The Weekly Pen: Welcome to Week 1 of year 2023

# payments
# fx
# tradfi
# currency
# investing

We made it through the year 2022 and into 2023. Welcome to week 1.The Pen team is back with the first weekly pen drop in the new year, bringing you the latest in the world of finance and global economy peppered with the disruptive progression of Decentralized Finance. The Crypto winter has officially begun, and Penning has sat their eyes on the future and how to navigate through the cold towards the other side. Here’s this week’s wrap up. Have a good read.


Ukrainian pharmacies will now accept cryptocurrency payments through Binance Pay. The service will be available in over 4,000 pharmacies throughout the country and will allow customers to pay for their prescription medications using a variety of cryptocurrencies. Binance Pay is a payment platform developed by Binance, one of the world's largest cryptocurrency exchanges. It allows merchants to easily accept payments in cryptocurrency and provides a convenient way for consumers to use their digital assets to make purchases. This partnership with Ukrainian pharmacies is expected to make it easier for consumers to pay for their medications, and could potentially increase the adoption of cryptocurrency in the country.


Cryptocurrency payments platform Wyre has announced that it is shutting down. The company, which was founded in 2013, raised $5.8 million in funding and was valued at $5.2 billion at its peak. However, it has struggled to compete with larger, better-funded competitors and has seen a decline in usage in recent years. The company's management team has decided to shut down the platform and return the remaining capital to investors.


Celsius Network has won a legal battle over the ownership rights to customer cryptocurrency deposits. The case was brought by Michael Oliver, who claimed that he was the rightful owner of $50,000 worth of bitcoin that he had deposited with Celsius. However, the court ruled in favor of Celsius, stating that the company was entitled to ownership of the bitcoin because it was providing a lending service to Oliver. The ruling is a victory for Celsius, as it affirms the company's right to use customer deposits as collateral for its lending operations. It also has wider implications for the cryptocurrency industry, as it sets a precedent for the ownership of digital assets in lending arrangements.


Companies in the US have rushed to borrow money from the corporate bond market due to the easing of financial conditions as investors lower their expectations for future interest rates. In the first week of this year, firms including Credit Suisse and Ford issued $63.7bn worth of US-marketed debt, compared to $36.6bn in the last five weeks of 2022. While this week's issuance is lower than the $73.1bn issued in the first week of January 2022, interest rates have risen from almost zero to 4.25-4.5% since then. This has significantly increased the cost of borrowing, although it has dropped since peaking in October as cooling inflation has tempered expectations of how long the Federal Reserve will have to keep interest rates high.


Elon Musk's attorneys are seeking to move his upcoming trial in a defamation case from California to Texas, citing local negativity towards the Tesla CEO. The case was brought by British cave diver Vernon Unsworth, who is suing Musk for calling him a "pedo guy" on Twitter. Musk's attorneys argue that the high-profile nature of the case and the negative sentiment towards Musk in California would make it difficult for him to receive a fair trial. The trial is scheduled to begin in March and is expected to last for about a week.


US stocks rose on Friday following the release of December jobs data and an economic activity survey, which indicated that inflation may be cooling. The Dow Jones Industrial Average increased by 2.13% and the S&P 500 rose by 2.28%. The Nasdaq Composite added 2.6%. The positive performance helped stocks end the week in positive territory, with the Dow and S&P 500 each rising 1.5% and the Nasdaq advancing 1%. The nonfarm payrolls report showed that the US economy added 223,000 jobs in December, higher than the expected 200,000. Wages grew by 0.3% on the month, lower than the expected 0.4%. The ISM's nonmanufacturing purchasing managers' index revealed that the services industry contracted in December, indicating that the Federal Reserve's interest rate hikes may be slowing the economy.


The changes, which are aimed at addressing regulatory concerns and satisfying demands from the Chinese government, will see Ant Group transformed into a financial holding company and Ma replaced as chairman by the company's CEO, Eric Jing. The revamp comes after Ant Group's initial public offering (IPO) was suspended by Chinese regulators in November. The IPO, which would have been the world's largest, was halted amid concerns about the company's regulatory compliance and the potential risks posed by its financial products. Ant Group will now be required to meet the same regulatory requirements as traditional financial institutions.


The annual rate of inflation in the 19-country bloc dropped to 1.3% in December, down from 1.4% in November. The drop was largely due to a decrease in energy prices, which fell by 2.9% on an annual basis. However, core inflation, which excludes volatile energy and food prices, remained stable at 0.3%. The European Central Bank has a target inflation rate of just below 2%.


Tribe Capital, a San Francisco-based venture firm, has cut the value of its investment in Canadian-British start-up Invenia by 95% after the company's CEO was fired following an investigation that found he had "inflated the revenue and profitability of the company". The valuation cut is the latest blow to Tribe, which was started by former staff of Social Capital four years ago and has also invested in crypto exchanges FTX and Kraken. The firm is re-evaluating several well-funded start-ups, according to Arjun Sethi, CEO of Tribe and a member of Invenia's board. Sethi said the firm would be exploring ways to recoup its investment, which represents 8.9% of Tribe's $335m second fund.


US prosecutors are investigating hedge funds' relationships with cryptocurrency exchange Binance over alleged money laundering violations. The US Attorney's Office for the Western District of Washington in Seattle has subpoenaed investment firms to provide records of communications with Binance in the past few months, according to anonymous sources cited by the Washington Post. It is not clear if the subpoenas mean that prosecutors will bring charges against the cryptocurrency exchange or the hedge funds, as authorities are still evaluating evidence and the possibility of a settlement with Binance, according to legal specialists. Binance has been under investigation in the US since 2018 over allegations including unlicensed money transmission and money laundering conspiracy.


The Bahamas liquidators overseeing the dissolution of FXT Holdings have said that they have resolved most of the issues surrounding the case. FXT Holdings, a cryptocurrency firm, was placed into liquidation in the Bahamas in April 2022 after its CEO, Jon Woodall, was arrested and charged with fraud in the US. The liquidators had previously expressed concern about the transfer of cryptocurrency assets and other assets out of the company. However, they now say that they have received "satisfactory assurances" from the company's leadership and have resolved most of the issues surrounding the case. The liquidators will now focus on finalizing the dissolution of the company and returning any remaining assets to its creditors.


Shiba Inu-themed tokens called BONK are yielding nearly 1,000% for liquidity providers on the Solana blockchain. BONK is an automated market maker (AMM) and one of several tokens that have recently gained popularity on Solana, which has seen a surge in decentralized finance (DeFi) activity. BONK is currently being used as collateral in the yield farming protocol, which allows users to earn a return on their deposits by providing liquidity to the protocol. The success of BONK and other tokens on Solana highlights the increasing importance of AMMs in the DeFi space, which allow users to buy and sell tokens without the need for an order book or market makers.

Till we yield again