September 10, 2018
Several big announcements this morning: Gemini, headed by the Winklevoss twins, announced that they had received approval to issue its first cryptocurrency, a stablecoin called the Gemini Dollar ("GD"). Designed to facilitate the use of cryptocurrency as a medium of exchange, each GD will be backed by a US dollar, "in order to give it the stability of the fiat currency and the speed and borderless nature of a cryptocurrency". Notable in this announcement is a partnership with State Street Bank, which will hold the cash deposit account tied to the GD. Gemini also acquired a crypto custody patent last week (link below).

Over the past year, several stablecoin projects have raised capital including Basis, Reserve and Carbon. Also announced today by itBit (the 50th largest crypto exchange in the world): a stablecoin initiative and related regulatory approval. In last week's newsletter, I linked to the funding announcement for Terra, a stablecoin project backed by Binance (the largest crypto exchange in the world by volume), which will focus on the ecommerce market in Asia. Stablecoins are an important infrastructure technology to enable more use cases for cryptocurrency, and it's great to see the amount of innovation and experimentation that exists in this part of the market. Notably, exchanges are highly involved as there is recognition that their businesses can benefit from further development of this sector.

We are also seeing continued consolidation of companies, including today's announcement that Chain, one of the first companies targeting enterprise blockchains and backed by Visa, Nasdaq and Citi, has been acquired by Stellar's for-profit arm. The new entity will be called Interstellar. This announcement is notable in that it acknowledges the importance of public blockchains (such as Stellar) in building out "private" enterprise blockchains. While I am a believer in the importance of blockchain tech for enterprise efficiencies and new business models, public blockchain interfaces are key to making sure that all of these chains will be interoperable and not recreate the silos of current enterprise infrastructure.

Finally, Ethereum (ETH) continued its slide over the past week to under $200, which many are attributing to liquidation of the currency by ICO projects that raised ETH. This is the natural flipside to the run up we saw last year when ETH was in demand to fund these projects. Teams have realized that they need to diversify their holdings to de-risk their dependence on one currency. Next year is one to watch for ETH as highly anticipated upgrades start to roll out.
Yours Truly,
Jalak Jobanputra
Founder, Future\Perfect Ventures
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"I look at the macro view and the way the world has changed. I started investing in '99, and we were just moving to the internet phase from the PC phase and starting to open up more data but data still resided in databases and we still looked at centralized institutions. That was just the ethos of the 20th century. As time has gone on- Microsoft just bought Github last week and that would have seemed unreal just a few years ago that Microsoft is buying an open sourced developer community because they were not the biggest supporters of open source for a long time. So we're just moving towards more of an open source world. This next generation cares about privacy. You can't ignore all of those macro forces. Even within the financial sector, everything used to reside only within the four walls of a company and then I remember investing in Yodlee in 2000 and they started opening up APIs - customer data between banks and now that's just standard practice. That's where we're headed and that's where I think it's the timing that also matters as well as the technology. " - Jalak Jobanputra