PayPal is stepping up its game in the crypto world by partnering with Anchorage Digital to offer rewards for holding its stablecoin, PYUSD. This move aims to attract institutional investors by giving them a reason to keep PYUSD in their portfolios.
Anchorage Digital, the only U.S. crypto firm with a federal bank charter, brings a unique level of regulatory credibility to the table, setting this partnership apart from other crypto ventures that often navigate a murkier regulatory landscape.
Despite the initial hype, PYUSD has yet to achieve the same success as its competitor Tether, which dominates the stablecoin market. To boost adoption, PayPal expanded PYUSD to the Solana blockchain, enhancing transaction speed and reducing costs, making it more versatile beyond Ethereum. What’s particularly intriguing is how the rewards program operates. Instead of being a traditional marketing ploy, the rewards are based on income generated from the stablecoin’s underlying assets, offering a real financial incentive for investors.
Related: What is PayPal USD, and how does it work?
While this strategy could be a game-changer, it also raises questions about the regulatory environment. Anchorage Digital asserts that the rewards aren’t classified as securities, sidestepping U.S. banking regulators and making the program more attractive to investors weary of legal hurdles.
What this partnership signals is PayPal’s serious intent to carve out a significant space in the digital currency world, while also offering a potentially lucrative opportunity to be part of something that could reshape how we think about stablecoins.
ASIC Puts the Killswitch on 615 Crypto Scam Websites
The Australian Securities and Investments Commission (ASIC) has dismantled over 7,300 phishing and scam websites, including 615 specifically targeting cryptocurrency. This effort is part of a larger initiative to combat financial fraud, which has contributed to $1.3 billion in losses reported by Australians in 2023. ASIC’s ability to swiftly take down these scam sites is the result of close collaboration with other agencies and the use of advanced detection methods.
In a statement, ASIC revealed that since July 2023, it has successfully shut down more than 5,530 fake investment platforms, 1,065 phishing scam links, and 615 cryptocurrency-related scams. Investment fraud remains the most prevalent form of scam in Australia, with social media being a common tool used by scammers to lure victims into fraudulent investments.
Sarah Court, ASIC’s Deputy Chair, highlighted that on average, the commission removes 20 scam websites each day. The agency’s partnership with the National Anti-Scam Centre and other organisations has been essential in quickly identifying and dismantling these fraudulent sites. Advanced technology also allows ASIC to act swiftly against crypto scams, many of which use fake endorsements from well-known public figures.
ASIC advises consumers to be cautious when encountering investment opportunities, especially those promoted through social media. They recommend taking the time to research and verify the legitimacy of investments before proceeding. If anything appears suspicious, individuals are encouraged to contact their bank, report the issue to Scamwatch (managed by the Australian Competition and Consumer Commission), and alert others to prevent further victims from falling prey to these scams.
Crypto Market Surges as FOMC Minutes Hint at Potential Rate Cuts
Cryptocurrencies experienced a significant rally this week, buoyed by recent insights from the Federal Open Market Committee (FOMC) minutes and a surprising downward revision in U.S. labour data. The possibility of an interest rate cut, along with hopes for a dovish approach from Federal Reserve Chair Jerome Powell at the upcoming Jackson Hole Symposium, further fueled the market’s momentum.
The FOMC’s July meeting minutes, released on Wednesday, indicated that most members were open to easing monetary policy at the September meeting if economic data remained on the expected trajectory. The committee’s confidence in the gradual return of inflation to its target bolstered the positive sentiment in the crypto markets. Great news for us crypto investors.
The relationship between cryptocurrency, equities, inflation and interest rates has always correlated and has given us enough historical data to use this as a vantage point.
“In the past, Bitcoin has shown a correlated relationship with equity markets – and has shown negative price reaction to rates going up in response to inflation, along with equities.”
Interest Rate Cuts vs Crypto Price – Explained:
Will reduce the cost of borrowing money, which can increase disposable income and the amount available for investment.
- Increased Consumer Spending
With more disposable income due to lower loan payments, consumers may invest in cryptocurrencies. Additionally, with traditional savings accounts offering lower returns due to decreased interest rates, more people may seek alternative investments, including crypto, to achieve better yields.
- Weaker Currency, Higher Exports
Cryptocurrencies, particularly Bitcoin, are often viewed as a hedge against fiat currency depreciation. When a currency weakens, investors may turn to cryptocurrencies as a store of value, driving up demand and prices.
Cryptocurrencies, which are considered higher-risk investments. With a reduced risk-free rate, investors are more likely to chase higher returns in riskier assets like cryptocurrencies, boosting market activity and prices.
Lower interest rates typically result in increased liquidity in the financial system as borrowing becomes cheaper and easier. This added liquidity can flow into cryptocurrency markets, driving up asset prices.
Will reduce the cost of borrowing money, which can increase disposable income and the amount available for investment.
- Increased Consumer Spending
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