CRYPTO INDUSTRY NEWS #7

One of the oldest US banks will offer investments in cryptocurrencies to its customers. PayPal is preparing to launch a “super-application” for cryptocurrencies. Funds will be allowed to invest in cryptocurrencies in Germany. An American company with assets of $45 billion invested in Bitcoin. Ukraine is preparing to launch a national digital currency.

One of the oldest US banks, State Street, which holds assets worth more than $40 trillion and has more than $4 trillion under its own management, plans to offer cryptocurrency services to its largest private clients, Bloomberg reports. According to the publication, the bank is ready to assist its clients in preparing reports and processing transactions with digital assets.

The bank plans to enter into a partnership with the crypto-oriented accounting company Lukka inc to obtain software for working with crypto assets.

State Street top manager Nadine Chakar noted that there is a high demand from the largest clients of State Street Bank for investments in cryptocurrencies, so the bank strives to meet the demand of its clients for digital assets.

“The growth in the popularity of digital assets is unlikely to slow down in the near future, so State Street intends to continue creating the necessary infrastructure for the further development of our digital asset service models,” Nadine Chakar explained.

In June 2021, the banking giant created a division of State Street Digital to work with cryptocurrencies, focused on the development of the central bank’s digital currency (CBDC), the study of blockchain technologies, and the tokenization of assets from the real sector.

The company noted that support for digital assets will be added to their own electronic trading platform GlobalLink soon.

The PayPal payment system announced the imminent launch of a “super application” for working with cryptocurrencies — it will be an absolutely new cryptocurrency wallet with additional features.

In addition to the function of storing digital assets, the application will have several additional features. The application will provide users with access to cryptocurrency deposits with increased interest rates, early access to funds with direct investments, messenger functionality, and some “additional cryptocurrency functions”.

During a conference with investors, PayPal CEO Dan Shulman hinted that the development of the application is already fully completed. PayPal plans to launch the app in the next few months. Initially, the service will be available only to United States users, but it will gradually appear in other countries.

“Unique technologies, artificial intelligence and machine learning were used in the development of our application,” Dan Shulman said at the conference.

On the eve of the conference, Shulman also hinted that the possibility of trading cryptocurrencies on the PayPal platform will appear for users from the UK. The company plans to expand its geography within a month.

Let’s recall that the payment system launched the possibility of trading cryptocurrencies on its platform back in the fall of last year. In mid-July of this year, PayPal increased the weekly limit for buying cryptocurrencies on its platform from $20,000 to $100,000 and also canceled the annual limit of $50,000 for the purchase of Bitcoin and other digital assets.

“These innovations will allow our customers to get more choice and flexibility when buying cryptocurrencies on our platform,” said Jose Fernandez da Ponte, Vice President of blockchain and cryptocurrencies at PayPal.

In Germany on the 2 of August, a law that allows institutional investment funds (Spezialfonds) to invest up to 20% of their portfolio in crypto assets comes into force.

Spezialfonds are special investment funds with small leverage, which do not have strict requirements for liquidity and asset diversification. Among such funds that will have the opportunity to invest in cryptocurrencies are also pension and insurance ones, which manage €1.8 trillion of assets.

The potential size of investments in cryptocurrencies from German funds may amount to €360 billion.

According to Sven Hildebrandt, CEO of the German company Distributed Ledger Consulting (DLC), more than 4 thousand German investment funds can get access to investments in cryptocurrencies.

Although this news signals the growing interest of institutional funds in crypto assets. According to some experts, German funds are not yet ready to invest 20% of their assets in digital currencies due to the instability of the cryptocurrency market associated with high volatility and lack of sufficient

“The instability of the cryptocurrency market can become a serious factor constraining the investment activity of traditionally conservative institutional funds in Germany,” explained Kamil Kaczmarski, Financial Services Consultant at Oliver Wyman LLC.

He expects that at the initial stage after the law comes into force, German funds will not invest large funds in crypto assets.

“It will take at least five years for the funds to approach the threshold of 20% of investments in digital assets,” Kamil added.

According to a Friday report by the financial news agency The Street, a large New York company Golden Tree Assets Management, which manages assets worth more than $45 billion, invested part of the funds in Bitcoin. The exact amount of investment is not reported.

According to The Street, before buying Bitcoins, the company’s management discussed the issue of hiring specialists in the field of cryptocurrency investments.

The company considers Bitcoin an acceptable tool for diversifying investment portfolios. Apparently, the report of The Street, the company invested only in Bitcoin. The Golden Tree management refuses to invest in other digital currencies so far.

In early July, the company’s executives, including founder Steven Tenenbaum and partners Dib Salem and Joseph Nagar, invested in the Borderless Capital venture capital fund, focused on the HNT token of the Helium ecosystem.

Previously, Borderless Capital has invested in the Securitize tokenization platform.

President of Ukraine Vladimir Zelensky has signed the law “On Payment Services”, which allows the national regulator to develop its own digital currency (CBDC).

It is expected that the law will contribute to the modernization, further development of the payment services market and will contribute to the introduction of innovations in the financial sector of Ukraine.

Under the new law, the National Bank of Ukraine will have the right to create a “regulatory sandbox” — a platform for testing financial services and tools based on innovative technologies.

The law is intended to adapt the legislation of Ukraine to the legal frames of the European Union and then integrate the payment system of Ukraine with the EU.

The new law is based on modern requirements and takes into account the standards of European regulations, including the Directive on Payment Services 2 and the Directive on Electronic Money.