Coinbase Ventures invests in Indian exchange CoinDCX amid mixed regulatory signals

MaskEX Gets Initial Regulatory Approval in UAEThe online cryptocurrency trading platform and wallet provider, MaskEX has been given initial regulatory approval by a regulator in the United Arab Emirates (UAE).Photo by Carlos Alberto Gómez Iñiguez on UnsplashThe trading platform received outline approval from the Virtual Assets Regulatory Authority (VARA) in Dubai, where the company is headquartered. While the business has been around since 2021, this first compliance step is significant as it seeks to build and extend its footprint within the UAE and the broader Middle East and North Africa (MENA) region.Regulatory significanceTo say that regulation has lagged the development of crypto assets on a global basis is an understatement. However, the high profile and spectacular crypto business failures in 2022 have really captured the attention of regulators and lawmakers. Many point to inadequate regulation as a key cause of those failures. With that, most regulators recognize that it won’t be acceptable to the broader public to have such a loss impact on ordinary investors in a rerun of the collapses of 2022.VARA has been one of the most proactive regulators in that respect. The Authority has developed a regulatory framework, culminating in its current licensing regimen for crypto businesses. It wouldn’t have been feasible for MaskEX to trade without obtaining regulatory approval.Regulatory actionIn February, VARA issued Open Exchange (OPNX), a platform that specializes in the trading of crypto bankruptcy claims, with a cease and desist order, relative to the establishment of that business in Dubai. Last month, the Regulatory Authority issued an investor alert related to OPNX, warning the investing public that OPNX was not regulated by them and that investing in or using the platform was risky.That culminated with VARA sending OPNXs founders and CEO a formal warning letter. With that sort of action playing out, it’s no surprise that MaskEX has tried to go the compliant route, acquiring that initial approval.The firm is not alone in taking that approach. On May 1, BitOasis, another crypto trading platform headquartered in Dubai, became the first entity to be awarded a broker-dealer license.This milestone event for MaskEX means that it can now complete entity formation, expand its team, secure banking services and generally, open for business. In its application MaskEX requested permission to engage in the activity of acting as an exchange, offer borrowing and lending services, as well as to act as a broker and crypto asset manager.Crypto market to be driven by ME and Central AsiaOn social media on Thursday, MaskEXs VP and Chief Strategy Officer (CSO) Ben Caselin, said that the initial approval forms part of the firm’s application for a Full Market Product (FMP) license. Caselin used the opportunity to post a video offering a sneak peek at the firm’s new Dubai offices. “MaskEX will be the first crypto exchange to publicly disclose their headquarters and even allow the general public to visit,” he said.Speaking at Finoverse Arabia this week, Caselin also said that “the next crypto bull market is once again going to be driven by Asia, and the unsurprising surprise will come from the Middle East and Central Asia.” That’s a prediction that’s being floated by quite a number of industry commentators, and with the US shooting itself in the foot in its approach to digital assets, it sounds like a reasonable prediction.

RBI Official Encourages Indian Banks to Adopt BlockchainIn a recent conference organized by the Reserve Bank of India (RBI), Deputy Governor Mahesh Kumar Jain highlighted the importance of adopting innovative technologies like artificial intelligence (AI) and blockchain to ensure sustainable growth and stability in the country’s banking sector.Speaking at the RBI-hosted event for directors of Indian banks last week, Jain emphasized the need for effective corporate governance, governance structure, and risk management strategies to tackle future challenges arising from technological disruptions, evolving customer expectations, and cybersecurity threats.Photo by rupixen.com on UnsplashLeveraging AI and blockchainThe recommendation to leverage AI and blockchain technologies aligns with India’s digital transformation goals and the desire to enhance customer experiences while investing in cybersecurity measures. Jain advised Indian banks to prepare for the future by focusing on digital transformation, exploring innovative technologies like AI and blockchain, and seeking collaborative opportunities with other industry players. He also emphasized the importance of upskilling the workforce to meet the demands of the digital era.Inconsistent approachThis proposal comes at a time when the Indian government’s stance on cryptocurrencies remains ambiguous. While India has been exploring the introduction of a central bank digital currency (CBDC), the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, which aimed to establish regulations for digital currencies, has not been legislated.According to the RBI’s annual report, which was published on Tuesday, the central bank is progressing with its retail central bank digital currency (CBDC) pilot program, with plans to expand the number of banks involved, the use cases, and the number of locations. It had expanded the scope of the project to involve one million citizens, but it’s looking to broaden that user base also. In contrast, the country’s approach to decentralized cryptocurrency has been contradictory, sometimes banning it and at other times, allowing it.It is noteworthy that India’s neighbor, Pakistan, has also recently announced plans to train one million IT graduates in AI by 2027, with potential applications in weather prediction, agriculture supply chain optimization, and health services transformation.The RBI’s recommendation to adopt AI and blockchain technologies reflects the growing recognition of their potential benefits for the banking sector.Embracing tech innovation in bankingBy embracing these technologies, Indian banks can enhance efficiency, automate processes, and strengthen security measures. The adoption of AI and blockchain has the potential to transform various aspects of banking, including risk management, fraud detection, customer service, and transaction processing.While India continues to navigate the regulatory landscape surrounding cryptocurrencies, the central bank’s focus on AI and blockchain signals its commitment to embracing technological advancements and preparing the banking sector for the future. As India’s financial ecosystem evolves, the adoption of these technologies can empower banks to offer innovative services, streamline operations, and provide secure and efficient financial solutions to customers.The RBI’s emphasis on digital transformation, AI, and blockchain paves the way for Indian banks to explore new avenues for growth and resilience. As the country progresses on its digital journey, the adoption of emerging technologies will play a pivotal role in shaping the future of the banking sector and contributing to India’s overall economic development.

SC Ventures Exits Digital Asset Custody Infrastructure InvestmentSC Ventures, the Singapore-headquartered corporate venture capital arm of Standard Chartered Bank, has announced its decision to divest its stake in Metaco, a Swiss-based digital asset custody firm. As one of Metaco’s early adopters, SC Ventures played a crucial role in supporting the company’s growth and development.Photo by Pixabay on PexelsDissolving a partnershipHaving been the largest institutional investor in the digital custody infrastructure firm, SC Ventures contributed significantly to the enhancement of Metaco’s award-winning custody product. The partnership between the two entities facilitated valuable contributions in various areas, including corporate governance, business strategy, institutional use cases, and access to SC Ventures’ extensive ecosystem. Through their collaboration, SC Ventures aimed to provide institutions with a secure and compliant ecosystem for operating digital assets.Ripple acquisitionIn a recent development, enterprise blockchain company Ripple acquired Metaco for $250 million. Ripple’s acquisition of Metaco signifies its diversification into custody solutions, expanding its business opportunities within the blockchain sector. With this move, Ripple aims to offer its customers technology that enables custody, issuance, and settlement of various types of tokenized assets. Further evidence of Ripple’s interest in this area emerged last week with the news that the company is collaborating with authorities in Hong Kong to showcase real world asset tokenization.Despite the acquisition, Metaco will continue to operate as an independent brand and business unit, under the leadership of its founder and CEO, Adrien Treccani. This decision ensures continuity and stability for Metaco’s existing clients and partners while benefiting from the resources and support provided by Ripple.Ongoing linkWhile the divestment of a division of an international banking behemoth like Standard Chartered from a digital asset infrastructure firm may seem like a bad news story, it’s likely not that straightforward. It’s worth noting that Zodia Custody, itself a digital assets custody venture incubated by SC Ventures, continues to maintain a strategic partnership with Metaco.The ongoing collaboration between Zodia Custody and Metaco focuses on matters related to compliance and risk management. This partnership ensures that both companies can leverage their respective expertise to address the increasing demand for safe and compliant access to cryptocurrencies and digital assets from institutional investors.Despite this divestment, it appears that SC Ventures still recognizes the importance of supporting emerging technologies on the cusp of adoption through its continued involvement with Zodia Custody, continuing advancements in the digital asset space.SC Ventures’ exit from its stake in Metaco marks a significant milestone in the ongoing evolution of both companies. While SC Ventures has played a vital role in Metaco’s growth, the acquisition by Ripple opens up new opportunities for Metaco to expand its offerings and cater to a broader customer base. Meanwhile, the collaboration between Zodia Custody, Metaco, and SC Ventures ensures that institutional investors have access to secure and compliant solutions as the demand for digital asset services continues to rise.