Cooling recession fears have infused new life into the crypto market.
Welcome to The Daily Forkast, July 8th, 2022.
I Megha Chaddah of Forkast covering all things blockchain.
Crypto markets turned green after Fed officials claimed a recession fears are overblown.
A think tank pushes for a ban on Binance in the Philippines.
India probes possible foreign exchange violations.
And could the GameFi industry offer investors shelter amid the storm?
Let's get you up to speed from Asia to the world.
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Let's kick off with an uptake in the market.
Bitcoin gained 8% overnight, crossing the US$22,000 mark at 9:30 a.m.
Hong Kong time today.
While according to CoinGecko, the total market cap headed north of the $1 trillion mark.
Those moves followed Fed Governor Christopher Waller playing down recessionary fears.
He says he's in support of a 75 basis point hike next month, followed by 50 points in
September.
St. Louis Fed president James Bullard echoed the sentiment, saying there's a good chance
of a soft economic landing.
Wall Street also traded up with the Nasdaq composite, gaining 2.3% Thursday.
However, with earnings season looming, analysts urge caution over how long the rebound may
last.
That means investors should be watching out for a bumpy road ahead.
Head to our website, Forkast.News for all the latest analysis of market moves.
You can, of course, like and subscribe to this video to keep updated every day from
Monday to Friday.
Binance is in the hot seat again, this time in the Philippines.
A policy think tank has asked the government to ban the exchange over posting promotions
without securing proper permits for cars.
Jenny Ortiz reports from Angono, Philippines.
Public policy think tank InfraWatchPH says Binance is operating in the Philippines illegally.
In a letter to the Trade and Industry Department convener Terry Ridon said the exchange is
an unregistered entity in the country and that it is actually promoting its services
on various social media sites, including Facebook, Twitter and Instagram without the proper permits.
Ridon on told Forkast they have already received the response from the department.
At the level of the Consumer Protection Bureau.
They have responded that it is best to proceed with this question with the Bangko Sentral
ng Pilipinas.
So basically they wanted to wash their hands over the question of a sales promotion.
But we will elevate this to the level of a new DTI secretariat, particularly because
we have information that other virtual currency platforms which are registered in the Philippines,
essentially undertake the same.
They undertake DTI permitting requirements for sales promotions.
Forkast has also reached out to DTI Secretary Pascual for comment, but received no response
as yet.
Last month, the think tank also asked the country's central bank to suspend and ban
Binance because of its lack of the virtual asset services provider or VASP license.
I think we had been able to provide a solid information that Binance is indeed operating
in the Philippines without particular licenses and that in the event that they would want
to basically undertake a new license, I think they should be able to they should be subjected
to like very serious critical scrutiny on their well, firstly on their anti-money laundering
commitments.
And basically, they ought to be scrutinized on their actual commitment to working with
government in undertaking their platform in the Philippines.
In an earlier statement, Binance said it's continuously engaging with stakeholders globally,
including the Philippines, to further contribute to the web3 and blockchain ecosystem.
While in the Philippines last month, Binance founder Changpeng Zhao said they are working
to acquire the fast and e-money licenses.
Attorney Rafael Padilla of BlockDevs Asia told Forkast clarity is needed on whether
the licensing of fasts falls within the regulatory perimeter of the central bank in the first
place.
Aside from whether the world's largest crypto exchange has bypassed Philippine laws, InfraWatchPH
says it has one big concern.
What is the most important point in all of these questions on Binance is this where will
the public go in the event that investments turn sour?
And we are talking not about investments that had really been subjected to actual risk,
and these are risks that had been accepted by users.
But the risks, the risks that we are talking about here would be the risks involving virtual
currencies that turned out to be actual scams.
In Angono, Philippines, I'm Jenny Ortiz, Forkast.
Over in India, two crypto exchanges have been summoned amid a probe.
To possible foreign exchange violations.
The Directorate of Enforcement or ED, has asked CoinDCX and CoinSwitch for additional
information.
The ED, which enforces economic laws in India, summoned the two exchanges earlier this week
in a live stream on Wednesday.
CoinDCX said most of the major exchanges were asked to attend the probe so the government
could understand how the business works.
They asked us to understand our business model.
We are very open.
The business model works so well because ultimately this is how the industry can grow, right?
You would want to be regulated as more and more people.
This is what I mean by crypto adoption because now say without collaborating.
CoinSwitch told Forkast their approach has always been that of transparency.
Meanwhile, Forkast's call to ED offices were unanswered and the relevant investigating
officer was unreachable.
The probe comes alongside the industry taking a beating, with trading volumes down as much
as 63% since the new tax at source was introduced on July 1st.
Meanwhile, in an exclusive interview with Focus editor in Chief Angelo Circle's CFO,
Jeremy Fox Geen discusses what's at stake for the crypto industry as contagion fears
spread in the wake of Terra Luna's collapse.
Here's a sneak peek.
If there was a bank run and investors wanted to hypothetically withdraw that $55 billion
worth of USDC today, could it and could you redeem all of those redemptions?
Well, the first thing to understand is how we hold USDC, how we manage the reserve, and
how we're regulated to ensure that we can meet redemption demands even in the most extreme
stress scenarios.
Fundamentally, it's the assets that back the stablecoin and where they're held that are
the critical questions to understand, to answer your question as as as you know and as I think
as I hope everyone knows, because trust and transparency is at the heart of everything
we do.
We hold the USDC Reserve 80% roughly in short duration US Treasuries, and 20% roughly in
cash within the United States banking system.
And we have advanced liquidity operations capabilities and our customers can mint and
redeem USDC on demand using our APIs.
Fundamentally, what that means is we have $10, 15 billion of cash at hand to satisfy
immediate demands, and US Treasuries themselves are the most price stable liquid assets in
the world, with a daily trading volume of something like US$650 billion.
And they can settle on the same day or at the very least plus one.
So our customers could redeem all of USDC in one day.
We could process those redemptions, and the only limits to the time that they would get
their U.S. dollars back are the limits in the settlement systems of the fiat currency
banking system itself.
Make sure to catch the full interview in the latest edition of Word in the Block due out
on Monday.
And finally, while the crypto winter is causing pain for many, others are sensing opportunities,
particularly in the gamified space.
Forkast's Shen reports from the IVS Crypto 2022 conference in Okinawa.
With the liquidity crunch hitting the crypto industry hard, many will be looking for bright
spots.
So could the answer be GameFi?
Marrtin Hoon of Singapore based gaming guilds as a service platform MetaOne, told Forkast
the gaming industry has proved incredibly resilient in the past.
Over the past 20 years of the economic financial turmoil.
Gaming industry is waterproof, recession proof and virus proof.
It grows year on year.
So GameFi should be following the same because the fundamentals has to be back on the game.
Well Gen Kanai of Hong Kong based blockchain gaming studio Animoca Brands says turbulent
times for markets can offer great opportunities for venture capitalists.
We think that this is a great time.
If you're a developer of a of a of a game, this is a time to focus on developing and
building and releasing.
Getting feedback from your users and your community.
I mentioned this in my panel, but some of our our most successful investments were made
during the previous crypto winter.
Kanai says.
And America's investments in the Sandbox, DApper Labs and Axie Infinity Developers Sky
Mavis were among the winners from the previous crypto winter, who announced that while crypto
investors may be taking risk off the table, that's not the case with gamers.
And he expects growth to come.
Gamers are different because gamers are prepared to take risk their data because they dared
to do in-game purchase.
They have been used to that, but the game must be fun for them to do so.
So there is this very big growth that we foresee in the next one two years.
In fact, it could be in even just a matter of months.
Hoon believes the key to that growth is integrating the technological developments that have already
been made with game fi into the mainstream gaming worlds.
If that can be played out correctly and having the right tools set to attract traditional
group of gamers into GameFi, you're totally.
We set the whole button for gaming ecosystem and creating the current market cap of the
gaming ecosystem maybe 10x to 20x.
It's be exciting.
Kanai says Animoca is on the lookout for teams who are passionate about bridging the gap
by building blockchain versions of popular game styles.
We think that just as there are many different genres of games, RPGs, FPS, Etc., etc..
We think that in the future there could be popular blockchain games in all of the popular
genres that gamers enjoy today.
So right now there isn't really a popular blockchain game, but we think that could happen.
We think that there isn't really a popular horror game in blockchain, but we think that
could happen.
Kanai asks that a new theme for them is education.
And to that end, the company acquired the user generated educational content platform,
Tiny Tap last month in Okinawa.
I'm Timmy Shen, Forkast.
And that's The Daily Forkast from Asia to the world.
Follow us on Twitter for the latest updates @Forkast_News.
Head to our website as well for more detail on all of today's stories and a whole lot
more.
Until next time I'm Forkast's Megha Chaddah, see you then.