CoinLoan Weekly: Modest gains, euro-backed stablecoin, crypto credit cards

Price dynamics

BTC price

After falling below $19,200 on Monday, July 4, BTC was able to gain some ground. Following the 7-day peak of $22,109.67 on Friday, July 8, it stayed above $20,800 through the weekend. S&P 500’s rally and a tech stock rebound may have supported BTC as risk appetite improved.

Despite Sunday's slide by 3.41% (July 10), The Fear & Greed Index rose to 24 within the extreme fear zone. There were no weekend clues, and investors now anticipate several US indicators (inflation numbers, weekly jobless claims, wholesale inflation, and retail sales), along with China’s GDP, all due for release this week.

At the time of writing, BTC is changing hands at $20,473.70, with a 24-hour slip of -1.6% and a 7-day rise of +6.3%

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ETH price

ETH mirrored BTC’s gains — from around $1,050 at the beginning of the week, it grew to a peak of $1,260.46 on Friday, July 8. On Sunday, July 10, the price descended below $1,200.

Two metrics suggest $880 was a genuine bottom. Margin traders have substantially increased their long positions since mid-June, which implies that they do not expect ETH to move below $900. Options traders have also become less bearish.

At the time of publication, ETH is trading at $1,141.66, with a 24-hour loss of -2.1% and a 7-day change of +6.2%

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XRP price

Unlike its counterparts, XRP reached its 7-day low on Tuesday, July 5, when it dipped to $0.315477. Subsequently, it headed upward, climbing to $0.354918 on Friday, July 8. On Sunday, July 10, XRP slid below $0.33.

Despite the ongoing lawsuit, CEO of Valhil Capital Jimmy Vallee expects XRP to reach $35,000. The community has several reasons for optimism, including new use cases for XRPL (Colombia’s first National Land Registry has been launched on top of the blockchain) and a testnet for smart contracts within XRP Ledger.

As of now, XRP is trading at $0.323965, with a 24-hour slide of -1.1% and a 7-day climb of +0.4%.

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Cryptocurrency news

Euro-backed stablecoin and growing USDC adoption

A new stablecoin called Euro Coin (EUROC) is the first digital asset backed by the euro. It was launched on June 30 by Circle, the company behind USDC, which is the fourth most liquid cryptocurrency.

The novelty will be used for transactions in decentralized finance apps and Web3. The company's website describes it as "100% backed by euros held in euro-denominated banking accounts so that it is always redeemable 1:1 for euros."

Meanwhile, Circle's USDC coin has recently been adopted by Banking Circle, an EU-based firm facilitating cross-border payments. On Friday, July 8, the company announced its use for payment acceptance, processing, and settlement. USDC will become part of its new service for banks and payment providers.

The firm described the move as a “key step in democratizing global finance” through better “reconciliation, speed and cost advantages”. According to Mishal Ruparel, head of virtual asset services, it is the bank’s first foray into the market: “Some of our clients have been serving the crypto space for the past year or two, and we want to support their growth.”

Meanwhile, Fed vice chair Lael Brainard has urged for faster regulation, mentioning that stablecoins are an area of risk spillover, along with bank involvement in crypto activities. Currently, USDT, USDC, and BUSD account for over 80% of the total market cap, and fiat-backed stablecoins are “highly vulnerable to runs.”

Visa and Mastercard pave the way for crypto credit cards

According to The Wall Street Journal, market turmoil has not deterred major US card companies from betting on crypto. While fintechs' Visa and Mastercard cards constitute a niche market, the two biggest payment processing networks could catalyze a turning point for digital assets.

Visa and Mastercard are exploring ways of making crypto-funded cards commonplace, inviting more issuers, and allowing more merchants to accept crypto. Several big brands, including AT&T Inc. and Chipotle Mexican Grill Inc., are already doing it.

Still, a lack of clarity remains. First, merchants would like to bypass fees for debit and credit card transactions. Secondly, security is crucial. Some payments executives say nationwide regulation must oblige financial institutions to accumulate reserves backing their crypto holdings.

Both Visa and Mastercard are using fiat-backed stablecoins as their testing ground. They want to get payments directly from card issuers and relay them to merchants' banks. Visa is testing a system that converts stablecoins into local currency at the final step, and it aims to roll out this option in certain markets globally before the end of 2022.

Visa is sharing information with issuers to help them decide if they should adopt crypto transactions. Generally, banks are more likely to approve them for clients with high-limit cards. They are also considering dedicated, lower spending limits.

In 2021, CompoSecure Inc., which develops metal cards for American Express Co. and JPMorgan Chase & Co., launched a card like no other. It stores the holders' private keys to crypto, so they can sell it or make payments by entering their PIN into the app and tapping the card on their phone. In the future, the same feature could be added to chips on standard credit and debit cards.