Post-COVID America is warming to crypto
Katharine Wooller, MD, Dacxi, a cryptocurrency fintech platform for the retail market, shares insights into how perceptions of cryptocurrency is shifting in the States - and why it matters
The United States has the largest economy by GDP in the world, and thus all other countries’ economic health are affected by the pull of its gravity. Indeed, it has long been said that when America, financially, gets the sniffles, the hold world braces to catch a heavy cold.
Traditionally slow to adapt, in no small part due to a draconian regulatory body, piecemeal announcements over late summer and early autumn would suggest change is afoot. As an economic behemoth, it would be fair to assume the rest of the world will follow America’s lead.
Recent changes are illuminating, and it well worth considering the sum of their parts, which would suggest the US attitude to crypto’s place in global financial infrastructure is thawing.
The U.S. Securities and Exchange Commission (SEC) has made recent, fundamental changes which have far reaching implications. In late August it was announced that the New York Stock Exchange (NYSE) will be able to raise capital without the expense of an IPO via a Primary Direct Floor Listing, concluding that sufficient investor protections are in place. Further, the rules for accredited investors have been tweaked, thus expanding the pool of retail investors who can invest in private securities, if they can show “knowledge and expertise”.
While Commissioner Hester Peirce describes the move as “cautious”, the sum of these two changes is the acknowledgement that there is an ecosystem of private investors seeking returns in early stage start-ups, who in turn desperately need access to capital. Too long this has been the monopoly of hedge funds and venture capitalists. It can be argued, that the logical progression is that the heir apparent for tokenising businesses must be crypto. Indeed, it is interesting to note that INX Ltd is imminently looking to launch the first ever security token offering (STO) registered with the SEC, and thus legally marketable to mom-and-pop investors.
Even the highest echelons of US financial system seem to be considering how crypto may fit into the post-Covid reality. In late June the US Senate held a hearing on The Digitization of Money and Payments, with witnesses including former Commodity Futures Trading Commission (CFTC) Chair J. Christopher Giancarlo discussing a tokenised version of the dollar, who has long argued for future-proofing the currency.
He is quoted as saying: “The Digital Dollar Project believes the opportunity is at hand not just to imagine such an ecosystem, but to actually build it.” Interestingly, included on the invitee list was Charles Cascarilla, CEO of Paxos, a regulated crypto coin collateralised by the U.S. dollar, suggesting a focus around central bank digital currencies and stable coins. The acknowledgement of the application of crypto from arguably the most powerful central bank in the world, is no small triumph for the industry.
The notion seems to be catching on at a local level also. “Yes California”, a Brexit-style movement to grant independence for the State of California, seeks to establish crypto to function as the local currency. The group has recently appointed a blockchain expert to propose an economy based on digital assets to provide a host of benefits to its citizens, including universal basic income, free healthcare, and free education.
The head of the movement, Marcus Ruiz Evans, enthuses: “people need assistance, especially right now, and the government is struggling to come up with somebody.” This is not some a bunch of eccentric and idealistic nobodies; according to Yes California, the state government has agreed to hold a public petition into Californian independence this year. Clearly the political mechanisms are taking this seriously, and interestingly California’s Senate Banking and Financial Institutions Committee recently passed a bill seeking to define digital assets and measure their impact on state and consumer protections.
The change of tune from what was previously the most hostile nation on the planet to crypto cannot be underestimated. Whilst these changes may look like small steps for the US, they are giant leaps for the acceptance of crypto as a major player in modernising the American economy for the new normal.
Tink partners with Novalnet AG for open banking payments
The Munich-based fintech Novalnet AG, which was founded in 2007 and is one of Europe’s leadingfintech companies, has announced a new partnership with Tink, the Swedish open banking platform currently connected to more than 3,400 European banks.
Novalnet AG delivers payment solutions and fully automated services, from checkout to debt collection. Its solutions are also available worldwide.
According to reports, the fintech company plans to launch a real-time payments feature for merchants across Europe, to expand its current services and enhance the transaction experience it operates through its platform.
The new feature, says Novalnet, will revolutionise payments for ecommerce with transactions being credited to merchant’s accounts almost instantly.
Novalnet partnership with Tink
By partnering with Tink for payment initiation services (PIS) technology, Novalnet will take previous region-specific payment methods and offer a new unified digital payments service to its merchants across Europe.
The fintech’s real-time merchant payments feature, which will be launched initially in Germany and the United Kingdom, will then be integrated across other European markets during 2021.
Speaking about the new collaboration, Emmanuel Kirse, COO of Novalnet, explained, "We expect great things from our strategic partnership with Tink, which is a significant development for both parties.
“With Tink, Novalnet can offer a new set of open banking-related solutions in Europe. The new opportunities offered by this partnership will help both Tink and Novalnet grow together, along with our merchants."
Cyrosch Kalateh, Regional Director for the DACH region at Tink said, “Our partnership with Novalnet is a big step for Tink in the German market, and we are excited to work together to bring new, innovative payments services to merchants across Europe.”
He added, “At the end of 2020 Tink committed to expanding its payment initiation services from five to 10 markets, fuelled by an €85mn investment round. We are proud to add Germany to this list by announcing we have now fully launched Tink’s PIS services in this market.”
Image credit: Novalnet AG