Appold Market Watch - Week 6 to 10 May 2024
Market Update & Industry News - Week ending 10 May 2024
🔷 Global payments giant, Mastercard, tested shared-ledger technology for tokenised asset settlements with US Financial Institutions such as J.P. Morgan, Visa, and Citi. The Regulated Settlement Network (RSN) enables tokenised assets such as money, treasuries, and investment-grade instruments to be settled collectively. Mastercard said the project focus is to improve efficiency and reduce errors in cross-border settlements.
Appold view: Mastercard announced the RSN in September 2021 when it partnered with Paxos on stablecoins. By 2023 it had developed into a Multi Token Network (MTN) as a more extensive framework to facilitate and scale transactions in blockchain ecosystems.
🔷 US trading platform, Robinhood Markets, announced that it had received a Wells Notice from the U.S. Securities and Exchange Commission over a securities violation from crypto tokens traded on its platform. The SEC is currently battling US crypto firms over disputing whether cryptocurrency is classed as a security.
Appold view: There have been diverse views on this. Robinhood claims that there is a weak case from the SEC as the assets don’t qualify as securities, and will fight it. The general market consensus is concerned with the ongoing challenges of unclear and evolving regulatory frameworks.
🔷 UK-based banking and Fintech giant, Revolut, launched a crypto exchange for UK retail customers which promises alleged easier on and off-ramping than larger rivals with the ability to trade over 100 tokens. Revolut X will allow current Revolut account holders to trade within the Revolut ecosystem switching from fiat to crypto between their accounts.
Appold view: A bold move from Revolut and clearly seeing an opportunity. Operating its own venue is a strategic and potentially costly pivot from previously offering digital assets to its clients in partnership with other service providers.
🔷 Australia’s Tax Office (ATO) ordered crypto exchanges to provide the personal data and transaction accounts of up to 1.2m traders to crack down on people allegedly avoiding tax liabilities. Last year the ATO stated that capital gains tax is not just on crypto products but also extends to token interaction with decentralised lending protocols.
Appold view: This reflects a broader trend among global tax authorities to ensure tax compliance from all areas of crypto-related activities. Expanding compliance to service providers enhances their investigative powers on current and historic investments made by individuals.
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