Venezuela’s NO in BTC to Sanctions, Euro Stablecoin Emerges, France Declares War on Crypto Anonymity, DBS Digital Exchange Goes Live
In this edition:
- Venezuela: By-Passing Sanctions With Crypto
- Euro Stablecoin? Now You’ve Got It
- France Fights Crypto Anonymity, ‘Draining Euro From Terrorist Financing Channels’
- DBS Bank’s Digital Exchange Ready for Crypto Trading
Feeling better because it’s December? Yeah. Me neither. Wait until the NY-resolutions peer pressure kicks in. Instead of e.g. quoting Tolkien and shifting the topic to something more cerebral, we’re better off going to the point straight away.
So, quite an interesting week in the industry of crypto is behind us, and we shall be talking about some important events; how Venezuela is fighting US sanctions by trading with BTC, new euro-backed stablecoin on Stellar, clearing terrorism out of crypto transactions, and how banks are becoming crypto exchanges.
Fellow Anchorians and other curious-about-crypto people, if this news is your cup of tea, then welcome to the 70th jubilee edition of Weekly Crypto Roundup, and let’s dive right in!
Venezuela: By-Passing Sanctions With Crypto
Venezuela, a Latin American country that is no stranger to cryptocurrencies, wants to extend its utilization of crypto and use it as a means of settlement in international trading, particularly with Iran and Turkey.
RunRun.es analyzed Maduro’s efforts to fight and overcome sanctions by the US, focusing on the usage of Bitcoin and other cryptocurrencies. Of course, we all remember Petro, the concept of Venezuela’s digital national currency backed by the country’s reserves of minerals and crude oil. While the currency didn’t fulfill its primary purpose, Venezuela’s crypto journey continued.
President Maduro’s stance on cryptocurrencies is clear, as he had shared it in one of his speeches earlier this fall presenting a new anti-sanctions bill (la Ley Antibloqueo): “The anti-sanctions bill is the first response […] to give new strength to the use of Petro and other cryptocurrencies, national and global, in domestic and foreign trade, so that all cryptocurrencies of the world, state and private, could be used. This is an important project that is under development.”
The Venezuelan government wants to by-pass US sanctions and at the same time by-pass the dollar as the main means of payment; therefore, trading goods internationally while settling in crypto became the next logical step.
The interesting thing, however, is that the volume of bolivar-bitcoin transactions in the country has significantly decreased. Measured weekly, 233 bitcoins were exchanged last week in the country, way below the record of 2,487 bitcoins per week from February 2019.
Clearly, there is space for improvement and we can only wait and see if Venezuela will proceed with the plan of utilizing crypto for international settlements and how it will look like.
Euro Stablecoin? Now You’ve Got It
A fully euro-backed stablecoin by German Bankhaus von der Heydt, EURB, was launched on Stellar blockchain on Thursday. The Munich-based BVDH, one of the oldest banks in Europe, opted for tokenization and digital asset custody technology partner Bitbond.
Using the Stellar blockchain, they created an asset that is backed one-for-one with the euro, which won’t be openly traded on exchanges. The idea behind the token is to ease international transactions and enable secure cross-border money transfers on blockchain.
Regarding tokenomics, the bank will expectedly have full control over the currency issuance, including the burn/mint mechanism.
Lukas Weniger from BVDH also explained that ‘’a fiat currency transfer is held at an escrow account at BVDH, which then triggers the issuance of the EURB stablecoin’’ while adding that ‘’the stablecoin is a very sensitive product, and it requires a lot of trust from the users at the end of the day‘’.
Digitization of assets has surely been a trending topic in the banking industry for some time now, but its form branches out into various projects. While central banks worldwide consider and work on their CBDCs, commercial banks want to explore the industry, too.
2021 seems very promising in terms of interesting projects coming to life as FOMO is spreading among central banks, commercial banks, private companies, and even governments. The hybridization of fiat currencies, digital currencies, and blockchain will only continue to grow in separate use cases.
France Fights Crypto Anonymity, ‘Draining Euro From Terrorist Financing Channels’
The French Ministry of Finance will introduce new strict measures and requirements concerning KYC procedures for ‘’all cryptocurrency companies operating in and servicing the country’’. In this manner, France hopes to fight the financing of terrorist groups by ‘’draining the euro’’ out of the process.
This firm policy against anonymity that crypto transactions usually offer is crucial in fighting terrorism, according to Minister of Finance Bruno Le Maire. ‘’You have nothing to fear if you have nothing to hide’’ is the principle the French government will use in the upcoming regulatory effort.
France is, naturally, not banning crypto-related activities, but only making sure they are not connected with financing various terrorist cells in-country and abroad. By regulating the KYC (know-your-customer) procedure, authorities will be able to track transactions to actual people, in case of illicit activities connected with terrorism.
In September, French authorities arrested 29 individuals linked to funding extremists in Syria using cryptocurrencies, so this approach from the French government was somewhat expected.
‘’Since 2013, the main method of financing jihadis had been via cash sent to people in countries neighboring Syria. That evolved into a more sophisticated, less visible system as surveillance tightened,’’ and it is believed that, in the last few years, hundreds of thousands of euros have been sent to jihadists in this manner.
While decentralization and anonymity are at the very core of the ideology behind Bitcoin, sovereign countries such as France have the right to protect their sovereignty and people. And if disabling crypto anonymity at the moment is a necessary step for the French government, it is both legal and legitimate.
DBS Bank’s Digital Exchange Ready for Crypto Trading
DBS Bank of Singapore announced its Digital Exchange (partially owned by Singapore’s SGX stock exchange) will go live next week. The exchange will also provide tokenization of securities and other assets, as well as bank-grade custody for digital assets.
According to Piyush Gupta, DBS Group CEO, ‘’the new exchange will facilitate spot exchanges from fiat currencies to cryptocurrencies and vice versa’’.
Gupta added: “We are ready to begin crypto trading as early as next week. Security token offerings may take a month or two to get started – but in summary, we are ready to go. […] You can tokenize anything, you can tokenize a painting. But for now, we will be concentrating on financial assets.”
Singapore is known as a country open to financial and technological upgrades, so it comes as no surprise that a Singaporean multinational banking and financial services corporation will now embrace the possibility of crypto trading.
BTC, ETH, BCH, and XRP are the cryptocurrencies that will be available for trading on DBS Digital Exchange, along with four fiat currencies – SGD, USD, HKD, and JPY.
You’ve reached the final destination of the 70th edition of Weekly Crypto Roundup! I hope it was an insightful ride since we covered some quite interesting topics.
While the world continues to absorb cryptocurrencies and blockchain technology and create various ‘hybrid’ services and products, the global financial landscape is slowly but surely changing. Possibilities inside the industry of crypto are now numerous, but we’ll continue to comment on them.
By now you know the drill, my fellow Anchorians – until next week, I wish you fair winds and the following seas!
Disclaimer: The information provided in this post is not legal, accounting, or financial advice. I am not a lawyer, accountant, or financial advisor. I am not registered as an investment adviser with any federal or state regulatory agency. The Information should not be construed as investment or trading advice and is not meant to be a solicitation or recommendation to buy, sell, or hold any cryptocurrencies.