Island Fintech (August 2023)
MAS releases its stablecoin regulatory framework, Thai bank Kasikorn launches a billion dollar bid to buy Home Credit Vietnam, and more
Hey Islanders,
Joyce here! First up, thank you for being so patient with us for the past 8 months - we last greeted y’all in December, and while life happened and we both took a break from writing for awhile, we’re back and up and running!
We’re also planning to shake things up a little here, so keep your eyes peeled for any new stuff in the future. In the meantime, please enjoy today’s edition.
P.S. We also have Instagram and Linkedin pages now, so do follow us there and reach out with thoughts anytime!
🐠 Dips
The MAS finalises its stablecoin regulatory framework, after a public consultation
The framework covers and regulates single-currency stablecoins pegged to the Singapore Dollar or any G10 currency that are issued in Singapore.
The framework lays grounds for stricter requirements for stablecoin issuers in terms of value stability, base capital maintained, redemption at par requests and disclosure of information of the stablecoin’s value.
🏝 IF Insight: Great news from Singapore and is a huge step towards embracing and building up the crypto industry here! While governments around the world are still trying to choose their stance on crypto (ps. read below for how badly the U.S. has fumbled the bag), Singapore has decided to accept that crypto is here to stay, and instead of stopping innovation in this area, chose to lay out a clear regulatory framework so that all participants can take part safely. I truly believe we are one step closer to becoming the crypto capital of the world - Joyce
Thai bank Kasikorn launches a billion dollar bid to buy Home Credit Vietnam
In an aspiration to become a top 20 bank by 2027, KBank is in talks to buy Home Credit Vietnam for $1 billion
🏝 IF Insight: If successful, this deal would contribute to the ongoing trend of consolidation in Asia's financial sector and mark one of the largest mergers and acquisitions in Vietnam's financial industry in 2023. It is clear that KBank’s desire to buy a loanbook in Vietnam shows that there’s saturation in a more mature market like Thailand where Bangkok Bank has a clear lead, with KBank in the second spot. Interestingly, in March, Grab and a number of Japanese banks were also interested in acquiring Home Credit’s entire SEA book - it’s interesting that they haven’t followed through just yet - allowing KBank to take a more focused and strategic investment opportunity. For me personally, it also reflects the growing “Southeast-ification” of SEA financial services - remember Citibank exiting their corporate banking presence in the region and selling to regional banks like OCBC? Truly a shifting of the tides - I might call it the share-buyback equivalent of a successful FS industry - Vinay
Paypal launches USD stablecoin, issued by Paxos
Paypal USD stablecoin is fully backed by U.S. dollar deposits, short-term U.S. treasuries and similar cash equivalents, and can be redeemed 1:1 for U.S. dollars.
The stablecoin is an ERC-20 token, meaning it can be used not only within the PayPal ecosystem, but also external exchanges and wallets
Currently, only PayPal customers in the United States are able to purchase PayPal USD.
🏝 IF Insight: Paypal’s move comes at a time where the U.S. has taken a hostile stance towards crypto entities operating in the country, most famously the Coinbase and Binance SEC cases. Paypal USD would enable cheaper cross-border costs, and also open the platform to interoperability with crypto exchanges, marking Paypal’s first big leap into the world of decentralisation and web3 - Joyce
Grayscale wins court battle against the SEC
On Tuesday, the U.S. Court of Appeals delivered a crushing interpretation of the SEC’s logic for denying an ETF, finding the agency acted “capriciously” and “arbitrarily.”
This means that the SEC would have to review Grayscale’s previously rejected ETF application.
🏝 IF Insight: Move aside Gary Gensler, you don’t always have the final say. The court ruled in favor of Grayscale, showing us that the SEC is not the ultimate arbiter of crypto. Bitcoin had a large green candle and jumped 5% upon news of the court’s ruling, and crypto-related stocks had a field day as well. Why are we so concerned about the potential of a Bitcoin ETF? Are Wall Street and Main Street even supposed to be together? In my opinion, the launch of an ETF would unlock massive amounts of liquidity sitting at the sidelines right now, waiting for a regulated product to be launched - something that’s deemed safe. If we’re truly in it for mass adoption, maybe it’s time to actually walk the talk. - Joyce
Coinbase’s Layer 2 network Base goes live on mainnet after initial testnet frenzy
Base is an Ethereum L2 network incubated in Coinbase. Its testnet launched in February this year.
Coinbase launched a campaign called Onchain Summer in conjunction with its mainnet launch, where big brands collaborate with Coinbase to launch their NFT collections and run on-chain events on Base.
The mainnet launched with $142M TVL, surging another 10.9% to $240M TVL in just 7 days.
🏝 IF Insight: A few weeks before the Base mainnet launch, degens went crazy on the chain speculating on its first memecoin, Bald (yes, it’s a play on Brian Armstrong’s hair, or lack thereof). Many memecoins and DEXs followed soon after, with a majority of them ending up as rugs. Users started complaining that the chain was like a honeypot; you could only bridge in, not out. Bald itself rugged for a hot minute before the deployer was pressured to add liquidity back in and the speculating continued. In this cruel bear market the degens have truly had fun with this one. We’ll see what holds in store for Base, as its TVL has now surpassed Cardano, crypto normies’ beloved chain - Joyce
🐋 Dives
Friend.tech - the new OnlyFans for crypto bros?
Joyce Lee
How much do you think your friends are worth?
Oof, hard hitting question. But what if you could trade the value of your friends… in public…?
A few weeks ago, CT (crypto twitter) started circulating invite codes for a new mysterious socialfi app called friend.tech - it calls itself the marketplace for your friends. Very apt way to put it.
You basically sign up with your Twitter account and your friends can buy and sell ‘shares’ (now called keys) of yourself. What made it interesting was the fact that friend.tech is mobile first, instead of being an annoyingly web-only product that we are all accustomed to in web3.
Within 24 hours of launch, trading volume surpassed 4,400 ETH. Bots started sniping up shares of newly joined accounts to flip - it soon became the playground for MEV bots sniping each others’ shares. But more interestingly, an unexpected group of people started joining the platform - OnlyFans creators.
And it makes sense. Shareholders of an account get to be in an exclusive group chat with the account owner - many CT influencoooors have taken this opportunity to shill their bags in the group chat - while OnlyFans creators have shared photos to their shareholders (and also probably at the expense of some crazy simp messages).
Looking at the friend.tech Dune dashboard, we see that activity on the protocol has fallen off sharply, in both buy and sell transactions. For awhile in the first two weeks it generated even more fees than Uniswap and Lido, two of the biggest protocols on Ethereum.
Such is the fate of a crypto app nowadays - the attention span in the space is getting shorter and shorter, as evident in the duration of rugs happening everyday. The friend.tech team did a great job of taking a stab at launching a great socialfi app, but time will tell if it can sustain the initial hype. Or will we all go back to good ol’ Uniswap to speculate on memecoins and OnlyFans to simp for girls?
🍹 Twitticisms
https://twitter.com/modestproposal1/status/1695177654822191184?s=20
https://twitter.com/NorthRockLP/status/1695172393747239118?s=20
https://twitter.com/fintechjunkie/status/1696328109111288129?s=20