Singapore Bank Opens Branch in the Metaverse

Laos targets crypto operators’ unpaid feesIn a bid to enhance state revenues, Laos has turned its focus to the cryptocurrency sector, revealing that operators in the country owe a total of $20 million in fees. The announcement, reported on Thursday by Chinese state news agency Xinhua News, references information from the Lao People’s Army News.Photo by Alessio Roversi on UnsplashLoss-making mining activityLaos had previously granted authorization to 15 blockchain companies to engage in crypto mining or operate as exchanges as part of a strategy to diversify government income sources. However, Prime Minister Sonexay Siphandone disclosed that two of these companies showed no progress in their operations, while others lagged behind in meeting their financial obligations to the state.It emerged in August that the national electricity supplier, Electricité du Laos, had decided to suspend the supply of energy to crypto miners amid a perfect storm of challenges. Laos has ample hydro electric resources and is a net exporter of electricity. However, a drought this year has challenged it to honor contracts for supply of electricity to the Electricity Generating Authority of Thailand.To deal with this issue, power supply to Laotian crypto miners was suspended. To compound matters, many mining operators have been struggling financially and were unable to pay their bills.Debt reliefSiphandone mentioned that since the government initially set the tax obligations, the overall value of cryptocurrencies has experienced a 50% decline. Consequently, Laos has decided to alleviate the burden on crypto companies by reducing the outstanding balance by an equivalent 50%.Following this decision, the affected companies have commenced the settlement of their fees, and it is anticipated that all outstanding amounts will be fully resolved by the year’s end, according to the country’s Prime Minister. However, he issued a cautionary note, stating that companies failing to make satisfactory progress would face consequences, including the suspension of their operations, imposition of fines or even the revocation of their licenses.Digital transformationIn May, Laos outlined key aspects of its digital transformation strategy, emphasizing the use of digital technology to generate new fiscal revenue, strengthen foreign exchange reserves, control inflation, and promote sustainable economic growth. The move to reduce crypto companies’ tax burdens amid market volatility underscores Laos’ adaptability to the challenges presented by the dynamic cryptocurrency landscape.As part of its digital transformation strategy, the Laotian government signed a cooperation agreement with Singapore’s MetaBank. Partnering with another overseas entity, the country has also relied upon the expertise of Japanese fintech developer Soramitsu with regard to a central bank digital currency (CBDC). Soramitsu has played a pivotal role in enabling the issuance of Laos’ Digital Lao Kip.Early last year, the landlocked Southeast Asian country authorized trading licenses for two crypto platforms. These included Lao Digital Assets Exchange (LDX), a joint venture between Phongsupthavy Group and AIF Group, and Bitqik, a subsidiary company of Simuong Group.

As the cryptocurrency market anticipates the approval of a spot bitcoin exchange-traded fund (ETF) in the United States and the subsequent boost to bitcoin’s unit price, Arthur Hayes, Chief Investment Officer (CIO) of family office Maelstrom, has issued a warning of potential market turbulence. Hayes, better known as the founder of crypto derivatives platform BitMEX, has moved on to Hong Kong-based Maelstrom, a family office that invests in early stage infrastructure ventures that implicate a move towards the decentralization of everything.Photo by Kanchanara on UnsplashMacroeconomic risk factorsIn a detailed blog post on Friday, Hayes outlines a number of macroeconomic variables that could lead to a bitcoin unit price downturn. Hayes begins by highlighting the depletion of the Federal Reserve’s reverse repo program (RRP), which has served as a significant driver for risky assets over the past year. This program allows qualified banks and investment firms to park cash and earn interest on it. The RRP balance has rapidly declined from a record high of $2.5 trillion at the end of 2022 to $700 billion. Hayes projects it to reach its historical average of $200 billion by March. As this liquidity source dwindles, he anticipates negative impacts on bonds and stocks, as well as cryptocurrencies. Fed BTFP expirationThe second factor contributing to the potential market turmoil is the expiration of the Bank Term Funding Program (BTFP) on March 12. This crucial Fed facility is designed to provide longer-term loans to commercial banks. The mechanism aids banking sector stability. Hayes is concerned that the BTFP might not be extended. Such an eventuality could lead to bankruptcy for banks holding massive unrealized losses on their bond holdings. It could lead to a “liquidity rug pull” event reminiscent of the banking crisis in March of the previous year. The crypto OG predicts that such an eventuality would force a response. “The combination of a lack of liquidity gushing from the RRP and the lack of printed money to cover the bond losses on banks’ balance sheets will decimate the financial markets globally,” he wrote. Hayes asserts that the combination of reduced liquidity from the RRP and the lack of printed money to cover bond losses could have a global impact on financial markets. In response to this scenario, he predicts that the Fed will cut interest rates during its March 20 meeting and reinstate the BTFP funding line. ‘Healthy’ correctionIn terms of bitcoin’s price, Hayes foresees a “healthy” correction of 20% to 30% from early March prices if the outlined scenario unfolds. However, he suggests the decline could be as much as 40% if BTC rallies to $60,000-$70,000 in the coming weeks. Despite this temporary plunge, Hayes remains optimistic about bitcoin’s resilience, emphasizing its status as a neutral reserve hard currency that is not a liability of the banking system and is traded globally. In a recent podcast appearance, Hayes expressed the view that the business model of U.S. dollar stablecoin issuer Tether will be challenged once multinational banks receive the go-ahead to offer fiat-backed stablecoins. Overall, Arthur Hayes has urged investors to be cautious and to prepare for potential market volatility in March, emphasizing the importance of understanding the interconnected factors influencing both traditional finance and the cryptocurrency market. 

Animoca Brands, a company focused on Web3 and metaverse projects, has gotten together with the Hong Kong subsidiary of British banking giant Standard Chartered to establish Anchorpoint Financial Limited.In a press release published to its website on Aug. 8, Animoca Brands outlined that the joint venture company has been established with the objective of building a business model that will concern itself with the issuance and advancement of licensed stablecoins. The move follows Hong Kong’s Stablecoins Ordinance, which went live on Aug. 1.Photo by Andres Garcia on UnsplashHKT involvementThe partnership also involves Hong Kong Telecom (HKT), one of the largest telecommunications companies in Hong Kong. This collaboration is not something that has just been formed. The trio had been participants in a regulatory sandbox related to stablecoin issuance established by the Hong Kong Monetary Authority (HKMA) in 2024.  Back in February, it emerged that the three companies had entered into an agreement to establish a joint venture with a view towards applying to the HKMA for a license to cover the issuance of a Hong Kong dollar-pegged stablecoin. By June, the companies had formed that company. Applying for a licenseAnchor Financial has already informed the HKMA of its intention to apply for a stablecoin license. A recent Bloomberg report asserted that somewhere in the region of 50 companies have expressed an interest in obtaining stablecoin licensing in Hong Kong. However, the regulator is likely to issue no more than 10 licenses. Additionally, disclosure by the HKMA of strict customer identification rules related to the city’s new Stablecoins Ordinance has sparked concern among industry stakeholders. Know-your-customer (KYC) rules will put an onus on stablecoin issuers in Hong Kong to verify the identity of every stablecoin holder. Bo Tang, head and assistant director at the HKUST Institute for Financial Research, told Reuters that the rules were “a bit too strict and not good for acquiring users.” Ricky Xie, a crypto trader based in Hong Kong, pointed out that these KYC rules aren’t just for those who would hold accounts with the stablecoin issuer, but instead they will apply to every stablecoin holder. A number of Hong Kong stablecoin-concept stocks, that had been performing well in the market, fell by as much as 20% when these stringent rules were disclosed by the HKMA. Evan Auyang, group president of Animoca Brands, expressed contentment with Animoca’s partnership with HKT and Standard Chartered Bank (Hong Kong), while adding:”Stablecoins represent one of the most compelling use cases within Web3, and we believe we are still at the early frontier of widespread adoption across institutions and retail alike. As assets continue to move on-chain, the HKMA-regulated fiat-referenced stablecoin is important in reinforcing Hong Kong’s position as a leading international financial center.” The first stablecoin licenses are expected to be issued by the HKMA early next year.