Visa, PayPal and BNY Mellon Lead TradFi’s This Week Crypto Expansion
Visa Launches Platform for Banks to Issue Fiat-Backed Tokens on Ethereum
Visa has developed the Visa Tokenized Asset Platform (VTAP) to assist banks in issuing fiat-backed tokens on the Ethereum network. This platform enables the development of fiat-backed tokens powered by smart contracts, digitizing and automating existing processes to facilitate the exchange of real-world assets (RWAs).
Spanish bank BBVA is set to be one of the first financial institutions to use this platform, with plans to roll out a live pilot in 2025. Visa's extensive work in the blockchain and digital assets space includes processing cryptocurrency payments in stablecoin USDC and becoming a partner with Brazil's central bank for a central bank digital currency (CBDC) pilot project.
PayPal Launches Crypto Functions for U.S. Businesses
PayPal has introduced new functionality for U.S. business clients, enabling the buying, holding, and selling of cryptocurrencies. This service will initially not be offered in New York State. Additionally, U.S. merchants can now transfer cryptocurrency on-chain to third-party eligible wallets, allowing business account holders to send and receive supported crypto tokens to and from external blockchain addresses.
The company's decision to provide these features is driven by the desire for business owners to access the same cryptocurrency capabilities available to consumers. The new features are part of PayPal's strategy of increasing crypto utility for its U.S. clients.
BNY Mellon Cleared by SEC to Broaden Crypto Custody Beyond Bitcoin, Ethereum
BNY Mellon has received SEC's non-objection to expand its crypto custody services beyond Bitcoin and Ethereum ETFs, indicating a major step for traditional financial institutions in the digital asset space. The proposed structure for digital asset custody complies with regulatory guidelines, allowing BNY Mellon to proceed without additional approval processes.
SEC Chair Gensler confirms that the approved structure is applicable to other digital assets, safeguarding customer funds by segregating them from the bank's own assets. This move reflects a shift in regulatory perspective and is expected to add competition and enhance the safety of custody services.
Guggenheim Tokenizes $20M Commercial Paper on Ethereum
Guggenheim Treasury Services, partnered with Zeconomy, issued $20 million of tokenized commercial paper on the Ethereum blockchain, with Moody's Investors Service giving it a P-1, the highest credit rating. Zeconomy's CEO mentioned a "massive demand" for digital assets, particularly after the success of crypto ETFs.
This move comes as the tokenization space rapidly grows, with about $12 billion in market capitalization, including $2 billion in tokenized U.S. government securities. Guggenheim's involvement in tokenizing assets is a new venture for the $300 billion asset manager, which has historically been active in the crypto ecosystem through its Macro Opportunities Funds.
Revolut Considers Stablecoin Launch, Robinhood Delays Plans
Revolut is considering launching a stablecoin, potentially disrupting the market dominated by Tether's USDT. While the fintech giant has yet to make a final decision, it highlights the growing interest in stablecoin issuance by major players. In contrast, Robinhood reportedly has no immediate plans for a stablecoin launch.
Regulatory scrutiny, particularly in the EU with the forthcoming MiCA regulation, poses challenges for stablecoin issuers. With Tether holding a significant market share, Revolut's potential entry into the market could challenge its dominance. The profitability of stablecoin issuance is evident as Tether reported earning $5.2 billion in profit in the first half of 2024 from its USDT reserves.
eToro Launches Direct Crypto Trading in Germany, Expanding Services
eToro has expanded its crypto services in Germany by introducing spot trading through a partnership with DLT Finance, enabling German users to trade cryptocurrencies directly. Tangany will provide custody services to ensure the safety of customers' digital assets. New features for spot trading include limit orders, stop-loss, and profit-taking options, offering German traders more control and flexibility compared to crypto CFDs.
eToro prioritizes privacy and security, with essential customer information being shared in line with data protection policies. The move reflects eToro's commitment to developing its crypto services in Germany, where interest in cryptocurrencies is growing despite restrictions in other countries.
This article has been refined and enhanced by ChatGPT.
