Kiffmeister’s #Fintech Daily Digest (08/18/2020)

Bitcoin is an account, not a token
JP Koning weighs in on the account- versus token-based money taxonomy debate: “Garratt et al are right about bitcoin being an account-based system. But I don’t think that bitcoin also qualifies as a token-based system.”
The OCC’s Crypto Custody Letter Was Years in the Making
The U.S. Office of the Comptroller of the Currency (OCC) announced last month that federally regulated banks could provide services to crypto startups in addition to custody. It turns out the OCC was already leaning toward the move before Acting Comptroller Brian Brooks took the top job at the agency. Indeed, the OCC has been examining the cryptocurrency space since at least 2018 and likely longer, because the very act of writing an interpretive letter typically takes months. Banks that are now interested in branching out into crypto should reach out to their local OCC supervisors if they have additional questions.
The DeFi Fee Explosion: How YAM’s Collapse Drove Ethereum Fees to New Heights
The speculation surrounding YAM draws natural comparisons to 2017’s ICO mania. But this is a more complex version, where speculators need to interact with an increasingly complicated system of DeFi smart contracts. This can lead to unexpected risk and sudden surges in fees, which can make it prohibitively expensive to get in and out of speculative positions quickly. Ultimately, escalating fees can cause mass congestion and lead to cascading effects throughout the network. But speculation often helps drive innovation. DeFi will push Ethereum towards scalability solutions, and developers will likely continue to push the boundaries of what’s possible in decentralized finance. But there will likely also be a lot of damage along the way, especially if DeFi applications continue to launch without proper auditing and precautions.
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