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The leader of the Office of the Comptroller of the Currency, a US banking regulator, is continuing the Biden administration’s push for bank-style regulation for stablecoin issuers.

On April 8, Michael Hsu, the Acting Comptroller of the Currency, spoke to an audience at Georgetown Law School on his “Thoughts on the Architecture of Stablecoins.”

Effectively, Hsu maintained the President’s Working Group’s proposal that any new law should limit stablecoin issuance to “insured depository institutions,” a category that is usually synonymous with banks. Important to note is that Hsu, along with most of the major leaders of US financial regulators, was part of the team that assembled the PWG report.  

Hsu seemed to reject recent alternate proposals that would create multiple licensing paths for stablecoin issuance, saying “in my experience, the wider the variability, the more likely a risky issuer blows itself up, sparking contagion across peers.”

However, he argued that such a category could be more flexible for stablecoins that do not operate as investment vehicles: 

“A banking approach would be more effective. Some have expressed concerns, however, about undue burden and inefficiency. If a stablecoin entity were tightly limited to just issuing stablecoins and holding reserves to meet redemptions, I would agree that the full application of all bank regulatory and supervisory requirements would be overly burdensome. Provided that the activities and risk profile of a stablecoin issuing bank could be narrowly prescribed, a tailored set of bank regulatory and supervisory requirements could balance stability with efficiency.”

Nellie Liang, the Treasury official who spearheaded the PWG report, made similar arguments that banking charters could themselves be more flexible than had been generally acknowledged. But a central dispute here is that US law only requires banks to keep a small fraction of their deposits in instantly redeemable cash.

Though different stablecoins operate in different ways, the common practice among major operators has become to hold full reserves in cash or short-term Treasury securities. A notable exception is Tether’s holdings of unidentified commercial paper, a practice that USDC experimented with until recently. 

While Hsu maintained skepticism towards the crypto industry’s long-term promise, he did say:

“It is hard to ignore the rapid growth of the developer community, market signals about blockchain firms’ long-term potential, and pronouncements and actions from a range of policymakers and governments.”

© 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.

Crypto exchange giant Binance has appointed a top official from the UK’s Financial Conduct Authority (FCA) as its global director of regulatory policy. 

Stephen McWhirter left the regulator after a more than nine-year tenure, where he held a number of fintech-related roles, according to a LinkedIn post on Friday seen by The Block and confirmed by McWhirter. Most recently, he worked as a strategy and engagement manager in the data, technology and innovation division. 

He had contributed to the much-anticipated Kalifa Review of UK Fintech, commissioned by the chancellor to identify strategic areas of development in the sector. 

“I’ve been very fortunate in my time at the FCA to be involved in many national, European and global policy initiatives and debates, particularly in respect of financial services regulation of technology, where working with many great regulators, firms and global bodies gave me a ringside seat during a fascinating period in policy making,” he wrote on LinkedIn. 

“As a regulator, who would have thought a few years ago that Cloud, AI, DLT, MetaFi, or DAO to name a few would become so topical..?”

The appointment comes as Binance CEO Changpeng Zhao, the high-profile crypto billionaire universally known as CZ, was recently spotted wooing an influential gathering of UK government officials in Westminster. 

McWhirter is the latest example of an official formerly housed at a public entity, such as a central bank, government or regulator, going in-house to a crypto firm. It is not clear where in the world he will be based. 

Earlier this week, The Block revealed that the Bank of England’s fintech chief had left to join custody platform Fireblocks. Last year, Austrian exchange Bitpanda also hired former FCA official Matthias Bauer-Langgartner as its managing director for UK and Ireland. Alongside these, ex-UK chancellor Philip Hammond joined Copper as a senior advisor last year. 

Binance didn’t return requests for comment by press time.

© 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 Council of the European Union has agreed on Friday to bar Russians from being able to access “high-value” crypto services as part of the latest round of sanctions imposed on the country due to its invasion of Ukraine.

The crypto prohibition is one of three financial measures listed in the six-part sanctions package. Other items listed include a full asset freeze on four Russian banks that account for over a fifth of the country’s banking sector and an embargo on advisory services for wealthy Russians.

According to the sanctions package published by the European Commission, the crypto ban will serve to close potential loopholes. This refers to fears that wealthy Russians could use cryptocurrencies to evade financial sanctions imposed on Russia.

Wealthy Russians reportedly own over $130 billion worth of crypto, according to Mikhail Mishustin, the country’s prime minister. Mishustin made the claim Thursday while presenting a yearly report by the government.

Other prohibitions covered in the sanctions package include import bans on all Russian coal, but not oil and gas. The sanctions also target goods like cement, rubber, and vodka, among others.

The fifth round of sanctions also bars Russian nationals from procurement contracts in the EU.

© 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.

Near Protocol is bringing out its own stablecoin called USN, The Block has learned, according to a source familiar with the situation.

Rumors surrounding the stablecoin first surfaced when Zoran Kole, founder of Zorax Capital, claimed in a Substack post that Near Protocol was launching a stablecoin that will offer 20% yield. 

Sleuths on Twitter further noticed that a testnet version of Ref Finance — the second-largest decentralized exchange on Near — showed the stablecoin. The user interface on Ref Finance’s testnet website displays USN under its stableswap section along with other popular stablecoins like USDC, USDT and DAI. This implied that the stablecoin was being tested out, but was not necessarily indicative of the official team.

We have been unable to confirm whether the stablecoin will offer such high yields, as Kole claimed, something that would put it in line with Terra USD (UST).

Near Protocol is a scalable blockchain that recently raised $350 million in a funding round led by Tiger Global, with participation from Republic Capital, Hashed, FTX Ventures, Dragonfly Capital, and others.

We have reached out to Near Protocol for comment and will update this article should we hear back.

© 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.

After decades of experience working with software companies, Thoma Bravo, a private equity firm with over $100 billion in assets under management, announced its plans to move into crypto last fall. 

In this episode of The Scoop, Thoma Bravo founder of Orlando Bravo unpacked the similarities between early software companies and today’s crypto landscape, and discussed the thought process behind Thoma Bravo’s decision to begin investing in the crypto ecosystem.

As Bravo shared during the interview:

“At Thoma Bravo, the way to think about how we make strategic decisions is actually quite simple: we’re very ‘micro.’ We focus on what are the best deals that are right in front of us that fit our strategy. Our strategy, if you had to define it very briefly, would be: how do you turn great innovators into great companies, and how do you do that while working and empowering existing management teams?”

This is the same philosophy that has been working for Thoma Bravo since its pioneering success early on in the software industry.

Bravo went on to explain:

“With that philosophy 20 years ago, is how we entered private equity software, which almost nobody was doing at the time… So the same applied to our entry into crypto. We saw a cohort of deals on the growth equity side of our business that just had higher growth, better economics, better valuation, and they were all under an extremely powerful macro movement.”

While Bravo cited many similarities between the software industry from the early 2000s and the crypto industry today, he also thinks crypto companies have an edge.

Crypto companies have “better business models,” Bravo notes. “You can build a huge business here with very little capital.”

Indeed, Thoma Bravo isn’t the only private equity firm from traditional finance to recognize the fact that crypto founders have unique needs.  Sequoia Capital and Bain Capital have recently launched their own crypto-specific funds catered toward crypto-native founders.

During this episode Chaparro and Bravo also discuss:

• Bravo’s investing philosophy
• NFTs and luxury digital assets
• How ‘original capital’ is embracing digital assets

This episode is brought to you by our sponsors Fireblocks, Coinbase Prime & Cross River
Fireblocks is an enterprise-grade platform delivering a secure infrastructure for moving, storing, and issuing digital assets. Fireblocks enables exchanges, lending desks, custodians, banks, trading desks, and hedge funds to securely scale digital asset operations through the Fireblocks Network and MPC-based Wallet Infrastructure. Fireblocks serves over 725 financial institutions, has secured the transfer of over $1.5 trillion in digital assets, and has a unique insurance policy that covers assets in storage & transit. For more information, please visit www.fireblocks.com.

About Coinbase Prime
Coinbase Prime is an integrated solution that provides institutional investors with an advanced trading platform, secure custody, and prime services to manage all their crypto assets in one place. Coinbase Prime fully integrates crypto trading and custody on a single platform, and gives clients the best all-in pricing in their network using their proprietary Smart Order Router and algorithmic execution. For more information, visit www.coinbase.com/prime.

About Cross River
Cross River is powering today’s most innovative crypto companies, with banking and payments solutions you can rely on, including fiat on/off ramp solutions. Whether you are a crypto exchange, NFT marketplace, or wallet, Cross River’s API-based, all-in-one platform enables banking as a service, ACH & wire transfers, push-to-card disbursements, real-time payments, and virtual accounts and subledgers. Request your fiat on/off ramp solution now at crossriver.com/crypto.

© 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.

A trio of former Citi executives have formed a new investment management firm dedicated to crypto named Motus Capital.

The company is the brainchild of Alex Kriete, Greg Girasole and Frank Cavallo — each of whom left Citi in the past few months after long stints at the bank. Most recently, Kriete and Girasole served as co-heads of the Citi Global Wealth digital assets group.

Details about the new operation are scant, but Kriete said in a LinkedIn post that it would aim to bring the trio’s “decades of combined experience advising and managing clients’ wealth” to the crypto sector.

In a recent interview, prior to unveiling Motus Capital, Kriete told The Block that “financial institutions have a hard time keeping pace in this market.”

“We’re excited to build something that caters to these people,” he added.

While at Citi in 2017, Kriete and Girasole began writing an internal, crypto-focused newsletter — helping establish the pair as in-house experts at the bank.

Their departures in April are just the latest example of talent flowing from Citi out into the wider crypto sector. The Block chronicled the exodus in a recent piece, counting no fewer than 15 departures who have found new homes at firms including Copper, CoinFund, Paxos, Genesis, the Provenance Blockchain Foundation.

© 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.

Mobile payment app Strike has partnered with Shopify, alternative payment provider Blackhawk Network and point-of-sale supplier NCR to create a new US payment system that allows merchants to quickly receive payments in dollars after people pay with crypto.

The Lightning Network-based system will work with online purchases from merchants using Shopify, as well as point-of-sale transactions at many large chain stores.

“It’s a new, innovative, superior payments rail that is finally embedded and distributed into our lives,” Strike CEO Jack Mallers explained to a packed crowd at a Miami Bitcoin conference on Thursday afternoon. He then showed a video of himself using it to check out at a Chicago grocery store.

“You’re going to be able to walk into a grocery store, to a Whole Foods, to Chipotle, you want to use a Lightning node over Tor, you do that,” Mallers said. “You want to use the Cash App? You do that,” Mallers said to cheers and applause from the audience.

Mallers showed a list of major U.S. companies that he says would be able to accept payments this way, including McDonald’s, CVS, Walgreens, Whole Foods and Wal-Mart, in addition to several other grocery stores and restaurants.

“Strike’s integration is accessible by any consumer in the world with a Bitcoin Lightning Network-enabled wallet, including more than 70 million CashApp users,” Strike said in an April 7 press statement about the Shopify integration. One of its first partners is the popular Los Angeles-based streetwear brand Warren Lotas.

Mallers announced the new payment network to a packed room, building up the announcements with a speech called “The King’s Gambit” that described a history of payment networks and credit cards and gave an overview of how card transactions work. 

Mallers teased the announcement on Twitter and in an interview in the days leading up to the conference, revealing that his talk would likely have something to do with connecting merchants to crypto. 

According to Mallers’ presentation, Blackhawk Network is integrated with 400,000 storefronts and has 37,000 partners. Point-of-sale supplier (POS) NCR is responsible for one in six POS systems worldwide, another slide added.

© 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.

Midway through last week, the Ukrainian government launched its much-anticipated NFT collection, with the goal of raising around $1 million for war and humanitarian efforts. Yet after a week has passed, hundreds of the 2,182 NFTs have yet to be sold. 

It’s the first time a nation has launched its own NFT collection. But so far the sale has been met with much less enthusiasm than other high-profile NFT sales, which often sell out immediately.

The collection was announced at the beginning of March when the Ukrainian government canceled its original plan for a crypto airdrop and said that it would instead sell NFTs. It then took nearly a month to reveal the collection.

Named “META HISTORY: Museum of War,” it depicts a timeline of events from the start of the war through artworks with a tweet stacked on top. One of them is a drawing of airplanes inside a birdcage, calling back to when European Commission President Ursula von der Leyen announced the EU would close its airspace to all Russian aircraft. Another shows a number of skulls with flowers growing out of them symbolizing Russian soldiers who lost their lives.

Source: OpenSea

To buy one, users must visit the project’s website and mint it, after which the NFTs are listed on OpenSea. The Ukraine government announced 24 hours after the launch that 1,051 had sold. As of Thursday afternoon, under 1,600 were listed on OpenSea, with the total number of owners being 641.

A spokesperson for The Ukrainian Ministry of Digital Transformation, the agency behind the NFT sale, said it has raised over $600,000 so far.

Meanwhile, the floor price on OpenSea stands at 0.155 ETH and the secondary trading volume at 13.6 ETH as of Thursday afternoon — numbers that indicate that the secondary market for the collection isn’t very strong. 

The spokesperson declined to answer questions about whether the sale has met the agency’s expectations thus far. If it does reach its goal of raising a little over $1 million, that would be just a small portion of the more than $70 million that the country has received in crypto assets since Russia’s invasion on February 24. 

© 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.

Ex-Blockstream chief strategy officer Samson Mow brought three guests on stage at Bitcoin 2022 to give updates on bitcoin adoption plans in their various countries. However, no government official announced making bitcoin nationwide, legal tender at the conference like El Salvador’s Nayib Bukele did last year.

Próspera, a Special Economic Zone in Honduras, sees crypto as legal 

While Honduras’ central bank knocked down rumors about the country making bitcoin legal tender a few weeks ago, a jurisdiction called Próspera on the island of Roatán announced that it recognizes cryptocurrency as a legal currency in its own area.

Próspera, which refers to itself as an “enhanced Special Economic Zone” on its website, said in a press announcement that “[b]itcoin and other cryptocurrencies effectively operate as legal tender within its jurisdiction.” In addition, Próspera says it will invite municipalities, governments and international firms to issue bitcoin bonds from its jurisdiction.

“Honduras Próspera Incorporated is the promoter and organizer of the Próspera jurisdiction on the Caribbean Island of Roatán in Honduras,” Honduras Próspera Inc. president Joel Bomgar told the audience alongside Mow. “Bitcoin within Próspera operates as legal tender — that means no capital gains tax on bitcoin, you can transact freely using bitcoin, and you can pay taxes and fees to the jurisdiction in bitcoin,” he said. “You can also start a bitcoin business in the jurisdiction using the regulatory framework of your choice, and all done in an AML and KYC-compliant manner.”

Bomgar added that accredited investors can also invest directly in Honduras Próspera Inc. through a security token convertible note offering, live on the Securitize platform. 

Bomgar is a Republican politician in the U.S., currently serving as a state representative in the Mississippi House of Representatives.

El Salvador was the first country to announce the adoption of bitcoin bonds, but the country has put the first issuance on hold due to international market conditions and other factors. It is unclear when that first bond would launch. 

Madeira, an autonomous region of Portugal, will focus on bitcoin adoption

The next show of support for bitcoin adoption was from Miguel Albuquerque, president of an autonomous region of Portugal called Madeira. Madeira comprises a group of islands northwest of Africa, known mainly for being a popular tourist destination.

 “I believe in the future and I believe in bitcoin,” Albuquerque said, without specifically saying it would be legal tender there.

Albuquerque announced that Madeira bitcoin purchases and sales are not subject to income taxes, and pointed out that it offers a 5% tax rate for businesses. However, all of Portugal is currently free of income taxes on crypto purchases.

Mexican senator says she will propose crypto legislation 

Finally, Mow invited Mexican Senator Indira Kempis on stage to give an update on efforts to propose cryptocurrency legislation in that country. 

Kempis has previously mentioned she was planning to introduce a cryptocurrency law in Mexico this year inspired by El Salvador’s, based on reports.

She again noted today that she would focus on a plan to make bitcoin legal tender. 

“In two months we will propose legislation to modify regulations in fintech and in monetary law. And we have a message for our president. We are looking forward to sitting down and having coffee with you to talk about this plan — bitcoin as legal tender in Mexico.”

However, the likelihood of Mexico’s government warming up to a new crypto law anytime soon is unclear — especially if it would involve making a cryptocurrency like bitcoin legal tender.

Speaking during an October press conference, Mexican president Andrés Manuel López Obrador downplayed the idea of making cryptocurrencies legal tender in response to a reporter’s question about whether it would follow El Salvador’s lead.

Meanwhile, Mexico’s presidential Twitter account tweeted on December 29 that it planned to have its own digital currency in place by 2024. 

Kempis also mentioned she has already been submitting bills to guarantee financial inclusion and education as a constitutional right in Mexico. 

Mow’s new nation-state adoption-focused Jan3 raises $21 million 

Mow revealed on March 1 that he was leaving Blockstream after five years to “focus on nation-state bitcoin adoption,” and announced during the conference that his new bitcoin company Jan3 has raised $21 million at a valuation of $100 million.

The company’s mission is to “accelerate hyperbitcoinization,” Mow said.

Jan3 is focused on Layer-2 technologies like the Lightning Network and Liquid Network, Mow explained. The company has signed a memorandum of understanding (MOU) with the government of El Salvador to build digital infrastructure. 

Catarina Moura contributed reporting. 

© 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.

Improbable, a British company focused on building tools for virtual experiences, has raised $150 million.

Improbable aims to let companies build their own Web3 businesses and virtual experiences on its platform. The goal is to let thousands of users participate in the company’s virtual experiences that are interoperable with current blockchains in areas such as entertainment, sports, music and fashion. 

Andreessen Horowitz and SoftBank Vision Fund 2 led the funding round, with additional participation from Mirana, Digital Currency Group, CMT, SIG and Ethereal Ventures. 

“Giving people the tools to design their own metaverses at the scale that Improbable enables, with web3 interoperability and composability to expand on each other’s creations, will result in some truly groundbreaking virtual experiences,” said Andreessen Horowitz general partner Chris Dixon in a statement. 

In recent months, notable brands have sought to stake out virtual world initiatives, such as the recent Metaverse Fashion Week featuring brands like Tommy Hilfiger and Estee Lauder.

© 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.