Latest in Legislation 04

Australia and UAE grant licenses to crypto exchanges; the Fed expresses concern over stablecoins, and WeChat bans crypto and NFT-related accounts.
  • WeChat bans accounts providing access to crypto or NFT-related services
  • Hex Trust receives crypto asset license from the government of Dubai’s Virtual Assets Regulatory Authority
  • Australian crypto exchange BTC Markets received license to operate a crypto exchange
  • Iranian government set to cut power supply of crypto miners starting July
  • Fed expresses concern over stablecoins, highlighting the “structural fragilities"

The Scoop:

WeChat, the top social media platform in China - updated its policies to ban accounts that provide access to crypto or NFT-related services. Under the new policy, purchasing or trading crypto and NFTs will be restricted or banned as they are considered illegal. The new guidelines also cover secondary NFT trading, stating that “accounts that provide services or content related to the secondary transaction of digital collections shall also be dealt with in accordance with this article.”

Crypto-custodian Hex Trust has announced the approval of its crypto-asset license from the government of Dubai’s Virtual Assets Regulatory Authority (VARA). The approval allows the company to provide services to institutional clients and investors. With so many crypto firms setting up offices in the UAE, Dubai has quickly risen as a global hub for crypto firms. The UAE established VARA three months ago to provide licenses to crypto companies looking to operate in Dubai. Over the last few months, firms such as Crypto.com, Bybit, Kraken, and Binance have set up shop and received licenses in the UAE.

Australian crypto exchange BTC Markets said on Monday that it has received a license to operate a crypto exchange through its sister company, BTCM Payments. The license is the first of its kind in Australia, and will enable it to provide non-cash payment products and general financial advice. BTC Markets said the move will allow it to better service its Australian customers, while bringing new products and services to the market.

The Iranian government announced it is cutting the power supply of the country's legal crypto mining rigs to help deal with electricity shortages in the country. The Iranian government has supplied electricity to crypto miners at subsidized rates for years, but they now claim it has become unsustainable. The measure would help end the crippling electricity shortages that Iranian citizens have been experiencing for years. Rajabi Mashhadi, a spokesperson for Iran's Ministry of Energy stated, "There are currently 118 authorized [digital currency] extraction centers in the country, which must cut off their electricity supply from the national grid from the beginning of July."

Members of the Federal Reserve Board
Members of the Federal Reserve Board (Drew Angerer/Getty Images).

The Federal Reserve published the latest “Monetary Policy Report” on Friday. The report states that algorithmic stablecoins are a risk of financial instability, highlighting the “structural fragilities" of stablecoins as demonstrated by “the collapse in the value of certain stablecoins." The Federal Reserve listed a number of risks that investors should be wary of. Because these stablecoins are backed by the US dollar, investors must be cognizant of the underlying assets being employed as well as the risks associated with these underlying assets. In addition, the lack of basic transparency regarding the entities backing such stablecoins may exacerbate the vulnerability of the asset meant to be pegged 1:1 to USD.

New crypto adoption:

Decrypting Legalese:

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The Federal Reserve System or "Fed" is the central banking system of the United States of America. It was created on December 23rd, 1913 - with the enactment of the Federal Reserve Act, which was inspired by a series of financial panics that led to the desire for central control of the monetary system.

DISCLOSURE:

This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. You should consult your own advisers as to those matters. Charts, graphs and references to any digital assets are for informational and illustrative purposes only.

Finblox Blog is associated with Finblox - a reliable cryptocurrency earnings platform where you can buy and earn passive income on your digital assets.

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