Copycats

Welcome back. Although the Fed’s move to raise interest rates by a hefty 75 basis points came as no surprise, stock markets took a plunge. And Bitcoin…didn’t care. We’re enjoying the volatility role reversal, hbu?

Today: International regulation trends, what “Chief Twit” means for crypto, and industry incest. Buckle up. 

—Vincent & Angelina

Crypto Rules Around the World

Governments around the world are ramping up their scrutiny of crypto while getting caught up on how the technology might enhance their own traditional markets.  

India is putting crypto on the G20 agenda when its year-long presidency of the intergovernmental forum begins next month, but it may not be good news for the industry. 

What will India do?

• The country said it's including crypto because it wants the global community to tackle regulation of the digital asset industry together. 

• But the regulation in question isn’t so simple. India’s government created a 30% capital gains tax on crypto transactions and its central bank has called for a crypto ban in the past—meaning it’s unlikely that India will advocate for relaxed crypto regulation. 

Elsewhere: Meanwhile, the Bank of International Settlements (BIS) is orchestrating a program among the central banks of France, Switzerland, and Singapore to study how DeFi protocols could automate foreign exchange markets. (The bankers will release a proof-of-concept in 2023). 

Unlike traditional FX, these automated market makers would exchange CBDCs within a liquidity pool instead of matching buyers and sellers. 

One side note: The project is designed to speed up foreign exchange transactions, but it could make CBDC prices more volatile as algorithms can sometimes make sell offs more brutal.  

Big picture: Regulators around the world are struggling to understand how to regulate DeFi, which includes issues that don’t exist in many parts of traditional finance. 

The bottom line: Governments are moving towards cracking down on crypto while also taking advantage of its technological innovations. If the community wants to avoid more onerous regulation, it will have to focus on developing financial innovations that are useful and more stable than the current system. 

—Vincent

Everything Goes for Chief Twit

Ever since Elon Musk marched into Twitter HQ last week carrying a sink, degens have celebrated the takeover as a major win for crypto. But Musk, aka Chief Twit, has yet to specify how he plans on crypto-fying Twitter…so we’re collecting some ideas.

Some Web3 features Twitter might adopt:

1) Financial services. Earlier this year, Musk outlined his vision for turning Twitter into a sort of “everything app” similar to China’s WeChat. That could include peer-to-peer payments and e-commerce––using crypto.

2) Verification payments. On Tuesday, Musk announced that a blue “verified” checkmark on Twitter will cost $8/month. Users might be able to pay this fee in crypto.

3) Fighting bots. Having invested $500 million into the takeover, Binance is creating an internal team to help Twitter crack down on bots using blockchain.

Zoom out: Twitter is at the epicenter of crypto culture, meaning any changes will affect the crypto community. But Musk’s commitment to free speech is good news for crypto, promising that degens will be able to continue using Twitter as their primary discourse channel.

And one last thing? The price of DOGE doubled following the news of a successful Twitter deal as traders are high on hopium–– being Elon’s favorite token, DOGE supporters are hopeful that the Dogefather will integrate memecoin payments into the platform.

—Angelina

One Crypto Company Built on Another

The two pillars of Sam Bankman-Fried’s crypto empire are looking more like one pillar after recent revelations in the crypto press this week. Sam Bankman Fried’s Alameda Research has a balance sheet full of FTX's FTT token—which is used for granting FTX users discounts in its trading marketplace, according to CoinDesk.

Alameda’s total FTT exposure includes: 

• $3.66 billion in FTT assets

• $2.16 billion in FTT collateral 

• $292 million in locked FTT tokens that are liabilities 

While there's nothing illegal about the holdings, they show that the trading giant's foundation largely resets on an asset produced by its sister company. The revelation is yet another example of just how incestuous the crypto industry can be.

—Vincent

In other news:

• Rick & Morty creator’s NFT drop upsets collectors. 

• Coinbase’s CPO becomes the latest crypto exec to leave the C-suite.

• Binance might buy a bank to bridge the gap between crypto and TradFi.

• Users will soon be able to mint and sell NFTs directly from Instagram. 

• Could Steph Curry’s “Curryverse” be the next big play-to-earn experience?

And that’s what you need on your radar today in crypto. We’re taking bets on ways Elon will tweak Twitter. Shoot us your predictions. See you back here on Sunday!