Tuesday, June 27, 2023

Interest building in BTC, crypto in Africa, public blockchain trials by a central bank, and more...

“The people who designed the tools that make the Net run had their own ideas for the future.” – Tim Berners-Lee  ||  

Hi all! This email may seem long, but it’s mostly charts. There’s some interesting insight into the state of crypto adoption in Africa – it’s probably not what most in the northern hemisphere assume. And we have a central bank and financial regulator testing DeFi trading and tokenization on a public blockchain. 🤯

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WHAT I’M WATCHING

Interest is building. Below I share several charts that show growing interest in BTC, as well as why, despite this interest, the price is still range-bound.

Crypto adoption in Africa. This is an area I’ve been following for a while, especially given the relative lack of established legacy infrastructure when it comes to electronic payments, the eye-watering inflation in many areas, and some infringements of personal liberties from certain autocratic regimes. Yesterday I came across a survey by an African non-crypto company that broke some assumptions but gave data to support others. More on this below.

Store of value. Speaking of eye-watering inflation, Zimbabwe’s year-on-year rate is at 175% (75% month-on-month!!). This means that the monetary value of a basket of goods priced in Zimbabwe dollars is down more than 60% in one year. Bitcoin, however, is up 46% in the same period.

Public trials. The Monetary Authority of Singapore (MAS) has published details of its latest blockchain tokenization trials on Ethereum. Yes, a central bank and financial regulator is trialling a public blockchain for asset issuance and trading, and it is doing so with other legacy institutions including Standard Chartered, HSBC, Citi, UBS and JPMorgan. The trials include trading tokenized government bonds in decentralized liquidity pools (amazing), and the issuance of tokenized trade finance portfolio.

Bank rules. The European Union has reached a provisional agreement on the terms of new bank capital legislation, including initial conditions for crypto assets. It has not yet specified what these are, but they could end up reflecting the Basel Committee on Banking Supervision recommendations of the maximum risk weighting of 1250%, which means $1 held in reserves for each $1 held in unpegged crypto assets.

MARKETS

Pressure building?