|Welcome to issue #19 of the DeFi DeBrief, your weekly digest of the biggest news in DeFi.
Latest interest rate rise was just 0.5% 😅
A moment that many investors had been waiting for: the US Federal Reserve raised interest rates by a mere 0.5% on Wednesday last week in response to better-than-expected inflation data.
Now, as Jerome Powell said, “50 basis points is still a historically large increase, and we still have some ways to go.” Even so, the latest hike is the first signal of a slowdown in the ‘pace’ of said hikes.
This comes after a rise of 0.75% in the past four meetings.
Why should you care?
Riskier investments are unlikely to see a tailwind until inflation abates and rates reverse; that’s why the Fed’s latest decision is a positive signal. It suggests we’re moving in the right direction, even if there’s a long way to go.
Interest rates are still at the highest level in 15 years, with the peak rate expected to be over 5% by some point next year. But when we pass peak interest rates, there could well be a return to a slightly more risk-on attitude.
And that’s when bearish sentiment could fade.
|IN THE HEADLINES
Visa steps ever closer to the blockchain 🤝
Visa continues its march into the world of blockchain, releasing a paper detailing how the global payments giant could one day enable automatic payments on the Ethereum network.
Visa wants to help Ethereum users schedule auto-payments from self-custodial crypto wallets. Now, there’s no such capability on the Ethereum mainnet, although something called “Account Abstraction” may soon allow it.
That said, Visa’s ongoing blockchain ambitions show just how attractive the sector is to mainstream payments companies.
IN THE HEADLINES
Mazars cuts ties with crypto firms ✂️
Auditing firm Mazars, publisher of Binance’s proof of reserves report, has cut ties with clients in the crypto industry. The move follows the collapse of FTX, with rumours swirling about the trustworthiness of other players’ finances.
Binance had sought to temper concerns about its position by releasing its proof-of-reserves, detailing how much crypto the exchange holds. The report was released, then swiftly withdrawn following the Mazars announcement.
Mazars has also ceased working with Crypto.com and KuCoin.
Five short reads catching our eye this week:
TEMPERATURE CHECK 🔥
*Data last updated at 08:00 on 21st December.
TWEET CHECK 🐦
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