An eightfold rally in Ethereum (ETH) over the past year to a record faces possible turbulence from the impending launch of CME ETH futures. The contracts set to debut on February 8 evoke memories of 2017, when the start of Bitcoin futures coincided with a peak in the leading digital asset ahead of a spectacular bust. A Federal Reserve Bank of San Francisco analysis posits the derivatives opened the door for bearish investors. A successful launch of ethereum futures this month is likely to be followed by options on ethereum futures, perhaps as early as 2022, in a similar manner to the launch of options on bitcoin futures in the first quarter of 2020.
Visa is piloting a suite of application programming interfaces (APIs) that will allow banks to offer bitcoin services. The Visa Crypto APIs pilot program will let clients “easily connect into the infrastructure provided by Visa’s partner, Anchorage, a federally chartered digital asset bank, to allow their customers to buy and sell digital assets such as Bitcoin as an investment within their existing consumer experiences.” Visa will partner with First Boulevard, a digital bank focused on “building generational wealth” for the Black community, to test test the new suite of crypto APIs. Visa is already working with crypto companies to issue bank cards and has partnered with 35 crypto firms to date, but this is the first time the company has offered crypto services to banks.
Ant Group and Chinese regulators have reportedly agreed on a restructuring plan that will turn Ant into a financial holding company, making it subject to capital requirements similar to those for banks. The plan calls for putting all of Ant’s businesses into the holding company, including its technology offerings in areas like blockchain and food delivery. One of Ant’s early proposals to regulators had envisioned putting only financial operations into the new structure.
* The views expressed herein are those of the author and should not be attributed to the International Monetary Fund, its Executive Board or its management.