The Clearing House Real-TIme Payments Tracker June 2024 Banner

This Week in Web3: Usability, Utility and Oversight 

The next iteration of the internet, Web3, has been around for a while now. 

Meta’s Reality Labs division — the arm of the tech giant that focuses on metaverse, mixed reality (MR), augmented reality (AR), virtual reality (VR), and artificial intelligence (AI) initiatives — is already 10 years old, as just one benchmark.  

And Web3, which refers to a blockchain-based web that includes cryptocurrencies, NFTs (non-fungible tokens), DAOs (decentralized autonomous organizations), and decentralized finance applications, is undergoing a third act. 

As just one data point, after a challenging couple of years, Ripple CEO Brad Garlinghouse said he now expects the value of the crypto market to double in 2024 to above $5 trillion, thanks to factors like the approval of the first U.S. spot bitcoin exchange-traded fund (ETFs) and the upcoming “halving” of bitcoin.

While only time will tell the truth behind Garlinghouse’s prediction, the future waits on no one. That’s why PYMNTS keeps an ear to the ground, listening for all of the latest initiatives driving the connected economy forward, and this is the must-read pulse check on the top Web3 news and innovations we’ve been tracking this week. 

Crypto’s Utility Starts With Usability

As PYMNTS wrote earlier this year, many industry observers in the crypto space believe — in spite of the sector’s rocky 2023 — that blockchain technology and cryptocurrencies could potentially revolutionize financial inclusion for marginalized and unbanked communities.

Unlike traditional banking systems, which often require things many people cannot meet — minimum deposit sizes, credit history and proof of address — blockchain-based assets allow marginalized populations to bridge the gaps hindering their financial options.

And the Web3 marketplace is responding with innovations designed to broaden financial access to crypto, as well as streamline the use of it. 

In one example, Keytom, a neobank centered around digital assets, launched on Tuesday (April 9). The Dubai-based company said its goal is to introduce “a new era of financial management by organizing all digital assets in one convenient location.”

Also on Tuesday, Blockchain.com and MetaMask partnered to enable seamless and secure cryptocurrency payments, a collaboration that includes an integration of Blockchain.com’s crypto payment solution, Blockchain.com Pay, with MetaMask’s self-custodial platform, the two companies said, emphasizing that this integration will make crypto “more approachable and less complicated.”

Read also‘Cryptofinance’ Might Be Replacing ‘Cryptocurrency,’ but Bitcoin Is Still Unreliable

This follows the news that Telegram Messenger, the fourth most popular messaging app by active monthly users after Meta’s WhatsAppWeChat, and Facebook Messenger, announced that it was pivoting to crypto payments for its advertisers, and crypto payouts for content creators on the messaging app.

Elsewhere, Web3 money app Wirex says it is creating a DAO for its payment platform WPay, an initiative designed to give users the opportunity to play a larger role in shaping the future of the platform.

And on Monday (April 8), it was announced that Kyriba and Onyx, a blockchain business unit from J.P. Morgan, are collaborating to better streamline cross-border payments, with the two firms explaining that Kyriba will use Onyx’s Blockchain Deposit Account (BDA) product, JPM Coin, blockchain technology and real-time payment processing to increase payments transparency. With J.P. Morgan’s Global Payments API, which is available in the Kyriba Marketplace, clients can complement this cross-border payment solution with real-time payments and real-time bank reporting. 

J.P. Morgan said in October that its JPM Coin digital token was handling $1 billion in daily transactions. 

The collaboration followed the announcement on April 4 that cross-border money transfer service Xoom now lets users make transactions with PayPal’s USD stablecoin.

Navigating the Web3 Landscape

For all its innovations and advances, the Web3 landscape remains relatively unregulated around the world.

As PYMNTS reported April 4, the Consumer Financial Protection Bureau (CFPB) is now monitoring video games and virtual worlds to ensure their compliance with federal consumer financial protection laws.

PYMNTS wrote last month that as the crypto market is making a comeback — with bitcoin topping $70,000 and memecoins resurgent — so too has crypto crime.

A recent report from the FBI’s Internet Crime Complaint Center (IC3) shows that Americans made more than 43,000 complaints about cryptocurrency scams last year, with losses to crypto-based frauds and scams rising to $3.9 billion, up 53% year over year.

And now the U.S. Treasury Department wants more tools to sanction the use of crypto by bad actors to fund their causes, asking Congress to greenlight a “secondary sanctions tool” aimed at overseas digital-asset providers involved in illicit finance.

On April 5, a jury in a U.S. District Court has found Terraform Labs and its co-founder, Do Kwon, liable for defrauding investors in crypto asset securities. The court found earlier that the company and Kwon unlawfully offered and sold crypto asset securities. 

And Swiss National Bank (SNB) Chairman Thomas Jordan said Monday (April 8) that the risks of a central bank digital currency (CBDC) issued to the general public would outweigh any potential benefits.

Meanwhile, just 10 cryptocurrency exchanges account for 90% of the market’s trading, and that concentration could be a problem, according to a report issued Wednesday (April 10) by the European Securities and Market Authority (ESMA).

The biggest of those exchanges, Binance, saw its new CEO report that the cryptocurrency exchange is a more mature company now. Meanwhile, the exchange is contending with ongoing legal issues in other countries, such as Nigeria, where its head of financial crime compliance, Tigran Gambaryan, has been charged with tax evasion and money laundering.

Read also: Crypto Continues to Serve as Case Study in Behavioral Economics

Still, that all hasn’t stopped investor appetite from rekindling somewhat relative to its previous highs, with Galaxy Digital Holdings reportedly talking with outside investors to assemble a $100 million fund to invest in early-stage crypto companies. The planned Galaxy Ventures Fund I will focus on financial applications, software infrastructure and protocols building in crypto, aiming to invest in as many as 30 startups over three years.

And elsewhere in the broader Web3 space, Nekojarashi and Intertrust announced Tuesday they will debut “Chime,” a film by celebrated director Kurosawa Kiyoshi through a unique Web3 collaboration on Nekojarashi’s Digital Video Trading (DVT) Platform, Roadstead.io.