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- > US Federal Reserve cuts interest rates by 0.5%: What does this mean for crypto?
- > Commonwealth Bank of Australia experimenting with crypto, working with regulators
- > GameFi Taking Off as Solana Reveals Handheld Web3 Gaming Console
- > Solana Breakpoint Conference Reveals Partnership With Financial Goliaths Franklin Templeton and Citigroup
US Federal Reserve cuts interest rates by 0.5%: What does this mean for crypto?
The first rate cuts in four years for the United States saw liquidity return to the markets, with the price of Bitcoin rallying on the news.
The biggest macroeconomic event for September has come and past, following the US Federal Reserve meeting and deciding to cut interest rates by 50 basis points. As those with a mortgage will tell you, interest rates have been brutally high of late – a response to the inflation caused by COVID lockdowns and their associated stimulus.
But with inflation cooling and supply returning to normal, the US fiscal body decided to lower the cash rate for the first time in four years.
Somewhat paradoxically, the news is both bullish and bearish for the crypto sphere. On the one hand, lower cash rate means that “money is cheaper” – making it easier for professional investors and institutions to borrow from banks and other lenders. Additionally, everyday households have a bit more cash in their pocket to spend on riskier assets like cryptocurrency.
In short, lower interest rates mean greater liquidity.
The Feds’ decision correlated with a snap rally for Bitcoin and friends, with most major coins seeing gains of 5-10% in the weeks following the rate cuts.
Conversely, some in the community are concerned that the heavy rate cuts demonstrate that economic policymakers are bracing for a recession. This view, shared by BitMEX founder Arthur Hayes, is yet to come to fruition, with several US stock indices sitting at all-time highs.
So, at least for now, interest rates coming down to Earth is a positive sign for crypto investors.
Commonwealth Bank of Australia experimenting with crypto, working with regulators
Australia’s largest bank revealed they have dabbled in using stablecoins to manage large, international transfers, but are faced with a regulatory bottleneck to enter the next phase of adoption.
Aussie banks haven’t always been the most crypto-positive institutions going around. Despite some good work behind the scenes on blockchain projects, several “Big Four” companies have put strict limitations on retail investors engaging with crypto exchanges. Customers have repeatedly complained about deposit ceilings, transaction holds, and at worst, threats of “de-banking” clients based on their crypto investment activity.
This is something that the Commonwealth Bank of Australia (CBA) – the nation’s biggest financial institution – is looking to amend. Prominent publication the Australian Financial Review hosted its annual crypto summit just last week, with several well-known Aussie companies represented.
One such attendee was CBA’s Managing Director of Blockchain and Digital Assets, Sophie Gilder. Gilder was offered a keynote speech slot, where she outlined how Commonwealth Bank have actually been experimenting with digital assets for nearly a decade.
In particular, Gilder noted CBA’s interest in stablecoins – digital currencies pegged to AUD and other fiat currencies – as a convenient alternative to clear payments instantly and efficiently, especially for international transactions. Additionally, Gilder revealed that Commonwealth Bank has considered building (or using) a native blockchain to streamline the settlement of large transactions which typically require a lengthy clearance process.
The Managing Director noted that, while Aussie regulators were keen to update legislation and work with the Web3 industry to improve clarity, they were hamstrung by existing laws. Gilder believes that, for blockchain tech to take off in Australia, there needs to be a “political will to implement legislation” and provide funding.
With an election coming up in early 2025, Australian politicians may follow in the US’ footsteps and make crypto an important topic in their campaigns.
GameFi Taking Off as Solana Reveals Handheld Web3 Gaming Console
Solana announced Play Solana Gen 1, a GameBoy-inspired console with an in-built wallet to provide portable Web3 gaming.
GameFi has been a big winner in 2024, thanks mostly to the success of Telegram as a platform for “mini-apps”. This has seen the rise of idle clicker games, where essentially, players tap a screen repeatedly to earn income. They can then use their “earnings” to upgrade their character, improving their yield potential. The simplicity and money-making nature of these “games” is a match made in heaven for the current GameFi capabilities, and has resulted in the onboarding of hundreds of millions onto blockchains like TON.
Although titles like Notcoin and Hamster Kombat aren’t exactly crypto’s version of GTA V or God of War, they have demonstrated there is a significant market for blockchain-based gaming.
And this is something that Solana is tapping (get it?) into, with the popular DeFi ecosystem announcing the release of Play Solana Gen 1 (PSG1). The handheld device is reminiscent of a GameBoy Advance and will allow owners access to Solana’s suite of Web3 games.
The PSG1 is currently available for pre-order at a retail price of US $199. Participants will receive access to a Player-1 NFT, which rewards community members with exclusive access to new games, discounts and an allocation of the upcoming Play Solana SPL token airdrop.
Specs for the PSG1 are still a little murky – it’s unclear how powerful the console’s processor is and what level of games it can run. Given most Web3 titles are still fairly simple in terms of scope, most games built on Solana can likely be played on the PSG1, assuming they are compatible with a controller.
That said, we do know that the PSG1 comes with an inbuilt hardware wallet, making it a breeze for investors to interact with in-game economies and withdrawing/depositing crypto.
For now, it’s hard to know whether the PSG1 will be a cool gimmick for Solana fans, or if it is the first step of many into revolutionising GameFi.
Solana Breakpoint Conference Reveals Partnership With Financial Goliaths Franklin Templeton and Citigroup
Solana’s biggest event in 2024 has seen trillion-dollar institutions Franklin Templeton and Citigroup throw their support behind the blockchain, citing its scalability and cost-effectiveness.
It’s been a monster year for crypto and financial institutions. Barely 12 months ago, most billion-dollar banks and asset managers wouldn’t touch the blockchain with a ten-foot pole. But with the introduction of spot Bitcoin ETFs, big-name businesses have been flocking to crypto in their droves.
Just a few days ago, the trillion-dollar company Franklin Templeton announced that it was working with Solana to build a blockchain-based mutual fund.
A mutual fund, simply put, is a basket of assets purchased by a fund manager on behalf of an investment pool. They are primarily popular in the United States, Canada and India, but similar products exist around the world.
Franklin Templeton plans to leverage the Solana network to release a new mutual fund, taking advantage of the blockchain’s lightning-fast settlement times and low gas fees.
“Solana offers the transaction capacity we need to handle the volume of ledger entries for a mutual fund, making it right the choice for this initiative.” – Mike Reed, Franklin Templeton Partnership Development Lead
Franklin Templeton isn’t the only company getting their feet wet in Solana. Citigroup, the third-largest bank in the US and another trillion-dollar enterprise, unveiled plans to utilise Solana international payments.
Blockchains have often been touted as a solution to the expense of foreign exchange and the incompatibility that can come when transferring assets overseas. And it appears Solana is the network of choice for that purpose – at least in the eyes of Citigroup.
Ben Knight
