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Bank of America predicts that PYUSD will not be easily adopted

Bank of America reacts to the launch of PayPal’s PYUSD stablecoin, pegged to the US dollar, arguing that the asset is unlikely to be widely used, at least not anytime soon.

PayPal’s recent groundbreaking announcement about the launch of its US dollar-denominated stablecoin PYUSD has sparked much criticism around the world. While it seems like a significant step toward cryptocurrency adoption, some say PayPal won’t be very successful any time soon.

One of the largest banks in the US, Bank of America, outlined the main reasons why PayPal USD is unlikely to see immediate adoption in its recent research report.

Competing against CDBCs

First, Bank of America analysts Alkesh Shah and Andrew Moss explained that PayPal’s stablecoin could face intense competition in the market:

“Longer term, we expect PYUSD to experience additional hurdles to adoption as competition from central bank digital currencies (CBDCs) and yield stablecoins increases.”

It is true that several countries are actively exploring Central Bank Digital Currencies (CBDCs) that could compete with stablecoins, as both are based on similar technologies and are pegged to fiat currencies. Only this year, countries like Brazil, South Korea, Russia, Japan, the United Kingdom, among others, have reported news about the launch of their CBDCs. There is speculation that the US may also be working on its CBDC, although some of the country’s presidential candidates have claimed to be against it.

Competing against other stablecoins

Also, there are many other stablecoins that PYUSD will have to compete with. Profitable stablecoins are now especially attractive to investors, according to Bank of America:

“Investors may have been fine holding non-yielding stablecoins like USDT and USDC when rates were close to zero, but it is likely that yielding stablecoins will become increasingly available and attractive with short-term rates above 5%.” .

Dealing with regulatory scrutiny

Finally, the analysts also suggested that PayPal could face regulatory problems if traditional banks are prohibited from issuing stablecoins:

“Investors are likely to be indifferent to the stablecoins they own, as long as the stablecoins are perceived as safe and accessible on major trading platforms. We do not expect the launch of PYUSD to lead to accelerated regulatory clarity, as stablecoin issuance does not change the systemic risk for traditional markets, but stablecoins could face regulatory hurdles if nonbanks are prevented from issuing stablecoins. ”.

Just one day after PayPal unveiled its stablecoin project, the US Federal Reserve released new guidelines on the use of “dollar tokens” by US banks. According to the notice, to engage in any type of stablecoin-related activity, US banks will now need to receive a written supervisory no objection from the Federal Reserve.

Meanwhile, cryptocurrency scammers didn’t wait long to try to cash in on the big news and flooded decentralized exchanges with fake PayPal tokens.

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Japan’s New Laws Will Put Limits on Cryptocurrency Taxes

Japan has just established a new level of clarity for its crypto tax agenda. Up until this point, all unrealized gains from crypto assets were subject to the country’s current 30% corporate tax rate, though this now appears to be coming to an end.

Japan Is Ending Some Crypto Fees

The news came from the Japan National Tax Agency (NTA). The agency explained in a statement that crypto assets will be excluded from any company’s asset valuation based on market value if certain conditions are met. For example, a company is required to hold crypto assets for certain periods after obtaining them, in case tax breaks occur. Furthermore, it has been said that all crypto transfers are subject to specific restrictions.

Soto Watanabe – CEO of web development company3 Stake Technologies Pte. – believes that the new tax laws will open all kinds of doors for innovation in Japan, and he believes that he will do wonders to prevent Japanese cryptocurrency companies from exiting. At the same time, he also says that the rules could be extended a bit to ensure that cryptocurrency companies in other regions also benefit. He stated:

   For now, whoever wants to do something... can do it without leaving the country. I would like to continue constructive discussions with politicians and authorities. Next, I would like to do something about taxation at the end of the term of having tokens issued by other companies as a corporation, since it is an obstacle to the national expansion of national projects and projects.

While crypto taxes have not been rendered null and void in Japan, the current rules are seen as much less stringent and a solid step forward for the Asian country, which until this stage was considered one of the harshest with its currency laws. digital, due to this. it was home to the Mt. Gox and Coincheck disasters. Both are considered among the best cryptocurrency exchange hacks ever.

The first, which took place in 2014, saw more than $400 million in BTC disappear overnight, while the second (which took place four years later) saw more than half a billion in various crypto funds disappear. The situation surrounding Japan and crypto taxes begs the question: “If a country that is home to not one, but two of the biggest crypto mishaps can facilitate the industry, why can’t the US?”

The United States is currently using a regulation-by-app attitude when it comes to crypto. Agencies like the SEC are harassing the industry with everything they have, and lawsuits are being filed against some of the biggest cryptocurrency companies, including Coinbase.

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Aave Launches New GHO Algorithmic Stablecoin on the Ethereum (ETH) Mainnet

Lending and lending platform Aave (AAVE) has launched a new decentralized stablecoin on the Ethereum (ETH) mainnet.

The dollar-pegged stablecoin called GHO (GHO) is governed by the decentralized autonomous organization (DAO) Aave.

Nader Dabit, director of developer relations at Aave, says that the GHO is an “overcollateralized” stablecoin.

“Anyone can mint GHO using the assets they provide on the Aave Protocol V3 Ethereum marketplace as collateral, ensuring that the GHO is supercollateralized by a multitude of assets.

With GHO, the underlying mechanics and policies are fixed and cannot be arbitrarily changed by a centralized entity or individual. All transactions are done via self-executing smart contracts, and all information related to GHO transactions is published and auditable directly from the blockchain or many user interfaces.”

Aave says in the GHO launch announcement that the stablecoin is transparent and committed to the protocol community.

“Interest repaid in the GHO is redirected to the Aave DAO treasury. This supports the sustainability of the protocol and the continued development of new features.”

More than 2.7 million GHO tokens have been minted on Ethereum since the stablecoin’s official launch on Saturday, according to the project’s website.

The GHO fell from its peg to the dollar to a low of around $0.978 at one point on Sunday. It is trading at $0.982 at the time of this writing.

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Bitcoin Hits $30,800, Pulls Back To $29,950 After Finding Resistance

Bitcoin (BTC) surprised the market with a strong move higher, reaching as high as $30,800 on some cryptocurrency exchanges. The world’s largest digital currency has found the strength to rally to these levels and recover to $29,950. Bitcoin is now finding strong resistance between $30,000 and $30,800. Breaking this level can push Bitcoin towards $32,000.
Bitcoin Hits $30,800, Its Highest Level Since Mid-April

Bitcoin continues to attract investors from around the world as the digital currency hits its highest price since mid-April 2023. This shows that there is clear interest in gaining access to the largest cryptocurrency on the market.

One of the reasons behind the latest price increase could be related to the fact that Blackrock has filed an application to offer a spot Bitcoin ETF to institutional investors. Furthermore, the halving that is expected to take place next year is already attracting users who want exposure to Bitcoin.

These are just a few of the reasons why Bitcoin has skyrocketed in recent weeks. However, let’s not forget that BTC is still 57% below its all-time high recorded in November 2021. Since then, Bitcoin has been in a downtrend that now appears to be reversing.

At the end of 2022, Bitcoin reached its lowest price in years. The digital currency dipped below $16,000 for a few days allowing investors to enter the market relatively cheaply compared to what has been going on since late 2020 until now.

However, it is not clear what could happen to Bitcoin in the future. It will be important to keep an eye on the latest developments in the industry and how regulations may affect the price of the largest virtual currency on the market.

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Hong Kong authorities encourage major banks to adopt crypto clients

The Hong Kong Monetary Authority (HKMA), the regulatory body that oversees banking activities in the region, reportedly encouraged major banks like HSBC and Standard Chartered to establish relationships with cryptocurrency exchanges.

This effort to embrace the cryptocurrency sector comes despite the increased regulatory scrutiny the industry faces on a global scale. This initiative aims to position Hong Kong as a major global hub for the cryptocurrency industry.

However, the sector still faces challenges stemming from significant collapses in the past. A report dated June 15 revealed that three sources with knowledge of the matter revealed that the Hong Kong Monetary Authority (HKMA) had raised concerns during a May meeting with UK-based companies and the Bank of China.

The HKMA sought explanations from these institutions regarding their reluctance to onboard cryptocurrency exchanges as clients. This indicates the HKMA’s active interest in encouraging banks to participate in the digital asset industry and potentially highlights its commitment to promoting the development of the cryptocurrency sector in Hong Kong.

Just weeks earlier, the Hong Kong Monetary Authority (HKMA) had issued a circular to banking institutions, emphasizing the importance of keeping abreast of developments in emerging markets and urging them to take a more proactive stance in exploring new sectors, including cryptocurrency. market.

Hong Kong Shows Growing Acceptance of Crypto Businesses

With ambitious aspirations to establish itself as a pre-eminent crypto hub in Asia, Hong Kong recently unveiled a regulatory framework legalizing the buying, selling and trading of cryptocurrencies for all its citizens, which will go into effect in June.

Hong Kong’s progressive approach to digital asset laws has instilled confidence in the domestic market, prompting several companies to apply for licences. Among them is Huobi HK, the Hong Kong subsidiary of global trading platform Huobi, which recently announced the launch of spot and managed services for business and retail clients in the region.

In the wake of lawsuits filed by the US Securities and Exchange Commission (SEC) against exchanges Binance and Coinbase, Hong Kong is proactively positioning itself as a hotspot for entities affected by these legal actions.

Hong Kong Legislative Council member Johnny Ng recently took to Twitter to support struggling cryptocurrency company Coinbase. In a show of solidarity, Ng invited Coinbase and urged the company to consider establishing its operations in Hong Kong, where the regulatory environment is perceived to be more favorable for cryptocurrency businesses.

This month, Hong Kong recently introduced a comprehensive set of regulations tailored to the digital asset industry, marking a major milestone. These regulations create a framework that allows locally licensed cryptocurrency companies to start operating.

The highlight of this development is that licensed companies can now provide services to retail investors, allowing them to participate in cryptocurrency trading.