Cryptocurrency payments and custody services ready to go

Last week, a number of leading banks announced plans to offer fiduciary services for cryptocurrencies. BNY Mellon, the world's largest custodian bank, has announced that it will launch such solutions later this year, and will add prime brokerage services at a later stage if customers are interested.

BNY Mellon thus joins other well-known banks, such as JPMorgan, Citi, Goldman Sachs and Deutsche Bank, which are to plan to launch cryptocurrency custody services in 2021. It is not known whether these banks also intend to offer brokerage services. 

It is worth noting that JPMorgan has been quite negative about cryptocurrencies so far. In late 2017, its president, Jamie Dimon, determined Bitcoin as "Fraud". However, at the end of last year, he showed more diplomacy by declaring that bitcoin simply did not suit him.

The creation of an offer of cryptocurrencies in recognized banks signals the popularity of this asset class in the financial industry. It also indicates that there is a demand for such services, and traditional banks are most likely afraid to overlook this trend.

About the Author

Mads Eberhardt, Cryptocurrency Market Analyst, Sax Banks. Cryptocurrency Market Analyst at Saxo Bank. He gained experience as a trader at Bitcoin Suisse AG and founder http://BetterCoins.dk (website taken over by Coinify).

MasterCard joins Visa

Last week, we mentioned that Visa is planning a cryptocurrency product offering for banks, enabling them to broker cryptocurrency trading for their clients. Currently, MasterCard, like Visa, plans to include cryptocurrencies in its offer. 

In the information on the MasterCard website, the company presents a plan to include selected cryptocurrencies in its network later this year. It allegedly assumes the possibility of settlements in relation to selected cryptocurrencies - primarily the so-called stable currencies - stablecoins. MasterCard is expected to include at least the second largest stable currency, USDC. It's a cryptocurrency that Visa also wants to include in its network. 

In the announcement by MasterCard it was mentioned that the company is working - together with numerous central banks - on the possibility of adding their digital currencies (the so-called CBDC) to its payment systems. For the cryptocurrency market, it is of great importance that the two largest payment processing companies independently construct cryptocurrency offers.

Uniswap's volume reaches $ 100 billion

The transaction volume on the largest decentralized exchange - Uniswap - reached a record level of USD 100 billion. Decentralized exchanges are often considered a key aspect of decentralized finance, the so-called DeFi. The Uniswap exchange started operating at the end of 2018 and is based on the Ethereum network, where traders can make currency conversions using tokens based on Ethereum. The most popular tokens on Uniswap are stable currencies in exchange for tokens such as Chainlink, Wrapped Bitcoin or WETH. 

The Uniswap exchange has significantly contributed to the proliferation of Ethereum transactions - and thus increased transaction processing fees on the web. To some extent, however, this means that Uniswap has fallen victim to its own success. High transaction fees caused an outflow of investors to other decentralized exchanges. As a result, especially in recent months, it has gained in popularity Binance (so-called Binance Smart Chain). Although PancakeSwap, a decentralized exchange based on Binance Smart Chain, is currently recording a daily trading volume that is half the volume on Uniswap, depending on how long it takes for Ethereum's scalability to stabilize with ETH 2.0, in the foreseeable future this exchange will most likely reach a higher volume than Uniswap.