocurrencies, marking a significant step toward mainstream adoption. Read more

💰 Crypto Mergers & Acquisitions

• MoonPay Acquires Solana Payments Startup: MoonPay has acquired a Solana-based payments firm, reinforcing its push into blockchain-based financial services. Read more

📈 Global Crypto Market and Institutional Developments

• Standard Chartered Launches Crypto Custody in EU: Standard Chartered has obtained a license in Luxembourg, enabling it to offer cryptocurrency custody services across the European Union. This move underscores the growing demand for secure crypto storage solutions within regulated frameworks. Read more.
• JPMorgan Eyes Euro Stablecoins Amid MiCA Rollout: As Europe's MiCA regulations take effect, JPMorgan has shown interest in exploring euro-denominated stablecoins. The bank's engagement signals a shift toward greater integration of crypto into traditional finance. Read more.
• Bhutan Adds Bitcoin, Ethereum to Strategic Reserves: Bhutan's central bank revealed holdings in Bitcoin, Ethereum, and Binance Coin as part of its foreign reserves strategy. The move aims at diversifying assets and strengthening economic resilience. Read more.
• South Korea Moves to Lift Institutional Crypto Trading Ban: Authorities in South Korea are reportedly considering removing restrictions on institutional cryptocurrency trading. The policy shift is expected to boost market confidence and institutional adoption. Read more.
• Swiss Legislator Advocates Bitcoin Constitutional Inclusion: A Swiss lawmaker is pushing for a referendum to embed Bitcoin in the nation's constitution, aiming to bolster Switzerland’s position as a crypto-friendly hub. Read more.

🌍 Geopolitical and Regulatory Trends

• IMF Urges Kenya to Clarify Crypto Regulations: The International Monetary Fund has encouraged Kenya to implement clear guidelines for digital assets to combat money laundering and terrorism financing risks. Read more.
• China Tightens Crypto Oversight Amid New Forex Rules: New regulatory measures are being enforced in China, targeting foreign exchange transactions related to crypto. This reflects ongoing scrutiny of the digital asset sector. Read more.
• Guangzhou Expands Digital Yuan Pilot Program: The Chinese city of Guangzhou is accelerating its efforts to integrate the digital yuan into the local economy as part of its 2025 blockchain action plan. Read more.
• Hong Kong Pushes Blockchain Banking Initiative: Authorities in Hong Kong have launched a project aimed at enhancing blockchain adoption in the banking sector to drive financial innovation. Read more.

🛠 Technology Adoption and Strategic Innovations

• Revolut Taps Pyth Network for Real-Time Banking Data: Digital banking giant Revolut is leveraging the decentralized oracle platform Pyth Network to enhance its real-time financial data offerings. Read more.
• OCBC Launches Tokenized Bonds for Investors: Singapore-based OCBC Bank introduced tokenized bonds for corporate investors, highlighting increased blockchain adoption in traditional finance. Read more.
• BlackRock-Backed BUIDL Token Approved for Stablecoin Use: BlackRock’s BUIDL token is now an approved asset backing Frax Finance's FRxUSD stablecoin, showcasing growing institutional involvement in DeFi. Read more.

🌎 Regional Crypto Adoption and Economic Shifts

• Thailand Pilots Crypto Payments in Phuket: Thailand's government is testing cryptocurrency payment systems in tourist-heavy areas like Phuket as part of efforts to modernize its tourism economy. Read more.
• Portugal’s Big Bank Halts Crypto Transfers: A leading Portuguese bank reportedly stopped facilitating transfers to crypto platforms, reflecting potential regulatory pressures in the nation. Read more.
• El Salvador Holds Over 6,000 Bitcoin: El Salvador continues to solidify its Bitcoin adoption strategy, becoming the sixth country to amass over 6,000 BTC as a national reserve. Read more.
• Venezuelans Ditching Dollars for Crypto: Amid economic turmoil, Venezuelans are increasingly turning to cryptocurrencies as alternatives to the US dollar for everyday transactions. Read more.
• Syria Considers Bitcoin Legalization: Syrian authorities are evaluating potential legal frameworks for Bitcoin, signaling openness to crypto integration despite geopolitical challenges. Read more.

⚖️ Regulatory Leadership and Market Challenges

• CFTC Chair Resigns, Warns of Crypto Market Gaps: The outgoing chair of the US Commodity Futures Trading Commission highlighted vulnerabilities in crypto regulation during his departure announcement. Read more.
• MiCA's Impact on Tether and EU Market Dynamics: Europe's MiCA regulations are challenging stablecoin issuer Tether, potentially reshaping the region’s crypto landscape. Read more.

🏦 Institutional and Regulatory Developments

• Groupe BPCE to Offer Crypto to 35M Users: France's Groupe BPCE is integrating Bitcoin and cryptocurrency investments for its extensive user base, signaling growing mainstream banking adoption. The initiative aligns with global trends in banking and crypto convergence. Read more.
• Germany Enhances Crypto Oversight with FinMaDiG: The Bundestag approved FinMaDiG, a law aimed at reinforcing crypto regulations under MiCA. The move strengthens Germany's commitment to financial stability in the digital asset market. Read more.
• Botswana Advocates Proactive Crypto Regulation: The Central Bank of Botswana has urged the implementation of robust crypto regulations to mitigate risks and future-proof the nation’s financial system. Read more.
• Philippines SEC Proposes Crypto Framework: The Philippines' securities regulator is advancing plans for a comprehensive framework to govern cryptocurrencies, focusing on investor protection and market integrity. Read more.
• Turkey Tightens Crypto AML Rules by 2025: Turkey plans to mandate stricter anti-money laundering protocols in crypto transactions by 2025, requiring detailed user information from exchanges. Read more.

🌍 Global Crypto Adoption

• Global Banks May Boost XRP Price: Adoption by major banks could significantly influence XRP's price trajectory, highlighting its utility in cross-border payment systems. Read more.
• Russia Expands Bitcoin Use in Foreign Trade: Russia’s Finance Minister confirmed broader use of Bitcoin for international trade amidst geopolitical pressures and sanctions. Read more.
• Thailand Mulls Bitcoin Pilot, Binance Involved: Thailand is exploring a Bitcoin-focused pilot project, with Binance expected to play a strategic role in advancing the initiative. Read more.
• Japan Wary of Bitcoin Reserves: Japan remains cautious about adopting Bitcoin as a reserve asset, citing stability concerns and regulatory complexities. Read more.‍
• Chivo Wallet Architect Calls for Shutdown: A key figure behind El Salvador’s Chivo wallet has advocated for its closure, citing inefficiencies and the need for a revamped strategy for Bitcoin adoption. Read more.

🛠️ Business and Industry Moves

• Securitize Eyes BlackRock’s BUIDL for Frax: Securitize has proposed integrating BlackRock's BUIDL token as collateral for Frax Finance's stablecoin, aiming to enhance institutional adoption. Read more.
• MoonPay Targets $150M Helio Pay Acquisition: Crypto payment platform MoonPay is pursuing a $150 million acquisition of Helio Pay to expand its service offerings and market share. Read more.
• Copper Withdraws UK Licensing Application: Custody provider Copper has retracted its UK Financial Conduct Authority application, signaling possible strategic shifts in compliance or focus. Read more.

🌐 Institutional and Regulatory Developments

• South Korea’s Stock Exchange Urges Crypto Institutionalization: The Korea Exchange CEO emphasized the need for clear institutional frameworks to integrate cryptocurrencies into mainstream financial markets, suggesting it could enhance investor confidence. Read more here.
• FCA Pushes for Crypto Transparency in UK: The UK Financial Conduct Authority seeks industry feedback on new measures to boost transparency in the crypto sector, aiming for better investor protection and market integrity. Read more here.
• India Advocates Global Crypto Regulation Framework: Indian officials highlighted the need for a coordinated international approach to crypto regulations while noting no immediate timeline for domestic rules. Read more here.
• Rep. French Hill Promotes Pro-Crypto Legislative Agenda: Newly appointed House Financial Services Chair French Hill shared his plans for advancing pro-crypto policies, focusing on regulatory clarity and fostering innovation. Read more here.

💱 Stablecoin Innovations and Launches

• Ripple Introduces RLUSD Stablecoin: Ripple launched its RLUSD stablecoin on December 17, designed to enhance liquidity and settlement speed in its ecosystem. Read more here.
• Ethenas Launches BlackRock-Backed USDTB Stablecoin: Ethenas introduced the USDTB stablecoin, backed by BlackRock’s BUIDL token, marking a significant entry in the evolving stablecoin market. Read more here.
• Usual Adopts M0 Infrastructure for Stablecoin: Usual, a growing stablecoin issuer, is leveraging M0’s infrastructure to launch a new token, enhancing its blockchain capabilities. Read more here.
• Tether Expands to Europe with Stablr Investment: Tether backs Stablr, a Euro-denominated stablecoin startup, to strengthen its position in the European market. Read more here.
• MiCA-Compliant Stablecoins Dominate European Markets: Kaiko’s report reveals that stablecoins adhering to Europe’s MiCA regulations are driving growth and regulatory compliance across the region. Read more here.

🌍 Global Crypto Strategies and CBDCs

• Indonesia Completes Digital Rupiah Pilot: Indonesia successfully tested its digital rupiah’s proof of concept using distributed ledger technology, advancing its CBDC development. Read more here.
• El Salvador Limits Bitcoin for IMF Deal: To secure a $1.4 billion agreement with the IMF, El Salvador announced restrictions on Bitcoin activities, despite its pro-crypto stance. Read more here.
• Russia Sets Digital Ruble Launch Date Amid Bank Concerns: The Russian central bank confirmed the rollout timeline for its digital ruble, despite skepticism from commercial banks. Read more here.
• Societe Generale Completes First CBDC Repo Transaction: Societe Generale and Banque de France executed a repo transaction using a central bank digital currency, advancing institutional use cases. Read more here.

🛠️ Blockchain Infrastructure and Projects

• ENS Launches Layer-2 Network with NameChain: Ethereum Name Service integrated Linea’s technology stack to roll out its Layer-2 network, enhancing scalability for blockchain naming services. Read more here.
• Dynamic Blockchain ETP Debuts on Stuttgart Exchange: DDA and Heliad introduced a pioneering blockchain exchange-traded product on the Stuttgart Börse, offering dynamic exposure to the sector. Read more here.

🏦 Crypto Investment and Adoption Trends

• Brazilians Allocate Up to 35% of Assets in Crypto: A new survey reveals that Brazilian investors dedicate 7-35% of their portfolios to cryptocurrencies, reflecting growing trust in digital assets. Read more here.
• El Salvador Plans Bitcoin Buys Despite IMF Concerns: In parallel to its IMF negotiations, El Salvador disclosed plans to continue purchasing Bitcoin as part of its national investment strategy. Read more here.

🚀 Crypto Adoption Trends

• India Leads in Global Crypto Adoption: India has emerged as the global leader in crypto adoption, with experts emphasizing stablecoins as a critical factor for sustained growth. Read more.
• Digital Euro Leader Resigns Amid Controversy: Stefan Berger, a key figure in the Digital Euro project, has stepped down amid allegations of bias toward German interests, raising concerns about the initiative's direction. Read more.

🏦 Stablecoins and Central Bank Digital Currencies (CBDCs)

• Circle and Binance Partner to Boost USDC Adoption: Circle and Binance have joined forces to promote USDC use by integrating it more deeply into Binance's ecosystem. The move is expected to enhance liquidity and foster greater adoption of USDC globally. Read more.
• Ripple’s RLUSD Gains Regulatory Approval: Ripple's RLUSD stablecoin received regulatory clearance, paving the way for its deployment in compliant jurisdictions. This approval positions Ripple to expand its offerings in the growing stablecoin market. Read more.
• Citi Sees Stablecoins Supporting USD Dominance Against Bitcoin: Citigroup analysts argue that stablecoins could reinforce the U.S. dollar's dominance by facilitating its use in digital financial solutions and cross-border payments, countering Bitcoin's challenge to fiat currencies. Read more.
• Stablecoin Market Cap Nears $200 Billion: The combined market capitalization of stablecoins continues to rise, nearing $200 billion. This underscores their pivotal role in the crypto economy as a bridge between traditional and decentralized finance. Read more.
• India's Central Bank Sees CBDC Potential: The Reserve Bank of India expressed confidence in the transformative potential of CBDCs for the nation's economy, emphasizing use cases in payments and financial inclusion. Read more.
• Kyrgyzstan Defines Digital Som Framework: Kyrgyzstan's parliament has approved a legal framework for the Digital Som, a CBDC, marking a significant step in its digitization efforts. Read more.
• Bank of England Explores Privacy for Digital Pound: The UK is investigating zero-knowledge proofs to safeguard user privacy in its digital pound development, aligning with growing concerns over data protection. Read more.
• New Zealand’s CBDC Efforts Meet Public Apathy: Despite governmental enthusiasm, New Zealand's public response to CBDC proposals has been muted, raising questions about the feasibility of widespread adoption. Read more.

🌍 Crypto Regulations and Legal Developments

• Hong Kong Issues Crypto Licensing Guidance: Hong Kong has unveiled new licensing regulations for crypto firms, reinforcing its position as a leading hub for regulated digital asset activities. Read more.
• Iran to Regulate Cryptocurrencies, Not Restrict Them: Iran's finance minister has confirmed plans to regulate rather than ban cryptocurrencies, indicating a more balanced approach to digital assets. Read more.
• Ukraine Plans Crypto Legalization by 2025: Ukraine is set to legalize cryptocurrencies fully by 2025, but the government has clarified there will be no tax exemptions for crypto-related activities. Read more.

🏙️ Regional Crypto Innovations and Partnerships

• Vancouver Considers Becoming Bitcoin-Friendly: Vancouver's city council has passed a motion to evaluate policies that would make it a Bitcoin-friendly city, potentially boosting local crypto adoption. Read more.
• El Salvador and Argentina Partner on Crypto Innovation: El Salvador and Argentina have signed an agreement to promote crypto innovation in Latin America, focusing on knowledge exchange and regulatory frameworks. Read more.
• Argentina Opens Market to US Crypto ETFs: Argentina's financial regulator has approved the entry of U.S.-based crypto ETFs into its domestic markets, broadening investment opportunities for local investors. Read more.

🏦 Central Bank Digital Currencies (CBDCs) and Regulatory Moves

• Philippines Completes Wholesale CBDC Testing: The Philippines central bank concludes a wholesale CBDC test aimed at streamlining fund transfers. This initiative reflects Southeast Asia's growing interest in digital monetary systems for efficiency and financial inclusion. Read more.
• ECB Progress on Digital Euro: The European Central Bank releases its second report on the Digital Euro project, focusing on privacy, usability, and potential for retail payments. The report underscores the EU's cautious yet deliberate approach to CBDC development. Read more.
• Central Bankers Question CBDC Value: A new survey reveals waning enthusiasm for CBDCs among central bankers, despite ongoing research and pilots. Key concerns include unclear demand and risks of centralization in digital financial ecosystems. Read more.

🌍 Global Policy and Crackdowns

• Diem Stablecoin Project a "Political Kill": David Marcus, the famous former Facebook executive claims the Diem (formerly Libra) stablecoin project was thwarted by political and regulatory resistance, emphasizing the challenges tech giants face in entering financial sectors. Read more.
• Coinbase Exec Predicts Stablecoin Regulations by 2025: A Coinbase executive foresees regulatory clarity for stablecoins within two years, suggesting it could coincide with potential political changes, including a Trump presidency. This timeline highlights the growing importance of stablecoin policy. Read more.
• Cambodia Blocks Binance and Coinbase in Crypto Crackdown: Cambodia's government restricts access to major crypto platforms, citing concerns over financial stability and regulatory gaps. This move signals the nation's conservative stance on crypto markets. Read more.
• FDIC Urged Pause on Crypto Activities: Documents obtained via Coinbase's lawsuit reveal that the FDIC requested banks to halt crypto-related activities. This regulatory pressure underscores growing scrutiny of crypto's integration into traditional finance. Read more.

📈 Innovations in Stablecoin

• Programmable Yield Stablecoin Model: This article highlights a novel stablecoin framework offering programmable yield functionality, allowing enhanced financial tools in decentralized finance (DeFi). The model aims to balance security and flexibility, potentially unlocking new avenues for stablecoin adoption. Read more.
• Noble Launches Stablecoin on Cosmos Using Cryptodollar Infrastructure: Noble, a Cosmos-based protocol, launches a custom stablecoin backed by M^0 infrastructure. This initiative focuses on interoperability and decentralization, leveraging the scalability and ecosystem of Cosmos. Read more.

🚀 Ecosystem Growth and Opportunities

• Chainalysis Highlights Web3 Opportunities: Chainalysis explores Web3's growth potential in gaming, DeFi, and creator economies. The report emphasizes untapped opportunities for innovation in these segments, driven by blockchain adoption. Read more.
• Nuvei Expands Blockchain Payments in Latam: Payment provider Nuvei unveils a blockchain solution supporting stablecoin payments across Latin America. This initiative aims to bridge gaps in financial infrastructure while boosting crypto adoption in the region. Read more.
• dtcpay Plans Shift to Stablecoins by 2025: The crypto payments firm dtcpay announces plans to prioritize stablecoin transactions by 2025, phasing out Bitcoin and Ethereum. The strategy aligns with market demand for lower volatility in crypto payments. Read more.

🔒 Privacy and Cross-Chain Solutions

• Namada Launches Privacy-Focused Cosmos Layer 1: Namada, a privacy-centric blockchain on Cosmos, officially launches its mainnet with a native token. This Layer 1 project emphasizes enhancing transactional privacy while integrating with Cosmos' ecosystem. Read more.
• Ethereum-Compatible Cross-Chain Payments with Safe: Safe introduces a Visa-like payment system enabling cross-chain crypto transactions. Its focus on interoperability and speed positions it as a critical infrastructure for decentralized payments. Read more.

🏦 Stablecoins and Tokenization

• BlackRock-Backed Stablecoin Gains Traction: Projects like Ethena and Securitize are leveraging BlackRock’s involvement to pitch tokenized stablecoin solutions, aiming for a $1 billion market. Read more.
• Standard Chartered Predicts Stablecoin Growth: A report predicts stablecoins could account for up to 10% of U.S. M2 and foreign exchange transactions, highlighting growing institutional interest. Read more.
• Tether Ends Support for Euro Stablecoin: Tether has discontinued its EURt stablecoin, citing compliance challenges with Europe’s MiCAR regulations. Read more.
• Schuman Financial Launches Euro Stablecoin: A MiCAR-compliant euro stablecoin, Europ, has been introduced to enable secure and regulated digital euro transactions. Read more.

🌍 Global Regulatory Developments

• UK to Unveil Crypto Regulations in 2025: The UK plans to implement comprehensive crypto and stablecoin regulations by early 2025. This move aligns with its ambition to be a global crypto hub while addressing risks tied to digital assets. Read more.
• Brazilian Bitcoin Reserve Proposal: A Brazilian lawmaker has introduced a bill to establish a national Bitcoin reserve to mitigate economic risks. The initiative aims to position Brazil as a leader in crypto adoption. Read more.
• China’s AML Law Highlights Crypto Focus: China’s Supreme Procuratorate has underscored cryptocurrency-related anti-money laundering (AML) priorities in its latest legislation, signaling a tougher stance on illicit crypto use. Read more.
• Taiwan Tightens Crypto AML Rules: Taiwan has strengthened anti-money laundering measures following violations by a local exchange. The updated rules aim to enhance compliance and protect users. Read more.
• Morocco Plans to Lift Crypto Ban: Morocco is drafting regulations to end its crypto ban, signaling a shift toward embracing digital assets with a clear regulatory framework. Read more.

📈 Crypto Adoption and Market Trends

• India Explores CBDCs and Payments: India is examining the use of central bank digital currencies (CBDCs) for cross-border payments to enhance financial inclusion and efficiency. Read more.
• UK Crypto Ownership Reaches 7 Million: Over 7 million UK adults now own cryptocurrencies, reflecting growing mainstream adoption, according to the Financial Conduct Authority. Read more.
• Crypto Gains Aid Mortgage Approvals: Rising crypto investments are enabling lower-income households to secure mortgages, as digital asset gains boost financial stability. Read more.

🔄 Institutional Moves and Partnerships

• Ripple’s Tokenized Fund Launch: Ripple and Archax have launched the first tokenized money market fund on the XRP Ledger, marking a milestone in institutional crypto products. Read more.
• Partior Secures $80M in Funding: Blockchain-based payments platform Partior raised $80 million from Deutsche Bank and other backers to expand global operations. Read more.
• Robinhood Adds USDC in EU Markets: Robinhood has expanded its crypto offerings by enabling USDC trading in European markets, bolstering its global strategy. Read more.

🏛️ Legal and Policy Developments

• Chinese Court Bans Crypto for Wages: A Chinese court has ruled against using cryptocurrency for wage payments, citing its legal tender policies. Read more.
• Russia’s Digital Ruble Transition Period: Russia’s Ministry of Industry proposes a two-year phase-in period for its digital ruble adoption, aiming to minimize disruptions. Read more.

🚀 Emerging Projects and Innovations

• Coinbase Won't Support Celo Migration: Coinbase announced its decision not to support Celo’s migration to a Layer 2 solution, triggering a lot of emotion from the Ethereum and Celo community. Read more.
• Suriname Candidate Promotes Bitcoin: A Suriname presidential candidate has pledged to adopt Bitcoin as the national currency if elected, signaling progressive views on crypto. Read more.
• Indonesia’s Crypto Surge: Indonesia reported over $30 billion in crypto transactions in 2024, supported by 21 million traders, underscoring rapid adoption. Read more.

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What is the interchange fee?

You go into Starbucks and order. “That’ll be $7.89,” the cashier says. (Inflation!) You tap your card, the payment is authorized, and a minute later you’re sipping your latte.

It was convenient, fast, and Starbucks was happy you paid with a card and moved along rather than fumbling in your pocket for change. But the convenience of that card payment also costs Starbucks money, a little piece of the transaction that goes to the companies making the payment system work smoothly. One key part of that cost is called the interchange fee.

The interchange fee varies heavily depending on a variety of factors: the country in which the transaction takes place, the kind of merchant where a purchase is made (online vs. in person), whether or not it is a cross-border transaction, the type of card used (debit vs. credit, for example), and more. At Kulipa, we see that the average interchange fees on consumer purchases amount to:

• 0.2% in Europe
• 1.5% in Latin America, Africa, Asia, and the Middle East
• 2.0% in USA

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In money terms, that means the interchange fees would be:

• €0.20 on €100 in France
• R$1.50 on R$100 in Brazil
• $2.00 on $100 in New York

Who shares the interchange fees?

Interchange fees are divided among the different players in the transaction – with the exception of Mastercard or Visa, who have a different role that we’ll get into below.

Card issuers take the largest part of the pie in exchange for coordinating the activity among all these players. If the transaction’s card issuer has a BIN sponsor, that sponsor is also paid out of the portion of the interchange fees that goes to the issuer.

(A BIN sponsor lends their financial license to a card issuer, acting as the issuer’s guarantor with the relevant financial authorities. It is, of course, also possible that no BIN sponsor is involved if the card issuer itself has gone through the regulatory process, as for example Kulipa has done in multiple geographies.)

Interchange fees are paid by the acquirer of the transaction to the issuer (for definitions on these, check out our article on How card payments work).

How is the interchange fee calculated?

This is where Mastercard or Visa come in, as they are the ones tasked with defining and facilitating the system of interchange fees.

There’s only one place in the world where it’s quite easy to define the interchange fee: Europe. For transactions in Europe, the interchange fee is fixed by regulation for domestic transactions at 0.2% (for debit cards). 

In the rest of the world, however, it’s very complicated to understand how much the interchange fee will be, today, for a given transaction happening in a given location. It can, and does, vary based on a variety of circumstances. 

Final interchange fees are calculated with an Interchange Rate Designator (IRD), which is essentially a set of rules that covers pretty much any combination of potential factors to come up with the final number for a given transaction. 

The range of IRDs is, frankly, wide. Here, it’s enough to say that an IRD is impacted by the type of card used, the type of merchant where the purchase is made, the geographic location of everyone involved, the technology used to complete the transaction, and the time when the transaction is submitted.

What does this all mean for a crypto wallet that issues payment cards?

Interchange fees have the potential to be an attractive new revenue stream for crypto wallets. But due to the complicated calculations involved, there’s also a certain opacity that opens the door to salesmanship in the industry. 

Specifically, because it’s natural to start dreaming when thinking about the benefits of a new revenue stream, some card issuers try to sell a dream. We’ve talked with clients who have told us they were promised up to 90% of the net interchange fee on a transaction. The thing is that this flashy number is often standing in front of hidden costs, or is actually not true. 

At Kulipa, our stance is that clarity and openness is better. That’s why our contracts spell out how we’ll keep somewhere between 20-50% of what we’re actually getting, depending on transaction volume, while being up front about what that number is.

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That leads to one big conclusion: Wallets should be aware that while interchange fees can indeed be a great new revenue stream, they aren’t really enough to be the foundation of a thriving business. The bottom line is that payments can be a great new use case that leads to happier customers; in exchange, interchange fees are a good incentive for providing these services.

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Want to learn more about how to enhance your crypto wallet with a branded debit card? Check out kulipa.xyz and reach out to set up a call to talk about your specific needs.

🏛️ Regulatory Updates and CBDC Developments

• India's Central Bank Takes a Cautious Approach to CBDC: The Reserve Bank of India is refraining from rushing its central bank digital currency (CBDC) rollout, focusing instead on careful planning and robust testing. This measured strategy aims to ensure security and effectiveness. Read more.
• Argentina's Bold Bitcoin Proposal: A lawmaker in Argentina has proposed allowing the central bank to purchase and mine Bitcoin. The initiative aims to strengthen the country's financial resilience amid economic challenges. Read more.
• Digital Euro Delays Raise Concerns: Delays in launching the digital euro could undermine Europe's competitive edge in the global CBDC race, warns the European Central Bank. Policymakers cite technological and regulatory hurdles. Read more.
• Norwegian Task Force Urges CBDC Caution: Norway's financial authorities stress a cautious approach to CBDC development, highlighting the importance of privacy and financial stability in the project. Read more.

🔎 Global Legal and Compliance Shifts

• Shanghai Court Recognizes Virtual Currency as Property: Despite its strict stance on cryptocurrency trading, the Shanghai Court now legally recognizes virtual currencies as property, offering limited protection under existing laws. Read more.
• Nigeria Introduces Tougher Crypto Fraud Penalties: Nigeria has enacted stricter punishments for crypto-related fraud to curb illicit activities while encouraging responsible digital asset use. Read more.
• EU Tightens Screening for Crypto Providers: The European Union's regulator has released stringent guidelines for crypto service providers, focusing on anti-money laundering (AML) compliance and client screening. Read more.
• Swiss Watchdog Warns of Money Laundering Risks: Swiss regulator FINMA has flagged digital assets as a significant money laundering risk, emphasizing stricter oversight for compliance. Read more.
• Nepal Tightens Crypto Monitoring: Amid rising crypto-related financial crimes, Nepal is enhancing transaction monitoring to combat money laundering. The move reflects growing concerns over the misuse of digital currencies. Read more.

🌐 Institutional Moves and Partnerships

• Mastercard and JPMorgan Join Forces: The financial giants have collaborated to enhance blockchain-based payments, aiming for faster and more seamless cross-border transactions. Read more.
• Charles Schwab Eyes Direct Crypto Investments: Charles Schwab is exploring direct crypto offerings for clients, signaling further institutional acceptance of digital assets. Read more.
• Paxos Seeks EU Market Access: Stablecoin issuer Paxos plans to acquire Membrane Finance, aiming for a strong foothold in Europe’s increasingly regulated crypto market. Read more.

🪙 Stablecoins and Token Innovations

• MiCA Sparks Stablecoin Growth: Tether, Kraken-backed Quantoz Payments are launching MiCA-compliant stablecoins to meet the European Union’s regulatory requirements. Read more.
• Sky Deploys Stablecoin on Solana: Sky has introduced a new stablecoin on the Solana blockchain, enhancing the ecosystem's utility for decentralized finance (DeFi) applications. Read more.
• BlackRock's BUIDL Token Debuts: BlackRock has launched its BUIDL token on a Securitize platform, offering synthetic dollar minting while maintaining yield from real-world assets. Read more.

🚀 Political and Market Trends

• Slawomir Mentzen's Pro-Crypto Agenda for Poland: Polish politician Slawomir Mentzen vows to make Poland a crypto-friendly haven if elected, highlighting tax incentives and regulatory clarity. Read more.
• RBA Governor Rejects Bitcoin in Australia: Michele Bullock, governor of the Reserve Bank of Australia, dismissed Bitcoin as unsuitable for the nation’s economy, reinforcing the focus on CBDCs. Read more.

🏢 Key Developments in Regulatory Agencies

• Gary Gensler to Step Down in 2025: SEC Chair Gary Gensler plans to resign in January 2025, sparking speculation about future regulatory directions for crypto markets. Read more.
• US CFPB Digital Payments Rule Excludes Crypto: The Consumer Financial Protection Bureau has finalized its rule for large digital payment providers but excluded cryptocurrency firms from the scope. Read more.

🛠️ Technology and Infrastructure Updates

• Monad Launches Testnet: Monad has unveiled its testnet, designed for high-speed blockchain performance, promising a significant leap in throughput and scalability. Read more.

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🌍 Global Developments in Tokenization and Stablecoin Use

• Germany’s Bundesbank Joins Project Guardian: The Bundesbank collaborates with Singapore’s Project Guardian to explore financial market tokenization, focusing on cross-border use cases and distributed ledger technology. This highlights increasing global interest in digital asset integration. Read more.
• Tether Completes USDT Crude Oil Transaction: Tether executes its first USDT-based crude oil trade in the Middle East, signaling a major step in stablecoin adoption for commodities trading. Read more.
• Tether Unveils Hadron Tokenization Platform: Hadron aims to simplify asset tokenization by offering a framework for tokenized securities, enhancing access to blockchain-based financial services. Read more.

🏦 Institutional Moves in Crypto Adoption

• Intesa Sanpaolo Expands Digital Assets Desk: Italian bank Intesa Sanpaolo, a Ripple partner, broadens its crypto offerings to include spot trading, reflecting the rising institutional demand for digital assets. Read more.
• BlackRock’s BUIDL Extends Blockchain Integration: BlackRock expands its blockchain-focused platform BUIDL to include Aptos, Arbitrum, Avalanche, Optimism, and Polygon, signaling its continued commitment to decentralized finance (DeFi). Read more.
• Coinbase Acquires Utopia Labs: Coinbase acquires stablecoin payment processor Utopia Labs, enhancing its capabilities in stablecoin transactions and enterprise crypto solutions. Read more.

📈 Expanding Crypto Accessibility

• Revolut Launches Crypto Exchange in 30 Markets: Revolut extends its cryptocurrency exchange services to 30 new markets, emphasizing its strategy to scale crypto adoption globally. Read more.
• Sling Money Now Available in the US: Sling Money, a crypto remittance platform, debuts in the U.S., allowing users to send money internationally with lower fees and improved access. Read more.

💰 Stablecoin Regulation and Legislation Updates

• UK to Introduce Stablecoin Rules: The UK announces plans to regulate stablecoins and exempt staking rewards from capital gains tax, fostering a more crypto-friendly regulatory environment. Read more.
• US Stablecoin Legislation Gains Momentum: The Digital Chamber advocates for clear US stablecoin laws, emphasizing their importance in maintaining dollar dominance and global competitiveness. Read more.

🌐 Regional Crypto Trends

• Russian Bank Sber Tests Crypto Payments: Russia's Sberbank announces a pilot for crypto settlements, demonstrating the growing role of digital currencies in international transactions amid sanctions. Read more.
• Underbanked US Households Rely on Crypto: An FDIC report reveals that underbanked American households are adopting cryptocurrencies at higher rates than fully banked ones, citing easier access and utility. Read more.

🌐 Crypto Payment Expansions

• Helio Expands Solana Payments on Shopify: Helio Pay is enhancing Shopify's crypto payment capabilities by integrating Solana, allowing for swift, low-fee transactions. This development underscores Shopify's ongoing crypto adoption and highlights Solana's scalability in supporting high transaction volumes. Read more
• Detroit to Accept Crypto for Taxes and Fees: Detroit, the 26th most populous city in the U.S., is set to become the largest American city to accept cryptocurrency payments for taxes and fees. This decision aligns with a growing trend among U.S. municipalities embracing crypto for public transactions, positioning Detroit as a leader in crypto-friendly policies. Read more

📊 Crypto Regulatory Developments

• South Korean Regulator Reviews Corporate Crypto Investment: South Korea's Financial Supervisory Service is set to decide next month on corporate investments in crypto. This regulatory clarity is anticipated to impact corporate investment strategies and potentially encourage more institutional crypto engagement in South Korea. Read more
• Pakistan Proposes Amendments to Legalize Crypto: Pakistan’s government has proposed changes to the SBP Act to permit and regulate cryptocurrencies. The reforms could pave the way for a legal crypto market in Pakistan, potentially supporting financial inclusion and new economic opportunities. Read more
• Bolivia Eyes Top 5 Crypto Adopter Spot: Bolivian lawmakers aim to position the nation among the top five in crypto adoption, with plans for a supportive regulatory framework. This move reflects a broader trend in Latin America to leverage crypto for economic modernization. Read more

💼 Institutional and Corporate Crypto Innovations

• UBS Launches Tokenized Money Market Fund: Swiss bank UBS introduced a tokenized money market fund on Ethereum, providing institutional clients with blockchain-based, tokenized assets. This launch signals UBS’s continued exploration of digital asset integration in traditional finance. Read more
• BNB Chain’s New Tool for Small Business Tokenization: BNB Chain launched a tokenization tool targeting small businesses, allowing them to create blockchain tokens for fundraising. This initiative could democratize access to capital for smaller firms by simplifying the tokenization process. Read more

🔐 Privacy and Security in Crypto

• Illuminex Introduces Bitcoin Privacy Solution: Illuminex has released a non-custodial wallet solution focused on enhancing Bitcoin privacy. This feature aims to address growing demand for privacy in crypto transactions, especially among users concerned with data security. Read more
• French Gambling Regulator May Ban Polymarket: Reports indicate that France's gambling regulator could ban Polymarket, citing legal concerns over betting markets. This decision would align with regulatory moves across Europe to restrict certain crypto betting platforms. Read more

🌍 Global Crypto Infrastructure Developments

• JPMorgan Expands Blockchain FX Settlements: JPMorgan plans to leverage blockchain to expedite dollar-euro foreign exchange settlements. This marks a major step for blockchain in traditional banking and could streamline cross-border transactions for global clients. Read more
• SWIFT and Chainlink Team Up for Tokenization Pilot: SWIFT and Chainlink announced a tokenization pilot, aiming to streamline inter-bank tokenized asset transfers. This pilot highlights efforts to bridge traditional banking and blockchain through interoperability solutions. Read more
• Circle Prepares for Hong Kong Expansion and IPO: Circle has announced expansion plans for Hong Kong as it prepares for an IPO. This move reinforces Circle’s commitment to growth in Asia and its dedication to regulatory compliance in key markets. Read more
• Seven South Korean Banks Join CBDC Pilot: Seven major South Korean banks will join a CBDC pilot, signaling strong interest in digital currency from the country’s financial sector. This participation could accelerate CBDC adoption in South Korea and inspire further innovation. Read more

💸 Stablecoins and Payment Networks

• Crypto Firms Launch Network to Promote USDG Usage: A coalition of crypto firms has launched a network to promote USDG stablecoin usage, aiming to increase the adoption and utility of stablecoins within the digital economy. This initiative seeks to support stable, efficient payment solutions for users globally. Read more

🌐 Tokenization and Asset Management Advances

• Nairobi Securities Exchange partners with Hedera: The Nairobi Securities Exchange (NSE) has teamed up with Hedera to foster tokenization of assets in Kenya. This move aims to enhance financial inclusivity and efficiency by utilizing blockchain to create new asset classes accessible to a wider range of investors. Read more here.
• Ant CEO highlights tokenization's financial potential: Eric Jing, CEO of Ant Group, emphasized tokenization's pivotal role in advancing the financial ecosystem. He underscored how blockchain-backed assets can revolutionize the landscape by reducing barriers and enhancing market participation. Read more here.
• RWA tokenization as the next asset management revolution: Tokenizing real-world assets (RWAs) is gaining traction as a transformative force in asset management. This third major shift in financial management is poised to bring liquidity and transparency to traditionally illiquid asset markets. Read more here.

💵 Stablecoin Developments and Regulations

• Paxos launches USDG stablecoin in Singapore: Paxos has introduced USDG, a U.S. dollar-backed stablecoin, in collaboration with Singapore's DBS Bank. This initiative complies with Singapore's regulatory framework and marks Paxos’ expansion in stablecoin offerings. Read more here.
• Paxos urges for stablecoin regulation: In a recent letter, Paxos stressed the urgent need for a regulatory framework for stablecoins, highlighting their pivotal role in financial stability. The communication to U.S. policymakers aims to accelerate the adoption of clear guidelines. Read more here.
• Japanese crypto body to self-regulate stablecoins: A Japanese crypto industry association is preparing to introduce self-regulatory practices for stablecoins to promote transparency and market stability. This approach reflects proactive measures amidst global regulatory uncertainties. Read more here.
• U.S. Treasury notes stablecoin influence on T-bills: The U.S. Treasury has observed a growing trend where the expansion of stablecoins contributes to increased demand for U.S. Treasury bills. This relationship signals stablecoins' role in mainstream financial operations. Read more here.

🌍 Regional and International Crypto Initiatives

• Taiwan's crypto exchange registration system imminent: Taiwan’s financial regulator is set to implement a mandatory registration system for crypto exchanges by next month. This policy aims to bolster market integrity and investor protection. Read more here.
• Hong Kong's HKDR stablecoin launch on HashKey: Hong Kong is set to introduce the Ethereum-based HKDR stablecoin, which will be listed on the HashKey exchange. This launch reflects the region’s focus on developing its digital asset infrastructure. Read more here.
• Bolivian bank enables USDT custody: Banco BISA in Bolivia has launched a USDT custody service, allowing users to store and transact with the popular stablecoin. This move expands the adoption of digital assets within the country’s financial ecosystem. Read more here.

🔄 Cross-Border and Privacy-Enhanced Solutions

• BIS project supports compliant cross-border transactions: The Bank for International Settlements (BIS) has developed a project aimed at facilitating compliant cross-border payments. This initiative seeks to streamline transactions across jurisdictions while adhering to regulatory standards. Read more here.
• Circle and INCO Network launch privacy-focused token: Circle has partnered with INCO Network to introduce a version of the ERC-20 token standard that emphasizes enhanced privacy. This project targets users who seek more confidentiality in blockchain transactions. Read more here.

🔗 New Stablecoins and Blockchain Projects

• Libeara's U.S. Treasuries fund launch: Libeara, backed by Standard Chartered, is preparing to launch a fund centered on U.S. Treasuries in collaboration with FundBridge Capital. This venture underscores the trend of integrating blockchain with conventional financial products. Read more here.
• Tether's dirham-pegged stablecoin on TON blockchain: Tether plans to introduce a stablecoin tied to the UAE dirham on the TON blockchain. This development highlights Tether's strategy of diversifying its offerings to meet regional demands. Read more here.
• sUSD backed by real-world assets on Solana: Solayer has launched sUSD, a stablecoin backed by real-world assets on the Solana blockchain. This addition aims to provide users with an asset-backed, decentralized financial instrument. Read more here.

📈 Crypto Demographics and Trends

• Indonesian youth embrace crypto: A recent report shows that over 60% of young Indonesians are investing in cryptocurrencies, reflecting a significant generational shift towards digital asset adoption in Southeast Asia. Read more here.

Joel Monegro’s Fat Protocols thesis has had a long-lasting impact on crypto. While it’s been heavily debated, the overall vision stands true 10 years later - but for how long?

The thesis is fairly simple: blockchain protocols generate exponential value for end users as more applications (DApps) are built on top of them. Think how yield optimizers built on top of Dexes help users get more out of the same basis product. Everything is open source and interconnected, creating a virtuous growth cycle. This stands in stark contrast to Web2, where value is concentrated in monolithic applications.

This take stands true to this day, despite being 10-years old.

But as Web3 grows and welcomes newbies, it can feel like it’s dropping more and more of its initial identity. To provide smoother experiences, it becomes more centralised, sacrificing self-custody for the convenience of intermediaries.

In short, back to the old ways.

The growth of centralized applications raises a critical question: is crypto devolving into Web2, back to thin protocols and fat applications?

What’s thin, what’s fat?

Self-custody is at the root of what makes crypto the ecosystem it is today. Without it, there is no Ledger, no DeFi delta-neutral strategies spread across 57 DApps, no obscure Solana memecoins: crypto just becomes another inflexible speculative commodity.

Self-custodial wallets allow thin applications and fat protocols to thrive, so let’s see how they benefit end users. As opposed to their centralized counterparts (CEXs), they do not take wild fees whenever users interact with on-chain applications to trade, swipe or gamble money away.

Actually, wallets are so hands-off they can even struggle to generate revenues. Most of them take fees whenever users make a swap or bridge natively in their UX. This model pushes them to integrate as many chains as possible to capture hot liquidity, and thus generate as much in-wallet movement as possible (we discussed it here).

Users are the main beneficiaries of this monetization struggle - for them, this is a free playground (minus the gas). However, the UX complexity that comes with with self-custody creates significant entry barriers for newcomers.

This is where custodial wallets and centralized products come in. They offer a familiar, Web2-like experience that lowers the barrier to entry, making crypto more accessible. This is made possible by the fact that CEXs run for the most part off-chain - including all the trading activities, order matching, and ledgers.

CEXs are fat applications, and as such, they take fat cuts, sometimes as high as 2% per transaction. But they onboard new users. Therefore, a legit question arises:

Is web2 just… Better?

By Web2, understand fat applications and thin protocols. The Binance or Coinbase of this world when it relates to crypto. Is a great UX better than a higher value sum for end users?

Let’s start with the good news: traded volumes on the DEX/CEX ratio are looking up. This means that more and more volumes are traded on-chain than off-chain. But DEXs are still loosing the custody war: as of October 24, 85% of the volume is still traded on CEXs. This shows that the majority of users prefer simplicity over profit. Put otherwise, custody over self-custody.

Onboarding new users remains a very hard problem to solve because of the steep learning curve required to navigate in Web3. The process of setting up a wallet, securing seed phrases, and navigating various blockchain interactions is far removed from the intuitive experiences users have come to expect from Web2 applications.

In addition to that, it’s easy to get lost in the plethora of wallets out there. The market isn’t consolidated, which means there are solutions in every directions for all users type. This is all pretty confusing. And the switching cost from one wallet to another is pretty low: winning products will always be the ones with the better UX.

Currently, the better UX belongs to custodial solutions. CEXs for wallets/ trading/ yield generation aren’t the only applications that have a lot of success: Wirex for cards, BitStack for DCA, or Stake for gambling - all with impeccable and fun experiences.

But all is not gloom and doom. Self-custodial, decentralised products are catching back up: Aave for credit, Uniswap for swapping and staking, Legends or Infinex for wallets, Kulipa for cards.

All of this points towards one thing: fat applications might currently have the better UX, but DApps are catching up, and they have the advantage of added value through ecosystem synergies. Web2 might be better for non-tech savvy users now, but we’ll likely see a reversal in the coming years. And after all, what’s even the point of using Web3 if it’s not to leverage the value that fat protocols provide?

If not self-custody, why crypto?

It’s in these words that Ian Rodgers, Ledger’s Chief Experience Office, opened WalletConnects’ 2024 market statement:

In each bull run, new crypto or blockchain-focused companies compromise on self-custody, security, or both. Each time they have a very rational explanation for why this compromise is necessary, usually related to usability and “onboarding the masses.” Each cycle results in users getting rekt and broad distrust in the ecosystem. Little is as predictable.

This is what happens when fat applications win: everyone else gets the bitter end. FTX, Celsius, BlockFi… There are too many bankrupt centralized products to count already. That’s why crypto was created in the first place - to cut intermediaries playing with their client funds.

So how do we make self-custody more accessible? Probably by embedding self custody in familiar applications. Let’s take an example, like creating the CAC 40 of cryptos. Users can understand it very easily, making it more comfortable for them - and they benefit from the juicy APIs. They don’t need to know that it’s market neutral, hedged on Uniswap, etc. All of this is secondary. The important thing is that they already know and trust the high-level product.

Another example is the rise of social logins, with solutions like Argent or WalletConnect’s web wallets. Users can create a non custodial wallet just with their Google account: Web3 embedded in products retail already knows. From there, they can explore the wonders of dapps and digital collectibles.

It’s easy to imagine other embedded experiences - like FaceIDs to help users log in their favorite websites where their digital collectibles are, or instant settlement at payments, with stablecoin transfers on the backend. That’s one of the things we’re working towards with Kulipa.

Conclusion

It’s fair to say this centralisation of crypto is temporary. The space isn’t mature enough yet to onboard billions of non-tech savvy users, and familiar experiences provided by fat applications offer a great alternative.

We’re achieving scale with the rise of layer 2s, anonymity with ZK/ FHE technology, security with solutions like Ledger, but we’ve yet to solve user experience. Web3 isn’t devolving into Web2, it’s only sharing the long tail of retail end users with custodial solutions, to give itself the time to create more delightful and fairer products for everyone around the globe.

About Kulipa

Kulipa helps non-custodial wallets issue crypto payment cards. With Kulipa cards, wallets can generate more fund movement, easily develop new use cases and maximize organic acquisition. Get in touch here!

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💰 Stablecoins in Traditional Finance and CBDCs

Hong Kong’s CBDC Ambitions and Crypto Exchange Growth: Hong Kong’s Financial Secretary highlighted the region’s commitment to integrating Central Bank Digital Currencies (CBDCs) into its digital finance infrastructure. Alongside, the Hong Kong Securities and Futures Commission continues expanding licensed crypto trading platforms, aiming to solidify Hong Kong’s place as a digital asset hub in Asia. This balanced approach suggests Hong Kong’s intent to lead responsibly in digital finance. Read more‍

Norway’s Cautious CBDC Approach: Norway's central bank is continuing its gradual research into a Central Bank Digital Currency (CBDC), with no rush to adopt digital cash. Norges Bank Deputy Governor Pal Longva highlighted that the country’s digital payment infrastructure is highly efficient, giving them flexibility in CBDC timelines. As one of the least cash-reliant economies, Norway’s focus remains on a wholesale CBDC, likely delaying broader adoption decisions until 2025. This approach contrasts with other countries pushing forward more assertively on CBDCs. Read more‍

Traditional Finance Explores Tokenization, BIS Warns of Risks: The Bank for International Settlements (BIS) has highlighted both potential benefits and risks in tokenizing real-world assets (RWAs). While tokenization could reduce transaction costs and improve efficiency, BIS warns of governance, legal, and operational risks that need oversight. Despite these concerns, institutions like Barclays and Citi are actively exploring tokenized assets, anticipating massive market growth in the next decade. Balancing innovation with stability will be key as tokenized finance develops. Read more‍

Solana and Stablecoin Infrastructure Boost: Following Stripe's acquisition of Bridge, stablecoins appear poised as the non-Bitcoin "killer use case" for crypto, particularly for Solana. Stripe’s entry into stablecoin payments reinforces this outlook, with Solana’s fast, low-cost network attracting startups like Perena and Sphere, focusing heavily on stablecoin applications. Stripe's move could pave the way for more acquisitions and exits, providing crypto venture capital with an alternative to token launches. This could mean more long-term planning in crypto VC as stablecoins integrate further into finance. Read more]

JPMorgan and Tokenized Treasuries: JPMorgan explores tokenized U.S. Treasury securities with a vision of expanding stablecoin capabilities in traditional finance. This experiment addresses efficiency in bond markets, potentially reducing settlement times and costs. If successful, this move could deepen the integration of stablecoins in institutional finance, enhancing liquidity and enabling near-instant settlements. Read more

🌐 Global Regulatory Shifts and Adoption

Argentina’s Regulatory Pivot: Argentina's National Securities Commission is rethinking its stance on Bitcoin and other digital assets. Previously hesitant, the regulatory body is moving towards creating a registry for Virtual Asset Service Providers (VASPs) and building regulatory frameworks that protect users while encouraging innovation. This aligns with President Javier Milei's crypto-friendly policies, hinting at a potentially lucrative future for Argentina's crypto industry. Read more‍

MiCA Regulations: Europe’s New Crypto Landscape: The MiCA regulations are set to reshape the European stablecoin market, introducing guidelines for transparency and issuer accountability. This regulatory move addresses both consumer protection and market stability concerns, as stablecoins gain traction in mainstream finance. MiCA’s impact could extend globally, influencing how other regions approach crypto regulation. Read more‍

Nigeria Drops Charges Against Binance Exec: In a significant development, Nigeria has dismissed money laundering charges against Binance executive Tigran Gambaryan. Held since early 2024, Gambaryan’s case raised concerns about the treatment of crypto professionals and the role of international relations in such proceedings. His release underlines the complexities of operating in regions with evolving crypto regulations. Read more‍

India Weighs Crypto Ban, Explores CBDCs: India’s government is revisiting a potential crypto ban, aiming to strike a balance between market concerns and innovative blockchain applications. Officials are assessing a framework that might permit a Central Bank Digital Currency (CBDC) while restricting other digital assets. Given India’s rapidly growing tech sector, a cautious, centralized approach might align with national economic goals while addressing financial stability. Read more‍

UAE Welcomes DAOs in Regulatory Oasis: The UAE’s latest regulatory framework is carving out space for decentralized autonomous organizations (DAOs). Positioned as a “Digital Assets Oasis,” this initiative aims to integrate DAOs into the country’s broader fintech landscape, supporting their growth and aligning with the UAE’s digital transformation ambitions. Read more‍

Russia’s FATF-Compliant Crypto Exchange Rules: In response to international standards, Russia is preparing regulations for crypto exchanges that align with Financial Action Task Force (FATF) guidelines. This approach could attract institutional investors seeking safer, more transparent trading environments, although implementation challenges remain given Russia's complex regulatory history. Read more‍

🚀 Crypto Accessibility and Consumer Adoption

Stripe Acquires Bridge to Build Stablecoin Infrastructure: Stripe recently acquired the stablecoin platform Bridge, aiming to build “the world’s best stablecoin infrastructure.” With this $1.1 billion acquisition, Stripe is positioned to lead stablecoin-enabled transactions, particularly for cross-border payments. Bridge, known for supporting APIs that streamline tokenized transactions, has gained traction from fintech firms and global institutions. This acquisition aligns with rising demand for fast, low-cost transactions without relying on traditional banking, signaling a strong endorsement of stablecoin technology. Read more‍

Avalanche and Visa’s New Crypto Card: Avalanche has introduced a Visa card allowing crypto payments in WAVAX, USDC, and sAVAX at any Visa-accepting location. Initially launching in Latin America and the Caribbean, the card is available in physical and virtual formats, with features like self-custody and PIN protection. This move enhances crypto accessibility, paving the way for mainstream adoption, especially in regions with limited financial services. The project positions Avalanche as a significant player in bridging crypto with traditional finance. Read more‍

💵 CBDCs: The Digital Currency Revolution

China’s CBDC Milestone: 180 Million Wallets and ¥7.3T in Transactions: China continues to lead the charge in Central Bank Digital Currency (CBDC) development, with its e-CNY digital yuan reaching 180 million personal wallets and processing over ¥7.3 trillion ($1.02 trillion) in transactions as of July 2024. This massive growth reflects China's aggressive push to modernize its financial system, offering seamless integration between traditional banking and blockchain-based payments. Notably, e-CNY can now facilitate offline transactions and even function without electricity, a move that could set a new standard for global CBDCs. However, user hesitancy remains, with concerns about the limited functionality of digital wallets compared to traditional accounts. As China enhances its CBDC's usability across sectors like public transport, this initiative underscores the broader trend of financial digitization worldwide. Read more‍

Brazil Launches Second Phase of CBDC Pilot: Drex: In Brazil, the Central Bank has opened applications for the next phase of its CBDC pilot, Drex, from October 14 to November 29, 2024. The pilot aims to enhance financial tokenization through complex use cases like loans backed by custodial assets and tokenized federal government bonds. This phase is significant as it builds on the initial trials involving 16 consortiums, exploring blockchain's potential in mainstream finance. However, the country still faces challenges in implementing scalable privacy solutions. As Brazil integrates more participants, its efforts reflect the increasing role of tokenization in future financial systems. Read more‍

📈 Stablecoins in Focus: Adoption and Innovation

Stablecoin Adoption Remains Low in the U.S., Reports Chainalysis: According to a recent Chainalysis report, stablecoin adoption in the U.S. is lower than anticipated. The report attributes this slow uptake to a combination of regulatory uncertainty and a lack of mainstream use cases beyond crypto trading. While stablecoins like USDC and USDT are gaining traction in DeFi and trading, they have yet to make a substantial impact on retail or institutional payments. The report emphasizes that clearer regulations and increased education on stablecoin benefits could unlock further adoption. Read more

MiCA-Compliant Euro Stablecoins Gain Market Share: The European stablecoin sector is witnessing growth driven by MiCA-compliant euro stablecoins. Research by Kaiko shows that these compliant stablecoins are gaining ground in the market, reflecting Europe’s robust regulatory framework. This trend shows how regulatory clarity, such as that offered by MiCA, can bolster investor confidence and lead to increased adoption of blockchain assets. As regulatory oversight becomes a larger part of the conversation, Europe’s MiCA framework is emerging as a model for integrating stablecoins into the traditional financial system. Read more

Stripe Joins the Stablecoin Bandwagon via Paxos Partnership: Global payments giant Stripe has teamed up with Paxos to enable stablecoin payments on its platform, signaling yet another major institutional embrace of blockchain-based transactions. Stripe’s new partnership will utilize Paxos’ stablecoin infrastructure, providing a seamless experience for cross-border payments, particularly in regions underserved by traditional banking systems. This partnership is part of a larger trend where major financial services companies are incorporating stablecoins to enhance global financial inclusivity, lower fees, and increase transaction speeds.
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Stripe Eyes Stablecoin Platform Bridge in Acquisition Talks: Busy week for Stripe, as it is in advanced discussions to acquire the stablecoin fintech platform Bridge. If successful, this move would deepen Stripe’s involvement in stablecoin payments, building on its existing partnerships with Paxos. Bridge’s technology would enable Stripe to offer faster, more cost-efficient cross-border transactions using stablecoins like USDT and USDC, positioning Stripe to compete in the growing digital payments space. Read more‍‍

Ripple’s Stablecoin Expansion: RLUSD Partners Revealed: Ripple’s announcement of RLUSD stablecoin partnerships is a significant development for its global expansion efforts. By establishing partnerships across key regions, Ripple aims to strengthen its role in the stablecoin ecosystem. These collaborations will help in distributing the RLUSD stablecoin more efficiently and potentially create a more diverse stablecoin market. Ripple’s strategy highlights its ongoing commitment to increasing blockchain's role in cross-border payments and financial inclusion, leveraging the strengths of stablecoins. Read more‍

UAE Approves First AED Stablecoin Issuer: The UAE is making headway in the digital currency space by granting in-principle approval for its first AED-pegged stablecoin issuer. This regulatory milestone signals the UAE’s ambition to be a key player in the stablecoin market and offers a framework for further developments in financial digitalization. This move reflects the broader Middle Eastern interest in blockchain technologies as they explore new financial frontiers while adhering to regulatory standards. Read more‍‍

🏦 Corporate Blockchain Moves: Mergers, Partnerships & Innovations

DBS Bank Introduces Blockchain Services in Singapore: Singapore’s largest bank, DBS, has made waves by introducing token services for blockchain-based banking. This move further solidifies Singapore’s position as a blockchain-friendly nation and pushes the boundaries of how traditional banking integrates with decentralized technology. DBS aims to streamline banking operations using tokenization, making it easier for businesses and consumers to interact with digital assets. As the line between traditional finance and blockchain blurs, this move highlights the accelerating trend of institutional blockchain adoption in Asia. Read more‍

Tether Explores Commodities Trading and TradFi Opportunities: In an unexpected twist, Tether, known for its leading stablecoin, USDT, is now eyeing the commodities trading and traditional finance (TradFi) sectors. Paolo Ardoino, Tether’s CEO, hinted at this strategic shift during a recent event, which could diversify Tether’s revenue streams beyond the crypto ecosystem. While Tether remains dominant in the stablecoin market, its venture into commodities could bring stablecoins closer to traditional financial markets. This move suggests an ongoing trend where blockchain entities are increasingly blending with conventional finance, opening up broader applications for stablecoins in real-world markets. Read more

‍Thailand’s Siam Commercial Bank Launches Stablecoin Payment Service: Siam Commercial Bank (SCB) introduced a new stablecoin service aimed at making cross-border payments easier and cheaper. The service leverages blockchain technology to facilitate faster and more secure international transfers, positioning SCB as a leader in financial innovation in Thailand and Southeast Asia. Read more‍

⚖️ Regulation & Compliance: Securing the Crypto Ecosystem

El Salvador’s Bitcoin Adoption Stalls Despite Legal Tender Status: A recent survey in El Salvador revealed that only 7.5% of citizens actively use Bitcoin, despite its legal tender status. This highlights ongoing challenges in the country’s effort to integrate Bitcoin into its economy. Lack of education, accessibility, and trust in the technology are key factors affecting adoption rates. Read more‍

ESMA Calls for Tighter Crypto Regulation and Cyber Audits: The European Securities and Markets Authority (ESMA) has called for stricter regulation of cryptocurrencies and mandated cyber audits to protect the growing digital asset ecosystem. ESMA’s increased scrutiny highlights the importance of security and investor protection in the expanding crypto market, as the European Union aims to balance innovation with regulation. Read more‍

🌍 Crypto Market Developments: Wallets, Rankings & Surveys

Bitget’s Wallet Rivals Binance in App Store Rankings: Bitget’s crypto wallet app is climbing the ranks in app stores, now rivalling Binance in popularity. This surge reflects Bitget’s growing influence as it provides a streamlined user experience for both new and experienced crypto traders. Bitget’s rise showcases the increasing competition in the crypto wallet market, challenging established players. Read more‍

Including an answer to the big question: How to prevent double spending?

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In our previous article, we explained the criteria for determining if your wallet would be best served by a debit card or a prepaid card. As mentioned, the smooth user experience offered by crypto debit cards comes with some additional technical issues; below, we detail how Kulipa handles them based on account characteristics, security keys, risk management, and more.

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When a wallet comes to Kulipa to ask about deploying our crypto debit cards to their users, the conversation quickly turns to some relatively technical points. On our side, we want to know more about the wallet’s current goals, as issuing a debit card is a resource intensive endeavor. On their side, they need to know exactly how Kulipa manages the various flows of authorization, clearing, fund transfer and more. 

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Those are good questions, and we’re happy to go over the details for each particular situation. Here, though, we’d like to explain how the flow of funds works for debit cards, depending on the various characteristics a wallet can have.

First up: The double spending issue 

Debit cards for self-custodial wallets are quite new. Instead of the classical prepaid card model, a debit card transmits funds directly from the user’s self-custodial wallet to the merchant’s bank. This means we at Kulipa have around 5-6 seconds to:

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1. Receive the authorization request that begins when the card is being used,
2. Check if there are enough funds in the user’s wallet,
3. Say yes or no to Visa/Mastercard.

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After that, there’s another thing we have to do before the payment is cleared and the funds are settled:

4. Somehow ensure the user doesn’t move the funds before we send them to the merchant.

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Step 4 is known as the double spending issue. As we saw in our previous article on payment networks, clearing and settlement happen quite some time after the payment authorization is granted (ranging from 24-72 hours, depending on what day of the week it is).

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Thus the transaction can be approved quickly, but the funds only leave the user’s account when it’s time for Kulipa to settle the payment with the card network. Double spending would occur if, in the meantime, the user had placed another transaction before the settlement that depleted the account to the point where there are no longer enough funds available for the transaction.

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We clearly need to prevent that, and how it happens depends on the wallet infrastructure. What does that mean? Wallets can generally be characterized as: 

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• Account abstraction (AA), often referred to as smart wallets. These are managed by smart contracts and are therefore programmable. This means that we can have some special rights over the user’s funds, including freezing them. Argent, Avocado, and Trust Wallet SWIFT are examples of this kind of wallet.
• Externally-owned accounts (EOA), including MPC wallets, which are a bit more tricky. As their infrastructure is hard-coded into protocols, they have limited functionalities and need different safeguards to prevent double spending. Some examples here are Metamask, Trust classic, and Coinbase wallet.

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Let’s see how we implement debit cards into each of these, starting with Account Abstraction. 

Account Abstraction Wallet: The Flow of Funds

Let’s use the example of Argent, one of the wallets using Kulipa’s crypto debit cards. It’s a very instructive one, showing how we can use the specific characteristics of AA wallets to fit within the existing debit card system.

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TLDR for the model

The full flow of funds, from authorization to clearing and settlement, looks like this:

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Authorization

1. The user enters their key via Argent’s app to execute a transaction with a merchant (i.e., they try to pay for something).
2. Our issuer processor receives the transaction request from the card network and sends it to Kulipa.
3. Kulipa checks the user’s account balance with Argent. If sufficient funds are available, we send a transaction approval to both Argent and the card network.
4. Argent places a hold on the funds using their cosigner key (more details on that below); The card network sends an approval message to the merchant’s point of sale machine.
5. Kulipa updates the user’s account balance on the backend (a process that also works when funds are added to the wallet using an on-chain transaction).

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Clearing & settlement

1. At the end of each day, the card network sends the clearing file to Kulipa.
2. Kulipa uses its session key to send USDC from the user’s wallet to an offramp account that is owned by Mastercard, Visa, or another EMI, depending on the region.
3. Funds are offramped into a settlement account before being sent along traditional payment rails to the merchant’s bank account.

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Argent’s specificities

Argent uses a cosigner model, meaning that both the user and Argent need to validate a transaction with their respective keys in order for it to be validated on-chain. Cosigning is important because it avoids double spending using an enforced hold of the funds being used for a debit card transaction. This then enables the funds to only truly move at the end of the day, when Kulipa has received the clearing file from the card network.

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While the user has a key generated when they create their wallet, and Argent has its own key that lets them cosign transactions, Kulipa needs to become part of this flow as well. This happens thanks to session keys, which Argent has been developing for quite some time.

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Session keys allow Kulipa to hold its own key, generated when the user orders their debit card. This key gives Kulipa very specific rights to the user’s funds held in Argent: Kulipa can only touch USDC, and the funds are offramped.

Externally-owned accounts

Issuing a debit card for EOA wallets works a bit differently since these wallets can’t enforce smart policies on users’ funds like those seen with account abstraction wallets. As such, Kulipa can’t block a third-party transaction after authorizing a payment, nor can we wait for the clearing file to arrive before collecting the funds.

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Therefore, in order to solve the double spending problem, there’s an additional account added to the flow of funds: an escrow account, where the funds are placed directly after authorization takes place.

Authorization

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1. The user uses their card to execute a transaction with a merchant (i.e., they try to pay for something).
2. The issuer processor sends Kulipa a request for authorization.
3. Kulipa attempts to move the funds to the escrow account. 
   1. If the transaction is validated by the blockchain, that means there were enough funds and we can say “Yes” to the card network.
   2. If the transaction fails, there aren't enough funds and we say “No”.
4. Kulipa updates the user’s account balance on the backend (a process that also works when funds are added to the wallet using an on-chain transaction).

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Clearing and settlement

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1. At the end of each day, the card network sends the clearing file to Kulipa.
2. Kulipa sends the funds from the escrow account to an offramp account that is owned by Mastercard, Visa, or another EMI, depending on the region.
3. Funds are offramped into a settlement account before being sent along traditional payment rails to the merchant’s bank account.

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And that’s it for this product deep dive! Stay tuned for next week’s article, and in the meantime, feel free to follow us on X or stop by our brand new website for more information. 

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💰 Stablecoin Shake-Ups & Innovations

Coinbase’s Stablecoin Delisting in the EU: Coinbase recently announced it would delist stablecoins that don’t meet the European Union's new MiCA (Markets in Crypto-Assets) guidelines. This move highlights the tightening regulatory framework around stablecoins in Europe, as MiCA sets out clear rules for stablecoin issuers to ensure transparency, reserve backing, and customer protection. While this change may seem restrictive, it also signals maturation within the market, creating a path for greater legitimacy and stability. For investors and companies alike, compliance will be key to continued operations in Europe. Read more

Stablecoin Regulatory Framework in the US:Senator Hagerty's draft legislation on stablecoins has sparked attention in the U.S., echoing the regulatory framework recently proposed in the House of Representatives. His proposal emphasizes the need for clear guidelines to regulate stablecoins, including how reserves should be managed and transparency ensured. This aligns with the growing global focus on stablecoin regulation as governments try to mitigate risks while embracing the benefits of blockchain technology. Industry leaders should watch these developments closely as the U.S. regulatory environment continues to evolve. Read more

Native USDC Now Available on Sui via Navi Protocol: Native USDC is now accessible on the Sui blockchain through the Navi Protocol, broadening the use of the popular stablecoin in decentralized finance (DeFi) applications. This integration allows users to leverage USDC for payments and other transactions within the Sui ecosystem, promoting faster, more efficient digital payments. As USDC continues to expand its footprint across blockchains, it strengthens its position as one of the leading stablecoins in the crypto market. Read more

Paxos Launches Yield-Bearing Stablecoin on Arbitrum: Paxos has introduced a yield-bearing stablecoin on the Arbitrum network, bringing a new dimension to stablecoin utility. This development allows users to earn returns on their stablecoin holdings, integrating decentralized finance (DeFi) functionality directly into the token. By building on Arbitrum, Paxos benefits from lower transaction costs and faster processing times, enhancing its competitiveness in the rapidly growing stablecoin market. As yield-bearing assets continue to attract attention, this new offering could reshape how stablecoins are utilized, especially within DeFi ecosystems. Read more

Brazil’s Real-Pegged Stablecoin BRL1 to Launch Soon: Brazil's crypto platforms are preparing for the launch of BRL1, a stablecoin pegged to the Brazilian real. This initiative aims to create a stable digital currency that mirrors the country's national currency, offering a reliable medium of exchange for both consumers and businesses. With the BRL1 stablecoin, Brazil continues to innovate within its digital asset space, further bridging traditional finance with blockchain technology. The launch of BRL1 could drive broader crypto adoption across the country, making crypto more accessible to everyday users. Read more

🏦 TradFi Meets Blockchain: A New Era of Finance

Ripple Expands Custody Services with RWA Tokenization: Ripple continues to push forward with its enhanced crypto custody services, now offering banks and fintechs solutions that include real-world asset (RWA) tokenization. This development allows institutions to tokenize and manage physical assets, such as real estate or commodities, on the blockchain. With more financial institutions exploring tokenization, Ripple’s focus on custodial services demonstrates its ambition to become a key player in the broader adoption of blockchain by traditional finance. Read more

Bitpanda Expands with SteelCoin Security Token: Bitpanda has broadened its investment offerings by adding SteelCoin, a security token, to its platform. This move underscores the growing demand for tokenized assets that represent tangible investments, such as commodities and real estate. Security tokens offer a new frontier for investors, providing greater liquidity and accessibility to markets that were previously hard to enter. Bitpanda’s expansion into this space signals a wider trend of investment platforms embracing blockchain for asset management. Read more

NBB Launches Bitcoin-Linked Investment Product in the Gulf: The National Bank of Bahrain (NBB) has introduced the first Bitcoin-linked investment product within the Gulf Cooperation Council (GCC). This groundbreaking offering gives investors in the region exposure to Bitcoin without directly holding the asset. The move underscores the growing institutional interest in crypto assets across the Middle East. As more banks embrace crypto-linked products, the traditional finance world is increasingly incorporating digital currencies into their portfolios, offering new opportunities for diversification. Read more

State Street Explores Tokenized Bonds and Money Market Funds: State Street, one of the world's largest asset managers, is exploring the tokenization of bonds and money market funds. By leveraging blockchain technology, State Street aims to create more efficient, transparent, and accessible financial products. Tokenized bonds offer faster settlement times and lower costs, making them an attractive option for both investors and issuers. This exploration signals that traditional finance institutions are increasingly interested in adopting blockchain for mainstream financial products. Read more

Midas Tokenization Firm Opens to Retail Traders in the EU: In a first for the EU, Midas, a tokenization firm, has opened its MTBILL and MBASIS tokens to retail traders, signaling a new era of accessibility in blockchain investment. By offering tokenized assets to retail investors, Midas is breaking down the barriers traditionally associated with institutional-level investment. This move is significant as it aligns with the broader trend of democratizing access to financial markets through blockchain technology. Retail traders can now access tokenized versions of physical and financial assets, paving the way for more inclusive participation in the financial ecosystem. Read more

💸 Crypto Payments Are Back: More Accessible Than Ever

Stripe’s Return to Crypto Payments: In a significant move, Stripe has reintroduced crypto payment options, starting with USDC stablecoin in the U.S., marking its return after a six-year hiatus. This is a strong signal that mainstream financial services are finding renewed value in crypto payment infrastructure. By offering stablecoin transactions, Stripe aims to bridge the gap between traditional finance and digital currencies, especially for businesses looking to diversify their payment methods. This marks an important shift in how crypto is perceived within financial services. Read more

Alchemy Pay Adds Samsung Pay Integration for Crypto Payments: Alchemy Pay has launched an integration with Samsung Pay, further simplifying crypto payments for users worldwide. This collaboration allows users to make purchases using cryptocurrencies through Samsung Pay’s platform, enhancing crypto's accessibility for everyday transactions. By enabling crypto payments through a widely-used mobile wallet, Alchemy Pay is pushing the boundaries of crypto adoption and providing more practical use cases for digital currencies in daily life. This partnership could also drive broader acceptance of crypto in retail. Read more

🌐 Global Watch: New Crypto Rules & Regulatory Moves

Taiwan’s FSC to Trial Crypto Custody Services: Taiwan's Financial Supervisory Commission (FSC) is set to launch an institutional trial for crypto custody services, demonstrating its commitment to strengthening the digital asset ecosystem. This trial is aimed at ensuring safe and secure storage solutions for crypto assets, potentially leading to wider institutional adoption. The move reflects Taiwan’s cautious yet progressive approach to crypto regulation, balancing innovation with investor protection. Custody services are crucial for attracting institutional investors, and Taiwan’s entry into this space could signal broader regulatory acceptance across Asia. Read more

Thailand’s SEC Proposes Crypto Fund Regulations: Thailand’s Securities and Exchange Commission (SEC) is considering new regulations for crypto investments in mutual and private funds. This regulatory development would bring much-needed clarity for institutional investors looking to allocate capital to crypto assets. As the Thai market matures, regulatory oversight will be crucial to fostering trust and encouraging growth in crypto investments. These guidelines could also serve as a model for other emerging markets seeking to regulate crypto in a balanced manner. Read more

UN Calls for Crackdown on Unlicensed Crypto Exchanges in Southeast Asia; The United Nations has urged Southeast Asian countries to clamp down on unlicensed crypto exchanges operating within the region. This move highlights growing concerns about the risks posed by unregulated crypto platforms, which can be exploited for illicit activities, including money laundering. The call for stricter oversight reflects the global trend toward increased regulation of crypto markets to safeguard investors and protect financial stability. Governments in Southeast Asia may soon respond with tougher enforcement measures. Read more

Hong Kong Issues Third Crypto Trading License as More Approvals Loom: Hong Kong has granted its third crypto trading platform license, marking significant progress in its regulatory framework for digital assets. The city aims to become a hub for crypto innovation, and more licenses are expected to be approved soon. This development reflects Hong Kong’s commitment to balancing innovation with regulatory oversight, encouraging both local and international crypto firms to operate within its jurisdiction. As Hong Kong solidifies its position as a crypto-friendly hub, the region is likely to attract more industry players. Read more

🌎 Latin America’s Crypto Surge

Brazil’s DeFi Integration in Central Bank Digital Currency (CBDC) Pilot: Brazil is taking bold steps toward integrating decentralized finance (DeFi) into its upcoming digital currency, Drex. This pilot aims to explore how DeFi protocols can enhance financial inclusion and streamline operations within the country’s financial system. The central bank’s openness to DeFi integration shows a progressive stance, which could set a precedent for other countries looking to balance traditional finance with blockchain technology. As governments seek innovative ways to foster financial efficiency, Brazil’s initiative could spark a global trend. Read more

Argentina Overtakes Brazil in Crypto User Inflows: Argentina has emerged as Latin America’s leading crypto market, surpassing Brazil in user inflows. This shift highlights the strong demand for crypto in a country facing significant inflation and economic instability. As more Argentinians turn to digital currencies as a hedge against economic uncertainty, the country is becoming a critical hub for crypto adoption in the region. The rising use of crypto in Argentina could influence how other countries in Latin America adopt and regulate digital assets. Read more

Some people dream of buying a Lamborghini with their crypto; others are just looking to get some pizza delivered.

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And while that last one might not take 10,000 BTC anymore, given the problems crypto holders still have when trying to spend their funds in their local economy, it can sometimes feel like it does.

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Could your wallet actually make it easy to spend crypto holdings on everyday purchases, whether at the grocery store, the hairdresser, or even the car dealership? With Kulipa, the answer is yes.

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But whether that happens through a prepaid card or a debit card depends on some characteristics of your wallet. And making the right decision between one or the other is fairly important, as implementing a card is a resource-intensive process.

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How do you know which solution is right for you?

What’s the difference between a prepaid card and a debit card? 

Let’s take a moment to define what we’re talking about. 

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• Whenever a user pays with a debit card, the funds are moved directly from the wallet to the merchant. It provides a seamless purchasing experience and can thus encourage more daily use.
• A prepaid card works the same in the moment of purchasing something, but prior to paying with it users need to put funds in a segregated wallet that the card issuer – Kulipa – owns. They can only pay using those preloaded funds, which can be fine for many scenarios but also means a bit more friction for the end user. 

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Keeping that high level view in mind, let’s dive into the two options to look at the types of wallet they fit best. 

What criteria are a good signal for issuing crypto debit cards?

• Goal - Delighting users: Some wallets are more focused on the user experience than others, whatever their reasoning. Debit cards are great for these, as they take away the friction of needing to regularly add funds to the card. Users simply have a card that’s always connected to their wallet, ready to use whatever funds they have there. So while they take more resources to set up, debit cards do operate much more smoothly once they’re in the users’ pockets.

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• A scaled team: Issuing a debit card takes a certain amount of time to implement. We’re not talking in terms of years, but we are talking about a few months. Aside from validating the program with Visa and/or Mastercard, card production, and BIN issuance, a debit card is technologically delicate to implement. For example, we need to prevent double spending (to avoid authorizing a transaction and then having the user empty their wallet before the funds are actually pulled for settlement); this requires some tailored solutions for each wallet, depending on their infrastructure. Having engineers and product people ready to commit fully to launching a debit card is very important to have a smooth launch. 

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• Available budget: Issuing a debit card is a real process, including many different stakeholders (we covered this in a previous article). As the card issuer, Kulipa handles most of the heavy lifting, from project management to technical integration in our implementation fee. Then there are some costs that come with launching the card program itself: creating a dedicated BIN, implementing the design for the manufacturer and card network, shipping physical cards… When it’s all totaled up, creating and issuing your brand’s debit card is a five figure matter. For this reason, a debit card can be better suited for wallets with a live product and growing traction. 

What criteria are a good signal for issuing crypto prepaid cards?

• Goal - Testing the waters: Prepaid cards are a great way to get a foot in the door with card products. They’re a standard and fast way to test users’ appetite for payments. Once you’re convinced that it works, it’s always possible to upgrade to debit for a superior experience. 

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• Easy implementation: Because prepaid cards always have the same mechanism, there is less tailored work to be done and thus lower implementation fees. There are still some project management aspects that need to be handled – card design, program validation, etc. – but the total cost is always going to be lower than with a debit card program.

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• Speed over UX: There are similar savings in time to market and implementation. As the technical setup is standard, a prepaid card can be live just a few weeks after agreeing on the terms. 

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The virtuous circle of crypto cards

For wallets that start their own card program, whether debit or prepaid, there’s a relatively tight feedback loop that shows why adding the powerful experience of global crypto spending for your users can take your wallet to the next level.

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1. Higher retention, generated by daily wallet use. By enabling crypto to be used everywhere, you’re creating the best possible situation for frequent card usage, leading to increased retention and mindshare. Seeing people pay with a card branded with your wallet’s name also contributes to organic acquisition, further growing your wallet usage.

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2. New revenue streams, enabled by significantly more fund movement. By entering the card transaction flow, wallets can access part of the standard interchange fees (from 0.5%-1.5% of the total price) paid by merchants at each card payment. Additionally, Kulipa only handles stablecoins; this means that Kulipa card users holding only BTC (for example) will have an exchange from BTC to USDC when making a payment, generating in-wallet DEX fees. The same goes for bridging, if there aren’t enough funds on the chain used by the card for payment. 

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3. Additional product features that can be built on top of the card program: cashback, loyalty programs, quests, points, airdrops, etc.  This can have benefits in terms of product, marketing, customer service and more. Working together, your teams can deliver an experience that brings you right back to having more customers using their wallets on a daily basis, letting the whole cycle start back up again.

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In conclusion

• Prepaid crypto payment cards are easier and more affordable to set up, but include an intermediary step (topping up funds on a separate wallet) that creates a bit more friction for the user.

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• Debit crypto payment cards take more time and resources to get up and running, but can create a seamless user experience that matches the typical “pull out my card and tap it on the machine” experience that users expect from traditional finance, eventually leading to even more fund movement.

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For crypto wallets that want to issue their own branded debit cards, there are some technical questions that always come up: How do funds move between various players? How do you prevent double spending? What do security and permissions look like?

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In our next article next week, we’ll explain just that for our debit card! And no matter which option feels like the right one for your wallet now, be sure to follow us to stay up to date on how Kulipa’s bringing the power of crypto payments to users around the world.

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🌎 Global Increase in Government Interest in LatAm and Asia

IMF Reasserts Bitcoin Concerns in El Salvador: The International Monetary Fund (IMF) continues its cautious stance on El Salvador’s Bitcoin experiment, calling for reforms to mitigate potential risks. During an October press conference, the IMF highlighted the need for the Salvadoran government to narrow the scope of its Bitcoin Law and improve oversight. The focus is on limiting public sector exposure to Bitcoin due to its volatility, which could have destabilizing effects on the economy. Despite these warnings, El Salvador remains committed to its Bitcoin policy, with President Nayib Bukele maintaining high public support domestically and internationally for his broader economic reforms. The IMF's recommendations are part of ongoing discussions as the nation seeks economic stabilization support. Read more‍

Taiwan Tightens AML Regulations for Crypto Firms: Taiwan is stepping up its regulatory game with new Anti-Money Laundering (AML) rules for crypto companies. This comes as part of a broader global trend where governments are focusing on ensuring that crypto markets are both transparent and secure. The new regulations will likely impose stricter reporting and compliance requirements for crypto firms, ensuring that Taiwan remains aligned with global financial standards while supporting innovation in the crypto space. Read more‍

Uruguay’s Crypto Regulatory Leap: Uruguay has emerged as a leader in Latin American crypto regulation after its president signed a new comprehensive crypto law. The legislation sets a framework for the use, exchange, and regulation of digital assets, placing Uruguay ahead of many of its regional peers in terms of legal clarity. This is expected to boost crypto adoption and innovation in the country, positioning it as a hub for blockchain development in the region. Read more‍‍‍

China’s Ex-Finance Minister Calls for More Research into Cryptos: Former Chinese Finance Minister Lou Jiwei has voiced the need for increased research and deeper understanding of cryptocurrencies. In a shift from China’s traditionally cautious stance on digital assets, this call for action highlights the growing global importance of crypto technologies. Lou emphasized that a thorough study is crucial for crafting sound policies, particularly in an era where blockchain is increasingly influencing financial systems. While China has largely clamped down on crypto trading and mining, the government's focus on central bank digital currencies (CBDCs) suggests an ongoing interest in blockchain's underlying potential. Read more‍

Argentina’s Vice President Discusses Bitcoin with Bukele: Argentina's Vice President Cristina Fernández de Kirchner has confirmed discussions with El Salvador’s President Nayib Bukele regarding Bitcoin and its role in economic policy. With Argentina grappling with high inflation and currency instability, these talks underscore growing interest in cryptocurrency as an alternative financial system. The conversation reflects the broader trend of Latin American countries considering digital currencies as part of their economic reforms, with Argentina potentially exploring Bitcoin’s future use alongside other financial innovations. Read more‍

💸 SWIFT, PayPal, and Ripple Deepen Engagement in Crypto Payments

SWIFT Joins the Crypto Conversation: In a significant development for institutional crypto adoption, SWIFT, the global financial messaging service, announced new trials to facilitate crypto transactions. The trials, which involve major banks, aim to streamline blockchain-based asset transfers while maintaining regulatory compliance. This could bridge the gap between traditional banking systems and the growing crypto ecosystem, signaling broader acceptance of digital assets. The collaboration between SWIFT and financial institutions shows that the narrative of crypto disruption is slowly evolving towards integration rather than competition. Read more‍

Ripple Expands into Brazil’s Cross-Border Payments: Ripple has partnered with Mercado Bitcoin, one of Brazil’s largest crypto exchanges, to enhance cross-border payment solutions in Latin America. This move reflects the growing demand for efficient and cost-effective remittance systems in the region, where traditional banking solutions often fall short. By leveraging Ripple’s blockchain technology, the partnership aims to bring faster and cheaper international money transfers, reinforcing blockchain’s value in practical, real-world applications. Read more‍

PayPal Makes First PYUSD Transaction: PayPal has completed its first business transaction using PYUSD, its recently launched stablecoin. This transaction was the payment of an invoice to accounting giant Ernst & Young. With a trusted platform like PayPal now fully engaged in blockchain technology, it signals a shift toward greater adoption of stablecoins in everyday business transactions. Read more

🏦 Banks Increasingly Exploring Tokenization Solutions

ANZ Joins Project Guardian for Tokenization: Australia’s ANZ Bank has become the first Australian institution to join Singapore's Project Guardian, a significant initiative focused on exploring real-world asset (RWA) tokenization. By collaborating with blockchain oracle provider Chainlink Labs and investment platform ADDX, ANZ aims to improve interoperability between blockchains. This could streamline the movement of tokenized assets such as commercial paper across financial markets. This project is vital, as the fragmentation of blockchain-based assets has long been a barrier to adoption and liquidity. ANZ’s participation will also explore how its stablecoin A$DC can facilitate these transactions, setting the stage for more efficient capital movements across blockchain networks. Read more

Bitcoin Swings Amid ECB and Börse Stuttgart Blockchain Expansion: The European Central Bank (ECB) and Börse Stuttgart have accelerated their blockchain initiatives, contributing to significant price swings in Bitcoin. While the ECB’s digital euro projects are in full swing, Börse Stuttgart's push toward more blockchain-based financial products demonstrates Europe’s increasing commitment to embracing blockchain in financial markets. This expansion may have contributed to Bitcoin’s volatility as institutional adoption grows and regulatory frameworks evolve. The integration of blockchain into traditional finance, despite regulatory concerns, continues to push Bitcoin into the spotlight, further cementing its role in global markets. Read more

🚀 The Stablecoin Showdown

Robinhood & Revolut Eyeing the $170B Market: As regulatory clarity around stablecoins continues to unfold, fintech giants Robinhood and Revolut are reportedly exploring launching their own stablecoins. While both companies are significant players in digital finance, neither has confirmed a stablecoin launch just yet. This move would place them in direct competition with PayPal’s PYUSD and stablecoin giants like Tether and Circle, which currently holds over 90% of the market. Tether’s dominance, bolstered by its $5.2 billion profits in 2024, sets a high bar for newcomers. The increasing regulation under the EU's MiCA framework might encourage more firms to enter the stablecoin market, but it could also complicate the issuance process with stringent reserve requirements. If Robinhood or Revolut were to proceed, they could challenge Tether's dominance by leveraging their existing user base and innovative tech capabilities. However, they are likely to adopt a cautious approach, given the complexity of regulatory compliance. The next few months will be critical in seeing if these fintech firms take the plunge into stablecoin issuance. Read more‍

Ethena Launches BlackRock-Backed Stablecoin: Ethena has made headlines with the launch of its new stablecoin, backed by BlackRock's tokenized BUIDL fund. The partnership represents a major milestone in the convergence of traditional finance and blockchain, with Ethena aiming to provide a stable and reliable cryptocurrency. The backing by BlackRock, a major global asset manager, is expected to bring both credibility and liquidity to Ethena’s stablecoin, signaling growing institutional interest in the blockchain space. Ethena's move highlights a broader trend where asset-backed stablecoins are becoming key financial tools, serving as a bridge between conventional finance and the crypto world. By leveraging BlackRock’s expertise, Ethena is poised to bring stability to a notoriously volatile sector. This launch also underscores a shift towards regulated and asset-backed stablecoins, which could be the future of the digital asset space, especially as stricter regulations like MiCA come into play. Read more

PayPal Expands PYUSD Access for U.S. Businesses: As of September 25, 2024, PayPal has rolled out its cryptocurrency services, including the PayPal USD (PYUSD) stablecoin, to all U.S. business account holders. This update allows over 38 million U.S. merchants to buy, hold, and sell cryptocurrencies directly from their PayPal business accounts. Additionally, businesses can now transfer PYUSD and other cryptocurrencies to and from external wallets, providing enhanced flexibility for commercial transactions. This move is part of PayPal’s broader strategy to integrate digital currencies into everyday commerce, with PYUSD also available on the Solana blockchain for faster and cheaper transactions. By extending its crypto features to business clients, PayPal continues to drive adoption of blockchain technology across various sectors. Read more

Bolivia Sees Crypto Boom After Legalizing Payments: Bolivia is experiencing a massive surge in crypto transactions, following its decision to legalize cryptocurrency payments. The country saw over a 100% increase in crypto activity, a testament to the increasing global trend towards embracing digital currencies for everyday transactions. This legalization move positions Bolivia as a regional leader in crypto adoption, showcasing the transformative potential of blockchain technology in emerging markets. The surge in transactions indicates that cryptocurrencies are filling a void in regions where access to traditional financial services is limited. With crypto adoption on the rise in Latin America, it will be interesting to see if other countries follow Bolivia’s lead. Read more‍

Circle Launches Compliance Engine for Blockchain: Circle introduced the Compliance Engine, a tool to simplify regulatory checks for businesses using its programmable wallets. It includes features like transaction screening and monitoring to detect risky behavior in real-time. Upcoming additions, such as the Travel Rule, will help companies meet international compliance standards, making it easier to operate within the digital asset space while adhering to regulations. Read more

🏦 TradFin Embracing Change

‍Visa’s Bold Move to Aid Banks in Issuing Stablecoins: Visa, in a move outside of its traditional card business, has launched a platform designed to help banks issue their own fiat-backed stablecoins. By providing a robust framework for banks to integrate stablecoin issuance, Visa underscores the growing interest of traditional financial institutions in blockchain. The company’s platform will help banks navigate the complexities of launching and maintaining stablecoins, ensuring compliance with evolving regulations. As the race to dominate the stablecoin market intensifies, Visa's involvement is likely to accelerate adoption across the banking sector, further blurring the lines between crypto and traditional finance. Read more‍

Swiss Blockchain Firms Boost SME Tokenization: In an interesting move, Swiss blockchain companies Taurus and Aktionariat have joined forces to launch the first regulated secondary market for small and medium-sized enterprises (SMEs). This partnership leverages Aktionariat's expertise in tokenizing Swiss equity shares and Taurus' trading technology to create a blockchain-powered marketplace. The aim is to increase liquidity and market access for SMEs, allowing investors to trade tokenized shares of firms like RealUnit Schweiz AG on the Taurus Digital Exchange (TDX). This initiative promises to enhance the accessibility of equity investments while preserving traditional rights, showcasing the potential of blockchain to transform private capital markets. The project is expected to go live in November 2024, with more companies likely to follow, expanding the ecosystem of tokenized SMEs. Read more‍

🌍 Government's initiatives:Regulations and CBDC

Dubai Updates Marketing Regulations for Crypto Companies: Dubai's Virtual Assets Regulatory Authority (VARA) has released new guidelines for marketing and promotions within the cryptocurrency space, aimed at enhancing transparency and investor protection. These updates come as part of a broader push by VARA to position Dubai as a global crypto hub while ensuring a safe environment for both businesses and investors. With this regulatory clarity, Virtual Asset Service Providers (VASPs) operating in Dubai must adhere to stringent rules on marketing communications, including clear risk disclosures. Read more‍‍‍

Digital Euro: Strengthening Financial Sovereignty in Europe: As Europe moves closer to launching its digital euro, the European Central Bank (ECB) has emphasized its potential to enhance financial sovereignty and resilience. By introducing a central bank digital currency (CBDC), the ECB aims to safeguard European monetary autonomy amid increasing competition from private cryptocurrencies and foreign digital currencies. This initiative aligns with broader efforts to digitize financial systems globally, but it also faces challenges around privacy, adoption, and the balance between innovation and regulation. The digital euro could play a critical role in the future of European finance, offering a secure and regulated alternative to decentralized digital assets. Read more

Bitcoin started in 2008 as a mean of payment, and with Stripe re-authorizing stablecoins, we’re circling back to it. As their total supply hovers around all-time-highs in August at $154bn+, stablecoins potential is undeniable.

Problem is, stablecoins in and out of themselves don’t solve any problem - for now, they are mostly regarded as the safest way to be exposed to crypto. But their true potential is far greater: instant settlement, easy access to the dollar, free-of-charge remittance - the use cases are legion. However, such potential can only be exploited when stablecoins get more accessible, or better embedded in the existing financial infrastructure.

We need a way to do just that, and wallets with a Web2 UX like Opera Minipay, Sling or Payy might be the solution. The self-custodial products are embedded in a great user experience, enabling both decentralised operations while removing friction for the user. Could embedded wallets be the gateway to mass stablecoin adoption?

We sat down with Mathilde David, Product Lead for Stablecoin Movement at Paxos, to explore the challenges and opportunities ahead.

1. What are the current issues slowing down stablecoins adoption?

Despite their growing popularity, stablecoins are still grappling with a couple of important challenges before they can achieve mainstream adoption.

Top of the list is the lack of regulatory clarity. Governments worldwide are struggling to classify and regulate this new asset class, creating a climate of uncertainty that deters businesses from entering the market and ultimately slows down innovation.

Second is accessibility. Having to on and off-ramp creates a significant barrier to entry for non-tech savvy users. Because of that, most of stablecoins current usage isn’t focused on making our payments more efficient, but rather on creating profits on-chain. According to Visa, more than 90% of stablecoin transaction volumes are made by bots, automating transactions such as arbitrage, MEV plays or liquidity providing on the blockchain.

Stablecoins need a UX lift, and Mathilde agrees:

"Much work is needed to simplify the Stablecoin payment experience. Today, as an example amongst many, users often have to choose which chain they want to make payments from: should they pick Ethereum, Solana, Polygon? That's typically the type of complexity that should be abstracted."

Such complexities not only deters new users but also limits the potential use cases of stablecoins. To make them more appealing to mainstream audiences, the user experience needs to be simplified and streamlined. This means abstracting away the technical complexities of blockchain technology and creating a more intuitive and user-friendly interface.

Until these challenges are addressed, stablecoins will likely remain confined to the crypto-native space, limiting their potential to revolutionize the broader financial landscape.

So let’s talk about just that: if it needs to be simple to pay with stables for people to start using them, what would the ideal payment experience in stablecoins look like? Embedded wallets might have the answer.

2. Embedded wallets, the gateway to mainstream stablecoin adoption?

Let’s think about the money sending process for a Venmo user. Enter a phone number and a PIN, and voilà, a payment has been made. No IBAN to register in the app, no beneficiaries to add to your bank, and god forbid, no QR code to scan.

Isn’t it the user experience stablecoins need to become mainstream? Stripped down to the bare minimum: pay with a phone number.

For Mathilde, it’s pretty clear - consumers habits are already there, they’re just waiting on the UX:

“There's definitely habits and a lot of trust from consumers to use digital wallets. It makes it natural to adopt crypto wallets with an intuitive experience, such as Metamask or Phantom. The next step is ensuring users can easily make payments with these wallets."

Reading this, one might think that delightful payment means like CEX cards (Binance, Coinbase etc) already exist, and such payment experiences are already available. Then, why hasn’t it been widely adopted yet?

Well, there are 2 reasons for that:

1. Most cards aren’t self-custodial (since they are issued by CEXs). As such, they often have hefty fees (as high as 1.5% on every payments) and are subject to all the issues CEXs have faced in the past (FTX, Genesis etc).
2. The few self-custodial cards that exist, like Ledger’s CL card, are pre-paid for the most part, adding significant friction in the user experience prior to paying, and limiting adoption.

At the end of the day, actually getting self-custodied stablecoins is very hard for the average user, and the options for paying with them are currently not optimal (although we’re working on it at Kulipa with pure debit cards).

So let’s say embedded wallets grow their user base, and that stablecoin-based means of payments are improved. Well, it’s just the beginning of the story. Wallets might be the best enabler for stablecoins payments, they won’t help with global acceptance just by themselves. They are merely the distribution tool, and we need the rest of the party to join. And who might that be?

3. Payment infrastructure providers are the next adopters

Wallets and their end users are only one part of the equation. Merchants and payment infrastructure providers are the two others.

For merchants, stablecoins are just a net positive, because it solves two of their biggest problems: long settlement times and intermediaries costs. Mathilde explains:

“I spent a lot of time with US merchants during my time at Square. From their perspective, any dollar counts. They are focused on minimizing the costs to operate payments, and stablecoins on low cost chains are a great solution for this”

Another interest merchants have in accepting stablecoins is the access to a global pool of consumers. It’s very expensive and a lot of work for merchants to be able to accept payments from any place in the world; a painful country by country integration is usually the way to go. On the other hand, 560 million people worldwide hold crypto. This is as many international consumers within reach without much work to do.

So it’s pretty clear that merchants are pretty incentivized to accept stablecoins. That’s 2 out of 3 parts of the equation validated. What about payment infrastructure providers? You know, those who build the apps, the payment rails, the protocols.

After some tough love in the last couple years, providers are coming back to stablecoins. In 2024, there has been a large number of good news for stablecoin’s acceptance.

Just to name a few:

• Revolut launched their own crypto payment cards two weeks ago,
• As mentioned, Stripe’s validation is pretty big for the industry,
• PayPal Xoom now offers free cross-border payments in 160 countries using PYUSD,
• Block has partnered with Yellow Card to facilitate affordable transactions in Africa,
• Grab, Southeast Asia's ride-hailing giant, has begun accepting stablecoin payments
• Mastercard announced exploring blockchain payments with 5 web3 startups, including Kulipa.

Things are moving. Startups are launching in the space, and incumbents are progressively integrating this new mean of payment. But for Mathilde, stablecoins shouldn’t limit themselves to getting adapted to traditional finance (TradFi). It’s only the beginning of true innovation:

“Stablecoins offer a chance to innovate beyond traditional finance.  There’s a real opportunity to create a better financial system for everyone. Paxos did this with the Lift Dollar, a dollar-backed stablecoin that automatically distributes daily yield when held in your wallet, turning it into a savings account.”

We’re getting there

Embedded wallets are the best gateway for stablecoins, as their user experience gets clearer and easier to handle. Payments rails are progressively integrating stablecoins after some much needed ecosystem consolidation - and merchants are all for it.

At the end of the day, stablecoins true potential might be just within reach, much closer to reality than what we expect. Will the rest of Web3 follow in their steps?

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About Kulipa

Kulipa helps non-custodial wallets issue crypto payment cards. With Kulipa cards, wallets can generate more fund movement, easily develop new use cases and maximize organic acquisition. Get in touch here!

The views expressed in this article are solely those of the author and do not necessarily reflect the official position or opinions of Paxos.”

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💸 Stablecoin Expansion: USDC and PYUSD on the Move, and more

Circle Expands USDC’s Footprint Across Latin America: By supporting local bank transfers via PIX and SPEI, Circle is making waves with the expansion of its USD Coin (USDC) stablecoin to Brazil and Mexico, two crucial markets in Latin America. This move is a strategic push to enhance financial inclusion and simplify cross-border transactions. With the demand for remittance services and digital payments growing rapidly in these regions, USDC could become a key enabler of cheaper, faster, and more secure financial transfers. This marks another step in Circle’s efforts to make USDC a leading stablecoin for everyday transactions globally. Read more

PayPal's PYUSD Takes a Step Forward in Settlements: PayPal’s PYUSD stablecoin has been selected for transaction settlement on the newly launched TrueX Exchange, positioning it as a significant tool for cross-border and digital transactions. With PayPal’s backing, PYUSD is poised to challenge traditional settlement systems by offering a more efficient, blockchain-powered alternative. The adoption of mainstream stablecoins for institutional-level settlements is a clear signal of the shift towards decentralized finance becoming part of traditional financial services. Read more

Circle and Sony Team Up: USDC on Soneium: In an exciting partnership, Circle and Sony’s Block Solutions Lab have launched USDC on the Soneium blockchain, only a month after the launch of the chain. This collaboration reflects the expanding integration of stablecoins in different sectors, particularly in gaming and digital assets. Soneium, known for its blockchain solutions in entertainment, seeks to improve in-game economies and cross-platform digital asset exchanges, and Circle’s USDC stablecoin is a critical enabler. With this move, Sony Block Solutions is bringing the stability and liquidity of USDC to digital entertainment platforms, pushing the frontier of decentralized gaming ecosystems. Read more

MoviePass Introduces USDC Payments with Sui Blockchain: MoviePass, a subscription-based movie service, is stepping into the blockchain space by enabling USDC payments on the Sui Layer-1 network. This integration allows MoviePass users to settle transactions using USDC, offering enhanced security and speed for payments. It’s part of MoviePass’s broader strategy to adopt innovative technologies for customer experiences, leveraging the Sui blockchain’s robust infrastructure. Blockchain integration in entertainment is expanding, and MoviePass’s adoption of USDC demonstrates the growing utility of stablecoins in diverse sectors. Read more.

CEX.IO Teams Up with MoneyGram and Stellar for Cash Solutions: CEX.IO has partnered with MoneyGram and Stellar to enhance crypto cash-in and cash-out services. This collaboration is aimed at making the conversion between fiat and cryptocurrency more seamless, utilizing MoneyGram’s global reach and Stellar’s efficient blockchain. The move signals increasing accessibility in cryptocurrency for mainstream users, particularly those in underbanked regions. This partnership is a step toward simplifying the way people interact with crypto by making it more accessible through established financial services. Read More

🏦 National Digital Currencies: The Future of Money?

Barclays Paves the Way for a Digital Pound: Barclays has taken significant steps toward the potential implementation of a digital pound, exploring three key use cases: personal payments, merchant payments, and secure transactions. In a series of papers, the bank emphasized the need for "functional consistency" to ensure seamless integration between digital pounds and traditional bank money. Notably, they propose a robust financial market infrastructure (FMI) to streamline operations, ensuring that both digital and fiat currencies work harmoniously.Barclays' exploration aligns with the UK's broader Central Bank Digital Currency (CBDC) initiatives, which are expected to finalize by 2025-2026. The potential adoption of a digital pound could modernize the UK’s financial ecosystem, increase payment efficiency, and improve trust in digital transactions by leveraging blockchain-like security to prevent fraud. Read more

Swiss SIX Stock Exchange Eyes Crypto Expansion in Europe: In a significant development, Switzerland's SIX Stock Exchange is considering launching a dedicated crypto exchange in Europe. This move reflects a growing recognition of cryptocurrencies and digital assets as a mainstream asset class, further enhancing the legitimacy of crypto trading on traditional financial platforms. By integrating crypto assets into established exchanges, the bridge between decentralized finance and traditional markets continues to strengthen. With MiCA in place, it's logical to see an acceleration of institutional adoption of crypto. Read more

🏛️ Governments Embrace Crypto

Property Rights & Legal Evolution in the UK: In a landmark ruling, the UK High Court has officially recognized Tether (USDT) as property under new regulatory frameworks. This decision not only strengthens the legal standing of stablecoins but also sets a precedent for how digital assets will be treated in legal and financial contexts moving forward. This ruling is part of a larger trend of governments adapting their legal systems to accommodate the growing presence of cryptocurrencies. This recognition of stablecoins as property could have far-reaching implications for financial regulation and investor protection. Read more

Louisiana Embraces Crypto for State Payments: In a forward-looking policy shift, Louisiana’s state government has begun accepting cryptocurrency payments for state services. This move signals growing state-level acceptance of digital currencies and highlights the potential for broader government adoption in the U.S. By allowing residents to pay for services using cryptocurrencies, Louisiana is promoting innovation and setting a precedent for other states. Read more

🔧 Giants Strengthen Blockchain Adoption

JPMorgan’s Bold Blockchain Move: Pioneering Blockchain Adoption: JPMorgan Chase CEO Jamie Dimon recently disclosed that the banking giant is one of the largest adopters of blockchain technology. Despite Dimon’s previous skepticism about cryptocurrencies, JPMorgan has embraced blockchain for its potential to revolutionize payment systems and enhance financial transparency. By integrating blockchain into its operations, the bank is further demonstrating how traditional financial institutions can leverage decentralized technologies to stay competitive and efficient. Blockchain enthusiasts and finance professionals alike should keep an eye on JPMorgan as it continues to shape the narrative around institutional blockchain adoption. Read more

Google Cloud Supports Blockchain: A New RPC Service: Google Cloud has launched its blockchain RPC service, designed to support Web3 developers across Ethereum and other blockchains. This service simplifies the development of decentralized applications by providing infrastructure to developers, further pushing blockchain adoption in mainstream technology sectors. Google’s entry into blockchain infrastructure provision shows how major tech firms are integrating decentralized technologies into their services. Read more.

How do card payments work, and what does it take to enable everyday purchases with crypto? 

A short guide to using existing financial infrastructure to make crypto debit cards a reality

“Wallets, stablecoins, gas, security keys… Crypto is just too complicated for everyday payments.”

As we’ve developed our crypto debit cards at Kulipa, we’ve heard that a lot – even from close friends and crypto natives. But here’s the thing: it’s not true. Or at least, it’s not any more true for crypto than it is for fiat. After all, those same friends aren’t going around saying:

“Issuer processors, interchange fees, fraud alerts… Fiat is just too complicated for everyday payments.”

Why? Because traditional banking has (largely) taken all of those complications away from the end user, at least as far as everyday payments are concerned. Today’s consumer is happy with how payment transactions work because they have zero idea of what’s happening in the background. For them, it’s simply “Pick what I want, put my card up to the machine, and go about my day.”

Kulipa is bringing that same ease of use to crypto payments, all the way down to having a debit card that you can use wherever Mastercard and Visa are accepted and that – most importantly – works the exact same way from a user’s standpoint.

But to do that, we’ve had to take all of the complications that exist for crypto (and fiat!) and make them disappear for the end user. Specifically, the complications exist in two flows: the payment authorization flow and the clearing and settlement flow. 

Below, we’ll walk you through how we’ve done it, giving wallets the power to issue their own branded cards to all of their users.

The payment authorization flow in a nutshell

When we go into a shop and pay for groceries, or enter our card information to buy some new clothes online, we’re all used to the slight lag between the moment when the card is scanned and when the transaction is approved.

That lag is covering up a lot of steps – steps that the end user is never aware of, and quite simply doesn’t need to be aware of. Importantly, adapting these steps in order to use crypto in everyday payments doesn’t require a completely new flow, but only changing one particular aspect of it! But we’ll get back to that later.

Here’s a general schema of the payment authorization flow:

Let’s break it down: What happens when a consumer says “Yes, I want a coffee”? 

(Hold tight, jargon incoming.) 

The consumer provides their card information to the merchant, through a physical point of sale (POS) like Ingenico (for a coffee at Starbucks).

Now, one might think that the PSP or POS goes directly to the consumer’s bank to ask if the customer has enough money. But they don’t – at least not directly. Instead, they need to talk to the card network, which for the large portion of transactions means the household names of Mastercard or Visa. These card networks are actually just a hub that processes all authorization requests. 

And because getting connected to these card networks is very complicated, long and expensive, there’s another intermediary that exists: payment processors, who take on the grueling task of connecting individual banks to card networks. 

Before diving deeper on payment processors, a word about banks. In the world of payments, the customer’s bank is referred to as the issuing bank – because they’re the ones issuing the card that’s used for the payment; the merchant’s bank is referred to as the acquiring bank, because they’re the ones acquiring the money from the transaction.

Now, back to payment processors. None of them are household names, such as Episode6 on the issuing side or Lyra on the acquiring side, because their logos aren’t riding around in your back pocket all day. They’re still critical within the flow, though, because they’re the ones communicating with the banks. 

Payments processors come in two flavors: the issuer processor, connecting the issuing bank to the card network, and the acquirer processor, connecting the acquiring bank. 

So in sum, the POS/ PSP sends the authorization request to its acquirer processor, who forwards it to the card network, who forwards it to the issuer processor, who finally asks the issuing bank: “Does your customer have enough money in the bank?” 

If yes, the answer goes through the same path back to the POS/ PSP terminal, where the consumer and merchant can see “Payment accepted”. At the same time, a message is sent by the acquirer processor to the acquiring bank to say that the merchant’s account can expect a payment. 

Eventually.

Because even though the payment authorization flow only takes a few seconds, there is that second flow mentioned earlier that now comes into play: the clearing and settlement flow.

The clearing and settlement flow in a different nutshell

Even though the consumer and the merchant both feel the transaction has been completed, in reality the actual fund transfer won’t happen for another 24-72 hours (depending on when the transaction takes place, for example during the weekend, right before a holiday, etc.). 

Completing the fund transfer first requires the payment to be cleared: at the end of the day, the merchant shares a clearing file to the acquirer, via its acquirer processor. The clearing file is used by the banks to reconcile which payments have been made throughout the day by their customers, and towards which banks. The acquirer then sends the file to the card network who forwards it to the issuing bank.

Upon receiving it, the issuing banks will send the money from the consumers' accounts to the card network, specifically to a settlement account. Once there, the money will be sent back out from the settlement account to the merchant’s bank, and the transaction is complete.

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Kulipa: Your new card issuer

That’s almost 600 words to describe what, to the consumer and the merchant, takes a few seconds on one little machine. And that’s what we mean when we say that fiat payments aren’t simple – they just feel simple!

That’s also why we create frictionless crypto debit cards: not because they’re simple, but because we already know how to adjust the existing system to accept crypto.

Let’s go back to our graphics, now showing how Kulipa can become a part of them in order to issue crypto debit cards that work in the same simple-for-the-end-user way that traditional payment cards do.

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Kulipa stands in the same place as the traditional issuing bank, as we are the ones issuing the debit cards.

At the same time, we do add in another step – completely unseen to the consumer and the merchant! – that connects us to the wallet where the consumer has their crypto holdings. With that verification, we are able to use the rest of the transaction rails that support frictionless everyday payments.

At the risk of becoming repetitive, the point isn’t that all of this is simple: it isn’t! And the payment industry is big business because of it. To compensate for that complexity, every transaction in the EU includes a 0.2% fee paid by merchants that is shared out among all of the parties involved (and that fee is roughly 1.5% in the rest of the world). This is called the interchange fee, and we share it with wallets. Those fees are there to ensure that the transaction process looks simple, and they can work for both fiat and crypto.

At least, they can now that Kulipa is here 🙂

Want to find out more? Head over to our homepage. 

Want to create your wallet’s branded cards to give your users the power of crypto in their pocket? Set up a call with us here. 

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⚖️ Regulatory evolutions around the World

UK Moves to Recognize Crypto as Personal Property: The UK Parliament has introduced the "Property (Digital Assets, etc.) Bill," a groundbreaking legislative move to recognize digital assets, including cryptocurrencies and NFTs, as personal property under English and Welsh law. This development is set to provide enhanced legal protection for crypto asset owners against fraud and scams. It introduces a new category of personal property, "things," specifically for digital assets, separate from "things in possession" (like cars) and "things in action" (like debts). The bill aligns with the UK's ambition to become a global crypto hub by providing a clearer legal framework that encourages investment and innovation in the sector. Justice Minister Heidi Alexander emphasized that the law's update is crucial to keep pace with evolving technologies, ensuring the UK remains a leader in crypto assets regulation and related legal matters. Read more‍

Hong Kong Tightens Crypto Regulations: Hong Kong's Securities and Futures Commission (SFC) has introduced a new licensing regime for crypto trading platforms, specifically for over-the-counter (OTC) activities. This move aligns with the city’s broader strategy to become a regulated hub for digital assets, emphasizing investor protection while promoting a secure trading environment. The new regulations aim to deter money laundering and fraud, setting a precedent for other jurisdictions considering stricter crypto oversight. Read more

Latvia's Central Bank Offers Pre-Licensing Consultations: The Central Bank of Latvia has initiated pre-licensing consultations for crypto firms seeking to establish operations in the country. This proactive approach aims to provide clarity and support to businesses navigating the regulatory landscape, reinforcing Latvia's commitment to fostering a balanced environment for digital innovation. Read more‍

North Carolina Passes Anti-CBDC Legislation: North Carolina’s legislature has successfully overridden the governor's veto of an anti-central bank digital currency (CBDC) bill, becoming one of the few states to actively push back against the federal exploration of CBDCs. The bill prohibits the use of a potential US digital dollar in the state, reflecting broader concerns about financial privacy and government control over digital transactions. Read more‍

Kraken Criticizes Australian Regulatory Uncertainty: Kraken, a major crypto exchange, has criticized the Australian Securities and Investments Commission (ASIC) for creating regulatory uncertainty that could stifle innovation in the country's digital asset sector. The exchange highlighted concerns over inconsistent enforcement actions and the lack of clear guidelines, calling for a more transparent regulatory framework to support the growth of the crypto industry in Australia. Read more

Binance Subsidiary Secures Indonesian Crypto License: Tokocrypto, a Binance subsidiary, has successfully secured a crypto license in Indonesia, enabling it to offer regulated services in the rapidly growing Southeast Asian market. The licensing aligns with Indonesia's broader efforts to regulate the crypto space and attract global players to its market, ensuring investor protection and market integrity. Read more‍

Binance and Bybit Near Regulatory Approval in Kazakhstan: Binance and Bybit are close to becoming Kazakhstan's first regulated Digital Asset Trading Facilities (DATFs), as the country continues to establish itself as a regional hub for crypto innovation. The licensing of these exchanges is expected to enhance investor confidence and attract more players to the Kazakhstani market. Read more‍

💵 Growing usage of stablecoin for real world use case

‍‍‍‍Visa, Stablecoins, and Real-World Applications: A recent survey conducted by Visa, Brevan Howard, and Castle Island Ventures reveals growing confidence in the real-world applications of stablecoins. The study shows that institutional players are increasingly exploring stablecoins as efficient payment mechanisms, hedging instruments, and tools for remittances, with an eye toward integrating them into existing financial systems. The adoption of stablecoins is seen as a bridge between traditional and decentralized finance, offering a more stable and scalable solution compared to more volatile cryptocurrencies. Read more‍

SWIFT’s Ambitious Experiment with Tokenized Assets: SWIFT, the global financial messaging network, is set to pilot solutions that interlink fiat currencies with tokenized assets. This initiative aims to create seamless interactions between digital and traditional assets, facilitating smoother cross-border transactions. By testing interoperability, SWIFT hopes to enhance the efficiency of global financial markets, addressing key concerns around liquidity and settlement delays. This move signals a significant step toward the broader institutional adoption of blockchain technologies. Read more‍

Trust Wallet CEO Sees Growth in Africa and South Asia: Trust Wallet's CEO has noted significant growth in crypto adoption in Africa and South Asia, driven by a rising demand for stablecoin access to USD. As users in these regions seek alternatives to unstable local currencies, stablecoins are increasingly being viewed as a reliable store of value and medium of exchange, fueling further interest in crypto services. Read more

India Leads in Global Crypto Adoption Index: India has emerged as the leader in the Global Crypto Adoption Index by Chainalysis, demonstrating the highest levels of cryptocurrency adoption worldwide. The index, which considers factors like on-chain activity, trading volume, and peer-to-peer transactions, reflects India's rapidly growing interest and participation in the crypto economy. This comes despite regulatory uncertainty and restrictions within the country, underscoring a robust grassroots-level enthusiasm for digital assets. As India's crypto ecosystem expands, it poses an interesting case study of how local markets can thrive amidst regulatory ambiguity. Read more

Singapore's Stablecoin Payments Soar: Singapore's stablecoin payments reached a staggering $1 billion in Q2, reflecting a surging demand for digital payment solutions. This growth highlights the increasing reliance on stablecoins for financial transactions in the region, driven by their lower volatility and faster settlement times. As more businesses and consumers turn to stablecoins for daily transactions, Singapore's position as a leading crypto-friendly hub continues to solidify. Read more‍‍‍

PayPal and Venmo Partner with ENS for Crypto Payments: PayPal and Venmo have announced a new partnership with the Ethereum Name Service (ENS) to facilitate crypto payments. This collaboration allows users to create customized payment addresses linked to their ENS names, streamlining the process of sending and receiving crypto assets. The integration highlights the growing trend of combining traditional finance with blockchain technologies to create more seamless and user-friendly payment solutions. Read more

BBVA Expands Crypto Services in Switzerland: BBVA has expanded its crypto services in Switzerland by integrating USD Coin (USDC) into its offerings. This expansion reflects the bank's commitment to meeting growing customer demand for stable and regulated digital asset services, solidifying its position as a pioneer in the adoption of cryptocurrencies in traditional banking. Read more‍

📈 Global usage of crypto still steadily growing

Crypto Ownership Remains Steady: A recent report shows that crypto ownership levels have remained steady across the US, UK, France, and Singapore, despite regulatory uncertainties and market fluctuations. This consistency suggests that digital assets have established a firm foothold among retail investors, who continue to see value in holding cryptocurrencies as part of a diversified portfolio. The findings underscore a maturing market where digital assets are increasingly viewed as viable long-term investments. Read more

Peaq Network and Lufthansa: Pioneers in Web3 Innovation: Peaq, a decentralized physical infrastructure network (DePIN), has attracted the interest of giants like Lufthansa and Deutsche Telekom, signaling a significant step forward for Web3 adoption. These companies have committed to leveraging Peaq's Web3 framework to create decentralized applications (dApps) that promote more efficient and transparent logistics, air travel, and telecommunications services. The collaboration is expected to drive Web3 innovation across various sectors, emphasizing the real-world utility of blockchain technology beyond just cryptocurrencies. This partnership reflects a growing trend of traditional industries exploring blockchain solutions to enhance their operational efficiency and user experience. Read more

Nubank Shuts Down Nucoin Operations: In a surprising move, Nubank, the largest digital bank in Latin America, has decided to terminate its native cryptocurrency, Nucoin, as part of its restructuring process. Launched in partnership with Polygon in March 2023, Nucoin aimed to provide rewards and incentives to Nubank's customers. However, due to market volatility, Nubank has opted to suspend all trading and conversion activities related to Nucoin, giving users a grace period of 15 days to convert their tokens to Bitcoin or USDC. This decision marks a significant shift in Nubank’s crypto strategy and raises questions about the future of digital banking in Latin America. Read more‍‍‍‍‍

Swiss Crypto Bank Expands in Austria: Amina, a Swiss crypto bank, has obtained a Virtual Asset Service Provider (VASP) license in Austria, allowing it to offer its services across the European Union. This move reflects the bank's strategy to expand its footprint in Europe and capitalize on the growing demand for regulated crypto services. Amina's expansion comes amid increasing scrutiny of digital assets by European regulators, underscoring the importance of compliance in the crypto sector. Read more‍‍‍‍‍

Russian Businesses Push for Unrestricted Crypto Use: Russian businesses are urging Moscow to allow the unchecked use of cryptocurrencies and stablecoins, especially for international transactions. This push comes amid ongoing Western sanctions, highlighting the strategic importance of digital assets as tools for bypassing economic restrictions. Read more‍

Russia Develops Crypto Infrastructure to Evade Sanctions: Russia is reportedly developing its crypto infrastructure to evade Western sanctions, as per a recent report by Chainalysis. The report suggests that Moscow is increasing its use of cryptocurrencies to facilitate international trade and circumvent restrictions, posing new challenges for global financial regulators. Read more

💵 Stablecoins and CBDC: The Path to Mainstream Adoption

Nigeria is moving in the right direction: Nigeria’s Securities and Exchange Commission (SEC) has granted “Approval-in-Principle” to two digital asset exchanges—Busha Digital Limited and Quidax Technologies Limited. These approvals mark a crucial step in integrating cryptocurrencies within Nigeria’s financial ecosystem, aligning with the SEC’s objective of supervise youth participation in the capital market. The initiative falls under the Accelerated Regulatory Incubation Programme (ARIP), which aims to test innovative business models in a controlled environment. The SEC has also admitted five firms, including Trovotech Ltd and our partners at Wrapped CBDC Ltd, to test their models under its Regulatory Incubation Program. The SEC has also signaled a crackdown on unregulated platforms, reinforcing the importance of compliance in this rapidly evolving industry. Read more

Bridge Network Raises $58M. In the world of decentralized finance, the Bridge Network, founded by former Square and Coinbase executives, has successfully raised $58 million to establish a new stablecoin payment network. This initiative underscores the increasing demand for decentralized payment solutions that offer users enhanced security and transparency and are vital for improving accessibility and efficiency in global financial transactions. This development also highlights the ongoing trend of experienced professionals from traditional tech companies transitioning into the blockchain space, bringing with them valuable expertise. The funds will be used to further develop the network’s infrastructure, with a focus on interoperability between different blockchain networks. Read more‍

Ripple Expands with New Stablecoin Initiatives: Ripple is reportedly "very close" to launching a new stablecoin, expanding its footprint in the digital payments space. This stablecoin aims to enhance Ripple's cross-border payment solutions by providing a faster and more efficient alternative. Additionally, Ripple has announced plans to introduce EVM-compatible smart contracts on the XRP Ledger, which could open new possibilities for decentralized applications (dApps) on the platform. The company also plans to launch a stablecoin offering in Japan, reflecting its strategy to strengthen its presence in Asia. Read more‍

Synthetic Stablecoin Innovation by DWF Labs: DWF Labs has announced the creation of a synthetic collateralized stablecoin, a unique financial instrument designed to offer stability while being backed by a diversified pool of assets. Unlike traditional stablecoins, this new model aims to provide a more resilient structure against market volatility. On the flip side, it is also more difficult to fully prove the pegging of these stablecoin. It will lead to regulatory challenges, especially under miCA in Europe, where it will not quality as an eMoney Token, and its simplified framework. Read more

Brazil’s CBDC Pilot Moves Forward: Brazil's Central Bank has selected Visa and Santander for Phase 2 of its Central Bank Digital Currency (CBDC) pilot. This phase will test the implementation and interoperability of the digital real within the country’s financial ecosystem. The move underscores Brazil's proactive stance in exploring CBDCs and reflects a broader trend of countries experimenting with digital currencies to modernize their monetary systems. It will be interesting to see how this initiative will interoperate with the Pix instant payment scheme. Read more‍‍‍

🌐 Regulations updates from around the world

Qatar’s Digital Asset Framework: A Step Toward Clarity: Qatar has launched a comprehensive framework to regulate digital assets, aiming to enhance clarity and security for participants in its crypto market. Following the lead of Dubai in the reagion, this move positions Qatar as a progressive player in the digital asset space, aiming at promoting responsible innovation while mitigating associated risks. Read more.

UK Crypto Firms Struggle with Licensing: The UK's Financial Conduct Authority (FCA) revealed that 87% of crypto firms failed to secure licensing under the new anti-money laundering (AML) rules. This high failure rate underscores the challenges crypto companies face in meeting the standard financial regulatory standards. The FCA's stance reflects the UK’s cautious approach to regulating the digital asset industry, which aims to protect consumers while fostering innovation. Read more‍

Venezuela’s Call for a Return to Crypto: President Nicolás Maduro has reiterated the need for Venezuela to return to the "crypto path," following a period of regulatory stagnation. Maduro’s administration initially pushed for the adoption of Petro, a state-issued cryptocurrency, but faced challenges due to sanctions and economic conditions. This renewed call reflects Venezuela's ongoing interest in leveraging blockchain technology to circumvent economic restrictions and foster financial independence. Read more

🏦 Acceleration of TradFi adoption of crypto

Swiss Banking Giant ZKB Embraces Crypto: Zurich Cantonal Bank (ZKB), one of Switzerland’s largest banks, has partnered with Crypto Finance to offer crypto brokerage services. This collaboration signifies a growing acceptance of digital assets among traditional financial institutions in Switzerland, reinforcing the country’s reputation as a hub for blockchain innovation. Read more‍

Siemens’ $300 Million Blockchain Bond: Siemens issued a $300 million digital bond using blockchain technology, demonstrating a commitment to leveraging innovative financial instruments. This digital bond is based on Germany's Electronic Securities Act, which allows for the issuance of securities via blockchain, highlighting a trend of traditional companies adopting blockchain technology for greater efficiency. Read more‍

Japan’s Major Banks Test Cross-Border Stablecoin Transfers: Three major Japanese banks are collaborating on a new platform to test cross-border stablecoin transfers, an initiative that could revolutionize international payments by reducing costs and increasing speed. This pilot underscores Japan's commitment to exploring blockchain technology's potential for enhancing financial infrastructure. Read more‍

🚀 Stablecoins and Digital Currency Evolution

Tether Abandons Blockchain Plans: Tether has scrapped plans to launch its own blockchain for its USDT stablecoin. The move suggests a strategic focus on consolidating USDT’s existing multi-chain presence rather than taking on the risks of developing new blockchain infrastructure. In a competitive and regulatory-heavy market, this could be a wise choice to maintain liquidity and trust. Tether seems to be prioritizing resilience and reinforcing its current market leadership amid growing competition from other stablecoins like Circle’s USDC and PayPal’s PYUSD. Read more

PayPal Launches PYUSD Rewards: PayPal has teamed up with Anchorage Digital to launch a rewards program for its PYUSD stablecoin, aiming to integrate it into everyday transactions. This program offers users PYUSD rewards, potentially boosting adoption and bringing digital assets closer to the mainstream. The partnership emphasizes the importance of regulated custody for digital assets but may face hurdles from regulatory scrutiny and consumer hesitation. PayPal’s move marks a step towards a more interconnected financial ecosystem. Read more

Binance listing a new MiCA compliant stablecoin: Binance has listed EURi, the first bank-backed, MiCA-compliant stablecoin, marking a key step toward regulatory alignment in the crypto space. This move underscores Binance's commitment to operating within Europe’s new crypto framework, fostering trust and stability. EURi’s listing could set a precedent for future regulatory-compliant digital assets, encouraging broader adoption and promoting a more secure, transparent crypto ecosystem across Europe. Read more

Mixed Approaches to CBDCs Globally: India plans a gradual rollout of its CBDC, reflecting a cautious approach as digital rupee adoption grows. Ecuador, however, remains uninterested in launching its own CBDC, signaling hesitation amid economic concerns. These varied stances highlight the diverse global landscape of CBDCs. Read more on India | Read more on Ecuador

🌍 Geopolitical and Regulatory Dynamics

Russia Embraces Crypto, New Zealand Tightens Regulations: Russia plans to trial crypto for cross-border payments, a strategic move to bypass sanctions and assert financial independence. This step could set a precedent for other countries seeking financial autonomy through crypto. In contrast, New Zealand is proposing new crypto reporting standards aligned with OECD frameworks, showing its commitment to regulation and transparency. These contrasting approaches highlight diverse global strategies towards digital assets. Read more on Russia | Read more on New Zealand

Japan’s Blockchain Vision: Japan’s Prime Minister, Fumio Kishida, endorses Web3 and blockchain as solutions to social challenges, signaling a significant shift in how a major economy views digital technology. This endorsement could spur innovation and adoption in areas like governance, digital identity, and social welfare, potentially setting Japan as a leader in Web3. It’s a strong message that blockchain technology has roles beyond finance. Read more

🏦 Institutional Adoption and Financial Innovation

Hong Kong’s Digital Finance Push: Hong Kong's "Project Ensemble" explores integrating tokenized assets within a new CBDC sandbox, aiming to modernize its financial ecosystem. The Hong Kong Monetary Authority’s initiative could lead the way in bridging traditional finance with digital assets, once more setting an example for other regions. If successful, it could promote wider acceptance and regulatory alignment for CBDCs and tokenization globally. Read more

Institutions Are Moving Into Digital Assets: According to Blockworks' “On the Margin” newsletter, institutional involvement in digital assets is increasingly seen as inevitable. Despite market volatility, traditional financial entities are steadily entering the crypto space, recognizing the benefits of digital assets for portfolio diversification. As regulatory clarity improves, expect a surge in institutional adoption, bringing more stability and legitimacy to the market. Read more

🎓 Blockchain Education and Cultural Integration

Argentina Adds Blockchain to School Curriculum: Argentina will include Ethereum and blockchain technology in its high school curriculum, promoting early education in decentralized technologies. This initiative aims to prepare the next generation for a blockchain-driven future and positions Argentina as a regional leader in tech education. It could set a trend for other nations recognizing the importance of blockchain literacy. Read more

🏦 Stablecoins on the Rise: Coinbase and Tether Lead the Way

This week has seen significant advancements in the stablecoin sector, particularly in Europe and the Middle East. Coinbase has launched Euro Coin (EURC), a euro-backed stablecoin issued by Circle, on its platform. This move comes in response to the European Union’s Markets in Crypto-Assets (MiCA) regulation, which aims to provide a unified regulatory framework for cryptocurrencies across Europe. By offering fee-free euro-to-EURC conversions, Coinbase is positioning itself as a key player in the compliant and regulated stablecoin market in Europe​. Read more

Simultaneously, Tether has announced its plans to launch a Dirham-backed stablecoin in partnership with UAE-based entities. This new stablecoin will be pegged to the UAE Dirham and is expected to facilitate digital payments and cross-border transactions within the region, reflecting Tether’s strategy to diversify its stablecoin offerings and tap into new markets​. Read more

🌍 Regulatory Developments: Global Efforts to Control Crypto

Global regulatory scrutiny on cryptocurrencies continues to intensify. In China, new updates to anti-money laundering (AML) laws now explicitly include virtual asset transactions, marking a significant step in the country’s efforts to curb illicit financial activities. This aligns with global trends where governments are tightening controls on digital assets to prevent money laundering​. Read more

In Hong Kong, a lawmaker has proposed the creation of a legal framework to regulate Decentralized Autonomous Organizations (DAOs) following a recent court case involving Mantra. This proposal underscores the need for clear regulatory guidance in the decentralized finance sector, which continues to grow in complexity and importance​. Read more

India is also moving forward with its regulatory agenda, preparing to release a crypto consultation paper that could pave the way for a more structured approach to digital asset governance. Meanwhile, in the Dominican Republic, the top financial regulator issued a warning about the risks associated with cryptocurrencies, reflecting ongoing concerns about potential fraud and financial instability​. Read more

The U.S. is set to treat crypto transactions like cash, expanding reporting requirements to increase transparency and reduce illicit use. This move integrates crypto more deeply into traditional financial oversight, raising the compliance standards for the industry. Read more

Seychelles has passed a new bill to regulate Virtual Asset Service Providers (VASPs), aiming to create a transparent and secure environment for digital asset businesses. This legislation positions Seychelles as a compliant hub for crypto operations, ensuring better oversight and protection for users. Read more

⚖️ Compliance and Legal Challenges: Binance in the Spotlight

Binance, still the largest cryptocurrency exchanges, is under increasing pressure as it faces multiple legal challenges. The company is planning to hire 1,000 new compliance staff members in a bid to bolster its regulatory adherence worldwide. Read More

This expansion comes amid a new class-action lawsuit accusing Binance and its CEO, Changpeng Zhao, of facilitating money laundering. Binance’s efforts to enhance its compliance infrastructure could be seen as a necessary step to navigate the tightening regulatory environment​. Read more

💸 Adoption and Integration: Blockchain’s Growing Role in Traditional Finance

Blockchain technology continues to make inroads into traditional finance and government operations. DBS Bank in Singapore has implemented blockchain technology for the distribution of government grants, improving transparency and efficiency in the process. This adoption of blockchain by a major financial institution highlights the technology’s potential to revolutionize public sector operations​. Read more

In the United States, Franklin Templeton has launched a tokenized money market fund on the Avalanche blockchain. This initiative represents a significant step in the integration of blockchain technology with traditional financial products, offering investors a new way to access money market funds through decentralized platforms​. Read more

🌍 Regional Developments: Expanding Crypto Footprints

The global expansion of cryptocurrency exchanges continues, with Coinbase and KuCoin applying for licenses in Turkey. This move underscores the importance of regulatory approval for crypto exchanges as they seek to enter new markets and build trust with users. Read more

Similarly, Quidax has become Nigeria’s first SEC-licensed crypto exchange, marking a milestone for the African nation’s growing digital asset sector​. Read more

In Dubai, a court ruling in favor of paying salaries in cryptocurrency represents a landmark decision that could pave the way for wider adoption of digital currencies in everyday transactions within the region. This ruling highlights the increasing acceptance of cryptocurrencies as a legitimate form of payment in the Middle East​. Read more

💵 Rising Momentum in Stablecoin

• ‍PayPal’s PYUSD Expands on Solana, Overtakes Ethereum: PayPal's stablecoin, PYUSD, has made headlines with its rapid expansion on the Solana blockchain. Since its debut on Solana in May 2024, the token's supply has grown to 377 million, surpassing its 356 million token supply on Ethereum. This shift underscores the benefits of Solana's high-speed, low-cost transactions, which have been key to PYUSD's adoption. PayPal’s strategy to integrate PYUSD into decentralized exchanges and liquidity pools on Solana has positioned the stablecoin as a significant player in the ecosystem. Features like "confidential transfers" further enhance its appeal by offering privacy while maintaining compliance. This growth reflects a broader trend of stablecoins seeking more efficient and scalable platforms. Read more‍
• Ripple Tests RLUSD on Multiple Blockchains: Ripple has begun beta testing its RLUSD stablecoin on both the XRP Ledger and Ethereum mainnet. This dual-network approach aims to leverage the unique advantages of each blockchain, with XRP's strengths in cross-border payments and Ethereum's robust smart contract capabilities. The testing phase is expected to set the stage for broader adoption of RLUSD, potentially challenging established stablecoins like PYUSD and USDC. Ripple's move highlights the increasing competition in the stablecoin space as more projects explore multi-chain strategies to enhance liquidity and functionality. Read more
• Next-Generation Euro-Pegged Stablecoin Launches in Europe: Next-Generation, in partnership with Decta, has launched a new euro-pegged stablecoin, EURT, adding to the growing list of stablecoins designed for use within the European Union. This launch comes at a time when the EU is also considering tighter regulations on crypto exposures for investment funds, highlighting the balancing act between fostering innovation and ensuring market stability. The EURT stablecoin aims to facilitate easier transactions across Europe, potentially playing a crucial role in the region’s digital finance ecosystem. Read more
• Ethena Expands USDe Access with Solana Integration: Ethena has integrated Solana into its platform, expanding access to its USDe stablecoin by adding SOL as a backing asset. This move enhances Ethena’s offering by leveraging Solana's fast and low-cost transactions, making USDe more accessible and efficient for users. The integration aims to boost liquidity and attract a broader user base by offering a stablecoin backed by a rapidly growing blockchain network. This development is part of Ethena’s broader strategy to diversify its asset backing and improve the stability and usability of its stablecoin in the decentralized finance ecosystem. Read more

• ‍Kiln and DeFi Innovations, IMF and Bitcoin Risk Management: Kiln, a leading provider of DeFi infrastructure, has partnered with Crypto.com to offer stablecoin rewards, highlighting the increasing intersection of DeFi and traditional financial services. Meanwhile, the IMF is exploring Bitcoin risk management strategies with El Salvador, underscoring the global institution's growing focus on the implications of national cryptocurrency adoption. These initiatives are part of broader efforts to integrate and regulate the evolving crypto landscape effectively. Read more
• Xapo Bank Introduces Interest-Bearing Crypto Accounts in the UK: Xapo Bank has launched a new service offering interest-bearing accounts for USD and Bitcoin, becoming the first to offer such a product in the UK. This development marks a significant milestone in the integration of crypto with traditional banking services. By providing interest on crypto holdings, Xapo is making digital assets more attractive to investors who are seeking returns on their investments while maintaining exposure to cryptocurrencies. This could pave the way for other banks to explore similar offerings, further blurring the lines between traditional finance and the crypto world. Read more
• Sling Money Secures $15 Million for Stablecoin-Based Payments: Sling Money has raised $15 million in a Series A round to boost its stablecoin-powered global payment app. The platform aims to streamline cross-border transactions, offering faster, cheaper, and more transparent payments. By leveraging stablecoins, Sling Money addresses common issues in international payments, such as high fees and slow processing times. This funding will accelerate product development and market expansion, positioning Sling Money as a potential disruptor in the remittance industry. Read more

🌏 Contrasting Regulatory Landscapes

• Canada and the EU Tighten Crypto Regulations: Canada is ramping up its regulatory oversight on crypto trading platforms with a strict compliance deadline from the Canadian Investment Regulatory Organization (CIRO). This move aims to protect investors while ensuring that crypto platforms operate within a clear legal framework. (Read more) Similarly, the European Union is considering stricter regulations on crypto exposure for its trillion-euro investment funds. These developments in Canada and Europe reflect a broader global trend of tightening regulations in response to the growing crypto market, highlighting the challenges and opportunities that lie ahead for the industry.
• India's Evolving Crypto Legislation and EU's Investment Fund Regulations: India's Finance Ministry is working on new crypto legislation that aims to regulate the sale and purchase of cryptocurrencies, signaling a move towards more formalized crypto market oversight. This legislation could have wide-ranging implications for one of the world’s largest emerging markets. (Read more) Concurrently, the EU is considering stricter rules for crypto exposure in its trillion-euro investment funds, reflecting ongoing efforts to ensure financial stability while embracing new technologies. Both developments will be pivotal in shaping the future of crypto in these regions. Read m​ore
• Ecuador’s Central Bank Issues Warning Amid Rising Worldcoin Adoption: In response to the increasing adoption of Worldcoin in Ecuador, the country’s central bank has issued a stark warning about the risks associated with cryptocurrencies. The bank highlighted concerns about the potential for financial instability and the lack of regulatory oversight for digital assets. This warning reflects the cautious stance many governments are taking as cryptocurrencies gain popularity, particularly in regions with less developed financial infrastructures. The situation in Ecuador underscores the need for clear regulatory frameworks to manage the risks while enabling innovation. Read more

• Binance reaching an agreement in Brazil and India: Binance has reached a crucial agreement with Brazil’s SEC regarding its offering of derivatives products, a significant milestone after years of regulatory challenges. This agreement is expected to set a precedent for how crypto exchanges operate in emerging markets under stringent regulatory environments. Read more

• OKX giving up on Nigeria: In contrast, OKX has decided to discontinue its services in Nigeria due to changing regulatory conditions, reflecting the challenges crypto companies face in regions with less favorable regulatory environments. These contrasting approaches underscore the diverse global landscape for crypto regulation and adoption. Read more
• Regulatory Pressure on Bybit in France: Meanwhile, Bybit faces increased scrutiny in France, with the AMF issuing warnings about the platform’s activities. These developments highlight the ongoing tension between crypto innovation and regulatory compliance, as governments around the world seek to balance investor protection with fostering technological advancement. Read more‍
• Thailand open to experimentation: Thailand’s SEC has launched a digital asset sandbox, allowing companies to test innovative products in a controlled environment. This initiative is part of Thailand’s broader strategy to become a regional hub for digital assets, providing a supportive regulatory framework for blockchain innovation. Read more

📈 Crypto Institutional Adoption Accelerates

• ‍Morgan Stanley Greenlights Bitcoin ETFs for Advisors: Morgan Stanley is reportedly allowing its financial advisors to pitch Bitcoin ETFs to clients, signaling growing mainstream acceptance of crypto investments. This move marks a significant step for institutional adoption, as more traditional financial players begin to embrace digital assets. The decision could pave the way for broader acceptance of crypto products among conservative investors, potentially boosting the market's overall growth. The integration of Bitcoin ETFs into traditional portfolios could also enhance the legitimacy and stability of cryptocurrencies in the eyes of regulators and investors alike. Read more‍
• Crypto Adoption and Financial Innovation Across Europe and Asia: Across Europe, the Bank of England is planning to test a wholesale CBDC (Read more), while Slovenia pioneers the EU's digital finance revolution with its first sovereign digital bond (Read more). In Asia, Hong Kong lawmakers are advocating for eased banking restrictions for crypto firms to foster innovation. Read more
• Ledn Processes $1.16 Billion in Loans Amid Bitcoin Rally: Ledn, a leading crypto lending platform, processed $1.16 billion in loans during the first half of the year, driven by Bitcoin's price surge. The platform enables users to borrow against their Bitcoin, tapping into the rising value without selling their assets. This significant loan volume highlights the growing role of crypto-backed lending in providing liquidity and financial flexibility for users. Read more
• ‍Digital Euro’s Complexity Raises Concerns in Europe: The European Central Bank’s (ECB) initiative to introduce a digital euro has been met with criticism due to its perceived complexity and potential negative impact on the existing European payments infrastructure. Critics argue that the digital euro could disrupt the traditional financial system, leading to inefficiencies rather than the intended benefits of a more inclusive and innovative payment system. The ongoing debate around the digital euro underscores the challenges central banks face in integrating digital currencies into established financial frameworks. Read more
• Germany's Blockchain-Based Bond: Germany's KfW bank has partnered with Boerse Stuttgart to issue a blockchain-based bond, signaling the integration of blockchain technology into traditional financial markets. This move reflects Germany’s commitment to innovation in finance, setting a precedent for other European nations. Read more
• ‍Crypto Investment Trends in Italy and Spain's Regulatory Data: Recent data from Italy’s Consob regulator shows a significant increase in crypto investments, reflecting growing interest in digital assets across Europe. In Spain, new regulations are being implemented to better monitor and manage crypto-related activities, aligning with broader EU efforts to regulate the sector. These trends highlight the ongoing shift towards greater institutional involvement and regulatory oversight in the European crypto market. Read more

• IMF Collaborates with El Salvador on Bitcoin Risk Management: The International Monetary Fund (IMF) is working with El Salvador to explore strategies for managing the risks associated with Bitcoin, following the country's adoption of the cryptocurrency as legal tender. This collaboration focuses on developing frameworks to mitigate potential financial instability and ensure that Bitcoin can coexist with traditional financial systems. The IMF’s involvement underscores the global significance of El Salvador's Bitcoin experiment and the broader implications for countries considering similar moves. This initiative reflects the ongoing dialogue between global financial institutions and nations experimenting with digital currencies. Read more

💳 Crypto for payment

• ‍MetaMask’s Crypto Debit Card Launch with Mastercard: MetaMask, in partnership with Mastercard, has launched a crypto-powered debit card, allowing users to spend their digital assets directly at merchants worldwide. This move is a significant step towards mainstream adoption of cryptocurrencies, as it bridges the gap between digital and traditional finance. The MetaMask card is expected to enhance the usability of crypto, making it more accessible for everyday transactions, and could potentially drive greater adoption of blockchain technology among consumers. Read more‍
• Circle’s Tap-and-Go Payments on iPhones: Circle, the issuer of USDC, is introducing a new tap-and-go payment feature for iPhones, further integrating stablecoins into the daily financial lives of users. This feature is expected to streamline payments, making it easier for users to spend their USDC on everyday purchases. As stablecoins like USDC become more embedded in consumer payment systems, we can anticipate further innovation in how digital assets are used in retail settings. Circle's move highlights the ongoing evolution of the payment landscape, driven by advancements in blockchain technology. Read more

➕ Other News‍

• ‍Vitalik Buterin’s Vision for Cross-Chain Interoperability: Ethereum co-founder Vitalik Buterin has outlined a plan for seamless cross-chain interoperability, which could revolutionize how different blockchain networks interact. This vision aims to create a more connected and efficient ecosystem where assets and data can move freely across multiple blockchains. Buterin’s proposal is seen as a key step towards solving the fragmentation issues that currently plague the blockchain industry, potentially unlocking new use cases and driving greater adoption. As cross-chain solutions develop, they could play a critical role in the future of blockchain technology. Read more

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📈 Crypto Adoption on the Move

• US Spot Ethereum ETFs finally launching: The SEC has officially approved nine spot Ethereum ETFs, set to begin trading on July 23. This landmark decision includes funds from BlackRock, Fidelity, VanEck, and more. Even if analysts predict these ETFs could attract between $5.4 billion to $15 billion in the first six months, the first few days have been slower than expected. This move offers a regulated pathway for investors, reducing previous concerns over market volatility and regulatory scrutiny. Ethereum's exchange balances had also dropped to multi-year lows, indicating strong anticipation for the launch. Read more
• Ferrari Revs Up for Crypto Payments in Europe:  Following a successful US launch, Ferrari is expanding its crypto payment options to European dealerships. Not sure this is the most mass market use case, but it's interesting to see a Ferrari at the forefront of finance. Read more
• Toyota Considers Ethereum Integration:  In another take of blockchain in the car industry, the auto giant Toyota is exploring the possibility of incorporating Ethereum blockchain technology in the design of their Mobility-Oriented Account (MOA), holding the identity of the vehicle. Read more
• Italian Bank Issues Digital Bond on Polygon: Cassa Depositi e Prestiti SpA (CDP), an Italian state-owned bank, and Intesa Sanpaolo, Italy’s largest banking group, have successfully completed their first digital bond issuance on Polygon. This issuance is part of a broader European Central Bank (ECB) initiative to explore wholesale fiat money settlement methods on blockchain technology. Read more

⚖️ Global Regulatory Landscape Takes Shape

• India Promises Landmark Crypto Policy Paper: Indian Economic Affairs Secretary Ajay Seth announced that India will be releasing a comprehensive crypto paper in September. This paper, rather than proposing immediate legislation, will focus on initiating stakeholder consultation. Read more

• South Korea Cautious on Corporate Crypto Investment:  South Korea's financial regulator expressed caution regarding corporate investments in cryptocurrency. The regulator stressed the need for a thorough risk assessment framework to safeguard corporate interests and financial stability. Read more
• Argentina Tightens Crypto Regulations Argentina is stepping up its crypto game by requiring exchanges to obtain operating permits. This move aims to regulate the industry and protect investors. While it might impose additional hurdles for businesses, it also signals a growing acceptance of cryptocurrencies in the country. Read more
• Argentina Approves First Crypto-Capitalized Company:  In another bold move to modernize Argentina's economy and boost its appeal to foreign investors, the regulatory authorities have granted approval for companies to hold and utilize capital in Bitcoin and USDC. Read more
• Coinbase UK Fined by FCA: Coinbase's UK subsidiary was fined $4.5M by the Financial Conduct Authority (FCA) for failing to meet regulatory standards and in doing so providing e-money services to roughly 13,000 “high-risk” customers. Read more

💵 Stablecoins Take Center Stage

• Hong Kong Pushes Stablecoin Trials:  After the launch of its stablecoin sandbox in March, Hong Kong continues its exploration of stablecoins with a trial involving Standard Chartered Bank and Animoca Brands. The region’s financial regulators also released the results of a legislative proposal consultation for stablecoin issuers on Wednesday. Read more
• HKMA Offers Sanctuary for Stablecoin Issuers: With HKMA positive attitude towards stablecoins, local banks are becoming friendlier. For exemple Hong Kong virtual bank, ZA Bank, on Friday, announced the roll out of reserve bank services for stablecoin issuers. The bank noted that it is negotiating partnership with nearly 10 stablecoin firms. Read more
• Lightning Labs Eyes Smoother Stablecoin Settlements:  Lightning Labs is working on improving stablecoin settlements using the updated Taproot capabilities of Bitcoin.  This could simply make stablecoin viable on Bitcoin by increasing the efficiency and scalability of stablecoin transactions. Read more

🌏 CBDC across the globe

• Philippines Sets CBDC Launch for 2029: After an initial pilot phase, the Philippines has confirmed its plan to launch a wholesale central bank digital currency (CBDC) by 2029. Unfortunately, much like the Digital Euros, it will operate on a private payment and bank-owned settlement system, rather than on a public blockchain. Read more
• Russian CBDC Won't Be Cross-Border Ready Until 2026:  Russia's central bank digital currency (CBDC) project is not expected to support cross-border transactions until 2026, which appears to be too slow for President Vladimir Putin. Observers had anticipated that the digital ruble could serve as a tool to circumvent sanctions and reduce dependency on the US dollar. Read more
• Peru Experiments with CBDC Pilot:  Peru's central bank is partnering with Viettel Peru to pilot a CBDC program. The initiative involves collaboration with various stakeholders to ensure the system's design and functionality meet the Central Bank's requirements. This collaborative approach aims to enhance user adoption and address potential entry barriers. Read more

➕ Beyond the Headlines

• US Accounting Giant Teams Up With Crypto Company: KPMG and Cryptio have partnered to help US crypto firms adhere to GAAP compliance, establishing robust controls and accounting practices, crucial for institutional investors drawn to crypto amid rising debt and inflation. Read more

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💰 Payments

• Stripe Makes Crypto Purchases Easier in Europe: In a move that could significantly boost crypto adoption, payment giant Stripe has expanded its crypto integration to the European Union. This means online businesses in the EU can now offer their customers the option to purchase Bitcoin, Ether and Solana using a regular credit or debit card. Knowing Stripe's focus on User Experience, This is a major step forward in making crypto transactions more accessible to everyday users. Read more

⚖️ Regulation

• Hong Kong Paves the Way for Stablecoin Regulation:  Hong Kong has released the results of a consultation on regulating stablecoins, a type of cryptocurrency pegged to a fiat currency [18]. The proposals suggest a licensing regime for stablecoin issuers, which could bring greater transparency and stability to the market. This is a positive development for the future of stablecoins. Read more‍
• Taiwan Cracks Down on Crypto Crime 🇹🇼: Taiwan has tightened its AML regulations for virtual asset providers, aiming to combat illegal activities involving cryptocurrency [15, 16]. This includes increased reporting requirements and stricter penalties for non-compliance. These measures are necessary to ensure that Taiwan's crypto market operates within a legal framework. Read more‍
• Australia Sounds Alarm on Crypto Money Laundering:  A new report by the Australian Transactions and Reports Analysis Centre (AUSTRAC) highlights the growing risks of money laundering using cryptocurrency. The report identifies several areas of vulnerability, including digital currency exchanges, tokens, luxury goods, and unregistered remittance dealers. This is a confirmation for regulators around the world that it's critical to implement coherent AML/KYC measures in the crypto space. Read more
• More Countries Mull Crypto Regulations ️: Both Argentina and Russia are considering new regulations for cryptocurrency trading. Argentina is urging citizens to declare their crypto holdings to avoid extra taxes, while Russia is exploring the possibility of allowing stock exchanges to offer crypto trading for qualified investors. These developments highlight the growing global focus on regulating the crypto space. Read more on Argentina and Russia
• South Korea's Crypto Law Goes into Effect 🇰🇷: South Korea's first comprehensive cryptocurrency regulatory framework, the Virtual Asset User Protection Act, has officially come into effect [23]. This new law imposes stricter requirements on digital asset exchanges, including requiring them to store at least 80% of user deposits in cold wallets and maintain insurance or reserve funds. This is a significant development for cryptocurrency regulation in Asia, and it will be interesting to see how it impacts the South Korean crypto market. Read more‍
• OKX Chooses Malta for European Compliance: Crypto exchange OKX has chosen Malta as its hub for complying with EU regulations under the Markets in Crypto Assets (MiCA) framework. This move suggests that Malta is becoming a center for crypto businesses looking to operate in Europe. Read more: OKX chooses Malta as MiCA hub for compliance with EU regulations Read more‍
• FTX and CFTC Reach Settlement: Infamous and bankrupt crypto exchange FTX has reached a settlement agreement with the CFTC (Commodity Futures Trading Commission) for $12.7 billion. This settlement resolves a lawsuit filed by the CFTC in 2022 fraud by FTX. Read more

📈 Adoption ️

• BlackRock CEO Sees Bitcoin as a Legitimate Asset:  In a significant shift in perspective, BlackRock CEO Larry Fink has acknowledged Bitcoin's potential as a hedge against inflation [6, 12]. This is a major endorsement from a leading Wall Street institution and could further accelerate institutional adoption of cryptocurrencies. Read more

• State Street Eyes Stablecoin and Security Token Offerings: State Street, a custody bank giant, is exploring the possibility of issuing its own stablecoin and security tokens. After layoffs in January this year, this move suggests a regain confidence in the industry for State Street. Read more

• Uniswap Labs Launches Wallet Browser Extension : In a move that expands their offerings beyond the realm of their famous decentralized exchanges (DEXs), Uniswap Labs has launched a new multi-chain wallet browser extension. This extension allows users to swap crypto, sign transactions, and send or receive crypto directly from their browser, supporting a wide range of 11 blockchains. Read more
• Moody's Provides Risk Analysis for Project Guardian : Moody's, a credit rating agency, has been tapped to provide risk analysis for Project Guardian, a digital asset custody initiative launched by a consortium of banks [21, 22]. This involvement of a traditional financial institution in a crypto project is a sign of growing institutional interest in the space. Read more

💵 Stablecoins

• Dark Side of Stablecoins: Enabling Criminal Transactions: Chainanalysis reported that stablecoins now make up the majority of illicit transaction volume on the blockchain. This highlights the potential misuse of stablecoins for criminal activity and the need for a balanced regulation. Read more

• Hong Kong is proposing regulation of fiat-referenced stablecoins: Hong Kong's measured approach to regulating fiat-backed stablecoins as a significant move. The FSTB & HKMA's framework balances innovation with consumer safety. Licensing all issuers, foreign presence requirements, and local reserve mandates aim to prevent TerraUSD-like disasters. This fosters a transparent and accountable stablecoin ecosystem in Hong Kong, potentially shaping the future of this financial tool. Read more

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Today, we’re excited to announce the launch of the first zk-powered debit card for seamless stablecoin spending, in partnership with Argent, and backed by $3 million in funding. This marks a significant step towards our mission of making self-custodial wallets a mainstream financial tool.

“We’re proud to be launching with Argent as our first non-custodial wallet and working alongside Mastercard to continue contributing to the global adoption of everyday crypto payments.”

Kulipa co-founder and CEO Axel Cateland

Partnering with Argent

A shared vision

Argent, a pioneer in non-custodial wallet technology, has built a trusted platform with over two million users on Starknet. We are proud to collaborate with them to introduce a new kind of debit card that leverages zero-knowledge (zk) technology for secure, low-cost, and scalable transactions.

"By integrating zk technology, users can be confident their transactions are both secure and fully non-custodial, while enjoying the benefits of low fees and true scalability"

Itamar Lesuisse, co-founder and CEO of Argent.

How it works

Our card simplifies crypto spending. When used at a terminal, we seamlessly convert Circle's USDC or Paxos stablecoins to fiat currency, making it effortless for merchants to accept crypto without any additional integration.

This ensures a smooth, familiar debit payment experience for Mastercard users and merchants worldwide, with the added advantage of on-chain settlement.

Making non-custodial wallets mainstream

Our mission

This partnership is a crucial step in our mission to make self-custody wallets a mainstream financial tool. While centralized exchanges have offered crypto cards for some time, the self-custody space has lagged behind. We believe it's time to empower wallets with the tools they need to catch up.

We see two key drivers for increasing the global adoption of self-custody wallets:

• High Retention: Reaching daily use through real-world utility.‍
• ‍Low Friction: Providing a delightful user experience.

How we're helping wallets achieve this

• High Retention: We're transforming wallets into spending hubs by enabling everyday spending with stablecoins. Stablecoins already offer a range of benefits like inflation hedging, instant settlement, and low-cost remittances. Only one thing is missing: being able to spend them anywhere. Our card enables spending stablecoins at any merchant, on any chain, with any wallet infrastructure.

• Low Friction: We offer the only multichain debit card solution, providing a seamless experience for both users and wallet providers. Users can enjoy the convenience of a debit card without the need for topping up, while wallets can easily launch cards on their native chains without worrying about compliance, logistics, or fraud.

The path forward

We raised $3 million in a pre-seed funding round co-led by Fabric Ventures and White Star Capital, in addition to being selected to Mastercard’s Start Path incubator program.

“Although stablecoin adoption has seen exponential growth in the last few years, its most natural use case, payments, has not yet reached the masses”

Sep Alavi, general partner at White Star

This support from top partners will help us establish global presence and issuing capabilities, get integrated with key players in the industry and keep innovating on the future of payment like we’ve done with Argent.

Contact us

We’re excited to open the next chapter of crypto payments.

Want to know more? Want to reach out? Come talk to us here or visit our website at kulipa.xyz!

🏦 CBDCs & Stablecoins

• Russia Expands Digital Ruble Pilot: The Central Bank plans to widen the pilot's reach to include "tens of times" more people and facilitate real transactions with real money starting this September. This brings the Russian CBDC closer to mass availability, how much of the adoption is driven by the sanctions. Read more‍
• First Philippine Peso Stablecoin Launched: The PHPC is backed by Philippine pesos and is meant to make financial transactions in the Philippines more efficient. It was created by Coins.ph and is available on the Ronin blockchain, a popular blockchain for games like Axie Infinity. Read more‍
• SEC Ends Investigation Into Paxos Over BUSD: The SEC won't pursue charges against Paxos for issuing BUSD the stablecoin launched in partnership with Binance. But this doesn't necessarily mean BUSD is cleared. The NYDFS previously stopped Paxos from issuing new BUSD due to regulatory concerns. The situation surrounding BUSD's regulatory status remains unclear. Read more
• Argentinians Increasingly Hoarding USDT Soaring inflation in Argentina keeps pushing citizens towards USD stablecoins in particular Tether (USDT) as a safe haven. Despite the potential of cryptocurrencies to hedge against inflation, Argentinians' growing use of Tether (USDT) highlights a key risk. The long-term stability of USDT's peg to the US dollar remains a concern for some. Read more
• Crypto Spending Made Easy: Kulipa's Argent Debit Card: We announced at EthCC a Mastercard debit card for Argent that seamlessly enables crypto for everyday purchases. This eliminates the need for exchange transactions and simplifies using crypto in the real world. Read more

⛓️ Crypto Adoption

• Dubai Embraces Blockchain for Trade: explains how Dubai is launching a blockchain platform to improve customs clearance. This will benefit businesses and government entities by streamlining processes, reducing paperwork, and improving transparency in the supply chain. Read more‍
• Blockchain Payment Network Partior Secures Funding: Partior, a collaboration between DBS, JPMorgan & Standard Chartered, just secured $60M in Series B funding. This paves the way for faster, more efficient interbank transactions through their blockchain network. Read more‍
• Venezuelans Turn to Crypto for Remittances: This article . Venezuelans sent $461 million worth of crypto in 2023, which is 9% of all remittances. This number represents a 75% increase from 2021. Peer-to-peer platforms are popular because they allow Venezuelans to bypass official exchange controls. Read more
• Goldman Sachs to Introduce Three Tokenization Initiatives in 2024:  Goldman Sachs' move into tokenization signifies the growing interest of traditional financial institutions in exploring blockchain technology's potential for asset management and financial transactions. Read more
• Europe's Central Bank Experiments with Digital Bonds: Deutsche Bank trials issuance of a digital bond without intermediaries. This ECB experiment could pave the way for a more efficient and streamlined bond market structure. Read more
• Tokenized Treasuries on the Rise? Securitize CEO confirms the rapid growth of tokenized treasuries, with the market value surpassing $1.8 billion. This confirms the revolution of the bond markets by increasing accessibility and efficiency. Read more
• CME Group Lists New Crypto Indices: CME Group launches new crypto indices for XRP & ICP!  This provides institutions with transparent pricing data for these assets, potentially boosting their adoption and mainstream acceptance. Read more
• Taiwan Mobile Secures Crypto License: Taiwan Mobile nabs a crypto license, signalling telecom giants' interest in the digital asset market. It remains unclear what applications they will focus on. Read more

Regulation & Enforcement

• Philippines Central Bank Rejects Crypto Endorsement Claims: The Philippines Central Bank Governor distances itself from claims it endorses any cryptocurrencies. This reinforces the need for clear regulations and investor education in the Philippines' growing crypto space. Read more
• EBA Extends AML/Travel Rule Guidelines to Crypto Service Providers This signifies the expansion of Anti-Money Laundering (AML) and Travel Rule regulations to encompass crypto service providers, enforcing stricter information sharing for crypto transfers, improving transparency. Read more
• Latvian Authorities Fine Crypto Service Provider: Latvian authorities hit crypto service provider Payeer with a hefty €10M fine for violating Russia sanctions. This highlights the growing importance of compliance in the crypto industry as regulations get clearer. Read more
• Nigerian Finance Minister Urges SEC Board to Tackle Crypto Regulation Challenges Nigeria's Finance Minister calls on the SEC to tackle complex crypto regulations while fostering innovation. This follows the Binance's legal drama and the unclear regulations hindering the country's blockchain potential. Read more
• Italy to finally Implement EU Crypto Regulations Italy's move towards implementing existing EU regulations suggests a more unified approach to crypto regulation within the European Union. Read more

Other Interesting Developments

• US Senate Suggests Blockchain for some National Security Application: This confirms the potential applications of blockchain technology beyond finance, potentially in areas like supply chain management and national security. Read more
• Team Behind Polygon ID Launch New Privado ID Wallet: The team behind Polygon ID launches a new digital identity wallet called Privado ID. Privado ID is a web wallet that allows users to prove their identity without revealing personal information. It uses cryptography and zero-knowledge proofs to do this. Read more

⚖️ Regulation Evolutions

• MICA Progress: Just weeks after MiCA took effect, Circle became the first approved stablecoin issuer under the new EU regulations, for the USDC and EUROC. This is a big win for stablecoin legitimacy and paves the way for wider adoption in the EU, especially with the launch of the ERUOC in Europe. Read more‍
• Paxos ready for Singapore: Paxos received the approval from the Singaporean regulator to issue stablecoins. This will probably strengthen their partnership with DBS Bank. Read more
• US Regulation Debate:  The debate on stablecoin regulation in the US continues, with some arguing for immediate action. It will be interesting to see how the US approaches this compared to the EU's framework. Read more‍
• Hong Kong Review: Hong Kong is set to review its recently introduced crypto asset regulatory framework (New CIES) following the withdrawal of applications by several major exchanges, including OKX. Read more‍
• Global Disclosure Framework: Global banking regulators approving a framework for banks to disclose crypto exposure shows a growing focus on transparency within the traditional financial system.  Read more
• Nigeria temporary regime: Nigeria regulates VASPs with aAccelerated Regulatory Incubation Program (ARIP) until digital asset rules are ready. ARIP includes residency and KYC requirements for VASPs. Read more

💵 Stablecoins for Everyday Use

• Mass Adoption: The Philippines integrating Tether (USDT) for social security payments is a significant step towards mainstream adoption of stablecoins. Read more.
• Multi-Stablecoin Support: Opera expanding its crypto wallet with support for multiple stablecoins like USDT and USDC demonstrates a growing user demand for flexibility and the challenges with interoperability. Read more.

🏦 CBDC Developments

• Collaboration for CBDC Innovation: The Bank of France joining forces with the Hong Kong Monetary Authority for CBDC and tokenization research is a positive sign for international collaboration in this space, which is necessary for global interoperability of the different CBDCs. Read more
• Digital Yuan Security: China's focus on bolstering security and KYC measures for its digital yuan highlights the importance of combating money laundering in the digital asset space. Read more.

➕ Other Interesting Reads

• Survey on Crypto Usage: A survey indicating Canadians are very much attached to cash, and crypto is no exception to that. Read more.
• Gold-backed NFTs: Swarm's launch of gold-backed NFTs showcases the potential of tokenization for traditional assets. However, their approach of leveraging the NFT exemption to potentially bypass MiCA regulations raises questions about long-term compliance. Read more
• On-Chain Net Asset Value: The partnership between Sygnum, Fidelity, and Chainlink to bring net asset value on-chain is a promising development for transparency in DeFi. Read more
• Sony entering crypto Tech giant Sony reportedly entering the crypto trading space signifies not only the growing mainstream interest in digital assets but also the potential for wider adoption within the entertainment and content creation industries: blockchain-based digital rights management, in-game currencies, loyalty programs. Read more

⚖️ Regulation on the Rise:

• Europe: Several EU countries are getting ready to scale their crypto regulations. Italy is considering stricter oversight (Read more) while the UK's Financial Conduct Authority (FCA) is expanding its crypto division with 100 staff members (Read more) to manage the already 44 crypto companies registered with them (Read more).
• Africa: Nigeria approved a blockchain policy to support secure transactions and value exchange. Even if the full text is not public, it focuses on tokenisation of real world assets and excludes cryptocurrencies. It also mandates regulators to develop deployment rules. Read more‍
• Louisiana: Louisiana's 'Bitcoin rights' bill was quietly passed into law on June 19. It protects digital asset miners, users' right to self-custody, allows Bitcoin payments, and bans CBDCs. Louisiana joins Oklahoma, Montana, and Arkansas in passing similar legislation, aiming to influence federal policy. (Read more). Similarly, North Carolina's proposed ban on a Central Bank Digital Currency (CBDC) highlights the ongoing debate surrounding their potential impact on privacy in some libertarian states (Read more)‍
• USA: The Supreme Court ruled against SEC's in-house judges for fraud cases, requiring federal court trials, drastically limiting SEC's enforcement power. (Read more).  A US Treasury advisory points to the use of crypto in illicit activities (Read more).

💵 Stablecoins and Transparency

• Tether discontinued USDT support for EOS and Algorand to optimize resources, continuing redemption for 12 months while focusing on more popular blockchains. Supporting multiple blockchains creates a monumental technical and liquidity burden for stablecoin issuers, even the largest. The sheer number of chains (e.g., dozens) makes managing reserves and ensuring smooth transactions incredibly difficult. (Read more)

• With MiCa coming into force, more exchanging will delist non-compliant stablecoins. This week, Bitstamp's delisted of Euro Tether (EURT). (Read more)

📈 Growing Adoption

• Coinbase's partnership with Stripe to support USDC payments and accelerate the crypto availability in mainstream financial services (Read more).
• Sberbank, Russia's largest lender, recognises the potential of blockchain and crypto-related services (Read more). This, along with Brazil's largest fintech bank integrating the Lightning Network (Read more), showcases continued institutional interest in the underlying technology.
• 40% of South Korean university students reportedly invest in crypto. Highlighting a certian risk appetite, and a lack of trust in state-issued pensions .(Read more)

⚖️ Regulation: Ethereum SEC drops investigation, and more...

• US & North America: This week will probably in our industry's history. The SEC, the US securities regulator, has concluded a months-long investigation by classifying the world's second-largest crypto as a commodity, not a security. ConsenSys, a key player in the case, celebrates this as a landmark decision. (Read more). In the meantime, North Dakota joins the list of states banning Binance operations (Read more)
• South America: Brazil's tax agency is summoning major crypto exchanges (Binance, Coinbase), which operate from outside the country, for info on their operations and compliance with new tax laws. Read more
• Asia: While Singapore is raising concerns about Anti-Money Laundering (AML) risks associated with crypto-tokens (Read more), it's also looking to advance its own digital asset market with a new licensing framework (Read more).
• Globally: The Bank for International Settlements (BIS) is taking a proactive stance with its new innovation hub in Toronto . This confirms the growing interest from the BIS and more generally from traditional financial institutions in exploring blockchain technology. Read more

💵 Stablecoin: A double-edged sword?

• Globally: Jeremy Allaire, CEO of Circle, the leading stablecoin issuer, predicts stablecoins could represent 10% of the global economy within a decade While this outlook is undeniably bullish, it underscores the significant potential of stablecoins for mainstream adoption. Read more
• Europe: In response to MiCA regulations, which some stablecoin issuers like Tether announced they would not address, we're seeing the first exchange delistings. For example, Uphold has stopped supporting several stablecoins, including USDT. Read more
• Russia: A survey suggests Russians are using Tether (USDT) in response to sanctions. This highlights the potential of stablecoins as a tool for navigating financial restrictions, but also raises concerns among regulators about crypto's role in bypassing financial controls. Read more

🏦 CBDCs: Progress, Plans, and Perils

• Globally: In a recent report, the IMF highlights the potential of Central Bank Digital Currencies (CBDCs) for financial inclusion in the Middle East. Read more
• Iran: Iran launches its digital rial on Kish Island, allowing cashless payments via QR codes. Concerns remain about Iran using the CBDC to bypass US sanctions, despite sanctions targeting related technology providers. Read more
• Switzerland: Switzerland's central bank decided to extend its wholesale digital franc pilot program by two years. They'll add more banks and aim to increase transaction volume to assess its long-term viability. Read more

Other News

• Argentina: Argentine President Javier Milei confirmed his support for a competitive currency market that includes Bitcoin, aiming to bolster the struggling economy through crypto adoption. Argentina's economic crisis has heightened Bitcoin's appeal as a hedge against the depreciating peso. Read more
• Medias: Fox and Time partner on Verify protocol to fight misinformation with content verification on-chain. Read more

🚀 Emerging Markets Embrace, Institutions Dive In

• Emerging Markets Embrace Crypto: Freelancers worldwide increasingly prefer crypto payments (Read more), and a fintech leader sees crypto as a vital tool in developing economies (Read more). This highlights crypto's potential to provide financial inclusion and bypass traditional limitations.
• Traditional Finance Gets on Board: Major institutions are dipping their toes in the crypto waters. Brazil's largest bank expands crypto trading (Read more), and HSBC begins offering digital yuan services (Read more). This adoption by the largest banks globally is probably a consequence of the relative regulatory easing in the US.
• Ripple Strengthens Partnership with National Bank of Georgia: Ripple expands its partnership with the National Bank of Georgia to promote digitalization in the local economy (Read more).
• Hong Kong Embraces Crypto ETFs: Hong Kong highlights the flexibility of its crypto ETF regulations (Read more).
• Suriname Considers Bitcoin Adoption: A presidential candidate proposes El Salvador-style Bitcoin adoption in Suriname (Read more).

🏦 Stablecoin and CBDCs: new initiatives

• Stablecoin Interoperability Expands: rUSD, a USD-backed stablecoin, is coming to the Ethereum network in addition to its native Ripple XRP Ledger (XRPL) (Read more).‍
• Saudi Arabia Joins Cross-Border CBDC Initiative: Saudi Arabia joins a project for cross-border central bank digital currency (CBDC) payments (Read more).

⚖️ Regulation: Finding the Balance

• Global Push for Clarity: Zimbabwe seeks public feedback on crypto regulation amidst economic woes (Read more), while Taiwan sees collaboration between 24 crypto firms to establish self-regulatory standards (Read more). These efforts demonstrate a global desire for clear regulatory frameworks
• US Regulatory Landscape: The US crypto industry shows signs of resilience despite ongoing regulatory strife (Read more). What doesn't kill you makes you stronger... except when it slows you down so much that you miss the opportunity.

Other Interesting News

• Bitcoin Treasury Strategies: Blockworks explores the growing trend of companies incorporating Bitcoin into their treasury strategies (Read more).
• Ireland as a Crypto Hub: Ireland emerges as a prime destination for European crypto ventures (Read more).
• Innovation Drives Progress: Circle integrating Solana for programmable wallets (Read more). This interoperability fosters a more connected and efficient ecosystem.‍
• New Zealand Explores Crypto Real Estate: A New Zealand study investigates the potential of crypto for real estate and digital assets (Read more).

⚖️ Regulation and Compliance: A Global Challenge and Opportunity

• Hong Kong has recently acknowledged Bitcoin's resilience, setting a precedent in market endurance and regulatory perspectives. Read more‍
• On the African continent, Rwanda carefully plans the introduction of a CBDC by 2026, aiming at enhancing its digital economy. Both narratives reflect the nuanced and evolving regulatory environment that influences the global adoption and integration of digital currencies. Read more‍
• The European Union, gearing up for MICA regulations, sees Binance limiting non-compliant stablecoins, reflecting a proactive adaptation to upcoming legal frameworks. Read more

🌏 Thailand, Australia and Mexico: Global Crypto Dynamics

• Mexico's Crypto Ambitions Under New Leadership: Mexico's recent election of Claudia Sheinbaum as its first female president could signify continued or even enhanced support for cryptocurrency policies initiated by her predecessor. Sheinbaum’s administration may further explore the integration of crypto into Mexico's financial landscape, aligning with a broader trend in Latin America where digital assets are increasingly seen as pivotal economic tools. This regional pivot towards crypto could stimulate further innovations and regulatory frameworks across Latin America. Read more.
• First crypto ETF in Thailand: Thailand's approval to launch its first crypto ETF by One Asset Management marks a significant step towards mainstreaming cryptocurrency investments within the nation. This initiative not only diversifies investment options but also showcases the Thai SEC’s progressive stance towards digital assets. Read more‍
• Growing crypto ownership in Australia: Australia reports a surge in crypto ownership, particularly among the younger demographics, indicating a robust growth trajectory in blockchain adoption and a burgeoning interest in digital finance solutions. Read more

💼 Corporate Mergers and partnerships: Robinhood, Coinbase & Bitpanda

• Acquisition of Bitstamp by Robinhood: The acquisition of Bitstamp by Robinhood for $200 million all-cash deal indicates a strategic move to solidify Robinhood's position in the global crypto exchange market. This deal points to a trend of increasing consolidation in the industry. Read more ‍
• Acquisition of Station Labs by Coinbase: Concurrently, Coinbase is making significant strides with the acquisition of Station Labs and the launch of a new smart wallet featuring gasless transactions and multi-chain support, focusing on enhancing user experience and technological prowess. Read more‍
• Bitpanda partnership with Deutsche Bank: Meanwhile, Deutsche Bank's partnership with Bitpanda to enhance crypto transaction capabilities in Germany indicates a growing integration of traditional financial structures with digital asset services, reflecting a significant shift in how financial institutions are approaching cryptocurrencies. These changes suggest a maturing market that is increasingly aligning with established financial regulations and practices. Read more

🌎 Stablecoins for Global Trade and Payments

• Russian Firms Embrace Stablecoins: Russian companies are increasingly turning to stablecoins to facilitate cross-border transactions amidst sanctions. This trend highlights the potential of stablecoins to bypass traditional financial systems and provide a more efficient and accessible alternative: Read more
• Cambodia Sees Stablecoins Boosting Fiat: Cambodia's central bank governor believes digital currencies can actually strengthen the use of fiat money. This perspective suggests stablecoins could complement, rather than replace, existing financial structures: Read more‍
• PayPal Expands PyUSD to Solana: PayPal's stablecoin, PyUSD, is now available on the Solana blockchain, offering users faster and more affordable transactions: read more

🏛️ HSBC and US Credit Unions push for tokenization

• HSBC Backs Singaporean Digital Market Infrastructure: Global banking giant HSBC has invested in Marketnode, a Singapore-based company focusing on digital market infrastructure. This move signals continued institutional interest in the potential of blockchain technology and digital assets: Read more
• Hong Kong Steps Up Crypto Regulation: Hong Kong's Securities and Futures Commission (SFC) is conducting on-site inspections of crypto platforms, indicating a focus on ensuring compliance and investor protection within the crypto space: Read more
• US Credit Unions Embrace Tokenization: US credit unions are adopting tokenization of real-world assets, demonstrating the potential of blockchain technology to improve efficiency and security in traditional financial services: Read more

🇨🇳 🇮🇱 CBDCs in China and Israel

• China's CBDC Update: The Chinese central bank provided an update on its digital yuan (e-CNY), emphasizing its use in both the domestic market and cross-border transactions. This development underscores China's commitment to exploring the potential of CBDCs: Read more
• Israel Launches Digital Shekel Test: Israel has begun testing its own digital shekel, further adding to the growing list of countries exploring CBDC implementation: Read more

🪪 Other Notable News

• Mastercard Unveils Crypto Credential Service: Mastercard is launching a new service that allows users to store and manage their crypto credentials securely. This development could facilitate wider adoption of cryptocurrencies for everyday payments: Read more

⚖️ Regulation: Good news from the US

• ‍Ethereum ETFs finally approved in the US: In a landmark decision, SEC grants approval to eight Ethereum ETFs. This approval marks a significant step forward for mainstream crypto adoption. ETFs (Exchange Traded Funds) are tradable baskets of securities that track an underlying index, such as a stock market index. This approval suggests the SEC is growing more comfortable with cryptocurrencies and could pave the way for wider acceptance. (Read more)‍
• House Passes Act to Foster Innovation in Financial Technology (FIT 21) Similarly, the House passing the bipartisan FIT 21 Act, which aims to foster innovation in financial technology, indicates a willingness to embrace new technologies with proper safeguards. (Read more)‍
• French Regulator Warns Investors Over Bybit Ban: The French ban on cryptocurrency derivatives exchange Bybit serves as a reminder of the potential for regulatory intervention. (Read more)‍
• Turkey and Brazil Improving Their Respective Crypto Regulation Plan Expected by Year's End Turkey is drafting crypto bills to align with international standards. (Read more) Meanwhile, Brazil is crafting a crypto regulation plan. (Read more) These actions illustrate the attempt to balance the need for innovation with the protection of investors and users.

🌐 CBDCs: Global Advances and Challenges

• China's President Calls for Overcoming Barriers in CBDC Systems: Several headlines point to the increasing focus central banks are placing on CBDCs. China's President Xi Jinping emphasized overcoming technical and regulatory hurdles for successful CBDC implementation. (Read more)
• American Bankers Association Urges House to Block Fed CBDC Plans: In the US, the American Bankers Association is lobbying against the Federal Reserve's CBDC plans, highlighting ongoing concerns about potential disruption to the traditional financial system. (Read more)
• Hong Kong Launches e-CNY Wallets for Payments and advocates for CNY-Pegged Stablecoin: Hong Kong is actively piloting e-CNY wallets for payments, potentially paving the way for a future digital Yuan. (Read more) Interestingly, an influential figure in Hong Kong's financial sector, the chairman of the Hong Kong Investment Funds Association (HKIFF), is advocating for a CNY-pegged stablecoin, highlighting the potential for CBDC-inspired innovation. This could be a significant development, as stablecoins are digital assets pegged to a stable reserve asset, like a fiat currency, to reduce price volatility (Read more)

💵 Stablecoin: Next-gen coming

• New stablecoins create more robust algorithmic stablecoin, while remaining fully decentralized: The emergence of "fourth-generation" stablecoins like Ethena's USDe addresses the volatility concerns that plagued earlier iterations, such as TerraUSD. Unlike established fiat-backed stablecoins like USDC and USDT, these new "synthetic dollar" designs utilize non-fiat collateral, with Ethena specifically leveraging Ethereum (ETH). To mitigate the inherent volatility of purely decentralized assets, these projects employ sophisticated Delta-hedging strategies. For instance, USDe maintains its peg by utilizing short ETH positions on centralized exchanges (CEXs) to hedge against fluctuations in the value of its stETH collateral. This approach offers a distinct risk profile compared to traditional fiat-backed stablecoins, and the long-term viability of these "fourth-generation" designs remains to be seen. (Read more)

📈 Adoption: Is Wall Street Warming Up to Crypto?

• Morgan Stanley Invests $269.9M in Bitcoin ETFs, Leading Institutional Adoption: As an additional sign that the industry is warming up to crypto with the Ethereum ETFs approval, traditional financial institutions are showing signs of increasing interest in crypto. Major investment bank Morgan Stanley's investment in Bitcoin ETFs indicates a growing appetite for exposure to the asset class. (Read more)
• Wall Street Giant CME Considers Entering the Spot Bitcoin Trading Market: Additionally, the Chicago Mercantile Exchange (CME), a leader in derivatives markets, is contemplating entering the spot Bitcoin trading market, which could bring further legitimacy and liquidity to the space. A spot market allows for the immediate buying and selling of an asset, while derivatives are financial contracts derived from an underlying asset. (Read more)

⚖️ Regulation Roundup

• The International Monetary Fund (IMF) advised Nigeria to regulate crypto trading, a much less aggressive approach than the current ban and a sign of growing global interest in establishing clear frameworks. Soon than later, it is a necessary step for mainstream adoption, and with careful planning, regulation can foster innovation without stifling it (Read more).‍
• The Philippines is taking a proactive approach by launching trials of a national stablecoin pegged to the Philippine peso (Read more). This could be a significant development for financial inclusion and economic growth in the region.‍
• Turkey's draft crypto regulation is reportedly ready for parliament (Read more), while India's regulatory landscape remains divided, with the Securities and Exchange Board of India (SEBI) open to oversight but the Reserve Bank of India (RBI) seeking a stablecoin ban (Read more). This highlights the inherent tension between regulators' desire for clear rules and stablecoin innovation, particularly USD-dominant stablecoins, which can indirectly dollarize an economy and potentially undermine central bank control.
• In the US, a Senate resolution aims to overturn a provision (SAFETY Act Section 121) that could have broad implications for crypto businesses (Read more).  Circle also plans to transition its legal operations from Ireland to the US (Read more), which could be another sign of a positive prospect for the regulatory landscape.
• Additionally, Oklahoma's status as the first US state to enshrine crypto self-custody rights signifies a step towards greater individual financial empowerment within the cryptocurrency ecosystem, and fro crypto in general (Read more).
• This need for regulatory evolution is evident, as a survey reveals U.S. financial advisors' reluctance to discuss cryptocurrencies with clients due to legal concerns (Read more).
  

🚀 Adoption on the Rise

• Brazil upheld its ban on crypto donations for political campaigns (Read more), highlighting the complex relationship between crypto and political systems.
• El Salvador El Salvador has taken a bold step forward in tokenization by launching its national investment offering through the National Bitcoin Office. This blockchain-based capital raise leverages the Liquid network (Read more). This is an interesting experiment in financial innovation, and it will be interesting to see its long-term impact for El Salvador and globally.
• Mastercard is welcoming 5 global startups, including Kulipa, in its Start Path program, to develop blockchain use cases and user experiences (Read more). This collaboration between a major payment network and blockchain innovators is a promising sign for mainstream adoption.
• Deutsche Bank joined a Singapore-based digital asset platform, demonstrating the growing interest of traditional financial institutions in asset tokenization (Read more). This trend has the potential to unlock new levels of efficiency and liquidity in financial markets.

🏦 Stablecoins and CBDCs

• A report suggests Chinese workers are converting their digital yuan salaries back to cash (Read more). This raises questions about trust or potential limitations in usability of the CBDC, contradicting the Chinese government's optimistic messaging.
• In contrast, a European Central Bank official downplayed the notion that a digital euro would replace the Swedish krona (Read more). CBDCs are likely to coexist with traditional currencies, offering complementary functionalities.‍
• Tokenized Treasuries are emerging as a new asset class, but widespread adoption may take time due to infrastructure and regulatory hurdles (Read more).

We're thrilled to announce that Kulipa has been selected to join Mastercard's Start Path Blockchain and Digital Assets program!

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This prestigious program connects high-potential startups with Mastercard's expertise and network to accelerate innovation in the blockchain space. We're excited to explore with Mastercard how blockchain technology can revolutionize the financial system, creating a more efficient and inclusive experience for millions around the world.

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Here's what Axel Cateland, founder of Kulipa, had to say:

“Through Mastercard Start Path, we’re looking to uncover new ways to unlock crypto mass adoption and wider financial inclusion with convenient, global stablecoin payments.”

Sabrina Tharani, SVP of Global Fintech Programs at Mastercard also commented:

“As digital assets become increasingly mainstream, Mastercard is embracing opportunities to support and collaborate with startups to build the future of blockchain and digital assets innovation through the Start Path startup engagement program."

Want to learn more? Check out the full press release here.

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⚖️ Regulation Roundup

• ‍AML Focus in Taiwan and the EU: Taiwan is proposing stricter AML regulations for crypto service providers, including jail terms and fines for non-compliance (Read more). Meanwhile, Marsh is offering insurance solutions for EU crypto custodians, a sign of maturing regulatory frameworks (Read more).‍
• US Considers Crypto Mixer Ban: The US House of Representatives is proposing a two-year ban on crypto mixers, aiming to combat illicit activities (Read more). This is part of a wider conversation about balancing innovation with financial crime prevention.‍
• Philippines and Nigeria Grapple with Crypto: The Philippines is set to unveil crypto guidelines (Read more), while Nigeria is delisting the Naira from P2P platforms citing concerns about manipulation of the currency's value (Read more). Both countries are navigating how to integrate cryptocurrencies into their financial systems.

💵 Stablecoins on the Move

• Tether Fights Back and Expands: Tether refutes Deutsche Bank's claims regarding its solvency, rightfully pointing out the irrelevance of the comparison to TerraUSD, an algorithmic stablecoin whose recent collapse does not reflect the asset-backed model of Tether (Read more) and invests in Citypay.io, boosting crypto payments in Eastern Europe (Read more). This highlights the growing role of stablecoins in facilitating international transactions.
• Lightning Labs and Ripple Embrace Stablecoins:  Lightning Labs is exploring bringing stablecoins to the Bitcoin network, aiming to improve scalability and transaction speeds (Read more). Additionally, Ripple plans to launch a USD-backed stablecoin in June, further diversifying the stablecoin landscape (Read more).

🏦 CBDCs Take Center Stage

• Rwanda and India Lead CBDC Developments: Rwanda is exploring a tokenized retail CBDC (Read more), while India is boosting the offline capabilities of its retail CBDC project (Read more). These developments showcase the increasing interest from central banks in issuing their own digital currencies.
• Swiss National Bank Considers Wholesale CBDC: The Swiss National Bank is discussing alternatives for a wholesale CBDC (Read more), indicating a potential shift towards digital settlements for institutional transactions.

Beyond the Headlines

• Mastercard Embraces Tokenized Assets: Mastercard is offering tokenized asset solutions (Read more), highlighting the potential of blockchain technology to revolutionize traditional asset classes.
• Majority of Americans See Opportunity in Crypto: A new survey reveals that while most Americans recognize the limitations of the current financial system, they remain skeptical about crypto as a solution (Read more). This underscores the need for increased education and user-friendly crypto products.
• Innovation Continues with Starknet Grant Program: Starknet, a Layer-2 scaling solution for Ethereum, is launching a $5 million grant program to foster innovation within the blockchain space (Read more). This exemplifies the ongoing efforts to improve scalability and user experience in the blockchain ecosystem.
• Traditional Finance Gets a Digital Boost: A state-owned German bank is introducing digital bonds (Read more), showcasing the potential of blockchain technology to streamline traditional financial processes.
• Colombian Bank Launches Crypto Exchange and Stablecoin: Bancolombia, a major Colombian bank, is entering the crypto space with its own exchange and stablecoin (Read more). This is a significant development for crypto adoption in Latin America.
• Revolut and Vodafone Join the Crypto Fray: Revolut launches a crypto trading platform for UK users (Read more), while Vodafone explores using SIM cards for mobile crypto transactions (Read more). These initiatives indicate

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🔎 Clearer Waters for Stablecoins?

Data suggests that stablecoins are becoming a global asset class, with countries like Pakistan showing renewed interest in digital currencies. This growing recognition of stablecoins globally bodes well for the future of crypto, despite the regulatory hurdles that continue to persist. (Read more)

Tether's new partnership with Chainalysis to monitor transactions is a significant development for the stablecoin arena. This move towards transparency is a welcome shift, and it's an encouraging sign that the industry is taking steps to ensure compliance and foster trust (Read more). A similar sentiment is echoed in the Canadian stablecoin space where Coinbase has received a conditional license to operate. It indicates a growing acceptance of crypto technologies in traditional financial markets. However, the potential merger of stablecoin operations with FAA is met with skepticism, with experts doubting the feasibility of such an integration (Read more).

In a significant shift, Circle's USDC stablecoin reportedly processed more transactions than Tether's USDT in April 2024. This could indicate a growing preference for USDC, potentially due to its focus on US-based regulation (Read more).

💼 International Affairs: Iran, Russia and Venezuela

In the geopolitical landscape, Iran and Russia are exploring bilateral trade solutions powered by CBDCs. While this hints at the potential of blockchain in disrupting traditional trade mechanisms, Russia's proposed crypto ban has raised eyebrows. It may present complications for the global market, but reaffirms the volatile regulatory landscape globally (Read more). Venezuela too, is tightening regulatory scrutiny on digital currency usage, pointing to a cautious approach towards crypto advancements (Read more).

📜 Legislative Moves: UK and Argentina

The UK is demonstrating progressive thinking with an FCA allocation of £30 million for crypto oversight in 2023 and a lawmaker advocating for reconsideration of the retail crypto ETP ban (Read more). Meanwhile, in Argentina, a lawmaker has presented a draft WorldCoin regulation bill, further proving that the crypto regulatory conversation is heating up worldwide (Read more).

💹 Investment Shifts: BlackRock and Indian Investors

BlackRock's recent interest in tokenization echoes the broader shift towards digital asset investment (Read more). This shift is mirrored in a survey revealing that 45% of Indian users with retirement plans are investing in crypto, underlining the changing dynamics of investment portfolios globally (Read more).

⚖️ Regulatory Concerns & Protection: US and ConsenSys

The US market has seen self-custody wallet providers exit amid regulatory concerns (Read more). In parallel, ConsenSys is seeking court protection against potential SEC overreach for Ether and MetaMask. These developments reflect the complex and evolving relationship between crypto enterprises and regulatory bodies (Read more).

🇨🇳 China's CBDC Project and Hong Kong's Virtual Asset Retail Services

In Asia, the architect of China's CBDC project is facing a probe for alleged violations (Read more), while Hong Kong's ZA Bank is rolling out virtual asset retail services (Read more). As the East continues to experiment and innovate in the crypto space, it's clear that the journey is fraught with both opportunities and challenges.

Do we need a Spotify for Wallets? with Alexandre Gabadou from The Big Whale

With 400 million active on-chain personal wallets last year, we're still in the early stages of the Web3 adoption cycle. That's a mere 7.5% of the world's online population, or 5.35 billion people (with the over-optimistic assumption that 1 wallet equals 1 user). The good news? You're still early.

To onboard the remaining 5 billions, Web3 will have to get a design upgrade and get simpler. The challenge, however, remains: how can wallets achieve both simplicity and security?

To answer this, we spoke with Alexandre Gabadou, Head of Product at The Big Whale (TBW), France's leading Web3 media outlet. We'll explore what diversification means for wallets from both user experience & business models standpoints, to make them mainstream-friendly.

4 high-friction UX problems that slow down wallets adoption

Before diving into onboarding the non-technical majority, let's identify user experience pain points plaguing wallets today:

• Onboarding friction: The UX cost of the first transaction is too high. To enjoy the wonders of Web3, newcomers have to achieve the following steps: they first need to convert fiat to crypto through an exchange, send it to a wallet, understand gas fees and pay them. They can also opt for the on-ramp solution, but which comes with a KYC. The number of steps to cross is way too high to onboard non-tech savvy people.
• Transaction abstraction problem: All of the steps in a transaction are abstracted in Web2 (except for 3D Secure in some cases). They’re not so much in Web3. To get their funds from A to B, users are faced with a variety of different options they need to get familiar with: bridge, stake, send, lock, provide liquidity, and many more. All this lingo coupled with manual tasks adds complexity for the mainstream user.
• UX Competition: A battle for dominance unfolds whenever users connect to a DApp. Coinbase Wallet, Metamask, and the entire crew pop up at the same time in the browser, fighting for attention. It creates needless confusion due to a lack of standardization.
• Validating transactions: While conceptually interesting, validating a transaction before payment creates a clunky experience for Web2 users. To them, payment IS an authorization, and both usually happen at the same time. Web3 could benefit from a similar approach for simplicity.

On this last point, Alexandre shares a good example: Web3 operations applied to Web2 businesses.

To illustrate, we attempted offering crypto payments for TBW subscriptions. Renewals were riddled with manual tasks and limitations, resulting in a 50% higher churn rate for crypto payers compared to fiat. This is because we had to manually remind crypto renewers to go through Coinbase Commerce and recreate a transaction. Fiat users had everything automated with Stripe. We’re excited to see similar options in Web3 subscription systems emerge, such as SubsProtocol.

While these four examples highlight UX limitations hindering wallet adoption, it's unfair to solely focus on Web3's shortcomings. The entire ecosystem is a playground for innovation and new use cases, and it should also be part of the equation. Perhaps the best way to illustrate this might be from emerging monetization patterns.

Complexity breeds flexibility

Let's talk business models. Subscriptions are the bread and butter of many Web2 businesses. But what if Web3 could add a twist to it?

Alexandre continually explores how crypto could complement revenue generation sources for TBW:

We researched NFT models for TBW, considering not just monetization but also community engagement. It's allowed a significant shift from traditional subscriptions, which in my opinion became irrelevant in the age of free information for established media outlets. NFTs have the power to enhance user retention through gamification and foster a strong community around our brand.

Staking presents another alternative: the more users stake, the more functionalities they would unlock within the product. Staking offers a compelling alternative to subscriptions, allowing users to provide liquidity on a DApp and earn yield, while retaining control over their assets.

This is where, despite their complexity, these new models bring modularity. They enable individuals to decide how much to spend, when to pull back, and to get proper skin in the game to support their favorite projects. That’s what current users find so fascinating about Web3.

Let’s rewind to some 30-40 years ago. In the early days of the internet, innovators like the CERN in Geneva used to stock their first datasets onto physical tapes. They indeed came to the conclusion that taking such datasets out of the system altogether was the most secured way to store them. Sounds familiar to a certain way to save on-chain assets?

Alexandre offers another interesting adoption example: when music used to be free during the Limewire era.

For a while, music didn’t have a CD sales-led business model anymore, Limewire and peer-2-peer downloads killed it. But eventually Spotify came up, and simplified access for everyone. We think that in the media industry, there is an opportunity to do the same, to change how users interact with content, to make it worth the experience.

Early birds in Web3 thrive in its complexity: it’s free, it’s wild, it’s flexible. But the learning curve to get there was costly. To bridge the chasm and appeal to the mainstream market, a Spotify might be necessary for wallets. One that would bring simplicity in the user experience, even if it comes at a premium.

A diverse spectrum of wallet solutions

The future of Web3 wallets doesn't lie in a one-size-fits-all solution, but in a diverse ecosystem catering to various user profiles. Web3 usage will soar when users will have a choice between several solutions that align with their needs.

• A Spectrum of security options: Cold wallets will remain the go-to choice for security-conscious users, while hot wallets and delegated on-chain custody solutions (like Kiln for staking) will cater to those seeking a balance between convenience and security.
• Wallets tailored to use cases: Today's Web3 users manage their assets across blockchain ecosystems (e.g., Metamask for EVM chains vs. Keplr for Cosmos) or by risk level (cold vs hot wallets). Web2, however, has a use-case based approach: people have different accounts for savings, risky investments, and joint accounts, each with appropriate security and freedom levels. A similar approach in Web3 would significantly improve the user experience.
• Flexible business models: Most wallets currently generate revenue through in-app transactions. But there's more to explore! This model diverts development from user-centric solutions (as discussed in our previous Deep Dive article on The Liquidity Chase). Instead, users should have access to wallets with monetization models that works best for them, such as flat subscriptions (SubsProtocol), freemium with paid features, token-based (Trust’s $TWT), or NFT gatekeeping (Tokenproof).

Let's revisit staking as an example. According to Alexandre, current Web3 mechanisms should persist, but with beginner-friendly options.

Imagine a tiered subscription model for our platform. The higher the tier, the more content and features readers unlock. After paying in fiat, they're informed they can actually get their payment back anytime, because we've seamlessly on-ramped and staked it on the backend. This simplifies and streamlines staking for everyone.

Embracing diversity for a thriving Web3

It's widely acknowledged that current on-chain users have endured a steep learning curve to get there in the first place. They're accustomed to the Web3 equivalents of Limewire and Linux, valuing their free and flexible nature. It's also a commonplace opinion to say that the mainstream audience might prefer the simplicity of a Spotify or iOS experience, even if it comes at a premium. A mature Web3 ecosystem thrives on both modularity and its ability to abstract complexity. It's a world where iOS and Linux coexist, just like today.

On this point, Alexandre offers a compelling benchmark for success: the Grandma Test.

Can your grandma make an on-chain transaction? It seems far-fetched now, but it's a useful metric to gauge Web3's UX readiness for the non-technical majority.

The path to a flourishing Web3 ecosystem isn't paved solely with simplicity, but with diversification. The space won't succeed by abandoning early adopters or resorting to uninspired Web3 experiences through over-centralization, custodial services, or intermediaries. True growth lies in enabling all these options to thrive together.

About The Big Whale

In an ecosystem full of opportunities and dangers, The Big Whale helps individuals and companies make the best decisions in Web3. Access high quality content about the latest in crypto, top events and an engaged community, all from a single source.

About Kulipa

Kulipa helps non-custodial wallets issue crypto payment cards. With Kulipa, wallets can create new use cases, onboard users, and generate more movement through your wallet. We provide a one-stop-shop payment solution with branded cards, flexible infrastructure, best-in-class payment experience for users, and comprehensive support tools to supercharge your team.

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🌍 Global CBDCs: On the Rise

• ‍Chile and Mauritania have all chimed in with their CBDC perspectives. Chile seems to be edging closer to launching its own CBDC (Read more), while Mauritania is seeking help from G&D to design theirs(Read more).
• A new report from the World Economic Forum reveals that 98% of central banks are exploring CBDCs (Read more).
• The digital Euro is facing some hurdles, with an ECB board member stating that the iPhone is not compatible with the digital euro (Read more). Furthermore, the launch of the digital euro is not expected until 2028 (Read more).

🏦 Institutional Crypto Adoption

• The world of institutional investors is also warming up to crypto. A KPMG report reveals that 39% of institutional investors in Canada had crypto exposure in 2023 (Read more).
• 6 years after stopping accepting payments, Stripe is bringing back crypto payments, signaling a shift in the payment industry (Read more).

⚖️ Crypto Regulations

• Crypto regulations seem to be on everyone's mind, with Indonesia and Australia inking a crypto taxation deal (Read more) and the EU introducing new anti-money laundering regulations (Read more).
• And, of course, with regulation comes enforcement with Thailand set to block access to unlicensed crypto platforms (Read more).

💵 Stablecoin Adoption: US Senate Bill & Banks

• A new US Senate bill could encourage banks to enter the stablecoin market (Read more). This development could significantly bolster the adoption of stablecoins and further integrate them into the existing financial system.

📱 A Better Future for Crypto: Sustainability and Accessibility

• Jupiter, a Solana DEX aggregator, is making moves to expand its mobile presence by acquiring the Ultimate Wallet (Read more). This shows a growing trend of crypto platforms aiming to increase accessibility through mobile interfaces.
• In the world of Bitcoin mining, PayPal proposes an incentive program for miners to adopt clean energy (Read more) while a project in Finland is using Bitcoin mining to heat homes (Read more). These initiatives suggest a promising future for sustainable crypto operations.

🏁 Global Central Bank Digital Currencies (CBDCs) Race Heats Up!

• CBDCs around the world Israel's central bank rolls out sandbox CBDC experiments (Read more), South Korea speeds up its CBDC project (Read more) and New Zealand begins plans to introduce a CBDC (Read more).
• Fidji for Crypto Meanwhile, the Reserve Bank of Fiji insists that crypto is still not recognized as legal tender (Read more).
• It seems like a global CBDC race is on! Each move marks an exciting step in the evolution of digital currency, with potential implications for global monetary policy and financial stability.

💼 Self-Custody Wallets & Layer 2s: The New Norm?

• Kraken, a major crypto exchange, introduces self-custody wallets (Read more), a move that redefines the traditional exchange-customer relationship.
• Meanwhile, OKX and Polygon collaborate to launch the X Layer public mainnet (Read more), another attempt at scalability issues in the blockchain sphere.
• These developments reflect a trend towards greater control and scalability in the crypto ecosystem.

⚖️ Regulation and Taxation: A Balancing Act

• Governments are grappling with how to regulate and tax crypto, from the USA to Canada. Senators Lummis and Gillibrand introduced a new bill to regulate stablecoins (Read more), while Canada plans to implement crypto tax (Read more) and require reporting of crypto transfers by 2027 (Read more).
• The UK is also set to introduce stablecoin and crypto legislation by mid-2024 (Read more).
• Again it proves that, as the crypto world matures, regulatory and tax considerations will become increasingly important.

🚀 Institutional Adoption: Banks and Big Tech Embrace Crypto

• It's been a big week for institutional adoption of crypto. Germany's largest federal bank plans to offer crypto custody services (Read more), while HSBC looks to broaden tokenized offerings after launching a gold token (Read more).
• EY uses Polygon's proof of stake for business on the tech front, underscoring the importance of blockchain technology in modern business operations.

📈 Crypto Market Developments: ETFs, DeFi, & Stablecoins

• Bitcoin and Ethereum ETFs get the green light in Hong Kong (Read more), a major milestone for crypto adoption in the region.
• Xuirin Finance, a pioneer for DeFi, sells out stage 1 of its card presale (Read more), indicating strong investor interest in DeFi projects.
• Lastly, the use of stablecoins continues to grow (Read more), with crypto payment firm Triple A including PayPal's stablecoin in payment options for customers (Read more).

⚖️ Regulatory update

• ‍SEC Goes After Uniswap in DeFi First The SEC's lawsuit against Uniswap highlights the ongoing regulatory uncertainty surrounding DeFi.  This will likely lead to further discussions about how to regulate decentralized protocols (Read more)‍
• Thailand Seeks Regulations on Crypto P2P Activities Thailand's move to regulate crypto P2P activity reflects a global trend towards establishing a framework for the industry (Read more)‍
• New Zealand Minister Calls for Overhaul of Digital Asset Regulations New Zealand's proposed overhaul of digital asset regulations could create a more supportive environment for the crypto industry (Read me)‍
• Hashkey CEO Slams Hong Kong Crypto Regulations Industry pushback against overly restrictive regulations is a recurring theme. Striking a balance between innovation and consumer protection will be key (Read me)‍
• South Korea to Tighten Token Exchange Regulations South Korea's plan to tighten regulations, including blocking hacked tokens, highlights the need for global cooperation on cybersecurity standards (Read me)‍
• Paraguay Proposes Bitcoin Mining Ban Citing Power Issues Paraguay's proposal to ban Bitcoin mining due to power grid concerns underscores the need for the industry to address its energy consumption (Read me)

💸 Stablecoins on the rise

• While PayPal's PYUSD stablecoin circulation has seen a decrease, its recent integration of PYUSD for faster and cheaper international transfers could lead to significant volume growth. Despite a recent decline in PayPal's PYUSD circulation (Read more), integrating it for international payments could be a game-changer for mainstream stablecoin adoption. By leveraging Paxos' US dollar-pegged pyUSD, PayPal offers users a faster and potentially cheaper way to send money across borders. This could significantly boost global financial inclusion (Read more)‍
• Hong Kong Mulls Crypto Stablecoin Issuer Hong Kong is exploring the issuance of a government-backed stablecoin. This could position Hong Kong as a hub for digital asset innovation, although regulatory clarity remains essential (Read me)‍
• 1inch Partners with Mastercard for Crypto Debit Card This collaboration between a leading DEX aggregator and a major payments network is another sign of mainstream adoption. Crypto debit cards offer a convenient way to spend crypto holdings (Read me)‍
• Ethena Labs to Scale USDE Stablecoin with Bitcoin Backing Ethena Labs' plan to leverage Bitcoin for USDE stability is an interesting experiment in hybrid stablecoin designs (Read me)‍
• Japan's Sony Bank Experiments with Yen-Pegged Stablecoin on Polygon This experiment by a major Japanese bank demonstrates the potential for stablecoins in global financial markets (Read more)

🔗 Other Interesting Stories

• Survey: Gen Z More Likely to Hold Crypto Than Stocks This survey suggests growing interest in cryptocurrencies among younger generations (Read more)
• BlackRock Considers Tokenized Fund Trading via Circle's USDC BlackRock's exploration of tokenized fund trading could be a major driver of institutional adoption of stablecoins (Read more)
• Solana's Battle Against Congestion Solana's ongoing efforts to address network congestion are crucial for maintaining its scalability (Read more)
• Philippines Faces Withdrawal Issues After SEC Blocks Binance This situation underscores the importance of clear regulations and consumer protection measures. (Read more)

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The Liquidity Trap: How Wallets are Chasing Trends and Missing Innovation

The non-custodial wallet market is booming, but a question remains: can they bridge the user gap and innovate for wider Web3 adoption? In this article, we delve into wallet challenges with insights from Arthur Pfalzgraf, Product Manager at Ultimate. We'll explore what makes a successful wallet, and what the industry needs for mainstream adoption.

1. Wallets in Search of an Identity

The non-custodial wallet market booms, yet struggles to find its place. The reason? A still unclear value proposition targeting two user segments with opposing needs.

• Degens: Crypto investors seeking yield and new opportunities (Europe, Asia, USA)
• Savers: From high-inflation countries (Nigeria, Argentina, Venezuela), they seek secure and seamless access to dollars via stablecoins to hedge against inflation.

Both segments are sensitive to different wallet features. Degens value in-app trading features like Ultimate's candlestick chart integration, while Savers prioritize a smooth onboarding process and security.

These differing needs create an identity crisis for wallets, making it difficult to target the right audience and concentrate usage within the wallet itself, rather than on Decentralized Applications (DApps) on the blockchain.

Arthur captures this perfectly:

"For everyone, wallets are a mean to an end, not an end in themselves. Crypto and Decentralized Applications ARE the end product."

Wallets will need to specialize. We're already seeing traction for Savers-oriented wallets like Sling, Opera Mini Pay, and DolarApp, with simple products and clear value propositions. Degens-oriented wallets, however, are trickier.

2. The Liquidity Race: Innovation's Trap

Most "1st-Gen" wallets we’re familiar with are arguably Degen-oriented. Metamask exemplifies this with its complex, tentacular product facilitating trading across many blockchains at the expense of user experience.

To gain market share, Degen-oriented wallets chase capital. They race for short-term liquidity capture, multiplying DApp integrations and cross-chain compatibility.

This is because Degens seek the easiest way to reach the latest hype blockchain/DApp narratives. A wallet must integrate quickly with "hot" chains to convert users. Ultimately, wallets aim to increase retention by owning users for maximizing in-app trading features, their business model.

But this strategy is risky, as Arthur points out:

"Following liquidity by integrating embedded DApps within the App does not scale well. The Space is not mature enough. By the time we integrate a DApp like Lido, the hype is over and everyone's on to RWAs or restaking."

Ultimate Wallet has chosen a different approach:

"Rather than reactively integrating all chains and DApps, we focused on the chains with the most activities and users, and build an in-DApp browser. The browsing experience is optimised for Web3, and contains specific security features."

3. Marketing and Innovation, the Keys to Success

Product strategy for Degen wallets may be lacking a clear direction, but it might not be what matters most. At the end of the day, it’s all about gaining market shares. And a smart way to do it is through incentive-driven marketing, or strong community building.

Arthur explains:

"Metamask is a good example. They dominate the market despite a user experience that is far from optimal. They've managed to create a strong brand name and generate volume, which is essential for creating revenue. Creating incentives is also very effective: Backpack, for example, created an NFT collection, which had a positive impact on their launch.”

However, innovation is catching up. Smart wallets with Account Abstraction (AA) are the talk of the town on Crypto Twitter.

But is this the innovation Degens expect?

"Certainly, AA improves the user experience. But I don't think users choose a wallet based on AA versus EOA (Externally Owned Accounts). If a wallet is EOA and launches a token, people will prefer the wallet generating short term value for them. The token is the product, not the wallet.

For Arthur, community building is ultimately what drives Web3 products’ success.

“Wallets need to build their communities to create a growth loop effect. Moreover, having champions on twitter or youtube that will accelerate the word of mouths is key.”

Ultimately, non-custodial wallets need to bridge the gap between deep UX innovation and community-building. Only a great combination of both can create sustainable growth and enable mainstream access to self custody.

About Ultimate

Ultimate is a powerful self-custody wallet to buy & sell tokens and NFTs on Solana, Ethereum & Bitcoin. With their intuitive user experience and advanced in-app trading features, they're ideal for traders and beginners alike. Check them out on their website or mobile app, in the Apple and Playstore.

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⚖️ Regulation Roundup

• From Singapore's Custody Oversight to Lithuania's Licensing Crackdown Regulatory developments continue around the world. Singapore's MAS 🇸🇬 is expanding its oversight to include crypto custody, a move that could bring greater stability to the market (Read more). In contrast, Lithuania 🇱🇹 is taking a stricter approach with new licensing rules that could potentially reduce the number of operating crypto firms (Read more). These contrasting approaches highlight the ongoing debate around how best to regulate the cryptocurrency industry.

• France and Argentina: Cracking Down on Unauthorized Activity Both France 🇫🇷 and Argentina 🇦🇷 have taken action against unauthorized cryptocurrency activity. This is a reminder for users to be vigilant and only deal with licensed and reputable firms. It's also positive to see regulators working with the industry to improve compliance (Read more about France and Argentina).

🏦 Central Bank Corner

• China's Digital Yuan Gets a Hardware Wallet Boost China 🇨🇳 continues to push forward with its digital yuan initiative. This week's news highlights their integration with hardware wallets, a move that could increase user adoption and security. While this isn't directly related to traditional cryptocurrencies, it's a significant development in the CBDC (Central Bank Digital Currency) space, and one that other countries are sure to follow closely. (Read more)
• Project Agora: Central Banks Explore Tokenized Cross-Border Payments Project Agora, a collaborative effort between central banks 🏦, is exploring the use of blockchain technology for cross-border payments. This is a fascinating development, and if successful, could streamline international transactions and reduce costs. It's also a sign that central banks are increasingly recognizing the potential of blockchain technology (Read more).

🔗 Other Interesting Reads

• Ripple Announces Cash-Equivalent Stablecoin Ripple's announcement of a cash-equivalent stablecoin is another interesting development in the stablecoin space. It remains to be seen how this offering will differentiate itself from existing options (Read more).
• Morgan Stanley Aims for First-Mover Advantage with Bitcoin ETF The race for a fully approved Bitcoin ETF in the US heats up, with Morgan Stanley reportedly aiming to beat UBS to the punch. This could be a significant development for mainstream adoption of Bitcoin (Read more).

A Glimpse into Account Abstraction

Beyond the Buzz

It’s undeniable that Account Abstraction (AA) has been generating a lot of excitement on Crypto Twitter. While live integrations within digital products are still hard to find as the tech is so new, AA's potential to transform user experiences for non custodial wallets is undeniable. This article explores concrete AA applications that are already in development, showcasing the real-world benefits they offer to users today and in the future.

What is Account Abstraction?

To keep it short, Account Abstraction (AA) is an Ethereum Request for Comment (ERC) that lets developers create non-custodial wallets as programmable smart contracts. These smart contract wallets offer users all of the same features that traditional wallets have — but with enhanced security & advanced customizations on top. This paves the way for better web3 user experiences and use cases.

As this article does not intend to focus on how Account Abstraction works, we won't go deeper in the details on this front. However, you can check the 3 links below that will explain AA by growing levels of technical complexity.

• Level 1: Overall explanation
• Level 2: Technical overview from Vitalik Buterin
• Level 3: The initial thread between the Ethereum devs

EOAs vs. AA: A Tale of Two Wallets

Currently, most users rely on a specific wallet type known as Externally Owned Account (EOAs) - Metamask falls in this category. Being the first generation of wallets, they have paved the way for DeFi and on-chain onboarding but come with significant limitations.

On the other hand, Account abstraction simplifies smart contract development, empowers users to manage funds across different contracts without juggling private keys for each one, and enhances security for users.

Let’s see how they compare to programmable wallets:

Limited Functionality

• EOAs can only perform tasks whenever the user is here to validate them, implying little automation capabilities.
• AA wallets, on the other hand, leverage smart contracts to unlock a wider range of functionalities. Imagine setting spending limits for your children's accounts or automatically rebalancing your DeFi portfolio – these become possible with AA.

Security Woes

• Losing your private key with an EOA means losing access to your entire crypto portfolio.
• AA wallets store private keys within smart contracts, making them more resistant to theft. Additionally, AA allows for features like multi-signature wallets, requiring multiple approvals for transactions, similar to requiring two keys to open a safe deposit box.

Gas Fee Headaches

• Every interaction with the blockchain using an EOA incurs a gas fee, often requiring users to manage gas prices and hold the network's native token.
• With AA, the gas fee can be paid by a third party, meaning the gas could be paid for using alternative tokens, a credit card, or even allowing sponsoring gas costs.

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These limitations paint a clear picture: EOAs, while familiar, struggle to develop features wallets would need to open up to a more mainstream audience - and this is where Account Abstraction steps in. Let's now explore the exciting possibilities AA unlocks, diving into concrete user experiences that are being built or envisioned with programmable wallets.

The Future of User Experience with AA

AA enables wallets to open up to a more intuitive and secure Web3 experience. Here's how:

Real World Use Cases

• Friend.Tech - Seamless Onboarding: Last year, Friend.tech onboarded thousands in Web3 through their smooth onboarding process. Users can sign in with familiar methods like SMS, Google, or Apple. Behind the scenes, Privy, Friend.Tech's onboarding partner leverages an AA layer to seamlessly create a self-custodial wallet for new users and enable this seamless process. Importantly, neither Friend.tech nor Privy have access to users’ private keys, ensuring their assets stay secure while retaining complete control. Read more here.
• Visa - Frictionless Gas Fees: Paying gas fees with familiar methods like Visa cards becomes a reality with AA. Visa allows users to cover fees using their cards, eliminating the need for native tokens or bridge processes, just like paying for online purchases with your credit card today. Read more here.
• Kulipa - Debit Cards for Self-Custodial Wallets: Unlike other crypto payment cards that only enable a prepaid card, Kulipa creates smooth debit experience with AA wallets. Their smart architecture enables them to authorize the transaction based on the wallet’s balance and settle directly on chain. This ensures a smooth payment experience for users, allowing them to spend crypto instantly without upfront top-ups. Read more here.

2 Other Potential Use Cases

• Freeze Assets: Imagine a "virtual cold storage" feature within wallets, to prevent accidental transfers of specific assets, similar to how banks allow users to temporarily freeze their cards. Users could choose which assets to "freeze," ensuring valuable NFTs or crypto holdings remain secure.
• Automated Trading Strategies: AA enables in-wallet trading strategies tools connected to price action on the blockchain, similar to tools offered by platforms like Unibot. Think triggered buy and sell actions, or DCA strategy directly within the wallet, eliminating the need to interact with external DApps and constantly monitor markets.

Conclusion

Account Abstraction is a revolutionary update that unlocks a future of user-friendly, secure, and versatile interactions with the blockchain. From seamless onboarding to innovative features like virtual cold storage and in-wallet trading, AA paves the way for a more accessible and intuitive Web3 experience for everyone.

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⚖️ Regulation Roundup

• Estonia Approves Bill to Regulate Crypto Service Providers This is a positive step for the industry, providing much-needed clarity for businesses operating in Estonia 🇪🇪 Read more‍‍
• US Targets Crypto Exchange KuCoin This enforcement action by the US 🇺🇸 Department of Justice highlights the ongoing scrutiny of crypto exchanges regarding Anti-Money Laundering (AML) compliance. It's a reminder that as the industry matures, regulatory expectations will continue to evolve. Read more‍
• Indonesia Considers Regulatory Sandbox for Crypto Firms This measured approach by Indonesia 🇮🇩, exploring a regulatory sandbox for crypto firms, is an interesting development. It could pave the way for controlled innovation while managing potential risks Read more‍
• EU Updates AML Rules for Anonymous Crypto Transactions 🇪🇺 The EU's update to AML rules for anonymous crypto transactions reflects a global trend towards balancing financial inclusion with mitigating illicit activities. Read more‍
• Tron Blockchain Tied to Illicit Crypto Activity This report highlights the importance of addressing illicit activities within the crypto space. Blockchain technology can be misused, but ongoing efforts to improve transparency and compliance can help mitigate these risks. Read more

🏦 CBDCs projects

• IMF Proposes Digital Money for Pacific Islands The IMF's proposal for digital money in the Pacific Islands is an example of how blockchain technology can promote financial inclusion. Read more‍
• SWIFT to Launch CBDC Platform & UAE Develops CBDC Strategy ‍News of SWIFT's CBDC platform launch in 2025 and the UAE's CBDC strategy highlights the growing interest in central bank digital currencies around the world. Read more on SWIFT and on the UAE CBDC

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📈 Adoption on the Rise

• HSBC Launches Tokenized Gold for Retail Investors in Hong Kong 🇭🇰 HSBC's launch of tokenized gold for retail investors opens up new avenues for traditional finance to embrace blockchain technology. Read More‍
• ‍UK Government Backs Tokenization Collaboration The UK 🇬🇧 government's support for tokenization collaboration demonstrates a growing recognition of the potential of this technology. Read More‍
• U.S. Sanctions Target Russian 🇷🇺 Crypto Entities  This action highlights the potential use of crypto for sanctions evasion, but it's important to note that blockchain's transparency can also be a tool for regulators. Read More‍
• Philippines 🇵🇭 Blocks Binance Amid Regulatory Concerns This is a reminder of the ongoing challenges around global crypto regulations. Read More

Innovation in Focus

• Ethereum Network Reaches 1 Million Validators This is a significant milestone for the Ethereum network, demonstrating its growing decentralization and security. Read More‍
• ‍Near Foundation Unveils Chain Signatures ()Near Foundation's Chain Signatures technology has the potential to improve scalability and efficiency in blockchain applications. Read more‍
• ‍Open Launches On-chain Ticketing Ecosystem This development by OpenSea paves the way for innovative ticketing solutions powered by blockchain. Read more‍
• Circle Launches USDC on Solana Circle's launch of USDC on Solana demonstrates the interoperability potential of stablecoins across different blockchains. Read more

💵 Stablecoins and CBDCs: Still rising

• Hong Kong is pressing forward with its e-HKD initiative, launching the second phase of its pilot program to explore potential use cases for its CBDC. This is a significant development as central banks around the world grapple with the potential of digital currencies to transform the financial landscape. Read more
• China's central bank published a digital yuan guide for foreign visitors, hinting at potential wider adoption of its CBDC. Read more
• On the stablecoin front, Congressman Patrick McHenry's positive comments regarding stablecoin legislation in the US offer a glimmer of hope for the industry. Clear regulations could provide much-needed stability and growth for this crucial sector. Read More
• However, established stablecoins like Tether are facing increased competition from new players entering the market, signaling a dynamic and evolving landscape for stablecoins. Read more

⚖️ Regulatory Roundup: Ethereum in the US regulator visor

• The ongoing investigation by the SEC into key crypto companies, with Ethereum (ETH) potentially being classified as a security, adds another layer of uncertainty for the industry. How this plays out could have significant ramifications for the entire crypto market. Read more
• As crypto adoption increases, so does the focus on regulation. The UK's Financial Conduct Authority (FCA) plans to implement a market abuse regime for crypto assets in 2024, aiming to protect investors from potential manipulation. Read more
• Similarly, Argentina is taking steps to tighten its grip on crypto exchanges, potentially impacting user experience and exchange operations. Read more
• Liberia is working on building a CBDC with blockchain solutions firm GLuWa. This is another example of a government exploring the potential of CBDCs. Read more
• Sweden's Riksbank also released its final report on its CBDC project, offering valuable insights into potential CBDC design and implementation. Read more

📈 Crypto Adoption: From Coffee Shops to Global Ride-Hailing

• Despite the regulatory hurdles, there are positive signs of crypto adoption worldwide. According to a recent report, Nigeria and Turkey led the way in crypto adoption in 2023. Read more
• This trend is trickling down to everyday businesses as well. A local coffee shop in Washington D.C. is now accepting crypto payments, showcasing the potential for crypto to integrate into traditional spending habits. Read more
• Further solidifying this trend, Grab, a major ride-hailing platform in Southeast Asia, is bringing crypto payments to Singapore. This could significantly increase crypto's visibility and use case in the region. Read more

Other Features for Mainstream Adoption

In the last article, we explored how cryptocurrencies, particularly stablecoins, offer a lifeline to those facing financial exclusion and the harsh realities of inflation. We also discussed the potential of crypto debit cards as a way to bridge the gap between crypto ownership and everyday spending, a crucial step for mainstream adoption.

However, wallets need to evolve beyond just facilitating payments if they are to truly reach the masses. This article dives into two additional use cases that can revolutionize crypto wallets and empower everyday users.

1. Remittance: Sending Money Made Simple

Traditional remittance systems are notoriously inefficient and expensive. With over 70 countries relying on remittances for a significant portion of their GDP, there's a massive opportunity to disrupt the status quo.

Current systems often charge exorbitant fees (averaging 7%), making it difficult for families to send money back home. This burden is even heavier in regions with high inflation, where the value of sent funds erodes quickly.

Here's where stablecoins and blockchain technology come in as game changers. Crypto wallets with features designed specifically for remittance can make sending and receiving money faster, cheaper, and more transparent.

Imagine:

• Clean User Interface: A user-friendly interface that hides the complexities of blockchain technology, making it accessible to everyone. Minimal use of technical jargon to make the platform welcoming to newcomers unfamiliar with the world of crypto.
• Local Currency Denomination: The ability to view balances and transactions in the user's familiar local currency, eliminating confusion and simplifying the process.
• Seamless Payment Experience: Effortless sending and receiving of funds, with features like easy contact management and transaction tracking.
• Group Remittance Splitting: A way to easily split bills and shared expenses amongst multiple recipients.
• Transparent Fiat On/Off Ramps: Integration with services like Transak to enable low-cost and user-friendly conversion between fiat and crypto.
• Messaging App Integration: The ability to communicate seamlessly with recipients through secure wallet-to-wallet messaging platforms like Beoble.

Several projects like Sling, DolarApp, and Opera MiniPay are already pioneering these features.  Their focus on user-friendly interfaces, robust cross-border functionalities, and targeted marketing strategies paves the way for wider adoption of crypto for remittances.

2. Wallets as Financial Hubs: Beyond the On-Ramp

Currently, crypto wallets are often seen as gateways to the DeFi ecosystem, where users can invest and manage their crypto assets. But what if wallets could evolve into the ultimate destination for our crypto holdings, not just a temporary pitstop?

To achieve this, wallets need to own their UX, which means evolving on three key front:

Streamlined DeFi Access

• Integrated DeFi Apps: Built-in DeFi applications offering features like yield generation, secure vaults, and investment opportunities directly within the wallet interface. Imagine a supercharged version of the Metamask Portfolio.
• On-the-Go Portfolio Tracking: Real-time ROI tracking tools that empower users to make informed investment decisions without leaving the wallet app.

Improved Security

• Escrow Functionality: The ability to hold funds securely until the recipient acknowledges receipt, mirroring the safety features of e-commerce and traditional finance applications. Zert wallet and UPCX blockchain are at the forefront of this concept.
• Multi-Layered Authentication: Robust security suites that include biometric authentication (like Coinomi) and multi-party computation (like Zengo) to safeguard user assets.

Frictionless Fiat Onboarding and Liquidity Management

• Native Fiat-to-Stablecoin Swaps: Built-in fiat-to-stablecoin exchanges with minimal slippage and competitive rates compared to traditional finance options.
• Automated On-Ramp Solutions: Features like Bitstack's round-up mechanism, allowing users to effortlessly convert spare change into crypto.

3. Crypto Debit Cards: Bridging the Gap to Mainstream Adoption

As discussed in the first article, crypto wallets face a user experience hurdle. While the underlying technology offers advantages, complex interfaces and a disconnect between crypto holdings and everyday spending hinder mass adoption. Crypto debit cards like the ones offered by Kulipa bridge this gap by offering a familiar payment method.

Empowering Wallets for a Brighter Financial Future

Crypto wallets hold immense potential to revolutionize how we interact with money. By prioritizing user-centric features like intuitive interfaces, robust security, and seamless fiat on-ramps, wallets can empower the underserved, transform remittance, and democratize finance.

Integrated DeFi applications unlock new investment opportunities, while crypto debit cards, like those offered by Kulipa, bridge the gap between crypto and everyday spending.

By embracing these innovations and focusing on user needs, the crypto wallet industry has everything in its hands to unlock a more inclusive financial future, where everyone can participate in the global economy and build a brighter tomorrow.

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1. The Flawed Fiat System

Let's face it, traditional banking leaves a significant portion of the world behind. Consider this: a staggering 1.4 billion adults lack access to reliable financial institutions. This isn't just a statistic; it's a human right denied.

Enter Stablecoins: A Lifeline for the Unbanked

This is where crypto innovation shines. Stablecoins, crypto assets pegged to real-world assets like the US dollar, offer a compelling alternative. Unlike fiat currencies vulnerable to systemic mismanagement (46% of Argentinians have bought stablecoins to hedge against inflation), stablecoins provide much-needed stability.

Stablecoins bypass the inefficiencies of traditional finance. Imagine frictionless access to USD in regions with limited dollar availability or exorbitant exchange rates. They bridge this gap, creating a global, permissionless financial system.

The market reflects this potential. The stablecoin market cap has skyrocketed from $60 billion in 2021 to a staggering $145 billion in 2024. However, a crucial hurdle remains: user experience.

Web3: A Gateway with a UX Grind

Current crypto wallets, the gateways to Web3, are plagued by high-friction onboarding processes. Blockchain complexities and security concerns further hinder mass adoption.

Centralized exchanges (CEXes) initially offered a more user-friendly experience, attracting significant liquidity. However, recent exchange meltdowns and the regulatory hammer have shaken user confidence.

The onus now falls on crypto wallets to step up. We need a user experience revolution that prioritizes ease of use, intuitive interfaces, and robust security. Until then, mass adoption will remain a pipe dream.

What’s next

This article series will delve into the exciting possibilities that lie ahead for crypto wallets.  We'll explore key features and use cases that next-generation wallets should implement to propel crypto into the mainstream.

We'll focus on solutions that remove complexity and make interacting with cryptocurrencies as seamless as using traditional online banking - or Centralized Exchanges.

The first area we'll examine is the endpoint of any financial system: payments. Ultimately, crypto adoption is driven by the desire to build wealth and unlock greater purchasing power. However, to unlock that potential, users need a seamless way to spend their crypto.

2. Crypto payments to the rescue

High Friction Processes

Wallet to wallet payments

Payments are the lifeblood of any financial system, yet crypto has demonstrably struggled in this crucial area. The current user experience is riddled with friction: the cumbersome on-ramp process, token swaps, deciphering complex wallet addresses, and the constant anxiety of lost transactions. It's hardly surprising users resort to test transactions with minuscule amounts just to ensure functionality.

QR codes

QR code payments, a proposed "quick fix," are equally cumbersome. Finding a Web3-compatible point-of-sale system, wrestling with QR code scanners, and validating transactions – these steps fall far short of the effortless experience users expect.

Relevant (yet Flawed) Answers

Fortunately, crypto payment cards offer a glimmer of hope. These cards, already available from various providers, provide a more familiar payment experience. However, widespread adoption remains elusive due to limitations in existing models:

• Centralized Exchange (CEX) Debit Cards: These cards (think Binance, Crypto.com, Coinbase) rely on centralized assets and suffer from traditional settlement times (24-72 hours).
• On-Chain Prepaid Cards: These options (like Gnosis Pay, HolyHeld, Immersve) boast on-chain settlement, but user experience suffers due to the high friction process of pre-loading cards before any payment.
• Collateralized Credit Cards: Ledger's offering powered by Baanx falls into this category. Again, the need for collateral creates very high constraints in the user experience.

Kulipa: A Vision for Seamless Crypto Payments

Kulipa aims to bridge this gap by introducing a comprehensive solution: white-label debit cards designed specifically for non custodial wallets. Our cards seamlessly integrate with existing wallets, enabling users to spend crypto effortlessly anywhere Mastercard is accepted, with the added benefit of on-chain settlement.

By prioritizing user-friendliness and security, Kulipa's debit cards have the potential to unlock global adoption for crypto wallets and propel stablecoins into the mainstream. This not only empowers individuals with greater control over their finances but also fosters a more inclusive financial future for all.

Building a Future Where Crypto is Usable for Everyone

As we've seen, crypto wallets with high onboarding friction are a significant roadblock to mass adoption. Crypto payment cards offer a glimmer of hope, but limitations in existing models remain. In the next episode of this series, we'll explore two more use cases that can revolutionize crypto wallets: remittance and on-ramp solutions with a focus on user experience. By focusing on features that empower users and bridge the gap between crypto and everyday life, we can build a future where crypto is usable by and for everyone. 

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🇪🇺 Stablecoin Regulation Heats Up in Europe

The European Banking Authority (EBA) is taking another step towards finalizing stablecoin policy. Their latest draft focuses on how stablecoin issuers (they call them "asset-referenced token" issuers) should handle customer complaints. This is a positive sign for stablecoin adoption in Europe, indicating a move towards clear and standardized regulations. (Read more)

💵 Future of Money update: Stablecoins vs. CBDCs

Central banks continue to explore CBDCs, with Russia and Israel making significant progress.  Russia recently passed a law legalizing CBDCs (Read more), while Israel is planning an interest-bearing version (Read more). Meanwhile, Hong Kong is accelerating its exploration of crypto with a pilot its own CBDC (Read more) and a regulatory sandbox for stablecoin issuers (Read more).

Hot on the heels of Circle launching USDC on Celo, Tether is now bringing its USDT stablecoin to the blockchain as well. This is a significant development for Celo, a network particularly popular in emerging markets where USD stablecoins are in high demand as a hedge against inflation. Read more

These developments highlight the growing interest in CBDCs and stablecoins as a potential future form of digital cash, while the US remains on the sideline on these topics (Read more)

⚖️ Regulation on the Rise

Regulation continues to be a hot topic in the crypto space. Indonesia recently announced new crypto regulations coming in 2025 (Read more), while Poland's regulator gained the power to block crypto access (Read more).  The EU is also cracking down on crypto's use in sanctions evasion (Read more). These moves reflect a global trend towards establishing a framework for the crypto industry, and tightening the grip of regulator on the industry, to ensure its long term success.

Other News in Brief

• Ethereum's long-awaited "Dencun" upgrade went live, aiming to reduce transaction fees. Read more
• Following this Ethereum upgrade, Starknet gaz fees are down 99%. Read More
• Binance executives were reportedly detained in Nigeria, highlighting ongoing challenges for crypto companies in certain regions. Read more
• A report suggests French teenagers are increasingly turning to crypto investments. Read more
• Thailand's SEC approved spot Bitcoin ETFs for accredited investors. Read more
• South Korea is implementing a crypto tracking service to improve tax transparency. Read more

Stay tuned next week for another update on the ever-evolving world of blockchain!

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CBDC update 🏦

• 🇵🇭 Philippines and Hong Kong Pilot WCBDCs: The Philippines and Hong Kong are both making strides in Central Bank Digital Currency (CBDC) development. The Philippines unveiled "Project Agila," their pilot program for a wholesale CBDC, wCBDC (Read more), while Hong Kong launched a similar project focused on fostering tokenization. Read more
• 🇺🇸 Fed Prioritizes Privacy in CBDC Development:  Federal Reserve Chair Jerome Powell addressed concerns regarding privacy in CBDCs, emphasizing its importance. This is a welcome sign, as privacy is a crucial factor for mainstream CBDC adoption. Read more

Stablecoins and Regulation ⚖️

• 🇭🇰 New Stablecoin in Hong Kong: Conflux Network introduced the AxHKD, a Hong Kong dollar-backed stablecoin.  This highlights the growing interest in stablecoins pegged to local currencies, offering price stability for crypto users. Read more
• 🇵🇭 Philippines Embraces CBDCs While Reining in Exchanges: While working on a wCBDC, the Philippine authorities are cracking down on unlicensed crypto exchanges (though Binance remains accessible), painting a picture of a crypto ecosystem experiencing what looks like a coordinated regulatory approach to regain control. Read more
• 🇬🇧 UK Embraces Stablecoins:  The UK is set to implement a regulatory framework that considers the coexistence of stablecoins and CBDCs, aligning with EU standards. Clear regulations are essential for fostering innovation, and alignement with EU regulations will bring consistency across the continent. Read More

Other Interesting Reads

• 🌐 BRICS Consider Blockchain Payment System: The BRICS nations (Brazil, Russia, India, China, and South Africa) are exploring the development of a blockchain-powered payment system. This could be a significant step towards greater global financial inclusion. Read more
• 🇪🇸 Spanish Authorities Halt Worldcoin Data Collection: Privacy concerns led Spanish authorities to order Worldcoin to halt data collection. This is another reminder of the ongoing debate surrounding data privacy in the crypto world. Read more
• 🏦 Traditional Finance Embraces Crypto: Established institutions like Deutsche Börse launching a spot crypto platform (Read more), Safepal partnering with a Swiss bank (Read more) and Revolut's partnership with MetaMask (Read more) further highlight crypto's growing relevance.

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Central Banks Take Center Stage 🏦

• 🇷🇺 Russia's Allies Eyeing CBDC Collaboration:  A report suggests Russia's allies are interested in collaborating on a CBDC, highlighting the growing global interest in central bank-issued digital currencies. This could potentially create a multipolar digital currency landscape alongside existing fiat currencies. Read more
• 🇯🇲 Jamaica's CBDC Push: Jamaica is determined to launch a CBDC to address cash access limitations. This aligns with a broader trend of developing economies exploring CBDCs to promote financial inclusion. Read more
• 🏦 Bank for International Settlements (BIS) on Stablecoins: The BIS released an executive summary of its recommendations for global stablecoin regulation. This is a crucial step towards establishing a clear framework for stablecoins, fostering their growth and adoption. Read more

Stablecoins on the Rise 📈

• 📈 Stablecoin Market Cap on the Rise: The overall stablecoin market capitalization reaching $138 billion, with a 4.5% monthly volume increase, signifies the growing importance of stablecoins within the crypto ecosystem. Read more
• 🌐 USDC Expands Reach: USD Coin (USDC) continues its global expansion with a new alliance to reach new markets. This highlights the dominance of USDC in the stablecoin market, but also raises questions about concentration risk. Read more
• 💵 Coincheck Lists USDC: The first-ever USDC listing on a major Japanese exchange is a significant development. It paves the way for wider stablecoin adoption in Japan, a country known for its regulatory rigor. Read more
• 🇯🇵 Crypto Payments Boom in Japan: A report suggests Japan is positioned as a global leader in compliant crypto payments. This aligns with Japan's history of technological innovation and its embrace of cryptocurrencies. Read more
• 🇳🇬 Nigeria Limits Naira Purchases of Stablecoins: Nigerian crypto exchanges are reportedly halting Naira purchases of USDC and USDT, reflecting the Central Bank of Nigeria's ongoing scrutiny of the crypto space. Read more

Regulatory Roundup ⚖️

• 🇭🇰 Hong Kong Cracks Down on Non-Compliant Crypto Exchanges: Hong Kong is taking a tough stance on non-compliant crypto exchanges, highlighting the importance of adhering to regulatory frameworks for sustainable growth. Read more
• 🇰🇷 South Korea Delays Crypto Regulations Ease: South Korea's delay in easing crypto regulations indicates a cautious approach, prioritizing consumer protection alongside fostering innovation. Read more
• 🇪🇸 Spain Flags Unregistered Crypto Firms: Spanish regulators are cracking down on unregistered crypto firms, emphasizing the need for compliance within the crypto ecosystem. Read more

Global Adoption on the Horizon 🚀

• Ether Gains Institutional Favor: A report suggests Ether (ETH) is attracting more institutional interest compared to Bitcoin (BTC), which remains a retail favorite. This could indicate a shift in investor preferences towards blockchain utility beyond just store-of-value. Read more
• Finoa Integrates Tokenized T-Bill Fund: This integration allows institutional investors to securely hold tokenized US Treasury Bills within a custodial wallet system. This signifies the growing interest from institutions in integrating tokenized traditional assets. Read more
• Tezos Tokenizes Real Estate: The tokenization of equity in a luxury resort on the Tezos blockchain demonstrates the potential of blockchain technology for asset fractionalization and democratizing access to investments. Read more

Regulation Roundup: From Stablecoins to CBDCs ⚖️

🇬🇧 UK Eyes Stablecoin and Staking Legislation:‍

The UK is aiming to pass stablecoin and staking regulations within the next six months, signaling a proactive approach to embracing crypto innovation while managing potential risks. This is a positive development for the industry, providing much-needed clarity and fostering a stable environment for growth. Read more

🇭🇰 Hong Kong Pushes for Licensing Bills:

Across the pond, Hong Kong is pushing for licensing bills for stablecoins and OTC crypto trading. This follows their earlier announcement on regulating stablecoins, indicating a commitment to creating a well-defined regulatory framework for the industry. Read more

🇪🇺 ECB and Crypto: A Love-Hate Relationship?

The European Central Bank's (ECB) recent disparaging comments about Bitcoin drew the ire of the crypto community. While it's important to have open discussions about the risks and limitations of crypto, overly negative rhetoric can hinder constructive dialogue and innovation. Read more

🇮🇳 India Optimistic on CBDC Efforts:

The National Payments Corporation of India expressed optimism about the Reserve Bank of India's Central Bank Digital Currency (CBDC) efforts. This indicates growing interest in CBDCs as a potential alternative to traditional fiat currencies. Read more

🇳🇬 Binance Implements Price Cap in Nigeria:

Following ban on crypto exchanges by the Nigerian government, Binance implemented a price cap for USDT on its Nigerian P2P platform to comply with local regulations. This highlights the challenges of navigating diverse regulatory landscapes for global crypto platforms.  Read more

🛑 Circle Discontinues USDC on Tron Network:

Circle, the issuer of USDC, a popular stablecoin, announced it will no longer support USDC on the Tron network. This decision is primarily driven by compliance considerations, as Tron's founder faces accusations from the US SEC. Tron remains the dominant stablecoin on its own network, and Circle emphasizes that it is not endorsing these accusations. Read more

Adoption on the Rise: From Singapore to Turkey

🇸🇬 Finance-Savvy Singaporeans Embrace Crypto:

‍A recent study revealed that a significant portion of Singaporeans own crypto and view it as the future of finance. This highlights the growing interest in crypto among tech-savvy populations and its potential to disrupt traditional financial systems. Read more

🇹🇷 Turkish Legislators Meet Crypto Stakeholders:

Turkish lawmakers met with crypto stakeholders, pledging security and innovation in their draft crypto law. This engagement is crucial for crafting regulations that foster a healthy and responsible crypto ecosystem. Read more

🏤 Swiss Postfinance Offers Crypto:‍

In a surprising move, Swiss Postfinance partnered with Sygnum to offer crypto trading services to its customers. This mainstream adoption by a traditional financial institution is a significant step forward for crypto's integration into the wider economy. Read more

🇿🇦 South Africa Embraces Digital Payments and Crypto:‍

South Africa's recent budget review signals a progressive stance on digital payments and crypto assets. The country plans to leverage stablecoins and blockchain technology to promote financial inclusion and boost digital payment adoption. This move positions South Africa as a potential leader in financial innovation and responsible crypto integration. Read more

Other noteworthy developments

🚧 Security and Costs: Hurdles on the Road to Web3 Adoption

A recent survey by Web3Auth reveals that security concerns remain a significant obstacle to Web3 adoption, with nearly half of respondents citing it as a major barrier. High transaction costs and lack of user-friendly interfaces further hinder mainstream adoption. However, there are ongoing efforts to improve the user experience, such as implementing mobile-friendly features and simplifying signup processes. Read more

⛓️ Vitalik Buterin Raises Concerns about Complex Layer-2 Solutions:

Ethereum co-founder Vitalik Buterin expressed concerns about the complexity of layer-2 scaling solutions, highlighting the need for simpler and more user-friendly options. Read more

🛡️ MetaMask Beefs Up Security with Real-Time Alerts

MetaMask, a popular crypto wallet, has introduced real-time security alerts to help users identify and avoid scams. These alerts are available across various blockchains and can warn users about suspicious activity or potential phishing attempts. This feature is a positive step towards enhancing user security and building trust in the crypto ecosystem. Read more

💸 Understanding Crypto Taxes in the US: A Primer

Cryptocurrency holders in the US are subject to taxes on various events, including buying and selling crypto, converting between different cryptocurrencies, using crypto for purchases, and mining or staking crypto. It's important to note that there is currently no minimum threshold for reporting crypto earnings, so even small transactions may be taxable. Read more

🚀 Smart Contracts Go Live on Stellar: A New Dawn?

This article discusses the recent launch of smart contracts on the Stellar network, marking a significant milestone in its development. Smart contracts enable the creation of more complex applications and functionalities on the Stellar blockchain, potentially opening doors for new use cases and wider adoption. Read more