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Ripple is partnering with Colombia’s central bank to explore blockchain technology use cases in the South American country.

Banco de la República will work with the information and communications ministry to pilot use cases to enhance the country’s high-value payment system using Ripple’s CBDC Platform.

Joe Vollono, a director of CBDC business development at Ripple, said the company had been in talks with the Colombian central bank for over a year. The pilot is being run with Spain-based blockchain technology firm Peersyst Technology.

“When we’re talking about the high-value payment system, what we’re generally referring to is large scale, wholesale payments, RTGS systems, and related financial operations and infrastructure that might benefit from leveraging distributed ledger technology,” Vollano said in an interview. “And so that’s really the focus of the exploration here.”

Ripple’s efforts with central banks around the world

Besides improving speed, the efforts could ultimately reduce costs. The project will run through the end of 2023, Ripple said in a statement, noting that tests will be conducted in a controlled environment without compromising resources. 

Ripple has worked with monetary authorities in Hong Kong, Montenegro, Bhutan and Palau. 

“One of the advantages of the reasons to explore this technology for high value payments is around the infrastructure, and the idea that this these transfers can be done with finality, speed and scale in a way that existing infrastructure may not provide for the same flexibility,” Vollono said.

© 2023 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.

Cross-chain protocol deBridge launched DLN Trade, a way for trading tokens across multiple blockchains.

DLN Trade makes use of decentralized order book to allow for direct trading of any asset on one chain to any asset on another, according to a statement. It avoids the standard method of locking funds into a smart contract, used by most liquidity pool-based decentralized exchanges. It hopes that its alternative design will protect against slippage and frontrunning.

DeBridge said DLN Trade doesn’t have any transfer limits, compared to normal decentralized exchanges, which have limited liquidity. This allows for the execution of trades of any size with the same rates and efficiency, whether it’s a $1,000 or a $10 million cross-chain trade. Additionally, DLN enables users to set cross-chain limit orders, cancelable at any time.

DLN Trade also addresses the reliability and security concerns associated with liquidity pool-based infrastructure, deBridge claimed. By pricing any asset on one chain to any asset on another without relying on automated market maker models, DLN aims to mitigate such risks in real-time. This means users can trade across chains without being exposed to wrapped assets or liquidity pools, even during heightened market volatility.

The DLN app is live, offering support for Ethereum, Arbitrum, Polygon, Fantom, BNB Chain and Avalanche. DLN Trade plans to add support for additional chains soon.

© 2023 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 wallet tied to Curve Finance founder Michael Egorov has returned 1.35 million USD Tether (USDT) to Aave, reducing its on-chain debt.

Egorov has proactively reduced the debt to mitigate liquidation risk associated with his loan position on the decentralized lending platform, Aave. This comes amidst a drastic downturn of Curve’s CRV token, which has witnessed a 24% weekly decline and currently trades at $0.57, per CoinGecko.

Egorov’s loan position, backed by 288.7 million Curve DAO (CRV) tokens, valued at $167 million, has about 62 million USDT borrowed against it, with a health factor of 1.55 — down from over 1.6 yesterday.

This position has attracted attention from the DeFi community due to its size. It comprises over 30% of the total CRV token supply, an alarmingly high stake that, in light of the recent price drop, has sparked concerns of substantial selling pressure on CRV tokens and an increased risk of platform liquidation.

In a bold response to potential liquidation, Gauntlet, a firm that specializes in DeFi risk management, proposed to the Aave community that all CRV tokens on the version 2 platform should be frozen. This would be to reduce the risk of accruing bad debt arising from Egorov’s loan.

This freeze would necessitate a migration of Egorov’s loan position from Aave’s second version to its third, which is perceived as being better equipped to handle risk management.

Echoing a cautionary sentiment, Egorov commented on the Aave position to The Block, saying, “It’s better to be a bit more careful with this position on Aave. Even if [the] proposal gets rejected, it’s better for me to act as if it was executed.”

© 2023 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 prices have fallen further in the last 24 hours with large cap coins like bitcoin and ether in the red.

The price of ether is down 6% in the last 24 hours and is currently trading at $1,630 — solidifying losses of 11% over the last seven days. Meanwhile, bitcoin has dropped 4% in this timeframe and fallen by 6% over the week, now changing hands at $24,900.

With the market heading south, the total crypto market cap has shrunk to just $1.06 trillion today — from highs of $1.34 trillion in April. While it dipped below the $1 trillion mark in March it hasn’t spent a prolonged period of time below it since the end of 2022.

The CRV token of the decentralized exchange Curve is the worst-hit token in the top 100 by market capitalization. It’s down 12% in the last day, and 25% in the last week. This downturn may be related to concerns surrounding the large lending position taken by Curve’s founder, Michael Egorov, which is in danger of being liquidated.

The loan position has caused concerns because it represents such a large portion — around 50% — of the supply of CRV tokens. As a result, Gauntlet, which specializes in DeFi risk management, has recommended that lending platform Aave make adjustments to reduce the risk of bad debt were this position to be liquidated. The worry is that the paper value of the collateral might not be realized if it’s such a large portion of the token’s supply.

The market has also faced concerns today about tether, which has fallen 0.2% below the price of the U.S. dollar. This is due to an inbalance on the main Curve 3pool. Traders have already started capitalizing on this artbitrage opportunity.

© 2023 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.

Hong Kong’s banking regulator, the Hong Kong Monetary Authority (HKMA), is applying pressure on HSBC, Standard Chartered and Bank of China — who hold a special role as issuers of the city’s currency — to accept crypto exchanges as clients, despite the regulatory crackdown on the crypto industry in the U.S. 

At a meeting in May, the HKMA questioned the banks on their reluctance to onboard crypto exchanges as clients, according to sources familiar with the matter, the Financial Times reported. In a letter dated April 27 seen by the Financial Times, the HKMA stated that due diligence on potential customers should not “create undue burdens,” particularly “for those setting up an office in Hong Kong to look for the opportunities here.” 

On the same date, in a blog post signed by Arthur Yuen, the watchdog’s deputy chief executive, the regulator said it expects that “regulated virtual asset service providers (VASPs) will be able to successfully apply for a bank account through a reasonable process.” The HKMA also said banks should support licensed crypto firms with “their legitimate need for bank accounts,” according to a Bloomberg report.  

Hong Kong’s crypto ambitions

Hong Kong has a history as a crypto center, and the HKMA’s encouragement for banks to embrace crypto exchanges reflects the challenges faced by Hong Kong as it seeks to reestablish itself as a global hub for the crypto industry. While Beijing’s crypto crackdown diminished Hong Kong’s position, the government has expressed a desire to foster the right environment for digital assets firms. The introduction of a new licensing regime for crypto platforms this month is part of the government’s efforts to attract more crypto groups to the city.

Despite high-profile failures, such as the collapse of FTX, which once had its base in the city, Hong Kong remains enthusiastic about the sector. The banks don’t have a ban on crypto clients. However, there is resistance from senior executives at traditional banks who hold a conventional banking mindset, wary of prosecution over potential illegal activity. 

“HKMA encouraged the banks to not be afraid,” a person with knowledge of the discussion said, according to the Financial Times. “There is resistance from a conventional banking mindset. We are seeing some resistance from senior executives at traditional banks.”

One of the bank’s executives said they were torn between wanting “to ensure the development of that industry if it’s a policy of the Hong Kong government” and worrying they might be “taken to task on anti-money laundering or know-your-customer” issues, the Financial Times reported.

The recent lawsuits filed by the U.S. Securities and Exchange Commission against major crypto exchanges like Binance and Coinbase have added to the banks’ concerns.

Standard Chartered told the Financial Times it had “regular dialogue with our regulators on different subjects.” HSBC said it was “very engaged on policies and developments of this nascent industry in Hong Kong” and Bank of China declined to comment to the FT.

© 2023 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 Kraken, Bybit and Bitget made gains following the demise of rival exchange FTX, according to a report by blockchain analytics platform Nansen.

While the majority of crypto exchanges saw a decline in spot trading volumes over the six months post-FTX, Kraken and Bybit bucked the trend. Kraken is up 14.4% in average monthly trading volume to $18.9 billion, with Bybit up 7.65% to $18.2 billion. Binance remained the largest centralized exchange during the period, down marginally by -0.2% to $444 billion.

In terms of derivatives trading, Bitget saw its average monthly volumes grow by 4.85% to $204 billion in the six months that followed FTX’s collapse. Again, Binance remains the most dominant exchange with $1.3 trillion in derivatives trading. However, its volumes have fallen 12.9% compared to pre-FTX.

Meanwhile, decentralized exchange trading volume remained relatively stable over the same period. 

Since the collapse of FTX, trading volumes across centralized exchanges experienced a general decline. This downturn can be attributed to three factors, according to Nansen: investor shock, the loss of trust in centralized exchanges prompting a shift towards decentralized alternatives and increased regulatory pressure on exchange platforms post-FTX. 

FTX’s collapse shook the cryptocurrency industry and eroded user confidence in centralized exchanges (CEXs). As a result, exchanges have pivoted their attention from product and market expansion to prioritizing financial solvency and security. This shift was driven by growing demand from users for transparency and enhanced protection measures, according to Nansen. 

To assure clients, centralized exchanges are now implementing proof of reserves, a measure that demonstrates the actual possession of claimed funds, injecting transparency into operations. However, many have criticized such measures, claiming they fail to reveal audited fiat reserves, client and company liabilities and other information to assess a firm’s financial health.

Protection funds are also meant to boost user confidence, serving as dedicated repositories to cover losses resulting from hacks or unforeseen events. Binance and Bitget are the only exchanges to disclose their protection fund wallet addresses. Notably, both platforms have increased their protection funds to $1 billion from $735 million and to $300 million from $200 million, respectively, Nansen said, leveraging its analysis of over 250 million labeled cryptocurrency wallets.

Nansen’s report also highlights the mounting challenges faced by CEXs due to increased legal requirements and regulatory scrutiny following the FTX collapse, exemplified by the U.S. Securities and Exchange Commission’s recent charges against Coinbase and Binance.

© 2023 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.