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Luno Floats Venture Capital Arm to Invest in Web3.0 & Fintech Startups

by Blockchain NewsMarch 17, 2022

Luno, a digital currency platform owned by the Digital Currency Group (DCG), has launched Luno Expeditions, its Venture Capital (VC) outfit.

As reported by TechCrunch, the new VC offshoot will engraft itself as a funding outfit for cryptocurrencies or Web3.0 startups and those in the Fintech space.

Luno Expeditions is expected to fund as many as 250 startups annually, complementing the investment strategies that have long been defined by its grandparent company, DCG. According to Emily Cheng, the named Chief Executive Officer of the new offshoot leading a team of five, the decision to focus on both crypto and fintech firms is hinged on the fact that the entire outlook of the digital currency ecosystem is still being built. Some fintech firms fill in the bridge or gap that crypto startups are yet to fill.

“There is still a lot of work to be done in building the infrastructure that crypto will rely on. So our aim is to be supportive of this broader ecosystem. So what this practically means is we will invest in fintech companies that we feel match that long-term thesis, not just any fintech company,” she said.

As much as $50,000 to $250,000 will be invested in startups while at their seeds or pre-seed stages. It comes in at about $15 million to $75 million annually.

“We are likely to invest at the upper end of that range. Also, we have some flexibility, including writing larger cheques as we scale,” the CEO said. “The reason we didn’t go with a fund structure is that we don’t need any external funding to be able to build this business, both from a capital and management fee perspective. It also allows us to finance investments with evergreen capital, which we believe is more valuable to founders building companies in the fintech space and aligns all of our long-term interests better.”

The emergence of Luno Expeditions trails attempts by established companies, including Paradigm Capital, Coinbase Ventures, and Andreessen Horowitz (a16z), to pump into the fast-growing digital currency ecosystem.

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Binance Gets Business License to Offer Trading Services in Dubai

by Blockchain NewsMarch 17, 2022

Binance, the world’s largest cryptocurrency exchange by trading volume, announced Wednesday that it has obtained a license from Dubai’s Virtual Asset Regulatory Authority (VARA) to carry out some business operations in the region.

Binance received the greenlight as Dubai adopted its first law governing virtual assets last week and formed VARA as a market regulator to oversee the sector.

In a statement, Binance said, “the exchange will be permitted to extend limited exchange products and services to pre-qualified investors and professional financial service providers. All licensed VARA service providers will be monitored progressively to open access to the retail market.”

As part of the agreement, Binance said that it would also anchor a blockchain technology hub in the Dubai World Trade Centre (DWTC).

Helal Saeed Almarri, DWTC Authority Director-General, further elaborated about the announcement and said: “Binance will be able to operate its regional business from Dubai in the newly announced regulatory ecosystem that is subject to comprehensive legislation and internationally applicable policy frameworks.”

The United Arab Emirates (UAE) has been pushing to build the virtual asset sector and regulation to attract new business forms as regional economic competition rises.

In December, Binance disclosed that it was collaborating with DWTC to assist in creating an international virtual asset ecosystem in Dubai and help develop virtual asset regulations.

Expanding Offering across the Globe

The move comes just two days after Binance got regulatory approval from the Central Bank of Bahrain to operate as a crypto-asset service provider in the kingdom. The Bahrain kingdom has developed infrastructure to support the rapidly rising blockchain and crypto industry. The collaboration with Binance will help the country attract other global firms to invest in the local sector.

The license to operate as a crypto asset service provider in Bahrain strengthens Binance’s presence in the Middle East as the trading exchange encounters increasing scrutiny from financial regulators elsewhere.

Last week, UK’s FCA, a major financial regulator, stated that Binance lacked the power to assess the “fitness and propriety” of new beneficial owners of digital asset custodian Digivault after Binance formed a partnership with Digivault’s parent.

Although Binance has faced increased scrutiny from regulators in the US, UK, Europe and China, the firm has taken steps to improve its relationship with the authorities. The exchange is currently shifting its focus in the Middle East to cash in on the region’s interest in cryptocurrencies.

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Tagged : Binance / BUSINESS LICENSE / Dubai / Exchanges

LSG Group Says Crypto Exchanges Dealing in Russia Could See Setbacks

by Blockchain NewsMarch 17, 2022

The head of the London Stock Exchange Group said that cryptocurrency exchanges engaging with Russia could see negative consequences as Western governments look for ways to tackle Moscow’s invasion of Ukraine.

Crypto exchanges have turned a blind eye to orders for a cut off of all Russian users, which has given rise to concerns that Russia could use cryptocurrencies as a loophole to navigate around sanctions that have been put upon the country by the United States and Europe.

David Schwimmer, LSEG’s chief executive officer, said that crypto exchanges are stuck in between either abiding by the philosophy of independence from regulation or supporting the centralised system of global finance – which calls for the requirement of regulation and transparent frameworks.

“If that industry is seen as a bad actor … on the implementation of, or the avoidance of, sanctions in terms with what’s going on with Russia, I think that would have a long-term impact in terms of how that industry is perceived,” he said at a conference hosted by the Futures Industry Association in Boca Raton, Florida.

Recently, Japan has also urged crypto exchanges to stop business in Russia.

Following concerns from the Group of Seven (G7) nations, the country requested crypto exchanges to cancel transactions of crypto assets that are subject to asset-freeze sanctions against Russia and Belarus, Reuters reported citing national officials.

Blockchain.News reported that concerns among the G7 economies have been growing. They believe that the Russian government uses cryptocurrencies to tackle financial sanctions imposed upon the country for invading Ukraine.

Meanwhile, payment operators have already been following the orders of sanctions issued by the U.S.

American Express, Visa, Mastercard, and PayPal have announced the suspension of their operations in Russia in protest of its ongoing invasion of Ukraine.

The report added that four operators stated that cards issued by them would no longer function at shops or ATMs in Russia, and that also means customers will no longer be able to use their Russian cards abroad or for international payments.

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Tagged : Bitcoin / Blockchain / Crypto / Cryptocurrency / CRYPTOEXCHANGE / Exchanges / LSE / Russia / Ukraine

Crypto Exchange FTX Expands Business to Africa, Partnering Kenyan Fintech Firm AZA Finance

by Blockchain NewsMarch 17, 2022

To expand its global footprint and presence on African soil, top-notch cryptocurrency exchange FTX has partnered with AZA Finance, a Kenyan-based fintech company.

Through the strategic partnership, FTX seeks to enhance the use of Web3 and cryptocurrencies in Africa by offering ideal networking and learning resources.

Moreover, plans are underway to offer African and digital currency trading pairs, which will make it easier to deposit and withdraw cryptocurrencies using African currencies. The non-fungible tokens (NFTs) market is also expected to be boosted by onboarding artists on the continent.

Elizabeth Rossiello, AZA Finance CEO, welcomed the partnership and stated:

“After serving these booming enterprises for years, we know that the next generation of users, creators, and builders for the Web3 economy is undoubtedly African.”

The swift adoption of cutting-edge technologies by Africans coupled with the continent’s rapid-growing population, which is anticipated to double by 2050, also triggered this partnership.

Founded in 2013, AZA Finance, formerly called BitPesa, is a provider of cross-border payment solutions for businesses with a presence in ten African countries.

Based on a valuation of $32 billion, FTX has emerged as one of the leading crypto exchanges globally, and its expansion drive continues to gain steam.

For instance, FTX recently announced plans to open a regional headquarters in Dubai following the approval of its virtual-asset license.

The exchange’s CEO Sam Bankman-Fried acknowledged that FTX Europe, a branch operating in Europe and the Middle East, would offer “complex crypto-derivatives products with centralized counterparty clearing to the institutional market.

FTX Europe was established earlier this month, becoming the second affiliate of the crypto exchange after FTX US, which was launched in May 2019.

The company continues to expand its business worldwide. In February, FTX acquired Japanese digital assets brokerage firm, Liquid Group, to bolster its global presence, Blockchain.News reported.

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Tagged : Africa / AZA FINANCE / Crypto Exchange / Cryptocurrencies / Enterprise / EXPANSION DRIVE / FinTech / FTX / Kenya / Web3

The Russia-Ukraine War Might Accelerate CBDC Issuance, Former BOJ Official Says

by Blockchain NewsMarch 17, 2022

The sanctions slapped on Russia based on its invasion of Ukraine might prompt more nations to adopt central bank digital currencies (CBDCs) as a shield against the U.S. dollar’s supremacy in the global financial system, according to the former Bank of Japan (BOJ) executive Hiromi Yamaoka.

China has already set the ball rolling with its digital yuan. Yamaoka noted:

“While sanctions using financial infrastructure are necessary in extreme cases like the Ukraine crisis, they are ‘emergency means’ that should not be overused.”

With U.S. allies like Japan joining the sanctions, Yamaoka believes a situation that pushed Russia into default was intentionally developed.

He pointed out:

“The most effective, powerful weapon was the freezing of Russia’s foreign reserves.”

Following concerns from the Group of Seven (G7) nations, Japan recently requested crypto exchanges to cancel transactions of crypto assets that were subject to asset-freeze sanctions against Russia and Belarus.

Yamaoka stated that national security and defence would become key issues when discussing CBDCs. He added:

“There’s a chance a country like China could promote usage of digital yuan for cross-border transactions and create a currency bloc to counter the dollar’s dominance.”

During his BOJ tenure, Yamaoka was the head of the payment and settlement systems department. Therefore, he is well versed in CBDC and global settlement affairs.

Likewise, speaking on CNBC’s Squawk Box Asia Monday, financial technology consultant and author Richard Turrin shared similar sentiments that China’s digital yuan could counter the dollar’s dominance in international trade settlements this decade.

He stated:

“Remember, China is the largest trading country, and you’re going to see digital yuan slowly supplant the dollar when buying things from China.”

Turrin added that there was a high likelihood nations would seek other payment channels to stop the current dollar dependence as part of the “risk management exercise.”

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Tagged : CBDC / Central Bank Digital Currency / Digital Yuan / FinTech / Money / Russia / Sanctions / U.S. Dollar / Ukraine

Ukrainian President Signs Law to Establish Regulatory Framework for Crypto

by Blockchain NewsMarch 17, 2022

Amidst the ongoing war on its shores, Volodymyr Zelenskyy has signed into law the bill that will legalize digital currencies in the country.

According to a press release published by the Ministry of Digital Transformation, the new law helps in creating conditions for the launch of a legal market for virtual assets in Ukraine.

The new industry will be regulated by the National Securities and Stock Market Commission, which re-affirms the determination by the government “towards bringing the crypto sector out of the shadows and launching a legal market for virtual assets in Ukraine.”

According to the Ministry’s announcement, the new law helped in determining the legal status, classification, and ownership of virtual assets; determines market regulators which include the National Bank of Ukraine and the National Commission on Securities and Stock Market. Additionally, the law creates conditions for further formation of the legal field in the market of virtual assets; determines the list of providers of virtual assets and conditions of their registration; and in all, provides for the implementation of financial monitoring measures in the field of virtual assets.

While Bitcoin (BTC) and the host of digital assets are not legal tenders in Ukraine, the country’s determination to legalize digital currencies complements the passage of the bill by the Ukrainian parliament on February 17 amidst the ongoing geopolitical tension with Russia at the time. With the tension aggravating into a full-blown war, the digital currency ecosystem has rallied around Ukraine with donations flowing in through BTC, Ethereum (ETH), Dogecoin (DOGE), Solana (SOL), Polkadot (DOT), Tron (TRX), and even Non-Fungible Tokens (NFTs).

The positive disposition of Ukraine towards digital currencies paid off, and Zelenskyy’s signing of the bill shows the recognition of the hidden potentials digital currencies possess in transforming the payment and investment landscape. From El Salvador to Ukraine, the list of nations legalizing Bitcoin has continued to grow with more fated soon.

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Tagged : Crypto Donations / NFT / Regulation / Ukraine

US Federal Reserve Raises Interest Rates since 2018: Implications for Crypto

by Blockchain NewsMarch 17, 2022

The United States Federal Reserve announced to raise its interest rates by 25 basis points, the first time in about three years it will be making such a move since December 2018.

When the Coronavirus pandemic hit in 2020, the apex central bank reduced the interest rate to Zero in order to help the economy cushion the strain being ushered in by the pandemic.

The Justification for the Interest Rate Hike

Two years down the line, the economy has notably been experiencing a massive inflation spike that the drivers of the United States economy believe is best addressed by raising the interest rates.

While this 25 basis points hike is the first of many hikes that are slated for this year, industrial producers will generally be cushioned in how they access capital and churn out goods into the economy. The same applies to everyone accessing funding from established traditional financial institutions.

While the interest rate hike is billed to impact everyone in the United States, a lot of investors are set to benefit as the attractiveness of the traditional bond market is now bullish, with banking institutions also set to benefit from hiking rates associated with borrowing.

The Impact for Cryptocurrencies

Keeping the interest rate at zero is the best-case scenario for digital currencies. Several of its offshoot, including Decentralized Finance (DeFi), would have benefitted more like the startups in this space provide an investing alternative where the traditional market was not offering.

However, the 25 basis points increment only implies a 0.25% increment that pales compared to the potential growth rates found in the digital currency or DeFi ecosystems today. Crypto is thus still looking good for the most part, but a continuous hike in rate might stir the hearts of risk-averse investors to choose safe assets compared to the more volatile ones prevented by digital currencies.

The rate hike seems not to be impacting the price of Bitcoin (BTC) as of the time of writing, with the nascent asset class up 2.83% to $40,800.25 per data from CoinMarketCap.

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Tagged : Cryptocurrencies / Federal Reserve / Finance / Interest Rates