🌏Binance's Hong Kong Hurdle,🚓Do Kwon's Extradition Drama,🔗Uganda's $6B Blockchain Bet

November 25, 2023

Your 5 minute emerging markets web3 weekly update

In This Issue

Asia
🔸Binance’s US Guilty Plea Challenges Its Expansion Into Hong Kong
🔸From Mumbai to Dubai: Why Indian Firms Are Flocking to the UAE

Eastern Europe
🔸Do Kwon's Extradition Saga: A Jurisdictional Jigsaw Between the US and South Korea
🔸zkDay Istanbul: Vitalik Buterin and 1,200 Developers Unite for ZK Technology Revolution

Latin America and the Caribbean
🔸El Salvador's Crypto Economy: Over 100 New Companies and 100 New Jobs
🔸Brazilian Crypto Shock: Senate on the Verge of Greenlighting 15% Tax on Overseas Holdings

Africa
🔸TradeXchange: Uganda's Blockchain Solution for its $6 Billion Trade Ambition
🔸South Africa's Crypto Payment Adoption: Marching Towards Mainstream Use

Catch up on the latest episodes and clips from the second season of the EmergingVoices Podcast on YouTube!

Asia

Image Credit: Dall-E 3

Binance and its founder Changpeng Zhao's guilty plea to US anti-money-laundering laws could pose challenges to the cryptocurrency exchange's efforts to obtain a legitimate presence in Hong Kong, particularly as a Binance-backed local firm, HKVAEX, prepares to apply for a crypto license in the city. While Binance has not publicly expressed interest in establishing a compliant presence in Hong Kong, it set up HKVAEX as a separate crypto exchange to pursue a license. However, experts suggest that the guilty plea in the US could create difficulties for the license application in Hong Kong due to the significant ties between the two entities, as Hong Kong's regulatory requirements are stringent and include assessing the applicant's compliance with anti-money-laundering laws and potential criminal records of substantial shareholders or controllers.

The rise of Web3 and blockchain technology has strengthened financial ties between India and the Dubai. As India's strict tax rules have driven crypto activity away from the country, Dubai is attracting Indian crypto firms due to its low taxes, ease of setting up businesses, a dedicated regulator, and access to international markets. India and the UAE are also exploring interoperability between their central bank digital currency (CBDC) projects, as bilateral trade between the two nations reached $85 billion last year.

Eastern Europe

Image Credit: Dall-E 3

Terra founder Do Kwon's extradition has been approved by a court in Montenegro's capital, Podgorica, but whether he will be sent to the U.S. or South Korea is pending a decision by the country's Minister of Justice. Before his extradition, Kwon will serve a four-month sentence in Montenegro for document forgery. Kwon faces legal battles in both South Korea and the U.S. related to the collapse of Terra's stablecoin TerraUSD and native cryptocurrency Luna in 2022.

Over 1,200 zero-knowledge (ZK) technology developers, community members, and enthusiasts, including Ethereum co-founder Vitalik Buterin, attended zkDay Istanbul, highlighting the growing interest and enthusiasm for ZK technology. The event, focused on knowledge sharing and collaboration, saw a significant increase in attendance and was built upon the success of zkDay Paris. ZK-focused projects and early-stage startups had the opportunity to build connections and interact with key players in the ZK ecosystem. The ZK community continues to grow, with a strong convergence around the core mission of decentralization and innovation in Web3, and projects are focused on improving the user experience and onboarding users into next-generation consumer products leveraging ZK technology.

Latin America and the Caribbean

Image Credit: Dall-E 3

The Central Reserve Bank of El Salvador has registered 106 bitcoin service providers, a significant increase from the 45 registered companies at the beginning of 2022. These registered companies include cryptocurrency exchanges, custodians, payment processors, and digital wallets. Additionally, 11 licenses for the issuance of cryptoassets have been granted to companies like Ditobanx, Strike, and Binance, showcasing the growing interest and investment in El Salvador's cryptocurrency ecosystem. This development is expected to create more employment opportunities in the country, aligning with the government's pro-crypto stance since making Bitcoin legal tender in 2021. Just one year after the Bitcoin Law was approved, companies registered in the country generated about 113 direct jobs and about 400 indirect jobs.

The Economic Affairs Committee of Brazil's senate has approved a bill that introduces a 15% tax on cryptocurrency holdings in overseas accounts at international platforms such as Binance, Coinbase, Gate.io, Bitget, and OKX. The tax will apply to cryptocurrency holdings valued at more than approximately $1,200 (R$6,000), with the potential to generate significant revenue for the government, projected at approximately $1.44 billion (R$7.05 billion) in 2024, $1.38 billion (R$6.75 billion) in 2025, and $1.46 billion (R$7.13 billion) in 2026. The bill has already been approved in Brazil's lower house and is currently waiting for a vote in the Federal Senate. If passed it will go to the President for approval.

Africa

Image Credit: Dall-E 3

Uganda has signed an agreement with CargoX to create TradeXchange, a blockchain-based national trade facilitation platform aimed at supporting exporters, resolving trade bottlenecks, and promoting compliance with global trade standards. The platform will be built on CargoX's Blockchain Document Transfer (BDT) solution, which has already been successfully used in Egypt's National Single Window for Foreign Trade Facilitation (NAFEZA) system. TradeXchange will streamline processes and information flow among farmers, producers, traders, and government bodies, enhancing regulation, quality control, and produce traceability while fostering trust and minimizing disputes. It is expected to unify Uganda's trade practices with global standards, boosting production, packaging, quality control, and supporting the nation's goal of doubling its exports to $6 billion by 2026.

South African payments infrastructure company, Stitch, has launched a crypto payment solution enabling users to make direct cryptocurrency purchases from their wallets. This move addresses the rising crypto adoption in South Africa, where approximately 7.7 million residents hold cryptocurrencies. Stitch's 'Pay with crypto' method allows consumers to use cryptocurrencies for buying goods and services, with businesses receiving settlements in South African Rand (ZAR), effectively managing volatility risks. This versatile payment solution is poised to benefit various sectors, including online marketplaces, gaming platforms, and travel service providers.

Thanks for reading and have a great week ahead!

What did you think of today's newspaper?

Awesome I Great I Good I Okay I Bad


If you have any comments or feedback, just respond to this email!

Written by Jon Lira. Connect with him on LinkedIn.

Was this email forwarded to you? Sign up here