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Weekly Crypto Update

As an immediate countermeasure against the rising inflation of its fiat currency, the Russian central bank doubled key interest rates on Feb. 28, from 9.5% to 20%

The U.S. dollar-pegged stablecoin Tether (USDT) witnessed a spike of over 30% in five days against the Russian ruble highlighting the negative and immediate impact of the ongoing war on the traditional financial system.

The government has also asked Russian companies to sell 80% of their foreign currency revenues as threats related to a complete international financial ban prevails.

On the other hand BTC and altcoin trading volumes on Ukrainian crypto exchanges spiked over 200% amid growing concerns about its fiat stability. The National Bank of Ukraine has also implemented cash restrictions including withdrawal limits and banned cross-border foreign currency purchases and withdrawals, following these restrictions, Crypto exchange Kuna, whose volumes were under $1 million on Feb. 21 spiked up to almost $4.1 million in three days.

Following a fresh round of sanctions aimed at isolating Russian banks from the global financial system, experts are eyeing cryptocurrencies as a means to bypass the blacklist. It’s worth keeping in mind that using digital assets instead of US dollars is likely a violation of the sanctions.

A transaction done in bitcoin or any other cryptocurrency would be viewed the same as a transaction conducted in USD. US and EU based exchanges follow the same reporting as banks, with the implementation of KYC to all of its customers, but Decentralized exchanges and marketplaces in other countries might offer a work around.

By using a decentralised exchange it will not be difficult for them to avoid sanctions. Russian companies could quite easily use Russian based exchanges or brokers and transact in crypto across multiple decentralized without facing any real consequences.

Russia’s central bank digital currency, the under-development digital ruble, could allow companies to legally trade without the dollar in a state-sanctioned workaround. It is likely no coincidence that Russia moved recently to legalize cryptocurrencies, perhaps as a proactive measure to combat any potential sanctions that would arise from an invasion of Ukraine.

The supply of the Bitcoin network continue to demonstrate strong adoption as there are now more addresses with a positive BTC balance than ever before. On-chain statistics through February have suggested positive sentiment for Bitcoin as addresses with a non-zero balance of BTC reached an all-time high.

Additionally, those wallets with a positive BTC balance are increasingly hodling their coins.

Binance has forged an array of new partnerships with regulated firms, especially in countries where it has found it difficult to get regulatory approval.

Binance, the world’s leading crypto exchange by trading volume is returning to the Malaysian markets with a strategic stake in the country’s regulated digital asset trading platfrom MX Global.

Binance and Cuscapi Berhad acquired a key stake in MX Global, one of the four Recognized Market Operators - Digital Asset Exchange licensed by the Securities Commission (SC) in Malaysia.

The leading crypto exchange has a significant presence in the Asian region and with its new partnership in Malaysia, the exchange aims to expand the sustainable growth of the crypto market in the Southeast Asia region. MX Global, on the other hand, aims to bank on the recent partnership and new flow of capital to expand its market and become a leading liquidity hub in the region.

Binance’s recent slew of partnerships also reflects a pattern of sorts, especially in regions where the exchange has found it difficult to mitigate regulatory compliance requirements independently. The crypto exchange has restricted its services in Malaysia back in July 2021 after an order from the SC over non-compliance with the regulatory laws.

The 24 licensed crypto exchanges registered a collective average daily transaction volume of near $9.4 billion.

South Korea’s crypto market grew to 55 trillion won ($45.9 billion) by the end of 2021, as per a new study from the country’s chief financial regulator, the Financial Service Commission.

South Korea is considered among the strictest crypto markets in terms of regulatory policy implementations and made regular headlines throughout 2021 for its new Travel Rule and Know Your Customer requirements. However, the Korean crypto market has bloomed to new heights despite the regulatory scrutiny in 2021.

The FSC analyzed transaction data from the 24 licensed crypto exchanges and revealed that daily transactions on Korean crypto exchanges reached 11.3 trillion won ($9.4 billion). The combined operating profit of 24 businesses came to 3.37 trillion won ($2.8 billion). A total of nine crypto exchanges reported a net loss over the past year.

The crypto trading market was dominated by the national fiat, the Korean won, which accounted for 95% of the total crypto transactions, mainly from Upbit, Bithumb, Coinone and Korbit.

The domination of won in the Korean crypto market is attributed to a new crypto license regulation issued in 2021, that required crypto exchanges to open real-name bank accounts of traders in association with a certified bank. The particular regulations forced nearly 200 small and medium crypto exchanges out of business as banks refused to partner or offer any of their services.

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