As bitcoin, ethereum and other cryptocurrencies get increasing attention from investors, Wall Street and its traditional banks continue to adjust to the shift. Catch up on this week's top stories highlighting the intersection of these old guard and new school areas of finance with this recap compiled by The Fly.
MASTERCARD EXPANDS CRYPTO CARD PARTNER PROGRAM: Mastercard (MA) announced Monday the expansion of its cryptocurrency program. The company said, “Supercharging the partnership experience, cryptocurrency and crypto card partners are invited to join Mastercard’s Accelerate program for emerging brands and fintechs, giving them access to everything they need to grow quickly. The move comes as Wirex becomes the first native cryptocurrency platform to be granted a Mastercard principal membership, allowing it to directly issue payment cards.” Mastercard principal membership enables Wirex to issue payment cards directly to consumers and consumers can instantly convert their cryptocurrencies into traditional fiat currency, which can be spent everywhere Mastercard is accepted. Currency will always enter Mastercard’s network as traditional fiat currency. Users will also benefit from Wirex’s Cryptoback rewards program, which automatically gives customers up to 1.5% back in Bitcoin for every purchase made in-store.
OCC SAYS BANKS MAY HOLD CRYPTO FOR ‘SAFEKEEPING’: The Office of the Comptroller of the Currency published a letter Wednesday clarifying national banks' and federal savings associations' authority to provide cryptocurrency custody services for customers. The office said, “National and state banks and thrifts have long provided safekeeping and custody services, including both physical objects and electronic assets. The OCC has specifically recognized the importance of digital assets and the authority for banks to provide safekeeping for such assets since 1998. In the letter published today, the OCC concludes that providing cryptocurrency custody services, including holding unique cryptographic keys associated with cryptocurrency, is a modern form of traditional bank activities related to custody services. Crypto custody services may extend beyond passively holding ‘keys.’”
DMS ACCESSED IN TWITTER HACK: Following a Twitter (TWTR) hack in which many prominent accounts tweeted out messages relating to an apparent bitcoin-related scam, the company disclosed Wednesday that hackers accessed the DM inbox for up to 36 of the 130 targeted accounts. Twitter noted those accounts include one elected official in the Netherlands. The company also said that the 36 accounts are separate from the eight accounts where an archive of “Your Twitter Data” was downloaded, which includes all account activity including DMs. Twitter said none of the “YTD” downloads impacted Verified accounts.
RUSSIA GIVES CRYPTO LEGAL STATUS: Russian lawmakers approved a bill allowing legal status for cryptocurrencies, but prohibited them from being used for payment, Reuters reported Wednesday. Anatoly Aksakov, head of the Russian Banking Association and a financial committee within Duma, said an agreed position on cryptocurrency had now been defined in law. “Essentially the cryptocurrency is a complex of digital data, a digital code or a reference, that is stored in the information system,” Aksakov said. The bill will go to the upper house of parliament and then to the Kremlin. In comments on the new bill, the central bank said, “The draft law introduces the definition of a digital currency, which cannot be a means of payment. Possession of digital currency, its acquisition and transfer by legal means are allowed only if declared.”
SOUTH AFRICA BITCOIN EXCHANGE RAISES FUNDS: VALR, South Africa’s largest bitcoin exchange by trading volume, announced Tuesday that it has raised R57M, or $3.4M, to advance the adoption of cryptocurrencies. The Series A equity round of funding was led by 100x Ventures with participation from SA-based 4Di Capital and continued support from former FNB CEO Michael Jordaan and Bittrex. “I am very grateful that despite the challenging global COVID-19 pandemic that has adversely affected many businesses around the world, VALR has been able to grow at a phenomenal pace and we’ve been able to raise funds and partner with a set of world-class investors, adding to our already distinguished group of shareholders,” says Farzam Ehsani, VALR CEO and Co-Founder. VALR will use the proceeds from the capital raise to build new products and services, expand into new territories, and continue to build its team of professionals, particularly in the technology, regulatory and compliance, and client service domains.
CRYPTO STOCK PLAYS: Cryptocurrency revenues have been pointed to as reasons to be bullish on Advanced Micro Devices (AMD) and Nvidia (NVDA) in select research. Overstock (OSTK), DPW Holdings (DPW), Kodak (KODK), Ideanomics (IDEX), Riot Blockchain (RIOT), Pareteum (TEUM) and Social Reality (SRAX) are other stocks that have been touted, or promoted themselves, as a way to play the crypto theme.
PRICE ACTION: As of time of writing, bitcoin rose roughly 4.2% this week to $9,530 in U.S. dollars, according to TradeBlock.
