Author: Kristen Moran

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Taiwan’s Ministry of the Interior has approved the establishment of a cryptocurrency industry association, marking a significant step toward regulating the burgeoning sector.

The local cryptocurrency industry working group, which was formed last year to pave the way for the creation of the association, announced on Friday that it had received government approval for its application.

The working group is now tasked with finalizing all necessary preparations and officially establishing the cryptocurrency industry association by the end of June, as stipulated by government regulations.

Comprising 22 cryptocurrency firms, including prominent exchanges like MaiCoin and BitoPro, the working group has excluded ACE Exchange from its ranks due to ongoing investigations into alleged misconduct by its former executives.

Moving Towards Self-Regulation

While Taiwan currently mandates that cryptocurrency service providers adhere to anti-money laundering laws introduced by the Financial Supervisory Commission in July 2021, the sector largely operates without comprehensive regulation.

In September 2023, the FSC issued guidelines prioritizing customer protection for cryptocurrency firms. With the formation of an industry association, these firms aim to develop self-regulatory measures aligned with the FSC’s guidelines.

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In a recent blog post, Ethereum co-founder Vitalik Buterin shared his thoughts on memecoins and their potential to contribute positively to the cryptocurrency space. Buterin expressed his general disapproval of negative memecoins but emphasized the importance of fostering “good ones” that make constructive contributions.

Highlighting one of his moral principles, Buterin stated his lack of enthusiasm for memecoins associated with totalitarian political movements, scams, or rugpulls, which often result in disappointment and harm to participants. He acknowledged the recent surge of intentionally offensive memecoins, including those containing racial slurs or references to sensitive historical events like the Holocaust, expressing concern about their negative impact.

Despite these concerns, Buterin recognized the value of people’s desire for enjoyment and suggested that the crypto space should embrace this trend by promoting high-quality, fun projects that contribute positively to the ecosystem and society. He advocated for a balance, aiming for more good memecoins that support public goods rather than solely enriching insiders and creators.

Buterin proposed charity coins as an example of memecoins that could align with this vision, where a portion of the token supply or ongoing fees are dedicated to charitable causes. His remarks come amid ongoing discussions within the industry about the role of memecoins, with some expressing frustration over their potential to overshadow legitimate projects and concern over their regulatory implications.

Recently, regulators such as the Financial Conduct Authority in the UK have issued warnings about the risks associated with memecoins, particularly concerning their promotion by influencers on social media platforms. The FCA emphasized the need for approval from authorized representatives before advertising or posting memes related to financial products or services, including cryptocurrencies.

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Coinbase has announced its intention to enhance the storage of corporate and customer USDC balances on Base, an Ethereum Layer 2 solution incubated by Coinbase and built on the open-source OP Stack. This strategic move aims to capitalize on lower fees and faster settlement times offered by Base, without compromising the user experience on the Coinbase platform. Max Branzburg, Vice President and Head of Consumer Products at Coinbase, expressed enthusiasm about transitioning more of their operations on-chain and encouraged other companies to follow suit.

The decision has been well-received, with Base contributor Jesse Pollak expressing approval and stating that they are excited to support Coinbase’s transition to on-chain operations.

In parallel with this development, Base has experienced a substantial surge in Total Value Locked (TVL), reaching over $1 billion. This significant milestone represents more than double the TVL recorded at the beginning of the month, according to data from Defi Llama. Notably, the decentralized exchange Aerodrome contributes the majority of Base’s TVL, witnessing remarkable growth since early February.

Transaction counts on Base have surged, outpacing other optimistic rollups, with Arbitrum also experiencing notable growth. In contrast, OP Mainnet’s daily transaction count has seen a more moderate increase.

Coinbase’s decision to leverage Base for storing USDC balances aligns with the broader trend of increasing adoption of Layer 2 solutions in the Ethereum ecosystem. As Base continues to gain traction and demonstrate its scalability and efficiency, it is poised to play a significant role in facilitating faster and more cost-effective transactions for Coinbase and its customers.

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Deribit, a leading cryptocurrency derivatives exchange, is poised to witness historically high levels of bitcoin options open interest expiring this Friday. The surge in open interest, totaling over $9.5 billion, reflects increased liquidity and participation in the market.

According to analysts at Deribit, this end-of-month expiry represents one of the largest in the exchange’s history, accounting for approximately 40% of the total open interest. Comparatively, previous end-of-month expiries in January and February stood at significantly lower levels, around $3.74 billion and $3.72 billion, respectively.

A notable aspect of this expiry is the considerable portion of options set to expire in the money, amounting to $3.9 billion based on a current spot price of around $70,000. This suggests that a substantial number of options contracts hold value at current market prices, potentially leading to increased buying activity as traders seek to hedge or capitalize on further price movements.

Deribit analysts anticipate heightened volatility or upward pressure on bitcoin prices as option holders exercise their profitable contracts. The recent price rally in Bitcoin has contributed to this situation, resulting in higher levels of in-the-money expiries compared to typical scenarios.

Luuk Strijers, Chief Commercial Officer at Deribit, emphasized the bullish sentiment prevailing in the cryptocurrency market, particularly evident in derivatives data. Strijers highlighted the basis yield achievable by buying spot and selling longer-dated futures, indicating strong demand in the market.

Moreover, Strijers noted a significant increase in Bitcoin notional open interest in contracts valued at $100,000 and higher on Deribit. He also pointed out a shift in the put-call ratio for ether options, indicating evolving market sentiment towards short-term and long-term expiries.

Overall, the heightened levels of bitcoin options open interest on Deribit reflect the growing maturity and sophistication of the cryptocurrency derivatives market, underpinned by bullish market sentiment and evolving trader strategies.

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Bitcoin’s ascent faces a shaky $70,000 resistance, but data from the blockchain suggests participants are gearing up for a sustained rally. Recently, Bitcoin surged above $71,000, marking its highest point since March 15, propelled by capital inflows into spot BTC exchange-traded funds (ETFs).

On March 26, Bitcoin saw a 0.55% increase over 24 hours, reaching a weekly peak at $71,582. Factors driving this surge include consistent inflows into spot Bitcoin ETFs, the anticipation surrounding the upcoming Bitcoin halving, and positive sentiment among institutional investors.

Key to Bitcoin’s rally is the accumulation by large investors. Data from Sentiment reveals a rise in wallets holding between 1,000 BTC and 10,000 BTC, reaching 25.17% from 23% at the beginning of the year. Similarly, wallets holding between 10,000 BTC and 100,000 BTC saw a spike from 11.68% to 12.42% before settling at 11.98%.

This accumulation is reinforced by decreasing BTC deposits on exchanges, signaling reduced intent to sell. Instead, there’s been a surge in whale transfers from exchanges to self-custody wallets. Notably, one holder moved 2,400 BTC ($169.5 million) from Coinbase to an undisclosed wallet, while another withdrew 4,797 BTC ($339 million) to an unknown destination.

Anticipation surrounding the upcoming halving event is also bolstering Bitcoin’s price. Glassnode predicts that ETF buying power will overshadow the traditional supply squeeze expected from the halving, set for April. Analysts emphasize monitoring the activity of long-term holders (LTHs), whose decisions can significantly impact market liquidity and sentiment.

With the halving approaching, traders are eyeing Bitcoin’s next price level. Despite facing resistance, data from IntoTheBlock indicates strong support around $64,000, suggesting momentum for Bitcoin’s ascent back to the $70,000 range.

Traders are now focused on maintaining Bitcoin above $70,000, with $100,000 emerging as a key target for the price.

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Analysts anticipate significant growth for Bitcoin exchange-traded funds (ETFs) in Hong Kong, driven by the adoption of the in-kind creation model, which gives them a notable advantage over their US counterparts.

Eric Balchunas, a senior ETF analyst at Bloomberg, highlights Hong Kong’s adoption of the in-kind creation model as a potential catalyst for boosting assets under management (AUM) and trading volume for ETF products in the region. This view is supported by research from Bloomberg ETF analyst Rebecca Sin, who sees the in-kind model as an “opportunity for the market.”

Sin elaborates on the difference between the US and Hong Kong approaches, noting that while the US relies on cash transactions for Bitcoin ETF creation (cash in, Bitcoin ETF out), Hong Kong aims for Bitcoin-based creation (Bitcoin in, ETF out), presenting a unique opportunity for the market.

Earlier this year, Hong Kong authorities signaled their readiness to accept applications for spot crypto ETFs, with plans to introduce these financial products by mid-year. Several entities, including Harvest Hong Kong, have since filed applications to launch spot Bitcoin ETFs.

The in-kind creation model favored by Hong Kong contrasts sharply with the cash-creation model favored by US authorities. With in-kind redemptions, ETF issuers can exchange the fund’s underlying assets, such as Bitcoin, with market makers instead of transacting in cash during share creation and redemption. This mechanism allows ETFs to issue creation units without immediately selling the securities for cash.

In contrast, the cash redemptions required by the US SEC mandate fund managers to sell Bitcoin to provide cash for redeeming shareholders. Notably, BlackRock, one of the Bitcoin ETF issuers, has raised concerns about this method, citing challenges in maintaining share prices aligned with Bitcoin’s actual value.

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Worldcoin, the project known for its “proof of personhood” concept where individuals receive cryptocurrency tokens after having their irises scanned to verify their humanity, has faced a setback in Europe. A regulator in Portugal has directed the project to halt its biometric data collection efforts.

According to a report from Reuters, the Portugal data regulator, CNPD, has instructed Worldcoin to suspend its collection of personal data for 90 days. This directive follows a similar ban imposed on the project in Spain last month. The CNPD cited a high risk to citizens’ data protection rights as the rationale for urgent intervention to prevent potential harm. The report notes that over 300,000 individuals in Portugal have provided their biometric data to Worldcoin.

In response to the regulatory action, Tools for Humanity, the lead software contributor to the Worldcoin project, emphasized that the initiative adheres to all relevant laws and regulations governing the collection and transfer of biometric data. Jannick Preiwisch, the data protection officer at Worldcoin Foundation, reiterated the project’s commitment to complying with data protection authorities and expressed willingness to address any reported concerns, including those related to underage sign-ups in Portugal.

In an attempt to address privacy concerns and enhance user control over personal data, Worldcoin recently introduced “Personal Custody,” a new process that eliminates the storage and encryption of individuals’ biometric data. Previously, users had the option to allow Worldcoin to store their data. Tiago Sada, an executive at Tools for Humanity, highlighted that the updated approach grants users greater autonomy over their data, offering reassurance by reducing the need to place trust in external entities.

Worldcoin’s unique model rewards individuals with cryptocurrency tokens, known as WLD tokens, upon undergoing iris scanning to establish a World ID. According to the project’s website, Worldcoin has garnered participation from over 4.5 million individuals across 120 countries.

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According to analysts at Bernstein, BlackRock’s upcoming tokenized fund launch is poised to bring significant legitimacy to public smart contract chains, particularly Ethereum. The announcement of BlackRock’s BUIDL tokenized private equity fund earlier this month marks a significant move into digital assets by the world’s largest asset manager, following the launch of a spot bitcoin ETF.

The analysts at Bernstein suggest that BlackRock’s decision to utilize the public Ethereum blockchain instead of private chains, such as JPMorgan’s Onyx, expands interoperability and programmability within the space. This move is seen as a departure from the perception of public chains solely as “retail casinos.”

The analysts further elaborate that tokenized fund redemption could be facilitated on-chain with the integration of stablecoins like USDC. Additionally, the introduction of new asset classes such as bonds, equities, and foreign exchange stablecoins could lead to increased interoperability between asset classes on-chain, allowing for further programmability based on deal contract conditions. This development is seen as a significant step in utilizing blockchain technology for institutional utility rather than just retail speculation.

BlackRock’s tokenized fund, named the BlackRock USD Institutional Digital Liquidity Fund (BUIDL), was revealed in a U.S. Securities and Exchange Commission filing. The fund will invest in U.S. Treasury bills, repurchase agreements, and cash, although a specific launch date was not provided. Securitize will act as the tokenization platform, with ecosystem partners such as Anchorage, Coinbase, BitGo, Fireblocks, and BNY Mellon facilitating custody, settlement, and interoperability with traditional markets.

Bernstein’s analysts argue that BlackRock’s collaboration with partners from both traditional and crypto worlds will encourage more traditional institutional customers to adopt on-chain funds, resulting in reduced friction. This move is expected to provide institutional holders with benefits such as 24/7 instant settlement, increased transparency, improved capital efficiency, and reduced operating costs.

Furthermore, Bernstein suggests that tokenized funds could become a new growth category for asset managers, evolving from simple investment via ETFs to building on-chain products as a commercial revenue and cost-saving opportunity.

The analysts conclude that tokenization represents the next evolution of financial markets, akin to the ETF wave of the last two decades. They have also raised their year-end bitcoin price target to $90,000, anticipating a “mild” halving impact on miners.

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Tether, the entity responsible for the world’s largest stablecoin USDT, has disclosed its strategic foray into the domain of artificial intelligence, as per the company’s announcement on March 26. With a market capitalization reaching $104 billion, Tether is aiming to spearhead the development of open-source, multimodal AI models and integrate AI solutions into market-driven offerings.

This initiative emerges amidst mounting apprehensions regarding the monopolization of AI technologies by tech giants such as Microsoft, Facebook, and Google. Tether Data, a newly established subsidiary of Tether, is positioning itself as an advocate for transparency and privacy in AI model development. The company is delineating its focus into three primary domains: advancing open-source AI models, fostering collaborations for AI integration into various products, and engaging with the broader ecosystem through community participation.

Tether Data’s expansion into the realm of AI signifies a significant stride for the company, which has a track record of strategic investments across diverse sectors including renewable peer-to-peer telecommunications, energy, and bitcoin mining.

Paolo Ardoino, CEO of Tether, remarked in the announcement, “Artificial intelligence stands poised to revolutionize nearly every facet of our lives, both in the real and digital worlds. Today’s announcement establishes a new division within Tether, redefining AI boundaries and democratizing privacy-preserving open AI technology while setting industry benchmarks for innovation, utility, and transparency.”

As part of its AI venture, Tether Data has initiated a global recruitment campaign to attract top-tier talent to its burgeoning AI division. The company is extending invitations to proficient individuals passionate about AI to explore career opportunities through its dedicated careers page.

The implications of Tether’s entry into the AI arena are profound for the cryptocurrency industry. As a frontrunner in this space, Tether’s emphasis on open-source, transparent, and privacy-preserving AI models could establish new paradigms for the development and deployment of AI technologies. Furthermore, the integration of AI solutions into market-driven products may foster innovation and enhance efficiency within the digital assets market.

While AI continues its rapid advancement, concerns surrounding bias, accountability, and ethical usage remain prevalent. Tether Data’s commitment to open-source solutions could serve to address these concerns as it progresses with the development and integration of AI models into various products. Elon Musk’s recent legal action against Open AI over its closed-sourced models, followed by his subsequent open-sourcing of the ‘Grok’ model, underscores the significance of open-source initiatives in the AI landscape. Tether’s entry into this arena could further amplify the momentum of open-source endeavors, particularly given its considerable resources.

In summary, Tether’s strategic foray into AI signifies a notable evolution in its business trajectory as it seeks to consolidate its position within the burgeoning tech landscape. The burgeoning decentralized AI space in the crypto sector has experienced substantial growth in recent months, with the market cap surpassing the $25 billion mark in March.

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Binance has announced its decision to discontinue support for USDC (USD Coin) deposits and withdrawals on the Tron blockchain, effective April 5. This move comes more than a month after Circle, the issuer of USDC terminated its USDC minting services on Tron.

Starting from 2:00 a.m. UTC on April 5, deposits of TRC20 USDC tokens will no longer be credited to users’ accounts on Binance, as stated in an official blog post by the crypto exchange. However, it’s important to note that this change solely affects USDC issued on the Tron blockchain and deposits and withdrawals of the stablecoin on other networks like Ethereum will remain unaffected.

Despite the discontinuation of support for TRC20 USDC, trading of USDC on Binance will continue without any interruptions.

Circle, the issuer of USDC, cited risk management as the primary reason for terminating USDC minting services on Tron. The company emphasized its commitment to ensuring the trustworthiness, transparency, and safety of USDC, which led to the decision to discontinue support on certain blockchains.

Although Tron’s role as a platform for USDC is diminishing, it remains the primary blockchain for USDT (Tether), the dominant stablecoin, with the majority of USDT supply still residing on the Tron network.

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