Good morning, Asia. Here’s what’s making news in the market:
Welcome to Asia Morning Briefing. We bring you a daily summary of the top news US time, as well as an overview of market movements and analysis. For a detailed overview of the US market, see CoinDesk’s Crypto Daybook Americas.
A ruble-backed stablecoin tied to the sanctioned Russian Defense Bank somehow ended up sponsoring Singapore’s largest crypto event, raising compliance issues that highlight how easily financial sanctions can blur across jurisdictions.
On Friday morning, former White House Crypto Policy Director Beau Hines took to the Token2049 stage to extol the virtues of his new employer Tether and its Genius Act-compliant stablecoin USAT. This is how he described the guarantor of US dollar hegemony that the world seems to want.
A few hours later, Oleg Ogiyenko, director of regulatory and international affairs at A7A5, a ruble-backed stablecoin issuer that has been targeted by authorities around the world, took to the stage with a very different message.
Mr. Odzienko’s presence and his speech made the conference more interesting, but the big question on everyone’s mind is how the company authorized by Mr. Odzienko was able to pay the sponsorship fee.
A7A5, a ruble-backed stablecoin issued by Old Vector and used by the A7 LLC payment platform aimed at helping domestic businesses avoid sanctions, is backed by Russia’s state-run Promsvyazbank (PSB). PSB is a financial institution that has been sanctioned by the US, UK and many other jurisdictions around the world for its role in financing Russia’s defense sector.
Immediately after Russia’s invasion of Ukraine, Singapore broke decades of neutrality and joined Western countries in imposing sanctions on major Russian banks and defense entities, including state-run Promsvyazbank (PSB), a move that also set it apart from its ASEAN neighbors, which have avoided similar measures.
On 14 March 2023, the Monetary Authority of Singapore (MAS) issued Notice SNR-N01 prohibiting Singaporean financial institutions from doing business with major Russian banks, including Promsvyazbank (PSB), where A7A5’s reserves are held.
This effectively prohibits MAS-regulated institutions and crypto service providers from facilitating or processing transactions, sponsorships, or partnerships involving A7A5 or any other PSB-backed digital assets.
However, Token2049 is organized by BOB Group, which is registered in Hong Kong. As part of China, Hong Kong has followed Beijing’s lead in imposing sanctions and currently maintains trade and financial ties with Russia despite Western restrictions.
Token2049 organizers did not respond to repeated requests for comment. MAS did not provide a response by press time.
BOB Group plans to comply with local laws in Hong Kong, but other sponsors were nervous about having their brands associated with the A7A5. Many companies that spoke to CoinDesk called the existence of stablecoin issuers a “compliance nightmare,” and another said that seeing them on the site “gave a heart attack.”
BOB seems to have gotten the message and removed the reference to A7A5 from its sponsor list, but it’s still there in the Internet Archive.
A7A5 sponsors Token2049’s massage room (Sam Reynolds)
Meanwhile, A7A5 is proudly listed as a conference sponsor on social media, including Token2049’s official massage zone, a lounge where you can “seal deals while relaxing.”
market movements
Bitcoin: Massive inflows into U.S. spot ETFs and increased demand for safe-haven assets due to the U.S. government shutdown and expectations for global liquidity pushed Bitcoin up 11% on the week to a record high of over $125,000.
Ethereum: Ethereum is trading around $4,500 and is gaining attention ahead of the Fusaka upgrade in December. According to VanEck, this will reduce roll-up costs through PeerDAS, improve scaling efficiency, and strengthen ETH’s role as the monetary backbone of the network rather than just a fee-generating asset.
gold: Gold continues to soar, trading above $3,880 as investors seek safe haven assets amid the prolonged U.S. government shutdown.
Nikkei 225: After the ruling Liberal Democratic Party elected Sanae Takaichi as its new leader, Japan’s Nikkei stock average rose more than 4%, hitting a record high. Investors are betting that his pro-growth, “high pressure” economic stance will maintain the Bank of Japan’s accommodative policy.
Elsewhere for cryptocurrencies
- Current state of cryptocurrencies: What will happen to cryptocurrencies if the government shutdown continues (CoinDesk)
- Ethereum Foundation exchanges $4.5 million in ETH for stablecoins to boost growth (The Block)
- Trump tariff stimmy? Here’s what Covid Stimulus Check is worth if you invest in Bitcoin (decrypted)
