Crypto News Headlines (14-Feb-2023)

The recent regulatory action against Paxos and Binance over the partnership’s dollar-pegged stablecoin has spooked investors.

Following the crackdown from the SEC and the New York Department of Financial Services yesterday, Binance’s native token BNB fell more than 5%, before recovering some early this morning.

Traders also pulled funds en masse from the crypto exchange. Data aggregated by Nansen indicates that in the last 24 hours, a net $356 million has fled the exchange amid the latest regulatory scrutiny. That figure nearly quadruples in the weekly time frame.

BNB is an exchange token that lets holders enjoy reduced trading fees and perks for exchange users.

The token of stablecoin swapping service Curve (CRV) gained 11% in the past 24 hours amid a broader market demand for decentralized stablecoins.

While Curve does not offer native stablecoins yet, its upcoming curve USD (crvUSD) token is much awaited in crypto circles. Curve’s plans to deploy a dollar-pegged asset first became public in June, as CoinDesk reported.

Curve seemed to tease the upcoming issuance of crvUSD on Monday, stating an ongoing proposal would be “required for crvUSD to function autonomously.” The ongoing proposal would allow stablecoin pools to supply pricing data to external protocols.

Such a development likely served as a catalyst for traders as demand for CRV gained and the tokens saw over $770 million in trading volume on crypto exchanges.

Brazil’s oldest bank, Banco do Brazil, or Bank of Brazil will now allow citizens to pay their tax bills using cryptocurrencies. The Bank is making this initiative possible in collaboration with Brazilian-based crypto firm Bifty.

According to a statement by the Bank of Brazil, Brazilian taxpayers can now use cryptocurrencies to pay their taxes, fees, and governmental obligations, thanks to a joint initiative with Bifty. The statement said the feature is available to Brazilians with cryptocurrencies under the custody of Bifty, who will act as a “collection partner” for the bank.

Aside from being convenient for Brazilian taxpayers, the initiative could “expand” the use of access to the crypto space with “national coverage” while having a reputable bank providing customers with consumer protection.

The National Bank of Rwanda (NBR) has said the country’s financial services providers are forbidden from engaging in “any crypto-related activities until a regulatory framework has been put in place.” In a letter addressed to managing directors and CEOs of financial services providers, the NBR’s acting governor Soraya Hakuziyaremye suggested that the prohibition would help to ensure “efficient and sound financial services.”

Despite the central bank’s 2018 warning against crypto-related activities, Hakuziyaremye acknowledged in her letter that Rwandan residents have continued to trade digital assets like bitcoin. According to the letter, available data suggest that “more than three million U.S. dollars were traded on [the] Rwanda market since January 2020.”

The United Kingdom’s financial regulator, Financial Conduct Authority (FCA), is coming for unregistered cryptocurrency automated teller machines (ATMs).

THe FCA and the cyber team at West Yorkshire Police have taken action against several sites in and around Leeds city suspected of hosting illegally operated crypto ATMs.

Announcing the news on Feb. 14, the FCA emphasized that no crypto ATM operators in the United Kingdom currency have FCA registration. The authority stated that all crypto exchange providers — including crypto ATM operators — must be registered with the FCA and comply with the U.K. money laundering regulations.

Despite pushback from Bitcoin purists, Ordinals—the NFT-like project on the Bitcoin blockchain—shows no signs of slowing, as over 76,400 inscriptions have been created to date. The number of Ordinals spiked on February 9, 2023, exceeding 20,800 inscriptions for the day, according to data from Dune.

Launched last month, Ordinals is the latest project aiming to bring NFTs into the Bitcoin ecosystem. Counterparty, launched in 2014, was the first project that introduced non-fungible tokens to Bitcoin with the Rare Pepes collection, followed by the 2017 launch of Stacks.

What distinguishes Ordinals from earlier projects is that the digital assets are inscribed directly onto satoshis, the lowest denomination of a Bitcoin, without needing a sidechain or token.

Stablecoins play a vital role in crypto trading and their products potentially compete with the fiat banking system, Morgan Stanley (MS) said in a research report Monday.

The bank notes that U.S. regulators have begun limiting stablecoin products, adding that stablecoin issuance is important for crypto traders. Falling stablecoin market capitalization is an indication of falling cryptocurrency liquidity and leverage, the equivalent of quantitative tightening for the crypto market, the report said. A stablecoin is a type of cryptocurrency whose value is pegged to another asset, such as the U.S. dollar or gold.

Morgan Stanley notes that stablecoin market capitalization started falling at around the same time as the Federal Reserve balance sheet.

Sam Altman, CEO of OpenAI has made a contradicting tweet to the argument of the market. The ChatGPT founder is confident about the fact, AI is going to be the driving force for “economic empowerment”.

ChatGPT founder tweeted:

i think AI is going to be the greatest force for economic empowerment and a lot of people getting rich we have ever seen

— Sam Altman (@sama) February 13, 2023

Recent speculation was created by the ChatGPT’s recent version which was originally launched in 2020 as GPT-3. The astonishing responses to the queries in a human tone and the problem-solving skill of the Artificial Intelligence (AI) Chatbot made many nervous. People see innovation as a threat and replacement to human employment.

Indian Finance Minister Nirmala Sitharaman answered some questions regarding crypto mining and regulation on Monday in Lok Sabha, the lower house of India’s parliament.

Noting that cryptocurrencies are largely unregulated in India at the moment, Sitharaman explained: “Whether it’s mining or whether it’s the asset or whether it’s the transaction, we recognize that it is very, completely almost, driven by technology, and a standalone country’s effort in controlling or regulating it is not going to be effective.” She added:

There is an evolving consensus and that’s why in the G20, we are raising this issue and having detailed discussions with the members so that a standard operating protocol [SOP] emerges after the discussions.

The launch of Bitcoin nonfungible tokens (NFTs) — known as Ordinals — has tipped the number of non-zero Bitcoin addresses to a new all-time high of 44 million, according to crypto analytics platform Glassnode.

In a Feb. 13 report from Glassnode, the firm explained that for the first time in Bitcoin’s 14-year history, a portion of network activity is being used for purposes other than peer-to-peer monetary Bitcoin (BTC)  transfers:

“This is a new and unique moment in Bitcoin history, where an innovation is generating network activity without a classical transfer of coin volume for monetary purposes.”