CBDCs on Ethereum?

What you need to know today in crypto and beyond

June 2, 2021

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Today's must-reads

Top Shelf

CBDC GOES GLOBAL: The Bank of Thailand has hired German technology company Giesecke+Devrient to develop a CBDC prototype, and plans to release a digital currency on a three- to five-year timeline. Meanwhile, the former head of the digital currency initiative at the People’s Bank of China (PBoC) said CBDCs could one day run on Ethereum.

ONLINE SHOPPING? The Overstock-incubated tokenized securities venue tZERO is looking for a private buyer or possibly a SPAC. The move is reportedly to take the alternative trading system (ATS) to the next level and comes as Overstock looks to exit its blockchain-related investments.

VENTURES AND HEDGES: Master Ventures launched a $30 million fund for Polkadot-based crypto projects. AU21 Capital started a $21 million fund to invest in projects built on Ethereum layer 2 Polygon. Hedge fund manager Commonwealth Asset Management bought $15 million worth of tokens from Solana-based derivatives platform Hxro.

THE WAY TO KNOWLEDGE: Major DeFi players have launched AladdinDAO, a decentralized asset management marketplace to help new or less-informed investors generate returns through liquidity mining. Led by a former Huobi executive and including the participation of investors including Multicoin Capital and Polychain Capital, the DAO will help identify the “most promising” DeFi projects for investment.

GOLD FOR PENNIES: Institutional investors are exiting bitcoin positions for gold, following a 35% drop in May, according to JPMorgan analysts. Meanwhile, a Goldman Sachs commodities researcher said BTC is more like digital copper: “[Bitcoin and copper] are pro-risk, risk-on assets. They are substitutes for risk-on inflation hedges, not risk-off inflation hedges."

–D.K.

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Off-Chain Signals

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Putting the news in perspective

The Takeaway

How Do You Know Crypto Is Winning? Look Where the Talent Is Going

Crypto really is eating the software that ate the world. This isn’t just seen in the amount of capital being deployed in BTC or DeFi, which might have gone elsewhere, but also in the human beings who choose to work in the industry.

Over the last few months, there have been a few notable departures from traditional financial and software giants. Bridgewater, the world’s largest hedge fund, lost its chief financial officer to NYDIG. Coinbase hired a top Goldman Sachs lobbyist. FTX hired an executive from Citadel Securities.

Then there are the regulators who have made their home at crypto upstarts. Former acting Comptroller of the Currency Brian Brooks took charge at Binance.US the same day former top U.S. commodities regulator Chris Giancarlo joined BlockFi’s five-person board.

These are figures who, as part of their remit, had large swaths of the economy under their supervision and identified the most dynamic and personally rewarding opportunities as being in crypto.

"The internet is a remarkable social and technological phenomenon. It's by no means seen its course. What it's done first to information then to retail and transportation, it's now doing in financial services in a very broad way,” Giancarlo said the morning of his announcement, on CoinDesk TV.

These human flows demonstrate the viability of what’s being built in crypto. Capital deployment is a big indicator, and there are crypto projects doing big numbers. But that’s all a calculated risk, a gamble, a hope for yield in an economy where everything seems to offer returns. Tomorrow Tesla could announce it sold its BTC horde.

Human beings taking jobs in crypto is different. It’s stickier. But it also gives a peek into the industry’s dynamics. People may be motivated by competitive salaries or startup equity, but they may also have harder-to-define motivations, such as a belief or feeling that crypto is the future.

Employment reports consistently show blockchain skills are in high demand.

“The bitcoin and crypto industry has the highest asymmetry opportunity in any industry, so it is not surprising to see thousands of people moving from legacy businesses to these disruptive upstarts,” the influential Anthony Pompliano said over email.

Pomp kicked up a crypto jobs board four months ago to help place the experienced and inexperienced in open crypto roles. He says 50,000 people have already applied for positions, and as many as 20 people have been hired.

Mike Wen recently left Apple to go “all in on crypto.” He says he followed a familiar path for millennials: used BTC to buy a fake ID in 2014, invested in “the next wave” in 2017 and started to get curious again about DeFi in 2020. And now he’s hooked.

“NFTs were the first use case that both made sense to me as a consumer but also was something I knew I would be passionate about working on,” Wen said over email. He’s building a community-owned NFT platform, Gallery, and feels empowered by the core ideals of “decentralization, self-sovereignty and permissionless innovation that crypto embodies.”

While he doesn’t think most of his former colleagues will rush out to join a crypto startup or that decentralized collectives could ever truly compete on the hardware front with monoliths like Apple, Web 3.0 is where the real innovation is taking place.

“This relates to me so deeply because in my career I've always been grinding, just waiting for the ‘right opportunity.’ However, in crypto the opportunity is out there, you just have to go out and grab it,” Wen said.

–D.K.

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