New Stablecoins, Cryptocurrency Products and NFT Initiatives Launch; Ukraine Sells Donated NFT; SEC and OSC Bring Crypto Enforcement Actions


New Fiat-Pegged Stablecoins Launch, BIS Publishes New Findings on CBDCs

By Jordan R. Silversmith

Late last week, a global fintech firm and issuer of the dollar-pegged stablecoin, USD Coin (USDC), announced that it was preparing to issue a fully reserved, euro-pegged stablecoin from the United States called Euro Coin (EUROC). According to the announcement, Euro Coin will be available June 30 and will be a regulated and euro-backed stablecoin issued under the same full-reserve model as USDC. Through Euro Coin and USDC, the company hopes to bring faster and inexpensive transactions to global commerce.

In a related announcement, a Hong Kong-based company operating the Tether stablecoin announced it would be launching Tether tokens (“GBP₮”) pegged to the British pound sterling in early July. GBP₮ will reportedly join four other fiat currency-pegged tokens the company has in the market, including currencies pegged to the U.S. dollar, the euro, the Chinese yuan and the Mexican peso. According to a company blog post, GBP₮ will be a stable digital asset pegged 1:1 to the British pound sterling.

In a final development, a recently published chapter from the annual economic report from the Bank for International Settlements (BIS) contains results of its experiments on the use of central bank digital currencies (CBDCs) across borders. BIS argues that these experiments demonstrate that common systems using multiple CBDCs are operationally feasible and could bring new efficiencies to cross-border monetary systems. BIS notes that while this would be desirable, questions about policy considerations, legal and regulatory frameworks, and basic operational economics still exist and might undermine the viability of multi-CBDC platforms.

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Traditional Financial Firms and Startups Launch New Cryptocurrency Products

By Joanna F. Wasick

This week, a major U.S. financial services firm announced it would partner with METACO, a digital asset management solutions provider, to integrate “Harmonize,” METACO’s bank-grade digital asset custody and orchestration platform, into its existing infrastructure to develop and pilot digital asset custody capabilities. The partnership will reportedly allow clients to store and settle digital assets “seamlessly and securely,” and allow the financial services firm to extend its existing capabilities to digital assets while leveraging its current technological, operating and servicing model.

Also this week, a major U.S. energy company announced it completed its first agreement to provide power to a crypto mining facility under Wyoming’s Blockchain Interruptible Service Tariff. The company stated that the facility, which is expected to be operational by the end of the year, will be one of the largest bitcoin mining operations in the region.

Last week, SIMBA Chain, a blockchain startup, announced its seventh Small Business Innovation Research contract with the U.S. Air Force (USAF), this time for tokenizing the USAF supply chain budget so it can track the movement of funds between departments and suppliers, and keep tabs on potential supply risks. Also in the news, the U.S. General Services Administration (GSA) recently announced its latest auction of five lots of cryptocurrency, reportedly worth over $268,000. GSA began auctioning cryptocurrency confiscated by the government in 2021 and, to date, has garnered roughly $1.5 million on behalf of the U.S. government.

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NFT Ecosystem Expands; Ukrainian Government Sells NFT for Over $100,000

By Veronica Reynolds

Late last week, a press release by an American car company unveiled the company’s plans to launch a “one-of-one” non-fungible token (NFT) through an online auction. Borrowing from the sine qua non of NFTs, the car company coupled the digital asset with a one-of-a-kind, real-life 2023 Corvette Z06, which boasts a unique “Minted Green” color, also featured in the artwork of the NFT. According to reports, the car company will not apply the “Minted Green” color to another production 2023 model vehicle, and the NFT will “forever associate the car with this auction and its one-of-one status.”

In more NFT news, an underground sneaker company with strong ties to celebrities and major brands announced an auction featuring an NFT-backed pair of sneakers designed from the original “artist proof” that served as the prototype for one of the company’s most renowned sneaker lines, of which only 10 pairs were released and that reportedly command a resale price of over $25,000 per pair. The artist proof version of the sneaker will reportedly be the first of its cohort to be connected to an NFT. In a separate development, a Ukrainian government official recently announced that a CryptoPunks NFT donated in March of this year to the government-sponsored Aid for Ukraine fundraising campaign sold to an anonymous buyer for 90 ETH (valued at over $100,000 at the time of sale).

Additionally, various NFT marketplace initiatives were announced this week. First, a national sports league announced a partnership with an NFT platform that will facilitate the creation of an NFT marketplace that will offer limited-edition NFT “drops.” The partnership will reportedly result in the gamification of NFTs offered on the platform and provide purchasers with rewards and perks. Second, a leading e-commerce platform announced its entry into the NFT market through its acquisition of a leading NFT marketplace. And finally, a leading cryptocurrency cold-storage wallet provider reported in a blog post that it plans to launch a Web3 distribution platform and NFT marketplace that will allow its users to “create, store and distribute NFTs seamlessly and securely.”

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Canadian and US Securities Regulators Continue Crypto Enforcement Actions

By Alexandra Karambelas

This week, the Ontario Securities Commission (OSC) announced the resolution of enforcement actions involving two cryptocurrency trading platforms. The OSC alleged that the two exchanges, Bybit and KuCoin, failed to comply with Canadian securities laws by allowing Ontario residents to trade unregistered securities, according to the announcement. In a press release, Jeff Kehoe, director of enforcement at the OSC, said, “The outcomes announced today should serve as a clear indication that we refuse to tolerate non-compliance with Ontario securities law.”

According to recent reports, state securities regulators in Alabama, Kentucky, New Jersey, Texas and Washington have commenced a joint investigation into a major cryptocurrency lending platform. The investigation was reportedly prompted by the lending platform’s decision to freeze customer redemptions earlier this month. Speaking to a reporter, the enforcement director of the Texas State Securities Board, Joseph Rotunda, said “I am very concerned that clients—including many retail investors—may need to immediately access their assets yet are unable to withdraw from their accounts. The inability to access their investment may result in significant financial consequences.”

Late last week, U.S. Securities and Exchange Commission (SEC) Commissioner Hester M. Peirce released a statement calling for more cooperative and transparent regulation of the cryptocurrency sector. “Watching the SEC refuse over the past four years to engage productively with crypto users and developers has prompted feelings of disbelief at the SEC’s puzzling, out-of-character approach to regulation,” said Commissioner Peirce in her statement. Commissioner Peirce criticized what she characterized as the SEC’s overreliance on enforcement actions in lieu of more comprehensive rulemaking, saying that “one-off enforcement actions that represent the first time the Commission has addressed a particular issue publicly … are not the right way to build a regulatory framework.” In her statement, Commissioner Peirce said, “Regardless of what one thinks of crypto, it is in both investors’ and the SEC’s interest to take a more productive approach.”

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