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CRC Blockchain Industry Commentary #5


Source: Messari.io

1) Binance to use third-party services for providing direct fiat-crypto trading, says CEO


Cryptocurrency exchange Binance’s upcoming direct fiat-to-crypto trading facility, starting with Russian rubles, will be provided through third-party services. The information was revealed by Binance CEO Changpeng Zhao “CZ”, in an interview with Russian news outlet RBC on Tuesday. CZ did not disclose the names of those third-party services.


CRC Commentry: The news was released earlier this week by The Block that Binance.com is preparing to add support for direct trading between fiat and crypto on its platform. CZ’s comments about the use of third party is important as it also means Binance is not looking for starting their operations in Russia and that they will only enable fiat rampants through a third-party company. As I have mentioned yesterday, this strategy is significantly different from Huobi’s strategy of localizing and it might prove itself to be much more cost efficient and effective in terms of keeping its order book united.


2) Crypto exchange Bittrex moving headquarters from Malta to Liechtenstein


Cryptocurrency exchange Bittrex has announced it is moving headquarters from the “Blockchain Island” Malta to Liechtenstein. While the reason for the move was not disclosed, the exchange said it will be closing Bittrex International, which operates out of Malta, on Oct. 29.  Interestingly, just last month, Malta's financial regulator said that it will “actively monitor” licensed cryptocurrency businesses in the country to prevent money laundering.


CRC Commentary: Malta has become home to many crypto exchanges because of its friendly regulatory environment. Many exchanges have their legal entities based in Malta such as Binance, Okex and Bittrex. This news comes as a surprise that Bittrex is opting for Liechtenstein and leaving Malta. Another exchange that is based in Liechtenstein is Bitflyer and they have acquired their license long ago in 2018. I don’t think Liechtenstein will be less rigorous when it comes to AML/KYC monitoring but this move is an important one to watch.


3) A proposed bill aims to classify stablecoins as securities

Rep. Sylvia Garcia (D-Texas) introduced a bill to the House Financial Services Committee stating stablecoins lack regulatory guidance and should be classified as securities. According to CoinDesk, the proposed legislation could be a response to Facebook’s Libra, a project certain U.S. regulators seem keen on shutting down before it launches. The bill still needs to pass through multiple voting rounds before it can become a law, but the growing disapproval of Libra among regulators may not bode well for other stablecoin issuers.


CRC Commentary: That’s interesting, but the title could be misleading. Many stablecoins in the U.S are highly likely not considered as stablecoins as they are only provided as a vehicle to those who want to convert their fiat currencies to blockchain-based cryptoassets. However, in the whitepaper of Libra Project, it is said that Libra association will issue Libra Investment Tokens to early selected investors who would like to take profit from the usage of Libra tokens(commission fees) and the interest rate paid in return for keeping these funds at the banks. Last year, a similar project Basis was shelved because of the concerns that it might be considered as a security token. I don’t think this is important for GUSD, USDT, USDC type of stablecoins but it is important for the Libra project for sure.


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