Mastercard and digital asset platform Bakkt are partnering to allow merchants and banks to build cryptocurrency into their offerings,. consumers can buy, sell and hold digital assets through custodial wallets offered by Bakkt, and customers can collect and spend loyalty rewards through cryptocurrency. The move brings the universe of cryptocurrency one step closer to bridging the gap with the traditional credit card payment industry. As brands and merchants look to appeal to younger consumers and their transaction preferences, these new offerings represent a unique opportunity to satisfy increasing demand for crypto, payment and rewards flexibility”
The ProShares Bitcoin Strategy ETF (BITO) which tracks bitcoin futures instead of the cryptocurrency itself, became the fastest to surpass $1 billion in assets under management, signaling that the digital asset is finding its place on Wall Street. But Christopher Vecchio, a senior strategist, says it’s more buzz than anything. While the approvals send a positive signal for digital assets on their path to legitimization, the actual investment vehicles are probably a bad idea, Vecchio said. Those looking for exposure to bitcoin, should just buy bitcoin, he added. Aside from the unnecessary custodian fees, Vecchio noted that bitcoin is in what’s called contango, which occurs when the futures price of a commodity is higher than its spot price. Because there is expected future price appreciation in bitcoin for the next several months, the November, December contracts are trading at a higher level than the current spot price,” Vecchio said. BITO’s current structure has ProShares sell the lower-priced front-month contracts that are near expiration to buy the higher-priced, longer-term ones. This continuous process known as rolling means they end up paying more per unit, per contract than they would have by simply operating in the spot market. As the ETFs roll over each month, they create a negative roll yield, causing returns to be relatively lower than the returns that could have been yielded from exposure to bitcoin’s spot price.
Walmart is bringing bitcoin ATMs to 200 locations across the U.S. via a partnership with coin-cashing machine company Coinstar and crypto-cash exchange Coinme. Although the initial trial period is just 200 ATMs, the launch is part of a wider plan to install 8,000 bitcoin ATMs in the country. There are more than 25,000 bitcoin ATMs in the U.S. located at supermarkets and gas stations, and Coinstar operates 4,400 bitcoin kiosks in 33 states. Coinstar launched the Walmart pilot program in conjunction with Coinme. Customers wanting to use the bitcoin machines must have a Coinme wallet or set one up at the ATM. The cost is 4 percent for exchanging Bitcoin plus an additional 7 percent for converting the eCurrency into cash. People without a Coinme wallet can still insert paper money and use the returned redemption code to set up the Coinme account.
Cryptoasset custodian Zodia Custody has conducted trials with DMG Blockchain’s Blockseer Petra solution, making it possible to route cryptocurrency transactions to compliant green mining pools. Additionally, there’s a plan to add risk ratings to crypto transaction counterparties. One of the biggest institutional challenges with cryptocurrency is the ability to know with whom they’re transacting. While there may be KYC at most cryptocurrency exchanges, the crypto-asset can pass through many parties afterward. Blockseer Petra doesn’t yet solve this one but has plans to. Apart from knowing counterparties, another issue is understanding which organization is mining the blocks for cryptocurrency transactions. The crypto asset industry is often associated with high environmental impacts, particularly in relation to energy consumption. Further, the concept of unknown participants mining blocks is outside of many institutions’ risk appetite. Zodia Custody, in an industry first with DMG’s Petra platform, is able to address these concerns and offer clients the option to route transfers to OFAC-compliant, ‘green’ mining pools. Petra will also give comfort to institutional clients that their crypto transfers are being processed by known, sanctioned complaint parties. This represents a major milestone towards the institutional adoption of crypto assets.”
US-based fintech Marqeta is delivering new cryptocurrency-based card payment solutions for CoinBase, Shakepay, and Bakkt. As a card issuer, Marqeta has opened up new applications of its platform, to allow cryptocurrency to be spent at the point of sale or allow consumers to earn rewards in cryptocurrency from debit and credit card spending. Marqeta solutions like instant issuance allow cards to be immediately deployed into digital wallets, and its ATM network integrations, direct deposit, and ACH capabilities allow crypto innovators to build out a digital banking experience. Through its ecosystem of partners, such as Deserve, Marqeta will also be able to introduce unique features for its customers issuing credit cards, such as credit limits that can be adjusted according to a consumer’s cryptocurrency balance. The features of Marqeta’s modern card issuing platform have been leveraged by several customers to launch new products allowing customers to either earn or spend cryptocurrency at the point of sale. In this sense, Bakkt launched its Visa Debit Card, which allows customers to spend Bitcoin and cash balances from their Bakkt accounts, anywhere Apple Pay or Google Pay are accepted. Coinbase also launched its Visa Debit Card, which allows users to spend their cryptocurrency balances anywhere Visa debit cards are accepted and earn additional crypto rewards on eligible purchases.
Customers Bank of PA and blockchain-based digital payment provider Tassat Group have announced the launch of the Customers Bank Instant Token or CBIT, on TassatPay, a blockchain-based real time payments platform that will immediately begin serving a growing array of B2B clients who want the benefit of instant payments. Customers Bank believes it will attract clients and significant deposits with the launch of the TassatPay platform. TassatPay enables the bank’s clients to make real-time digital payments and works by tokenizing their U.S. dollar deposits. It also provides the infrastructure for executing smart contracts, processing transactions in multiple digital currencies and enhanced data capabilities.
After years of trial and error by would-be fund sponsors, cryptocurrency investing is finally opening up to the masses with the tacit U.S. approval of a bitcoin futures exchange-traded fund.
The Securities and Exchange Commission (SEC) greenlighted bitcoin futures ETFs in a first for the industry on Friday, after the regulator’s five commissioners met on the issue. ProShares, which filed for its Bitcoin Strategy ETF this past summer, may be the first to launch next week. The company filed a post-effective amended prospectus on Oct. 15, stating its filing is expected to launch on Monday, Oct. 18, though the fund may not begin trading immediately. Proponents of a bitcoin ETF believe the product will be more widely accessible for individuals interested in bitcoin than the actual cryptocurrency by giving investors a regulated alternative to the underlying digital asset. The first product will track bitcoin futures, rather than the price of bitcoin directly, however.
Bloomberg and Kaiko announce the issuance of the first series of Financial Instrument Global Identifiers covering crypto assets. The Financial Instrument Global Identifier (FIGI) is an open standard of the Object Management Group (OMG), for the issuance of unique identifiers assigned to financial instruments including equities, derivatives, bonds, municipals, and currencies. Kaiko and Bloomberg officially released the first batch of FIGIs for all Bitcoin and Ethereum instruments denominated in fiat currencies. All FIGIs are issued via OpenFIGI and Kaiko’s Instrument Explorer and are openly accessible to the public. FIGIs for crypto assets enable interoperability between industry participants such as digital asset exchanges, data aggregators, custodians, service providers, and regulators. Incorporating FIGIs at the infrastructure level enables a coherent view of market data across multiple providers and applications. FIGIs will be assigned at three levels of granularity: asset, currency pair, and trading platform.
The SEC is poised to allow the first U.S. Bitcoin futures exchange-traded fund to begin trading in a watershed moment for the cryptocurrency industry. The regulator isn’t likely to block the products from starting to trade next week, said the people, who asked not to be named while discussing the decision. Unlike Bitcoin ETF applications that the regulator has previously rejected, the proposals by ProShares and Invesco Ltd. are based on futures contracts and were filed under mutual fund rules that SEC Chairman Gary Gensler has said provide “significant investor protections.” Barring a last-minute reversal, the fund launch will be the culmination of a nearly decade-long campaign by the $6.7 trillion ETF industry. Four futures-backed Bitcoin ETFs could begin trading on U.S. exchanges this month, with deadlines for applications from VanEck and Valkyrie also approaching.
Finastra and Bakkt announced plans to make Bakkt’s digital marketplace and wallet available through Finastra’s open developer platform and app store, FusionFabric.cloud. Through the partnership, Bakkt, the trusted platform that enables consumers to buy, sell, store and spend a range of digital assets, including bitcoin, will be available to customers of community banks and credit unions, as part of Finastra’s Fusion Digital Banking solution. The app, will enable financial institutions to offer their account holders access to the growing crypto market without having to leave their existing, trusted banking environment.