Good evening! It looks like the week isn’t the only thing over the hump. The crypto market is showing signs of recovery, most likely because crypto CEOs appeared before Congress today to argue that their technologies offer some real promise for the future.
The House Financial Services Committee, led by Rep. Maxine Waters (D-CA), called the hearing to enhance lawmakers’ understanding of crypto assets. The executives argued that cryptocurrencies are fundamentally different and existing rules don’t apply. As always, we’ll keep an eye on it.
Today’s best performance among the top-20 cryptocurrencies was Polygon ($MATIC.X), thanks to its partnership with Wanchain, which will spread the use of Layer 2 cross-chain bridges to accelerate the development of interoperable blockchains.
Hopefully the trend up will keep going, and today’s news definitely shows some positive movements:
- Nexo, Fidelity partner to bring crypto access to institutional investors
- Visa launches crypto advisory service for financial institutions, merchants
- Crypto 101: What is Audius — a decentralized music streaming service
- Crypto and payments industry to undergo an overhaul in Australia
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Nexo and Fidelity Team Up To Offer Institutional Investors Crypto Products
Fidelity Digital Assets, a division of Fidelity Investments, has partnered with the crypto lending and exchange platform Nexo to provide institutional investors with custodial services, products, and lending services for crypto assets. The two firms will create a comprehensive product line and legal infrastructure for institutional investors looking to invest in cryptocurrencies.
Nexo will be able to expand its asset portfolio and add a second custody level to its security architecture as a result of its partnership with Fidelity Digital Assets, per announcement. The London-based company currently processes more than $50 billion in transactions annually for clients with more than 2.5 million accounts worldwide.
Additionally, Fidelity Digital Assets’ institutional investors will also have access to Nexo’s crypto prime brokerage. The company manages more than $7 trillion of client assets through its crypto division, Fidelity Digital Assets.
Kalin Metodiev, co-founder and managing partner at Nexo, said, “Working with Fidelity Digital Assets is the latest milestone in our quest to offer a complete institutional platform and to onboard traditional finance companies into the digital asset ecosystem. Our client base will now have full use of our industry-leading credit and trading products with reliance on Fidelity Digital Assets’ bespoke custody and security solutions.”
Through this deal, Nexo’s products and crypto prime brokerage will be available under one umbrella for institutional investors using Fidelity as their custodian. In other words, Nexo will expand its institutional offerings and grow its portfolio of assets under management (AUM). In return, institutional investors who currently hold digital assets at Fidelity Digital Assets will be able to access Nexo’s products and services directly such as crypto prime brokerage. Crypto prime brokerage allows clients to manage their digital assets in one place, allowing them to trade, custody, and lend over-the-counter (OTC).
The partnership shows how financial firms are closing the crypto lending and asset management gaps and how crypto products are becoming mainstream.
Visa Launches Crypto Consulting Services to Coax Mainstream Investors
In order to make cryptocurrency more acceptable among the general public, Visa is launching new consulting and advisory services to help clients understand cryptocurrency. The crypto advisory team members will work with the company’s consulting and analytics team to provide banks with strategic and tactical advice. This crypto advisory will also offer advice to financial institutions, retailers, and other firms on everything from implementing crypto features to exploring non-fungible tokens, per announcement.
In an interview with CoinDesk, Cuy Sheffield, Visa’s head of crypto, said, “We think it’s a critical role for Visa to play to help be this bridge between banks and the crypto ecosystem. Every bank should have a crypto strategy.”
Moreover, the payment processor released the results of a new global survey which found that more than a third of over 6,000 respondents already own or use cryptocurrencies – either as investment instruments or as exchange mediums. Over 40% of crypto owners said they would switch from their current bank to one offering crypto-related products within the next 12 months.
The credit card behemoth, from the beginning, has been a proponent of crypto and blockchain technology. Not only is the company exploring NFTs, but it has partnered with major exchanges like FTX and Coinbase to enable its clients to pay with cryptocurrencies at more than 70 million merchants worldwide.
This latest move positions the company closer to crypto, betting that its action will improve consumers’ understanding of crypto and, thus, ultimately helping with its next crypto-related plan.
What is Audius?
For over a century, singers and musicians have been dependent upon intermediaries (like labels, distributors, etc.) to reach an audience and build a career in music. While that’s often still the most conventional way for artists to build a career in music, digital streaming services have revolutionized the way that creators reach their audiences.
One of the foremost communities for music producers and creators circa the 2010s was Soundcloud, which used to have a thriving ‘underground’ scene (and emphasis on indie talent, unlike major streaming services.) However, it has been in decline over the years because of its weak business model. Audius is hoping it’ll be its replacement.
The San Francisco-based company behind the “open-source” community of artists, fans, and developers claims to have racked up over 5 million monthly active users.
At first glance, Audius feels similar to Soundcloud. It’s arguably not catered to listeners, but producers and producer communities. The difference is that it’s on the blockchain, meaning that content is immutable and governance is set by stakeholders in Audius’s native crypto.
How does it work?
With the help of blockchain technology, Audius lets artists upload their music to the app for free and connect with fans directly, secured by a decentralized network of node operators. In 2018, it was built on POA Network, an Ethereum sidechain, and later moved to the Solana blockchain.
The technical side of the streaming service doesn’t affect artists or fans as blockchain is just providing the infrastructure. For musicians and listeners, it is as easy as using any social media app like Facebook.
How is it different?
Being based on the blockchain, Audius operates through a decentralized network of nodes. The Audius network is powered by the Ethereum-based token ($AUDIO.X), which has three functions: First, it ensures network security by rewarding the node operators or validators responsible for running a node. Second, in Audius, the top artists of the week get incentives in the form of $AUDIO.X. Third, since $AUDIO.X is a governance token of Audius, it allows holders of staked tokens to vote on any proposals to the code and overall network.
Where’s it going?
Audius recently raised $5 million in a funding round that included famous artists such as Katy Perry, Nas, and Jason Derulo. Additionally, despite being one of the most significant non-financial crypto applications, Audius is still in its earliest stages. It still lacks support and acceptance from prominent artists, despite having secured uploads from prominent electronic musicians.
Australia To Introduce New Crypto Regulation Laws
As demand grows for crypto regulations in India, Australia is following suit. The Australian government is drafting a regulatory framework that will broaden the definition of crypto services that can be regulated.
In an interview with 7News Australia, Treasurer Josh Frydenberg said that the government is broadening out the definition of the services and the products that can be regulated. To provide users with safety and security, cryptocurrencies will have to be purchased and sold by licensed companies, he said.
The government will also develop a licensing plan for crypto exchanges next year, according to a report. The treasurer’s proposed regulation will also target online transaction providers like Apple and Google as well as “buy now, pay later” services. The Australian Treasury will also develop CBDC (central bank digital currency) in conjunction with the country’s central bank.
As more people’s lives shifted online during the pandemic, cryptocurrency and non-cash payments exploded in Australia. Compared to last year, crypto transactions by Australians have risen 63% this year. According to government data, 55 million non-cash payments are made every day in Australia, with almost half of the population using their phones to make payments.
Following the massive adoption, the conservative Australian government seems to be stepping up efforts to limit the power of the big technology companies, largely based in the United States. Treasurer Josh Frydenberg’s intent sounds like that, at least.
“If we do not reform the current framework, it will be Silicon Valley that determines the future of our payment system,” he said. “Australia must retain its sovereignty over our payment system.”
The move comes as India’s proposed laws provide for arrest without a warrant for anyone using crypto to make payments, while Chinese regulators have already prohibited both cryptocurrency transactions and mining. On the surface, this may appear to be a setback for U.S.-based tech companies, but it can also pave the way for the country to dominate the crypto industry.