Week In Crypto: First DeFi FX Transactions On Public Blockchain, MoneyGram Launches Crypto Trading

November 4, 2022
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Following months of reporting on crashes, fines and bankruptcies, Week in Crypto is decidedly upbeat this week as J.P. Morgan, DBS and SBI complete the first cross-border transactions on a public blockchain, MoneyGram launches crypto trading and Visa taps into World Cup fever with new NFTs.

Following months of reporting on crashes, fines and bankruptcies, Week in Crypto is decidedly upbeat this week as J.P. Morgan, DBS and SBI complete the first cross-border transactions on a public blockchain, MoneyGram launches crypto trading and Visa taps into World Cup fever with new NFTs.

J.P. Morgan, DBS Bank and SBI Digital Asset Holdings have successfully concluded the first foreign exchange and government bond transactions on blockchain.

The pilot, which was part of the Monetary Authority of Singapore’s (MAS) Project Guardian, included a live cross-currency transaction between tokenised Japanese yen and Singapore dollar, and then simulated the buying and selling of tokenised government bonds.

It was the first-ever industry pilot to carry out a cross-border transaction using decentralised finance (DeFi) on a public blockchain.

The pilot also marked the first time a bank issued tokenised deposits, Tyrone Lobban, J.P. Morgan’s head of blockchain launch and Onyx digital assets, pointed out.

“[W]e issued Tokenised Singapore Dollar Deposits! 💸This is a deposit token which is a general liability of JPM. It’s a native token giving stable on-chain value without the scalability issues of stablecoins. This is the 1st issuance of Tokenized Deposits by a Bank!,” Lobban told his Twitter followers.

Another novel feature, Lobban explained, is the use of verifiable credentials (VC) built on blockchain, which could serve as an important tool for compliance.

“As a heavily regulated bank, we cannot enable money laundering and must undertake KYC. Using VCs & allowlists was crucial for enabling us to use DeFi pools with certainty on these points. Institutional DeFi!,” the Onyx chief wrote.

Small, yes, but not irrelevant

Meanwhile, as J.P. Morgan was celebrating the first cross-border transaction using DeFi on a public blockchain, its president and chief operating officer, Daniel Pinto, appeared less enamoured over the prospect of cryptocurrencies.

Speaking at the Hong Kong Fintech Week on Monday (October 31), Pinto said: “bitcoin for us, I’d say the best word to describe it is irrelevant. It’s not good or bad.”

In discussing the potential of J.P. Morgan Coin, Pinto said only a few clients are interested in the crypto industry.

The Wall Street bank has tended to show more interest in the underlining blockchain technology and central bank digital currencies (CBDCs) rather than cryptocurrencies.

Countering his comments, Bill Winters, CEO of Standard Chartered, said he agrees with the J.P. Morgan president “on the overall scheme of things, but there is an institutional application for cryptocurrencies, and that overwhelmingly is in bitcoin and ether”.

“It’s small, but it’s not irrelevant,” Winters stressed.

MoneyGram expands crypto offering

Other traditional payment players have also been further dipping their toes into the pool of crypto.

This week, MoneyGram announced the expansion of its crypto offerings to allow users in the US to buy, sell and hold cryptocurrency via its mobile app.

The money transmitter will first support the trading and storage of bitcoin, ethereum and litecoin on its app. The company, which registered a 57 percent growth in cross-border transactions last year, noted it is exploring expansion to other markets in 2023, as global regulations allow.

Markets likely to be on the agenda for rollout are in Latin America. Not only is MoneyGram one of the biggest remittance providers in the region, crypto adoption has soared to new heights in recent months.

In some countries, such as Argentina, this is in part due to the extreme levels of inflation leading to many users adopting crypto in the hope of protecting their savings, while in Brazil, digital assets form part of regulators’ vision to embrace technology.

Visa’s NFT goal

Meanwhile, another large player betting on the growing popularity of crypto-assets is Visa, which is using its sponsorship of the FIFA World Cup in Qatar to expand its presence in the non-fungible token (NFT) space.

The card giant announced on Tuesday (November 1) that it had teamed up with Crypto.com to offer NFTs depicting football legends to fans.

The unique NFTs, which could be bought on the Visa Masters of Movement auction, feature digital art inspired by iconic goals from five legendary footballers. Proceeds from the auction will be sent to UK charity Street Child United.

Those who prefer not to pay a fortune for the NFTs can opt to join Visa at the FIFA Fan Festival in Doha and create their “own legendary moves” in the Visa Masters of Movement space.

The card giant explains that fans can step onto a digital LED pitch where their “iconic movements” are tracked and transformed into digital art.

CBDC, what threat?

Finally, Changpeng Zhao, CEO of Binance, has dismissed the idea that central bank digital currencies (CBDC) represent a threat to other cryptocurrencies.

"Is [CBDC] a threat to Binance or other crypto-currencies? I don’t think so. I very much think that the more we have, the better," he said.

Speaking at the Web Summit conference in London, Zhao said CBDCs can “validate the blockchain concept” and create the trust necessary to encourage the mass adoption of crypto.

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