In today’s edition of Bitmama’s weekly crypto news roundup, we cover interesting developments in the cryptocurrency industry. Top picks – South African central bank considers cryptocurrency to be a financial asset, Putin signs law prohibiting payments with digital assets in Russia, Opensea cuts 20% of the NFT market’s staff citing ‘Crypto Winter’ and ‘Macroeconomic Instability’.
Let’s get started.
South African central bank considers cryptocurrency to be a financial asset
The deputy governor of the South African Reserve Bank (SARB), Kuben Naidoo, recently said the institution had revised its stance on cryptocurrencies and is now looking to introduce a framework that governs crypto-related transactions. Naidoo, a member of SARB’s monetary policy committee, said such a framework would bring about a safer crypto ecosystem.
As explained in one report, when such a regulatory regime becomes effective, South African crypto investors — who have become accustomed to crypto scams — will be protected by the law. The SARB plans to have such a regulatory regime in place in 12 to 18 months’ time.
Meanwhile, Naidoo, who spoke at a webinar organized by PSG Konsult, is quoted in the report highlighting one of the key reasons the central bank changed its mind. He said:
‘’Our view has changed and we now regard [cryptocurrency] as a financial asset and we hope to regulate it as a financial asset. There has been a lot of money that has flowed in and there is a need to regulate it and bring it into the mainstream’’.
The deputy governor, however, insisted that the central bank’s intention is not to pick winners or losers but to ensure that “investors have an adequate health warning and investor protection.” Naidoo claimed the use of crypto in money laundering and other illicit activities is a source of concern that needs to be addressed, hence the SARB’s change of mind.
On crypto exchanges, Naidoo said: “They would have to comply with exchange control laws such as anti-money-laundering and counter financing of terrorism rules. They would also have to comply with exchange contracts rules in the same way that people who trade in any currency and make cross-border transactions are subjected to those laws.”
Putin signs law prohibiting payments with digital assets in Russia
Russian President Vladimir Putin has signed a law imposing direct restrictions on the use of digital financial assets (DFAs) as a means of payment inside Russia, the crypto page of the RBC business news portal reported. The ban applies to utilitarian digital rights (UDRs) as well.
Russia is yet to comprehensively regulate cryptocurrencies, but the law “On Digital Financial Assets,” which went into force in January 2021, introduced the two legal terms. Russian officials have in the past indicated that DFA encompasses cryptocurrencies while UDR applies to various tokens. This fall, Russian lawmakers will review a new bill “On Digital Currency” designed to fill the regulatory gaps.
The legislation approved by Russia’s head of state was filed with the State Duma, the Russian parliament’s lower house, on June 7 by the Chairman of the Financial Market Committee Anatoly Aksakov, and adopted a month later. Until now, Russian law did not explicitly prohibit payments with digital assets, although “monetary surrogates” are banned and the status of the ruble as the only legal tender is enshrined.
The new legislation will enter into force 10 days after its publication in Russia’s government gazette. Regarding the option for exemptions in its application, the RBC report notes that Russian legal experts have already highlighted certain controversies in the document.
Opensea cuts 20% of the NFT market’s staff citing ‘Crypto Winter’ and ‘Macroeconomic Instability’
Opensea joins the growing list of crypto asset companies announcing layoffs this year, as the crypto market downturn has affected nearly every aspect of the industry. On July 14, 2022, Devin Finzer, Opensea’s chief executive officer, explained the company had a “hard day,” after it had to let go of around 20% of the firm’s workforce. Finzer further shared the note that he wrote to members of the Opensea team before announcing the layoffs via Twitter.
Finzer’s note to the team says that management had to make an “incredibly sad and difficult decision,” and the statement highlighted the fact that the industry was dealing with a demanding “crypto winter.” Finzer added that Opensea needs “to prepare the company for the possibility of a prolonged downturn.” The CEO explained that the changes will help the company continue strong with “multiple years of runway.”
The move comes at a time when a myriad of tech companies, blockchain firms, and cryptocurrency businesses have laid off thousands of workers. Last week, Meta explained that it was slowing its hiring process and hinted at future layoffs. Firms such as Bitso, Robinhood, Coinbase, Gemini, 2TM, Rain Financial, Blockfi, Bitpanda, Buenbit, and Crypto.com have all announced layoffs. The Austrian exchange Bitpanda detailed that it had to let staff go in order to “navigate the storm and get out of it financially healthy.”
While many crypto companies have let people go, there are still a number of positions available in the digital currency and blockchain industry.
Opensea’s Finzer continued to compliment the employees that were leaving on Thursday in his Twitter thread. “The folks leaving us are smart, hardworking, mission-driven individuals who’ve played an immeasurable role in growing OpenSea and the NFT space to where we are today,” the CEO wrote. “We will miss them and they will forever be part of our story and community.” Finzer’s Twitter thread highlighted that the CEO still had an “immense conviction in the NFT space,” and he further noted that Opensea had a role to play in the growing sector.