🛑Luna NOT a security, 🪙Zimbabwe's Golden Move, 💳Binance's Russian Shift

April 29, 2023

Your 5 minute emerging markets web3 weekly update

In This Issue

Asia
🔸Landmark Ruling: Luna Not a Security, Rules South Korean Court
🔸China's CBDC Key to Belt and Road Initiative

Latin America and the Caribbean
🔸FTX Fallout Leads to Tougher Crypto Regulations in the Bahamas
🔸Itaú Bank's Stellar-Based Liquidity Pool Bridges Traditional Finance and Crypto

Africa
🔸Zimbabwe to Launch Gold-Backed Digital Currency to Stabilize Local Economy
🔸Roqqu Crypto Exchange Launches in South Africa, Offering Rand On- And Off-Ramps

Eastern Europe
🔸Binance Quietly Lifts Ban on Russian Bank Cards
🔸Russia’s Finance Minister Says Digital Currencies Will Offer Unrestricted International Payments

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Asia

Image Credit: Dall-E

A Seoul Southern District Court has ruled that Terraform Labs' cryptocurrency Luna is not a security, dismissing the prosecution's case against key personnel for capital market law violations. The decision is significant as the court stated that Luna is not a financial investment product regulated by the Capital Markets Act, and it could impact future legal disputes on whether or not cryptocurrencies are securities. The court decision said that it is difficult to view Luna as a financial investment product, and the trial against former co-CEO Shin and others is likely to be fraud and breach of trust rather than a violation of the Capital Markets Act.

China is expanding the use cases for its central bank digital currency (CBDC) for its Belt and Road initiative and cross-border trades. The plan includes promoting the use of the digital yuan to pay for services and storage charges for goods carried by cross-border trains departing from Xuzhou city, a trade hub for numerous goods headed for Europe. This comes as China aims to reduce reliance on the U.S. dollar in international trade and has completed trade treaties with countries like Russia and India based on their national currencies.

Latin America and the Caribbean

Image Credit: Government of Bahamas and Cointelegraph via Wikimedia Commons

The Bahamas' securities watchdog has launched a public consultation period for its Digital Assets and Registered Exchanges Bill, which is set to become one of the most "advanced" pieces of digital asset legislation globally. The legislation aims to enhance provisions for market innovation and development, strengthen measures for operating crypto exchanges, and bolster investor protections. It also includes requirements for staking, reporting, and safekeeping practices, with the issuance of algorithmic stablecoins expressly prohibited, following the collapse of the Terra ecosystem in May 2022.

Itaú Bank has presented two solutions at Brazil's Lift Lab 2023 event: a liquidity pool that connects the traditional financial system with decentralized finance (DeFi) solutions and an offline payment system called Pix NFC QR Code. The bank used Stellar for the project, allowing the liquidity pool to facilitate the use of DeFi services with connections to tokens such as the tokenized real, which banks can issue backed by demand deposits, and with services such as the purchase and sale of stablecoins. The offline payment system allows access to the Pix instant payment system without internet access by issuing a QR code or through Near Field Communication (NFC) technology for the amount to be paid.

Africa

Image Credit: Jingming Pan via Unsplash

The Reserve Bank of Zimbabwe (RBZ) is planning to introduce a gold-backed digital currency as a legal tender to stabilize the local currency. The RBZ intends to anchor Zimbabwe's gold reserves to its currency, allowing holders of small amounts of Zimbabwe dollars to exchange them for digital gold tokens to store value and protect against exchange rate volatility. The move follows the potential issuance of the "Mosi-oa-Tunya" gold coins and aims to utilize the country's gold reserves to anchor the Zimbabwe dollar and boost financial inclusion.

Nigerian crypto exchange Roqqu has gained regulatory approval to operate in South Africa, allowing users to deposit and withdraw in South African Rand to and from their Roqqu wallets. South Africa is one of the leading adopters of cryptocurrency in Africa, with 4 million South Africans owning cryptocurrencies. The exchange has its sights set on expansion into Ghana, Uganda, Kenya, and Tanzania in the near future, and has received a virtual currency license for the European Economic Area, allowing it to operate in over 30 countries.

Eastern Europe

Image Credit: Fly-D via Unsplash

Binance has quietly restored support for transactions with cards from Russian banks, including Visa and Mastercard, without prior announcement. Russian cardholders can top up their accounts in various currencies, except US dollars, through the Qiwi payment gateway. However, a representative from Qiwi stated that it has no cooperation agreements with the platform. Binance had previously blocked transactions with Russian-issued Mastercard and Visa cards after the Russian invasion of Ukraine.

Russia's Finance Minister, Anton Siluanov, has said that the use of digital currencies in international payments will be unrestricted. Siluanov emphasized that digital currencies like the digital ruble and digital yuan are the future of settlement systems, offering a way for two countries to settle accounts without the risk of freezing from other countries. The Central Bank of Russia had also previously noted that the system of cross-border settlements will be transformed in the coming years, and that it could be based on digital national currencies in the next five to seven years.

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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