The price of Bitcoin has dropped to a one-month low as minutes from the Federal Reserve’s last meeting in December showed that officials discussed shrinking the central bank’s swollen $8.3 trillion balance sheet and raising interest rates sooner than expected.

Decentralized finance (DeFi) money market platform Aave has launched a permissioned lending and liquidity service called Aave Arc to help institutions participate in decentralized finance while maintaining regulatory compliance.

Publicly-traded money transfer company MoneyGram has completed a strategic minority investment in Coinme, a cryptocurrency cash exchange in the United States. MoneyGram now owns 4% of Coinme.

DeFi, short for Decentralized Finance, is a term used to describe financial products that are built on permissionless and decentralized blockchains like Ethereum and Solana.

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Top stories in the Crypto Roundup today:

• Bitcoin Drops After ‘Hawkish’ Fed Minutes
• Aave Launches Permissioned DeFi Pools for Institutions
• MoneyGram Makes Minority Investment in Coinme
• What is Decentralized Finance (DeFi)?
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Bitcoin Drops After ‘Hawkish’ Fed Minutes

The price of Bitcoin has dropped to a one-month low as minutes from the Federal Reserve’s last meeting in December showed that officials discussed shrinking the central bank’s swollen $8.3 trillion balance sheet and raising interest rates sooner than expected.

The cryptocurrency’s price has rallied over the last few months with a growing number of investors betting that the more than $4 trillion of money printed by the Federal Reserve - made to support the coronavirus-hit economy - would spur inflation, with BTC acting as a hedge against it.

The Federal Reserve’s new potentially hawkish stance – in which it allows interest rates to rise and shrinks its balance sheet to control inflation – has seemingly put downward pressure on Bitcoin’s price.

From the minutes from the Federal Reserve’s Dec. 14-15 meeting:

“Some participants judged that a significant amount of balance sheet shrinkage could be appropriate over the normalization process, especially in light of abundant liquidity in money markets,”

Equities markets also slid on a faster-than-expected rise in interest rates, which weighed on assets more sensitive to such a move, including tech and real estate stocks.

Aave Launches Permissioned DeFi Pools for Institutions

Decentralized finance (DeFi) money market platform Aave has launched a permissioned lending and liquidity service called Aave Arc to help institutions participate in decentralized finance while maintaining regulatory compliance.

Aave Arc is a permissioned liquidity pool specifically designed for institutions to maintain compliance. The first of 30 entities in the whitelist for Aave Arc was Fireblocks, an institutional digital asset custodian.

The firm explained the pool “enables whitelisted institutions to securely participate in DeFi as liquidity suppliers and borrowers.” Aave Arc users must go through due diligence procedures to gain access, including know-your-customer and anti-money laundering checks.

Fireblocks also serves as a whitelisting agent for Aave Arc, ensuring institutions go through these checks. It has already approved 30 financial institutions to participate “as suppliers, borrowers and liquidators.” These include Anubi Capital, Celsius, Canvas Digital, GSR, and CoinShares.

MoneyGram Makes Minority Investment in Coinme

Publicly-traded money transfer company MoneyGram has completed a strategic minority investment in Coinme, a cryptocurrency cash exchange in the United States. MoneyGram now owns 4% of Coinme.

The investment builds on a partnership MoneyGram and Coinme built in May 2021, which was created to push a crypto-to-cash model by connecting BTC to fiat currency. The companies are now working on additional initiatives together.

Coinme was founded in 2014 and operates in 48 U.S. states. It plans to expand globally in the future and was recently named one of the fastest-growing tech companies in North America by Deloitte.

What is Decentralized Finance (DeFi)?

DeFi, short for Decentralized Finance, is a term used to describe financial products that are built on permissionless and decentralized blockchains like Ethereum and Solana.

This includes all sorts of exciting financial applications that offer lending, borrowing, trading, insurance and much more. More broadly, DeFi refers to a movement, where the goal is to build a better financial system by leveraging the power of permissionless blockchain technology to create one that is transparent, permissionless, cheaper, open-source and decentralized.

Learn more through CryptoCompare’s complete DeFi guide.

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