Blockchain Bites: Mastercard, BNY Mellon Embrace Crypto; Amazon Floats 'Digital Currency' Project
Recently deceased porn mogul Larry Flynt once said, “Hypocrisy is a detriment to progress." His story may have something to offer crypto.
1. Crypto infrastructure is being laid down across the banking, tech and financial sectors.
- BNY Mellon, the world’s biggest custodian bank, will allow customers to custody crypto by the end of the year. It’s working with unnamed outside partners to build out the offering, according to CoinDesk’s Ian Allison.
- Mastercard plans to support digital currency transactions directly on its massive network, and allow merchants that opt in to participate directly in the crypto economy, CoinDesk’s Danny Nelson reported. “Our philosophy on cryptocurrencies is straightforward: It’s about choice,” Mastercard Executive Vice President for Blockchain and Digital Asset Products Raj Dhamodharan wrote in a recent blog.
- Amazon is preparing to launch a “digital currency” project in Mexico, Nelson also reported. The e-commerce giant has posted a number of job offerings, describing the project, spearheaded by Amazon’s Digital and Emerging Payments (DEP) division, as a way for customers “to enjoy online services including shopping for goods and/or services like Prime Video.”
- Uber is considering adding crypto payment options, if there is a clear benefit, CEO Dara Khosrowshahi said on CNBC Thursday. The ridesharing giant is a member of the Diem (formerly Libra) Association, which is developing a payments network. Khosrowshahi shot down the idea of adding bitcoin to the company’s balance sheet.
- Enterprise software provider R3 has launched a new computing platform called Conclave to bring privacy to sensitive business data, aimed at financial institutions. “[Conclave] paves the way for a new generation of trusted services that can detect fraud, reduce cost, build high-value multi-party analytics and more – where the owners of the data control how it is processed,” R3 said.
2. U.S. regulators are flexing their crypto knowledge.
They're showing both an appreciation for blockchain technology as well as concern for what these new tools mean for the global economy.
Treasury Secretary Janet Yellen said, for the third time in recent weeks, that there’s a “growing problem” with crypto being used for illicit purposes, including terrorist financing. “I see the promise of these new technologies, but I also see the reality: Cryptocurrencies have been used to launder the profits of online drug traffickers; they’ve been a tool to finance terrorism,” she said at a financial sector innovation policy roundtable.
U.S. Securities and Exchange Commissioner Hester Peirce said the U.S. capital markets are ready for a bitcoin exchange-traded product on CoinDesk TV Thursday. She also pushed back on the idea that crypto is primarily a tool for illicit finance, adding, “There is more illegal activity happening in cash.”
The New York Stock Exchange (NYSE) halted trading of Virginia-based Blue Ridge Bank’s stock (BRSB) after a spike in trading activity Wednesday driven by its entrance into the bitcoin ATM game.
Perennial skeptic Nouriel Roubini said yesterday the SEC should investigate people like Tesla CEO Elon Musk for “market manipulation" after the meme-posting billionaire became interested in bitcoin and dogecoin.
3. What’s going on in altcoin-land?
- Centralized exchanges – such as FTX, Binance, Huobi and OKEx – are all seeing breakneck use and appreciation of their native utility tokens. CoinDesk markets reporter Muyao Shen wrote that bitcoin’s rapid appreciation is driving volumes on these crypto gateways. As a result, FTX’s FTT, Binance’s BNB and Huobi’s HT have grown 249%, 238%, and 161% on the year.
- Dogecoin developers are pushing out the first network updates in two years as the meme-coin barks at their heels. Dogecoin is now worth over $9 billion after influential handlers – from Elon Musk to rock star Gene Simmons – “endorsed” the joke. CoinDesk’s Colin Harper gives an impressive rundown on the technical fixes in store.
Every day brings a new example of the world waking up to the power of decentralized tools. Bitcoin being added to balance sheets, banks announcing custody solutions and payments monoliths like Visa and Mastercard planning to integrate crypto all point to a future where crypto is a major part of the economy. Some would go as far as saying it’s the future of money itself.
It’s not just a financial or technological revolution, but a cultural one. Crypto has a central thesis: There are certain basic services to which everyone should have access. That’s a liberal idea. All men and women are born equal, have equal claims to be heard, to build and to congregate. The difference between crypto and a document like the U.S. constitution, which ensures these inalienable rights, is that crypto is a technological foundation to encode them. It removes the eternal gatekeepers that have historically bent this frame.
Yesterday, Larry Flynt, the renegade publisher and speech activist, passed away from heart failure. The founder of Hustler is a complicated man. He was a purveyor of smut, but also one of the 20th century’s greatest civil liberties champions. His story is fundamentally a crypto one.
In 1983, Flynt was sued for libel by television evangelist Rev. Jerry Falwell after Hustler published a satire in which the Moral Majority crusader was said to have kissed his mother in an outhouse. The case wound up before the U.S. Supreme Court – though not before Flynt graced a district court wearing an American flag as a diaper and a purple heart medal – where the charges and penalties were dismissed.
The meaning of the case, and its legacy for strong U.S. speech protections, is summed up by something Flynt allegedly said: “If the First Amendment will protect a scumbag like me, then it will protect all of you. Because I’m the worst.” (I think this line was invented for "The People vs. Larry Flynt," the 1996 biopic.)
We’re facing a similar moment in time now with the rise of crypto. In giving anyone access to financial services, or a web platform in the case of the decentralized web, naturally questions will arise about what sort of behavior society should condone. That’s what Treasury Secretary Janet Yellen is wrestling with when talking about the promises of crypto as well as its use in illicit finance.
The last time Blockchain Bites covered the porn industry, CoinDesk Executive Editor Marc Hochstein raised questions about PornHub’s privacy policies after the adult entertainment site switched to accepting crypto as its primary payment form. The site also began requiring users to identify their accounts before posting any material. He wrote:
“If this prevents monsters from using the site in abusive ways, all the better. But it will create risks for those who only post lawful content.”
With intermediaries entering into the crypto economy, similar questions will arise. Gatekeepers, such as Mastercard, will once again be required to make decisions about who has access to these novel payment rails. It’s not always so clear.
Flynt may have some wise words to consider: “Hypocrisy is a detriment to progress.”
- Someone bought a Tesla Model 3 for 91 BTC in 2013. The car and coin are now at near-parity. (CoinDesk)
- Tyler Cowen interviews Coinbase’s Brian Armstrong (Marginal Revolution)
- The Men Who Pump Doge (Decrypt)
Who won Crypto Twitter?
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