Remittance and Fiat Devaluation Drives 1200% Growth in Africa’s Crypto Market: Report

Remittance and Fiat Devaluation Drives 1200% Growth in Africa’s Crypto Market: Chainalysis Report

Africa, the smallest crypto-economy, which received $105.6 billion worth of cryptocurrency between July 2020 and June 2021, saw a growth of more than 1200% by value received in the last year.

According to a report by Chainalysis, the region is seeing some of the highest grassroots adoption in the world, with Kenya, Nigeria, South Africa, and Tanzania all ranking in the top 20 of the Global Crypto Adoption Index.

This is due to P2P platforms being particularly popular in Africa. The reason for the popularity of P2P platforms in Africa is it is difficult to send money to crypto businesses from bank accounts.

“Crypto products are getting more user friendly, so they can onboard more people into the crypto economy and help them see that crypto is faster, cheaper, and more convenient,” said Artur Schaback, COO and co-founder of popular P2P exchange Paxful who is also seeing 300% growth in Kenya over the last year and 57% growth in Nigeria.

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Remittance is actually the primary reason African users are using these platforms, as some countries in the region have implemented strict capital controls.

This can be seen in the monthly growth of crypto payments below $1,000 in both volume and number of transfers.

Cross-region transfers also make up 96% of all transaction volume in Africa. Additionally, the share of retail-sized transfers at just over 7% of overall transaction volume is the biggest compared to the global average of 5.5%.

Many African users are also turning to cryptocurrency to preserve their savings amidst harsh economic conditions, says the report.

Paxful’s growth actually accelerated in Nigeria this past year during times of currency devaluation, noted Schaback. Chainalysis observed a similar phenomenon, showing when the value of Nigerian Naira or Kenyan Shilling value falls, the trade volume of respective fiat currencies increases.

And while African governments may follow other countries and introduce their own CBDCs, people may not be as receptive towards it given the instability and management issues with the fiat currencies.

“The only reason to use the e-naira over cryptocurrency would be trust in the government, and that trust has been eroded for many,” said Adedeji Owonibi, CEO and founder of a Nigerian blockchain consultancy, Convexity.

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Author: AnTy

Cloudflare CEO Concerned about Growth of Ransomware Attacks in the Crypto Space

Cloudflare CEO Concerned about Growth of Ransomware Attacks in the Crypto Space

In an interview on CNBC’s ‘Mad Money,’ hosted by Jim Cramer, Cloudflare CEO Matthew Prince called out crypto exchanges stating these firms “are becoming a popular target for cybercriminals.” According to Prince, cryptocurrency exchanges need to focus more on securing customers’ funds to prevent the rising cases of hacks and ransomware attacks.

Explaining the rising number of hacks on cryptocurrency exchanges, Prince said that money is the primary motivation, similar to bank robbers choosing banks.

“The old adage is, Why do bank robbers rob banks? It’s because it’s where the money is.”

“One of the biggest places that cyber attackers are going after right now is the various cryptocurrency exchanges and other cryptocurrency parts of the universe.”

Over the course of the year, the cryptocurrency ecosystem attracted attention to the rising number of ransomware attacks. Chainanalysis reported over $81 million in ransom was paid by victims by May 2021. Notably, the Colonial Pipeline hack in May raised concerns in the industry. The hackers disrupted fuel supply to some parts of the US East Coast, demanding a $5 million ransom – payable in BTC.

In June, Russian ransomware group REvil infiltrated over 200 companies across the globe via software supplier Kaseya, using its technology management software to spread the ransomware via the cloud. The hackers encrypted one of Kaseya’s tools with infected files, paralyzing hundreds of companies. The hackers then demanded a $70 million ransom, paid in BTC, to negotiate about decrypting the files.

These ransomware attacks have caused considerable debate in the crypto security space and the role that blockchain-based digital currencies play in the rising ransomware attacks. Despite the increasing ransom attacks, some crypto analysts believe blockchains actually help authorities track and arrest hackers easier due to the public nature of Bitcoin’s transactions, which are broadcasted on the network.

San Francisco-based Cloudflare is a web security infrastructure provider that protects companies from online attacks. Its key proposition service provides security to companies to prevent distributed denial of service (DDoS) attacks, which are common on crypto exchanges.

O0n the question if Prince would hold his cryptocurrencies on an exchange protected by Cloudflare, he said, “the company is giving a front-row seat to [its consumers] to prevent the evolving cyber threats they face. The company stays ahead of the curve through innovations that prevent any new forms of ransomware and hack attacks from affecting them.

“We’re proud of the fact that we’ve kept the cryptocurrency customers that are ours secure and safe and helped augment the additional protections that they have in place.”

“I’d feel safe using any of the cryptocurrency exchanges that use Cloudflare today.”

Apart from technically dealing with hackers, the US government is also fighting the rising cases of ransomware attacks. In June, the U.S. President’s national security advisor called on the G7 countries to unite and fight against the consistent ransomware attacks on national sites.

In a briefing from the White House press, Jake Sullivan, selected as Joe Biden’s national security advisor, called on the regulation of the cryptocurrency ecosystem as it represents “the core of how these ransomware attacks are carried out.”

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Author: Lujan Odera

Layer-2 Scaling Solution Polygon Records Continued Growth, But May Not Bring Fees Down on Ethereum

Layer-2 Scaling Solution Polygon Records Continued Growth, But May Not Bring Fees Down on Ethereum

Ethereum layer 2 scaling solution Polygon has been seeing a meteoric rise over the past few months.

The sidechain currently has over $9.5 billion of total value locked (TVL), up from just $1 billion less than two months back, with 3.71 million in ETH and 26.87 million in BNB. BNB -1.15% Binance Coin / USD BNBUSD $ 353.84
-$4.07-1.15%
Volume 4.49 b Change -$4.07 Open $353.84 Circulating 153.43 m Market Cap 54.29 b
8 h Layer-2 Scaling Solution Polygon Records Continued Growth, But May Not Bring Fees Down on Ethereum 6 d ETH 2.0 is Already the Largest Proof of Stake Network and Vitalik isn’t Concerned About Competitors 1 w China’s Regulatory Crackdown Focused on High Leverage Derivatives Trading

This growth of Polygon has been the result of the Ethereum network working at capacity and rising gas costs. ETH -2.99% Ethereum / USD ETHUSD $ 2,519.04
-$75.32-2.99%
Volume 41.91 b Change -$75.32 Open $2,519.04 Circulating 116.21 m Market Cap 292.74 b
6 h NHL Team, San Jose Sharks, to Accept BTC, ETH, DOGE, And Alts Next Season 6 h Polkadot Ecosystem Hits a Milestone as Kusama’s First Functional Parachain Goes Live 8 h Layer-2 Scaling Solution Polygon Records Continued Growth, But May Not Bring Fees Down on Ethereum

Up until now, there has also been a lack of layer 2 solutions, though popular ones Arbitrum and Optimism have yet to be user-ready. Layer 2 solutions are expected to bring the fees down on layer 1, Ethereum as well; however, according to long-term ETH investor Tetronode,

“L2 will cause L1 fees to go up, not down. Demand for L1 interaction is unlimited and only curbed by what the market is willing to pay. L2 settlements are valuable and worth almost any gas price. Arbing makes L1 fees dependent on value onchain, not TX throughput!”

As can be seen currently, the fees on Ethereum are extremely low, the gas price is actually set to tumble into a single digit, but this is actually indicating a lack of activity on DeFi.

The gas issue was also what led to the explosion of the Binance Smart Chain (BSC) in the DeFi scene. Hundreds of projects launched on BSC, and the network scaled from under a million transactions a day to more than 11 million at its peak.

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Polygon’s growth, in contrast, has been steady. Those already familiar with Ethereum went to the sidechain trying to escape the extremely high cost of transactions on the second largest network.

The layer 2 solution has its own variation of Uniswap, QuickSwap, which has risen in popularity. Its rapid growth can be attributed to the fact that it enables over 10,000 swaps, constantly indicating users make use of the lower transaction fees.

Additionally, the average value of swaps on this automated market maker (AMM) has risen from just $186 to the north of $30k at its peak.

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Popular lending protocol Aave which currently dominates the DeFi space, is also contributing to the share of transactions on Polygon. AAVE -1.24% Aave / USD AAVEUSD $ 331.35
-$4.11-1.24%
Volume 406.83 m Change -$4.11 Open $331.35 Circulating 12.79 m Market Cap 4.24 b
3 w Coinbase Enables its Over A Million Wallet Users to Use DeFi — DEXs, NFTs, & More 3 w Software Provider Temenos Enables Crypto Trading for Banks 3 w Aave Is Testing Private Pools for Institutions to Ape into DeFi, Reveals CEO Stani Kulechov

Aave was integrated on Polygon for less than a quarter, but the average user on Polygon’s implementation of Aave does about 5 transactions on any given day, noted Joel John. The combined gas cost for supporting over 4,000 users as of early June was under $15.

In the meantime, Polygon’s $9 billion market cap coin MATIC is feeling the market woes, trading at $1.40, down 46% from its all-time high of $2.62.

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Author: AnTy

Bitcoin Propels PayPal’s Massive Growth In Q1

Bitcoin Propels PayPal’s Massive Growth In Q1

Bitcoin and the general crypto market have surged largely due to an influx of institutional investors. Those who have put faith in the “digital gold” are currently smiling all the way to the bank.

The first tech company to espouse crypto’s remarkable returns in their Q1 earnings call was electric car manufacturer Tesla Inc. According to a Wednesday announcement, US payment giant PayPal Holdings has also revealed the impact Bitcoin had on its growth.

PayPal’s Crypto Support Pays Off

In its just-concluded Q1 investors’ earning call, payment giant PayPal had remarkable gains with a little help from crypto.

The Q1 earnings report showed a total payment volume (TPV) of $285 billion, up from $277 billion in Q4 holiday season sales.

PayPal also posted a net revenue north of $6 billion and earnings per share of $1.22 against analysts’ estimated $1.01 for Q1, 2021.

Alongside this growth, PayPal said it added 14.5 million net new accounts (NNAs), raising its already vast global reach to 392 million with 31 million merchants onboarded so far.

Following the Wednesday earnings call, its shares rose 5% and traded at $260 per share.

President and CEO Dan Schulman describe the results as the strongest first-quarter result in PayPal’s history. According to Schulman, their crypto payments adoption played a huge role in attaining these results.

According to Schuman, more than half of its current users opened the PayPal app more than twice a day following the crypto payment support functionality.

Schulman believes that crypto and central bank digital currencies (CBDCs) would eventually foster a more equitable financial system given their growing adoption.

PayPal’s immense success in Q1, expected to be slow in business, has been largely due to its crypto payments support. The payment giant enabled crypto trading services last year— opening the gates to customers and merchants on its platform to interact with digital assets.

To further cement its place in the newly emerging digital economy, it extended this capability to its peer-to-peer payment app Venmo. It enabled customers to make crypto payments in a trustless manner.

PayPal is committed to a crypto future following the acquisition of crypto-security firm Curv.

PayPal Aiming To Incorporate CBDCs Once Launched

According to Schulman, they are currently in talks with world governments concerning their CBDC program. Schulman said this is to make sure the payment company is not left out when these countries eventually roll out their digital currencies.

It’s finally becoming an arms race for countries piloting CBDC programs as a more efficient payment system. Many national banks have announced intents to launch a CBDC program, with the Republic of Georgia being the latest in a keenly contested race. China, which is the furthest in the rollout of a digital yuan, has served as a catalyst, and more countries are rapidly joining the CBDC bandwagon.

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Author: Jimmy Aki

Interest in DeFi Falls to Pre-Mania Level, Uniswap Volume on a Decline Despite CEX’s Issue

The DeFi market continues to see strong growth, with the total value locked (TVL) in the sector above $11 billion. While a record of almost 160k BTC is locked in DeFi, the locked Ether is also approaching the peak at 8.7 million ETH.

The mid of June was the “turning point” for DeFi finance, as per LunarCRUSH’s report confirmed by Google Trends when a steady upward trend in the US searches for the term DeFi was seen, which peaked in August only to fall sharply in September.

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Interest in term DeFi over time, Source: GoogleTrends

But the current scenario could further accelerate this growth.

The ongoing investigation into popular crypto derivatives platform BitMEX, and now issues at OKEx is likely to spur on further flow out of CEX and into DEX venues.

Already, as we reported, the trading volume on decentralized exchanges has rushed to new high thanks to DeFi and yield farming hype in Q3.

Monthly trading volumes for top 10 DEX increased 700% from July to $30.4 billion in Sept. while CEXs recorded $300 billion, the same as the previous month. The market share of DEXs that continues to increase is expected to grow further, that too, at the expense of CEXs.

The most popular DEX, which accounts for more than 60% of the volume, is Uniswap. The hottest trading platform was launched less than two years back and raised millions from venture capitalists, including Paradigm, Andreessen Horowitz, and Union Square Ventures LLC.

In the overall crypto space, it is the fourth-biggest exchange after Binance, OKEx, and Huobi. Paul Veradittakit, a partner at California-based Pantera Capital Management LP, which is considering investing in Uniswap’s governance tokens UNI said,

”It’s just phenomenal. We can really see decentralized exchanges make a huge dent in the market and potentially overtake centralized exchanges.”

Since dropping to half a billion dollars after its clone SushiSwap sucked the liquidity, the liquidity on Uniswap has been surging, surpassing $3 billion on Thursday. However, it is currently averaging a daily trading volume of $220 million, on a constant decline from Sept. 1st’s ATH of nearly a billion dollars.

Uniswap Volume
Source: Uniswap Info

It is rather a blessing for crypto projects as Uniswap, which generates revenue through transaction fees, doesn’t charge the issuers to list new tokens. Users don’t have to provide documents for KYC or AML measures as required by traditional crypto exchanges because of regulatory pressure.

Trading on Uniswap also means a bigger market to trade as it currently has 845 tokens listed while the leading spot exchange Binance only has 820 coins.

However, while Binance had over 15 million users at the end of last year, Uniswap is used by only 50k to 100k people, Kyle Samani, co-founder of crypto hedge fund Austin, Texas-based Multicoin Capital Management told Bloomberg. He said,

“This competition is just getting started. We are in the first inning.”

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Author: AnTy

PwC: “Large Crypto Unicorns to Become Increasingly like ‘Crypto Octopuses'”

The value of the M&A’s in the cryptocurrency world saw strong growth this year as it exceeded the total of 2019 just in the first six months of 2020, according to PwC’s latest report on the crypto merger, acquisition, and fundraising landscape.

Compared to last year’s $481 million, the first half of this year recorded $597 million in global deal value as tie-ups became less frequent but bigger.

In the first half of 2020, there were 60 tie-ups versus 125 in the whole of 2019, said PwC.

However, activity continues to shift away from the US as the volume in Asia-Pacific and Europe, the Middle East, and Africa was 57% compared to 51% last year.

The biggest deal of 2020 was made by Binance Holdings, which purchased CoinMarketCap for $400 million. PwC Crypto Leader Henri Arslanian said,

“We expect crypto M&A activity to remain strong for the coming months particularly with some of the larger or more profitable players acquiring firms that offer ancillary services to their current offerings.”

“We should expect the large crypto unicorns to become increasingly like ‘crypto octopuses’ by acquiring or investing in various ancillary businesses in order to remain dominant.”

Digital asset manager CoinShares also anticipates the materialization of a “more robust M&A market” but says significant industry consolidation is likely to come first to clean up the market fragmentation.

According to them, crypto companies need to demonstrate the ability to generate recurring revenue and stable cash flow, consistent delivery on growth metrics, low margin volatility and above-average margins, low revenue concentrations, and low founder involvement.

According to PwC, the first of the year also saw a spike in fundraising involving trading companies or cryptocurrency exchanges, which has been attributed to the rising digital asset prices, greater regulatory clarity, and increased institutional interest.

2020 saw legendary investor Paul Tudor Jones putting money in crypto, boosting demand from bigger players and MicroStrategy and Square making bitcoin a part of their Treasury.

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Author: AnTy

Blockchain Technology to Grow the Global GDP by $1.76T In the Next Decade: PwC Report

  • China set to benefit the most from blockchain technology growth in the next decade with a protracted $440 billion boost in its GDP during this period.
  • This represents 25% of the total protracted global GDP boost from the innovative technology – set at $1.76 trillion by 2030.

A research report from a ‘big 4′ accounting firm, PricewaterhouseCoopers (PwC), “Time for Trust,” explores blockchain technology’s global socio-economic impact in the next decade. Targeting 2025 as the tipping point for the technology. If adopted at scale, PwC experts and researchers see a $1.76 trillion impact from the technology by 2030. This represents 1.4% of the total gross domestic product (GDP) of the world.

The report focuses on blockchain’s practical use in five key areas – provenance, payments and financial instruments, identity, contracts, dispute resolution, customer engagement – and how they deliver value in building transparent and efficient solutions across all industries.

According to the report, Asia is set to witness blockchain technology’s greatest impact, China leading the growth with a $440.4 billion projection. Japan and India expected to witness a $72.3 billion and $62.2 billion increase, respectively.

The United States is expected to witness a $407.2 billion increase in GDP from blockchain innovation growth in the next decade.

PwC report further states blockchain’s role in enhancing transparency and traceability as the sector with the most growth potential – projected to grow by $$961.6 billion by 2030. Anthony Bruce, Partner, and Pharmaceutical and Life Sciences Leader, PwC U.K, praised the potential of blockchain innovation in providence and traceability in the healthcare industry, stating,

“For healthcare organizations, blockchain can ensure patient safety is at the heart of the pharmaceutical supply chain. It has the potential to give patients confidence in the authenticity and origin of drugs.”

Payments and securitization of wallets are also picking up the pace and is expected to grow by $433.2 billion in the next decade. The U.S is expected to lead global growth in this period and is expected to experience a $136.3 billion GDP growth from blockchain-based payment systems, with China coming in a close second at $104.6 billion.

“Blockchain has the potential to cut costs, speed up transactions and promote greater financial inclusion by streamlining cross-border and remittance payments,” Lucy Gazmararian, Crypto, and FinTech Advisory, PwC Hong Kong said.

“These powerful innovations will transform the payments infrastructure.”

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Author: Lujan Odera

MetaMask Active Monthly Users Grow 400% Thanks to Mobile App And ‘DeFi Revolution’

With a growth of more than 400% in the last year, crypto wallet MetaMask has reached the milestone of one million monthly active users on both mobile and desktop apps combined.

According to Talia Knowles-Rivas, Head of Marketing, Developer and Consumer Products at ConsenSys, the recent launch of MetaMask Mobile played an “important role” in bringing new users.

USA, India, Nigeria, and the Philippines are the top four countries in mobile users’ volume.

Just a couple of months back, the popular Ethereum wallet’s open-source code was taken over by ConsenSys.

On the Back of DeFi Boom

Over the last twelve months, significant growth in the adoption of Web3 games, DAOs, and the rapid consumer uptake of DeFi products and services further accelerated this growth curve.

“This 2020 curve parallels the trend in DeFi adoption, indicating that new users are coming to MetaMask specifically to participate in the decentralized finance revolution,” noted Knowles-Rivas.

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Instead of buying and storing ETH, MetaMask’s new phase of growth is powered by much more than just that. It was actually driven by providing the ability to invest, sell, lend, and borrow and use the popular DeFi protocols like Uniswap, Curve, Yearn, Aave, and Maker.

In the past few months, the Decentralized Finance (DeFi) sector has exploded into popularity, with more than $10 billion locked in it.

With most of the DeFi projects asking users to connect their wallets and MetaMask being the wallet provider the most used on them, it makes sense that just like DeFi bloom, activity on MetaMask also exploded.

With Metamask, users can not only purchase and store ETH but also browse DeFi protocols and exchanges and connect their wallets directly to start trading.

Be Careful!

MetaMask allows one to run Ethereum decentralized applications (Dapps) without running a full Ethereum node. As such, the DeFi boom especially helped in achieving this milestone.

But amidst this, one user, who professionally stops hacks from happening, shared the incident of getting hacked for $40,000 secured through his Metamask and Ledger.

He advised people to wake up and secure their funds as there are so many different easy to get hacked.

With the hackers always on the lookout to steal funds, to minimize the risk of getting your MetaMask hacked, secure it with hardware wallets like Ledger or Trezor, revoke access to apps used, and change wallets regularly.

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Author: AnTy

Over 100M Unique Users in the Crypto Ecosystem; University of Cambridge Digital Asset Study

The 3rd Global CryptoAsset Benchmarking Study, an initiative by Cambridge researchers to analyze the developing growth of the industry, has estimated that over 100 million people in the world currently hold BTC or alternative crypto assets. According to this publication, the number of new digital wallets increased significantly, with around 191 million accounts opened in Q3, 2020 alone.

Going by these stats, the number of new people who own crypto assets has skyrocketed compared to the 2018 estimates, which barely hit 36 million. The research attributes this growth to an increase in activity and awareness within the main functions of the crypto ecosystem. Other metrics highlighted include mining, off-chain service provision, regulatory compliance, and improvement in IT infrastructure.

A Vibrant Outlook

Despite taking a hit after the 2017 ICO boom, crypto onboarding has been at its highest post the bubble. More off-chain service providers have launched to on-ramp newbies through fiat-crypto ecosystems and vice versa. Notably, the usage demographics were found to vary between different regions greatly; for instance, crypto exchanges domiciled out of APAC emerged as more crypto-focused trading platforms. Reads the report:

“While North American and European firms primarily serve crypto asset hedge funds and traditional institutional investors …

a notable share of APAC service providers deals with miners (41%), in part explained by the high level of mining activities in the region, especially in China.”

Regulatory and Compliance

As for the regulatory scope, much still has to be done according to figures revealed by the research. Over 2 out of 5 firms surveyed have obtained a license or are in the process of doing so. This is despite the FATF Travel Rule coming in place last year, requiring all Virtual Asset Service Providers (VASPs) to comply with new KYC/AML standards.

However, the research also argues that general compliance has increased, and some of those who are not licensed are because their activities do not fall within current regulatory frameworks or established guidelines.

“However, the remaining 58% should not be perceived as the share of entities conducting unregulated activities or evading regulations: some surveyed service providers are engaged in activities that do not yet warrant any authorization process.”

IT Security

With scamming being prevalent in the crypto ecosystem, the research notes that at least 90% of the VASPs keep the entrusted assets in cold storage. Nonetheless, there’s always a downside risk attributed to insurance since this line of service is yet to make in-roads into the crypto market. Had it not been the case, ‘Those who do have insurance plans are primarily insured against cybercrimes, professional errors, hazards, and loss or theft of private keys.’

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Author: Edwin Munyui

BoE Governor Calls for Setting Global Standards for Stablecoins, Instead of Playing Catch Up

Stablecoins have been enjoying tremendous growth, and DeFi mania has only been pushing it further, so much so that these USD-pegged coins have been adding $100 million per day since mid-July.

“DeFi yields/interest rates are clearly a vacuum sucking in a lot of stablecoins,” shared Coin Metrics co-founder Nic Carter.

Source: CoinMetrics

As such, it makes sense these coins will continue to be under the increased scrutiny of regulators, which first came under their radar after Facebook unveiled its Libra stablecoin last year.

Now, Bank of England Governor Andrew Bailey is saying that financial regulators must avoid playing catch up with them. Bailey said in a speech to the Brookings Institution,

“If stablecoins are to be widely used as a means of payment, they must have equivalent standards to those that are in place today for other forms of payment types and the forms of money transferred through them.”

Calling for a clear G20 mandate for standard-setting bodies to clarify or refresh standards, he said existing regulatory standards must be examined and updated as necessary in the light of stablecoins. He said in the prepared speech,

“Regulators of global stablecoins must, and are, working with other regulators in other jurisdictions to ensure that they are appropriately regulated and gaps in coverage, opportunities for regulatory arbitrage, do not emerge.”

Any stablecoin which is based on the pound and launched in Britain should meet standards that are applied to banks, Bailey said. Also, the issuer of the stablecoin needs to be based in the country, he added.

“If a sterling retail stablecoin wishes to operate at scale in the UK, then we will strongly consider the need for an entity to be incorporated in the UK.”

Meanwhile, central banks have taken to work on their own state-owned digital currencies. China is already in the testing phase of its DC/EP, and Japan is also making digital yen its priority while both the BOE and US Federal Reserve have taken a cautious approach towards launching their central bank digital currency.

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Author: AnTy