Highline Digital Asset Weekly

Catch up on the most important developments in the digital assets this week with our Friday recap. This week we focus on the upcoming executive order from the White House, which may shake up and accelerate digital asset regulation.

The Digital Asset Complex remained range bound this week, as risk markets continue to digest recent economic data and potential future action from the Federal Reserve. As of Thursday, Bitcoin remained in a tight range above the $36K level — other Layer 1s ETH and SOL trading around $2600 and $97 respectively. Defi protocols such as Aave and Uniswap continued to struggle at or around their recent 52 week low levels.

1/30/22 What Happened This Week

1. Cryptocurrency exchange FTX Trading announced it raised a $400 million Series C funding at a $32 billion valuation. Following previous venture rounds of $1 billion in July 2021 and another $420 million in October, this brings total funds raised to $1.8 billion. Separately, last week U.S. affiliate FTX.US raised a $400 million Series A at an $8 billion valuation.
2. The government of India revealed on Tuesday that it would be launching a digital rupee and start taxing income from crypto, The Hindustan Times reported. In her Budget 2022 presentation, Indian finance minister Nirmala Sitharaman said that the Reserve Bank of India (RBI) will introduce a central bank digital currency (CBDC) in the next financial year.
3. ETF specialist WisdomTree has revealed plans to launch a blockchain-native financial services mobile app later this year as it looks to expand its presence in the digital assets space. Users can save, spend, and invest in cryptoassets such as Bitcoin and Ether, blockchain-enabled funds and tokenized versions of physical assets like gold, company executives have said.
4. GameStop and Immutable are launching a $100 million joint fund to invest in gaming NFT projects, according to an announcement on Thursday. Immutable X, a layer-2 scaling platform built on Ethereum, will also be partnering with the company to power its forthcoming blockchain-based marketplace, co-founder Robbie Ferguson told Blockworks.
5. Crypto wallet Phantom has announced a $109 million Series B funding round led by Paradigm, an investment firm focused on crypto- and Web3-related companies. The funding round brings the project’s valuation to a whopping $1.2 billion.

Friday Focus: Executive Order on Digital Assets

We’re taking a break from our month-long summary of the very informative Messari 2022 “Crypto Theses” paper to take a look at a big development in the digital asset market.

On Jan 24, the White House announced that President Biden will be issuing an executive order on Cryptocurrencies in the next few weeks. At the time of the announcement the scope was said to be broad and cover NFTs as well as currencies, but almost no details were provided. But some aspects of the plan along with some speculation has come out in the last few days. Here are the main points:

• Federal agencies have been studying the crypto markets for two years with multiple forms of guidance offered up by the Office of the Comptroller of the Currency (OCC), Commodity Futures Trading The order is primarily focused on stablecoins, which have drawn significant regulatory scrutiny over the last two years and which may be seen by some in the government as the most immediate challenge to the fiat currency system.

• The stablecoin market is huge, so it’s a good place to start from the government’s perspective. The market caps for the top four US Dollar stablecoins are: Tether (USDT, $78 billion), Circle (USDC, $50 billion), Binance US Dollar (BUSD, $15 billion), and TerraUSD, (UST, $11 billion), for a total of $93 billion.

• This order may be clearing the way for the Federal Reserve to create its own digital currency, referred to as a CBDC (Central Bank Digital Currency).

• According to reports, Treasury Secretary Janet Yellen, some Fed executives, and Senator Elizabeth Warren are calling the shots, rather than SEC Chief Gary Ginsler.

• Some feel that this is a sophisticated plan by the government to slow down the crypto industry and shift the balance of control and power to the traditional banking system. See the linked article from digital journalism site Decrypt for more:

https://decrypt.co/91301/federal-reserve-crypto-regulation-planstablecoins-big-banks

https://decrypt.co/91662/india-proposes-30-tax-crypto-income-announcesdigital-rupee-launch

WisdomTree to Launch Digital Assets Consumer App - Blockworks

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