CRYPTO

Cross-border coinage

For nearly 30 countries or territories, inward-flowing remittances—noncommercial money transfers that typically go to family and friends in another country—make up more than 10% of the annual GDP. $540 billion in remittances flowed to low- and middle-income countries in 2020, per the World Bank. 

Consider the coin: Most remittance payments are made via wire transfer or bank transfer, but increasingly, people are using cryptocurrency to send money back home. 

Mexican crypto company Bitso says it now handles 2.5% of remittances sent from the US to Mexico—totaling more than $1 billion annually. And RippleNet, the blockchain-based payments network for financial institutions that’s owned by crypto company Ripple, saw fivefold growth in transactions between 2019 and 2020. Some of the biggest players in the money transfer space, like Western Union and MoneyGram, are beginning to team up with crypto companies.

“Blockchain’s strengths really play to exactly what’s missing in the remittance space...whether it’s processing costs, transaction speed, complexity,” Grace Broadbent, a research analyst at Insider Intelligence, told us. 

Pros and coins

Traditional remittances can take days to clear. In some areas of the world, that’s a minor inconvenience—but in others, where the local currency is more volatile, it could significantly change the value of the payment. 

• Crypto, on the other hand, can take a matter of seconds: Broadbent said that sending a crypto remittance through RippleNet usually takes between four and six seconds to clear on its network.  

Crypto can also reduce fees. As more money transfer companies partner up with exchanges and offer crypto options, fees will still exist. But they’ll probably be lower than traditional methods. 

“If there's a criticism about the remittance industry...it's that fees are high,” Alex Holmes, CEO of money transfer company MoneyGram, said. But since blockchain aims to cut out extra steps involved in sending money back and forth, it can lead to anywhere from 40% to 80% in cost reduction, Broadbent said.

• Holmes said MoneyGram charges an average of 2.9%, compared to the World Bank’s reported global average of 6.4%. 
• Sendi Young, European lead for Ripple, told us its cost per transaction is about 90% less than the status quo for legacy money transfer companies. 

One main drawback for crypto remittances is that...well...it’s still hard to actually buy things with crypto. As a result, crypto holders typically have to convert it into their local fiat currency. And that’s tough for many people who rely on remittances for quick access to funds. 

• “Most of the remittances that we send are picked up within 24 hours, and, you know, from conversations with the receivers, we know that a lot of that money is spent within 24-to-48 hours on food, shelter, education, clothing, and...life’s necessities,” Holmes said. 

Looking ahead: Broadbent predicts we’ll see stablecoins—a way to tokenize fiat currency, like the US dollar—play a bigger role in crypto remittances as regulations firm up, adding that they’ll likely be a “huge catalyst for future adoption.” The stablecoin blends the best features of crypto and fiat currencies, she said—a speedy transaction, a lower cost, and even less volatility.

Click here to read the full story.—HF

VC

Funding recap: July 2021 edition

Another month, another eye-popping report on the pace of startup funding. Per Crunchbase data, startup investors doled out $61 billion in July, matching the all-time record for monthly global funding…a record that was set the month before, in June 2021. And 53 new unicorns (private companies worth $1+ billion) were created in the month, the second-highest total ever, after March 2021.

Here are some of the notable rounds from last month: 

• Rivian, the electric vehicle startup, raised an additional $2.5 billion. It’s raised $10.5 billion in total, although it’s yet to deliver a single vehicle. It planned to begin delivering its R1T pickup truck in July, but has bumped the rollout to September. 
• PsiQuantum raised $450 million to create a commercially viable quantum computer. It’s raised $665 million since it was founded in 2016, and in May it tapped GlobalFoundries to start making the specialized photonic chips it designed for its computer. 

• NotCo, a Chile-based food-tech startup founded in 2015, raised a $235 million series D. The round gave it a $1.5 billion valuation, earning it unicorn status. NotCo uses AI to develop appealing and convincing plant-based meat and dairy substitutes.

Bottom line: Like every other startup category, emerging tech companies are reaping the benefits of an unprecedented funding environment.—DM 

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FROM THE CREW

Last month, we wrote a series of articles all about how emerging technologies are transforming travel as we know it. In case you missed it, here’s a roundup: 

• How Las Vegas, premier tourist destination, is attempting to smart-ify itself 
• What it’s like to ride in a fully driverless Waymo robotaxi
• One of China’s biggest automakers is using radar-enhancing AI for self-driving
• How AR and VR could enhance travel

Looking ahead: Keep your eyes peeled for crypto pieces throughout this month...like the one at the top of this newsletter...and bookmark this hub if you want to keep up with all of our crypto content in August.  

BITS & BYTES

Stat: Russia plans to subsidize up to 25% of the purchase price of any Russian-made electric vehicle. 

Quote: “It is an absolutely appalling idea, because it is going to lead to distributed bulk surveillance of...our phones and laptops.”—Ross Anderson, professor of security engineering at the University of Cambridge, following the news that Apple will begin using an algorithm to scan iPhones for child abuse

Read: Women in tech are being erased. 

Listen: Our cofounder and executive chairman, Alex Lieberman, is no stranger to learning new things. And he’s discussing just that on this episode of his (he didn’t pay us to say this) terrific podcast, Founder’s Journal. On “Learning How to Learn,” Alex shares the four-step process for efficiently learning about any new topic—personal or professional. Listen to Founder’s Journal here.

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WHAT ELSE IS BREWING

• Qualcomm made a $4.3 billion offer to buy Veoneer, an advanced driver assistance system company. 
• Biden wants 50% of all new car sales to be electric by 2030, up from his previously reported goal of 40%.
• Verizon is using an AI model to help build out its 5G network and choose spots for transmitters.
• John Deere spent $250 million on autonomous tractor startup Bear Flag Robotics.

GOING PHISHING

Three of the following news stories are true, and one...we made up. Can you spot the odd one out?

1. Leaked reports show the IOC shot down the idea of a fully robotic Olympic team at the 2020 Tokyo games. 
2. A robot created a Super Mario Bros. mural with 100,000 dominoes in 24 hours.
3. A Chinese company debuted an underwater drone “robo-fish” at a recent military expo.
4. Team USA’s Olympics uniforms include wearable air conditioning. 

TECHS AND BALANCES

On Tuesday, SEC Chair Gary Gensler called crypto the “Wild West” and asked Congress for more resources to regulate digital currencies. 

In his framing, everyone from the bitcoin maximalists to the dogecoin shills should be celebrating more law and order: Gensler sees financial regulation as both consumer protection and a way to foster broader crypto adoption and usage. 

Also: The Senate is currently wrangling over who should be exempt from a provision of the infrastructure bill that mandates stricter tax reporting for crypto. 

ICYMI

Catch up on the top Emerging Tech Brew stories from the past few editions: 

• Biden’s electric vehicle goals meet reality
• NFT startup Bitski wants to make decentralization approachable
• How mixed reality could transform the travel industry in unexpected ways

GOING PHISHING ANSWER

Plenty of robots have been present throughout the games, but there was never any plan for them to actually compete against humans. As far as we know, that is... 

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