🔎Russia monitors its crypto users and uses stablecoins to evade sanctions

March 18, 2023

Your 5 minute emerging market web3 weekly update

In This Issue

Eastern Europe
🔸Russian Financial Intelligence Monitors Over 25,000 Crypto Users
🔸Russian Brokers Use Stablecoins to Evade Sanctions and Compliance

Latin America and the Caribbean
🔸Brazil's CBDC to Change Business Model of Brazilian Financial System
🔸El Salvador Launches Bitcoin Development Program for University Students

Africa
🔸African Fintech Backed By Silicon Valley Bank and FTX Denies Sale Rumors
🔸Due to Widespread Unrest, Nigeria’s Central Bank Extends Use of Old Bank Notes Amid Cash Shortages

Asia
🔸UAE and India Collaborate to Explore Cross-Border CBDC Transactions
🔸South Korea Backs Local Metaverse Companies With $30M Investment Fund

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Eastern Europe

Image Credit: Midjourney

Rosfinmonitoring, the financial intelligence agency of Russia, is monitoring over 25,000 participants' cryptocurrency transactions, with about 120 investigations carried out, and 60 criminal cases initiated, according to the agency's head, Yury Chikhanchin. He highlighted the importance of Transparent Blockchain, a software product that helped close down the Hydra dark web site, which dealt in drug trafficking, weapons, and money laundering. Testing of Transparent Blockchain is underway in Russia's Ministry of Internal Affairs and Federal Security Service.

Despite being cut off from SWIFT, Russian money is still finding ways to move between Russia and the West using stablecoins. Transparency International, a global anti-corruption NGO, has found at least eight over-the-counter brokers in Moscow that can sell tens of thousands of dollars in stablecoins for cash and then exchange them in the UK for pounds sterling, all without requiring any know-your-customer paperwork. Transparency International's investigation shows that political sanctions are not always effective in completely stopping the flow of unidentified funds from punished jurisdictions.

Latin America and the Caribbean

Image Credit: Midjourney

The Brazilian Federation of Banks (Febraban) has formed a new working group of 15 banks to provide feedback on the digital real, specifically with regards to security, interoperability, and scalability. The central bank of Brazil has presented a new version of the currency that will change the business model of the country’s financial system, with the use of its digital currency for wholesale operations between institutions. The initiative includes banks issuing tokens backed by bank deposits as stablecoins, which offers a range of opportunities for other products and services in the financial system.

The El Salvador Bitcoin Office has launched CUBO+, an advanced Bitcoin engineering program that aims to train Bitcoin and Lightning network developers through the Salvadoran university system. The program is fully funded by cryptocurrency sector companies, including Tether and Fulgur Ventures, and will support a small group of outstanding students from the main universities in El Salvador, all under 25 years of age. The first group will belong to the University of Don Bosco, with the intention of expanding the program in the coming years to include other universities and high schools throughout El Salvador.

Africa

Image Credit: Midjourney

Africa-focused fintech Chipper Cash, which raised $250m in a funding round led by Silicon Valley Bank (SVB) and FTX last year, has denied reports this week from unnamed sources that the company is weighing options including exploring a sale or seeking new investors. Also a banking client of SVB, Chipper Cash's CEO released a statement that the company's exposure to the failed US bank was "very limited" and held "only about $1M" in its SVB accounts. SVB owns approximately 2% of Chipper Cash.

Due to Widespread Unrest, Nigeria’s Central Bank Extends Use of Old Bank Notes Amid Cash Shortages (1 minute read)

Nigeria's central bank has announced it will continue to allow the use of old banknotes until the end of the year to comply with a recent court order. Due to a shortage of cash, the Supreme Court instructed the Central Bank of Nigeria to extend the use of the old 1,000, 500, and 200 naira notes, which were initially withdrawn from circulation. As we reported last week, the shortage of cash has been due to restrictions aimed at pushing Nigeria towards a cashless economy, including spurring adoption of the country's central bank digital currency.

Asia

Image Credit: Jdx and Anomie via Wikimedia Commons

The Central Bank of the United Arab Emirates (CBUAE) and the Reserve Bank of India (RBI) have signed an Memorandum of Understanding (MoU) to explore collaboration and cooperation in the field of financial technology (FinTech), particularly in the areas of Central Bank Digital Currencies (CBDCs) and interoperability between them. The two central banks plan to conduct proof-of-concept and pilot projects to establish a bilateral CBDC bridge to facilitate cross-border CBDC transactions like remittances and trade, as well as to share knowledge and expertise on emerging trends, regulations, and policies related to FinTech, financial products, services. The goal of the MoU is to promote joint experimentation with CBDCs and digital innovation initiatives between the CBUAE and the RBI.

South Korea Backs Local Metaverse Companies With $30M Investment Fund (2 minute read)

The South Korean government has invested 24 billion Korean won ($18.1 million) to create a fund of more than 40 billion Korean won ($30.2 million) for metaverse development. The Metaverse Fund aims to help Korean projects raise capital and compete with major tech companies, which have shown increasing interest in the metaverse. By supporting local companies and investing in the development of the metaverse ecosystem, South Korea is positioning itself to be a leader in this emerging field.

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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