Category Archives: Cryptocurrency

Jared Kushner, former President Donald Trumps son-in-law who acted as a senior advisor during Trumps time in the White House, was apparently interested in the idea of whether the federal government should make a cryptocurrency in 2018. In an email to then-US Treasury Secretary Steven Mnuchin, Kushner asked if he could have a group of people brainstorm about the government creating its own digital currency, as revealed by a Freedom Of Information Act request from CoinDesk.

While we havent seen the idea come to fruition, its interesting that someone who had a lot of status in the White House (and also acted as the director for the Office of American Innovation) was thinking about it years ago.

Heres the email in full:

Steven

Would you be open to me bringing a small group of people to have a brainstorm about this topic?

http://blog.samaltman.com/us-digital-currency

My sense is it could make sense and also be something that could ultimately change the way we pay out

entitlements as well saving us a ton in waste fraud and also in transaction costs...

The link included by Kushner goes to a 2018 blog post titled US Digital Currency, which was written by Sam Altman, a former president of startup incubator Y Combinator and currently the CEO of OpenAI. The post discusses how the US should create a cryptocurrency and make it legal tender in the country. (While it suggests naming the coin USDC, for US Digital Currency, there actually is currently a stablecoin named USDC, short for US Dollar Coin, but that it wasnt created by the government.) Altmans post suggests that the US cryptocurrency could have taxes built-in and that building it could help give America some power over a worldwide currency.

For his part, Kushner suggests it could be a way to cut down on waste, fraud, and transaction costs when paying out entitlements. The outcome of his request is unclear the emails dont show whether Mnuchin ever responded, or if there was ever a meeting about the idea.

The government hasnt been ignoring cryptocurrency in the time since Kushner sent the email. The IRS and the treasurys Financial Crimes Enforcement Network have been active in monitoring the crypto space, as well as trying to get legislation passed on crypto data collection and regulation. Mnuchins emails also reveal that the US Treasury had meetings with executives from several companies that deal in cryptocurrency, including Coinbase, Jack Dorseys Square (now Block), and Xapo Bank.

While the US doesnt have an official digital currency, there are other countries that do. Bitcoin is now an official currency in El Salvador, alongside the US dollar, and China has introduced a digital yuan, though its not based on the blockchain. Venezuela established its own cryptocurrency called the Petro in 2018 (in 2019, Mnuchin emailed two other Treasury secretaries, saying they should discuss the countrys plans to use crypto for international commerce), though the currency doesnt seem to have been particularly successful, and Trump banned Americans from buying it during his tenure as president.

While it doesnt seem like well be getting an official US cryptocurrency anytime soon, there was one last thing I noticed while reading through the trove of emails that Coinbase obtained; Mnuchin got some truly eyebrow-raising spam about crypto while heading the treasury (that may be one of the few things I have in common with him). My favorite was one from someone who... I think was claiming to represent all of humanity? The subject line reads Bitcoin Is Unrecognized By The Central Government Of The World (On Which We Live): The True Creator Of Bitcoin (In The Said World) Can Be Known.

The documents dont show if Mnuchin ever responded to that one. You can read the full cache of emails CoinDesk obtained right here, if youre so inclined.

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Jared Kushner floated the idea of a federal cryptocurrency, documents reveal - The Verge

Up until now, footballs relationship with cryptocurrency sponsorship has felt like a complete and utter free-for-all, with no rules whatsoever. Slowly but surely that is starting to change.

This week the UK government announced plans to crackdown on misleading ads for cryptocurrency companies, which would treat them like ads for other financial products, a move that could have far-reaching implications in the world of football which is increasingly dependent on the booming sector. Meanwhile Spain is leading a similar charge in the EU.

Cryptoassets can provide exciting new opportunities, offering people new ways to transact and invest, said Rishi Sunak, the UK chancellor. But its important that consumers are not being sold products with misleading claims. We are ensuring consumers are protected, while also supporting innovation of the cryptoasset market.

Volatile cryptocurrencies like Bitcoin and Ethereum boomed in value in 2021, leading to big financial gains for some people, but also generating huge amounts of hype which may mean latecomers are exposed to losses. Most cryptocurrencies have declined in value in recent months and nobody can predict what they will do next.

Non-fungible tokens (NFTs) a type of digital asset also based on blockchain technology with a lot of similarities to the examples outlined above, are excluded from the new rules.

But given there were almost literally no rules before this week, the shift from a Wild West to a very-slightly-less Wild West is a notable one.

Online betting ads have long been a huge revenue stream for football clubs, but that murky world is coming under increasing scrutiny and regulation. For example Italy imposed a strict ban on gambling firms recently.

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Football and cryptocurrency sponsorship: is the free-for-all over? - The Athletic

This article features the top ten cryptocurrency prices today on January 19, 2022

The crypto world witnessed turbulence last week as another variant of Covid-19, omicron had emerged. Bitcoin, the worlds most popular cryptocurrency, was trading at US$41,712.17 or 0.66 percent lower than its price 24 hours ago. Even though eight out of ten major cryptocurrencies are in red today, the total crypto market volume over the last 24 hours is US$78.87 billion, which makes a 3.64% increase. Here are the top 10 cryptocurrency prices you should check before investing.

Analytics Insight lists the top 10 current cryptocurrency prices on January 19, 2021

Bitcoin (BTC)- US$41,744.34(down by 0.66%)

Ethereum (ETH)- US$3,109.21(down by 2.18%)

Binance Coin (BNB)- US$464.38(down by 1.36%)

Solana (SOL)- US$138.69(up by 0.21%)

Tether (USDT)- US$1.00(down by 0.01%)

Cardano (ADA)- US$1.44 (down by 7.94%)

XRP (XRP)- US$0.7431(down by 1.46%)

Polkadot (DOT)- US$24.70(down by 2.26%)

Terra (LUNA)- US$78.55(upby 3.02%)

USD Coin (USDC)- US$0.9998 (down by 0.02%)

According to CoinMarketCap, the global crypto-market cap is US$1.97T with a volume of US$78.87billion over the last 24 hours with an increase of 3.64%.

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Another Red Flag! Top Ten Cryptocurrency Prices on January 19, 2022 - Analytics Insight

Susan G. Komen Now Accepting Cryptocurrency as a Form of Donation

DALLAS, January 19, 2022--(BUSINESS WIRE)--Susan G. Komen, the worlds leading breast cancer organization, will now accept donations in the form of cryptocurrency. Through a partnership with The Giving Block, Komen will be able to accept various cryptocurrencies and provide donors with tax receipts.

"We are excited to welcome donors who want to support the mission of Susan G. Komen to end breast cancer through cryptocurrency and appreciate the partnership with The Giving Block to make this possible," said Komens President and CEO Paula Schneider.

Added Pat Duffy, co-founder of The Giving Block, "Today, hundreds of millions of people use cryptocurrency. And with an average gift size of nearly $11,000, nonprofits who prioritize crypto donors are getting ahead."

Komen is currently accepting more than 70 cryptocurrencies, including:

Bitcoin (BTC), Ethereum

(MANA), Dogelon Mars

(QNT), Radicle (RAD), Ren

(ETH), USD Coin (USDC),

(ELON), Enjin Coin (ENJ),

(REN), Render Token

Dai (DAI), Dogecoin (DOGE),

Fantom (FTM), Fetch AI

(RNDR), Shiba Inu (SHIB),

Basic Attention Token (BAT),

(FET), Filecoin (FIL), Gala

Skale (SKL), Smooth Love

Ethereum Name Service

(GALA), Gemini Dollar

Potion (SLP), Somnium

(ENS), 0x (ZRX), 1inch

(GUSD), Injective Protocol

Space (CUBE),Spell Token

(1INCH), Aave (AAVE),

(INJ), Keep3r (KP3R), Kyber

(SPELL), Storj (STORJ),

Alchemix (ALCX), Amp

Network (KNC), Litecoin

SushiSwap (SUSHI),

(AMP), Ankr Network

(LTC), Livepeer (LPT),

Synthetix (SNX), Terra

(ANKR), API3 (API3), Audius

Loopring (LRC), Magic

(LUNA), TerraUSD (UST),

(AUDIO), Axie Infinity Shards

Internet Money (MIM), Maker

Tezos (XTZ), The Graph

(AXS), Balancer (BAL),

(MKR), Mask Network

(GRT), The Sandbox

Bancor Network Token

(MASK), Merit Circle (MC),

(SAND), UMA (UMA),

(BNT), BarnBridge (BOND),

Mirror Protocol (MIR), Moss

Uniswap (UNI), Wrapped

Bitcoin Cash (BCH),

Carbon Credit (MCO2),

Centrifuge (wCFG),

ChainLink (LINK), Civic

Numeraire (NMR), Orchid

Yearn.Finance (YFI), Zcash

(CVC), Compound (COMP),

(OXT), PAX Gold (PAXG),

(ZEC).

Curve (CRV), Decentraland

Polygon (MATIC), Quant

To learn more and make a crypto donation to Susan G. Komen, visit https://komen.org/donatecrypto.

Story continues

About Susan G. Komen

Susan G. Komen is the worlds leading nonprofit breast cancer organization, working to save lives and end breast cancer forever. Komen has an unmatched, comprehensive 360-degree approach to fighting this disease across all fronts and supporting millions of people in the U.S. and in countries worldwide. We advocate for patients, drive research breakthroughs, improve access to high-quality care, offer direct patient support and empower people with trustworthy information. Founded by Nancy G. Brinker, who promised her sister, Susan G. Komen, that she would end the disease that claimed Suzys life, Komen remains committed to supporting those affected by breast cancer today, while tirelessly searching for tomorrows cures. Visit komen.org or call 1-877 GO KOMEN. Connect with us on social at http://www.komen.org/contact-us/follow-us/.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220119005107/en/

Contacts

Amanda DeBardSusan G. Komen(972) 701-2131adebard@komen.org

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Cryptocurrency Unites With Susan G. Komen to End Breast Cancer - Yahoo Finance

The AFL has immoral form and is corrupting and compromising the sport with deals such as its $25m sponsorship deal with cryptocurrency firm Crypto.com, Reverend Tim Costello of the Alliance for Gambling Reform has said.

The AFL announced the five-year partnership on Tuesday, saying Crypto.com would be the official cryptocurrency exchange and trading platform for the AFL and the AFLW.

Crypto.com is a trading platform for cryptocurrencies, digital encrypted currencies that allow payments to be made without banks. It also offers pre-paid debit cards.

The company already has deals with international sporting brands including Formula One and UFC. It will also run an advertisement featuring actor Matt Damon at the Super Bowl in February.

The AFLs chief executive, Gillon McLachlan, said on announcing the deal that cryptocurrency and blockchain technology is a dynamic and emerging industry, and the AFL is delighted to partner with Crypto.com to be at the forefront of the industrys growth in Australia.

Costello, the Alliance for Gambling Reforms chief advocate, said in theory there was a bigger cake with cryptocurrency than conventional gambling, which was an entirely zero sum game.

But both were compromising the AFLs integrity, he said.

The sport is meant to be a sport, and all these add ons just because they say they need the money, chip away at the integrity of the sport.

You are literally corrupting and compromising the sport with all these other alternatives.

Costello said the AFLs history with sports betting made him suspicious about the new deal.

The AFL has really immoral form, utterly immoral form on this, he said.

AFL clubs have got out of pokies, by and large, but the AFL hasnt moved an inch on Sportsbet and saturation ads.

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David Glance, a cryptocurrency expert and University of Western Australia computer scientist said crypto companies were trying to gain legitimacy through various sponsorship deals.

As the deal was announced, Crypto.coms customer support account on social media was responding to complaints from multiple users that they had been kicked out of their accounts, with some of them saying they had lost money.

We have a small number of users reporting suspicious activity on their accounts, the company tweeted.

We will be pausing withdrawals shortly, as our team is investigating. All funds are safe.

Some users responded claiming their accounts had been hacked and their money was missing. Podcaster Ben Baller said about $18,000 went missing from his account, then later said it had been returned.

The chief executive of Crypto.com, Kris Marszalek, said no customer funds were lost.

The downtime of withdrawal [infrastructure] was [about] 14 hours our team has hardened the infrastructure in response to the incident, he wrote on Twitter.

We will share a full post mortem after the internal investigation is completed.

In a press release detailing the deal with the AFL, Marszalek said Crypto.com was committed to investing in Australia.

The AFL and AFLW are perfect platforms to associate ourselves with Australian sports and culture, he said.

Glance said it was strange for sporting organisations to become involved in cryptocurrency, although less so when one considered they are often also involved with gambling companies.

Someone in the AFL thought this was a good idea, but I dont think theyve thought it through, he said.

[Cryptocurrency] is an environmental catastrophe and its fuelling crypto crime. The people benefiting from this are doing it at the expense of people who lose money, and the environment.

It is estimated that mining cryptocurrency uses so much computer power that it burns more energy than entire countries. Guardian Australia revealed earlier this week that Australias financial security agency, Austrac, had concerns about a rise in crime as the use of cryptocurrencies increases.

Cryptocurrencies are also often criticised for having no underlying value and relying on new investors to deliver returns to existing investors.

The AFL and Crypto.com have been contacted for comment.

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AFL corrupting the sport through deal with cryptocurrency trading company, says Tim Costello - The Guardian

Bitecoin, a lesser known cryptocurrency has surprised many with its stupendous rise

Several penny tokens have performed well over the past few months but have remained under the radar because of various reasons, including the fact that they are not as popular as the market leaders and are thus relatively less monitored. Take, for instance, Bitecoin. This less-known cryptocurrency has surprised many with its stupendous rise in just 24 hours. Between January 16 and 17, the coin has rallied 19,650 percent to reach $0.000003271 from its previous value of $0.0006462, according to CoinMarketCap, a market research agency that tracks price movements of several coins.

However, by January 18, it lost a big chunk of its gains to settle at $0.0003839. And this sudden spurt and decline in its value have cast doubts on the coin's potential as a lucrative investment destination. Financial experts often warn about phishing coins that rise suddenly and then lose all the gains even more rapidly. A similar extreme volatility was noticed in a cryptocurrency inspired by the South Korean series Squid Game. Named after the show, the coin tried to capitalise on euphoria but lost all of its value within 24 hours in an apparent scam. This kind of scam is commonly called a "rug pull" by crypto investors.

Experts advise caution while investing in coins that promise stunning deals. They ask potential investors to first do their research and read about the coins and only when they are satisfied with the coin's trustworthiness should they put in their money. Also, volatility is a feature in the new cryptocurrency industry, so it's always a good idea for investors to evaluate their risk appetite before entering the market.

Meanwhile, the Bitecoin has now been ranked at 4,562 position on CoinMarketCap. The virtual coin has a total circulation of 6,10,000. And its maximum supply is capped at 1,000,000,000,000,000 (One one quadrillion).

In another move, Bitecoins will now be released on the basis of Binance Smart Chain platform and comply with ERC20 standard.

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Penny Coin Bitecoin Rises Massively, Then Loses A Big Chunk Of The Gains - NDTV Profit

Scalex Co-founders

Following the ban on crypto exchanges in several parts of Africa, cryptocurrency users on the continent have migrated to peer-to-peer platforms (P2P) for their on and off-ramp needs, remittances, and other transactions. This reliance on P2P platforms is what Scalex.Africa, a high-breed peer-to-peer crypto exchange was established to accelerate. Scalex provides blockchain-based solutions aimed at facilitating the secure and seamless adoption of cryptocurrencies in Africa.

Between July 2020 and June 2021, cryptocurrency adoption in Africa spiked by a whopping 1200% making the continent one of the fastest-growing cryptocurrency economies in the world, according to Chainalysis, a digital analytics firm. This surge in Africas digital asset market grew despite the heavy resistance that cryptocurrency has met due to draconian government regulations placed on the exchange in some countries on the continent.

Young Africans are migrating heavily into the crypto space with tons of avenues to earn from such as; play to earn games like Splinterlands and Axie Infinity. We also have a growing creator space with NFT creators leading the pack as well as remote workers who are receiving payments in crypto, Scalex co-founder, Emeka Nwosu said.

Being the second-largest peer-to-peer trader of Bitcoin globally, Nigerians who trade in crypto carry out these and related activities on multitudes of peer-to-peer platforms and communities that continue to spring up daily. These platforms have opened up the crypto space and its users to multiple risks causing some to end up in fraudulent transactions.

Scalex was originally built in 2020 to provide a more secure way for users to transact peer-to-peer on Telegram communities. In two years since its creation, it has evolved from a chatbot into a full web-based peer-to-peer exchange offering access to Bitcoin, Ethereum, and USDT while offering the flexibility to trade named tokens across Binance Smart Chain (Bep20) and Tron (Trc20) networks.

In addition to securing transactions, the platform eliminates bottlenecks experienced by users transacting on existing peer-to-peer platforms which were too complex and manual in their transaction mechanisms, thus improving user experience.

Drawing from our experience in the space, we have created a first of its kind peer-to-peer exchange for Africans that makes it possible to swiftly and securely swap your earnings from crypto to fiat currencies and vice versa, Scalex is the first to introduce an automated infrastructure which eradicates the need to manually confirm peer-to-peer transactions. The crypto space is becoming increasingly cluttered and it is easy to get distracted. Our aim at Scalex is to roll out products that provide the most value for Africans. We recently partnered with FTX Africa to offer On and Off-Ramp solutions to their users and we intend to consolidate on this to drive more partnerships globally. Nwosu added.

Since launching its private beta in May 2021 which went live for public use in September of the same year, Scalex has gained more than 5,000 users with over 24,000 transactions completed.

Scalexs operations are angel investor and venture-funded, having recently accelerated from GreenHouse Capital, a leading tech accelerator in Africa. Scalex.Africa is keen on expanding its services across Africa, with markets in Sub-Saharan and East Africa in view while also deepening its product offerings to users, with a host of products currently in development.

The Scalex mobile application is set to launch this year with plans to cater to a growing audience.

The Scalex Africa team is made up of amazing talents with deep industry experiences spanning over 6 years in the blockchain ecosystem. Emeka has a major in economics with 7 years experience in the banking sector across e-business and sales in addition to an MBA from Lagos Business School alongside MBA classmate and co-founder Ngati who is an experienced sales and business development strategist with experiences from leading global brands Guinness and Vlisco. James majored in Fintech and Business Analytics and has previously co-founded two startups in the past; SabiFX and Fooodmarket. Joel and Niyi are computer scientists and software developers who make up the five-man team and are experienced in early-stage startups.

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Meet Scalex, the startup paving the way for cryptocurrency adoption in Africa - TechCabal

January 18, 2022

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Introduction

On 12 January 2022, the Hong Kong Monetary Authority (HKMA) released a Discussion Paper on the expansion of the Hong Kong regulatory framework to stablecoins (e.g. crypto-assets pegged to fiat currencies). The Paper considers the adequacy of the existing regulatory framework in light of the growing use of stablecoins and other types of crypto-assets in financial markets, and the challenges posed by this increase in their prevalence. It further poses eight questions for consideration by the industry, including the scope of a proposed new regulatory regime to cover what the HKMA describes as payment-related stablecoins.

This client alert provides an overview of the HKMAs views on crypto-assets and stablecoins as outlined in the Paper, discusses the implications for players in the stablecoin ecosystem if the proposed changes are implemented, and suggested next steps for interested parties.

The HKMA has requested responses to the Paper by 31 March 2022, and has indicated that it intends to introduce this new stablecoin regulatory regime by 2023-2024.

HKMAs views on crypto-assets and financial stability

The Paper provides a valuable insight into the HKMAs views on crypto-assets in general, and stablecoins in particular, including their linkages to the traditional financial system and ramifications on financial stability.

In introducing its proposal to regulate payment related stablecoins, the HKMA has made it clear that while the current size and trading activity of crypto-assets globally may not pose an immediate threat to the stability of the global financial system from a systemic point of view, it does consider the increasing prevalence of crypto-assets to have the potential to impact financial stability. In particular, the HKMA has flagged that it considers the growing exposure of institutional investors, as well as certain segments of the retail public, to such assets as an alternative to, or to complement traditional asset classes, indicates growing interconnectedness with the mainstream financial system.

Further, as noted by the HKMA, it understands that while Hong Kong authorised banks (Authorised Institutions or AIs) currently undertake only limited activities in relation to crypto-assets, AIs are interested in pursuing these activities further, given that they face increasing demand from customers for crypto-related products and services. This is consistent with what we understand is a steady increase in high net wealth investors hungry for yield demanding access to crypto-assets through their private wealth managers, as well as an uptick in demand from retail investors in Hong Kong eager for the same exposure to upside. To this end, the HKMA has flagged that it will soon provide AIs with more detailed regulatory guidance in relation to their interface with and provision of services to customers in relation to crypto-assets.

Finally, the HKMA has also noted its concerns that the ease of anonymous transfer of crypto-assets may make them susceptible to the risk of illicit and money laundering / terrorist financing activities.

The HKMAs views on stablecoins

The Paper also flags the HKMAs view that stablecoins are increasingly viewed as a widely acceptable means of payment and that this, alongside the actual increase in their use, has increased the potential for their incorporation into the mainstream financial system. In the HKMAs opinion, this in turn raises broader monetary and financial stability implications and has resulted in the regulation of stablecoins becoming a key priority for the HKMA, which has stated in the Paper that it wishes to ensure that such coins are appropriately regulated before they operate in Hong Kong or are marketed to the public of Hong Kong.

The Paper goes on to identify a number of potential risks that may arise in relation to the use of stablecoins, including, in summary:

Given these potential risks, the HKMA has stated in the Paper that it considers it appropriate to expand the regulatory perimeter to cover payment-related stablecoins in the first instance, although it has not ruled out the possibility of regulating other forms of stablecoins as well.

The HKMAs discussion questions for industry consideration

The HKMA has noted in the Paper that it considers the need to regulate [stablecoins] is well justified and the tool to regulate[can] be decided at a later stage. However, it has indicated that it wishes for feedback from the industry and the public on the scope of the regulatory regime applicable to stablecoins, and to this end has set out eight discussion questions for industry consideration. A summary of the key questions posed by the HKMA, as well as the HKMAs views on those questions, is set out below.

In posing this question, the HKMA has noted that it intends to take a risk-based approach focused initially on payment-related stablecoins at this stage given their predominance in the market and higher potential to be incorporated into the mainstream financial market (as discussed above). However, the HKMA has noted that it intends to ensure that whatever regime is introduced is sufficiently flexible that it could extend to other types of stablecoins in the future. As such, issuers and traders of other types of stablecoins should not expect to avoid regulatory scrutiny forever.

The HKMA has proposed regulating a broad range of stablecoin-related activities, including:

This broad list is based on a list of activities in relation to stablecoins published by the Financial Stability Board[1] and as such may be viewed as in keeping with international standards. However, as discussed below in relation to Question 5, the breadth of this regime may raise concerns regarding the degree of overlap between this regime and others proposed by Hong Kong regulators, including the proposed VASP regime to be administered by the Securities and Futures Commission (SFC) (see our alert here).

The HMKA has suggested that it considers that entities subject to the new stablecoin licensing regime would be subject to the following requirements:

Further, given that it is common for multiple entities to be involved in different parts of a stablecoin arrangement, the HKMA has noted that such entities could be subject to part or all of the requirements, depending on the services they offer.

If requirements in relation to these matters are ultimately implemented by the HKMA, the stablecoin regime would cover some of the requirements of the proposed VASP regime, with the exception of requirements of reserves of backing assets, which will presumably only be applied to stablecoins given their nature.

The HKMA has signalled that it believes that only entities incorporated in Hong Kong and holding a relevant licence granted by HKMA should carry out regulated activities, to enable the HKMA to exercise effective regulation on the relevant entities. As such, it has stated in the Paper that it expects that foreign companies / groups which intend to provide regulated activities in Hong Kong or actively market those activities in Hong Kong to incorporate a company in Hong Kong and apply for a licence to the HKMA under this regime.

If implemented, this would have significant ramifications for those global crypto-exchanges currently offering trading in stablecoins to Hong Kong users from offshore. These businesses would be faced with a choice between either incorporating in Hong Kong and seeking a licence, or discontinuing their trading for Hong Kong users.

The HKMA has stated that it will collaborate and coordinate with other financial regulators when defining the scope of its oversight and will seek to avoid regulatory arbitrage, including in relation to areas which may be subject to regulation by more than one local financial authority.

However, an HKMA-administered regime of the breadth proposed above would create a situation in which an exchange undertaking transactions in non-stablecoin crypto-assets would be regulated by the SFC under its proposed new VASP regime while being regulated by both the SFC and the HKMA under its stablecoin regime. In this respect, we note that the proposed definition of virtual asset under the proposed new VASP regime applies equally to virtual coins that are stable (i.e. the so-called stablecoins).[2] While the HKMA and SFC share regulatory responsibility for Registered Institutions (i.e. Authorised Institutions which are separately licensed by the SFC to undertake securities and futures business), that shared regulatory responsibility concerns distinctly different types of activities. In contrast, we consider that from an exchanges perspective, the act of executing transactions in stablecoins is substantially similar to executing transactions in non-stablecoin crypto-assets. As such, this approach may lead to unnecessary and undesirable regulatory inefficiencies if exchanges are required to be licensed under both the SFC and HKMA regimes to undertake transactions in crypto-assets.

While not expressly stating that it will not require stablecoin issuers to be regulated as AIs under the Banking Ordinance, the HKMA has indicated that it expects that the requirements applicable to stablecoin issuers will instead borrow from Hong Kongs current regulatory framework for stored value facilities (SVF). However, the HKMA has signalled that certain stablecoin issuers may be subject to higher prudential requirements than SVF issuers where they issue stablecoins of systemic importance.

The HKMA has not expressly ruled out regulating unbacked crypto-assets, and has stated that it is necessary to continue monitoring the risks posed by this asset class. In stating this, the HKMA has also pointed to the VASP regime, suggesting that the HKMAs approach to this area is likely to depend on the success of that regime once implemented.

The HKMA has advised current and prospective players in the stablecoin ecosystem to provide feedback on the proposals set out in the Discussion Paper, and has noted that in the interim, it will continue to supervise AIs activities in relation to crypto-assets and implement the SVF licensing regime pending implementation of this new regime.

Conclusion

The Discussion Paper provides a valuable insight into the HKMAs plans for the future of stablecoin regulation in Hong Kong. While some concerns exist as to the potential overlap between the HKMAs new proposed regime and the SFCs VASP regime, it is clear that the HKMA intends to ensure that it is regarded as the primary regulator of stablecoins going forward, and that it sees the regulation of this asset class as closely linked to its key objective of ensuring financial stability.

____________________________

[1] See Financial Stability Board, Regulation, Supervision and Oversight of Global Stablecoin Arrangements: Final Report and High-Level Recommendations, https://www.fsb.org/wp-content/uploads/P131020-3.pdf, page 10.

[2] See Financial Services and the Treasury Bureau, Public Consultation on Legislative Proposals to Enhance Anti-Money Laundering and Counter-Terrorist Financing Regulation in Hong Kong (Consultation Conclusions), https://www.fstb.gov.hk/fsb/en/publication/consult/doc/consult_conclu_amlo_e.pdf, paragraph 2.8.

Gibson Dunns lawyers are available to assist in addressing any questions you may have regarding these developments. If you wish to discuss any of the matters set out above, please contact any member of Gibson Dunns Crypto Taskforce (cryptotaskforce@gibsondunn.com) or the Global Financial Regulatory team, including the following authors in Hong Kong:

William R. Hallatt (+852 2214 3836, whallatt@gibsondunn.com)Emily Rumble (+852 2214 3839, erumble@gibsondunn.com)Arnold Pun(+852 2214 3838,apun@gibsondunn.com)Becky Chung (+852 2214 3837, bchung@gibsondunn.com)

2022 Gibson, Dunn & Crutcher LLP

Attorney Advertising: The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

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Another Step Towards the Regulation of Cryptocurrency in Hong Kong: HKMA Releases Discussion Paper on Stablecoins - Gibson Dunn

Chris Maurice, founder of Yellow Card.

Investments might be all about taking risks, but they need not be an extreme sport. The risks must be calculated.

This is why some investors, despite the alluring craze, are wary of diving into the Bitcoin world. Bitcoin, a cryptocurrency, is highly volatile.

But there is some good news. Inventors are increasingly coming up with stablecoins that do not dramatically fluctuate like Bitcoin or Ethereum. One such crypto is tether (USDT).

USDT is the latest stablecoin to get into the Kenyan market. The tokens will be traded on the Yellow Card exchange.

Owned by Tether Limited, USDT targets investors who prefer to trade a token one-to-one for the US dollar, without the volatility that comes with other cryptocurrencies.

Tether is a cryptocurrency mainly hosted on the Ethereum blockchain and is pegged to the US dollar, which earns it the right to be called a stablecoin.

Other stable coins

Besides Tether, other stablecoins include USD Coin and Binance which derive their value from external assets. The asset can be a national currency such as the US dollar in the case of Tether or a combination of cash, treasury bonds, commercial paper, corporate bonds, and certificates of deposit with foreign banks.

This is unlike other cryptocurrencies such as Bitcoin and Ethereum which are tied to being mined by computers.

By end of Tuesday, one tether, just like the dollar, was going for Sh113.44.

Tether was initially designed to be worth $1 (Sh113.4) always, maintaining that value in reserves for each tether issued.

Chris Maurice, the founder of Yellow Card, says that by providing stability, you can hold a digital asset similar to a conventional currency but with the ease of trading for other cryptocurrencies on the crypto markets.

With this, you get the benefit of stability that comes with a stable government currency but with the flexibility and ease of movement of cryptocurrencies, says Maurice.

Hedge against inflation

Stablecoins such as Tether can also be used as a hedge against inflation - the general increase in prices of goods and services. This is a boon for investors in African countries such as Zambia and Nigeria, who have been discouraged from saving by the high inflation rates.

With high inflation rates, you are not sure if the Sh500,000 that could buy a car today will be enough for the same vehicle next week.

Trading with stable coins eliminates the transaction costs and delays that negatively affect your trade execution within the crypto market.

As of 2021, USDT remains the most widely used stablecoin and is the worlds fourth-largest cryptocurrency trailing only behind Bitcoin, Ethereum and Ripple.

In addition, it ranks as the coin with the highest daily trading volume, even surpassing Bitcoin.

In November, stablecoins received rare plaudit from the US government, with Treasury Secretary Janet Yellen saying cryptos were well designed and had the potential to support beneficial payment options, reported Fortune Magazine.

Lack of regulation

Ms Yellen was, however, quick to note that the continued absence of regulation was a problem.

It is this lack of regulation that has seen the Central Bank of Kenya repeatedly warn the public against cryptocurrencies, with Governor Patrick Njoroge saying the digital coins are like Ponzi schemes.

Since the exchanges are unregulated, they can trap investors with the promise of unrealistic prices and heavy discounts on use.

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Stable cryptocurrency can help shore up your savings against inflation loss - The Standard

PANAMA CITY--(BUSINESS WIRE)--Poloniex, a global cryptocurrency exchange, is celebrating its 8th anniversary with a strategic transformation, including rebranding, new products, improved user experience, and refined global marketing strategies.

Established in 2014, Poloniex enables millions of users to trade cryptocurrencies safely and conveniently, and its steady development has been recognised by the industry throughout the years. Entering its 9th year, Poloniex has refined its brand values as Passion, Prosperity and Perseverance.

This marks a new beginning for Poloniex. The central message that this years anniversary most wants to convey is Evolution, and the new brand value encapsulates Poloniexs determination to drive progress, maintain vitality and improve user experience globally.

In addition, Poloniex is launching a brand new trading system which will deliver superior performance, an improved API, and enhanced security. New trading features and financial products will be released as well. The upgrade will significantly improve performance and provide users more liquidity than ever before.

As a global platform, Poloniex will also accelerate its expansion into international markets. Targeted marketing strategies will be developed to expand Poloniexs global footprints in emerging markets such as the Commonwealth of Independent State (CIS), Asia-Pacific (APAC), Middle East and North Africa (MENA), and Latin America (LATAM) to drive overall business growth.

On top of that, a new Space Traveler program that integrates the previous volunteer and referral program will soon be available, creating a mutually beneficial collective to engage and unite local communities.

The 8th anniversary is a major milestone for Poloniex, and we couldnt have achieved this without the continued support of our users, said Shaun Scovil, General Manager of Poloniex. This is just the beginning with more great things to come. We have an ambitious growth plan and are ready to embrace the future in this constantly changing industry. This strategic update will power our evolution into the next phase.

Currently, Poloniex provides custodial and trading support for over 300 tokens and 450 market pairs, as well as other financial products to connect the world to the power of digital assets. Moving forward, Poloniex will continuously be dedicated to building a world-class and secure exchange for users around the world.

To celebrate the anniversary, Poloniex will launch huge reward campaigns for its loyal users. For more information, please visit https://poloniex.com.

About Poloniex

Poloniex was founded in January 2014 as a global cryptocurrency exchange. With its world-class trading platform and security, it received funding in 2019 from renowned investors including His Excellency Justin Sun, Founder of TRON.

Poloniex supports perpetual contracts, spot and margin trading as well as leveraged tokens, and its services reach global users in nearly 100 countries and regions with various languages available, including English, Turkish and Russian.

Website: https://poloniex.com

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Cryptocurrency Exchange Poloniex Celebrates 8th Anniversary with Strategic Overhaul - Business Wire