Regulatory News
European Union (EU)
EBA initiates public consultations on MiCA regulatory standards for ARTs governance, remuneration of staff and suitability of members of the management body measures - Yesterday, January 11, kickstarting a series of public hearings on the MiCA regulatory technical standards (RTS), the European Banking Authority (EBA) held a virtual session outlining its proposed measures on internal governance of ARTs issuers, remuneration of staff and suitability of members of the management body. These matters, mandated by the MiCA Level I text, are currently undergoing a period of public consultations with the industry and other interested stakeholders, with a deadline January 22, 2024. The EBA also presented its proposals for technical standards on establishing dedicated policies and procedures for managing conflicts of interest. The conflicts of interest consultation closes on March 7, 2024.
Bank of Portugal introduces tech-driven financial evolution in a new article - In a recent article, the Bank of Portugal examines the profound impact of digital transformation on the EU's banking and financial sector. Focused on innovative business models, the rise of Fintech and challenges facing traditional banks, the article highlights the emergence of Regtech and Suptech in response to evolving regulations. It serves as a comprehensive overview of the industry's adaptation to technological advancements, positioning it as a noteworthy resource in the evolving financial landscape.
United Kingdom (UK)
Bank of England chief criticizes Bitcoin's inefficiency in parliamentary meeting - Bank of England Governor Andrew Bailey told the UK Parliament Treasury Committee that Bitcoin is inefficient as a payment method and is not gaining traction. Bailey reiterated his view that unbacked cryptocurrencies lack intrinsic value. Deputy Governor Sarah Breeden mentioned the hindrance of the lack of regulatory framework for cryptocurrencies in traditional finance. The meeting also briefly discussed challenges posed by stablecoins and ongoing debates about central bank digital currency (CBDC), referred to as "Britcoin."
CBDC Technology Forum advances Digital Pound design - Last week, the Bank of England published the minutes of the eighth CBDC Technology Forum meeting held on 13 October 2023. The minutes reveal progress in subgroups exploring critical aspects of the digital pound architecture, with a focus on privacy and innovation. Topics included privacy-enhancing technologies, models of interaction between Payment Interface Providers (PIPs), core ledger technology, and requirements for providing a platform for innovation. The Bank of England emphasized the importance of privacy in the digital pound and provided insights into potential use cases. Subgroups presented their objectives, expected outputs, and timelines, with the next forum meeting anticipated in January 2024.
Industry News
European Union (EU)
Coinbase explores EU expansion with acquisition of MiFID-Licensed entity for derivatives offering - Coinbase aims to enhance access to its derivatives products in the EU by acquiring a MiFID-licensed entity based in Cyprus, subject to regulatory approval. The move aligns with Coinbase's commitment to regulatory compliance, emphasizing their Five-point Global Compliance Standard. The EU's MiFID is renowned for governing investment services, and adding this license would support Coinbase's global expansion strategy. The acquisition is anticipated to close in 2024 and signifies a pivotal step in bringing a more open financial system to a global audience.
United Kingdom (UK)
Montis expands offerings to support deposit tokens and wholesale CBDC in the digital securities market - Montis, a central securities depository (CSD) and subsidiary of Archax, has completed the development of its distributed ledger-based CSD in collaboration with Delta Capita. The expansion includes enabling delivery versus payment for settling digital securities transactions with deposit tokens and wholesale central bank digital currencies (CBDC). The company aims to optimize settlement in the EU, support European-listed warrants, and has identified potential cost savings of over 40%.
MENA
Phoenix Group secures $187M deal with Bitmain, enhancing Bitcoin mining dominance - Phoenix Group, a significant player in the Middle East's Bitcoin mining, solidifies its global position with a $187 million deal with Bitmain. This follows their recent partnerships and successful IPO on the Abu Dhabi Securities Exchange (ADX). The agreement with Bitmain, coupled with their commitment to sustainability through hydro cooling, reinforces Phoenix Group's dominance in the mining sector.
Global News
Visa ventures into Web3 loyalty with innovative customer engagement platform - Visa has introduced the Visa Web3 Loyalty Engagement Solution, a customer engagement platform offering gamified giveaways and immersive experiences through digital wallets. Partnering with SmartMedia Technologies, Visa aims to revolutionize loyalty programs, rewarding customers for active engagement rather than just transactions. The move follows insights from Bond's The Loyalty Report, highlighting a desire for rewards beyond purchases. Visa's Web3 solution is set to enable brands to provide unique digital collectibles and experiences, enhancing the loyalty experience. This initiative aligns with Visa's continued involvement in the crypto space, demonstrating its commitment to innovation.
Aave Community overwhelmingly votes for PayPal's PYUSD stablecoin integration - In an ongoing governance vote, the Aave community expresses overwhelming support (99.98%) for integrating PayPal's PYUSD stablecoin into Aave's Ethereum-based pool. According to CoinDesk, the proposal, initiated by Trident Digital, aims to strengthen synergies between Aave and PYUSD, fostering collaboration with PayPal's stablecoin. If approved, the integration could enhance the relationship between PYUSD and Aave's decentralized multi-collateral stablecoin GHO. Trident plans to contribute $5 million to $10 million in liquidity for PYUSD on Aave, signaling a strategic move in the decentralized finance space.
New U.S. Bitcoin ETFs 'Democratize Access to the Market - Following the approval of the first U.S. spot Bitcoin exchange-traded funds (ETFs), Cointelegraph quotes an EU analyst who envisions potential market democratization. Grzegorz Drozdz from Conotoxia notes that Bitcoin ETFs have already played a significant role in expanding market access, with the European Economic Area displaying openness to institutional investments. Although the current size of these funds remains modest, Drozdz anticipates a rapid increase in capital inflows, potentially signaling the start of a new bull market. The analyst emphasizes the potential influence of U.S. approval on the long-term development of the crypto world.
KuCoin thrives in 2023: User base surges to 31 Million, spot trading volume doubles - Despite regulatory challenges, KuCoin experienced significant growth in 2023, with its user base reaching 31 million, marking a 16% increase. The crypto exchange reported a substantial 106% surge in spot trading volume, showcasing robust user engagement and confidence. Latin America led in growth with a 34% increase, while the Middle East, Africa, and Europe also witnessed notable user base expansions. KuCoin's accomplishments include adding 149 new assets, totaling 830 digital tokens, and launching KuCard, a crypto debit card with over 10,000 registered users within a month.
Vitalik Buterin calls for modest gas limit increase in Ethereum network - Ethereum co-founder Vitalik Buterin advocates for a "modest" increase in the gas limit during a Reddit AMA organized by the Ethereum Foundation’s research team. Noting the longest duration without an increase in the protocol’s history, Buterin suggests a 33% rise from the current 30 million gas limit to around 40 million. The proposal aims to balance growing demand on the Ethereum network while ensuring efficient syncing and verification processes. As Ethereum gas fees surge, Buterin's recommendation aligns with efforts to optimize performance and adapt to changing demands.
