Fuzenomics Weekly #22
Your route to web3 alpha in the MENA region. Whether you’re a seasoned HODLer or just getting into crypto - we’ve got something for everyone to keep you ahead of the curve. By the community, for the community - Fuzenomics Weekly.
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Birds Eye View (vs Last 7 Days)
?? Overall Crypto Market Cap: $2.05 Trillion (+2.4%)
?? BTC Dominance: 56.94% (+0.84 PPT)
?? Price Snapshot:
?? Bitcoin: $59077 (+4 %)
?? Ethereum: $2309 (-0.98%)
?? BNB: $541 (+4.5%)
?? Solana: $131 (-2.0%)
Bank of International Settlements onboards 41 private firms including VISA & Mastercard for Project Agora
The BIS's Project Agora has moved into its design phase, welcoming 41 private financial firms. Launched in April by the BIS and seven central banks, the project explores integrating tokenized commercial bank deposits with tokenized wholesale CBDCs on a single platform.
The private sector participants include major players like Visa, Mastercard, SWIFT, Swiss SIX Digital Exchange, and Japan's Monex Group, along with clearing companies and numerous large banks. The Institute of International Finance was chosen to bring together these private participants, who answered a call for involvement issued in May.
Project Agora now stands as the BIS's largest project in terms of participants. The private sector members join central banks from France (representing the Eurosystem), Japan, Korea, Mexico, Switzerland, England, and the Federal Reserve Bank of New York.
The project tackles "structural inefficiencies" in the current international payments system by applying the BIS's unified ledger concept. It particularly focuses on customer verification and Anti-Money Laundering, processes often repeated by intermediaries in a transaction. The BIS stated:
“The project […] will investigate how tokenised commercial bank deposits can be seamlessly integrated with tokenised wholesale central bank money in a public-private programmable core financial platform.”?
Describing the BIS's vision of a unified ledger, BIS chief Agustin Carstens explained in a 2023 presentation that it would have open architecture with programmability and composability. CBDC and tokenized deposits would exist in separate sections of a ledger, with smart contracts enabling their interaction. Multiple unified ledgers could also interact with each other.
Project participants are also tasked with identifying legal and regulatory issues and gaps across the seven jurisdictions represented, as they relate to tokenization and CBDC. Project Agora is set to run until the end of 2025, concluding with a final report.
UAE’s central bank approves custodial risk insurance product for digital assets
The UAE Central Bank (CBUAE) has given the green light to a new offering that lets issuers provide insurance for digital asset custody risks.
OneDegree, an insurer based in Hong Kong, and Dubai Insurance from the UAE have begun offering digital asset custody risk insurance to UAE customers. The two firms, working together under the "OneInfinity" brand, said they received CBUAE approval for this product.
Custody risk insurance is a key part of how custodians, exchanges and other digital asset services manage risk. OneDegree notes that many regulators around the world require this type of insurance.
Robin Scott, who heads OneDegree's Middle East operations, said this insurance helps crypto service providers reassure clients about the safety of their assets.
Scott added that custody risk insurance in Web3 is like deposit protection in traditional banking. "In the Web3 world, required insurance serves as a private sector way to achieve similar goals," Scott said.
He also said that regulators worldwide want this product because they care about protecting consumers. Regulators aim to ensure that people and businesses using licensed digital asset platforms are covered if assets are lost.
Scott noted that CBUAE's approval means UAE companies can now buy this insurance locally. "For the first time, UAE companies can purchase custody risk insurance within the country," he said.
Scott mentioned that OneDegree and Dubai Insurance have already started selling custody risk insurance to UAE clients. He expects many firms will need this insurance as more companies get licensed in the UAE.
Which other countries in the world do you think can learn from UAE's forward looking approach when it comes to crypto? Let us know the comments below!
UAE regulators to allow Dubai-licensed VASPs to service entire country
The UAE's securities watchdog inked a deal with Dubai's crypto regulator to show "regulatory unity" across the nation by simplifying its licensing system.
The UAE's federal finance agency, the Securities And Commodities Authority (SCA) and Dubai's crypto overseer, the Virtual Assets Regulatory Authority (VARA), revealed a pact that would enable joint oversight of virtual asset service providers (VASPs) in the country.
Under this agreement, VASPs working in Dubai seeking a VARA license "can be automatically registered with the SCA to serve the broader UAE." However, the SCA noted that VASPs wanting to operate in emirates besides Dubai must still obtain a permit from the regulator.
The announcement detailed that the deal covers the process for mutual supervision of crypto firms. This includes enforcing penalties and fines, sharing information, and working together on staff training.
His Excellency Helal Saeed Al Marri, who heads VARA's executive board, stated that teaming up with the SCA allows for "smooth transferability of regulated services" while ensuring market risk protection nationwide. The official remarked:
In addition, His Excellency Mohamed Ali Al Shorafa, the SCA's Chairman, mentioned that the aim is to support the growth and stability of virtual assets in the UAE. He added that this ensures the implementation of Anti-Money Laundering (AML) rules and increases trust in the country's investment landscape.
Besides regulators working together to boost crypto growth in the region, its legal approach to crypto also saw new progress last month. On Aug. 16, UAE attorney Irina Heaver explained that the Dubai Court of First Instance acknowledged crypto as a valid payment method in employment contracts.
Heaver noted that the ruling in case number 1739 of 2024 sets a positive example that promotes the use of digital currencies in financial dealings.
Due to such developments in the area, a study also recognized the country as one of the leaders in global crypto adoption. Research by investment migration advisory firm Henley & Partners showed that the UAE ranks third globally in crypto adoption, ahead of countries like the United States.
Circle predicts stablecoins will become mainstream global payment method
Stablecoin giant Circle is optimistic about the future of digital currencies as everyday money. The company believes global rules should align to ensure all stablecoin issuers follow the same standards.
"Circle is sure that stablecoins will become common as internet-age money," Dante Disparte -
Circle's Strategy Chief.
"We think more internet payment companies and financial firms will join or grow in this field. This shows stablecoins are here to stay," Disparte noted.
Yet, Disparte stresses the need for worldwide rule alignment. He said all companies claiming to issue payment stablecoins should follow the same rules for reserves and fighting financial crime.
Disparte's words come as Circle plans to move its main office to New York by early 2025, after filing to go public in January.
Disparte explained that in the US, state banking and money transfer regulators can create and oversee payment rules at the state level. Other countries control payments or e-money activities nationally.
"The big question now is if the US will finally make federal stablecoin rules or keep things unclear, which lawmakers from both parties say isn't okay," Disparte said. He added:
Federal laws for payment stablecoins are crucial to promote safe competition in how Americans move, spend, save, and protect their money in a tech-driven market, Disparte believes.
The stablecoin bill, moved forward by the House Financial Services Committee in July 2023, has gained significant policy support, he noted.
"Congress should pass such a bill with both parties' support, and the President should sign it if it reaches him. The law would set a baseline for all issuers to follow US rules against money laundering, terrorist funding, and breaking sanctions," Disparte said.
He emphasized that these standards should apply to both US-based payment stablecoin issuers and their global counterparts, many of which are obtaining licenses to release dollar-linked stablecoins from places like the EU and UAE.
The EU's Markets in Crypto-Assets Regulation (MiCA) partially took effect in June, with new stablecoin rules becoming active on June 30.
On July 1, Circle announced it was the first global stablecoin issuer to meet MiCA requirements after getting an Electronic Money Institution (EMI) license from French banking regulators. Circle's USDC (USDC ) and EURC now comply with the new rules.
"Europe has done what other regions, including the US, haven't: provide clear legal and regulatory guidance for the entire digital asset market, not just parts of it," Disparte said. However, he noted:
The stablecoin market is getting more competitive with newcomers like PayPal's USD-pegged coin, PayPal USD, which has already reached a $1 billion market cap . Ripple Labs has begun testing its USD-pegged stablecoin , Ripple USD (RLUSD), on both XRP ledger and Ethereum, with plans to expand to more blockchains.
Tether's USDT remains the biggest stablecoin with a market cap over $118 billion, according to data from CoinMarketCap. Tether has also revealed plans for a new stablecoin linked to the UAE dirham (AED).
On August 26, the market cap for non-algorithmic stablecoins hit a new record of $168 billion. This surpassed the previous peak of $167 billion in March 2022, which had dropped to $135 billion by year-end.
Disparte extended an invitation to competitors worldwide, saying, "We welcome any rivals to come to the US, EU, Singapore, and other regions. Submit to strict licensing, follow our company's core standards, and join us as regulation-first, compliant firms. This approach will help our ecosystem grow and thrive for years to come."
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TON and Curve Finance team up on stablecoin swap initiative
The Open Network (TON) Foundation, a nonprofit backing TON blockchain growth, has teamed up with Curve Finance, a decentralized exchange (DEX).
This partnership aims to "foster a new TON-based stable swap project" to enhance stablecoin trading and user experience on the TON blockchain.
The TON-based swap project will utilize Curve Finance's Constant Function Market Maker (CFMM) technology, renowned for reducing price impact on stablecoin and similar asset swaps.
Vlad Degen, DeFi lead at TON Foundation, explained the CFMM tech integration's impact:
A press release states that the CFMM formula enables stablecoin swaps with less price volatility and slippage, leading to more efficient asset exchanges.
Currently, projects wanting to use Curve Finance's CFMM technology must get a license, making stable swaps on TON through this new project a key feature of the partnership.
The TON Foundation and Curve Finance will pick "an independent team" to build the stable swap project through a "public and clear" process.
The selected team will have "permission to use Curve Finance's stable swap formula in their project" with some of the new project's tokens given to eligible users.
Besides this recent partnership, Curve Finance switched to its native stablecoin crvUSD on June 28, changing its fee distribution from the 3cr token.
This change aimed to boost crvUSD's usefulness and integrate the stablecoin into Curve Finance's ecosystem to motivate users.
Egorov said then that users would "now get fees in a dollar-based stablecoin," a simpler and more stable method.
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