Category: Payments

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Banking Crime Payments Regulation

Brazil Legalises Crypto as a Payment Method

The Brazilian Chamber of Deputies, the equivalent of Australia’s House of Representatives, has approved legislation to legalise the use of cryptocurrencies as a payment method throughout the South American nation. Before the legislation becomes law, however, it must be approved by the executive branch of the Brazilian government. 

The new law will not recognise Bitcoin or any other cryptocurrency as legal tender, as was done in El Salvador last year. Instead, it adds cryptocurrencies to the definition of legal payment methods within the country, along with air mileage rewards programs.

Details of the New Legislation

The bill containing the new legislation, which was authored by Aureo Ribeiro, was passed by Brazil’s senate in April of this year but has been stuck in the nation’s lower house for several months.

In addition to recognising crypto as a legal payment method, the new law will allow for the creation of licenses for cryptocurrency exchanges, crypto custody providers and virtual asset managers. 

The law will also require that exchanges avoid the commingling of company assets and their customer’s assets, in what appears to be an attempt to avoid a repeat of the FTX collapse.

Legislation Creates New Crime

The bill also establishes the new crime of fraud involving virtual assets with a minimum penalty of two years in prison and a maximum of six years, plus a monetary fine.

It also adds to Brazil’s regulatory framework around crypto, declaring that any virtual assets defined as securities will be regulated by the nation’s securities watchdog, the CMV. Assets not defined as securities will be regulated by a body yet to be determined by the executive branch but expected to be the central bank.

Companies will have 180 days to comply with the new legislation after it passes into law.

What it Means for Crypto’s Growth

Once the new legislation is signed off by the executive branch, banks in Brazil could start allowing customers to pay for goods and services using crypto as an alternative to credit and debit cards, which may lead to significant growth in the use of cryptocurrencies.

Already, some banks in Brazil have begun offering crypto-based services — in October, the Warren Buffet-backed neobank, Nubank, announced its plan to launch its own cryptocurrency in the first half of 2023. 

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Dogecoin Markets Payments Social media

Dogecoin Rallies on the Back of Elon Musk’s Twitter 2.0 Plans

The price of everyone’s favourite dog-themed meme coin, Dogecoin, has surged over the past week on the back of a tweet from the new Twitter owner, Elon Musk. Musk’s tweet got the Doge army’s tails wagging as it outlined his plans for the social media platform, which included a vague reference to payments.

Data from CoinGecko shows Dogecoin’s price jumped from US$0.088 before Musk’s tweet on November 27 to US$0.108 at the time of writing, an increase of 22.2 percent. Over the week, Dogecoin is up a whopping 37.9 percent: a significant increase given the current bear market.

What Did Musk Tweet?

Ever since Musk purchased Twitter last month, Dogecoin enthusiasts have been hopeful that the famously Doge-interested billionaire would somehow integrate the coin into Twitter. 

In his Tweet on November 27, Musk outlined the progress he’d made since taking over the platform and also listed some future plans for what he referred to as Twitter 2.0 — The Everything App.

Some of the new features Musk listed included encrypted direct messages, long form tweets, relaunched ‘Blue Verified’, and a vague and mysterious reference to payments. 

Despite no direct reference to Dogecoin, the mention of payments coming to Twitter was enough to spark FOMO, triggering something of a buying frenzy and causing the meme coin’s price to spike.

Musk’s mysterious slide deck image with a blank space for payments. Source: @elonmusk on Twitter

Earlier Rumours Contribute to FOMO

Previously, just after Musk’s purchase of Twitter in late October, rumours had begun circulating, fuelled by speculation from tech blogger Jane Manchun Wong, that the company had commenced work on a crypto wallet that would allow users to deposit and withdraw crypto. This earlier speculation saw Dogecoin’s price jump 40 percent at the time and may have played a part in the excitement about Musk’s tweet.

Some in the crypto community have poured cold water on the idea of Dogecoin for payments — pointing out that unlike many other distributed ledgers, Dogecoin doesn’t natively support smart contracts and may not be suitable as a payments platform due to shortcomings in security, privacy and capacity for scaling. 

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Australia Crypto Memes Payments Shiba Inu

Fully Integrated SHIB Restaurant Set to Open in Australia

Touted as ‘Australia’s first #cryptoDINER’, a Shiba Inu themed restaurant called Shiba Wings is set to open on the Gold Coast and will accept crypto payments in exchange for its menu of hot wings, burgers and beers.

A tweet and video by Australian-based SHIB crypto enthusiast SHIB Planet revealed the new restaurant would use the NowPayments platform to accept cryptocurrency as payment. He also suggested the owners were open to future integration with Shibarium — the layer 2 upgrade to improve the scalability of SHIB on the Ethereum blockchain.

Shiba Inu (SHIB) is considered a ‘meme coin’ — tokens inspired by popular culture and internet jokes— and was created on the back of the success of Dogecoin. Although it seems much of its appeal comes simply from the cute imagery of the Shiba Inu dog breed, SHIB is currently ranked 13 in market value by CoinMarketCap.

Shiba Wings ‘Coming Soon’ to Surfers Paradise

According to Shiba Wings’ social media, the diner will open “soon” and will be located on Cavill Avenue in the Gold Coast suburb of Surfers Paradise. A number of mock-ups of the restaurant’s decor shared online show prominent Shiba Inu and Bitcoin imagery and a market ticker displaying crypto prices. 

Mock-up of the inside of the new Shiba Wings store. Source: Shiba Wings Facebook

Other Shiba Inu branded food ventures have been launched around the world including burger joints in Italy and a ‘Shiba food park’ in Venezuela. 

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Crypto News Gaming NFTs Payments

Apple Bans NFT Utility  – Continues 30% NFT Commission

The news isn’t great for NFTs following tech giant Apple’s updated App Store review guidelines released Monday October 24 — the rules allow for displaying in-app NFTs but ban the use of NFTs to unlock additional content or features within apps.

In addition to restrictions on NFT usage, the guidelines also state that apps must use Apple’s ‘in-app’ purchase functionality exclusively for any payments required to mint, list or transfer NFTs. The use of any other external payment method, including crypto, is not allowed. 

Apple forces apps to use its ‘in-app’ purchase functionality because it allows the company to collect what’s colloquially known as the ‘Apple Tax’ — a 30 percent surcharge applied to every payment made using ‘in-app’ purchases.

For context, NFT marketplaces like OpenSea and Magic Eden charge a 2.5 percent commission on sales.

No Token-locked Content on App Store

Apple’s updated guidelines seem to intentionally limit the functionality of NFTs by preventing some of their most interesting use cases. For example, the guidelines specifically state that NFTs cannot be used to unlock token-locked functionality within the app:

“Apps may allow users to view their own NFTs, provided that NFT ownership does not unlock features or functionality within the app.” 

Apple’s App Store review guidelines

Banning the use of NFTs in this way will substantially restrict their utility in apps available on Apple’s App Store and may even impact NFT prices.

No External Payments, Including Crypto

The guidelines also specifically ban the use of external links to non-Apple payment methods:

“Apps may allow users to browse NFT collections owned by others, provided that the apps may not include buttons, external links, or other calls to action that direct customers to purchasing mechanisms other than in-app purchase.”

Apple’s App Store review guidelines

While banning external forms of payment is standard practice for Apple — enabling them to collect a 30 percent surcharge on transactions— it seems to make less sense in the context of NFTs since they’re a form of crypto and are most often traded using other cryptocurrencies, not fiat currencies.

The new guidelines also updated some language around crypto exchange apps intended to ensure they’re compliant with local regulations:

“Apps may facilitate transactions or transmissions of cryptocurrency on an approved exchange, provided they are offered only in countries or regions where the app has appropriate licensing and permissions to provide a cryptocurrency exchange.”

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Banking Crypto News DeFi Payments

Mastercard and Paxos Team up to Help Banks Offer Crypto Trading

Mastercard and Paxos

Mastercard announced Monday that it is extending its partnership with cryptocurrency trading platform Paxos to create a program to make it easier for banks and other financial institutions to offer crypto trading services to their customers.

The program, called Crypto Source, will see Mastercard act as a bridge between Paxos and banks, with Paxos providing cryptocurrency trading and custody services on behalf of the banks.

Partnership Aims to Increase Retail Confidence in Crypto

Mastercard said its role in Crypto Source is largely about creating a secure, trusted bridge between crypto markets and traditional banking. By providing this bridge Mastercard hopes to increase both banks’ adoption of crypto trading services and retail investors’ confidence and willingness to engage with crypto markets. Mastercard’s President of Cyber & Intelligence Ajay Bhalla explained:

“At Mastercard, trust is our business. What we are announcing today is a connected approach to services that will help bring users safely and securely into the crypto ecosystem. Our recent investments in this space, such as the acquisition of CipherTrace and Ekata, are providing us with a unique set of capabilities to help provide our customers and consumers with the most technically advanced solutions available in the market.” 

Ajay Bhalla, President, Cyber & Intelligence at Mastercard

Mastercard’s role centres around verifying transactions, ensuring security and regulatory compliance, and helping banks implement the technology into their existing systems. Mastercard said banks would also be able to offer additional functionality, such as digital receipts and loyalty programs, to augment the core functionality. 

Program Deepens Mastercard’s Links With Paxos

Paxos is a blockchain-focussed company perhaps best known for their gold-backed cryptocurrency PAX Gold (PAXG), which has worked with numerous large finance companies, including PayPal, on crypto-related projects. 

Last year, Mastercard worked with Paxos to enhance its payment card offerings, making it easier for its partners, such as banks and crypto exchanges, to convert cryptocurrencies into fiat currency.

Crypto Source builds on Mastercard’s pre-existing relationship with Paxos and deepens its involvement in crypto ecosystems. Speaking about the relationship, Mastercard’s Chief Digital Officer, Jorn Lambert said:

“We’re excited to build on our long-term partnership with Paxos – co-innovating to bring safe and secure technology to financial institutions. Our crypto product innovations will provide choice at scale and continue to bring one-of-a-kind opportunities to financial institutions as they seek to offer new, advanced services to their customers”

Jorn Lambert, Chief Digital Officer, Mastercard

According to Mastercard, Crypto Source is currently in a pre-pilot phase, the company has not yet announced a date for a broader rollout of the program.

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Bitfinex Crypto News Payments Social media Tether

Tether and Bitfinex Launch P2P Video Chat App ‘Keet’

Tether and Bitfinex have joined forces with software company Hypercore to launch a fully encrypted, peer-to-peer video chat application.

Keet is the first app to be built on Holepunch, a platform that allows developers to incorporate Web3 applications. It will initially only be available on desktop, though all three companies predict there will soon be a mobile app featuring “amazing” video quality:

Payment App Also in the Works

Holepunch, which is closed-source but expected to become open-source later this year, doesn’t run on a blockchain but uses the Lightning Network, a “second-layer solution” that speeds up Bitcoin transactions while reducing costs.

This would enable a payment app to be built on Holepunch, with the Tether stablecoin (USDT) supporting a default payment system. In late May, USDT was integrated into Polygon, enabling 19,000 decentralised applications (DApps) on the ecosystem to use it.

More Investment Dollars to Come

Tether, Bitfinex and Hypercore have already poured US$10 million into Holepunch, which could see tens more millions of dollars in further investments, they added.

The Keet app, like Holepunch, is free to use and is expected to be more private and secure than Web2 centralised peers such as Zoom or Google Meet. This is because Keet users can make calls directly to another individual’s computer, with nothing stored on a server.

As Holepunch CEO Mathias Buus has said, “This app is for everyone.”

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Australia Crypto News Cryptocurrencies Payments

Australia Ranks Last Out of 20 Countries in Digital Currency Ownership: UN Report

New data from the United Nations Conference on Trade and Development (UNCTAD) shows that only 3.4 percent of Australians own crypto, placing the country last in a list of 20.

While Ukraine (12.7 percent), Russia (11.9%), Venezuela (10.3) and Singapore (9.4) topped the list, the most surprising result was that Kenya (8.5) was the highest-ranking African country, edging out South Africa (7.1) and Nigeria (6.3):

The result for Nigeria is also significant in that out of a population of 211 million, just over 13 million were owners of digital currencies in 2021.

Crypto Awareness Still Low in Australia

By comparison, a recent study conducted by research firm Roy Morgan found that over a million Australians owned some form of crypto, out of a total population of almost 26 million. Another survey published in December last year found that only one in 10 Australians even knew what a cryptocurrency was.

UNCTAD acknowledged in its findings that cryptocurrencies have grown in popularity in some Third World countries because they are “an attractive channel through which to send remittances”.

UNCTAD also found that middle-income individuals from hyperinflation-hit developing countries either own or hold cryptocurrencies because they are seen “as a way to protect household savings”.

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Australia Crypto Exchange Crypto News Payments

Aussie Exchange ‘Banxa’ Cuts 30% of Staff, Citing ‘Crypto Winter’

Australian crypto payments operator Banxa will lay off more than 30 percent of its global staff to reduce operating costs amid the ongoing bear market.

“Like many others in our industry [we] are anticipating another crypto winter, with trading volumes declining significantly,” said Banxa CEO Holger Arians in a grim letter to staff.

“We saw our market capitalisation nearly halve in a matter of days, and the forecast is that these conditions will most likely continue for another 12 months.”

Banxa must take decisive actions to reduce costs now, or else our company won’t be able to succeed over the long run.

Holger Arians, CEO, Banxa

With staff across seven different countries, including Australia, APAC, the US, UK and Canada, Banxa will reportedly cut employee numbers from 230 employees to 160.

European MD Also Out the Door

Banxa is an international Web3 on-and-off ramp solution that facilitates conversions between digital assets (including cryptocurrencies and NFTs) and fiat currencies. The company’s European managing director, Jan Lorenc, is also likely to step down, indicating Banxa’s diminishing interest in the Euro market.

The company has traded on the Toronto Stock Exchange’s early-stage TSX Venture Exchange since January 2021, but its shares have plunged 74 per cent in the past 12 months as the crypto and broader tech markets continue to cop a hammering.

Banxa will centralise its operations in the Australian and Philippines markets in order to better prioritise higher margins and profitability in the face of current industry headwinds, according to a spokesperson.

Jobless Crypto Queue Lengthens

Other major cryptocurrency platforms have also slashed their head counts. In mid-June, lending platform BlockFi and major exchange Crypto.com announced they would cut more than 400 jobs between them. Just a day later, Coinbase revealed it would be liquidating 1,100 jobs, or around 18 percent of its total workforce. With Gemini and Robinhood also recently rationalising their staff numbers, it would seem that the crypto winter is already upon us.

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Doodles E-commerce NFTs Payments

Shopify Releases New Crypto Features Including NFT-Gated Storefronts

E-commerce giant Shopify has announced it will introduce new crypto-centric features to its platform including allowing brands to give NFT holders exclusive access to gated products and experiences, a feature Shopify refers to as ‘tokengating’:

The tokengating feature will be made available for both online sales and in-person purchases at bricks-and-mortar stores. Tokengating on Shopify is currently in closed beta and is available only to select merchants.

How Will Tokengated Stores Work?

According to Shopify, store owners will be able to easily create a tokengated store in the Shopify app or add the feature to a physical store. Customers will need to connect their crypto wallet to verify ownership of a required NFT before they can purchase or access gated content, products or experiences.

Shopify says this model will help retailers more easily turn enthusiasm for their brand into sales by recognising and rewarding brands’ biggest fans and giving them access to exclusive content. 

NFT Gating May Increase Brand Engagement

Tokengating will likely appeal to NFT collection creators looking to increase brand engagement and monetisation, allowing them to move beyond simply selling NFTs and into selling real world products. 

Evan Keast, co-founder of the popular NFT collections Doodles, says tokengating offers NFT holders a chance to access exciting new brand experiences:

As an ambitious community-driven project, we’ve placed a strong emphasis on setting the standard for unique NFT collector experiences. By partnering with Shopify on tokengated merch, we surprised our holders and gave the ownership of a Doodle a whole new meaning. 

Evan Keast, co-founder, Doodles

Tokengating isn’t Shopify’s first foray into the world of NFTs and crypto. Last month the platform announced a partnership with Crypto.com that allows merchants to accept zero-fee payments in more than 20 cryptocurrencies. And in December 2021, Shopify introduced functionality allowing merchants to mint NFTs directly from Shopify.

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Australia Payments Ripple Stablecoins Stellar

Australian Giant Novatti Set to Launch AUD Stablecoin with Stellar and Ripple

Leading Australian digital payments company Novatti has announced that it will be partnering with Ripple to bring its Australian dollar stablecoin, AUDC, to the XRP ledger.

The company had previously announced a partnership with Stellar in May to bring the stablecoin to the Stellar blockchain.

Novatti’s AUDC stablecoin will be dollar-for-dollar backed by real Australian dollars – which seems a wise decision, given the recent chaos surrounding under-collateralised algorithmic stablecoins.

Development to be Largely Funded by Ripple, Stellar

Announcing the Ripple partnership, Novatti CEO and managing director Peter Cook said that much of the cost of developing the AUDC stablecoin will be borne by Ripple and Stellar:

Ripple and Stellar are largely funding the development work and even some of the marketing work that we do to get our stablecoin service out.

Peter Cook, CEO and managing director, Novatti

Cook said grant funding from the two blockchain networks would underpin the project until it started generating sufficient transaction fees to amass revenue on its own.

“For the next year at least, revenues will be from a number of payments from Ripple and Stellar for their grant programs that ameliorate our tech build costs and some of our marketing costs. As we start to monetise later this year, we’ll start to get transaction fees from the stablecoin service as well.”

Novatti Sees Opportunity in Stablecoins

Cook said the creation of AUDC and partnerships with Stellar and Ripple provide Novatti with the opportunity to expand its traditional payments business into the world of digital assets, potentially broadening its market and the use cases for its platform.

“Stablecoins for us is essentially a major foray into digital assets – we are still a payments company, a traditional payments company, but this now gives us a major entree between cryptocurrency, which goes up and down and is subject to other market forces, and real utilitarian crypto-based assets,” Cook said.

“So we build the stablecoin, it becomes part of our ecosystem or our infrastructure, which is licenses, tech, commercial partnerships, and from there we leverage and monetise it for either our financial services customers or end business type customers,” he added. 

We will provide services such as stablecoin-as-a-service and also holding and transacting of funds for things such as cross-border payments, on-ramps/off-ramps for cryptocurrencies, and other services yet to be seen. 

Peter Cook, CEO and managing director, Novatti

Both Stellar and Ripple have been active recently in partnering with organisations to develop use cases for their tech. In early June, Stellar announced it had partnered with MoneyGram to facilitate stablecoin remittance payments and last November Ripple joined forces with Pacific island nation Palau to develop an eco-friendly digital currency.