2023-12-22 11:35

The statement from the SFC and HKMA comes as expectations mount the U.S. SEC is on the verge of approving a spot bitcoin ETF. Hong Kong regulators said they are ready to consider applications for spot crypto exchange-traded funds (ETFs). In a joint statement, the Securities and Futures Commission (SFC) and Hong Kong Monetary Authority (HKMA) said the virtual asset environment has changed since 2018, when the SFC formulated a "professional-investors only" regulatory approach. Hong Kong has been loosening its approach to crypto this year, and the regulators' opinion on retail exposure to digital assets has shifted. In October, the SFC updated its rule book to allow a broader range of investors to engage in spot-crypto and ETF investing. Then, last month, SFC Chief Executive Officer Julia Leung said the regulator was moving toward allowing retail amidinvestors to buy spot crypto ETFs and would "welcome proposals using innovative technology that boosts efficiency and customer experience" provided any risks were addressed. "The virtual asset landscape has evolved rapidly and begun to expand into mainstream finance," the two regulators said in Friday's statement. The SFC "is prepared to accept applications for the authorisation of other funds with exposure to virtual assets, including virtual asset spot exchange-traded funds (VA spot ETFs)." The statement comes amount mounting speculation the U.S. Securities and Exchange Commission is likely to approve a spot bitcoin ETF in the first few weeks of next year. https://www.coindesk.com/policy/2023/12/22/spot-crypto-etf-applications-will-be-considered-hong-kong-regulators-say/

2023-12-22 07:42

Value locked on Solana applications grew in tandem, rising to $1.3 billion worth of tokens from the $400 million mark in November to reach levels previously seen in July 2022. Solana’s SOL neared $100 early Friday as ongoing hype for the blockchain’s speedy transactions, cheap fees and a lottery of meme coin issuances extended into its third week. Metrics show Solana has possibly been the strongest draw among on-chain traders, with trading volumes and network fees crossing those of Ethereum – which is usually the highest – on a seven-day rolling basis. Value locked on Solana applications grew in tandem, rising to $1.3 billion worth of tokens from the $400 million mark in November to reach levels previously seen in July 2022. These factors have apparently helped extend year-to-date gains for SOL to over 830%, with most growth in the past two months alone. The buying pressure has sustained even amid significant selling pressure from the bankruptcy estate of crypto exchange FTX, which held billions of dollars worth of SOL. The token was trading around $94 during the European morning, according to CoinDesk Indices data. Dog-themed bonk (BONK) apparently revived attention with a more than 1,000% jump in late November. That inspired a flurry of meme coins, such as dogwifhat (WIF), which yielded some early retail buyers with gains of over 10,000% in a short period. WIF added another 35% to market capitalization in the past 24 hours alone, showing no signs of stoppage amid significant hype in crypto circles on X. Data shows thousands of meme coins have since been issued by opportunistic developers. Most of these run up from a very low market capitalization to a few million. Meanwhile, some analysts expect SOL’s outperformance to continue in the weeks ahead, pointing to the possible interest from retail investors as a driver of token growth. “Solana is recovering more steadily than most major competitors and shows more interest in it in the community, which promises to keep its performance above the market in the coming months,” “Google searches on Solana have soared 250% in the past two months,” shared Alex Kuptsikevich, FxPro senior market analyst, in a Friday note to CoinDesk. “User interest has coincided with the explosive growth of the asset and rising prices of related meme coins.” “The Solana blockchain continues to grow strongly with the background of new protocols and related airdrops,” Kuptsikevich added, referring to the BONK, ACS and JTO airdrops to Solana users in the past weeks. https://www.coindesk.com/markets/2023/12/22/solana-nears-100-as-meme-coin-frenzy-continues-to-drive-rally/

2023-12-21 20:09

Moody’s Senior Director Yiannis Giokas said adoption accelerated this year, despite many destabilizing trends. In 2023, the global stablecoin market has witnessed a year of unprecedented developments, shaping the future of digital currencies. This year marks a significant shift, not only in technological adoption and innovation but also in the regulatory landscape that governs these digital assets. This post is part of CoinDesk's "Crypto 2024" predictions package. Yiannis Giokas is a senior director with Moody’s Analytics. Navigating the complex regulatory terrain The stablecoin market in 2023 has undergone a transformation, driven by significant advancements in regulation. Given that the U.S. is by far the primary market for stablecoins, the Financial Stability Board's (FSB) recommendations, advocating for comprehensive regulation and oversight of global stablecoin arrangements have proven to be a pivotal moment. These guidelines aim to foster a unified approach to managing stablecoins within the international financial system, highlighting their potential impact on global financial stability. Elsewhere, the G-20 discussions earlier in the year revealed a split in perspectives, especially among emerging economies, over concerns about the disruptive potential of stablecoins on sovereign monetary policies. This led to calls for stringent regulatory frameworks, reflecting the need to balance financial innovation with national economic safeguards. In October, the G20 adopted a crypto roadmap to coordinate a global policy framework for crypto assets, including stablecoins, which will also take into consideration implications for emerging markets. In the U.K., the Financial Conduct Authority (FCA) and the Bank of England (BoE) are working towards finalizing regulations by 2025, indicating a commitment to safely integrating stablecoins into the financial ecosystem. Similarly, the European Union's Markets in Crypto Assets (MiCA) regulation sets a high benchmark for stablecoin oversight, with specific capital and liquidity requirements for issuers. The United States is also taking legislative strides with various proposals to regulate stablecoins. A comprehensive stablecoin regulatory framework positions Japan ahead of other jurisdictions. Singapore's Monetary Authority of Singapore (MAS) has finalized its framework for single currency stablecoins, and Hong Kong is preparing to introduce a regulatory framework by the end of 2024. A tumultuous year It has been a rollercoaster year for the stablecoin market. It started with the announcement that U.S.-dollar backed Binance-branded BUSD would no longer be minted, nor supported into 2024, leading to a search for reliable alternatives. Then major stablecoins including USDC and DAI experienced de-pegging events during a banking crisis in March, raising concerns about their reliability. Binance's endorsement of trueUSD (TUSD) and tether (USDT) maintaining their status as “trusted” stablecoins despite regulatory and transparency challenges, marked significant moments in the market's evolution. Moody’s Analytics published a report that highlighted that large fiat-backed stablecoins depegged 600+ times in 2023, which futher encapsulated the volatility in the market. Adoption in mainstream financial operations This year, major companies like Visa, Mastercard and Checkout.com have embraced stablecoins for various applications. Visa expanded its stablecoin settlement capabilities and initiated pilot programs with Circle’s USDC using the Solana blockchain. Mastercard collaborated with Immersve to enable crypto payments in New Zealand and Australia. Checkout.com launched a stablecoin settlement solution, offering merchants 24/7 settlement flexibility, even on weekends and holidays. Looking ahead As we navigate through 2023, it's clear that the stablecoin market is at a crucial juncture. The regulatory landscapes across the globe reflect a concerted effort to integrate stablecoins safely into the financial system. While these regulatory efforts vary in approach and scope, they share a common goal: harnessing the potential of stablecoins while mitigating associated risks. Despite facing significant challenges, the market has shown resilience and adaptability. The evolution of stablecoins seems to be leaning towards enhanced regulatory compliance and a gradual shift towards more transparent, decentralized models. This promises a more secure and stable future for this crucial sector of the crypto economy. This year has been pivotal for stablecoins, marked by a broader regulatory push aimed at ensuring their stability and security. Despite some challenges and market fluctuations, the uptake and integration of stablecoins into both the crypto ecosystem and traditional finance indicate their increasing importance and potential for continued growth and innovation. As we move forward, the stablecoin market's trajectory points toward a future where these digital assets play an integral role in the broader financial landscape. In this regard, stablecoin issuers would be wise in 2024 to focus on transparency, risk management and putting in place proper controls in order to enhance trust and safeguards around the integrity of redemptions. https://www.coindesk.com/consensus-magazine/2023/12/21/2023-a-critical-juncture-for-the-global-stablecoin-market/

2023-12-21 17:37

The third-largest crypto exchange has said it wants to become regulated in countries with clear policies for the industry while arguing with the Securities and Exchange Commission for bespoke rules in the U.S. Crypto exchange Coinbase (COIN) said it received registration as a Virtual Asset Services Provider in France, allowing it to offer a "full suite of retail, institutional, and ecosystem products and services" in the country. The registration with the Financial Markets Authority (AMF) was announced the same day as stablecoin issuer Circle said it was granted conditional registration by the regulator as France looks to attract crypto businesses. Coinbase is the third-largest crypto exchange by trading volume, according to CoinGecko, surpassed only by Binance, which is also registered in the country, and Bybit. Registration allows it to offer custody of digital assets, buying and selling of digital assets for fiat currency and trading of digital assets, Coinbase said. France has been eager to attract crypto companies looking for environments with greater regulatory clarity than currently exists in the U.S. The European Union recently put into law the wide-ranging Markets in Crypto Assets (MiCA) legislation, which will start taking force across the 27-nation bloc next year. In the U.S., Coinbase has been requesting bespoke rules for the crypto sector from the Securities and Exchange Commission, something the SEC recently called "unwarranted." In the meantime, the exchange has said it wants to become regulated in countries with clear policies set out for the industry. Coinbase already has licenses elsewhere in the EU, including an e-money in license in Ireland and registration in Spain. In October, it said it planned to make Ireland its EU hub. This year it also received a license to operate in Bermuda and another in Singapore. Shares of the Nasdaq-traded company, already up 30% this month, added another 1.4% to $164.5. https://www.coindesk.com/policy/2023/12/21/coinbase-approved-as-virtual-asset-services-provider-in-france/

2023-12-21 17:19

The pace of real world asset tokenization picked up steadily in 2023. That’s likely to increase next year, with Ethereum well placed to benefit, says Cristiano Ventricelli, of Moody’s. Digital finance technologies hold a lot of transformative potential. Distributed ledger technology (DLT) – of which blockchain is the best known example – powers digital bond issuances that, in time, could lessen the need for intermediaries in the issuance process, thereby improving operational efficiency and potentially reducing costs. DLT also underlies tokenization of real world assets, which could increase accessibility of certain instruments. However, to make these potential benefits a reality and gain wider adoption, in Moody’s view, DLT-based technologies and platforms will need to overcome several key hurdles, including a lack of interoperability and standardization among DLT systems, a lack of reliable digital cash options, regulatory uncertainty and technology risks. This post is part of CoinDesk's "Crypto 2024" predictions package. In the last few months, an increasing number of institutions have begun to engage with permissionless blockchain via both pilot studies and real transactions. Many of these entities gravitate towards Ethereum, given its extensive ecosystem of applications and networks that have developed their own user base and product offering in the last few years. As an open-source public blockchain, Ethereum provides a blockchain base layer on top of which developers can build solutions for sharing data and value across other networks. Ethereum’s flexible design and its multi-year plan for upgrades, including ones that will improve interoperability, have made it a popular platform for digital bond issuances. Large institutions such as the European Investment Bank have issued bonds on Ethereum, which was also the blockchain underlying a digital green bonds Moody’s rated in 2023, a €10 million senior unsecured digital green bond issued by Société Générale. Over time, in Moody’s view, public blockchain networks like Ethereum and traditional infrastructure will be more interlinked, which will enhance blockchains’ use cases, promoting industry growth. Asset tokenization – converting an asset such as a fund, real estate or art into a digital token, making it storable and transferable using DLT – has been gaining ground in the past year. Total value of tokenized real world assets on public blockchains increased to $2 billion from $1 billion in the last 12 months, and Ethereum currently hosts the vast majority of it. One factor slowing the adoption of tokenization is a lack of a reliable form of digital cash, which has led market participants to settle transactions off-chain or use stablecoins. Stablecoins, a cryptocurrency whose price is pegged to a reference asset, such as fiat currency, are a form of digital cash, but under stressed market conditions stablecoins have not always maintained their peg. However, two other forms of digital cash that could address the present vulnerabilities of stablecoins are tokenized bank deposits and central bank digital currencies (CBDCs). The development of tokenized bank deposits and CBDCs will continue to progress in 2024, in Moody’s view, although their degree of interaction with public blockchains is still unclear. Legal clarity will also likely improve in 2024, in Moody’s view, as regulators progress in developing frameworks to support new digital assets and services, although not all regions are advancing at the same pace. Regions including the EU, Singapore and the UAE could all attract new investors as a result of new customer and investor protections and new licensing regimes for digital assets. The U.S., meanwhile, will likely continue to use regulatory enforcement actions to establish legal precedent within the digital asset marketplace, as development of a digital asset framework in the U.S. remains a more distant goal. https://www.coindesk.com/consensus-magazine/2023/12/21/ethereum-emerges-as-a-key-blockchain-for-tokenized-real-world-assets/

2023-12-21 15:39

Developers also penciled in the end of February as a soft target for the upgrade to hit the main Ethereum blockchain. Ethereum developers are heating up their testing process for the upcoming Dencun upgrade, a major milestone expected next year that would add capacity for data storage via a new process known as "proto-danksharding." In a biweekly call Thursday, the developers discussed that they are targeting Jan. 17 for the Goerli test network (testnet) to run through Dencun, the much-anticipated upgrade that will enable “proto-danksharding,” which reduces fees for layer 2 rollups and scale the blockchain by increasing space for “blobs” of data. “Obviously if we find a major issue or something crazy before then we can always cancel,” Tim Beiko, protocol support lead at the Ethereum Foundation said on the call. “This would mean ideally we’re putting out the blog post for the fork sometime during the week of Jan.uary 8th, so people have at least a week to update.” Dencun was originally targeted for the last quarter of 2023, but the developers pushed it back to 2024, citing the engineering complexities of the upgrade. Developers also discussed a draft timeline for the Dencun testing upgrade, aiming to run through another test network, Sepolia, on Jan. 31, the Holesky testnet on Feb. 7, and then proceeding to deploy the changes on mainnet around the end of February. These dates could change depending on the outcome of the testnet forks, they cautioned. Dencun would be the first major upgrade since Shapella earlier this year, which enabled staked ether (ETH) withdrawals from the blockchain. https://www.coindesk.com/tech/2023/12/21/ethereum-targets-january-for-first-testnet-deployment-of-next-big-upgrade-dencun/