Asian CBDC blitzkrieg and triumphant return of Coinbase

For the past seven days, the cryptocurrency market has been relatively calm. Experts’ eyes were on the potential launch of the first fully functional digital currencies of central banks, which, according to experts, can give the market a significant growth impetus, reports the correspondent of the Kapital.kz business information center.

Jeremy Allaire, CEO of USDC issuing company Circle, is “not under any illusions” about the possibility of a crypto market in China, but he was optimistic about Hong Kong. He commented on this in an interview with SCMP. “Reality has shown that any large financial market in the world is adopting digital assets, as are leading financial institutions. So for Hong Kong to remain relevant, it must also do so,” he continued. According to him, the mainland Chinese government supports Hong Kong’s web3 initiatives. Jeremy Allaire stressed that yuan-based stablecoins could bring more value to China than the CBDC already in test mode. “If the Chinese government wants the yuan to be used more widely in trade and commerce around the world, then perhaps ‘stablecoins’ are a better option than a central bank digital currency,” the Circle CEO explained. As an example, he proposed a stablecoin pegged to an offshore yuan. He also pointed out that Circle is inspired by the plans of the HKMA (Hong Kong Monetary Authority – Hong Kong Monetary Authority) to regulate the sector – by 2024, the body will introduce compulsory licensing for issuing “stable coins”. “We are pleased to see that this direction is a priority for the Hong Kong government and the HKMA. This situation is extremely motivating for us to develop business here,” summed up Jeremy Allaire.

It is worth mentioning that Circle, the issuer of USDC, intends to issue a “stablecoin” in Japan. This was announced by the co-founder and CEO of the company Jeremy Allaire in an interview with CoinDesk. He expressed interest in the jurisdiction amid the adoption of new rules governing stablecoins. According to him, if this asset class starts to be used in cross-border trading, the country will become a key market for the cryptocurrency industry.

Under a law passed in June 2022, stablecoins in Japan must be pegged to the yen or other legal tender and provide holders with redemption rights at face value. The head of Circle did not elaborate on the details of a possible issuance of stablecoins, but noted that the company is interested in partnering with the third largest economy in the world.

Potentially, the affairs of the main partner of Circle, the cryptocurrency platform Coinbase, have also improved. Since the filing of the SEC lawsuit against the bitcoin exchange, Coinbase capitalization has increased by more than 50%. During this time, its top management, including CEO Brian Armstrong, actively reduced their positions in shares. On June 6, the commission accused the company of unregistered offering of securities in the form of a series of tokens and illegally combining three functions – as a broker, exchange and clearing agent, which are usually separated in traditional markets. The regulator also drew attention to the Coinbase Earn staking program. On this day, the company’s shares fell 9.1%. At one point, the drop in capitalization reached 13.5%. On June 29, in response to the lawsuit, the platform accused the SEC of abuse of power. According to representatives of the exchange, referring to the Howie test, the assets specified in the claim are not investment contracts and, therefore, cannot be equated to securities. The company recalled that for many years it has complied with all regulatory requirements and has repeatedly requested direct advice from the SEC on the application of federal securities laws in relation to the digital asset industry. The organization refused to change its business model due to the commission’s lawsuit. At this stage, quotes have fully recovered losses after the actions of the SEC. As a result of trading on July 12, the growth in the value of shares reached 70.5% – they went up from $52.5 to $89.7.

In general, the general mood of the market was summarized by the head of Grayscale Investments CEO Michael Sonnenschein. He noted that the active participation of large investment companies in the quest to launch a bitcoin ETF indicates that the first cryptocurrency is no longer a “passing fad”. This was noted in his statement to The Block. Michael Sonnenschein stated that market participants are “reacting positively to the entry into bitcoin” of traditional financial institutions. In his opinion, this trend gives bitcoin additional value. “Recent news about ETFs highlights the sustainability of this asset class in a broader context, and many investors see digital gold as a unique investment opportunity,” the top manager added.

According to the results of the past seven-day reporting period, the total capitalization of the cryptocurrency market showed a slight decrease. As of Wednesday evening, July 12, 2023, it amounted to $1.190 trillion, which is 1.68% lower than the values ​​recorded at the end of the last seven-day reporting period.

1. Bitcoin (BTC). On Wednesday evening, July 12, 2023, the cost of “digital gold” dropped to $30,611. The market capitalization of bitcoin during this period decreased by $6 billion, amounting to $594 billion. The share of the “first cryptocurrency” in the total market capitalization at the same time increased by 0.4 percentage points and at the end of the reporting period amounted to 50.02%.

2. Ethereum (ETH). On Wednesday evening, July 12, 2023, the cost of “ether” fell to $1872. ETH compared to the value at the end of last week showed a decrease, which amounted to 4.27%. The share of Ethereum in the total capitalization of the cryptocurrency market during this time lost 0.46 percentage points and amounted to 18.93%.

3. Binance Coin (BNB). As of Wednesday evening, July 12, 2023, BNB was valued at $247. According to the results of the past seven-day period, the price of this cryptocurrency increased by 2.02%. The share of Binance Coin (BNB) in the total cryptocurrency market capitalization increased by 0.13 percentage points, amounting to 3.25%.

4. Ripple (XRP). As of Wednesday evening, July 12, 2023, Ripple (XRP) was valued at $0.4731. “Banking cryptocurrency” in comparison with the values ​​at the end of last week fell in price by 3.19%. The share of “banking cryptocurrency” in the total capitalization of the cryptocurrency market at the same time fell by 0.01 percentage points and amounted to 2.09%.

5. Cardano (ADA). As of Wednesday evening, July 12, 2023, Cardano (ADA) was worth $0.2912. The price of the asset following the results of the last reporting period fell by 0.79%. The share of ADA in the total capitalization of the cryptocurrency market at the end of the week increased by 0.01 percentage points and amounted to 0.86%.