October 31, 2022

🪙Crypto use cases revealed during the Russian war in Ukraine💥

October 31, 2022

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All the emerging market blockchain & crypto news you needin less than 5 minutes

In This Issue

Eastern Europe•RUSSIAN WAR IN UKRAINE: The crypto use cases revealed during the war•CBDC: Turkey funding CBDC research in its 2023 budget

Africa•SANCTIONS: Is the Central African Republic laundering Russian bitcoin?•CBDC: Due to disappointing results, the Central Bank of Nigeria desperately turns to taxis to boost CBDC adoption

Asia•CBDC: Binance's BNB Chain selected to integrate with Kazakhstan's CBDC•REGULATION: Singapore's proposed ban on retail crypto credit

Latin American and The Caribbean•USE CASE: Brazilian bank launches blockchain-based vehicle trading and car registration platform•ADOPTION: Costa Rican Congresswoman introduces a bill to regulate crypto-based payments

Eastern Europe

Image Credit: Ehimetalor Akhere Unuabona via Unsplash

With the Russian war in Ukraine entering its 9th month, the conflict has demonstrated both the good and bad sides to crypto. Here are a few of them:

•Crypto donations used for humanitarian aid, but also to make more war: Crypto has been used as a decentralized fundraising tool. On the one hand, the Ukrainian government and NGOs have been able to raise millions to support the Ukrainian military and deliver aid to the Ukrainian people. However, crypto has also been used to raise money for Russian militia groups fighting side-by-side the Russian military.

•Scammers are taking advantage of good Samaritans: Crypto scams are already an existing problem and the Russian war in Ukraine is an avenue for scammer syndicates to mask themselves as organizations fundraising for the Ukrainian cause. Scams like these are appearing on the traditional avenues: text messages, social media, and the dark web.

•Governments have the power to limit crypto: As demonstrated by the western sanctions on Russia, governments have been able to target Russian crypto custodial wallets under the control of European enterprises and exchanges and prohibit EU blockchain companies from providing crypto custodial services to Russian entities and individuals.CBDC: Turkey funding CBDC research in its 2023 budget (1 minute read)

Turkey published its 2023 budget and it allocates funds for central bank digital currency (CBDC) research. A live payments pilots may occur in 2023, however, it's not clear if a CBDC will be launched next year. The funds are allocated to the Central Bank of the Republic of Turkey (CBRT), the Ministry of Treasury and Finance, and the scientific research organization TUBITAK.Want more Eastern Europe news?•Binance still serving non-sanctioned Russians while seeking clarity on EU crypto regulations•Moldova bans cryptocurrency mining and building lighting due to energy crisis (Russian)•A project on the merger of blockchain platforms for the release of DFA and financial marketplaces was submitted to the Duma (Russian)•Mintsifra intends to create a technology center for digital cryptography (Russian)

Africa

Image Credit: Aboodi Vesakaran via Unsplash

Last week the Central African Republic (CAR) declared support for Russia in its ongoing war against Ukraine. Ola Altose, CEO of KoinKoin, a London-based Africa-focused crypto exchange, speculates whether the CAR will become a laundry service for sanctioned Russian money and crypto, and if the introduction of bitcoin as legal tender is linked to Moscow. Altose further speculates that Russia may be using bitcoin to repatriate funds from Russian mining activities and paramilitary operations conducted by The Wagner Group in the country. Last July the CAR became the 2nd country after El Salvador to adopt bitcoin as legal tender, however, the law was subsequently frozen until the Bank of Central African States (BEAC) issues regulations for cryptocurrency throughout the Central African Economic and Monetary Community (CEMAC).

Less than 5% of Nigerians are using the country's CBDC, known as the e-naira. Adoption has been low due to retail confusion about the difference between a CBDC and cryptocurrencies, general distrust in the government, banking system, and the ruling elite, and the motivation by Nigerians to acquire decentralized cryptocurrencies despite this year's market volatility because of the historical depreciation of the naira and record inflation. The world is watching Nigeria's attempt at rolling out a CBDC, and the Central Bank of Nigeria is so desperate to boost adoption that it has turned to motorized rickshaw operators to accept the e-naira and offer a 5% discount to drivers and passengers.

Asia

Image Credit: Aevozer via Wikimedia Commons

Binance founder and CEO, Changpeng Zhao, announced on Twitter that the National Bank of Kazakhstan (NBK) will integrate its central bank digital currency (CBDC), the digital tenge, on Binance's blockchain network, BNB Chain. The Binance team met with the NBK to discuss supporting its CBDC and integrating it with BNB Chain to bridge traditional banking with the crypto ecosystem. Two weeks ago, Binance received a license to operate in Kazakhstan.

The Monetary Authority of Singapore (MAS), the country's central bank and financial regulator, has published a paper proposing a ban on credit lines to buy crypto, leveraged token transactions, and crypto purchases by credit cards for retail customers. The paper also says, "[the] MAS has considered whether to prohibit the offering of cryptocurrency services to consumers entirely" and "cryptocurrencies can be highly volatile as their prices are typically not related to any economic fundamentals, and are hence highly risky and not suitable for consumers." The MAS has entered a feedback gathering phase through December 21st from industry players to give input on the suggested restrictions and other proposals.

Latin America and The Caribbean

Image Credit: Jim Witkowski via Unsplash

Santander Brazil has partnered with web3 infrastructure provider, Parfin, to pilot a blockchain-based tokenization platform for transferring used car ownership in Brazil. The platform uses smart contracts to automate the vehicle registration transfer process and payment based on delivery versus payment, a settlement method that guarantees the transfer of property after successful payment. The platform uses a private, permissioned blockchain built on the Ethereum blockchain.ADOPTION: Costa Rican Congresswoman introduces a bill to regulate crypto-based payments (2 minute read)

Costa Rica may be the next Latin American country to regulate cryptocurrencies, but this does not mean crypto will be legal tender. Congresswoman Johana Obando introduced a bill to regulate crypto-based payments in the country. The bill also seeks to provide protection for consumers and enterprises investing in crypto, attract more investments in the country, and “guarantee banking interoperability of cryptocurrencies through public and private banks in the national territory,” according to Obando. Unlike El Salvador, the bill does not force anyone to accept crypto-based payments, it establishes crypto as a legal way to transact between two agreeing parties.Want more Latin America & Caribbean news?•Digital real: on BC’s radar is compatibility with Ethereum; network will be allowed (Portuguese)•Santander Proposes Project to Tokenize and Trade Properties With the Brazilian CBDC•Brazilian fintech PurpleCats launches app that unites digital banking, exchange and cryptocurrency wallet (Portuguese)•A conglomerate of companies in the fine jewelry industry and sustainable mining from Colombia promote NFTs in this industry (Spanish)•Binance partners with Inswitch for FIAT On-Off Ramp in LATAM

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