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G20 Lays Regulatory Foundation to Accept Digital Payments by November Summit

G20 officials have announced that they will begin the preliminary regulatory groundwork for the group to accept digital payments with the work to commence in October.

As announced by its officials, the G20 summit which is represented by 19 countries and the European Union will begin preparations for the group to accept digital payments in October. Digital currency payments could be realized by G20 members before their next summit slated for Riyadh, Saudi Arabia next month.

According to a Kyudo News on July 11, the G20 officials have enacted a policy change in their acceptance of digital assets and have begun building the necessary infrastructure in direct response to China’s accelerated development of its digital Yuan and Facebook’s development of Libra.

New Risks Means New G20 Policy

At the 2019 G20 summit in Osaka in June 2019, the G20 officials agreed that crypto-assets can bring significant benefit to the financial system and the broader economy, according to the “G20 Osaka Leaders’ Declaration”. The officials also expressed that that digital assets do not carry any threat to monetary stability and asserted that technological innovation in payments could bring significant benefits to the economy.

This stance by the officials was contradicted a few months later in October 2019, when the Financial Stability Board (FSB), the G20 body published a study on the challenges that stablecoins pose to the global economy. The FSB stated that regulatory frameworks have already covered several activities associated with stablecoins, although there are other risks that many national regulators could be left unprepared for as well as threats to public policy and financial regulation.

The G20’s policy towards digital assets which is largely steered by the European Union appears to be continuing to react to developments withing the digital assets space, and this latest policy change enactment appears to be mainly driven by China’s announcement that their central bank digital currency (CBDC) architecture has been completed.

Bitcoin Forms “Ascending Triangle”, Tries to Rebound Above $35,000 Crucial Level

Bitcoin price continues with a mixture of red and green, currently up by 1.24% and trading at $34,374 as of 04:46 UTC AM during the intraday. For the last 24 hours, BTC’s market capitalisation stands at $52,79 billion, a decline of 9.17%.

The crypto seems trying to reverse the past losses witnessed yesterday. It sets to initiate recent recovery momentum from the lows experienced during the last two weeks that reached $32,112 on July 8.

The 4-hour chart shows an ascending triangle chart that signals a potential bullish trend, indicating a temporary consolidation before the price continues the uptrend. Buyers push the price up while sellers do not have enough interest to form a new lower low.

However, the presence of short candlestick bodies indicates a weak uptrend, meaning that the uptrend would be slow because of the relatively balanced strength ratio between the buyers and sellers.

The MACD lines moved upwards and have crossed the 0-level, which indicate a potential uptrend. The convergence of the two lines signals that the uptrend is gaining strength as the current prices rise faster than the past prices.

The bullish trend is further confirmed by the Relative Strength Index (RSI), which is above 50 (standing at 59.97), thus indicating that Bitcoin is in the bull territory.

BTC recently rebounded despite mounting regulatory concerns. Last week on Friday, July 9, Bitcoin defied the warning issued by Tesla CEO Elon Musk, who warned about BTC and ETH, slamming their transaction systems.

Musk tweeted that the world’s two biggest cryptocurrencies pursued a multi-layer transaction system, but their transaction rate was “slow” and cost “high”. Instead, Bitcoin made an impressive resistance and traded above at $32,700.

On Friday, July 9, BTC further defied a fresh warning issued by US Senator Elizabeth Warren, who raised concerns about the risks posed to financial markets and consumers by the crypto market.

Meanwhile, the evidence of small banks and multinational institutions considering offering Bitcoin services to both wealthy and retail clients is a big achievement for the crypto.

The flagship largest cryptocurrency is expected to remain to trade in a $35,000 resistance zone and $32,000 support zone.

However, the thesis of the bullish trend can be invalidated if sellers overcome buyers’ interest and push the price down.

Binance Stops Trading Of Stock Tokens amid increasing Global Regulatory Scrutiny

Binance announced the completion of the 16th quarterly Binance coin (BNB) elimination on Monday, 1,296,728 BNB (estimated $393.6million) has been burned.

“The latest quarterly burn includes the actual burning of 1,291,565 BNB, plus an additional 5,163 BNB that was effectively burned via the Pioneer Burn Program,” according to the statement. As per the white paper, the remaining locked team BNB are now unlocked and have been moved to the team address.

This burning operation just comes after the suspension announcement last Friday, July 16, that Binance will no longer offer digital tokens linked to shares as the Hong Kong Securities and Futures Commission (SFC) imposed a crackdown on Binance, banning its sales of stock token offerings in the city.

Stock tokens, commonly recognised as tokenised stocks, are blockchain-based shares of publicly traded companies. Unlike traditional shares, stock tokens can be purchased in fractions – a feature particularly useful for expensive stocks.

Binance started trading its stock tokens in April this year and allowed users to purchase a fraction of publicly-traded companies’ shares without paying commission fees. The exchange has offered five stock tokens such as MicroStrategy, Tesla, Microsoft, Coinbase, and Apple.

The shutdown announced last Friday disallowing Binance trading of its stock tokens, and users of the exchange will no longer be able to purchase stock tokens, effective immediately. The company said the existing stockholders should sell their holdings before October 14. If they do not sell by such data, their stock token positions will be closed on October 15.

Binance’s announcement came a few hours before the Hong Kong Securities and Futures Commission issued a warning on Friday, saying that Binance is not licensed to carry out a regulated activity in the city, particularly offering stock tokens.

“In Hong Kong, Stock Tokens are likely to be ‘securities’ under the Securities and Futures Ordinance (SFO), and if so, they are subject to the regulatory remit of the SFC,” the regulator stated.

“The SFC warns that where the Stock Tokens are ‘securities,’ marketing and or distributing such tokens – whether in Hong Kong or targeting Hong Kong investors – constitute a ‘regulated activity’ and require a license from the SFC unless an applicable exemption applies,” the regulator further said.

Binance had been offering stock tokens through a partnership with CM-Equity AG, German Financial services firm. Shares held by CM-Equity AG fully backs each token.

The exchange revealed on Friday that CM-Equity AG is developing its stock tokens trading portal for residents of Switzerland and the EEA (European Economic Area) and that Binance users in such regions could use the portal once launched.

A Binance spokesperson did not comment on the move initiated by the SFC, which came a day after Italy’s financial regulator made a similar announcement.

However, the spokesperson said that Binance does not currently have crypto business operations in Hong Kong and stated that the exchange takes its legal obligations seriously.

It is not clear whether regulators worldwide have coordinated their efforts, which have built unprecedented pressure on the largest cryptocurrency exchange in the world.

What’s wrong with Binance?

Apart from Hong Kong’s warning, Italy’s security regulator also announced that Binance was not authorised to offer investment services to Italians last Thursday, July 15.

Global regulators have issued warnings against Binance, drawing attention to the exchange’s business operations and its survival in the future, including Thailand, Singapore, Canada, The Cayman Islands, and Japan have also issued similar warnings about the crypto exchange.

In April, Germany’s Federal Financial Supervisory Authority (BaFin) said that Binance might be in breach of the nation’s securities laws regarding its stock token offerings. Last month, The U.K.’s Financial Conduct Authority ordered Binance not to carry out any regulated activity in the nation.

In short, regulators in multiple nations have announced that they are holding investigations against Binance or the crypto exchange is not authorised to operate within their borders.

Besides that, more nations have warned users about Binance. Many payment processors or banks, majorly in the UK and Europe, have subsequently cut off the crypto exchange.

Like any other centralised crypto platform, what is happening to the Binance crypto exchange may signal how regulatory authorities will approach cryptocurrency operations. The enforcement actions against Binance hint at what other crypto platforms are likely to expect.

Circle Files with The US SEC Intends to Become a National Cryptocurrency Bank

Circle, the firm behind stablecoin known as USDC, a digital token pegged to the US dollar, has filed with the US Securities and Exchange Commission to become a federally chartered national commercial bank.

In a regulatory filing submitted on Monday, August 9, Circle payments and digital currency firm stated that it is planning to push for a national bank charter to move some of its payment processing services in-house.

Circle said in the filing statement that it relies heavily on third parties for core services, like payment processing and wallets that creates business risks. Therefore, Circle stated that one potential solution is to push for a banking charter or attempt to acquire an existing national bank.:

“As part of our strategy to reduce our dependence on third parties, we may in the future consider pursuing a U.S. national bank charter or evaluate the acquisition of a national bank. This would allow us to access the Federal Reserve System directly, reducing the costs and time for settling transactions.”

The filing stated that Circle’s blockchain-based services rely on Algorand and Ethereum blockchains. The filing further mentioned that Circle’s traditional payment infrastructure relies on its relationships with financial institutions, which “sponsor” the firm into various payment networks.

Circle Seeking to Expand Its Business

On July 9, Circle announced plans to go public in a merger with special purpose acquisition firm Concord Acquisition corporation. Monday’s filing was a proxy statement for Concord’s shareholders to weigh approval of the public deal.

The deal valued Circle at $4.5 billion and came a few weeks after raising a $440 million funding round from investors including Willett Advisors, Fidelity, and Marshall Wace.

During that, Jeremy Allaire Circle CEO said that through such strategic transaction and the ultimate public debt, the company is taking a bigger step forward, with the relationships and capital required to develop a global-scale internet financial services firm that can help businesses everywhere to connect into a more effective, inclusive, and open global economic system.

Allaire stated that the desire to go public came from the growth that USDC stablecoin was experiencing over the previous year.

Allaire further explained that Circle saw a huge opportunity to raise capital and build a significant public firm with transparency and visibility to the institutions and enterprises that are building on top of the firm. That increased transparency brought on by going public could assist in alleviating fears surrounding stablecoins, Allaire said.

Currently, USDC is the eighth-largest cryptocurrency by market capitalization, and it is the second-largest stablecoin, with $26 billion of market value, behind Tether USDT’s $62 billion, according to CoinMarketCap.com.

Andreessen Horowitz Appoints FinCEN Exec Michele Korver as Head of Regulatory

Andreessen Horowitz, a U.S. Venture capital firm, also known as a16z, announced Tuesday for the appointment of Michele Korver, an official at the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN), as the company’s new head of regulatory.

Korver has served over 25 years in government and regulatory roles and is recognized as one of the leading federal prosecutors in cryptocurrency. The government and law-enforcement veteran recently served as the chief digital currency advisor at the U.S. Financial Crimes Enforcement Network (FinCEN), advising on digital asset policy. Korver spent less than nine months at FinCEN when she joined the agency in July 2021 after almost four years working as a digital currency counsel for the U.S. Department of Justice.

Horowitz hires Korver as the venture capital firm to continue pushing into crypto and web3. “It is hard to imagine someone better positioned to navigate and help shape the rapidly evolving web3 regulatory landscape. Korver will work with companies building products in the web3 space,” a16Z mentioned in a statement.

Korver talked about her new appointment via Twitter, saying: “I’m now excited to join a16z crypto and work directly with web3 projects to help them thrive in a rapidly-developing regulatory environment. a16z crypto was an early supporter of crypto and web3, and I’ve long admired their team and the visionary entrepreneurs they’ve backed. It’s clear to me that web3 and its underlying crypto technology can solve critical challenges of national importance.”

Helping Firms Investing Crypto and Web3 Projects

In January, Andreessen Horowitz announced that it plans to raise $4.5 billion in a fundraising round to support start-up projects related to blockchain and Web3 technology. The venture capital firm said that it would raise $3.5 billion for its crypto venture fund, which will be used to invest in crypto start-ups and projects seeking investment for initiatives. The company also planned to allocate another $1 billion; a fund focused on investing in new Web3 projects.

A16z has been an early and leading investor in numerous cutting-edge technology projects. In the past, prominent venture capital companies invested in crypto firms, including Protocol Labs, Polychain Capital, Opensea, Coinbase, Solana Labs, and Uniswap.

Founded in 2009, a16z currently manages more than $30 billion in assets in multiple funds across several sectors. The firm was one of the first major investors in companies such as Skype, Facebook, and Twitter.

The V.C. company has had little trouble raising substantial funds from major institutions eager to develop innovative projects to disrupt traditional financial institutions.

If a16z manages to attract investors to raise $4.5 billion, then it would become a company with the biggest venture fund in the industry, surpassing Paradigm’s $2.5 billion in November 2021.

Image source: a16z.com

Bermuda’s Jewel Bank Receives Regulatory Approval to Run as Digital Asset Bank

Jewel Bank announced on Tuesday that it has obtained a full bank license and a digital asset business license from the Bermuda Monetary Authority (BMA). The license acquisition has enabled Jewel Bank to become the first digital asset bank in the island nation.

The approval from an integrated regulator of the financial services sector in Bermuda allows Jewel Bank to provide service to digital asset firms in non-sanctioned countries worldwide around, as well as in the US. The Bermuda-based bank will mainly serve the needs of non-US licensed firms, providing them with the essential digital asset banking, fiat on/off ramps, payments, custody, crypto-collateralized lending, stablecoin issuance, and real-time settlement services.

Jewel Bank’s banking infrastructure aims to fill a critical gap in the rising global digital asset market by providing globally accessible digital asset banking.

Jewel Bank has innovated by itself as a direct issuer of fully reserved fiat-backed stablecoins issued against fiat deposits. The digital bank plans to offer USD stablecoin and other single fiat currencies. The bank intends to provide stablecoins “as-a-Service” to other banks and non-bank financial institutions that do not have the same regulatory, technology, and compliance capabilities.

Jewel Bank intends to provide domestic retail banking services in Bermuda and assist in accelerating Bermuda’s digital transformation.

Stablecoins’ Impact on Banking

Stablecoins have witnessed significant growth in the few previous years, serving as a potential breakthrough innovation in the future of payments. The market is proliferating, with new stablecoin issuers putting pressure on banks to dive in.

In January, PayPal announced plans to launch its own stablecoin under the name ‘PayPal Coin.’ PayPal’s move came as Facebook confirmed that it still intends to release its own stablecoin, Diem cryptocurrency.

Government and technology initiatives have driven the value of the stablecoin market up to about $140 billion — seven times higher than two years ago.

In January last year, the Office of the Comptroller of the Currency (OCC), led by former Acting Comptroller of the Currency, Brian Brooks, allowed US federal banks to participate as nodes on a blockchain or conduct payments using stablecoins.

While tech companies have taken the lead in stablecoin participation, many banks are also becoming active developers. The move hints that the stablecoin industry could follow the same path as the mobile-wallet market.

In January, Russia’s largest retail bank, Sberbank, sent an application to Russia’s Central Bank to register its blockchain platform to issue its own stablecoin.

Sygnum Singapore Secures MPI License from MAS

Sygnum Singapore’s announcement on 3rd October 2023 concerning its acquisition of a Major Payment Institution Licence (MPIL) from the Monetary Authority of Singapore (MAS) echoes a burgeoning narrative of regulatory evolution in the city-state’s digital asset sector. This development not only broadens Sygnum Singapore’s service suite but also augments the city-state’s stance as a burgeoning hub for digital asset enterprises.

The MPIL acquisition by Sygnum Singapore isn’t an isolated event, but part of a broader regulatory schema in Singapore aimed at nurturing a structured yet competitive digital asset environment. Recently, as reported by Blockchain.News, other notable entities such as Coinbase, GSR Markets, Blockchain.com, and Crypto.com have also navigated through Singapore’s regulatory milieu to secure MPI licenses. This wave of regulatory approvals highlights MAS’ progressive approach towards fostering a robust, regulated digital asset marketplace.

In the wake of these regulatory advancements, a competitive landscape is emerging with various entities like Coinbase, Blockchain.com, and Crypto.com also securing MPI licenses. This regulatory nod allows Sygnum Singapore to navigate this competitive terrain with a fortified regulatory standing, potentially attracting a broader segment of accredited investors and institutional clientele keen on regulatory compliance.

Sygnum’s Service Expansion

The MPIL enables Sygnum Singapore to augment its service suite, providing a regulated brokerage platform for digital asset trading. The license facilitates the launch of Sygnum’s regulated Digital Payment Token (DPT) brokerage service, offering a streamlined fiat-digital asset gateway. This expanded service suite is set to provide accredited investors and institutions with competitive spreads, deep liquidity, and rapid trade settlements, fostering a more vibrant digital asset trading ecosystem in Singapore and potentially beyond.

Securing the MPIL not only broadens Sygnum Singapore’s regulatory framework but also propels its strategic growth initiatives. The license could act as a catalyst for Sygnum to introduce innovative digital asset products and services, deepen engagement with institutional clients, and expand its market reach. This strategic move by Sygnum Singapore is likely to reverberate through the digital asset market, enriching the crypto market’s liquidity and vibrancy.

The acquisition of the MPIL by Sygnum Singapore signifies a meaningful step in the firm’s growth trajectory and a notable development in Singapore’s evolving digital asset regulatory landscape. Amidst a competitive yet regulated market landscape, Sygnum Singapore’s fortified regulatory standing positions it favorably, potentially paving the way for further innovation and engagement in the digital asset sector.