Fintech meets crypto #14
Stablecoins are back, Apple flirts with BNPL and the current state of global crypto-assets market.
Hi 👋
It feels like we are in the “quiet” phase of the bear market. And it may last for many months.
Companies that were not careful enough went bankrupt by now. Those that were reasonable during the bull market - are still building. And this observation is valid for both sectors: fintech and crypto.
Some people are even starting to see the light at the end of the tunnel. Like Sam Bankman-Fried (CEO of FTX):
Despite the still stormy crypto winter, which has driven Three Arrows Capital and Voyager Digital into bankruptcy filings and left Celsius and BlockFi facing liquidity challenges—the FTX CEO believes the worst of the liquidity crunch has passed, according to Reuters on Wednesday.
Do you see the light too?
Do you think the worst is behind us and now we can just focus on building new, exciting stuff?
Are you still interested in the crypto x fintech space?
I am.
Welcome to “Fintech 🤝 crypto” - episode #14.
Let’s go! 🚀
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Happened recently 👀
1) Digital Euro will be limited to 1.5 trillion 🇪🇺
In short:
When the digital euro (CBDC) is launched, its issuance will be limited to €1.5 trillion.
The limited issuance of the digital euro will help avoid negative consequences for the EU's financial system and monetary policy.
Digital Euro should be launched in 4 years (around 2026).
"As the population of the euro area is currently around 340 million, this would allow for holdings of around 3,000 to 4,000 digital euro per capita."
- Fabio Panetta, a board member of the European Central Bank (ECB)
My comment:
Why does ECB want to limit the digital euro issuance? The reason is simple: there is a huge concern among banks that the digital euro (issued by the ECB) will lure consumers into putting all their savings in CBDC. This would reduce the deposit of savings in banks affecting the banks’ survival and lending structure.
I can only guess that the European banking industry is putting huge pressure on ECB to limit CBDC usage as much as possible. At the same time, banks are working on their strategy once CBDC goes live. Let’s see how things will evolve.
2) Circle announces euro-pegged stablecoin called Euro Coin 💸
In short:
Circle, the company behind USDC, launches Euro Coin (EUROC).
Euro Coin is the stablecoin pegged 1:1 to the euro and secured with bank deposits of equal value in euros.
My comment:
No need to wait for the official Euro CBDC, Euro Coin (a stablecoin) is already here! Brought to you by Circle - the company that issues the second most popular stablecoin USDC (the first one, in terms of market cap, is USDT).
In short: this is the way. I’m bullish on classic, fully fiat-backed stablecoins (maybe not on the algorithmic ones, yet). USD is already well represented on the stablecoin market, however other global and widely used currencies (like Euro) are not. Now the situation is changing and this will spark a new wave of innovation in the fintech industry. Speaking of which… 👇
3) Tether launches a new sterling-pegged stablecoin (GBPT) 🇬🇧
In short:
Tether has announced that it will be launching Tether tokens (GBPT) pegged to the British Pound Sterling in early July 2022. Initial blockchain support will include Ethereum.
GBPT is an asset-backed stablecoin, meaning tokens are fully backed by cash or cash equivalents.
My comment:
Oh yes, there is a funny story about this news.
Last month I had the pleasure to attend “Future of Payments 2022” conference in Manchester (organized by FintechNorth UK).
One of the speakers - Barry James - did a great presentation about cryptocurrencies, metaverse, and what the future might bring.
While he was speaking about stablecoins and predicting that the British Pound Sterling stablecoin was imminent, I got a notification on Twitter that Tether is launching GBPT. Yes, almost exactly at the same time.
It’s just another proof that stablecoins are not going anywhere, they are here to stay and they will be integrated into the global payments ecosystem in the next 2-3 years.
4) Apple Pay will offer a buy now pay later option📱
In short:
Apple announced a major update to Apple Pay called Apple Pay Later, which will allow users to split the cost of an Apple Pay purchase into four equal payments over six weeks without interest or late fees.
Powered by the Mastercard network, Apple Pay Later is available everywhere Apple Pay is available in the U.S., both in apps and on the web — it requires no extra work from the developer or merchant side.
Apple enters the BNPL market. Grand View Research predicts that the BNPL could be worth $39.41 billion by 2030.
My comment:
Instead of my trying to write some witty and interesting comment on this, just go to “Great reads worth your time” section below and check out a brilliant article by Ron Shelvin from Forbes 👇 He covered it all.
Collab of the week 🤝 Brew.Money
What is Brew.Money
It’s a non-custodial wallet built on top of Polygon that lets you earn up to 10% APY on multiple blue-chip DeFi protocols like Aave and Balancer via a single click.
How it works
You can directly transfer money on the Brew app through Apple Pay. The app then, automatically converts it into USDC & deploys it into a blue-chip DeFi protocol (like Aave or Balancer) and helps you earn yields on that protocol. You can see your interest being credited on the app every second.
The Brew App is currently in beta.
Sign up for their waitlist today to be an early adopter.
Great reads worth your time 📚
📙 The Ascent of Crypto Assets: Evolution and Macro-Financial Drivers (Erik Feyen, Yusaku Kawashima, Raunak Mittal / VOX.eu)
This is a summary of a great paper (its full version is available here) that aims to describe the rise in on-chain crypto-asset activity around the world at the country level.
The findings prove that crypto-asset activity is a global phenomenon. Some industry estimates claim that 100-200 million people around the world owned or use crypto assets in 2021.
📕 Apple Pay Later: Cutting Through The Buy Now, Pay Later Hype (Ron Shelvin / Forbes)
Great article answering a very simple question: why is Apple launching Apple Pay Later (BNPL service) in 2022?
The author does a good job of explaining the way Apple is building its fintech services (merchant-facing products vs consumer-facing products)
Gold Tweets 🏅
1. Great thread on how to DeFi can grow from here (by ‘here’ I mean the current bear market 2022):
2. If you want to understand how BNPL differs from traditional lending, go and read this one:
3. Why stablecoins matter and why they will matter even more in the future:
4. And three more tweets that are ⚡️:
That’s all for now 👋
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Never settle,
/Pawel