December 31, 2022

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December 31, 2022

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All the emerging market web3 news you need in less than 5 minutes

šŸŽHappy New Year From EmergingCrypto.io!šŸ„‚Thank you for being a subscriber and helping us grow!The EmergingCrypto.io team wishes you and your family health, wealth, and success in 2023!

In This Issue

Africaā€¢RUG PULL OR THE FUTURE: Apparently Akon City is still happening in Senegalā€¢REGULATION: Morocco collaborates with the World Bank and IMF to develop crypto regulatory framework

Eastern Europeā€¢TOKENIZATION: Russia's largest bank uses blockchain to workaround western sanctionsā€¢CBDC: Turkeyā€™s central bank completes first Digital Turkish Lira test

Latin America and The Caribbeanā€¢REGULATION: Brazilian national investment funds will be able to allocate up 10% of their equity in cryptocurrenciesā€¢GLOBAL PERSPECTIVE: US dollar stablecoins provide options in the face of devalued domestic currencies in Brazil and Mexico

Asiaā€¢EXIT: Kraken shuts down its Japan unit, cites market conditionsā€¢REGULATION: Chinese metaverse entrepreneurs driven overseas due to strict regulatory environment

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Africa

Image Credit: Web Summit via Wikimedia Commons

Remember Akon City? You know, the namesake crypto city that R&B singer, Akon, pitched that would run on his namesake cryptocurrency, "Akoin"? Well, according to him plans for the cityā€™s development are "100,000% moving [forward]," despite the site remaining undeveloped for the last two years and currently being used as a pasture for goats. The $6B planned African metropolis, which was supposed to be built on the coast of Senegal, has faced numerous delays and setbacks which Akon conveniently blamed on COVID. To add insult to injury, the Akoin cryptocurrency, which was supposed to finance the city's infrastructure, has declined nearly 100%, leaving early investors holding the bag and wanting their money back. The city that the press initially compared with Wakanda may be a rug that is slipping at people's feet. In response to donor complaints, Akon said, "I would do a world tour just to pay them all back."

The Central Bank of Morocco has been in talks with the International Monetary Fund, the World Bank, and other international partners to develop a crypto regulatory framework, and the Governor of Morocco's Central Bank has announced that draft legislation for the use of cryptocurrencies in the country is now complete. The legislation provides a definition tailored to the Moroccan context and aims to protect individuals from the risks associated with investing in the highly speculative market, while not inhibiting innovation. Currently, trading and holding cryptocurrencies are illegal in Morocco, and the country's financial regulators did not recognize digital assets until a nationwide ban was implemented in 2017. However, the popularity of cryptocurrencies has continued to grow in Morocco, with the number of holders reaching 1.5 million in 2022.

Eastern Europe

Image Credit: Damir Babacic via Unsplash

Sberbank, Russia's largest bank, has conducted its first tokenized gold transaction on its proprietary blockchain platform with Solfer, a diversified holding company in the field of trading and processing of metals, and production of precious metal products. According to Alexander Vedyakhin, First Deputy Chairman of the Board of Sberbank, "The deal demonstrates the interest of the market and the real sector of the economy in a new instrument that can become a good alternative to investments in the framework of de-dollarization of the economy." Developing new financial instruments using blockchain and digital assets have been used as an important chess piece to Russia as a means to workaround western sanctions due to its war in Ukraine.CBDC: Turkeyā€™s central bank completes first Digital Turkish Lira test (1 minute read)

The Central Bank of the Republic of Turkey (CBRT) has successfully conducted the first payment transactions on the Digital Turkish Lira Network as part of the first phase of its Digital Turkish Lira Project. The CBRT will continue to run closed-circuit pilot tests with technology stakeholders in the first quarter of 2023 and share findings with the public through a comprehensive evaluation report. The CBRT will also continue to evaluate the use and integration of distributed ledger technologies in its payment systems. In 2023, the CBRT plans to unveil further phases of the pilot study, expand the participation with selected banks and financial technology companies to its Digital Turkish Lira Collaboration Platform, and prioritize studies on the technological requirements and economic and legal framework of the Digital Turkish Lira.

Latin America and The Caribbean

Image Credit: Ewan Kennedy via Unsplash

The Securities and Exchange Commission (CVM) of Brazil has published a new resolution, CVM Resolution 175, which allows national investment funds to invest up to 10% of their equity in Bitcoin and cryptocurrencies. The new rules also allow investment in "environmental assets" and expand concentration limits by asset type, while establishing capital risk exposure limits. The CVM's new regulation aims to improve efficiency in the fund market while reducing compliance costs and protecting investors.GLOBAL PERSPECTIVE: US dollar stablecoins provide options in the face of devalued domestic currencies in Brazil and Mexico (7 minute read)

Stablecoins are being used in developing economies such as Brazil and Mexico as a way to preserve wealth in the face of political instability, currency devaluation, and the decimation of savings. In Brazil, the devaluation of the Brazilian Real and capital controls on foreign currencies have led many Brazilians to turn to US dollar denominated stablecoins to participate in global markets and protect their savings. In Mexico, high fees associated with traditional payment rails for remittances have led to the growth of crypto companies offering lower fees and faster transactions using stablecoins and blockchain technology. In both countries, stablecoins have become a popular choice among citizens seeking financial freedom, which is often lacking in their home countries due to economic and political conditions.

Asia

Image Credit: Kent Banes via Unsplash

Cryptocurrency exchange, Kraken has announced that it will be ceasing its operations in Japan and deregistering from the Financial Services Agency as of January 31, 2023. The decision is reportedly due to the current market conditions in Japan and the weak global crypto market. Kraken has removed withdrawal limits through the end of January to allow clients to remove their assets and has removed deposit functionality from accounts. After deregistration has been completed on January 31, any remaining JPY will be transferred to a Guaranty Account at the Legal Affairs Bureau.

Chinese startups focused on metaverse and web3 have struggled to operate due to the Chinese government's cryptocurrency ban despite the large investments by Chinese tech giants Tencent, Alibaba, and ByteDance in these spaces over the past year. This has driven many startups to look to other markets across Southeast Asia with more relaxed regulatory environments. However, finding new open markets to set up operations have become increasingly difficult for Chinese startups due to the increasing regulatory scrutiny of digital assets driven by the collapse of high-profile cryptocurrencies, rising inflation, and concerns about money laundering and illegal financial activities.

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