šŸŖ™El Salvador Bitcoin Update, šŸšØBinance's Terror Link, šŸŒAfrica's Next CBDC

May 06, 2023

Your 5 minute emerging markets web3 weekly update

In This Issue

Latin America and the Caribbean
šŸ”øThe El Salvador Experiment: An Update on Bitcoin's Role a Legal Tender
šŸ”øBitso Becomes First Cryptocurrency Company Authorized to Offer Credit in Brazil

Asia
šŸ”øIsrael Seizes Binance Crypto Accounts Linked to Hamas and Islamic State Terrorism
šŸ”ø3AC Co-Founders in Hot Water in Dubai Over Launch of Unlicensed Crypto Exchange

Eastern Europe
šŸ”øUkrainian Police and the FBI Team Up to Crack Down on Virtual Asset Exchanges Used for Laundering Illegal Funds
šŸ”øExperts Skeptical of Russian Digital Financial Assets Market Despite Recent Revival

Africa
šŸ”øNigeria Adopts National Blockchain Policy to Drive Economic Diversification
šŸ”øMauritius to Launch Digital Rupee CBDC Pilot Phase in November 2023

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Latin America and the Caribbean

Image Credit: Midjourney

El Salvador's adoption of bitcoin as legal tender has brought positive benefits including increased access to technology, which has transformed business transactions in the country, according to El Salvador-based legal expert HĆ©ctor Torres. Bitcoin is primarily used as a store of value, but cryptocurrencies, including stablecoins, have seen a rise in daily transactions. Although there is no additional tax for bitcoin, there is a legal vacuum with respect to the status of all other cryptocurrencies.

Mexican cryptocurrency exchange Bitso has become the first company to receive a Direct Credit Society license from the Central Bank of Brazil. The license enables Bitso to offer credit options to Brazilian customers, as well as payment and investment options. The exchange has seen rapid growth in Brazil since launching in April 2021, with over one million users in its first year of operation in the country and an 85% growth rate in stablecoin transactions.

Asia

Image Credit: Midjourney

Israel's National Bureau for Counter Terror Financing (NBCTF) has seized approximately 190 crypto accounts at Binance since 2021, including two it said were linked to the Islamic State and dozens of others connected to Hamas. The NBCTF stated that the seizure was aimed at preventing terrorist activities and impairing the ability of the Islamic State to achieve its goals. Binance has not commented on the matter, but has stated that it collaborates closely with international counter-terrorism authorities and screens users for terrorism connections.

Dubaiā€™s Virtual Assets Regulatory Authority (VARA) has issued a written reprimand to five individuals including Kyle Davies and Su Zhu, the co-founders of collapsed hedge fund Three Arrows Capital (3AC), over the launch of Open Exchange (OPNX), which is offering virtual asset exchange services without securing regulatory licenses. OPNX launched its exchange on April 4th, prompting VARA to issue an Investor and Marketplace Alert before sending the written reprimand on April 18th. VARA officials say they issued OPNX and its founders with two Cease and Desist orders in February and March respectively.

Eastern Europe

Image Credit: Midjourney

Police in Ukraine, in collaboration with the FBI, have shut down nine virtual asset exchange services that offered anonymous exchange of cryptocurrencies, enabling the laundering of illegal funds obtained through malware attacks and online fraud. The infrastructure of the network was blocked and domain names removed, with visitors to the affected sites now seeing a confiscation banner. Law enforcement officers are currently identifying those involved in the multi-level international operation.

Seven digital financial assets issues were announced in Russia in April, amounting to around RUB 1 billion. Most of the offerings were sold by Sberbank, while Alfa-Bank carried out the placement of financial obligations of Rostelecom for RUB 750 million. Experts, however, are still skeptical of the digital financial assets sector in Russia, stating that only large players have access to the market and placements are more of a "tribute to fashion" than genuine financial instruments.

Africa

Image Credit: Midjourney

Nigeria's Federal Executive Council has approved a National Blockchain Policy as part of its strategy to diversify the economy and reduce dependence on the oil and gas sector. The focus is on promoting the adoption of distributed ledger technology in the public sector, with hopes that it will spur private sector adoption and the development of new blockchain business models. The country has already made progress in blockchain literacy, with the National Information Technology Development Agency awarding 30,000 blockchain scholarships, and plans to establish a National Blockchain Sandbox involving various agencies for testing blockchain applications.

The Bank of Mauritius is set to launch the pilot phase of its CBDC, the digital Rupee, in November 2023, with the governor prioritizing the development of a central bank digital currency since 2020. The digital Rupee aims to protect monetary sovereignty, assist with anti-money laundering, combat the financing of terrorism, and ensure commercial banks' involvement in the CBDC journey. With previous advancements in blockchain technology and regulations for digital assets, Mauritius is positioning itself as a center for innovation in the blockchain space.

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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