The Weekly Pen: Hacks, payments advancements, web2 meets web3. Week41 that went by

THE PENNING DROP
BLOCKCHAIN
CRYPTO
INVEST
By The Pen

The weekly Pen is back for the wrap-up of week41’s top trending stories in the web3, DeFi, and crypto. We wonder if there will be a dominant industry for its “subverses” in the space? Like all the other weeks, a lot has happened in the space this week as well. Some of it has left us in awe, others made us think “what took you guys so long?”. Read on and see what The Pen Team has captured this week.


BINANCE BLOCKCHAIN BROKE            

Probably the top trending news this week has been the hack on one of the blockchains linked to crypto giant Binance. Amidst the global crypto market meltdown of 2022 and the fall of crypto funds and companies, Binance was the latest victim of a hacker attack, out of thin air created 2 million BNB (Binance native token) out of the Binance network based on a vulnerability. This amounted to a total of $570Million being “stolen” from the network and resulted in Binance suspending deposits and withdrawals. The difference between this hack and the rest is that CZ (the famous initials of Binance CEO) said that all losses will be covered. Despite the hack being an act of 3rd party crime, Binance took full ownership of the unfortunate incident. Something very unlikely in the world of Crypto, where most would place the fault on others and withdraw from responsibility, placing it on the nature of the market. Something that Penning commends greatly. Safety, consumer, and client trust are key for the space to grow in a sustainable fashion and become an established decentralized financial market.

 

VISA PARTNERS UP FOR PAYMENT INNOVATION

While one crypto giant suffered (read Binance) losses, another experienced the opposite. The 2nd largest global payments giant VISA is launching a crypto debit card to be rolled out in more than 40 countries. Even though we are about 155 countries away from being completely omnipresent, this is a huge step forward toward crypto mass adoption. While Penning appreciates the fact that trillions of dollars are floating in the crypto space and VISA sees this as an opportunity to shift capital between markets instead of losing transaction volume from the centralized world, this is a huge step towards acceptance and could also be an eye-opener to lawmakers across the world. Read the full article here in see for yourself. As mentioned in the article “as long as people have things they want to buy, we want to facilitate it” and that pretty much sums it all up. The crypto world is not a “us against you” movement, but another sustainable financial innovation catering to capital allocation across the globe.

 

GOOGLE ON 7TH CLOUD WITH COINBASE

Just a few months after Blackrock announced its partnership with coinbase to give more seamless access to their institutional investors into the crypto space, google knocked on their doors as well to forge a, to date unseen, type of partnership. Google has chosen coinbase, to allow some customers (by some we think they mean crypto bag holders), to pay for cloud services with their crypto as early as 2023 and subsequently, coinbase will draw on Google’s cloud infrastructure. While some skeptics see this as another move to allocate FIAT currency from the crypto space back into the established financial markets, Penning believes this shows the nature of decentralized finance being a catalyst of financial innovation and sustainable payment infrastructures. In all essence, it’s a validation for the crypto industry.

 

JPMORGAN FLIRTS WITH DEFI

James Dimon, CEO of JP Morgan have long had various opinions about the nature of Bitcoin and cryptocurrency in general. From warnings against the market being a “ponzi-scheme” to expressing JP Morgan’s ambitions to deploy trillions of dollars of assets into the DeFi space. Many will never understand the true intentions of the established financial markets leaders the recent move by JPMorgan proves more positive sentiments towards the crypto space. While VISA partnered with FTX for cross-border crypto payments, they’ve also collaborated with JPMorgan to use their blockchain called Liink, to further streamline the use of their private blockchain B2B Connect (a similar network to Liink) to facilitate cross-border payments. B2B connect is now integrated with Onyx’s confirm network, an account-information validation product. Another SWIFT move towards mass-adaption or a cynical move towards advancing the CBDC infrastructure? Read the full article here and make up your mind for yourself.

 

LOOKING FOR STABILITY THE TETHER SAGA CONTINUES

Terra collapse, billions of dollars disappearing, and stablecoin innovators crashing is the theatrical turmoil of crypto 2022. In June this year investors pulled $1.6billion out of stablecoin Tether in just 2 days (after Tether already paid out $10BN in withdrawals back in May) as fear spread and the crypto crash was occurring. Heightening the anxiety levels of investors and the levels of stability of stablecoin providers, Tether the issuer of the world’s largest stablecoin USDT by market cap announced last week that it has eliminated commercial paper from its reserves and consequently replacing those investments with U.S. treasury bills (T-bills). It’s a result of Tether fighting the good fight and increasing its efforts to increase transparency, protecting investors first and foremost. In the light of Binance move to cover the losses from the chain hack, Tether is another prime example of the market players, “rebelling” against the notorious nature of the crypto space. Is there hope for the future of stablecoin, especially with the introduction of MiCA law? Read the full article here and take a stance.

 

BITCOIN INSTITUTIONAL ADAPTATION

Wrapping up this week's drop from the Pen, the trending news in the space is tilting towards positive sentiments from institutional investors and traditional financial markets. From VISA and JPMorgan payments initiatives to Google’s innovative offering with Coinbase, market analysts are indicating these moves as a sign of institutional adaptation of Bitcoin. Apart from the aforementioned moves of web2.0 and traditional finance behemoths, last month Nasdaq launched crypto custody for institutions and Franklin Templeton, Betterment, Société Générale, and other wealth managers. Back in the day news like these would have spiked bitcoins current (at the time of writing) price from $19,000 to to-digit percent spikes, but as it seems untethered (pun not intended) from the positive news flow, Penning believes it indicates a new normal for the space and inevitable progress for the crypto space and decentralized finance.

See you next week.

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