šŸ”„3AC Founders Fined Again,šŸš€Stablecoin Surge in Argentina,šŸŒNigeria Dominates Africa's Crypto Scene

August 19, 2023

Your 5 minute emerging markets web3 weekly update

In This Issue

Asia
šŸ”øOn the run in the UAE but free, 3AC Foundersā€™ New Project Fined Again by Dubai Crypto Regulator
šŸ”øSingaporeā€™s Bold Move to Regulate Stablecoins for Crypto Transparency

Latin America and the Caribbean
šŸ”øStablecoin Frenzy in Argentina Amid Peso Devaluation
šŸ”øDrex Revolution: Experts Discuss Brazilā€™s CBDC and Tokenization

Africa
šŸ”øAfrican Cryptocurrency Interest Skyrockets, Nigeria Commands 66.8% Of Continentā€™s Interest
šŸ”øOpEd: Tokenization Is the Solution to Unlocking Ghanaā€™s Economic Potential

Eastern Europe
šŸ”øInspired by China, Russia Eyes Fast-Track Digital Ruble Development
šŸ”øDigital Ruble Trials Begin: VTB and Promsvyazbank Report Success

Season two is a WRAP! Catch up on the latest episodes and clips from the second season of the EmergingVoices Podcast on YouTube!

Asia

Image Credit: David McBee via Pexels

For the second time Dubai's Virtual Assets Regulatory Authority (VARA) has fined the co-founders of the failed crypto hedge fund Three Arrows Capital for violations related to their new digital-asset exchange OPNX. VARA said penalties of 200,000 dirhams ($54,451) for Su Zhu and Kyle Davies along with OPNX co-founder Mark Lamb and Chief Executive Officer Leslie Lamb for marketing, advertising, and promotional rule violations have been paid. In May VARA fined OPNX 10 million dirhams ($2.7 million), which remains unpaid, for soliciting customers for its platform and collecting personal data without a license.

Singapore is preparing to implement rules that define criteria for stablecoins, enhancing transparency and stability in the cryptocurrency sector. The framework will apply to nonbank issuers of single-currency stablecoins pegged to major G10 currencies, where circulation exceeds SGD 5 million ($3.68 million). Reflecting Singapore's bid to both regulate the crypto industry and encourage innovation, the framework highlights the requirement for stablecoins to hold reserves equivalent to at least 100% of their circulating value, ensuring customers can redeem stablecoins at par within five business days, and maintaining a minimum base capital of SGD 1 million.

Latin America and the Caribbean

Image Credit: Tumisu via Pixabay

Amidst significant devaluation of the Argentine peso, citizens are turning to stablecoins as a way to safeguard their savings, with crypto trade volumes surging up to 500%. The popularity of dollar-pegged stablecoins like USDT has risen, providing a secure haven against the peso's decline, particularly following libertarian candidate Javier Milei's primary election victory. Stablecoins offer more accessible options than physical dollars, with USDT emerging as a widely used and versatile choice, even serving as a settlement currency due to challenges faced by Argentine importers in accessing foreign currencies for trade.

Industry experts discussed the potential of Drex, Brazilā€™s CBDC, and tokenization in a recent webinar titled "Cryptocurrencies Reach Financial Services." Sergio Yamani, the director of innovation and financial services at 7COMm, explained that Drex could enable banks to attract institutional investors in the digital assets segment, leading to enhanced transaction security and various solutions for crypto asset custody. The experts also discussed the convergence of the financial sector and the crypto universe, noting the revolutionary potential of Drex and digital asset tokenization in reshaping financial services, while also considering challenges like regulatory development and the appropriate extent of tokenization.

Africa

Image Credit: Choong Deng Xiang via Unsplash

Nigeria emerges as the leading African country in cryptocurrency interest, accounting for around 66.8% of the continent's total crypto interest this year, nearly eight times higher than the next most interested nation, South Africa, according to a report by CoinGecko. The breakdown by region shows West Africa leading with about 74.7% of the continent's crypto interest, while Northern, Southern, East, and Central Africa follow with 10.0%, 9.6%, 3.8%, and 1.9% respectively. Meme coins, DeFi tokens, and blockchain networks have gained significant popularity and have captured the attention of African investors in 2023.

In an OpEd by Emmanuel Asamoah, head of business development and partnerships in Africa for Bybit, he speaks about Ghana's untapped potential in crypto tokenization offers a solution to its economic challenges. Emmanuel emphasizes the possibilities of tokenizing commodities like gold, cocoa, and oil on the blockchain to create economic opportunities, enhance transparency, and counteract neocolonial influences. Tokenization could drive revenue diversification, digital adoption, and self-sustainability while addressing issues of corruption and middlemen, potentially sparking an economic revolution in the country and across the continent; however, Emmanuel concludes that challenges need to be overcome first including logistics, tax policy, trust, security, and audits in order for these benefits to be realized.

Eastern Europe

Image Credit: PYMNTS.com

Russia can potentially expedite the introduction of its digital ruble CBDC with insights drawn from China's experience with the digital yuan, according to Anatoly Aksakov, the head of the State Duma Committee on the financial market. Aksakov highlighted China's cautious approach to the digital yuan's rollout, expressing optimism that Russia can move faster due to the proximity of their digital currency initiatives. He emphasized the potential for cooperation between Russia and China to harmonize their digital national currencies for enhancing trade turnover and cross-border financial systems, with testing of the digital ruble beginning this week.

Digital Ruble Trials Begin: VTB (tap here) and Promsvyazbank (tap here) Report Success (3 minute read, Russian)

Russian banks began testing the digital ruble this week with VTB and Promsvyazbank, two of the 13 banks involved during the pilot phase, reported to have successfully conducted transactions with the digital ruble. This marks the first stage of testing real operations with the digital ruble, with mass introduction anticipated to begin in 2025. Both banks conducted internal experiments with the CBDC, involving their employees in testing account openings, transfers, QR code payments for goods and services using digital rubles in their applications, and with future plans to integrate smart contracts.

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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