Appold Market Watch - Week ending 13 December 2024

Market Update & Industry News - Week ending 13 December 2024

🔷 The Bank of England’s Prudential Regulation Authority (PRA) has requested that regulated firms disclose their current and future digital asset exposures by March 2025. This aims to enhance financial stability and inform the central bank’s future regulations. Firms must report their digital asset exposures and detail their application of the Basel framework, which sets capital and risk management standards for digital asset exposures.

APPOLD VIEW: This move is consistent with the European Central Bank (ECB), which previously implemented disclosure plans under the EU regulatory framework. The PRA mandate affects banks, insurance companies and designated investment firms.

🔷 Binance and Circle announced a strategic partnership to enhance the global adoption of USD Coin (USDC). This collaboration allegedly aims to integrate USDC more extensively across Binance’s platform, providing its 240 million users with increased access to the stablecoin for trading, savings, special promotions, and payment applications.

APPOLD VIEW: Binance’s partnership highlights a potential strategic shift towards regulated stablecoins at a time of strong trading volumes but declining market share. Equally, Circle has lost significant market share to Tether (USDT) and is being challenged in clawing that back. 

🔷 The stablecoin market reached a milestone, surpassing a total market capitalisation of $200 billion. This growth has been driven by a surge in digital asset trading and wider adoption of stablecoins for non-digital asset utilities like payments. 

APPOLD VIEW: We have seen firsthand that inbound enquiries from corporations and enterprises have risen. Their focus is on understanding, internally handling, and fully utilising cross-border transactions in a manner that settles quicker and is significantly cheaper than traditional FX transactions. We anticipate high growth in this activity over the coming years.

🔷 Crypto.com announced a banking relationship with Deutsche Bank, which offers corporate banking services across key Asia-Pacific markets, including Singapore, Australia, and Hong Kong. The aim is to strengthen Crypto.com’s financial infrastructure and operational efficiency in the region.

APPOLD VIEW: Deutsche Bank onboarding them as a regional banking client is good marketing for crypto.com, particularly in a sector where “debanking” and a refusal of banking services have been extremely common.

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