The Stellar Development Foundation, which administers the cryptocurrency Stellar Lumens (XLM), has snapped up “Chain,” a blockchain-based startup backed by corporate finance heavyweights, including Visa and Citibank. Details of the joint project, dubbed “Interstellar” are scarce. Nevertheless, Forbes insists the partnership represents the increasing tendency of crypto-assets, i.e. Stellar, to turn their backs on libertarian fever dreams and seek out the loving, possibly suffocating embrace of the Wall Street banking industry.
The finance industry appears to be tightening its grip. Multinational banking firm Citigroup, according to a person “with knowledge of the plans,” (per Bloomberg) has now developed a “mechanism” by which traders can invest in bitcoin and other digital currencies. Citigroup will not hold actual crypto but issue “digital asset receipts,” which represent specific crypto-assets but carry less of the calamitous risks. They are, Bloomberg reassuringly reports, “relatively safe.” Safe relative to, like, driving a bus full-throttle off a jutting cliff-edge or, safe relative to, say, not investing in highly volatile digital currencies? Who knows.
The Winklevii’s new token, the “Gemini Dollar,” purports to be even safer. The currency, say the twins, is matched with the dollar coin for coin. In fact, it essentially is the dollar, insofar as its entire value and function stems from its direct link with the currency. The blockchain stuff, it seems, is a mildly inconvenient USP: Gemini’s “decentralized network” is managed by a totally inclusive network of, er, Wall Street auditing firms. Per Bloomberg’s Matt Levine: “If you want to hold your Bitcoins through a bank, you can, but on the other hand if you want to hold your dollars through a blockchain, you can do that too.” That’s right. Having invented Facebook, the Winklevii have now invented the dollar. Can’t wait for whatever they’ve got next. The wheel, anyone?
Citibank: the People's ivory tower. PHOTO CREDIT: Shutterstock.
Nasdaq, too, is weighing in. The firm plans to incorporate a crypto-assets market predictor in its Analytics Hub, which traders use to gain insight into price and market dynamics. That is, if you believe Coindesk’s source, a “person familiar with the company's plans.” Bill Dague, Nasdaq’s “head of alternative data,” (alt-data?) was somewhat less forthright: “Whether or not we launch a crypto-related product remains to be seen."
The crypto-fervor is ringing through the offices and lower chambers of our venerable heads of state, too. Valdis Dombrovskis, Vice President of the European Commission (don’t fall asleep just yet!) said crypto-assets were “here to stay,” and that the Commission would continue figuring out how in hell to classify them in the meantime. That’s more than enough about the EU for one article.
Moving swiftly on, Joseph Young, editor of NewsBTC, wrote on Twitter that this sudden bout of enthusiasm from the mainstream banking sector and state regulators makes this “the best week for crypto,” despite the slump in prices. It also lends credence to Ethereum founder Vitalik Buterin’s baleful prediction that typical trustless cryptocurrencies will die, while the technology that underlies them will flourish. He neglected to mention, however, whether that flourishing would take place under the watchful gaze of financial regulators.