šŸ’°Binance Does $90B A Month In China,šŸ›‘Trouble for Worldcoin,šŸ¤Hong Kong's First Crypto License Issued

August 05, 2023

Your 5 minute emerging markets web3 weekly update

In This Issue

Asia
šŸ”ø$90 Billion In A Single Month!? Crypto Doesn't Really FEEL Banned in China
šŸ”øHong Kong's Crypto Breakthrough: First Exchange License Awarded to HashKey

Africa
šŸ”øWhat's Next for Sam Altman's Worldcoin After Kenya's Suspension Over Security Concerns?
šŸ”øSEC Warns Investors: Binance STILL Illegal in Nigeria

Eastern Europe
šŸ”øOpEd: EU's MiCA Regulation Not a Match Made in Heaven For Ukraine
šŸ”øRussia Is the Latest Country to Launch a CBDC

Latin America and the Caribbean
šŸ”ø10% of Argentina's Fintech Sector Dedicated to Crypto
šŸ”øUXD Launches: A New Stablecoin for Latin America's Economic Maze

šŸ“£Founderā€™s Note

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Asia

Image Credit: Kanchanara via Unsplash

Almost two years after banning crypto, Chinese Binance users traded $90 billion in cryptocurrency-related assets in a single month. The transactions in China make up 20% of Binance's volume worldwide, and with the exchange facing regulatory challenges globally, China's importance for Binance is emphasized internally. With more than 900,000 active users in the country, about 100,000 users at Binance as of January were classified as ā€œpolitically exposed persons,ā€ and the exchange allegedly helps Chinese users circumvent restrictions by directing them to visit different websites with Chinese domain names before rerouting them to the global exchange.

Hong Kong's new crypto regulatory framework awards its first exchange license to HashKey, allowing the retail trading of tokens in the city. Facing competition from Dubai and the European Union, the move comes as Hong Kong aims to restore its image as a cutting-edge financial center and attract crypto investments, but the city has yet to win big investments from an industry that remains cautious due to a market slump and regulatory uncertainties. Hong Kong offers not just a local market but also a conduit to Chinese wealth, particularly if Beijing ever loosens a ban on crypto trading on the mainland.

Africa

Image Credit: Mutua Matheka/Worldcoin via Financial Times

The Kenyan government has suspended the activities of the Worldcoin cryptocurrency and digital identity project to ensure it poses no risks to citizens' security. The project, co-founded by Sam Altman, the CEO of OpenAI, aims to create a digital ID system based on proof-of-personhood using iris scans. Kenyan authorities have initiated inquiries and investigations to verify the authenticity and legality of the project, expressing concerns over the collection of crucial identification information like iris scans in exchange for a digital ID.

The Nigerian Securities and Exchange Commission (SEC) has issued a cautionary notice to local investors warning them against using Binance, the world's largest cryptocurrency exchange, stating that its activities are neither registered nor regulated by the Commission, and its operations in Nigeria are illegal. This warning comes after a previous circular highlighted a fraudulent company operating under the name Binance Nigeria Limited, which the SEC claims is unlawfully conducting operations in the country. Binance responded by issuing a cease and desist notice to the organization and clarified that the entity mentioned in the circular is not connected to their company, expressing their willingness to cooperate with the regulatory body.

Eastern Europe

Image Credit: stevepb via Pixabay

In an OpEd by Ukraine's Deputy Minister of Digital Transformation, Oleksandr Bornykov expressed that Ukraine's adoption of the EU's Markets in Crypto Assets Regulation (MiCA) may pose challenges for the country's crypto industry, as it lacks "passporting rights" to operate across the entire EU market. The stringent regulatory requirements, including excessive disclosure and liabilities, may limit competition and deter new crypto asset service providers from entering the market. To foster its own competitive jurisdiction for the digital economy, Bornykov advocated that Ukraine should carefully select the most technically feasible provisions of MiCA while strategically positioning itself for future alignment with pan-EU standards once it becomes a full-fledged EU member.

Russia's CBDC is now officially launched and marking the country's third form of national currency. The Bank of Russia announced that they plan to start testing the digital ruble on real transactions and on a limited number of clients this month. A pilot program involving 13 banks and 30 trade and service enterprises in 11 cities will test digital wallets, transfers, and payments using QR codes, paving the way for a gradual expansion starting from 2025.

Latin America and the Caribbean

Image Credit: Ali Pazani via Pexels

Argentina's adoption of bitcoin and cryptocurrencies has seen steady growth, with 10% of the country's 330 registered fintech companies dedicated to the crypto ecosystem. According to the Argentine FinTech Chamber, this represents significant progress in the adoption and development of crypto services compared to previous years. However, despite this growth, the crypto sector in Argentina remains under regulatory scrutiny, with the country's Senate currently debating how to regulate the sector and the Central Bank imposing restrictions on bitcoin and cryptocurrency trading on local platforms.

Latin American blockchain financial services company, Ripio, has launched UXD, a 1:1 pegged US dollar based stablecoin for the Latin American blockchain project, Lachain Network. To meet the unique needs for Latin America, the goal of UXD is to help people safeguard their assets amidst the economic complexities in the region. Earlier this year, Brazilian Investment Bank, BTG Pactual, also launched a US dollar-pegged stablecoin, BTG Dol.

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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