23 February

Hong Kong will earmark $6.4 million (HK$50 million) for developing its Web3 ecosystem, according to its 2023-2024 budget published on Wednesday. The funds will go towards organizing major international seminars, cross-sectoral business co-operation and workshops for young people.

Hong Kong’s financial secretary, Paul Chan, also announced the start of a task force dedicated to the development of virtual assets, composed of members from policy bureaux, regulatory bodies and industry. The government has [also] set aside $3.8 billion (HK$30 billion) for a co-investment fund focused on attracting non-local businesses to Hong Kong, according to Lee’s policy address.”

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“Backers of the stablecoin TrueUSD (TUSD) have gone live with a new system in conjunction with data-oracle project Chainlink to assure that reserves are adequate before new units of the dollar-pegged token can be minted.

The addition of the “mint lock control” makes TUSD the first stablecoin ‘to programmatically control minting with real-time on-chain verification of off-chain reserves.’

The key is to get information from the bank account where the stablecoin’s reserves are kept to the blockchain-based smart contract that controls issuance of new TUSD. The reserve data is aggregated by an accounting firm called The Network Firm LLP and then provided on-chain via Chainlink.”

See Also: Binance Shifts to ‘Semi-Automated’ Process to Manage Reserves of Tokens It Issues: Bloomberg
See Also: Frax Finance Votes to Fully Collateralize Its $1 Billion Stablecoin

For QCP Capital, there is now reason to believe that risk factors for price performance will come not just from the Fed — but China and Japan. Bitcoin is sensitive to global liquidity, and when central banks inject it, this marks an incentive for growth in and of itself.

While the jury is out on BTC’s value as an inflation hedge, it cannot be denied that it is the most direct global liquidity proxy, as it is not tied to any one central bank or nation.

While we were focused on USD liquidity — from the Fed’s QT and Reserve balance, we’ve missed the massive liquidity injection by the Bank of Japan (BOJ) and People’s Bank of China (PBOC) over the past 3 months. Contrary to consensus, central banks have net added $1 trillion of liquidity since the market’s bottom in October 2022, with the PBOC and BOJ the largest contributors.

Such a large injection of liquidity will no doubt find its way to crypto, even despite what appears to be the current US administration’s best efforts to prevent that.”

See Also: Developer Activity Shows Healthy Growth of the Crypto Space
See Also: Bitcoin Price Remains Lower After Release of FOMC Minutes

“The offering of Dapper Labs’ NBA-branded “Top Shot” non-fungible tokens might be securities, a federal judge ruled Wednesday.

The Court finds that Plaintiffs’ allegations render each consideration under Howey facially plausible. The Court finds that Defendants’ public statements and marketing materials objectively led purchasers to expect profits.

The allegations that Dapper Labs created and maintains a private blockchain is fundamental to the Court’s conclusion. By privatizing the blockchain on which Moments’ value depends and restricting the trade of Moments to only the Flow Blockchain, purchasers must rely on Dapper Labs’s expertise and managerial efforts, as well as its continued success and existence.

The judge said his conclusion ‘that what Dapper Labs offered was an investment contract under Howey is narrow,’ and other NFTs may not be securities. ‘Rather, it is the particular scheme by which Dapper Labs offers Moments that creates the sufficient legal relationship between investor and promoter to establish an investment contract.

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“The Canadian Securities Administrators (CSA)—made up of securities regulators from each of the 10 provinces and 3 territories in Canada—have published a long list of new requirements for crypto companies wishing to stay legally compliant, and stablecoin platforms are clearly in the agency’s crosshairs.

Crypto asset trading platforms within the country will now be prohibited from allowing customers to buy or deposit stablecoins, or other “Value Referenced Crypto Assets” (VRCAs), without the CSA’s prior written consent. Obtaining consent means meeting the administrators’ many due diligence requirements, including ensuring that the stablecoin is fiat-backed.

The CSA requires that trading platforms allow such tokens to be bought or sold only if their reserves are made of “highly liquid assets” (cash and cash equivalents), and only if those reserves are held with a qualified custodian. They must also be subject to monthly review by independent auditors. Distributions of those tokens must also comply with Canadian securities legislation since, according to the notice, ‘fiat-backed crypto assets generally meet the definition of security.’

For greater certainty, we would not expect to provide consent in respect of a VRCA that is not fully backed by an appropriate reserve but rather maintains its value through an algorithm.”

See Also: Canadian Crypto Trading Platforms Face ‘Enhanced’ Rules Under New Regulations
See Also: Rep. Tom Emmer Says Fed Must Not Create Digital Currency ‘Surveillance State’

It’s time to pay attention to RWAs