The resurgence of digital assets in mainstream finance brings attention to Bitcoin automated teller machines (BTMs), with experts cautioning against the financial risks inherent in these machines, particularly in areas predominantly inhabited by Black and Latino residents.

BTMs, physical kiosks facilitating crypto conversions, have proliferated, especially during the pandemic, reaching approximately 31,100 units nationwide. However, investigations into the BTM boom reveal a disproportionate presence in Black and Latino neighborhoods, coupled with exorbitant transaction fees of up to 22%.

Bitcoin Depot, the leading US operator with around 7,300 BTMs as of April 8th, boasts high fees despite promoting financial inclusion. According to a November 2023 presentation, over 80% of Bitcoin Depot’s customers earn less than $80,000 annually. However, critics liken the high fees to predatory lending practices.

Despite claims of non-discriminatory placement, a Bloomberg analysis indicates a correlation between Bitcoin Depot’s BTM locations and areas with large Black and Latino populations, particularly in states like Georgia and Texas.

While some BTMs operate in major stores like Circle K and Cumberland Farms, local businesses often host them, with operators either paying rent or providing a monthly stipend to the store owners.

Transaction fees vary, with some BTMs charging flat rates plus a percentage fee. Critics dubbed this practice “predatory inclusion,” akin to payday lending, targeting marginalized communities.

In states like Alabama and Dallas, BTM placement aligns with higher concentrations of Black and Latino residents, raising concerns about equity and accessibility.

Bitcoin Depot’s CEO, Brandon Mintz, defends the fee structure, citing operating expenses and convenience as key factors. However, competitors CoinFlip and Bitstop also impose steep fees, up to 22%.

Despite the limited utility of BTMs for selling crypto, Bitcoin Depot eyes expansion, awaiting approval for operations in New York, a potential market expected to boost the company’s size significantly.

Critics like Aaron Klein from the Brookings Institution caution against the proliferation of BTMs, highlighting their limited functionality and the risks associated with crypto investments.

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Kraken, the second-largest U.S.-based crypto exchange, has unveiled its own crypto wallet, joining the ranks of competitors such as Coinbase(NASDAQ:COIN) and MetaMask in the saturated market.

The newly launched self-custodial “Kraken Wallet,” debuting on Wednesday, offers support for eight blockchains including Bitcoin, Ethereum, Solana, and Dogecoin. Notably, it is the first wallet from a major exchange to be open-sourced, allowing developers to access and contribute to the code. Kraken also incentivizes developers to identify vulnerabilities through its open-source grant program.

Focused on user privacy, Kraken Wallet collects minimal data necessary for functionality, shielding IP addresses and protecting users’ identity and location information. This emphasis aligns with the principles of the crypto space, emphasizing self-custody and privacy.

While Coinbase’s Coinbase Wallet remains popular, other major exchanges like Binance and OKX also offer wallets integrated into their ecosystems. Kraken’s move into the wallet space reflects its commitment to providing users with access to on-chain ecosystems and maintaining a user-centric approach.

Kraken has been expanding its product offerings, including discussions with layer 2 teams to explore building its own layer 2 blockchain. The development of Kraken Wallet underscores the importance of self-custody in the crypto ecosystem, particularly in light of the risks associated with leaving assets on centralized exchanges highlighted by past incidents such as the collapse of FTX crypto exchange in 2022.

Eric Kuhn, Product Director for Kraken Wallet, emphasized the significance of the “your keys, your crypto” ethos and expressed Kraken’s commitment to building the best all-in-one crypto wallet that is open-source, secure, and private.

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Centrifuge, a decentralized finance platform, revealed its intentions in a Wednesday blog post to establish a lending protocol for real-world assets  aimed at institutions on Base, an Ethereum layer-2 network developed by crypto exchange Coinbase.

According to the post, the protocol will enable verified institutions to onboard RWAs and borrow against their RWA holdings.

Anthony Bassili, Coinbase’s head of allocators and tokenization, remarked, “We continue to see significant interest from our institutional clients for easier access to tokenization solutions on-chain.”

This development coincides with Centrifuge’s announcement of raising $15 million in venture capital investment in an “oversubscribed” fundraising round. ParaFi Capital and Greenfield spearheaded the investment, with participation from multiple firms including Arrington Capital, Circle Ventures, Gnosis, The Spartan Group, and Wintermute Ventures.

Following the announcement, CFG, the protocol’s native token, surged by as much as 14% before moderating gains, as per CoinGecko data. Despite a slight pullback, the token remained up by 5% over the past 24 hours, surpassing the sector benchmark CoinDesk DeFi Index’s  1% decline during the same period.

This development occurs amid intensifying competition in the RWA tokenization realm, as digital asset firms and global banks endeavor to migrate traditional financial products like bonds and credit to blockchain infrastructure to enhance efficiency, settlement speed, and transparency. Asset management firm 21.co projected the market for tokenized assets to reach $10 trillion by the end of the decade.

Centrifuge specializes in bringing structured credit products to blockchain, with rwa.xyz data indicating $270 million in active loans on the protocol.

Ben Forman from ParaFi Capital expressed confidence in institutional adoption, stating, “The Centrifuge team is a leader in real-world asset tokenization, taking a deeply thoughtful approach to design decisions around legal, regulatory, and smart contract architecture.”

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In a recent update to its terms of service, PayPal has announced significant changes to its buyer and seller protection policies for non-fungible token (NFT) transactions, effective May 20.

Under the new policy, NFT purchases will no longer be covered by PayPal’s buyer protection program. Additionally, NFT sales exceeding $10,000 will no longer be safeguarded against false claims, chargebacks, or other fraudulent activities that may result in financial losses for sellers.

A spokesperson for PayPal cited the evolving nature of the NFT industry and the uncertainty surrounding proof of order fulfillment as reasons for the policy change.

While the company published a notice about these changes on March 21, the updates went largely unnoticed until now.

According to PayPal’s policy updates page, the revisions to its Purchase Protection Program and Seller Protection Program will come into effect on May 20, 2024. The Seller Protection Program will exclude NFT transactions with a value of $10,000.01 or above unless the buyer claims an Unauthorized Transaction and meets all other eligibility requirements.

Previously, PayPal provided buyer and seller protections for NFT transactions, with the buyer protection program offering refunds for falsely advertised items, and the seller protection program reimbursing sellers affected by payment disputes and fraudulent refund requests.

Despite these changes, PayPal has demonstrated an increasing interest in blockchain-based digital assets in recent years. In 2022, the company introduced support for cryptocurrencies on its platform and filed a patent application for an NFT purchase and transfer system that includes provisions for user royalties.

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