According to a report on Oct. 27, this real-world proof that the technology is increasing efficiency and reducing costs has bolstered the megabank’s confidence in the technology’s promise and profitability. With the expectation that further commercial clients will sign up to use the stablecoin, JPMorgan has created a dedicated business devoted to digital currency and blockchain work.
The new business unit, dubbed “Onyx,” has over 100 staffers and is being led by Umar Farooq as CEO. Takis Georgakopoulos, JPMorgan’s global head of wholesale payments, told reporters:
“We are shifting to a period of commercialization […] moving from research and development to something that can become a real business.”
On the heels of PayPal’s recent embrace of crypto, incumbents’ confidence that blockchain can actually make them money appears to be on the rise. JPMorgan’s experimentation and development with the technology thus far can be broken up into several key areas.
First, the megabank has been piloting a blockchain-based Interbank Information Network since 2017, involving over 400 participant banks and corporations. JPMorgan believes that the network, now being rebranded as Liink, can bring significant efficiency savings for the complex interactions of corresponding banks in cross-border wholesale payments. JPMorgan itself accounts for cross-border wholesale payment flows of over $6 trillion per day, across over 100 different countries.
The bank has also identified blockchain’s usefulness to innovate the existing, outdated system for processing “hundreds and millions” of paper checks. Blockchain and digitization can, securely, banish the physical aspects of this exchange altogether. Georgakopoulos said that a new blockchain system is months from commercial launch:
“Using a version of blockchain with the participants being the main issuers of checks and the main operators of lockboxes, it’s possible we can save 75% of the total cost for the industry today, and make checks available in a matter of minutes as opposed to days.”
Lastly, JPMorgan has confidence in blockchain for the creation of new payment rails for global central banks and their evolving central bank digital currencies. Pointing to China and Singapore, Georgakopoulos expressed his confidence that the probability of CBDC adoption is “very high.”
The new CEO of Onyx gave his insights as to why developments have appeared “slow,” or at least equivocal, on the blockchain front at JPMorgan until now:
“If you think about blockchain, we are either somewhere in the trough of disillusionment or just beyond that on the hype curve. That’s why at JPMorgan we’ve been relatively quiet about it until we were ready to scale it and commercialize it.”
Advertisement Stablecoins are hotter than ever, with Tether’s trade volume surpassing Bitcoin’s by 55% in the past 24 hours. Led by surges in the USDC and USDT, the total number of stablecoin daily active addresses has topped 265K. Stablecoin Active Address || Source: Coinmetrics The above chart by Coinmetrics is smoothed using a 7-day rolling […]
Stablecoins went wild in the days before Bitcoin’s recent surge In the days preceding Bitcoin’s latest rise in price, stablecoins went wild, exhibiting some largely unprecedented behavior. Stablecoins: all stablecoins inflow transaction and address count of all exchanges. Source: CryptoQuant. On October 18, stablecoins moving to exchanges reached record highs of 60,000 and 56,000 respectively, […]
Stablecoins are hotter than ever, with Tether’s trade volume surpassing Bitcoin’s by 55% in the past 24 hours. Led by surges in the USDC and USDT, the total number of stablecoin daily active addresses has topped 265K. The above chart by Coinmetrics is smoothed using a 7-day rolling average. Total active addresses for Tether hit […]
39% of the respondents that involve 150 portfolio companies see DeFi as the most bullish crypto development of 2020, as per the DCG Founders survey “State of Crypto 2020.”
The sector has seen immense growth in 2020 and continues to hit new highs; just today, a new record was set of $12.5 billion TVL.
The founders surveyed said notwithstanding the price of DeFi tokens, which have been tanking hard until very recently, “the protocol development and business growth of 2020 bodes well for the industry’s future.”
DeFi is followed by “BTC resilience” and “Stablecoin surge,” which makes sense given that the market cap of fiat-backed crypto has shot up past $12 billion this year.
“The growing demand for stablecoins in Latin America, and Argentina specifically, is due to the fact that buying dollars as a form of savings is a regular monthly habit for middle-class Argentinians, due to cyclical devaluations and loss of trust and credibility in the Argentinian peso,” said Sebastian Serrano, CEO of Ripio, an Argentinian digital asset exchange, and payments company.
Still, respondents were split on whether Ethereum, which is the center of it, will remain the dominant transaction-based blockchain. 51% still believe the second largest network will find scalability faster than new blockchains develop a community.
Adoption Drivers & Greatest Risks
Other findings of the survey revealed “global recession” (24%), “inflation” (19%), and “hunt for yield” (18%) as the main macro crypto adoption drivers. However, the smart money adoption won’t be bringing new highs for BTC price in the next 6-12 months as per the majority.
Only 20% think during this period, BTC will surpass $20,000.
Meanwhile, nearly six in ten respondents expect industry consolidation, resulting from big players buying smaller ones to limit competition to accelerate, particularly in the exchange and wallets & custody spaces.
However, the industry’s greatest risk remains the same; compliance and regulation as per 51% of the respondents.
“It’s really important that we start to see some consistency and coordination across regions,” said Simone Maini, CEO of Elliptic, a blockchain forensics, and analysis company, “there are still plenty of opportunities for regulatory arbitrage at the moment, where businesses are trying to operate in jurisdictions with looser regulations.”
Other factors that impede sustainable growth involve theft/hacks/scams (22%), investment crunch (12%), and technical obstacles (8%).
Overall, in 2020, four in five rated their company’s performance against expectations as “outperformed” or “neutral” while having COVID/remote work, third party delays, and fundraising as the main business challenge.
As a decentralized, borderless, and composable digital currency pegged to the US Dollar, Dai has many benefits and a vast range of use cases. Worldwide, people generate the Dai stablecoin or purchase it to use for everything from international remittance and inflation protection to e-commerce and gaining access to the newest DeFi products and services.
Dai’s versatility has enabled MakerDAO to become a blockchain project that is well on its way to “crossing the chasm”—experiencing meaningful and substantial adoption both within and beyond the immediate crypto community. As of this writing, almost a billion Dai have been generated and put to use in many ways, but primarily in the following five areas:
Let’s explore how Dai is used most today—and why it fits these user needs so well!
1. Inflation Protection and Savings
Many early cryptocurrency adopters were motivated to explore the technology due to economic turbulence experienced in their countries. While certain national currencies are highly stable and desirable, they are not always easy to access. Dai, however, can be purchased on various exchanges or generated from several forms of crypto collateral by anyone, and then held or transferred easily anywhere in the world. As a user-created decentralized stablecoin, Dai has no centralized issuer or administrator. As long as users hold their Dai in a software wallet, such as Metamask, they maintain total independent control of their funds.
Dai has become extremely popular in Latin America and other regions where national currencies have experienced significant volatility. In fact, Dai has become Argentina’s most popular crypto by exchange volumes—ahead of even Bitcoin—due to concerns over hyper-inflation. As of mid-August, Argentina’s 12-month inflation rate was over 40%. Dai is also popular in Brazil, Colombia, and Venezuela, all of which are experiencing economic difficulties.
Dai’s composability means it can readily be plugged into almost any DeFi application (dapp) on the Ethereum platform. Dapps enable anyone with an internet-connected device to gain access to financial products and services the likes of which are typically only available through traditional intermediaries. The most popular dapps include peer-to-peer interest rate protocols (colloquially referred to as lending protocols) and decentralized exchanges which are software platforms that enable peer-to-peer digital asset trading without middlemen. As DeFi grows, Dai should continue to be heavily relied on in current and yet-to-be created Dapps.
Many gamers are very comfortable with the concept of digital ‘currencies’—valuable items and collectibles that are traded seamlessly through what have become highly sophisticated in-game economies. But while trade within those economies might be smooth, moving funds in and out of systems when a game allows can be slow and expensive, depending on gamers’ locations and banking arrangements.
As a borderless currency that anyone in the world can quickly transfer and store, Dai is the ideal token for the gaming world. Unlike centralized game currencies, no company can devalue Dai or discontinue its wider use. Dai is a stable unit of account controlled exclusively by the people who hold it.
One very exciting emerging use case for Dai is as a currency of payment for digital art. More and more digital artists are embracing blockchain technology by using one-of-a-kind, limited-supply blockchain assets called non-fungible tokens (NFTs) to represent their original singular works and series.
While typical digital image files can be copied endlessly, NFTs are unique and prove provenance and ownership. Authentic art can be sold at auction, transferred, and traded on the secondary market by artists and collectors, all with the security provided by the blockchain.
NFTs also enable some truly imaginative applications. For example, Async.art’s layered, programmable art allows buyers to influence the look of a piece. Async also recently opened its first art auction for Dai.
Dai has also been integrated into other popular art platforms, including:
E-commerce has certainly come a long way since the early days of Amazon and eBay, yet the industry still lacks efficient global payment processes. But cryptocurrency is changing that. An estimated $4 billion worth of bitcoin was sent through payment processors in 2019, and today Dai is providing its own unique set of benefits for merchants. For example, shop owners that accept Dai payments can do so easily, without worrying about chargebacks, volatility, or payment processor fees.
Dai continues to carve out exciting use cases in both the blockchain sector and the real world, making meaningful differences in the lives of its users. The decentralized, borderless, and transparent nature of Dai fosters the development of new products and services for the community to explore, adding value to the broader Maker ecosystem and driving further global adoption of the Maker Protocol in the process.
Explore some of the many applications and use cases for Dai in the Maker ecosystem!
People’s Bank of China (PBoC) published a notice today stating that the country’s central bank has provided various channels such as email, fax and letter to acquire public opinions, or feedback on a revised draft that under Article 19, under Section 3, the draft proposes to include: Renminbi includes both a physical form and a […]
According to a statement by Changchun Mu, the director of the Chinese Institute of CBDC, China’s dual offline wallet for its CBDC has now been fully developed and is ready for testing. The introduction of this wallet is expected to be the follow up to the pilot, which took place on October 12. This phase […]
Banks will likely open crypto accounts next to fiat accounts, decentralized finance (DeFi) will claim its trillion-dollar company, while central bank digital currencies (CBDCs) will suprise many by entering our lives sooner than expected, Marc van der Chijs, entrepreneur, crypto-focused venture capitalist, and co-founder of VC firm First Block Capital (FBC), told Cryptonews.com.
Line, a Tokyo-based messaging giant, is building a platform for developing central bank digital currencies (CBDCs).
It has been reported by the South Korean news agency the Chosun Ilbo that Line aims to support the development of a so-called “customized CBDC.”
However, the messaging company is discussing the application of its blockchain-based CBDC platform with several central banks in major Asian countries.
Line executives said that they cannot disclose the exact countries that are considering the platform’s application.
Likewise, a Line spokesperson said:
“The firm aims to provide a blockchain platform that is fit for CBDCs based on Line Blockchain.”
The report said that Line has been actively exploring the crypto and blockchain industry. In August 2020, it launched a blockchain development platform for decentralized applications and services and a digital asset wallet named Bitmax.
Earlier this year, Line’s crypto subsidiary LVC Corporation launched trading of its proprietary cryptocurrency Link (LN) in Japan.
Thus, a number of Asian countries are making plans for their own CBDCs.
David Schwartz, CTO at Ripple, recently delivered a lecture at Berkeley, a lecture during which he shared his views on how he sees XRP and XRPL fitting into the broader picture of a world with CBDCs. CBDCs have been quite the rage recently, especially since the United States’ Fed Chair Powell confirmed that the U.S […]