Shanghai and South Africa Crypto Adoption. ECB with a Macroprudential Perspective
Disclaimer: Everything we write in "The Crypto Insider Report" is an x-ray of the industry as we see it, through the lens of publicly available information. We are not financial advisors.
More Crypto Adoption - Shanghai and South Africa
While the Web is full of news mentioning insolvency, bankruptcy and unsustainable business models, it’s great to take a step back and check out all of the building that is going on in the Crypto space. In doing so, I want to highlight that more and more policy work is happening. This week, we have Shanghai’s municipal government and South Africa’s Reserve Bank.
According to an article in CoinTelegraph, Shanghai’s draft for its next 5 year plan focuses a great deal on Crypto, with the goal of "promoting the deep integration of digital technology and the real economy". It covers NFT marketplace work, Metaverse research and Web3 investments for topics such as authentication and distributed storage. “Digital Finance” is also mentioned.
In another part of the world, South Africa’s Reserve Bank plans to regulate cryptocurrencies as financial assets, as CoinTelegraph reports. They plan to introduce legislation in the following 12 months in order to have the domain regulated and ensure some degree of investor protection. This is important, as according to some reports, around 13% of the population owns Crypto. The change will also warrant more tracking and KYC processes, in an attempt to discourage fraud.
Mihnea
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ECB’s latest thoughts on crypto from a macroprudential perspective
As part of its latest Macroprudential Bulletin, three ECB issued three research articles focused on crypto issues: DeFi, stablecoins; and climate risk of crypto. The bulletin provides insights into how the ECB thinks about these issues from a macroprudential perspective, i.e.identifying systemic risks by exploring the soundness and vulnerabilities of a financial system.
A number of quotes are depicted by Patrick Hansen, a keen observer of EU policies focused on the crypto industry:
Looking through the DeFi paper, we can mention a few key topics:
Users have strong incentives to join DeFi given the high generation of revenue and its distribution back to LPs.
DeFi has distinctive features which gives it advantages over tradFi (e.g. composability), but also can lead to possible headaches (complexity due to recycling of digital assets).
Governance is often concentrated (additional analysis would need to be done re: maturity of the project, delegation status, tokenomics).
In terms of regulation, the paper indicates the following:
DeFi does not have traditional centralized entry points (e.g. banks to be regulated) and has an anonymous nature. Thus, it provides challenges in terms of enforcement and effective regulation and supervision -> actual regulatory gaps need to be disentangled.
DeFi may require innovative ways of regulation:
In cases where central entities are not available, the focus might be put on the persons who deploy, govern and upgrade DeFi protocols / code. Thus, holders of governance tokens, DAO and platform developers could be brought into the regulatory perimeter.
Introduction of embedded regulation - regulators oversee the distributed ledger and impose requirements tied to / stemming from the data.
Razvan
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$75 million raised by Animoca Brands for an Open Metaverse
Kingsway Capital, Liberty City Ventures, Alpha Wave Ventures, 10T, Cosmic Summit Investments Limited, Generation Highway Ltd, and SG Spring Limited Partnership Fund are just a few of the investors from the latest Animoca Brand round, which raised more than $75 million.
The funding will be used to secure licenses for intellectual properties from popular names, to invest and acquire strategic assets and, of course, for product development.
Yat Siu, executive chairman and co-founder of Animoca Brands, said:
"Digital property rights represent a society-defining generational shift that impacts everyone online and will set the stage for the emergence of the open metaverse. We are deeply honoured to continue to enjoy strong support from investors as we work to solidify the leadership position of Animoca Brands in the Web3 industry and the field of true digital ownership."
Animoca Brands is working to deliver true digital ownership of users' virtual assets and data using technologies like blockchain and NFTs. This will enable various DeFi and GameFi opportunities (including play-and-earn), asset interoperability, and an open framework that can increase equity for all participants in the open metaverse. A bold statement, used more and more by most of the companies working on the Metaverse.
Animoca Brands has already a Portfolio of about $1.5 billion, and what's more important is that, in an article written when the company's estimation surpassed $1 billion, and that was one year ago, the company said:
"Nearly three years ago we explained our vision for the NFT ecosystem". That's a vision about NFTs from 2018, talking about visionaries.
Hopefully we will soon have a version of a Metaverse with interoperability options, because I have a feeling of a period that so called "best Metaverses" will show up like the NFTs projects did for the last year or so.
Stay vigilant
Cosmin
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Li Jin’s free Creator Economy course
More than a year ago, Li Jin, a renowned name in the web3 space and cofounder of Variant Fund, held a video course targeted at people wanting to get involved in the creator economy. Whether you’re looking to find something in the space or trying to understand its ins and outs for investment or hiring purposes, Li’s course is the place to be.
Initially, the course was not open to all, but it is now. Over the course curriculum, she goes over all sides of the creator economy: creating, businesses, growth, investing and more. One thing I found significant is that there is a video workshop with Variant Fund’s Jesse Walden.
Oftentimes we’re concerned about the lack of education in the space or, more specifically, centralized libraries of information. Although we’re used to scavenging for information on obscure Twitter threads and forums, most people aren’t and this is a great way to get them engaged - especially when it features actual experts in the space with proper achievements and published, cited articles.
I highly encourage you to take a look at it and maybe do a few of the lessons. They aren’t in a short format but there’s both video support and slides alongside assignments.
Matei
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For more educational crypto content, check out the links below:
The Stakeborg DAO Talks on YouTube: https://www.youtube.com/playlist?list=PLOrFZZifNn4Nx4nSQL3WS52ALPXgrTSVG
Discord channel: https://discord.com/channels/901898461568442458/903006233584341052
StakeborgDAO Quarterly Reports: https://docs.stakeborgdao.com/reports/dao-quarterly-reports
Stakeborg Academy: https://academy.stakeborg.com/
🧑🏽💻🤝thank you