Hi 👋
If you are following - one way or another - the crypto world you know what happened last week. If you don’t, here is the tl;dr version:
TerraUSD (UST) - algorithm stablecoin (so, by definition, 1 UST should always have the value of $1) built on the Terra blockchain - lost its pegged value (of $1) and started a so-called “death spiral”. In a pretty big way. From $1 to $0.1 in 4 days:
Algorithmic stablecoin can work only if it’s “paired” with a “sister” cryptocurrency. For TerraUSD, it was Luna. This is how Luna is doing now:
Pretty bad, huh? It’s not zero but really close.
Before the crash, Luna and TerraUST were in the top 10 cryptocurrencies with huge market capitalizations. And they are gone. Disappeared in a few days. Unfortunately, many people, who believed in the stability of the peg and invested all their savings to earn 20% APY by depositing their TerraUST into Anchor protocol, lost almost everything.
If you want to learn more about the crash & depeg, here are two great resources:
Twitter thread - a short read:
Or a longer read: Bloomberg article by Matt Levine - “Terra Flops”. This is a must read!
Anyway, apart from Luna crash, crypto bear market, high inflation & high interest rates, fintech & crypto are still on fire and a lot is happening.
Don’t lose hope - things will get better.
Welcome to “Fintech 🤝 crypto” - episode #12.
Let’s go! 🚀
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Happened recently 👀
1) Central Bank of Portugal grants country’s first crypto license to a bank 🇵🇹
In short:
TradFi bank - Bison Bank - was officially authorized to offer crypto custodian and trading services in Portugal.
My comment:
This news seems like a natural next step for the Portuguese banking sector since Portugal has been always very crypto-friendly with its tax-free cryptocurrency regulations.
I can imagine that more banks in the EU will follow the Bison Bank’s path in the next 2-3 years. The adoption of crypto services will only increase in time and when regulations kick in (like MiCa in Europe), we will witness more and more TradFi institutions start offering crypto services to their customers.
2) MetaMask now supporting crypto transactions with Apple Pay 💸
In short:
One of the most popular non-custodial crypto wallets - MetaMask - now supports crypto transactions directly with Apple Pay.
My comment:
The friction should be as minimal as possible - this is the main goal of many crypto apps. It’s enough that crypto by definition can be confusing to the normal user - the biggest players on the market try to make it super easy and fast to buy/sell and trade cryptocurrencies with their apps.
MetaMask (with more than 30 million active users) did the same thing and announced that now it supports Apple Pay as a payment method in their app.
3) Luxury brand Off-White and Australian convenience store giant - OTR - started to accept crypto 🤔
In short:
Luxury brand - Off-White - joins a growing list of luxury fashion lines adopting crypto, including watchmaker Hublot and Italian streetwear brand Philipp Plein.
Aussie convenience store giant - On The Run (OTR) - will accept crypto at 170 outlets. With help from Crypto.com they will implement their Pay Merchant product.
My comment:
On the one hand - we have already heard this type of news throughout 2020 and 2021. However, 2022 is a pretty bad year for the crypto industry (in terms of valuations) and there are still many traditional companies that are pushing their “crypto-strategies” by starting to accept payments in crypto.
Is that a signal of strength?
4) Adyen enters banking-as-a-service market 🏦
In short:
Adyen, omnichannel payment processing company that provides merchants with multiple ways to accept payments on a single platform, decided to enter banking-as-a-service (BaaS) market.
Adyen will offer white-labeled banking services, like multi
multi-currency bank accounts, corporate credit cards, short-term cash advances, and instant business loans.
It’s the first major strategic expansion for the Dutch payments company since it went public in 2018.
My comment:
Many fintech companies are targeting individual consumers with their “banking” services, like no-fee credit cards, cheap cross-border transfers, or buy-now-pay-later payments. Adyen, with its new BaaS products, wants to address small- and medium-sized businesses.
This is an interesting and bold move by Adyen. Its current market capitalization is about $60 billion and while Adyen has grown at phenomenal rates, its stock still trades at a lower valuation than competitors such as Block and Stripe that process significantly smaller transaction volumes. Adyen processed transaction volumes of $575.5 billion) in 2021, a 70% leap from the year before.
Banking-as-a-service is a quite different thing than classic payment processing services so I’m really curious how well Adyen will execute this strategy in 2022.
Great reads worth your time 📚
📘 I was wrong, we need crypto (by David Heinemeier Hansson)
Interesting piece by Hansson who used to be anti-crypto person but the truck protests in Canada (Feb 2022) made him reconsider his views.
📕 Anyone Seen Tether’s Billions? (by Zeke Faux, Bloomberg)
A bit longer read about the biggest stablecoin (in market cap) there is - Tether (USDT).
Considering the current situation (and the recent collapse of TerraUSD), this is a must-read!
TerraUSD failed as an algorithmic stablecoin, Tether is (supposedly) backed by fiat USD currency. But is it really?
📕. Why Apple Acquired An ‘Open Banking’ Fintech (by Ron Shevlin, Forbes)
Another Apple’s acquisition in the fintech space. This time Apple bought UK-based Credit Kudos, which many people refer to as an “open banking” company, for $150 million.
Good summary of why Apple did it and what impact it may have on the future Apple’s offering.
📙 Shopify’s evolution (by Ben Thompson)
If you want to fully understand the e-commerce & payments 2022 scene, you need to learn about Shopify. Ben Thompson wrote a great piece about this company and why it changed e-commerce forever.
Gold Tweets 🏅
1. A good thread on the current state of affairs of a bear market:
2. If you are new to web3 and want to start learning, this is a good starting list of resources you can use:
3. Who is building the backend of Metaverse? A lot of companies. Nice infographic showing most of them:
4. And one more. Probably nothing:
That’s all for now 👋
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Stay curious,
/Pawel