United Arab Emirates and China Complete $13.6 Million CBDC Transaction

Audy Castañeda
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United Arab Emirates and China Complete $13.6 Million CBDC Transaction

The UAE and China made the first cross-border transaction in renminbi, moving 50 million dirhams ($13.6 million) using the mBridge network. The network, which connects the central banks of Hong Kong, Thailand, the UAE and China, helps de-dollarize amid US tensions. The rise of dollar-backed stablecoins could boost dollar dominance and alter the global financial landscape, Morgan Stanley says.

The United Arab Emirates (UAE) and China have carried out the first cross-border central bank digital currency (CBDC) transaction in renminbi (RMB). The payment moved RMB and 50 million between the UAE and China using the mBridge infrastructure at a time when the dollar’s supremacy in Asia is in question.

The People’s Bank of China and the Central Bank of the UAE successfully exchanged Dh50 million ($13.6 million) in the first real-time payment made through their customized interbank network. The network, which ran its first pilot in 2014, connects the central banks of Hong Kong, China, the UAE and Thailand.

China Challenges the US with CBDC Tests

Two transactions were made yesterday during a high-level meeting in Abu Dhabi. Saudi Prince Mansour and Chinese Ambassador Yiming Zhang jointly sent Dh50 million to China. At the same time, the Chinese central bank made a remittance payment in digital RMB.

The transaction was the first real-time payment on the mBridge blockchain infrastructure, which connects the central banks of Hong Kong, Thailand, UAE and China. The network’s first pilot project was carried out in 2014. However, its importance has grown as China sought to de-dollarize itself amid tensions with the United States.

The mBridge network is not operational in the strict sense, though. Although plans indicate it will be launched in the middle of the year, the Bank for International Settlements says it is too early to set dates. The project has yet to address exchange costs and liquidity.

US CBDC and Stablecoins Will Support Dominion

One of the challenges of de-dollarization is that many countries have easier access to the US dollar than any other currency. In December last year, about 58% of central banks’ foreign exchange reserves were US dollars.

This phenomenon means that dollar-rich countries that conduct international trade in dollars have less counterparty risk. In Argentina, where the fiat currency has been devalued, most merchants prefer dollars. Even Javier Milei, the recently elected libertarian leader, does not support Bitcoin as much as US dollars.

According to David W. Birch, author of a book titled The Currency Cold War, the preference for dollars supports the creation of a US central bank digital currency. He claims that the race towards an American CBDC is like the space race between the United States and Russia. In his opinion, the United States should go all out to win it.

Andrew Peel, head of cryptocurrencies at Morgan Stanley, said the US dollar’s dominance could benefit from the rise of dollar stablecoins. Growing interest from institutional players like Visa and increasing settlements on blockchain mean that stablecoins can significantly impact the financial sector.

However, Danny Chong, CEO of DeFi performance platform Tranchess and former investment banker, disagrees. Speaking to a media outlet about the recent boom in tokenization and the potential of stablecoins, he said the following:

“CBDCs and stablecoins are… very close. Unbeknownst to many, there has been a rise in foreign stablecoins. The Japanese yen-backed stablecoin is becoming one of the main assets exchanged for foreign currencies. “Global usage of this stablecoin could soon surpass that of its dollar-based counterparts.”

By Audy Castaneda

US Department of Justice Goes against Another Exchange for Money Laundering

Leonardo Perez
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US Department of Justice Goes against Another Exchange for Money Laundering

The DOJ has accused Aliaksandr Klimenka of running an unlicensed money business and money laundering through BTC-e. Klimenka’s arrest in Latvia marks a crucial point in the case; He could face up to 25 years in prison if convicted. The case follows DOJ actions against Changpeng Zhao and Binance, illustrating a broader strategy to combat cryptocurrency misuse.

The United States Department of Justice (DOJ) has continued its scrutiny against illicit actors in the cryptocurrency ecosystem by filing charges against Aliaksandr Klimenka, a Belarusian and Cypriot citizen. The DOJ alleges involvement in a complex money laundering scheme through the BTC-e cryptocurrency exchange.

This recent legal action signals the continuation of the crackdown on illicit financial activities in the cryptocurrency sector, and marks another important step following the notable case against Changpeng Zhao, former CEO of Binance.

USA: Cryptocurrency Exchange Faces “Money Laundering” Charges

Klimenka, 42, now faces serious charges. These range from running an unlicensed money business to money laundering conspiracy.

The indictment, unsealed on Tuesday, claimed that Klimenka and Alexander Vinnik controlled BTC-e from 2011 to July 2017. This exchange is labeled as a hub for cybercrime and money laundering. In addition, it promised anonymity to users and attracted a criminal clientele.

BTC-e is accused of serving as a financial conduit for a range of criminal activities, including hacking incidents, ransomware scams, identity theft schemes, corrupt public officials, and narcotics distribution rings, and allegedly was used to facilitate crimes ranging from computer hacking to fraud, identity theft, tax refund fraud schemes, public corruption, and drug trafficking. The indictment explains that the US BTC-e servers were key to these illegal activities. Klimenka and his company, Soft-FX, allegedly rented and cared for these servers.

Furthermore, BTC-e was operating in the United States without following the necessary legal guidelines. In particular, it lacked anti-money laundering measures, customer identification checks or compliance programs:

“Despite carrying out important operations in the United States, BTC-e was not registered as a money services company with the Treasury Department, it did not have an anti-money laundering process, it did not have a verification system” “know your customer” or “KYC,” and did not have an anti-money laundering program, as required by federal law.”

Klimenka’s arrest in Latvia on December 21, 2023 marks a critical juncture in this case, following his extradition to the United States, where he now faces judicial proceedings. The seriousness of the charges against him could carry a maximum penalty of 25 years in prison.

The Justice Department’s Office of International Affairs worked with the Latvian government to secure Klimenka’s arrest.

This case emerged following the DOJ’s actions against Changpeng Zhao and the Binance exchange in 2023, illustrating a broader strategy to combat the misuse of digital assets.

In late 2023, the US District Court declared that Zhao and Binance allegedly violated the Commodity Exchange Act and CFTC regulations. This resulted in a $150 million civil monetary penalty against Zhao personally.

USA: The Binance Exchange Former CEO Case

Zhao’s guilty plea for violating the Bank Secrecy Act and Binance’s agreement to pay a $4.3 billion fine represent historic moments in cryptocurrency sector regulation.

The creation of the National Cryptocurrency Enforcement Team (NCET) further exemplifies the Department of Justice’s commitment to addressing cryptocurrency-related crimes. The NCET focuses on curbing the illicit use of cryptocurrencies and digital assets.

In addition, NCET collaborates with both national and international organizations. Its goal is to spearhead strategies against the misuse of digital currencies by hackers.

By Leonardo Perez

Use of Bitcoin in El Salvador Remains “Very Unusual,” According to Foreign Entrepreneurs

Audy Castañeda
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Use of Bitcoin in El Salvador Remains “Very Unusual,” According to Foreign Entrepreneurs

Local and foreign entrepreneurs agree that the use of Bitcoin is “very unusual” and that its use is minimal in El Salvador. So far, more than 100 companies have accepted BTC as a means of payment in that city, thanks to the spread of entrepreneurs. Despite the pro-Bitcoin push, El Salvador’s economy is stagnant and could have one of the slowest growth in Central America.

Prior to the presidential elections in El Salvador, local and foreign entrepreneurs admit that the use of Bitcoin (almost three years after the Bitcoin Law) is “very unusual.” Added to its low adoption, they admit that inflation has impacted the price of basic basket products.

Given the low adoption of Bitcoin, foreign entrepreneurs seek to encourage the use of BTC among local businessmen and foreign entrepreneurs in the town of Berlin (Usulután), El Salvador. So far, more than 100 companies have accepted BTC as a means of payment in that city.

Bitcoin Use in El Salvador Continues to Fall

After the presidential elections, El Salvador would resume the construction of the “Bitcoin City”. The country’s vice president, Félix Ulloa, detailed that they will resume plans to build the tax-free paradise and launch Bitcoin bonds after Bukele’s recent offensive against gangs practically guaranteed his re-election.

Nicki, a former mortgage advisor, explained to Reuters that “Adoption is huge for us – it is what we consider important and how bitcoin will win. “Bukele put the flag on the ground.”

The low level of optimism for Bitcoin in El Salvador seems to be the constant, as shown by the latest data from the Central Reserve Bank. Remittances in cryptocurrencies fell 34.5% in 2023, reaching the sum of 82.93 million dollars.

A media outlet reported that cryptocurrency remittances in 2023 contrast with the 126.72 million dollars recorded in 2022. In addition, this marked decline in currencies transferred through digital wallets represented a difference of 43.79 million dollars less, according to official data presented.

The significant decline in remittances received through cryptocurrency wallets reflects the challenges and changing dynamics in El Salvador’s economic ecosystem, as well as the complexities associated with the widespread adoption and everyday use of cryptocurrencies.

According to Reuters, despite the pro-Bitcoin push, El Salvador’s economy is stagnant and could have one of the slowest growths in Central America, since public debt amounted to $25 billion until last year.

The analysis shows that Bitcoin has not contributed “really anything” to the economy of El Salvador, nor significant benefits, although the government insists that skepticism “is being reversed.”

Only Foreign Tourists Visiting El Salvador Use Bitcoin

However, a large part of Salvadorans would “ignore” Bitcoin, since they would base their daily economy on cash. They seem more concerned about housing costs and basic food items. Meanwhile, tourists maintain that BTC is only transacted with tourists who “are visiting. It was not executed well. “The things that were supposed to happen just didn’t happen.”

The latest report from the University Institute of Public Opinion showed that only 16.3% of the population of El Salvador. The above believes that the economy has improved in 2023 due to the implementation of Bitcoin as legal tender. Even 18.6% believe that the country’s situation has “worsened” due to the adoption of BTC.

Even the José Simeón Cañas Central American University (UCA) stated that despite the progress in Bitcoin adoption in the country, the general feeling is one of little optimism. 52.9% believe that the country’s economy “remains the same” as always.

By Audy Castaneda

Celsius Announces Exit from Chapter 11 and Distribution of More Than USD 3 Billion to Creditors, and other News

Leonardo Perez
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Celsius Announces Exit from Chapter 11 and Distribution of More Than USD 3 Billion to Creditors, and other News

Celsius successfully emerges from Chapter 11 bankruptcy, paving the way for the distribution of over $3 billion in cryptocurrencies.

Cryptocurrency lender Celsius has announced its successful emergence from Chapter 11 Bankruptcy in the United States. In a press release issued on January 31, the firm reported that its financial recovery will also entail the establishment of a new Bitcoin mining company called Ionic Digital Inc., which will be managed by renowned cryptocurrency mining firm Hut 8.

Matt Prusak, currently Chief Commercial Officer of Hut 8, has been appointed CEO of Ionic Digital. The company plans to go public once all necessary approvals are obtained.

Crypto Exchange FTX Announces Customer Refund Plan Amid Legal Challenges

In a recent court hearing, FTX, the cryptocurrency exchange headed by Sam Bankman-Fried, has communicated its commitment to fully refund its customers affected by the recent bankruptcy filing.

While the promise of repayment is encouraging, questions are raised around the bankruptcy date set by U.S. Bankruptcy Judge John Dorsey, thus generating disputes between some plaintiffs.

The proposed refund process in US bankruptcy court would require plaintiffs to prove ownership and loss of assets in FTX, a process that will be overseen by restructuring advisors.

On the other hand, FTX has abandoned its plans to relaunch its platform due to a lack of buyers, choosing instead to focus on returning funds to former clients.

Block Inc, Jack Dorsey’s Bitcoin Startup, Lays Off a Thousand Employees in One Day

Bitcoin startup Block Inc., owned by Twitter founder Jack Dorsey, has carried out a significant wave of layoffs affecting around a thousand employees in a single day.

Block’s CEO and co-founder informed employees of the need to lay off “a large number of team members.” This, with the aim of streamlining operations. According to a memo reviewed by Business Insider, the layoffs focused on the company’s Cash App, Foundational and Square divisions.

Jack Dorsey had hinted at the possibility of layoffs last year, indicating that restrictions would be placed on Block’s growth. Employees were warned that the company planned to reduce its workforce by approximately 10%. Despite the projection that this process would take several months, almost a thousand workers were laid off in a single day.

“We decided it was better to do it all at once instead of distributing [the cuts] randomly so that it wouldn’t seem unfair to either the employees or the company. When we know we need to act, we want to do it right away instead of letting things drag on forever,” Dorsey said.

Tether Reports Increase in Cash Reserves and Profits in the Last Quarter of 2023

Stablecoin company Tether has revealed significant achievements in its Q4 2023 report, highlighting an increase in its cash reserves and quarterly profits, with a particular focus on the record ratio of reserves to cash and cash equivalents.

The report highlights that Tether has total assets of approximately $97 million, exceeding its total liabilities by about $5.5 million.

According to Tether’s certification report on January 31, the company posted a net profit of $2.85 billion in the fourth quarter of 2023, including up to $1 billion in net interest on US Treasury securities. gold and bitcoin reserves

Tether CEO Paolo Ardoino explained that achieving the highest proportion of reserves in cash and cash equivalents is due to the company’s commitment to maintaining liquidity, as well as to financial stability.

By Leonardo Perez

Polkadot (DOT) Circulating Market Capitalization Soars to $8.3 Billion and Records Massive 111% Growth

Audy Castañeda
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Polkadot (DOT) Circulating Market Capitalization Soars to $8.3 Billion and Records Massive 111% Growth

DOT’s circulating market capitalization reached 11 billion during the fourth quarter of 2023.

Polkadot, the computing platform known for its interoperability and scalability, has shown notable growth in key metrics during the latter part of 2023, as outlined in a recent report from Messari.

Outpacing Crypto Market Growth

According to Messari’s findings, Polkadot’s circulating market capitalization saw a remarkable quarter-over-quarter (QoQ) growth of 111%, reaching an impressive $8.38 billion. This growth exceeded the overall crypto market growth of 54% during the same period.

Furthermore, Polkadot’s year-on-year (YoY) change reached 94%, consolidating its position among the top 15 crypto projects by market capitalization.

In terms of revenue, Polkadot witnessed a substantial increase of 2,880% QoQ, generating $2.8 million in Q4 2023. This increase was mainly attributed to the significant increase in extrinsics, driven by the introduction of Polkadot signups.

Messari suggests that even excluding the four-day increase in Enrollments, Polkadot’s revenue would have doubled from the previous quarter, and it tends to be relatively lower compared to its competitors due to its network structural design.

Polkadot Witnesses Significant Increase in Active Addresses

Following the launch of OpenGov (the in-network governance module and framework) in June, the Polkadot relay chain saw an increase in account activity, largely due to increased participation in governance.

As Relay Chain is instrumental in facilitating governance processes, it saw a surge in active addresses on October 24, when users claimed their locked DOT tokens from the first batch of parachain auctions held two years earlier.

During Q4 2023, the Polkadot relay chain averaged over 10,000 daily active addresses, representing a substantial 90% increase quarter-over-quarter. Excluding the October 24 activity related to claiming DOT tokens, the average number of active addresses still saw a significant 70% increase in the quarter, reaching 9,000.

Additionally, cross-chain message (XCM) transfers on the platform increased 150% quarter-on-quarter, reaching an all-time high of 133,000. The total number of active XCM channels almost tripled in 2023, reaching 203 by the end of the year.

According to Electric Capital rankings, Polkadot has 800 full-time and 2,100 total developers, making it one of the largest crypto ecosystems in developer participation.

DOT Price Shows Mixed Performance

Despite notable growth in key metrics demonstrating network expansion, the price of Polkadot’s native token DOT has not followed suit and has even seen declines over longer time periods despite positive developments.

Currently, DOT is trading at $6.7420, representing a slight price increase of 0.3% in the last twenty-four hours, along with a gain of 9% year-to-date. However, over the last fourteen and thirty days, the token has recorded a price drop of 6% and 22%, highlighting the absence of bullish momentum and catalysts that could push DOT to higher levels.

Although it reached a 19-month high of $9.5711 on December 26, the subsequent price decline has brought DOT to a critical juncture, potentially erasing its gains from last year.

If the current level and its nearest support at $6.3229 fail to stop further price declines, DOT could fall to the $5.4830 level, which serves as the next major support on the token’s 1-day chart.

On the contrary, if DOT breaks its overhead resistance at $7.0392, the next target would be to break the short-term downtrend structure, facing the resistance at $7.5332 and another resistance at $8.1631. This would pave the way for another consolidation phase at its 19-month high.

By Audy Castaneda

El Salvador Will Remain Committed to Bitcoin after the Elections, Says Vice President

Leonardo Perez
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El Salvador Will Remain Committed to Bitcoin after the Elections, Says Vice President

After the next elections, El Salvador will remain committed to its decision to adopt BTC as legal tender.

On Wednesday, the vice president of El Salvador asserted that Bitcoin will continue to be legal tender in the country during President Nayib Bukele’s second term.

Bukele is expected to comfortably win the country’s next elections thanks to the strong repression carried out on gangs. For this reason, Félix Ulloa, vice president of El Salvador, temporarily licensed to run for re-election with Bukele, has highlighted his commitment to the adoption of BTC as legal tender by the Central American nation.

Likewise, the recent statement also comes after the International Monetary Fund (IMF) asked El Salvador to “reconsider the adoption of BTC” during negotiations for a $1 billion loan.

“The government has no intention of reversing the adoption decision,” said Félix Ulloa in an interview with Reuters. The vice president added that the recent decision by the US Securities and Exchange Commission (SEC) to allow exchange-traded funds (ETFs) that track Bitcoin “only strengthened” his resolve to adopt cryptocurrencies.

The recently approved cryptocurrency ETFs have been considered by experts as a turning point for Bitcoin, as they offer traditional investors exposure to BTC without owning the tokens directly.

“Right now, Bitcoin enjoys the greatest credibility in the world,” said Ulloa.

Additionally, Félix Ulloa also added that the government will continue building the “Bitcoin City”, a tax-free city, proposed by Nayib Bukele.

Ulloa explained that they will also continue with the proposal to issue passports to those investors who contribute the equivalent of $1 million dollars in Bitcoins in the country.

Bitfinex Securities Bet on El Salvador and Its Experiment with Bitcoin

In September 2021, El Salvador became the first country in the world to establish Bitcoin as legal tender. However, this drew widespread criticism from financial regulators.

The IMF, which is openly critical of the fact that the government is negotiating a $1.3 billion loan, has expressed concern. However, Ulloa remains hopeful that the obstacles can be overcome. “Most of the package has already been agreed,” he said.

According to a study carried out by the Institute of Public Opinion of the country’s Central American University, 70% of the country’s inhabitants were not willing to accept such legal tender in El Salvador.

The recent news comes amid the official announcement of the launch in El Salvador of “Bitfinex Securities”, a trading platform for Bitfinex tokenized securities, which took place on Wednesday.

The head of operations at Bitfinex Securities, Jesse Knutson, expressed that El Salvador’s financial performance in the last 3 years has been above its regional peers. Furthermore, Knutson attributed this growth in part to investment and tourism driven by the adoption of Bitcoin in the country.

“The development of a tokenized securities industry in El Salvador means a substantial leap for financial innovation in Latin America and globally,” said the Bitfinex statement.

El Salvador’s next elections, scheduled for February 4 of this year, will elect the president, vice president and the 60 deputies of the Legislative Assembly.

Despite numerous criticisms of his mandate, Nayib Bukele is positioning himself to emerge victorious in the upcoming elections for a second term. According to surveys, Bukele has approximately 69.9% of voters who approve of his candidacy for re-election.

Before Nayib Bukele came to power, presidents in El Salvador could only run for a single term.

By Leonardo Perez

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