Goldman’s DeFi ETF That Never Was

Plus: Swift Go launches, Tesla holds $1.3B in bitcoin, Bullish begins pilot |

What you need to know today in crypto and beyond  July 27, 2021 Sponsored By:     Welcome to The Node.   If you were forwarded this newsletter and would like to receive it, sign up here.   Questions? Feedback? We'd love to hear from you! Simply reply to this email.   –Daniel Kuhn Today's must-reads Top Shelf FALSE ALARM: Amazon has denied a rumor it was planning to accept bitcoin payments by the end of the year, following an erroneous City A.M. report earlier Monday that cited a single, unnamed "insider." Nevertheless, a spokesperson told CoinDesk the e-commerce colossus is interested in the space and is exploring specific plans for cryptocurrencies.   TALKING CRYPTO: Around 40 of the more than 1,200 meetings Brian Brooks took as acting U.S. Comptroller of the Currency were about cryptocurrency or involved someone from the industry, according to his calendar, which was obtained by CoinDesk through a Freedom of Information Act filing. The meetings involved a wide range of participants in the crypto market, from executives of Fortune 500 companies to founders of DeFi protocols.   STILL LONG ON BITCOIN: Despite its recent concerns about bitcoin's environmental impact, Tesla hasn't sold any more of its $1.3 billion stockpile since Q1, when the company trimmed its bitcoin position by 10%. Recently, Elon Musk also revealed that one of his privately owned companies, SpaceX, holds bitcoin.    SWIFT GO: Seven major global banks are live on SWIFT Go, a new service by the global interbank messaging system aiming to offer low-cost, cross-border payments. BBVA, NBY Mellon, DNB, MYBank, Sberbank, Societe Generale and UniCredit are the seven banks using SWIFT Go, according to an announcement Tuesday.   FIRST TRIAL: Bullish, the crypto exchange subsidiary of Block.one backed by Peter Thiel, will begin a seven-week pilot program. Announced Tuesday, the pilot will use simulated crypto assets and paper money to give invited investors a sample of Bullish's trading interface. The company is offering $525,000 in cash prizes divided up between participants who compete in simulated crypto trading games.   –Helene Braun A message from Nexo Your digital assets deserve a savings account in their BEST INTEREST. Leading crypto lender Nexo treats you, your crypto and your fiat to industry-best Crypto & Fiat services, featuring:    * Up to 12% interest on digital assets, paid out daily! * Yields available on BTC, ETH, LTC, BCH, XRP, XLM, EOS, TRX, LINK, BNB, PAXG, USDT, USDC, TUSD, PAX, DAI, HUSD, GBP and EUR. * No minimum or maximum limits on funds deposited, offering infinite opportunities to earn. * #ZeroFees on all transactions. * Military-grade wallet security and top-tier insurance on all custodial assets with SOC 2 Type 2 certified crypto custodian BitGo.   Get started at nexo.io Overheard on CoinDesk TV Sound Bite "The sooner that massive regulation comes into the market, the better it is for bitcoin, stablecoins and everything else." —Jordan Belfort, "The Wolf of Wall Street," on CoinDesk TV's "First Mover." A message from CoinDesk A Paradigm Shift in Mining The dynamic crypto mining industry has been even more active following China's crackdown. The global hashrate has largely shifted to North America, making the U.S. a key mining hub where institutions now take central stage.   In this sponsored webinar on Aug. 10, Foundry CEO Mike Coyler explains how this new demographic of miners have special requirements, which the company has been catering to through its rapidly growing Foundry USA Pool and other services. Register for free. What others are writing... Off-Chain Signals Binance and Russian museum to tokenize Da Vinci and Van Gogh paintings (Cointelegraph) Huobi Group is dissolving its China-based entity (Decrypt)   –H.B. & D.K. Sponsored Content   Globalway: GraphLinq: Bringing No-Code Development to Blockchain The GraphLinq platform helps to minimize costs by providing off-chain data storage for developers to use when appropriate. This allows for the building of graphs and other workflows that only incur gas fees when necessary. The system also relies on a layer 2 transaction solution running on the Polygon chain to further minimize costs. Putting the news in perspective The Takeaway Goldman's DeFi ETF That Never Was, Never Should Be In what appears to be a world first, Goldman Sachs has applied to list an exchange-traded fund (ETF) with the neologism "DeFi" in the title. But the fund appears to have little to do with "decentralized finance" as we know it.   The Goldman Sachs Innovate DeFi and Blockchain Equity ETF would track 20 companies that advance blockchain technology and the digitization of finance, according to a filing with the U.S. Securities and Exchange Commission (SEC).   With companies like Nokia, Sony and Cisco in the mix, though, it's clear the investment banking giant is taking something of a liberal view of what constitutes "DeFi." For instance, the greatest contribution to the blockchain space made by the German tech giant Siemens might be a press release announcing its inclusion in the ETF.   Although the news is a nothingburger, it is revealing in its own right of the extent that "crypto" has permeated the business world. It's also a clear expression of the disconnect between what hardcore coiners may want versus what is realistic to expect.   Many of the stocks included in the ETF could claim to be working on blockchain technology broadly, but any specific DeFi application is likely suspect. Most of these corporate efforts would fall under "enterprise blockchain," a term that's become a punchline among anyone who has actually used MakerDAO, Compound or Aave. But the phenomenon is still chugging along, presenting its own vision of corporate blockchain adoption.    While DeFi seeks to disintermediate middlemen from the equation, enterprise blockchain is about bringing them back in. Truly, a revolution is coming to database management and tracking leafy greens.   Take Nokia, the Espoo, Finland-based firm widely remembered for its near-indestructible, pre-smart phone era cellular devices. The firm recently launched a blockchain and artificial intelligence powered data marketplace, according to a press release. Buzzwords aside, that's not very sexy.   Overstock, Alibaba and Accenture also have well-documented, blockchain-related ambitions. CoinDesk reported in 2020 that Alibaba, for instance, was zeroing in on IBM's place as the top blockchain-related patent holders, with fingers in everything from music streaming to a Cosmos-like cross-chain solution.   These efforts don't always pay off. IBM notably slashed its blockchain division after revenue misses. Its stock was not included in the ETF application.   Yesterday, the markets went wild amid a circulating rumor that Amazon would soon accept bitcoin payments. That turned out to be false, though a company spokesperson did say the company remains interested "in the space."    If Amazon did accept bitcoin payments, it would be another strong endorsement of the crypto economy. It would also introduce another intermediary in the space, another company with its own corporate responsibility commitments.    Meanwhile, DeFi has organically blossomed into a $65 billion industry. It's a testament to the idea that complex financial systems can run without centralized, corporate oversight. I wouldn't bemoan an ETF application that tracked MKR, AAVE or COMP, but do we need the validation?   Crypto is meant to undercut or exist independently of corporate and state interests. The fact that so many international conglomerates and tech giants are taking note of the technology, while staying at arms length from the exciting stuff, is a testament to that. Their PR departments seem to find this simulacrum useful, but calling enterprise blockchain "DeFi" doesn't make it so.   Goldman's "DeFi" ETF application may stand a better chance than most crypto-related funds in getting approval from the SEC, exactly because it plays into this publicity trick. As Nathan DiCamillo noted, there are currently 12 outstanding bitcoin-related filings and several for Ethereum, and so far the agency has only punted on making a decision. Pretending that a bunch of blue-chip stocks are interchangeable with cutting-edge experimental protocols might help Goldman get past that gate, but it's hard to think that would be doing their customers any favors.    –D.K. Crypto State 2021: Middle East Even though many countries in the Middle East restrict or outright ban activities related to blockchain technology, the region is having its crypto moment. From Dubai's first-of-its-kind Bitcoin Fund listing to the Bank of Israel's trial of a digital shekel, interest is picking up in the region as crypto companies work closely with regulators in the Middle East and North Africa (MENA) to gain some clarity about oversight of digital currencies.   Join us as we jet-set through the Middle East on our #CryptoState2021 virtual tour and explore how different markets are thinking about crypto, their roadblocks and challenges, and crypto's impact on the region. Register for the Crypto State: Middle East virtual tour on Aug. 11. The Chaser... ATTENTION: Scammers have been sending fraudulent emails with links to sites disguised to look like coindesk.com. If you are in doubt about a link, type https://www.coindesk.com directly into your browser; do not copy and paste. Remember, if something seems too good to be true, it probably is. 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