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The Federal Reserve is getting closer to delivering its much-anticipated instant payments system, FedNow. 

In a virtual speech on August 29, Fed Vice Chair Lael Brainard announced: “We will be ready to launch the FedNow Service between May and July of 2023, bringing this innovative core instant payment infrastructure to financial institutions of every size across America.”

As currently envisioned, the FedNow service will provide real-time, 24/7 access to payments for financial insitutions of any size. 

Source: Federal Reserve

FedNow appears in many conversations alongside a potential Fed central bank digital currency or CBDC. A Fed governor recently came out in support of FedNow as opposed to a US-centric CBDC.

In her first appearance before Congress, Brainard herself fielded a barrage of questions about a potential CBDC from concerned Republicans looking to establish that the Fed lacked statutory authority to issue a digital dollar without congressional approval. It’s a subject about which several agencies, including the Fed, the Treasury, and the Department of Justice are supposed to report to President Biden by next week, per the executive order earlier this year. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The battle between crypto firm Ripple and the Securities and Exchange Commission (SEC) has moved into a new venue of sorts. 

Early last week, SEC Chair Gary Gensler wrote an op-ed for the Wall Street Journal promoting his handling of crypto regulation during his time at the commission.

While many in the crypto industry lament his “regulation by enforcement,” Gensler has argued that he is simply applying the securities laws in a tech-neutral way.

“Whether a car runs on gasoline or electricity, drivers and passengers deserve to be protected,” Gensler wrote in his op-ed, using the analogy of seatbelt laws. “There’s no reason to treat the crypto market differently from the rest of the capital markets just because it uses a different technology.”

 On August 28, the Wall Street Journal published a letter in response to Gensler’s op-ed from Ripple’s general counsel, Stu Alderoty.

Alderoty took issue with Gensler’s core metaphor, writing: 

“Mr. Gensler writes that whether a car runs on gas or electricity, you still need a seat belt. No one disputes that. But electric cars don’t need gas, and in his analogy, it is gas that the SEC is selling. Mr. Gensler looks to punish anyone who isn’t buying it.”

One of the highest-profile enforcement actions the SEC has undertaken against a crypto firm is SEC v. Ripple, which the commission launched in the twilight of prior Chair Jay Clayton’s term.

The case hinges upon the relationship between Ripple and the token XRP, which the SEC calls a security. As one since-ousted marketing executive at Ripple once put it, the firm claims that “Ripple’s relationship to XRP is akin [sic] Chevron’s relationship to oil.” The more recent op-ed from Alderoty seems to imply that the SEC itself has become the Chevron in question.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The Monetary Authority of Singapore may adopt stricter rules for retail crypto market participants, managing director Ravi Menon said Monday.

The city-state’s de facto central bank sought to differentiate how MAS has supported work on distributed ledger tech and areas such as tokenization while warning about speculative market activities, speaking during the Green Shoots Seminar, a fintech-focused event the MAS co-organized.

Singapore is often seen as being at the forefront of the crypto industry, with licensing and regulatory framework, but the regulations are focused on money laundering and terrorist financing risks rather than consumer protection. Reviews and public consultations are underway to strengthen regulation in for consumers and MAS is targeting to consult on proposed measures in the next few months, Menon said last month. 

“Adding frictions on retail access to cryptocurrencies is an area we are contemplating,” Menon said, according to a published copy of his remarks.  “These may include customer suitability tests and restricting the use of leverage and credit facilities for cryptocurrency trading.”

Banning retail access to cryptocurrencies is not likely to work as access is easy and crypto is borderless, Menon said. 

“Cryptocurrencies have taken a life of their own outside of the distributed ledger – and this is the source of the crypto world’s problems,” Menon said. “Cryptocurrencies are actively traded and heavily speculated upon, with prices that have nothing to do with any underlying economic value related to their use on the distributed ledger. The extreme price volatility of cryptocurrencies rules them out as a viable form of money or investment asset.” 

The MAS doesn’t want to chase away initiatives, however.

“The most promising use cases of digital assets in financial services are in cross-border payment and settlement, trade finance, and pre-and post-trade capital market activities,” he said, and the authority seeks “to anchor in Singapore crypto players who can value add to our digital asset ecosystem and have strong risk management capabilities.”

Menon also appeared to rule out any near-term prospects for a Singapore-based retail central bank digital currency (CBDC), though the MAS has conducted research and development in this area.

“The case for a retail CBDC in Singapore is not compelling for now, given well-functioning payment systems and broad financial inclusion,” he said.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The Lightnet Group said it has secured a $50 million capital commitment from LDA Capital to expand blockchain technology for remittances.

Singapore-based Lightnet will have the option to increase the $50 million to a total commitment of up to $100 million over the next three years. The funds will be used for payment and blockchain ledger-based remittance services with partner company Velo Labs Technology.

Lightnet, which aims to create a global network of “trusted financial services” partners to enable cross-border transactions, was co-founded by Chatchaval Jiaravanon, a member of the billionaire family that controls Thai conglomerate Charoen Pokphand Group. LDA Capital is a global alternative-investment group with a background in cross-border transactions worldwide. 

Lightnet is building pilot programs to enable remittances backed by distributed ledger technology through multiple channels, including the use of stablecoins. Transactions will bypass the SWIFT settlement process and reduce costs. SWIFT is a global inter-bank messaging system that facilitates international transactions. 

Lightnet is tapping into a massive market where demand shows no signs of slowing down. The global digital remittance market was valued at $17.88 billion in 2021 and is expected to expand at a compound annual growth rate of 15% from 2022 to 2030, according to Grand View Research.

People are also increasingly turning to cryptocurrency for alternative remittances, seeking to avoid capital controls and reduce the cost of sending money abroad.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Limit Break, a startup building web3 massively multiplayer online (MMO) games, raised $200 million over two rounds of venture funding.  

The chair of mobile gaming firm Mino Games, Josh Buckley and investment firms Paradigm and Standard Crypto led the rounds, Limit Break wrote in a Twitter thread. Additional participants include FTX, Coinbase and Positive Sum.  

Limit Break intends to incorporate web3 elements into the “free-to-play” gaming model. Free-to-play games are free upfront to play, and developers make money through ads or selling additional features for the game. The firm’s take on free-to-play is what they call “free-to-own,” in which users mint genesis non-fungible tokens (NFTs) for free. “These Genesis NFTs lead to other NFTs through airdrops and more, none of which involve gimmicky fundraising tactics,” Limit Break wrote. 

Limit Break’s financing comes amid the broader crypto bear market and illustrate the growing interest in blockchain-based mobile games. In July, NFTs/gaming were the most favored deal types for the twelfth consecutive month, getting about $500 million in funding, the second most in the sector after infrastructure, according to The Block Research.

The startup was founded by Gabriel Leydon and Halbert Nakagawa, former CEO and CTO, respectively, of the mobile gaming firm Machine Zone, which built mobile free-to-play games including Game of War, Mobile Strike and Final Fantasy: XV.  

Other blockchain-based mobile gaming firms to raise money this year include MetaverseGo and N3TWORK Studios, InfiniGods and others, The Block previously reported.  

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Users of Facebook can now post their digital collectibles and NFTs to their accounts on the platform. 

Meta, the parent company behind social media platforms Facebook and Instagram, announced Monday that it allowing users to add digital wallets and virtual assets to Facebook. The firm’s move now brings NFTs to Facebook’s 2.9 billion users, according to Statista.

This update means that users can post their NFTs across both Facebook and Instagram, Meta tweeted. 

Before today’s move, Meta had only allowed users to post their digital collectibles on Instagram.

Instagram’s digital asset integration expanded across 100 countries and included the Ethereum, Polygon and Flow blockchains, as The Block previously reported. 

“As we continue rolling out digital collectibles on Facebook and Instagram, we’ve started giving people the ability to post digital collectibles that they own across both Facebook and Instagram. This will enable people to connect their digital wallets once to either app in order to share their digital collectibles across both,” Meta wrote in an updated blog post. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

FTX is not planning to acquire crypto exchange Huobi, the company’s founder and CEO Sam Bankman-Fried said on Twitter.

Bankman-Fried’s comment follows a recent Bloomberg article naming FTX and Tron founder Justin Sun among a list of investors that have had “preliminary contact” with Huobi as its founder Leon Li looks to sell about 60% of the company.

Li is seeking a $2 billion to $3 billion valuation for the company and has reached out to “several international institutions,” according to Bloomberg.

But following the publication of that report, Bankman-Fried took to Twitter to quash the idea of his firm’s involvement.

“No, we are not planning to acquire Huobi,” Bankman-Fried wrote. “Apparently a lot of people are saying this.”

FTX has recently sought to acquire a series of troubled crypto firms amid crypto winter. For instance, it gave financial services firm BlockFi a multi-million-dollar bailout.

FTX US, the American subsidiary of global crypto exchange FTX, also recently announced that it is acquiring Canadian crypto trading platform Bitvo.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Quick Take

• In light of the rapidly expanding NFT finance market, mechanisms to accurately reflect NFT prices are gaining importance
• With the idiosyncratic nature of NFT prices in mind, various approaches have been devised to triangulate this issue
• This piece takes a closer look at three popular NFT pricing methodologies

This research piece is available exclusively to
members of The Block Research.
You can continue reading
this Research content on The Block Research.

MTV’s Video Music Awards (VMAs) ventured boldly into the metaverse on Sunday evening, with a performance from rappers Eminem and Snoop Dogg beamed from Yuga Labs’ game Otherside. 

With the Bored Ape Yacht Club’s (BAYC) virtual land as the main setting of the video, the pair’s journey into the metaverse begins after they smoke a comically oversized spliff.

The performance features some choice acting from the rappers, who fall down a swirling multicolored vortex and morph into the Bored Apes they own. There are also cameos from Kodas, the mysterious creatures created by Yuga that live in the Otherside.

The pair have previous form for engaging in Yuga Labs productions, having performed at ApeFest earlier this year – the in-person event designed to bring holders of BAYC NFTs together. They launched the track, called “From the D 2 The LBC,” earlier this year with an animated video featuring Bored Apes. 

Credit: MTV Awards / Snoop Dogg and Eminem

Otherside has probably been the most highly anticipated metaverse project since “metaverse” became a buzzword. 

Yuga Labs has revealed little so far about its game, aside from some technical testing. Like other virtual world platforms such as Decentraland and The Sandbox, people can own NFT-based parcels of digital real estate.

An auction for virtual plots of land, called Otherdeeds, netted $317 million when it launched in April. At the time, the sale was so popular it crashed the Ethereum blockchain, sending transaction fees skyrocketing. These NFTs entitle the holder to a plot of land in the game and a Koda, which lives on the land.

As such, the performance in the Otherside is a first – and an implicit endorsement of what Yuga Labs has built. 

Meanwhile, other virtual worlds were getting a showing. This year’s VMAs also included a category for best metaverse performance for the first time.

South Korean girlband Blackpink won that category having gone up against heavyweights of the industry including Justin Bieber and Charli XCX. Metaverse venues of choice included Minecraft, Roblox, Fortnite and Wave — with blockchain-based performances conspicuously absent. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Quick Take

• Voyager Digital bankruptcy court judge rules in favor of $1.6mm compensation package to 34 employees 
• Revised figures from initial filing for ~$1.9mm compensation to 38 employees 
• Part of the Key Employee Retention Program (KERP) Awards to maintain operationality during Chapter 11 Bankruptcy Filings 
• Disclaimer: This is a market commentary research piece and includes opinionated views from our research team. Nothing contained in this piece constitutes a solicitation, recommendation, endorsement, or offer by The Block Research
   

This research piece is available exclusively to
members of The Block Research.
You can continue reading
this Research content on The Block Research.