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Hey Tea Sippers š,
A smile a day keeps the doctor away, Happy Friday! :) Iām happy to see that youāre back.
Adobe just bought Figma the collaborative software design platform for $20 billion. Now all that stands in their way is Canvaā¦
In other news, the fed just hiked interest rates another 75 BPS, uh oh.
Anyways, I will send you off now. I hope that you enjoy the stories I have for you today. Grab your tea and start sipping!
Cheers! āļø
Nova Labs begins a partnership with T-Mobile to utilize the Helium network in efforts to expand their service.
Nova Labs is the creator of the Helium network. Not the element Helium, but the crypto-powered wireless network. It is a decentralized grid of wireless hotspots looking to create innovation within the wireless space. It looks like crypto is continuing to expand its footprint.
The deal. Nova can now offer products utilizing T-Mobileās and Heliumās networks. The numbers of the deal werenāt disclosed, but itās a 5-year partnership.
Next. Helium will be unveiling their mobile product for users to earn crypto for using the network, like staking.
Launch. The predicted beta launch will be early next year.
The general manager of Nova Labs writes,
āBut with the model that we are pursuing, it's important to understand we are not looking to replace large mobile operators with our network, we are building a network that could be a complement to the existing macro network of the operators,ā he said.
The Big Gulp āļø:Ā
This is the innovation weāve been looking for. It looks like the infrastructure and meaningful projects are starting to be built. The new method is, connecting to existing systems and being a compliment to them rather than competing with them. Maybe this will lead to mass adoption, weāll see.
The Treasury report on the Future of money and payments.
The central bank is the center of the monetary system. It has been the backbone and supported over a century of US economic and financial leadership. Developments in instant payments and Stablecoins have started to take place recently. Building the future of money and payments, supporting US global financial leadership, advancing financial inclusion and equity, and minimizing risks are all goals that the treasury has expressed concerns about.
Letās give you some brief background.
Money serves three core functions:
Unit of account
A medium of exchange
A store of valueĀ
There are two forms:
Public- The public uses a paper currency, federal reserve notes, or coins.
Public money presents no credit or liquidity risks
$2.2 trillion- federal reserve notes
$3.3 trillion reserve balances
$50 billion in coin
Private- Commercial bank money
Private money may present credit or liquidity risks
$19.4 trillion in private money
Private money is subject to runs. This occurs when solvency or asset liquidity comes into question. Private money owners also desire to convert to public moneyĀ at some point.
Payment Systems
They help facilitate the exchange of goods and services for money. Set of rules and processes for transferring money.
Helping the economy function
Involves clearing and selling:
Sender, receiver, FI
Asset/set of assets transferred among participantsĀ
Transfer process defining procedures associated with the transaction
Cross Border Payments-
Sending or receiving money from one jurisdiction to anotherĀ
Cross border typically takes multiple days to clear, and remittance generally involves fees of 6.4% on average
Non-remittance across borders has fees of up to 10%
Remittance market-
Allows users to fund mobile wallets with their bank accounts and credit/debit cards to send money to foreign wallets
Intermediaries
Banks are an example of an intermediary. They hold money balances for depositors. Enable transfers of money through payment services, allowing customers to make their payments.
Non-bank intermediaries
Involved in the issuance, transfer, and custody of moneyĀ
Financial intermediaries play an important role in mitigating the risk of money laundering and terrorist financingĀ
Problem
Processing times for checks tend to take long
Financial costs for paying via credit or debit are higher for the merchantĀ
Users/merchants average 2% per transaction
Overdraft fees and drawing against low balances
These high fees contribute to many households remaining unbanked or underbanked. There are a total of $15 billion or more each year in feesĀ
The numbers:
18.7% of Americans rely on check cashing and money orders
5% for sending remittances from the US = slow and costly
The Big Gulp āļø:Ā
Legacy systems tend to be slow, hard to adapt, and hard for some businesses to access. There is also a significantly underserved population indicating the need for more financial inclusion. The most recent developments have been in instant payments. Funds are available immediately instead of having to wait for the funds to settle. In the US, examples of instant payment systems include the Clearing houses RTP network, launched in 2017, and the FedNow service which will be launched in 2023. All this background was displayed to give you background for what the government is trying to propose. A central digital banking currency, which they believe will get rid of all the inefficiencies you read above and be able to make the economy run faster and smoother than ever before. Will it work?
Extra Tea āļø
New News- The NASDAQ plans to offer crypto custody services to lure more institutional players into the space.
On the run- Terraform Labs founder Do Kwon is being searched for by South Korean prosecutors.
Complete- The Ethereum Merge has been completed, switching its consensus model from proof of work to proof of stake.
Odyessy- Starbucks will be offering a web3 experience through their mobile rewards program.
Tea Pods āļø
Interested in learning more about Maple Finance and the next evolution of uncollateralized lending? Take a listen to this podcast on the Bell Curve.
Listen Here.
Sencha Tea Fact of the Week āļø
āThe highest the fed fund rate has ever been was 6.5% in May 2000.ā
Since you made it this far!
If you or a friend know anyone interested in the space, feel free to recommend them.
Cheers!āļø