Coinbase, the biggest US cryptocurrency exchange, went live with its direct listing on Nasdaq, on Wednesday.

The share fluctuated in the first hours of trading starting at $381 and initially jumping above $400 but dropping as of press time to about $378.

Trade analysts and economists characterized the share sale as a milestone for cryptocurrencies. 

The event has also been identified as a catalyst that might drive the adoption of digital assets.

Based on the latest trading price, Coinbase would have a market capitalization of $76 billion. 

The initial trading price was 52% above the reference price of $250 a share published late Tuesday by the Nasdaq.

Instead of the conventional IPO process, Coinbase chose to go for a direct listing, where existing shareholders can sell their shares directly on the exchange.

New investors including those from India, can start purchasing shares of the company as soon as the listing place. 

Last month, Facebook unveiled the plans of releasing their own cryptocurrency named Libra along side Calibra, wallet for Libra. But now Facebook's plan for a cryptocurrency has come under attack at a US hearing, with politicians calling the company "delusional" and not trust worthy. senator Sherrod Brown said, The company had showed "through scandal after scandal that it doesn't deserve our trust."

Facebook last month announced plans to launch a digital currency, possibly next year. But to do so it needs to get Washington lawmakers on its side. Since it unveiled the plan, critics have lined up to voice skepticism, including US president Donald Trump.

The Senate Banking Committee is questioning Facebook executive David Marcus over the tech giant's intention to launch its Libra digital currency. Martha McSally a Republican senator said "I don't trust you guys, instead of cleaning up your house you are launching into a new business model." Facebook was told to clean up its house before launching a new business model.

David Marcus who was president of PayPal from 2012 to 2014 said “We know we need to take the time to get this right.” He tried to assure concerns in his opening remarks by promising that Facebook will not begin offering Libra until regulatory issues are addressed.

Senators are concerned about the issues regarding how Facebook is planning to prevent money laundering through the new payment system and how consumers' data and funds will be protected. For that Facebook pledged that the Libra Association - the supposedly independent body tasked with managing the currency - will only share customer data with Facebook and external third parties if it has consent, or in "limited cases", where it is necessary.

David Marcus told the hearing: "The way we've built this is to separate social and financial data because we've heard loud and clear that they don't want those two types of data streams connected, so this is the way the system is designed. "Facebook will only have one vote and will not be in a position to control the association, nor will Facebook or the Libra Association position themselves to compete with sovereign currencies or interfere with monetary policy,"

Even though, Libra is a democratic, open system over which Facebook does not have control. On the other hand, Calibra very much is Facebook's product meaning it will be backed by the world's biggest and most powerful social network which might become the dominant force in global cryptocurrency.

 

Source: BBC

 

PayPal on Wednesday announced it would begin supporting cryptocurrencies for the first time, allowing any PayPal account holder to store, buy, and sell popular virtual currencies starting later this year. The announcement makes PayPal arguably the most significant company in the financial tech sector to adopt support for virtual currencies.

PayPal competitor Square launched support for bitcoin back in 2018 through its Cash app (Square also purchased $50 million worth of bitcoin earlier this month), but PayPal is going further in supporting bitcoin, Ethereum, Bitcoin Cash, and Litecoin. PayPal also plans to extend support to its money-sending subsidiary Venmo and international markets starting early next year. For now, PayPal plans to launch digital currency support for US users in the coming weeks.

The move makes PayPal a major digital wallet as well as a cryptocurrency exchange, and the result could substantially increase the potential adoption of cryptocurrencies among everyday users and online merchants. According to Bloomberg, PayPal has more than 346 million active accounts, of which 26 million are merchants.

“The shift to digital forms of currencies is inevitable, bringing with it clear advantages in terms of financial inclusion and access; efficiency, speed and resilience of the payments system; and the ability for governments to disburse funds to citizens quickly,” PayPal CEO Dan Schulman said in a statement. “Our global reach, digital payments expertise, two-sided network, and rigorous security and compliance controls provide us with the opportunity, and the responsibility, to help facilitate the understanding, redemption, and interoperability of these new instruments of exchange.”

Schulman says PayPal is “eager to work with central banks and regulators around the world” in supporting cryptocurrency. Reuters reports transactions on PayPal’s platform will be settled using traditional fiat currency, so merchants won’t need to transfer digital coins into dollars following a transaction. But PayPal for now is restricting users to purchasing cryptocurrencies on its own platform, and existing digital coin owners can’t transfer the contents of other digital wallets over to PayPal’s.

Source: Theverge

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Electric automaker Tesla said Monday that it has invested around $1.5 billion in Bitcoin and it plans to begin accepting the digital currency as payment for its high-end vehicles soon. The price of Bitcoin soared 15.4% to around $44,500 Monday in reaction to Tesla’s announcement, according to CoinBase.

The California-based electric car maker headed by Elon Musk revealed the new strategy in a filing with the U.S. Securities and Exchange Commission, saying its investment in digital currency and other “alternative reserve assets” may grow.

Bitcoin has drawn enthusiasts for its scarcity and security, but the volatile digital currency still is not widely used to pay for goods and services. It’s mostly been a store of value, like gold, with some limited merchants like Overstock accepting bitcoin for payment. It’s also used by those distrustful of the banking system or criminals seeking to launder money.

Whether other major companies will follow Tesla’s lead in investing in Bitcoin or accepting it for transactions is unclear. A vehicle is a large purchase, which could make Bitcoin a better fit to pay for it, but the wild price swings in Bitcoin could be a significant risk to any merchant who decided to accept it.

“It was wise of Tesla to announce that it will deem its investment in Bitcoin as an “alternative asset.” That is certainly appropriate because Bitcoin might be coming into greater acceptance as a currency, but it is not cash,” said Anthony Michael Sabino, a professor of law, at St. John’s University.

Tesla is in a unique position to accept digital currencies for payment since the automaker does not rely on a network of independently owned dealerships to sell its vehicles unlike traditional car companies such as General Motors and Ford.

Whether Tesla will get a definitive competitive advantage in accepting Bitcoin remains to be seen. The automaker could be simply investing in Bitcoin because Musk has been known to have eclectic tastes. Musk launched a Tesla car into space to demonstrate the payload capabilities of his SpaceX company rockets.

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