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The legalization of bitcoin has significantly undermined the investment attractiveness of this Latin American state. The world’s leading financial institutions – the IMF and the World Bank – criticized the decision of the El Salvadorian authorities, recalling the volatility of BTC. As a result, the dollar value of government bonds fell to a record low – almost to the junk level.
But not everything is so sad in the world of cryptocurrencies. For example, the popular Binance exchange feels great in the global capital markets and is currently selecting investors who are ready to finance its numerous projects. The largest cryptocurrency platform is in talks even with sovereign wealth funds, according to the Financial Times. But about 5 years ago it would have been difficult to believe in such a thing.
The NFT market is also booming. Literally everything is ready to put a hand to this process. The popular South China Morning Post has presented its non-fungible token (NFT) standard. The basic document – White Paper – was named Artifact.
Bitcoin won’t help El Salvador?
In early summer, the country’s parliament, on the initiative of President Nayib Bukele, adopted a law on the legalization of bitcoin. Then, for several months, the IMF, the World Bank and other international financial organizations insistently shook their fingers and asked Bukele to abandon the adoption of an “explosive” law that could not only undermine the financial stability of the state, but also create a dangerous precedent.
Some prophecies worked: the entry into force of the bitcoin law resulted in a drop in the investment attractiveness of Salvadoran government bonds. This week, securities fell to a record low – “junk” – level ($ 0.644 at the end of the session on Monday).
The Latin American state will try to turn the tide by placing bitcoin bonds as part of the project to create Bitcoin City, writes Bloomberg. The value of Salvadoran securities in dollar terms has been falling since April 2021. In the spring, the price of one bond was $ 1.10.
Investors are withdrawing from the assets of the Latin American state amid the conflict between President Bukele and the IMF. Alternatively, El Salvador will try to attract investment through bitcoin bonds. The return for investors will be 6.5%, and payments to holders will be made in US currency. El Salvador will use the raised funds to modernize the infrastructure of mining and trading.
Samson Moe, representing Blockstream, said on Bloomberg TV that institutional investors will be able to enter the El Salvadorian market through bitcoin bonds.
Binance Seeking Serious Investors
While El Salvador loses access to international capital, the largest cryptocurrency exchange in the world – Binance – is actively looking for partners willing to finance the development of its business. In an interview with the Financial Times, Binance CEO Changpeng Zhao said the company is negotiating even with several sovereign wealth funds.
He declined to name potential investors, but made it clear that the partnership agreements with the funds would speed up the resolution of the problems facing the exchange – both in Europe and Asia. A scenario is not excluded in which sovereign wealth funds can buy out a stake in Binance.
Last week, Changpeng Zhao announced plans to take the crypto company to an IPO and raise “a couple hundred million” in the next two months. Another major step in the current business development strategy will be the opening of Binance’s headquarters, which many saw as contradicting its concept of decentralization.
The average daily trading volume on the Binance crypto exchange now exceeds $ 118 billion, including the spot and derivatives markets (according to CoinMarketCap).
Who will be the first to develop the NFT constitution?
The popular South China Morning Post has presented its own version of the document that standardizes the non-fungible token (NFT) market. The newspaper published a White Paper titled Artifact.
South China Morning Post proposes to issue tokens within the NFT ecosystem based on its standard. Moreover, the newspaper itself plans to create a corporate collection NFT SCMP in the near future.
Tokens will be developed based on the Dapper Labs blockchain. The authors of the “NFT Constitution” proposed a variant of the structure for the management and sale of NFTs containing historical content. Recall that in 2016, the South China Morning Post was acquired by the Chinese IT giant Alibaba.
The newspaper first announced plans to develop standards for the NFT market in July. SCMP CEO Gary Liu said other historical content creators could use these standards to digitize information that could become collectible.
“We are proud that SCMP has launched this forward-looking project that brings important historical episodes to life. And we are delighted that they have chosen us as a partner to build the Artifact protocol, ”said Mickey Maher, Vice President of Dapper Labs.
Sources: CoinDesk, Bloomberg, CoinTelegraph, Financial Times, Twitter
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