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| What you need to know today in crypto and beyond July 20, 2021 Sponsored By: Welcome to The Node.
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Today's must-reads Top Shelf DOWN: Bitcoin drops below $30K for the first time in four weeks.
FOR EVERYTHING ELSE, USDC: Mastercard will use Circle’s USDC stablecoin as a bridge asset for cardholders who want to pay using crypto. Under the pilot program, which was announced on Tuesday, USDC will be a go-between consumers’ digital wallets and the fiat currency paid to merchants. Evolve Bank & Trust – with which the payments giant may issue “crypto cards” – and Paxos are also involved.
BIG MEETING: The President’s Working Group for Financial Markets plans to issue recommendations for stablecoin regulations in the next few months, it announced Monday. According to a readout published by the U.S. Treasury Department, the highly anticipated meeting examined stablecoin growth, use cases and possible threats. A UNICORN: OpenSea, one of the largest crypto-native marketplaces, is the latest Ethereum unicorn. The platform apparently capitalized on this year's boom in non-fungible tokens and is now valued at $1.5 billion after a $100 million Series B round of funding. Andreessen Horowitz (a16z), a Silicon Valley-based venture capital firm, led the financing round that closed Tuesday. TECHNO FACELIFT: The Port of Buenos Aires in Argentina is about to receive a technological facelift with the help of blockchain technology. In a bid to increase the speed and efficiency of the port’s processes, the port’s blockchain implementation will act as a “digital notary” to prevent alterations of information and improve traceability.
CEASE AND DESIST: Crypto lending platform BlockFi has received an order from New Jersey’s acting attorney general to halt its interest account operations in the state, CEO Zac Prince confirmed Monday. Prince said BlockFi remains “fully operational” for its existing clients in New Jersey.
–Helene Braun
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Overheard on CoinDesk TV Sound Bite “Every fiat currency globally of any significant economy will be tokenized."
A message from CoinDesk The Investor’s Perspective on the Bitcoin Taproot Upgrade Taproot is a bundle of three upgrades to Bitcoin aimed at improving network security, privacy and scalability. At the same time, it poses some potential drawbacks to Bitcoin including risks of low adoption, unintended privacy shortcomings and Bitcoin community disappointment and fracturing.
CoinDesk Research's newest report dives into the economic impact and investment implications of the Taproot upgrade. Download the full report.
What others are writing... Off-Chain Signals
SushiSwap unveils new crypto products (Decrypt) Crypto is an “untested asset category,” says UBS CEO Ralph Hamers (Cointelegraph)–H.B.
Sponsored Content
YouHodler: Integrating crypto in the financial mainstream With traditional interest rates close to or even below zero, the whole concept of earning interest on deposits has been turned on its head, making it harder than ever for asset holders to generate returns. That’s about to change, thanks to YouHodler, which combines the growth of crypto assets alongside the structures of traditional financial systems so asset holders can start to make decent returns again.
Putting the news in perspective The Takeaway Ann Brody is a Ph.D. student in Communication Studies at McGill University, where she researches blockchain technology and culture.
DeFi Isn't Better Than TradFi if People Can't Use It I am on a Zoom call with a woman from Shiraz, Iran, who is currently working as a freelance designer and is running a course that educates local populations on the fundamentals of blockchain and decentralized finance (DeFi).
The dominant narrative seems to be that in Iran, cryptocurrencies play an important role in helping people buy imports as one way of coping with the pressure of sanctions, but the reality – as my interviewee assures me – is way harsher.
Imagine you live in a place where you are denied access to basic services like Spotify and Netflix and then you stumble upon blockchain, which finally grants you the freedom to participate in these kinds of services and transact with anyone you want in the world. Then one day you log into your MetaMask wallet and realize that you can’t connect to the network and view your balance because you’ve just been geo-blocked.
“For a moment I thought that all my hard-earned revenue had just evaporated into thin air. Because I live in Iran, I can’t access basic web services, and now I can’t even access decentralized finance. How is that fair?” the freelance designer tells me.
Geo-blocking internet protocol addresses is becoming a common practice among blockchain and cryptocurrency companies that are actively trying to legally protect themselves from engaging with sanctioned entities. Geo-blocking sets limits on access to online content based on a user’s physical location by monitoring the user’s IP address.
Crypto’s philosophy of decentralization is premised on the belief that everyone should be able to participate in decentralized finance, and yet what appears to be happening is that many people around the world can’t find an entry point into it in the first place.
Every day, hundreds of Iranian users are getting kicked out of international online cryptocurrency exchanges with their funds getting frozen for unknown periods of time – and often, they don’t even get that money back. That is unfortunate, considering that Iranians are already unable to participate in social media platforms like Facebook, Twitter and Telegram without the use of virtual private networks, and even applications like GitHub and Slack, which are important for collaborative work.
Although those restrictions can be bypassed using VPN services, doing so requires issuing another level of trust unto shady services that are not always reliable, contradicting blockchain’s purpose. In essence, this means that people residing in sanctioned countries are being denied access to services both internally and externally and the promise of decentralization seems to apply only to some populations and to completely disregard others.
To be sure, even if crypto isn't fully decentralized, it's perhaps more open than or equally as accessible as its alternatives and certainly offers many benefits. For instance, it can enable people to participate in certain financial and market applications without having extensive knowledge in trading and investment, in contrast to traditional finance.
But to ensure that decentralized finance succeeds in areas where traditional finance has failed, developers and other stakeholders in this community have to start addressing issues pertaining to regulation and reframing the narrative around “decentralization.” Only by embracing a more sober outlook on what this technology can and cannot do in its present social and political context will we be able to construct more robust tools that will serve more than the needs of wealthy financial interests.
The next time you stumble on the profile of a crypto company with a mission statement that starts something along the lines of “making a more accessible financial system,” it’s a good idea to pause and reflect on the following questions: Who is this financial system being made more accessible to? Who is getting to decide what decentralization means and what it should look like?
If decentralized finance is being built for those already in power and can’t serve the needs of those who need it the most, then it’s really not better than traditional finance.
–Ann Brody
The CoinDesk Quarterly Review 2021 Q2
After two consecutive quarters of strong price gains for most of the top crypto assets, Q2 2021 finally brought an end to market euphoria with a resounding crash.
Most CoinDesk 20 assets, which constitute 99% of the crypto market by verifiable volume, ended the quarter with negative returns. Meanwhile, protocol development for the world's largest cryptocurrencies by market capitalization, Bitcoin and Ethereum, reached new milestones.
CoinDesk Research's latest Quarterly Review dives into the trends, developments and technological progress that shaped the crypto markets from April to June 2021. The full report is now available from the CoinDesk Research Hub.
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