🤑Coinbase, Ripple, and UBS's Big Bet On Asia,🚀Putin's Blockchain Gambit,💥Latin America's Explosive Crypto Surge

October 07, 2023

Your 5 minute emerging markets web3 weekly update

In This Issue

Asia
🔸American Eyes On Asia: Coinbase and Ripple Gain Approval for Digital Asset Payment Services in Singapore
🔸Swiss Banking Giant UBS Launches Ethereum-Based Tokenized Fund Pilot in Singapore

Eastern Europe
🔸Putin Touts Blockchain-Powered Finance As a Means To Evade Sanctions
🔸Explosive Report Reveals Crypto Companies Using Estonia and Lithuania as Hubs for Illegal Funds Flow Through the EU

Latin America and the Caribbean
🔸Crypto in Latin America: Substantial Growth and Shifting Motivations Revealed
🔸Brazil's Central Bank Chief Unveils Ambitious Data Tokenization and Monetization Plan with Digital Real Integration

Africa
🔸South Africa’s VALR Gains Nod From Dubai’s Crypto Regulator for Exchange Expansion
🔸Burned Bridges: Worldcoin on the Verge of Being Shut Down in Kenya Amid Privacy Concerns and Regulatory Challenges

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

Asia

Image Credit: Midjourney

American Eyes On Asia: Coinbase and Ripple Gain Approval for Digital Asset Payment Services in Singapore 
(Tap here for article 1 on Coinbase, 2 minute read)
(Tap here for article 2 on Ripple, 1 minute read)

Cryptocurrency exchange Coinbase and Ripple's Singapore subsidiary have both secured payments licenses from the Monetary Authority of Singapore (MAS), allowing them to offer regulated digital payment token services in the country. Coinbase considers Singapore a "vital market" and had previously gained initial approval in October last year. Ripple, which is experiencing rapid growth in the Asia-Pacific region, was also granted approval in June. The MAS has stringent anti-money laundering requirements, and it has granted licenses to 14 companies, including Coinbase and Ripple, while most applicants have not been successful in obtaining licenses.

Swiss bank UBS Management has announced the launch of a pilot for a tokenized Variable Capital Company fund in Singapore. The fund is created as a smart contract on the Ethereum blockchain and aims to facilitate fund subscriptions and redemptions. This move is part of the broader Project Guardian initiative by the Monetary Authority of Singapore (MAS) to tokenize various real-world assets, and UBS aims to collaborate with traditional financial institutions and fintech providers to enhance market liquidity and provide better market access for clients. Link to press release.

Eastern Europe

Image Credit: Midjourney

Russian President Vladimir Putin emphasized the significance of digital currencies and digital financial assets (DFAs) in international payments during a speech at the International Olympiad on Financial Security. Putin mentioned the rapid advancements in financial technologies, particularly the development of blockchain-based financial settlement models. He cited a collaborative project between central banks in Asia and the Middle East as an example of international economic cooperation, allowing for the issuance and exchange of digital currencies without the risk of third-party interference or abuse, i.e., western sanctions.

In a large-scale investigation, media outlet Vsquare has analyzed about 300 crypto companies registered in Estonia and Lithuania and has revealed numerous cases of fraud, money laundering, sanctions evasion, and illegal financing of criminal organizations. The Estonian government's licensing system for virtual asset providers, created in 2017, attracted numerous shadow firms, turning it into a hub for illegal funds flow through the European Union. Despite efforts to reform and clean up the sector, many businesses that ceased operations in Estonia have relocated to other European jurisdictions, including Lithuania, which now hosts over 800 crypto companies, contributing to the circumvention of financial sanctions and raising concerns about fraud and illicit activities within the industry. Link to English language report.

Latin America and the Caribbean

Image Credit: Midjourney

A joint report by the University of Cambridge and the Inter-American Development Bank reveals substantial growth in the Latin American and Caribbean cryptoasset ecosystem from 2020 to 2022. The study identified 175 crypto companies in the region in 2022, more than doubling since 2016. Changing investor motivations have shifted from speculation to hedging against inflation and devaluation, with respondents citing regulation as a primary obstacle to further industry development in the LAC region. Link to report.

The President of the Central Bank of Brazil, Roberto Campos Neto, has announced plans to monetize financial transaction data by transforming it into tokens integrated with the digital real. This data will be stored in digital wallets as part of a "Super App" set to launch in two years. This initiative is driven by Open Finance who is facilitating data sharing among financial institutions, with the Central Bank working to expand participation in the investment segment, currently limited to authorized institutions.

Africa

Image Credit: Midjourney

South African cryptocurrency exchange VALR has obtained initial approval from Dubai's Virtual Asset Regulatory Authority, a significant step toward its expansion into the Middle East. While the initial approval doesn't permit VALR to offer virtual asset services yet, it's a crucial milestone for the exchange's plans to establish a virtual asset exchange in Dubai. Founded in 2018, VALR has processed over $10 billion in trading volume and has raised $55 million since its launch.

Kenya's parliamentary panel has called for the shutdown of Worldcoin's cryptocurrency project within the country due to privacy concerns and a lack of stringent regulations. The government had initially suspended the project in August due to concerns about user privacy and iris scanning for a digital ID. The panel has urged the Communications Authority of Kenya to disable Worldcoin's virtual platforms and called for the suspension of the project's physical presence until proper regulatory frameworks are established for virtual asset service providers in Kenya.

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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