September 28, 2022

Photo: Jordan Vonderhaar/Bloomberg via Getty Images
Well hello, and welcome to Protocol Fintech. This Wednesday: stablecoin chatter at Converge22, crypto execs’ exit strategies, and East Coast versus West Coast fintech.
The money firehose pointed at crypto shows no sign of slackening despite the market crash. Pantera Capital is reportedly raising a $1.25 billion fund. At this point, the problem seems more about finding reasonable investments to make rather than finding LPs willing to fork over cash. I’m just waiting for someone to start up a firm called Falling Knife Ventures.
— Owen Thomas (email | twitter)Circle takes crypto’s center stage this week at a time when the battle over a major segment of the industry, stablecoins, is heating up.
The issuer of USDC is holding Converge22 in San Francisco, its first major industry event. The conference is taking place amid fresh concerns about the rapid expansion of stablecoins, a stronger push for regulation, and more intense competition among key players in the roughly $160 billion market.
It’s been an unstable year for stablecoins. Circle is holding its big event just a few months after the crash of the UST stablecoin and its sister cryptocurrency luna, a meltdown that Circle CEO Jeremy Allaire told Protocol was the result of a “collective hallucination.”
Meanwhile, regulators are growing worried. Federal Reserve chair Jerome Powell reiterated the need to rein in stablecoins.
But don’t count stablecoins out. The Federal Reserve has been exploring the creation of an official U.S. central bank digital currency, a future in which stablecoin companies see an important role for themselves.
The game plan for the digital dollar is still up in the air. “We don’t see ourselves as making that decision for some time,” Powell said recently. Expect a lot of talk about it at Converge this week regardless.
— Benjamin Pimentel (email | twitter)Fintech has made it easier to manage and move your money, but for merchants, financial institutions and other businesses, traditional banking infrastructure can still hold them back.
See how a Stablecoin infrastructure like USDC offers a fast, cost-effective alternative available today.
On Protocol: It is resignation season for crypto leaders. FTX.US president Brett Harrison is stepping down, as is Alex Mashinsky, CEO of the bankrupt crypto lender Celsius.
NFT trading volumes have fallen 97% from their January high. Transactions totaled just $466 million in September, compared to $17 billion at the start of 2022, according to data from Dune Analytics.
Nexo has acquired a banking charter. The crypto company said it has agreed to buy an undisclosed stake in Hulett Bancorp, which owns a small OCC-chartered bank called Summit National. The announcement comes a day after eight states sued Nexo, accusing it of offering unregistered crypto lending products.
Revolut can offer U.K. banking services. The digital bank is now registered with the country's Financial Conduct Authority for crypto services, following a lengthy wait.
Consumers are starting to feel a little bit better about the economy. The consumer-confidence index rose in September for the second month in a row, in part driven by falling gas prices.
Federal Reserve Board Gov. Michelle Bowman thinks the banking system needs to rethink how it tracks loans. “Nonbank fintech firms have become viable competitors for nearly all types of loan products, but most prominently consumer loans, small business loans, and student loans,” she said in a speech at the 2022 Community Banking Research Conference today.
Burnside has worked at Georgia fintech companies for over 30 years.
What are the big differences between East Coast and West Coast fintech?
West Coast is much more about the story and East Coast is more about reaching profitability and sustainability. This flight back to quality right now is very helpful for East Coast technology. West Coast has been taking a little bit of a beating here recently, in terms of valuations and otherwise. But my goal is to continue with the profitability and growth in the way we have, because I think that's ultimately what investors are gonna be looking for.
USDC offers cost-effective payments that can settle in seconds, near-instant transactions that can help take the process of paying suppliers from days to minutes, and digital dollars with global reach that enable merchants to expand their business to new markets.
Learn how businesses are taking advantage of these opportunities at Circle’s USDC Hub for Businesses.
Thanks for reading — see you tomorrow!
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