|Analysis: Crypto had an up and down week., with most major coins up 2-5% in the 7-day term. For a rare instance, Bitcoin was up while most DeFi and traditional alts were down, with some calling it the “Bitcoin Revenge Rally”. Spot volumes are down from this time a month ago overall.
Big Story Of The Week: US Based Exchange Kraken
Yesterday, US Based Exchange Kraken Announced They Had Been Approved To Operate A Special Purpose Depository Institution (SPDI), Which They Describe As A Form Of Bank, In Wyoming – At Face Value This Concludes A Long Saga And Fractious Relationship Between The Exchange And The US-Banking System. It Is Not Yet Known How This Will Affect International Markets.
- Kraken is legitimately one of the earliest North American crypto exchanges and one of few remaining from the pre-Mt Gox era. The firm was founded in 2011 and trading formally launched in July 2013. The platform has a history of issues with the US-banking system which included a move to suspend USD-deposits/withdrawals. The announcement notes that the State of Wyoming has approved a firm, tentatively being referred to as, ‘Kraken Financial,’ to operate a Special Purpose Depository Institution (SPDI). The intention of the move is to be able to offer a full-service crypto-fiat gateway and custody solution. Kraken espouses a vision where clients can transfer their assets seamlessly between fiat and crypto.
Takeaway: The functionality that Kraken describes in their announcement is not new to the space. Both Silvergate and Deltec among others operate similar ‘seamless’ systems that even allow for some cross-exchange operability. We expect, however, that the announcement will come as a relief for Kraken, which has had near death experiences when the US banking sector has turned its back on them. That said, bank friendliness towards the sector has greatly increased anyways, with even JP Morgan offering services to exchanges Gemini and Coinbase.
Other Weekly Headlines
- Decentralized exchange UniSwap has launched a governance token called UNI. A total of 1 billion UNI tokens have been minted, of which 60% will go to community members of the next 4 years. A further 21.51% will go to team members and future employees, and 17.8% to investors, with both having a ‘4-year vesting.’ UniSwap users can immediately begin claiming UNI tokens based on their prior use. Coinbase, FTX and Binance all quickly listed the token. – link – @UniSwap
- The Bahamas is set to roll out a digital currency called the Sand Dollar in October after successful testing on two islands. Officials behind the project claim it will make digital payments easier, especially in remote islands that play important roles in the country’s tourist-centric economy. The Sand Dollar will be backed by Bahamian dollars (which are pegged to USD). – link – @Bloomberg
- India is planning to ban cryptocurrency trading in the country, according to a report from Bloomberg. The Reserve Bank of India had previously banned commercial banks from providing services to crypto business, however that ban was overturned by the nation’s supreme court in March. – link – @Bloomberg
Bitcoin CEO: MicroStrategy’s Michael Saylor Explains His $425M Bet On BTC, CoinDesk, September 15, 2020
PODCAST: Andre Cronje Of Yearn Finance On YFI And The Fair Launch: ‘I’m Lazy’, Unchained Podcast, September 15, 2020
PODCAST: How SushiSwap Proved That Liquidity Is Not A Moat, Unconfirmed Podcast, September 11, 2020
EU Aims For Tight Grip On Digital Currencies To Stave Off Risks – Bloomberg, September 11, 2020