Cryptocurrency roundup: Twitter founder’s “DeFi” platform

It has been a mixed week for crypto with a combination of regulators getting worried about crypto; Jack Dorsey announcing he will launch a decentralised finance (DeFi) platform built around bitcoin; and dogecoin’s co-founder Jack Palmer lambasting cryptocurrencies.

Despite some bullish news for the industry, most cryptocurrencies remained in a sea of red compared to the previous week.

Here are the top stories that caught our eye.

Jack Dorsey says Square will launch a bitcoin “DeFi” platform

Jack Dorsey, the billionaire chief executive of Twitter said on Thursday his mobile payments company Square is due to launch a decentralised finance (DeFi) project using bitcoin.

“Square is creating a new business (joining Seller, Cash App, & Tidal) focused on building an open developer platform with the sole goal of making it easy to create non-custodial, permissionless, and decentralised financial services,” Dorsey said on Twitter.

The news is theoretically a win for bitcoin. Decentralised finance – the blockchain-based form of finance that eliminates intermediaries – has so far mostly been associated with cryptocurrency ether.

But it remains unclear what the business’ exact offering would be and how the project may be monetised. Among other finer details which have yet to be confirmed, the project has also not been named.

The UK will spend £11m to warn younger investors on risks of crypto

The Financial Conduct Authority – the UK’s regulator that oversees financial services – announced on Thursday it would spend £11m in a campaign to educate young investors about the risks and huge losses they can face if they invest in cryptocurrencies.

Research from Interactive published earlier this month shows 45% of young investors’ first investment was made in cryptocurrencies.

“This is a category of consumer that we are not used to engaging with – 18 to 30-year-olds more likely to be drawn in by social media. That’s why we are creating an £11m digital marketing campaign to warn them of the risks,” Nikhil Rathio, chief executive of the FCA said on Thursday in the FCA’s Our Role and Business Plan webinar.

The announcement comes as central banks across the globe are getting increasingly worried about the rise in cryptocurrencies. Many central banks are rushing to build central bank digital currencies (CBDCs) so they are unlikely to want competition.

China particularly has taken a tough stance on cryptocurrencies and earlier this banned cryptocurrency mining in the country and the country’s financial institutions from participating in the crypto space.

Conversely, the Bank of England’s deputy governor, Jon Cunliffe, told CNBC earlier this week that cryptocurrencies haven’t grown big enough to pose a systematic risk to financial stability. “There are issues of investor protection here. These are highly speculative assets,” Cunliffe says. “But they’re not of the size that they would cause financial…