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U.S. needs ‘to act quickly’ to regulate stablecoins, treasury secretary says

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U.S. Treasury Secretary Janet Yellen pushed for regulation during an annual testimony in front of the Senate Banking Committee, at a time where Terra’s algorithmic stablecoin UST struggles to retain its peg.

“New products and technology may present opportunities to promote innovation and increase efficiencies,” Yellen said. “However, digital assets may present risks to the financial system and increased and coordinated regulatory attention is necessary.”

In response to questions from Senator Pat Toomey and Senator Catherine Cortez Masto, Yellen said it would be “highly appropriate” for stablecoin regulation to occur by the end of 2022 because there are “many risks associated with cryptocurrencies.

“We really need a consistent federal framework,” Yellen commented. “I really look forward to working with [Toomey] and members of Congress to devise legislation that would accomplish that.”

Stablecoins by definition are supposed to be stable and hold their value through a 1:1 ratio that is fixed to an external peg like the U.S. dollar or it can be tied to other assets like UST, which is backed by dollars, but also cryptocurrencies like bitcoin and Avalanche.

While every stablecoin in circulation is backed by $1 equivalent in a reserve, there have been concerns recently about the validity of some stablecoins. For example, the algorithmic-based stablecoin UST fell as much as 35% from its 1:1 dollar peg on May 9, when it should technically never be away from the $1 amount.

“A stablecoin known as TerraUSD experienced a run and declined in value,” Yellen said. “I think that this simply illustrates that this is a rapidly growing product and there are rapidly growing risks.”

Key investors to back Elon Musk on the $44 billion Twitter bid

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Cryptocurrency exchange Binance committed $500 million, while venture capital firm Sequoia Capital committed $800 million to finance Elon Musk’s $44 billion takeover of social media platform Twitter (TWTR).

Around $7.1 billion has been committed by 19 different parties with investment firm Fidelity putting aside $316 million for the takeover

Tesla (TSLA) founder Elon Musk recently agreed to acquire the social media firm. Musk had said that he wants Twitter to be a proponent for free-speech. The billionaire is also a known supporter of cryptocurrencies, like memecoin dogecoin (DOGE) and bitcoin (BTC).

According to an updated Schedule 13D filing with the U.S. Securities and Exchange Commission (SEC) filed on Wednesday, the world’s largest crypto exchange was among the equity investors for the deal. A Schedule 13D is a form that must be submitted to the SEC when an entity acquires more than 5% of a company’s equity.

Twitter Equity Investors Commitments
A.M. Management & Consulting$25,000,000
AH Capital Management, L.L.C. (a16z)$400,000,000
Aliya Capital Partners LLC$360,000,000
BAMCO, Inc. (Baron)$100,000,000
Binance$500,000,000
Brookfield$250,000,000
DFJ Growth IV Partners, LLC$100,000,000
Fidelity Management & Research Company LLC$316,139,386
Honeycomb Asset Management LP$5,000,000
Key Wealth Advisors LLC$30,000,000
Lawrence J. Ellison Revocable Trust$1,000,000,000
Litani Ventures$25,000,000
Qatar Holding LLC$375,000,000
Sequoia Capital Fund, L.P.$800,000,000
Strauss Capital LLC$150,000,000
Tresser Blvd 402 LLC (Cartenna)$8,500,000
VyCapital$700,000,000
Witkoff Capital$100,000,000

BIS and Bank Indonesia to run CBDC TechSprint

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Bank Indonesia and the Bank for International Settlements (BIS) Innovation Hub are inviting developers to take part in a central bank digital currency hackathon.The latest TechSprint event, which comes as Indonesia takes on the G20 Presidency, is looking for participants ready to accept technology challenges related to wholesale and retail CBDCs.

The online hackathon will focus on three issues: building effective and robust means to issue, distribute and transfer CBDCs; enabling financial inclusion; and improving interoperability.

Shortlisted teams will showcase their prototypes in July, with winners to be chosen in October by an independent panel.

The winners for each category will receive an award of $53,000. All short-listed projects receive a stipend of S$10,000.

Agustín Carstens, general manager, BIS, says: “There is a collective belief that CBDCs have potential for promoting the public interest in this age of digital money. Trust in money is the glue that holds the financial system together.

“It is for this reason that, as technology advances, central banks must ensure that the monetary system remains fundamentally a public good and preserve its stability.”

Signicat acquires UK RegTech Sphonic

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Norway’s Signicat has acquired UK-based anti-fraud and identity technology company Sphonic for an undisclosed sum.Established in 2021, the London-based RegTech has created a suite of products capable of automating compliance decision processes. The firm’s primary product, Workflow Manager, enables clients to tap into identity verification and security tools from around 100 vendors via a single API. More recent products include a real-time fraud & AML transaction monitoring system in addition to a case management platform that also offers tools for visualising identity, fraud and AML data.

The deal is part of asn ongoing acquisition spree by Signicat, as part of a strategy to become a single provider for the entire digital identity and anti-financial crime lifecycle across Europe. Since 2019 Signicat has acquired five companies, including in the last year mobile authentication company Encap, electronic signing provider Dokobit, and identity proofing innovator Electronic IDentification.

“With digital fraud continuing to rise globally, it has become critical to know that your customers are who they claim to be,” says Asger Hattel, CEO of Signicat. “With Sphonic’s leading team of professionals and their data orchestration and decisioning platform, we will be able to offer a more extensive range of onboarding services with highly flexible risk and compliance solutions – all of which can keep international customers safe from fraud.”

The price of free speech-$44 billion – Elon Musk buys Twitter

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Elon Musk inked a deal to buy Twitter Inc (TWTR.N) for $44 billion cash on Monday in a transaction that will shift control of the social media platform populated by millions of users and global leaders to the world’s richest person.

It is a seminal moment for the 16-year-old company, which emerged as one of the world’s most influential public squares and now faces a string of challenges.

Musk has criticized Twitter’s moderation, calling himself a free speech absolutist, said that Twitter’s algorithm for prioritizing tweets should be public, and has criticized giving too much power on the service to corporations that advertise.

Political activists expect that a Musk regime will mean less moderation and reinstatement of banned individuals including former President Donald Trump. Conservatives cheered the prospect of fewer controls while some human rights activists voiced fears of a rise in hate speech.

Musk himself has described user-friendly tweaks to the service, such as an edit button and defeating “spam bots” that send overwhelming amounts of unwanted tweets.

Kraken Receives ADGM License

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Abu Dhabi Global Market (ADGM) said on Monday it has licenced the Kraken group to operate a regulated virtual asset exchange platform in the financial free zone.

Kraken is the first global virtual assets exchange group in the United Arab Emirates to receive a full financial licence from the ADGM, it said.

Kraken MENA (Middle East and North Africa) aims to provide access to virtual assets through regulated funding, trading, and custodial services in dirhams, UAE’s currency.

ADGM introduced a virtual asset regulatory framework in 2018 and has since established itself as a leading global hub and business platform for virtual asset activities for local, regional and international firms.

UAE’s main business hub, Dubai, has also been attracting crypto-currency firms as it issued its first law governing digital assets and formed the Virtual Asset Regulatory Authority (VARA) to oversee the sector in March.

MENA Fintech Association releases the SHIFT report

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The MENA Fintech Association (MFTA), the leading voice of the fintech community in the region, has released the first volume of the SHIFT report, a comprehensive guide that supports the fintech community in navigating the MENA payment landscape.

“SHIFT” is the name of the working group, which is composed of the association’s members. These industry leaders are focused on payment technology solutions and services, financial education and regulation, and international card networks. They include The London Institute of Banking & Finance (LIBF), Dubai International Financial Centre (DIFC), Abu Dhabi Global Market (ADGM), Arthur D. Little, BPC, checkout.com, Codebase Technologies, GPS, Karm, Mastercard, M2P Solutions, Marshal, Taptap Send and YAP. The working group was formed with the objectives of stimulating insightful conversations on regional prime payment topics and fostering a shift towards the future of payments.

The comprehensive SHIFT guide will be released in several volumes that cover the core aspects of payments, from regulation, technology and processing to information on trends in specific countries, including the UAE, Saudi Arabia, Kuwait, Bahrain, Oman, Iraq and others.

The release of the first volume, “SHIFT – MENA Payments Landscaping”, sets the scene. It contains everything a fintech needs to know about the regional payments market. It draws a picture of a diverse region undergoing a significant transformation in how payments are made.

Although the banking sector has been relatively slow to adopt digital payments compared to other parts of the world, a number of factors and trends that are discussed in this report indicate that digital payments are becoming more commonplace across MENA and are disrupting the traditional value chain for payments.

The report describes interesting and continuing developments in the region that are key drivers for change:

  • The rise in real-time and faster electronic payment methods
  • The growth of embedded payments
  • The blurring of lines between payments and lending/investments, such as buy now pay later
  • How cash is still a significant element of the overall payments landscape
  • The shift in the competitive landscape with the rise of substitute fintech offerings

     

Arjun Singh, Partner and Head of Financial Services Middle East at Arthur D. Little and a contributor to the SHIFT report, commented: ‘’What’s driving the rapid change in the MENA payments landscape is the region’s demographically young societies, who are well versed in the use of digital technology and are contributing to the trend of moving away from cash as a traditional medium of exchange.’’

He continued: ‘’Recent developments in regulatory initiatives that support a digital economy and cashless society and the impact of pandemic-driven digitalisation on all aspects of daily life have led to an increase in the number of fintechs in the region. These businesses are now replicating successful global models. Moreover, there is an increasing investment from VC and PE firms in the region within the payments sector.’’

Nameer Khan, Chairman of MENA Fintech Association further commented: ’’Payment is the heart of fintech and the backbone of our economies, plus at the pace we are becoming cashless as a society, it’s pivotal for the industry to support its development. This is the first time that the industry has come together to share their knowledge in an all-in-one guide that will serve to foster healthy payment competition and innovation in the MENA region. I invite fintechs to download the report and interact with MFTA members and the contributors of this report.’’

Christian Kunz, Head of Group Strategy and Innovation at DIFC Authority, commented: “The FinTech sector is witnessing rapid growth and we are delighted to be taking part in creating a comprehensive guide for the FinTech community. At DIFC, we are committed to developing start-up companies through our acceleration programmes that provide innovative solutions and stimulate the growth of companies’ businesses within integrated regulatory frameworks.”

Subsequent volumes of the report will cover regulatory and know-your-customer prerequisites, card-issuing models and best practices, cross-border payments and trending products, such as store value cards.

The SHIFT report is available from the MFTA website using this link.

Securrency Capital secures Financial Services Permission from Abu Dhabi Global Market

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Securrency Capital, a broker-dealer based in the Abu Dhabi Global Market (ADGM), today announced that it has secured a Financial Services Permission (FSP) from ADGM’s Financial Services Regulatory Authority (FSRA) to deal in investments as a matched principal and provide custody for those investments. The license enables Securrency Capital to provide trading of digital assets to a variety of clients, including retail clients.

“We are honored to have been granted an FSP by ADGM as a Category 3A brokerage,” said Amir Tabch, Chairman and CEO of Securrency Capital. “With this license, we will be able to leverage Securrency’s unparalleled proprietary asset tokenization technology, which automates multi-jurisdictional compliance and financial services and enables the movement of regulated value at the speed of tomorrow.” 

Securrency Capital is a wholly-owned subsidiary of Securrency, Inc., a US-based global financial markets infrastructure technology company that has developed best-in-class proprietary digital asset technology supporting the issuance, governance, and life cycle management of regulatory-compliant tokens, including clawback of value in the event of theft or fraud. Securrency, Inc. works closely with world-class institutional banking partners and leading asset managers to enable their seamless transition into the digital assets space. Securrency’s deep technology stack, coupled with Securrency Capital’s on-chain identity services, allows for secure, transparent ownership of tokenized assets.

“Being based in the ADGM has allowed us to leverage the wealth of knowledge from the regional firms, as well as the sophistication of our regulator, the FSRA, to deliver a global marketplace and distribution network for finding and trading all types of digital assets,” explained Phil Langton, COO at Securrency Capital. “Securrency Capital is now at the forefront of migrating traditional trading on blockchain networks and opening up new distribution channels to the multichain ecosystem and the metaverse. We are confident that we have built a strong foundation on which to grow and look forward to expanding our global footprint with the implementation of our partnership framework and our technology partnership with Securrency.”

“ADGM is a rapidly growing world-class financial center,” added John Hensel, Chief Operating Officer of Securrency, Inc. “Securrency Capital will be at the center of the dynamic and rapidly-growing digital assets marketplace in ADGM for which retail and institutional clients have been waiting. We are proud of Amir and his team at Securrency Capital and look forward to supporting their rapid growth.”

ADGM has built and aims to maintain an accessible and secure international financial center that nurtures innovation, promotes market transparency and trust, and encourages sustainable growth and stability. The receipt of its FSP from the ADGM’s responsible and pragmatic regulator affirms Securrency Capital’s commitment to be a trusted partner who can provide quality and reliable digital asset services in this ecosystem and globally.

Securrency Capital’s FSP will enable it to achieve its goal of offering a transparent and reliable platform through which global investors can trade digital assets. As a firm founded with an ethos of responsibility and compliance, Securrency Capital consistently interacts with regulatory bodies to firmly establish the level of trust needed to assure those new to the digital financial assets market.     

“ADGM’s regulatory approval is a significant milestone for us,” said Praveer Pinto, Compliance Director at Securrency Capital. “We intend to use this as a foundation to further our commitment to achieving compliance with our regulatory requirements and playing our part in maintaining the integrity of the financial services ecosystem for our clients and the community.”

Securrency Capital’s platform is expected to go live soon after securing additional approvals from the FSRA.

Binance awarded In-Principle Approval for a Financial Services Permission from Abu Dhabi Global Market

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Binance, the world’s leading blockchain and cryptocurrency infrastructure provider, has received its In-Principle Approval (IPA) for a Financial Services Permission (FSP) from the Financial Services Regulatory Authority (the FSRA) of Abu Dhabi Global Market (ADGM) to operate as a broker-dealer in virtual assets. Applying for the FSP from the ADGM FSRA is part of its plans in establishing itself as a fully-regulated virtual asset service provider.

ADGM, the International Financial Centre in the capital of the United Arab Emirates (UAE), introduced the world’s first comprehensive and robust virtual asset regulatory framework in 2018 and has since established itself as a leading global hub and business platform for virtual asset activities for local, regional and international organisations.

Dhaher bin Dhaher, CEO, Registration Authority of Abu Dhabi Global Market, said: “We are pleased that Binance has been awarded an In-Principle Approval in the ADGM and are excited to support them as they work towards establishing their foothold and presence in Abu Dhabi, the capital of the UAE. ADGM is the largest regulated jurisdiction of virtual assets in MENA region and Binance’s participation will add to its vibrant and trusted ecosystem of virtual asset trading venues, global exchanges and service providers.

ADGM’s virtual asset framework is well recognised globally for its inclusive regulations and robust provisions and it is part of ADGM’s ongoing commitment, as an International Financial Centre, to bolster the economic growth of Abu Dhabi and to uphold the transparency and integrity of the marketplace.

ADGM will continue to actively expand the business offerings and unlock new investments opportunities in the UAE, and enable virtual asset partners like Binance to support the growing financial needs of the investors and businesses across the region.”

Richard Teng, Head of MENA for Binance, said: “Binance has been actively engaging global regulators, such as ADGM, as part of its ongoing commitment to uphold global standards and collectively foster the developments and sustainable growth of the crypto ecosystem. ADGM is the pioneer in introducing robust virtual asset regulatory frameworks to support the growth of the global blockchain ecosystem. We are grateful for their support during our application process and look forward to working closely with ADGM and other key Abu Dhabi stakeholders for broader deployment of our world-class offerings and services across the whole MENA region and beyond.”

Upon the successful completion of its ADGM FSRA application, Binance will then be able to offer its services regarding virtual asset offerings to customers across the Middle East and North Africa (MENA) region, through its subsidiary Binance (AD) Limited.

EQIFi Launches DeFi Mobile App, Boasting Access to Yield Aggregator Product with Up to 70% APY 

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EQIFI, the decentralized finance (DeFi) platform for borrowing, trading, and investing in digital assets, backed by a regulated bank, has announced the launch of its mobile application, providing enhanced smartphone accessibility to the EQIFi DeFi product suite. The app provides access to EQIFi’s most sought-after products, including the EQIFi yield aggregator which offers up to 70% APY. The app also offers peer-to-peer crypto transfers with zero fees, access to a variety of crypto wallets, and the ability to make purchases in crypto through DeFi credit cards. 

Brad Yasar, CEO of EQIFi, said: “With over $249 billion Total Value Locked and counting, DeFi is set to take the financial industry by storm. With this advancement, people need access to DeFi just as much as they need access to their traditional bank account. Our app is designed to create this accessibility while also encouraging users to participate in the DeFi revolution through myriad capabilities, including the increased accessibility to our yield aggregator, something we are very excited about.” 

EQIFi app users have access to a variety of blockchains including Bitcoin (BTC), Ethereum (ETH, USDT, EQX, USDC) and Binance Smart Chain (EQX, and soon BNB). Users can engage with the yield aggregator product through their BTC, ETH, USDT & USDC holdings on the app. In addition to this, users have increased access to EQIFi’s native EQX token. The EQX token allows for in-app access to the EQIFi product suite, staking rewards, increased LTV and bonus APY. Custody for user assets on the EQIFi app is provided in partnership with Ledger. 

Ioana Frincu, CTO of EQIFi, said: “As DeFi adoption continues to boom, interactions with DeFi technology are becoming increasingly sophisticated. It is a natural step for EQIFi to bring the latest DeFi technology directly to our user base through the launch of our mobile app. The app will allow users to interact with EQIFi’s Yield Aggregator (which brings up to 70% APY), zero fee peer-to-peer transfers, staking and a state-of-the-art wallet ” 

EQIFi is powered by EQIBank. Launched in 2015, EQIBank is one of the world’s leading digital banks and offers tax-neutral personal and corporate banking services in multiple currencies to clients in over 180 countries. EQIBank offers competitive rates, 24/7 service, trusted security, and an innovative, simple online global banking experience across all devices. EQIBank provides bank accounts, loans, custody, debit and credit cards, OTC, and wealth management to EQIFi and all its qualified clients. 

The app is available to download from the App Store and Google Play. 

For more information, visit www.eqifi.com