The Reserve Bank of India (RBI) has published its latest Financial Stability Report (FSR) that outlines important events that have recently taken place in the national and international banking and fintech sector. The domain of decentralised finance (DeFi) earned a brief mention in RBI’s report wherein the central bank, discussed the focus of global bodies on developments in the sector. The RBI has also touched upon efforts by the US to regulate the crypto sector.

RBI’s FSR report mentions DeFi technology

In its FSR report, the RBI acknowledged that digital financial systems have seen adoption around the world, leading to the creation of newer business models and financial distribution channels.

The advanced technologies of distributed ledger (blockchain), cloud computing, artificial intelligence (AI), and machine learning (ML), as per the RBI, have shown to have pertinent implications for financial systems around the world.

Talking in particular about DeFi, the report said that global regulatory bodies like the Financial Action Task Force and the International Organisation of Securities Commissions (IOSCO) are constantly examining developments around DeFi. These global financial whistleblowers are concerned that a rapid growth in DeFi could have effects on the broader asset market and subsequently on the global financial stability.

US efforts to regulate the crypto sector

The central bank notes that the US government is attempting to create a regulatory framework for digital assets, in the form of the Financial Innovation and Technology for the 21st Century Act (FIT21) legislation. The FIT21 Act is expected to and empower the US Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) to oversee digital assets, venues and entities. As per the RBI, the FIT21 Act is also expected to ensure market certainty, while granting some form of recognition to digital assets in the country.

The RBI report also touches upon the US SEC’s decision to approve the trading of exchange traded products (ETPs) for select cryptocurrencies like Bitcoin and Ether ETFs.

On the other hand, India’s central bank has expressed concerns around the rising number of cybercrimes connected with the crypto sector on an international level.

“Ransomware crypto payments, business email compromises and cost of data breaches surged to a new high during 2023. The financial sector has reported over 20,000 cyber intrusions and digital attacks, which resulted in losses amounting to US$ 20 billion over the last 20 years. Furthermore, cyberattacks are found to swell during periods of political and economic uncertainty such as geopolitical tensions, with disruptive consequences,” the report noted.

RBI’s stance on crypto in India appears to be unchanged

The RBI has repeatedly said it prefers that crypto be banned in the country. Since cryptocurrencies allow anonymity in transactions, the central bank is concerned that crypto assets could be exploited for illicit activities like terror financing and money laundering. The crypto sector also gives people more control over their funds and eliminates the need for intermediaries like banks to process financial transactions, which threatens the monopoly of central banks on their respective financial systems.

Even so, the DeFi sector was mentioned once in RBI’s report, and industry members in the country are already hopeful about the future of the fintech sector in India.

“The RBI released its half-yearly Financial Stability Report (FSR) today. There is very little in there for the crypto asset sector, which could be both good, or bad, depending on which way one looks at it! There is no specific negative commentary on financial stability risks from digital assets, which could again mean something, or nothing, depending on which way one looks at this,” said R Venkatesh, Head of Public Policy, CoinSwitch as commenting on the development.

The latest report appears to reaffirm the RBI’s unwillingness to accept cryptocurrencies as legitimate modes of payments in the country in the near future.

The central bank of Bolivia has decided to lift a ban on payments using Bitcoin and other cryptocurrencies imposed in 2014. The country is aiming to balance its economy, while modernising its payment systems. Bolivia has become the latest Latin American country to take a pro-crypto stance, even though Bitcoin or other cryptocurrencies are yet to be recognised as legal tender in the region. The central bank will also allow banks to make crypto transactions — a restriction that was implemented in 2020.

Bolivia’s new stance on cryptocurrency and crypto transactions

In a statement issued on Wednesday, the Banco Central de Bolilvia announced that it was reversing its ban on cryptocurrency payments in the country, including Bitcoin transactions. The decision was made in collaboration with the Financial System Supervisory Authority (Autoridad de Supervisión del Sistema Financiero) and the Financial Investigation Unit (Unidad de Investigaciones Financieras).

According to Statista, the national debt in Bolivia is projected to increase by $21.2 billion (roughly Rs. 1,76,746 crore) between 2024 and 2029 .

The Bolivian bank has decided to let banks use approved electronic channels and facilitate crypto payments. While Bolivia’s central bank has yet to recognise Bitcoin or other cryptocurrencies as legal tender, allowing these transactions could fetch the country more in remittances since cross border crypto transactions are instant and typically free of charge.

In addition, Bolivia has been taking steps to reduce its reliance on the US dollar, especially after back-to-back interest rate hikes in recent months announced by the US Fed to cope with the post-pandemic economic slump. In July 2023, Bolivia reportedly challenged the dominance of the US dollar by turning focus to the Chinese yuan and the Russian ruble.

Other countries in Latin America doubling down on crypto

El Salvador became the first in the world to legalise Bitcoin as a legitimate currency back in September 2021. Salvadoran president Nayib Bukele is continuing efforts to convert the country into a completely pro-BTC region, rife for crypto-related businesses to set up shops in. Brazil is another country that has taken pro-crypto steps in recent years.

Delta, a crypto exchange with global headquarters in Kingstown, Saint Vincent, announced the launch of its India subsidiary on Thursday, June 27. The move comes at a time when the Indian government seems to be warming up to cryptocurrencies as it begins deploying rules to oversee the safety of the otherwise volatile digital assets sector. The exchange has set up its office in Mumbai, India’s financial capital.

Delta Exchange’s plans for India

India’s crypto market, even at this growing stage, has a robust presence of national as well as international exchanges. Binance, Kraken, KuCoin, CoinDCX, WazirX, and Unocoin are among crypto exchanges operating in India.

To compete with these already established players in India, Delta has decided to be the first to offer options trading for crypto assets in the country. In options trading, investors are reportedly allowed to buy or sell crypto assets at a predetermined price and date, which guarantees them profit from market price movements without making them own the underlying cryptocurrency.

It is, however, worth noting that crypto options trading is a risky investment with a high potential for loss, which is why it’s not a popular service offering from crypto investors in India.

Among other services, the platform will also let users facilitate instant transfers and deposits in the INR currency.

“This allows traders to operate on the derivatives exchange without the need of holding stablecoins or any other crypto coins. With a heavy focus on compliance and safety of its users, Delta Exchange India does not accept cryptocurrency deposits or withdrawals thereby eliminating any risks associated with crypto custody,” the exchange said in a prepared statement.

The exchange claims that it has already onboarded over 1,00,000 users from India onto the beta version of the platform. The company sees this development as crucial, especially as the country ranks first among 154 nations showing rapid crypto adoption at the grassroot level, as per Global Crypto Adoption Index.

Focus on India’s crypto laws

India’s finance ministry and the Reserve Bank of India (RBI) have been very meticulous and stringent in deploying rules to oversee the digital assets sector and bring more security to the financially volatile industry.

The Delta exchange has declared that it has registered with India’s Financial Intelligence Unit (FIU-IND) and has set up a 24×7 customer support system to cater to user grievances at all times.

Founded in 2018, Delta exchange is a digital asset derivatives exchange backed by multiple investors, including CoinFund, Sandeep Nailwal’s family office, Aave, Kyber Network, and SinoGlobal Capital, among others.

“Delta offers daily, weekly and monthly expiries for Bitcoin and Ethereum’s Options contracts, thus allowing more opportunities for traders in the market. Our launch in India marks a significant milestone in our mission to bring a secure, compliant and trader-centric platform for Futures and Options (F&O) traders in the country,” Pankaj Balani, Co – Founder and CEO, Delta, said in the statement.

With India reportedly estimated to house over 270 million crypto users by the end of this year, it seems only natural for crypto firms to increase the stakes and help interested investors venture into Web3 through crypto assets of their choice.

Binance has decided to add more layers of security over the management of accounts on its platform. The exchange’s decision comes after internal analyses showed that some of its features and services were being exploited to fetch unfair advantages, such as a better fee rate and higher API limits. Binance has planned to incorporate several steps to make its platform safe for users to engage with cryptocurrencies. The exchange has recently had run-ins with the law enforcement authorities of more than one country, making it reassess its user-friendliness and look for improvements that it can bring to its services.

Binance explains its exploitation

Bad actors have been flocking to exploit cryptocurrencies, mainly because these digital assets can process instant transactions, local and cross border, offering anonymity to the parties involved. Governments around the world are concerned about the misuse of crypto tokens to facilitate unlawful transactions linked to terror financing and money laundering.

Detailing the findings of its own analysis, a blog by Binance said, “Our platform offers various account types, including sub-accounts, managed sub-accounts, and fund manager accounts, which all play an important role in diverse genuine use cases. However, these features also have the potential to be misused by bad actors that seek to circumvent our controls to either access or sell access to a better fee rate and higher API limits.”

To ensure its account features are not being misused, Binance claims to have enhanced the monitoring of all account usage and related activities from a technological standpoint.

“We will investigate all potential or suspected incidents of misuse and, if necessary, take action that we consider appropriate to remedy misuse, which may include, but not limited to, suspension or termination of the relevant accounts,” the post added.

Binance offers rewards to encourage users to report misuse

In December 2023, Binance had claimed that it surpassed over 170 million users on its global network.

In order to catch financial miscreants misusing its platform, Binance has called out to its users asking them to be vigilant. The exchange is offering rewards for reporting potentially suspicious account holders.

“We will provide a reward for any verified case of account misuse. The reward amount will be determined on a case-by-case basis. Your support can make a significant impact and help improve our platform. These efforts are crucial to further enhancing and safeguarding the integrity of our platform,” the exchange noted.

Recently, Binance was fined $2.25 million (roughly Rs. 18.8 crore) in India for reportedly not adhering to the Prevention of Money Laundering Act, 2002 (PMLA). The crypto exchange has previously also had encounters with the American and Nigerian authorities over alleged non-compliance of their respective rules overseeing the crypto sector.

CoinDCX crypto exchange announced Tuesday, June 25, that it was launching a new Web3 mode within its existing app. Through this new service, the exchange will expose users to over 50,000 decentralised tokens that have not yet been listed on centralised exchanges. The transactions related to the trade and purchase of these DEX tokens will be in a Rupee-friendly format for the 15 million users that CoinDCX claims to be catering to.

What’s CoinDCX’s idea?

At present, there are over 2.4 million cryptocurrencies in circulation around the world and more are entering the crypto market. Traders are frequently drawn towards investing in a handful of popular or utility cryptocurrencies, leaving hundreds and thousands of tokens unexplored because of the volatility and risk factor linked to them.

CoinDCX, with this Web3 mode on its app, is looking to encourage investors to explore lesser-known digital assets. This would give the investors ample opportunities to engage with assets showing high-growth potential before these tokens reach broader markets, the company said in a prepared statement.

It is however noteworthy, that investors will have to be thorough in analysing the decentralised cryptocurrencies they might feel intrigued to invest in. The history of the project a crypto is linked to and its price patterns are amongst parameters that must be examined before entering its ecosystem.

“Users will now have access to emerging, trending, and pre-launch tokens from large and developing ecosystems such as Base, Solana, Binance Smart Chain, Polygon, and ten more chains. Users can buy tokens like ETH, Matic, USDT, USDC, and more through the conventional CoinDCX app using INR, and transfer them to Web3 Mode for purchasing assets within Web3,” the company explained.

‘Milestone moment’: CoinDCX co-founders on Web3 mode

Sumit Gupta and Niraj Khandelwal, the co-founders of CoinDCX, have said that this ‘milestone moment’ for the exchange will now pin it on the top of India’s crypto exchange pyramid.

“The launch of Web3 Mode marks a significant milestone in our mission to simplify Web3 access. This integration was made possible via Okto Chain. Last month, we introduced our fully expressive orchestration layer and in just a month, the first product using this technology is already live for CoinDCX users who can now interact with multiple chains, perform cross-chain token swaps, and confirm their identities across various networks—without dealing with the complexities of blockchain,” Khandelwal said, commenting on the development.

To mark this, the exchange has announced a ‘points airdrop’ initiative that will earn reward points for all CoinDCX’s users – based on their transaction history on the app.

With India reportedly estimated to house over 270 million crypto users by the end of this year, it seems only natural for crypto firms to increase the stakes and help interested investors venture into Web3 through crypto assets of their choice.

In recent days, not just CoinDCX, but other crypto firms in India have refreshed their lists of crypto tokens available to be traded. Last week, for instance, Giottus crypto exchange added 43 new tokens on its crypto list, taking the total count of listed tokens on its platform to 300.

The cryptocurrency market is displaying volatility across most cryptocurrencies on Wednesday, June 26. Bitcoin recorded a minor drop of 0.29 percent that dragged down its price from $63,200 (roughly Rs. 52.8 lakh) to the mark of $61,752 (roughly Rs. 51.5 lakh) on foreign exchanges like CoinMarketCap. On national exchanges, meanwhile, the value of Bitcoin stands at the mark of $60,145 (roughly Rs. 50.2 lakh). However, the Bitcoin chart needs significant sell pressure on the downside to test $70,000 (roughly Rs. 58.4 lakh) again.

“Bitcoin after testing the $58,000 (roughly Rs. 48.4 lakh) on Monday rebounded to $62,000 (roughly Rs. 51.9 lakh) in the past 24 hours. This move coincided with a recovery in Nvidia and the Nasdaq Composite, both of which experienced their worst days since April in the previous session,” Edul Patel, CEO of Mudrex told Gadgets360.

Ether showed a minor price hike of 2.63 percent on the crypto price tracker on Wednesday. Ether, at the time of writing, is trading at $3,725 (roughly Rs. 3.11 lakh) on national exchanges and $3,387 (roughly Rs. 2.82 lakh) on international ones.

“The sharp fall is unexpected in light of the anticipated approval of spot Ether exchange-traded funds (ETFs) in the U.S. in July, which had fuelled optimism for a significant price recovery. Significant Year to Date price movements ETH after giving a breakout above the ‘Descending Triangle’ pattern rallied up to $3,977 (roughly Rs. 33 lakh) and started to consolidate in a range from $3,900 (roughly Rs. 3.25 lakh) to $3700 (roughly Rs. 3.08 lakh),” the ZebPay Trade Desk told Gadgets360.

As of Wednesday, cryptocurrencies trading in losses include Binance Coin, Ripple, Tron, Near Protocol, Uniswap, Polygon, Leo, and Cosmos.

Cryptocurrencies trading in profits, meanwhile, include Tether, Solana, Dogecoin, Cardano, Shiba Inu, and Avalanche.

Chainlink, Polkadot, Litecoin, Stellar, Bitcoin SV, and Elrond also managed to retain small gains on the price charts.

The overall crypto market managed to rise by 0.91 percent in valuation over the last 24 hours. As of Wednesday, the crypto market cap stands at $2.28 trillion (roughly Rs. 1,90,34,922 crore), shows CoinMarketCap.

“In altcoins, memecoins continued to dominate the top movers of the day, with Coinbase L2’s leading memecoin, BRETT, and Ethereum’s PEPE topping the charts. Both of these memecoins are inspired by artist Matt Furie’s comic series, ‘The Boy’s Club’,” the CoinSwitch Markets Desk told Gadgets360.

CoralApp, an AI-focussed project backed by Binance, is gearing up to enter the hypercompetitive smartphone market in the coming days. The company has conceptualised a smartphone, dubbed the Coral Phone, packed with Web3 and AI capabilities. While the device will support traditional smartphone functions and apps, it will also be able to work seamlessly with decentralised applications (dApps), decentralised finance (DeFi), and decentralised physical infrastructure networks (DePINs).

Details on Coral Phone

At present, there are an estimated 6.84 billion smartphones globally and the number is soon projected to reach 7.1 billion. Through its Web3-centric smartphone, CoralApp aims to push technologies like DeFi, GameFi, and SocialFi to the masses.

The Coral Phone has been designed to provide direct access to decentralised apps, allow users to experience native on-chain games, and let users save their private wallet keys into the in-built Coral Vault, CoralApp said on the official website.

“Coral Phone offers a comprehensive suite of features enabling users to explore, interact, and thrive in the decentralized digital landscape. From seamless multi-chain cryptocurrency management to native on-chain gaming, Coral Phone isn’t just a smartphone — it’s your portal to a new decentralised digital era,” the website explained.

The company has teamed up with Acurast, a ‘decentralised serverless cloud,’ to combine Web3 and cloud computing technologies for the Coral Phone.

On the hardware front, the smartphone features a 6.55-inch AMOLED display and a 4800mAh battery. The dual-SIM phone will be powered by Qualcomm’s Snapdragon 8 Gen 3 chipset and will work on customised Coral OS 1.0 based on Android 14.

“The first 2,000 early bird devices will be priced at 1500 USDT or $1,500 (roughly Rs. 1.25 lakh). Limited availability and the price of subsequent sales may be subject to change,” the website added.

The interfacing of this phone will be decentralised, giving more independence to the users over their apps and content privacy. This AI layering on the device will enable it to offer an ‘intelligent’ and secure overall performance, said a report by ZYCrypto.

For now, CoralApp is letting users pre-register for these devices. While the exact date of the release of this device remains undisclosed, the website does say that the early birds will receive their devices by up to six months after having registered.

Binance had incubated CoralApp as part of the Season 4 of its global Incubation Program in 2022.

Web3 smartphones coming to mainstream markets

The Coral Phone is not the first smartphone that combines the already matured smartphone technology with the emerging Web3 technology.

In 2022, Solana Labs had unveiled its Solana Saga smartphone, packed with Web3 features like an inbuilt Seed Vault to safely store all the private keys linked to the device, among other Web3 features.

This year in May, Jambo, a Web3-enabled smartphone brand gave details about the JamboPhone, which is priced at $99 (roughly Rs. 8,230) and is laden with support for Web3 functionalities.

Louisiana has become the latest US state to support cryptocurrency mining, as more regions in the country are warming up to digital assets. A newly signed bill is expected to protect the rights of crypto mining individuals and businesses, who can continue to operate in the state as long as they are in compliance with local regulations. The US crypto market evolving into the largest in the world with its industry size projected to reach the valuation of $23,220 million by the end of the year.

Rising Adoption of Crypto Mining Businesses in the US

The governor of Louisiana has signed a bill to foster the growth of businesses related to crypto mining activities in the state, while the state has banned the use of central bank digital currencies, or CBDCs. The state of Louisiana is among others in the US that are tailoring laws around crypto that could open job opportunities and revenue streams for the state treasury.

Bill HB 488 protects the rights of crypto mining individuals and businesses to continue operations but while being in compliance with local noise ordinances. Businesses conducting crypto mining on a commercial level have been directed to set up shops in the industrial zones located across the state, the bill notes.

Furthermore, the bill now restricts all foreign parties from controlling digital mining businesses.

Louisiana’s support for crypto mining could help generate revenue and also open job opportunities in the state, that reportedly houses over 4.6 million citizens. However, crypto mining is infamous for consuming loads of electricity, disrupting power supply for local residents.

The global cryptocurrency mining market was valued at $1.92 billion (roughly Rs. 16,017 crore) in 2022 and is reportedly projected to reach $7 billion (roughly Rs. 58,398 crore) by 2032. As per JP Morgan, the Bitcoin mining sector is reportedly is garnering interest from investors.

The states of Oklahoma, Arkansas, Kentucky, and Florida are taking similar pro-crypto mining steps, while the federal government is working on comprehensive legislation to oversee the overall crypto sector.

Crypto Mining in Other Countries

Owing to the electrical load crypto mining businesses put on power grids, several countries have decided to ban their operations. In May, Venezuela banned crypto mining and seized thousands of mining computers.

Norway has also cracked down on crypto mining businesses this year in April.

Cryptocurrencies have made their mark on the fintech sector in several nations but have met with regulatory challenges because of the associated risks and volatile nature of the crypto market. Hong Kong is the latest to join the list of Asian regions that are accelerating efforts to establish a regulatory framework to oversee the crypto sector. The HKSAR Legislative Council, over the weekend, announced the setting up of a new subcommittee, that will dedicate its time to drafting detailed crypto laws.

Hong Kong aims to become crypto hotspot

Hong Kong authorities have prioritised making the region lucrative for Web3 businesses. After all, despite the financial risks involved with digital assets, the crypto market presently sits atop a valuation of $2.26 trillion (roughly Rs. 1,88,68,265 crore).

Johnny NG Kit-Chong, a member of the HKSAR, took to X to announce the creation of the crypto-focussed subcommittee. In his post, Kit-Chong disclosed that the subcommittee will explore regulations from two aspects – one regarding Web3 policies and the other around virtual assets.

From the point of view of Web3 policies, the subcommittee is tasked with balancing the growth of Web3 under a regulatory framework. The artificial intelligence (AI) sector will also be fostered by this newly formed body.

Policy work around virtual assets, meanwhile, will revolve around protecting investors and consumers that could lead to a boost in market confidence.

Other responsibilities assigned to the subcommittee, as per Kit-Chong, include assessing “potential application scenarios and risks of stablecoins in Hong Kong, and regulatory systems that ensure financial stability without stifling innovation.”

The body will also devote time to exploring the demand for professional custody services due to the rise of virtual assets in Hong Kong and conducting research around corresponding custody methods and regulatory measures.

The members of the committee are also inviting recommendations from the public, which they think can help them oversee Web3 elements like decentralised autonomous organisations (DAOs).

“I welcome suggestions from the global Web3 industry. I will study them in detail and summarise them to present to the government through the Legislative Council platform,” the HKSAR Legislative Council member said.

Where does Hong Kong stand on crypto?

Hong Kong allows the trading and holding of cryptocurrencies, but no cryptocurrency is recognised as legal tender there. Crypto activities related to individual investors are not subject to taxes, however, firms indulging in professional crypto activities are subject to income tax.

As per Triple-a.io, over 2.45 lakh people, or 3.27 percent of Hong Kong’s total population, currently own cryptocurrencies.

Last month, Hong Kong’s Securities and Futures Commission (SFC) announced that it would be conducting checks to see if all crypto functional exchanges were adhering to the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO) on priority.

Prior to this in April, Hong Kong followed the US to approve ETFs related to Bitcoin and Ether, aiming to boost the engagement of institutional investors with these otherwise risky digital assets.

The Web3 sector is generally considered to have a high exposure to cyber-attacks and hacks, but Telegram-backed The Open Network (TON) blockchain has particularly found itself in trouble. As per blockchain security firm SlowMist, the TON blockchain faces a high risk of phishing attacks. The entire TON ecosystem is currently under threat, which could negatively impact the blockchain’s near future plans, especially at a time when the project admittedly aims to onboard 500 million users on-chain by 2028.

What do cyber experts say?

Yu Xian, the founder of SlowMist, alerted the team behind the TON blockchain about looming phishing threats to the network on June 23. In phishing attacks, the actor entices potential victims into sharing their private information – personal as well as financial – in order to exploit the information and steal funds.

“There are more and more phishing activities in the TON ecosystem. The Telegram ecosystem is too free, and many phishing links (or bot forms) are spread through message groups, airdrops and other deceptive methods,” Xian posted through his Twitter account that goes by the handle @evilcos.

Since TON users can link their wallets to their Telegram accounts, Xian fears that if the integrity of TON-linked wallets is violated, it could expose the affected users’ private messages as well.

The expert believes that the developers behind the TON blockchain should start taking measures to mitigate the situation.

As per Chainalysis, 2022 saw victims lose an estimated $516.8 million (roughly Rs. 4,314 crore) to crypto phishing scams. In 2023, this number stood at $374.6 million (roughly Rs. 3,127 crore) through November.

As of now, TON has not reacted to the development.

Growth of TON

For Telegram founders, the Durov brothers, the idea for The Open Network first took shape around 2018. Later in 2022, the TON mainnet went fully live and operational.

Just recently, the TON coin was listed on Binance for deposits and withdrawals. At the time of writing, TON was trading at $7.31 (roughly Rs. 610) on CoinMarketCap.

Since 2022, Web3 investment company DWF Labs infused $10 million (roughly Rs. 80 crore) in the Layer-1 blockchain network. Around the same time, Telegram said it would auction rare usernames on the TON marketplace.