Good morning, and welcome to Protocol Fintech. This Friday: making crypto pay (and sing), Ukraine’s crypto airdrop goes poof, and Ken Griffin’s regrets.
Off the chain
A touchstone of crypto culture is an absurdist optimism. WAGMI and HODL are all but incomprehensible to Gen Xers who graduated during a recession and adopted a reflexive cynicism in response to a world that seemed stacked against them. The off-kilter musical stylings of crypto fangirl Randi Zuckerberg, an elder millennial, produce a lot of eyerolls, including her recent, er, adaptation of a Twisted Sister number. But consider that there just might be a lesson in her ardor for coin: Has any financial product in the history of money ever produced as much unabashed joy as cryptocurrency?
— Owen Thomas (email | twitter)
Making crypto pay
Worldpay is already processing billions of dollars of crypto purchases. Now the card-payments giant is diving deeper into crypto.
The unit of FIS has a network of more than 1 million merchants that it could use to mainstream crypto payments — a sector that’s been dominated to date by a handful of crypto-native companies. And it works with four large U.S. crypto exchanges: Binance, Coinbase, Crypto.com and OKEx.
Buying crypto is just the beginning. Worldpay is planning to leverage those relationships to move beyond allowing consumers to buy crypto with credit or debit cards, its primary crypto business at present.
- With a big bet on stablecoins, Worldpay is hoping to mainstream crypto payments with two new products it’s readying for release.
- First, it plans to let crypto-native businesses such as crypto exchanges accept fiat payments via Visa or Mastercard and convert the proceeds to stablecoins, said Nabil Manji, head of Crypto and Emerging Business at Worldpay. This product, especially useful for companies that use stablecoins as their reserve currency and prefer not to touch fiat, is expected to launch by the end of June.
- The second product, “pay by crypto,” would let any Worldpay merchant accept stablecoins and other cryptocurrencies as payment directly from consumers, online or in person. The merchant would have the option to immediately convert the payment to fiat if it wants. The product is still being developed, but could be available later this year or early next year.
- Instead of paying with a card, consumers could use a crypto wallet — which is a notable move coming from a payment processor that built its business on cards.
Could this unlock shopping with crypto? The pay-by-crypto product would potentially provide consumers with many more merchants where they could spend their crypto, since Worldpay has more than 1 million merchants worldwide.
- Worldpay hasn’t said what it will charge merchants yet. While they could bypass Visa and Mastercard’s interchange rates and avoid chargebacks, crypto transactions carry their own fees, and merchants would have to figure out processes for refunds and disputes.
- The move of a major card processor into crypto could magnify the threat crypto poses to Visa and Mastercard’s payment rails.
- At the same time, the card networks are making their own moves to get into crypto. Mastercard has a deal with Coinbase on NFTs, as well as another with Bakkt to enable crypto-based debit and credit cards. Visa has cards with Coinbase and BlockFi among others and is testing settling in stablecoins.
It’s not clear if consumers will want to spend their crypto. Even those who are crypto-savvy are reluctant to spend crypto that fluctuates in value, since that could mean triggering taxes or foregoing a big run-up in price. Worldpay’s emphasis on stablecoins could help address this, since those tokens are designed to hold a steady value against fiat currencies. And it’s positioning itself to be ready if and when consumers decide they’re willing to pay with crypto.
— Tomio Geron (email | twitter)
A version of this story first appeared on Protocol.com. Read it here.
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On the money
On Protocol: Ukraine canceled its planned crypto airdrop, instead turning to NFT sales. While the promise of an airdrop prompted an influx of microdonations, the cancellation followed an apparent attempt to spoof the promised token.
Lugano, a city in Switzerland, plans to make bitcoin and USDT legal tender. The city has partnered with Tether to make bitcoin, USDT and its LVGA Points token de facto legal tender. The Swiss franc will remain the actual legal tender nationwide.
The U.K.’s Financial Conduct Authority said it investigated 300 crypto firms last year. The British financial watchdog said that there are at least 50 live investigations into unauthorized businesses not registered with the FCA.
UkraineDAO raised over $6 million through a Ukrainian flag NFT sale. The sale of the NFT generated over 2,100 ether. Proceeds will go to nonprofit relief organizations in Ukraine.
OpenSea barred Iranian users from its marketplace. Users complained on Twitter that their OpenSea accounts were deactivated without notice or explanation. An OpenSea representative confirmed the ban, stating that they were complying with U.S. sanctions.
Infura, a service used by the MetaMask wallet and other blockchain tools, accidentally blocked Venezuelan users from accessing its services. While changing configurations to block other jurisdictions in accordance with the U.S. sanctions list, Infura “mistakenly configured the settings more broadly than they needed to be.”
Overheard
Brex co-CEO Henrique Dubugras said the corporate credit card company isn’t planning on going public any time soon. “I think we would only consider [going public] in a good market. We’re not anti-going public or anything, but we’re still a 5-year-old company, and I think it’s very normal for companies to wait until they’re 8 or 9 years old,” he said at an event.
Ken Griffin, the billionaire CEO of Citadel, said he made the wrong call on crypto. “Crypto has been one of the great stories in finance over the course of the last 15 years. And I’ll be clear, I’ve been in the naysayer camp over that period of time,” he said in an interview with Bloomberg.
AnnaLou Tirol, deputy director of FinCEN, said that the Treasury bureau’s efforts against corruption and other financial crimes have been strengthened by the passage of the Anti-Money Laundering Act of 2021. “It represents the greatest transformation of the United States’ AML-CFT regime since the USA Patriot Act of 2001,” she said at an event.
The chart
Did Russians dump rubles for crypto? There’s a neat correlation between the fall in the ruble against the dollar and the rise in bitcoin’s price. But correlation isn’t causation: Bitcoin has been rising as fears of a crypto winter fade, while the ruble’s movements have been closely linked to sanctions.
A MESSAGE FROM NOVOPAYMENT
The future of the digital economy is in our hands. That’s why NovoPayment partners with fintechs to turn their visions into reality. Unlock the power of NovoPayment’s suite of complementary BaaS solutions from digital banking to card solutions, payment infrastructure, and more – all on our easy-to-use platform. Let’s innovate.
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Thanks for reading — see you Monday!
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