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- Nigeria’s central bank loosens rules for banks facilitating crypto transactions 🇳🇬🏦
Nigeria’s central bank loosens rules for banks facilitating crypto transactions 🇳🇬🏦
PLUS: Turkey’s Erdoğan picks crypto professor for central bank board. Sotheby’s sold $35 million worth of digital art in 2023.
Manan Vora
December 26, 2023
Snapshot Web3
December 26, 2023
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Regulatory and Legal News
In 2023, 25 countries, including Austria, Japan, and Switzerland, have implemented legislation or regulations for stablecoins, according to the PwC Global Crypto Regulation Report. This includes requirements for licensing, registration, and adherence to the Financial Action Task Force's Travel Rule. Some countries like the United States, the United Kingdom, and Canada are still finalizing stablecoin legislation. Around 18% of jurisdictions, including Bahrain and India, have not initiated any stablecoin regulations, while 23% are actively working on adopting stablecoin laws, such as Australia and Singapore. The stablecoin market, led by Tether, has seen substantial growth in 2023, with Tether's market capitalization surpassing $90 billion in mid-December.
The U.S. Securities and Exchange Commission (SEC) has set a December 29 deadline for spot Bitcoin ETF applicants to submit final S-1 amendments. Applicants who miss the deadline won't be part of the initial wave of potential approvals in early January. The SEC emphasized the need for a cash-only redemption model and the identification of authorized participants in filings. Despite last-minute updates, analysts still expect the SEC to approve the first spot Bitcoin ETFs by January 10.
The Central Bank of Nigeria (CBN) has lifted restrictions on Nigerian banks facilitating cryptocurrency transactions, recognizing the increasing global demand for crypto. In a circular, the CBN outlined guidelines to set minimum standards for establishing banking relationships and opening accounts for virtual asset service providers (VASPs) in Nigeria. The move comes nearly two years after the CBN enforced a ban on banks engaging with digital currencies. However, financial institutions are still prohibited from holding, trading, or conducting transactions in cryptocurrency using their own accounts. The local blockchain industry has called for regulations to foster blockchain integration in Nigeria.
Turkish President Recep Tayyip Erdoğan has appointed Professor Fatma Özkul, an expert in crypto assets and blockchain technology, to the central bank's Monetary Policy Committee. Özkul has been a lecturer at Marmara University in Istanbul since 2012, with a focus on accounting, finance, auditing, blockchain, and digital assets. She authored a book on crypto asset accounting in 2022. The Committee recently raised Turkey's interest rate to 42.5% due to rising inflation. Turkey ranks fourth globally in raw crypto transaction volumes, with around $170 billion in activity between July 2022 and June 2023. Authorities are considering regulations for the crypto market.
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Innovation and Launches
Base Network, a project associated with Coinbase, has witnessed steady growth, with a total value locked (TVL) of nearly $735 million, reflecting a 4% increase in the past week. Since its official launch in August 2023, Base's TVL has grown from $592 million at the end of November to $600 million. User engagement has consistently increased, with over 3 million cumulative users by December 22. The daily active users have risen substantially, reaching over 70,000 users in most of November and December. The daily trading volume of Ether on the network has surged from 1 ETH to 79,354 ETH by December. Base Network, using the optimistic rollup framework, achieves a daily transaction speed of 3.45, with over 6.97 million transactions completed in the last 30 days.
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NFT, Gaming and Metaverse
Fine arts auction house Sotheby’s reported approximately $35 million in digital art sales in 2023, marking it as one of the most exciting years for digital art. Sotheby’s conducted its first live digital art auction with 300 attendees, generating $12 million in sales. The auction house recorded the highest fee for digital artwork, selling the NFT "Ringers #879" by artist Dmitri Cherniak for $6.2 million. In total, Sotheby’s held over 25 auctions focusing exclusively on digital art or including it in contemporary art sales. The company also launched its on-chain marketplace for NFTs, called Sotheby’s Metaverse.
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Scams and Hacks
Curve Finance's community has voted to reimburse liquidity providers (LPs) affected by a $61 million hack in July. Tokenholders approved the disbursement of tokens worth over $49.2 million to cover losses in Curve (CRV), JPEG’d (JPEG), Alchemix (ALCX), and Metronome (MET) pools. The reimbursement includes Ether and CRV tokens in the pools before the hack, along with missed CRV emissions. The funds will come from the community fund in the form of Curve DAO (CRV) tokens. The hack occurred on July 30, exposing vulnerabilities in stable pools using certain versions of the Vyper programming language.
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Interesting Reads
In 2023, notable figures in the crypto space emerged as Santas and Grinches. Larry Fink of BlackRock garnered praise for pushing for a Bitcoin ETF, while ZachXBT earned respect for exposing scammers and raising awareness about SIM swap attacks. Vivek Ramaswamy, a 2024 Republican presidential candidate, advocated for a lighter regulatory touch on crypto. On the flip side, Gary Gensler, SEC Chair, faced criticism for the SEC's litigious approach, and Elizabeth Warren continued to be a staunch crypto critic, pushing for the "Digital Asset Anti-Money Laundering Act." JPMorgan Chase CEO Jamie Dimon maintained his negative stance on Bitcoin, while mainstream media received scrutiny for perpetuating debunked narratives about crypto. Actor and activist Ben McKenzie expressed negative views about Bitcoin, and Greenpeace faced backlash for misunderstanding the crypto community. Economist Nouriel Roubini, nicknamed "Dr. Doom," announced plans to issue his stablecoin despite maintaining a generally pessimistic view of the crypto market.
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Miscellaneous
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The information provided in this newsletter is for informational purposes only and should not be interpreted as investment advice, endorsement, or recommendation. Cryptocurrency investments carry significant risk due to their volatility. You should consider your financial situation, investment goals, and risk tolerance before making any investments. We strongly recommend consulting a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results.
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