Square to launch bitcoin DeFi platform, CEO Jack Dorsey says
Jodie Gunzberg, CoinDesk Indexes Managing Director joins the Yahoo Finance Live panel to discuss the latest as Jack Dorsey says Square will launch bitcoin DeFi platform.
Video Transcript
ZACK GUZMAN: Well, Bitcoin continues to hold above that key $30,000 level. And it's getting a boost yet again from one of its big fans, Jack Dorsey, CEO of Square and Twitter-- taking to Twitter here to announce that Square is creating a new business focused on building an open developer platform with the sole goal of making it easy to create non-custodial, permissionless, and decentralized financial services.
In his words, primary focus is Bitcoin. Its name is TBD, and it follows his announcement at Bitcoin 2021 in Miami that Square was already going to be working on a wallet in the Bitcoin space. Jack Dorsey doubling down there. For more on that, I want to bring on Jodie Gunzberg, CoinDesk Index's Managing Director here joins the show. Jodie, appreciate you taking the time here to chat.
I mean, we've talked about catalysts in the Bitcoin space-- Bank of America, as you guys reported today, approving Bitcoin futures trading for some clients. And we can get into that. But what does maybe the Square news say about not only Jack Dorsey's commitment to Bitcoin, but also the potential to build DeFi applications on top of it?
JODIE GUNZBERG: Yeah, this news to focus on the fire services on Bitcoin supports the case for even more adoption as it aims to provide new ways to access the financial services that are typically like trading, or borrowing and lending, insurance products, savings products. And the goal is really to make it easier to create these non-custodial, permissionless, and decentralized financial services.
So along with Square's latest project, another factor that could aid the adoption of Bitcoin-based DeFi is the Taproot upgrade that's slated for mid-November. And historically, the Bitcoin blockchain has been considered slower and less efficient than its Ethereum counterpart. So this [INAUDIBLE] to make it easy to use DeFi services on Bitcoin could ramp up adoption and provide greater competition to the Ethereum-based DeFi.
ZACK GUZMAN: Yeah, Jack Dorsey's always seemed hesitant to really embrace Ethereum and what's being built there in the traditional DeFi outlets, but focusing in on doing so on Bitcoin. And when we talk about Bitcoin, that Bank of America news, as CoinDesk reported here, adding futures trading-- I mean, how important is that when it comes to the other big catalysts we've been talking about, and potential institutional excitement around it? I mean, how important is that move from Bank of America?
JODIE GUNZBERG: I think it's huge. And this is one of the key signs of success for any emerging asset class is this institutional adoption. The major financial institutions have approved investment in Bitcoin products. And just the news today that Bank of America approved the use of Bitcoin's futures trading is meaningful, not only for the ability of clients to use Bitcoin to speculate, but to hedge.
And once derivatives markets develop to allow hedging, it's an essential piece of insurance that enables investors to participate in the market and manage their risk. So the deeper liquidity allows more products to be offered and widely distributed. And the fact that the CME group, that's the Chicago Mercantile Exchange, took the leading spot on the list of Bitcoin futures trading platform also shows a continued rise in the institutional participation.
ZACK GUZMAN: Yeah, we've seen a few number of those traditional Wall Street firms adding back their crypto desks, and now this is well-- very interesting to see it all play out. But, Jodie Gunzberg, CoinDesk Index's Managing Director, appreciate you hopping on to chat that with us. Have a great weekend.