📉Binance's Market Share Plummets,🤾Venezuela Dodges Sanctions with USDT,🚀Turkey Tops Global Stablecoin Usage Amid Inflation Crisis

April 27, 2024

Your 5 minute emerging markets web3 weekly update

In This Issue

Asia
🔸Binance’s Bitcoin Market Share Plummets Globally, Is the Giant Falling?
🔸CoinMENA and Zodia Markets Partner To Enhance Crypto Trading Infrastructure and Boost Liquidity in MENA

Latin America and the Caribbean
🔸USDT for Oil: Venezuela Is Increasingly Relying on Tether to Evade US Sanctions
🔸Bitcoin as Legal Tender in Paraguay: A Real Legislative Effort or Just Digital Gold Dust?

Eastern Europe
🔸Amid High Inflation, Turkey Becomes the Global Leader in Stablecoin Purchases: Chainalysis
🔸Russia's Central Bank and Rosfinmonitoring Launch 'Know Your Crypto Client' Pilot To Monitor Crypto Transactions

Africa
🔸South Africa's FSCA Approves 75 Crypto Service Providers, More Applications Under Review
🔸Mauritania Explores CBDC Future with G+D Collaboration

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Asia

Image Credit: Dall-E 3

Binance's dominance in the global bitcoin trading market has significantly declined, with its market share plummeting from 81.3% to 55.3%, while its share in the altcoin market also dropped from 58% to 50.5%. This decrease is largely attributed to their decision to end a zero trading fee promotion, amidst an industry shift where smaller exchanges like Bybit and OKX are gaining ground, increasing their market shares to 9.3% and 7.3% in non-US bitcoin trading, respectively, buoyed by expansions in Asia and favorable regulatory environments. Under the leadership of Richard Teng, Binance is tightening governance and operational protocols to regain its market position, against the backdrop of a broader industry buying surge driven by a significant rise in bitcoin prices.

CoinMENA, a digital asset platform licensed in Bahrain and the UAE, has formed a strategic partnership with Zodia Markets, a UK-based digital asset trading firm backed by Standard Chartered, to enhance trading infrastructure and operational efficiency. This collaboration aims to improve liquidity and reduce slippage for transactions involving G10 and GCC currencies against stablecoins and other cryptocurrencies, leveraging Zodia's expertise in serving institutional clients and CoinMENA's strong presence in the MENA region. With both companies optimistic amid increasing investment interest in the sector, the partnership is seen as a strategic move to bridge traditional finance with the digital asset space and enhance the growth and adoption of digital currencies in the Middle East and North Africa.

Latin America and the Caribbean

Image Credit: Dall-E 3

Venezuela's state oil company, PDVSA, is accelerating its adoption of USDT (Tether), for oil exports to circumvent the reintroduction of U.S. oil sanctions and the non-renewal of a general license that allowed for certain transactions. Moving away from traditional banking systems towards cryptocurrency-based transactions, this shift aims to mitigate the risk of having sale proceeds frozen in foreign bank accounts. Despite the U.S. dollar being the standard currency for global oil transactions, PDVSA has increasingly demanded prepayment in USDT for oil trades and is requiring new customers to maintain cryptocurrency wallets. "USDT transactions…don't pass any trader's compliance department, so the only way to make it work is working with an intermediary," one trader said, referring to how paying for oil with digital currencies is still highly unusual. PDVSA has increased its reliance on middlemen for its oil sales, particularly to China, since the U.S. imposed secondary sanctions on Venezuela in 2020, disrupting its relationship with large trading partners. Tether said it respects the U.S. Treasury's list of sanctioned entities and "is committed to working to ensure sanction addresses are frozen promptly."

Paraguay may soon join El Salvador in adopting Bitcoin as legal tender, following a new bill introduced by Deputy Derlis Rodríguez, currently under discussion in Paraguay's Chamber of Deputies. The proposed legislation, detailed in 60 articles, aims to integrate Bitcoin into Paraguay’s financial ecosystem as an 'experimental' asset with 'unlimited legal tender' status alongside the local currency, the guaraní. Though it remains unclear what this designation fully entails. This bill is part of a broader legislative effort, two other bills under consideration: one regulating virtual asset activities and promoting local investment, and another that seeks to ban Bitcoin mining, reflecting a broader debate and diverse legislative approaches to cryptocurrency regulation in Paraguay.

Eastern Europe

Image Credit: Chainalysis

Turkey has become the world's leading nation in stablecoin purchases relative to its GDP, with transactions accounting for 4.3% of its $907 billion economy, as reported by Chainalysis in "The 2024 Crypto Spring Report." The growing reliance on stablecoins in Turkey is attributed to local currency volatility, with residents turning to cryptocurrencies like USDT to preserve value amid high inflation rates. While the U.S. remains the largest market for stablecoin transactions globally, its stablecoin purchases as a percentage of GDP are just 0.5%, ranking fourth behind Turkey, Thailand, and Georgia.

The Central Bank of Russia, in collaboration with Rosfinmonitoring (official website; Wikipedia) and five major banks, is piloting a new "Know Your Crypto Client" program, which may extend beyond its initial May 2024 deadline depending on its outcomes. The pilot aims to integrate cryptocurrency transactions with traditional financial systems for enhanced compliance and establish clear protocols for crypto-related transactions, including identifying and regulating suspicious activities in the banking sector and assisting in the detection and prevention of illicit financial flows through cryptocurrencies. This initiative, part of a broader regulatory effort, includes an experimental platform called "Transparent Blockchain" to help identify links between fiat and crypto transactions, and is expected to shape future crypto compliance procedures and regulation in Russia.

Africa

Image Credit: Dall-E 3

The Financial Sector Conduct Authority (FSCA) of South Africa has officially approved 75 institutions as crypto asset service providers (CASPs). This announcement comes in response to media reports inaccurately claiming exclusivity in licensing among institutions. The FSCA, which started licensing CASPs on June 1, 2023, has also received 374 license applications to date and continues to update the list of approved CASPs accessible on their website. Despite the growth in licensed CASPs, the FSCA clarifies that its authorization pertains only to financial services related to crypto assets, such as advice and investment management, and does not equate to recognizing crypto assets as legal tender.

Giesecke+Devrient (G+D) and the Central Bank of Mauritania have signed an agreement at the Spring Meetings of the IMF and World Bank to explore a central bank digital currency (CBDC) of Mauritania's national currency Ouguiya. The two entities will collaborate to design and potentially introduce the CBDC as a cash complement, with the joint project focusing on understanding the societal and economic benefits of a digital Mauritanian Ouguiya. This initiative aligns with Mauritania's national development strategy to leverage digital technologies for economic growth and prosperity, with the CBDC intended to foster macroeconomic stability, promote financial inclusion, and support the country's digital transformation agenda.

Thanks for reading and have a great week ahead!

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Written by Jon Lira. Connect with him on LinkedIn.

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