February 19th, 2025

Market wrap: US equities muted amid tariff news, gold hits near record high, digital assets is the future

The economic landscape of the past week has been shaped by a complex interplay of policy announcements, market reactions, and strategic corporate moves, all set against a backdrop of global uncertainty. At the forefront of these developments was President Trump’s indication of imposing tariffs on automobile, semiconductor, and pharmaceutical imports, potentially starting from April 2nd. This move, ostensibly aimed at encouraging foreign manufacturers to invest in US production facilities, could have profound implications, particularly for industries where international supply chains are deeply integrated.

The automobile sector, already navigating through the challenges of electrification and autonomous driving, now faces the added complexity of potential tariff hikes. For European carmakers like Volkswagen and BMW, and Asian giants like Toyota and Hyundai, the implications are stark. The tariffs could increase the cost of vehicles for US consumers, potentially dampening demand, or push these companies towards establishing or expanding manufacturing operations in the US This shift, while beneficial for local job creation, comes with its own set of challenges, including high setup costs, cultural integration, and the need for skilled labor. Moreover, the environmental impact of such a move could be significant, considering the carbon footprint associated with new production setups.

Despite these looming threats, US equity markets showed a tempered response. The MSCI US index managed a slight increase of 0.3 per cent, with gains predominantly in Energy and Materials sectors, suggesting perhaps an anticipation of benefits from increased domestic production or from sectors less directly impacted by the tariffs. However, this muted market reaction might also indicate a ‘wait-and-see’ approach from investors, expecting either negotiations or modifications to the tariff policy before its full implementation.

The Federal Reserve’s stance, as articulated by various officials, was to maintain current interest rates, reflecting a cautious approach to monetary policy amidst these trade uncertainties. Yet, the market’s expectation for a rate cut by September, as priced into futures, shows an underlying belief that the Fed might eventually need to counteract any adverse economic effects of these tariffs, like inflation or a slowdown in consumer spending. This is mirrored by a rise in the 10-year US Treasury yield to 4.55 per cent, suggesting a market adjusting to new realities of potentially higher inflation or a stronger dollar, which indeed rose by 0.5 per cent to above 107.

Gold’s steady hold near record highs, with a 1.4 per cent increase, underscores the market’s search for safety amid these geopolitical and trade tensions. Meanwhile, Brent crude oil’s recovery after OPEC+’s suggestion to delay supply increases could signal a tighter oil market, which might benefit energy companies but also stir inflation concerns.

In Asia, the economic narrative was somewhat divergent. The Reserve Bank of Australia’s rate cut to 4.10 per cent was a move to stimulate an economy facing external pressures, yet it came with warnings against expecting too much from further monetary easing. In China, the decline in the CSI300 index by 0.9 per cent reflected ongoing concerns about economic stability and the impact of US trade policies. The Hang Seng China Enterprises Index’s initial gains fizzled out, pointing to a cautious optimism regarding government support for the private sector.

Turning to the digital economy, significant movements are afoot in the cryptocurrency space. Robinhood Markets’ planned expansion into Singapore through Bitstamp, an exchange it acquired for US$200 million, highlights a strategic push into Asia’s burgeoning crypto market. This move not only aims at leveraging Bitstamp’s regulatory and institutional strengths but also reflects a broader trend of integrating cryptocurrencies into mainstream finance, albeit with careful consideration of regulatory landscapes.

Hong Kong’s proactive stance on digital assets was vividly illustrated at the Coindesk Consensus Hong Kong 2025 conference, where the CEO of the Securities and Futures Commission, Julia Leung, outlined plans for new crypto products like derivatives and margin lending. This aligns with Hong Kong’s ambition to become a leading center for digital assets, especially post the 2021 crypto ban in mainland China. The issuance of nine digital asset trading licenses, with more applications in review, and the drafting of stablecoin regulations, all point towards a strategic pivot to capitalise on the global crypto boom.

From my perspective, these developments are indicative of a world where traditional economic structures are being challenged by new policies and technological advancements. The potential tariffs could lead to a reconfiguration of global supply chains, impacting not just trade but also environmental and employment policies. The Fed’s cautious approach to interest rates reflects a delicate balancing act between supporting growth and controlling inflation. Meanwhile, the rise of digital assets in regulated markets like Hong Kong and Singapore signifies a shift towards a more tech-driven financial ecosystem, where regulation will play a crucial role in shaping market dynamics.

This economic juncture requires companies and investors to be agile, adapting not just to policy changes but also to technological innovations. The interplay between these economic, regulatory, and technological shifts will continue to define the strategies and fortunes of businesses worldwide, making this a critical time for strategic foresight and adaptability.

Source: https://e27.co/market-wrap-us-equities-muted-amid-tariff-news-gold-hits-near-record-high-digital-assets-is-the-future-20250219/

Anndy Lian

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com

j j j

June 24th, 2024

Crypto Cyber Resilience in 2024: Strategies for safeguarding crypto assets

With digital assets becoming a bigger player in the global economy, everyone’s buzzing about “crypto cyber resilience.” It’s no surprise – 2024 has seen some seriously high-tech hacks, phishing attacks, and other cyber threats targeting cryptocurrency. This article dives into the current state of crypto security. We’ll explore what companies and individuals can do to protect their digital treasures, and how to build strong defenses against these ever-evolving cyber attacks. We’ll also compare these challenges to the Wild West days of fintech, highlighting how the threats and solutions have transformed alongside the crypto landscape.

The Current State of Crypto Cyber Resilience

Cryptocurrency, while promising unprecedented financial opportunities, has also introduced a host of new vulnerabilities. According to Chainalysis, cryptocurrency-related crime hit an all-time high in 2022, with illicit addresses receiving $14 billion worth of cryptocurrencies. This figure underscores the critical need for robust security measures in the crypto space.

In 2024, the landscape of crypto cyber resilience is defined by an ongoing arms race between cybersecurity experts and cyber criminals. The rise of decentralised finance (DeFi) platforms has particularly exacerbated the issue. These platforms, while democratizing access to financial services, have also become prime targets for hackers. For instance, in 2022, the DeFi sector saw a staggering $53.5 billion in losses due to hacks and exploits, as reported by IntoTheBlock

What Companies Should Do to Enhance Crypto Cyber Resilience

Implement Multi-Factor Authentication (MFA): One of the fundamental steps companies can take is to enforce multi-factor authentication (MFA). MFA adds an extra layer of security by requiring users to provide two or more verification factors to gain access to their accounts. This significantly reduces the risk of unauthorised access, as attackers would need to compromise multiple forms of authentication.
Adopt Cold Storage Solutions: Storing the majority of crypto assets in cold storage, which is offline storage, can drastically reduce the risk of theft. Unlike hot wallets, which are connected to the internet and hence more vulnerable to hacks, cold wallets are immune to online attacks.
Regular Security Audits and Penetration Testing: Regular security audits and penetration testing are crucial in identifying and mitigating vulnerabilities. Companies should engage with cybersecurity firms to conduct thorough assessments of their systems and rectify any weaknesses. This proactive approach helps in staying ahead of potential threats.
Educate Employees and Users: Human error remains one of the biggest threats to cybersecurity. Companies must invest in comprehensive training programs to educate employees and users about phishing, social engineering attacks, and safe practices for handling crypto assets. Knowledgeable users are less likely to fall victim to scams.
Implement Robust Incident Response Plans: Having a well-defined incident response plan is essential for minimising the impact of a cyber attack. This plan should include steps for immediate containment, eradication of the threat, and recovery of affected systems. It should also outline communication strategies to inform stakeholders and mitigate reputational damage.
Leverage Advanced Cryptographic Techniques: Employing advanced cryptographic techniques such as zero-knowledge proofs and homomorphic encryption can enhance data privacy and security. These techniques allow for the verification of transactions and computations without exposing sensitive data.

Preventing Hacks, Phishing, and Other Cyber Threats

The prevention of cyber threats in the crypto space requires a multi-faceted approach that addresses both technological and human factors. Here are some strategies:

Strengthen Network Security: Ensuring that network infrastructure is secure is paramount. This includes using firewalls, intrusion detection systems, and regular monitoring to detect and block suspicious activities. Network segmentation can also help contain breaches and prevent them from spreading.
Employ Blockchain Analytics: Blockchain analytics tools can help track and analyse transactions across the blockchain. These tools are valuable in identifying suspicious patterns and potentially fraudulent activities. Companies like Chainalysis and Elliptic offer services that provide insights into the flow of funds and help in tracing the origins of illicit transactions.
Use Smart Contract Auditing: Smart contracts are the backbone of many DeFi platforms, and their security is critical. Regular auditing of smart contracts by specialized firms can identify vulnerabilities and ensure that they function as intended. This reduces the risk of exploits that could lead to significant financial losses.
Promote User Awareness: User awareness campaigns can educate investors and users about common phishing tactics and how to avoid them. Encouraging the use of hardware wallets, which require physical confirmation for transactions, can also add an extra layer of security.
Adopt Decentralised Security Measures: Decentralised security measures, such as decentralised autonomous organisations (DAOs) for security, can leverage the collective intelligence of the community to identify and mitigate threats. This collaborative approach can be more effective than traditional centralised security models.

Comparing Crypto Cyber Resilience to Fintech Security

The fintech era, which saw the rise of digital banking and online financial services, laid much of the groundwork for current cybersecurity practices. However, there are distinct differences between the security needs of traditional fintech and the current crypto landscape:

Centralisation vs. Decentralisation: Traditional fintech services are typically centralised, with security measures focused on protecting centralised servers and databases. In contrast, cryptocurrencies operate on decentralised networks, such as blockchain, where security must be distributed across all nodes. This decentralisation presents unique challenges and requires innovative security solutions.
Regulatory Frameworks: The regulatory frameworks governing traditional financial institutions are well-established and comprehensive. Cryptocurrencies, however, exist in a relatively nascent regulatory environment. While regulations like the EU Cyber Resilience Act are emerging, there is still a lack of uniformity and clarity in many jurisdictions, making it harder to establish standardised security protocols.
Nature of Assets: Traditional financial assets are often backed by physical or legal guarantees (e.g., government bonds, insurance). Cryptocurrencies, being purely digital, lack these tangible assurances. This intangibility makes them more susceptible to cyber threats, emphasising the need for robust digital security measures.
Evolving Threat Landscape: The threat landscape in the fintech era was largely confined to phishing attacks, malware, and hacking attempts aimed at centralised systems. In the crypto world, the rise of quantum computing poses a significant threat to cryptographic algorithms that underpin digital currencies. Additionally, the anonymity and irreversibility of cryptocurrency transactions make them attractive targets for cybercriminals.

Conclusion: Building a Resilient Future for Crypto

The future of cryptocurrency hinges on the industry’s ability to build robust cyber resilience. As the crypto market continues to grow, so too does the incentive for cybercriminals to exploit vulnerabilities. Companies must adopt a holistic approach to security, integrating advanced technologies, rigorous protocols, and comprehensive user education.

To survive, the industry needs to build a fortress around security, with cutting-edge tech, bulletproof protocols, and everyone on the same page about staying safe.

Here’s the good news: companies can seriously toughen their defenses by using double-verification logins (multi-factor authentication), keeping most crypto offline in secure storage (cold storage), and having regular security checkups (audits). Plus, educating users about crypto scams is like giving them a shield against online attacks.

But that’s not all. Crypto needs its own special security suit, not just hand-me-downs from the traditional finance world (fintech). Decentralised security measures and keeping up with new regulations are crucial for navigating this ever-changing landscape.

Here’s the key: everyone needs to work together. Companies, cybersecurity experts, and even regulators need to join forces to build a strong defense around the entire crypto ecosystem. By working as a team, we can make sure the exciting potential of crypto isn’t overshadowed by cyber threats.

Source: https://ciosea.economictimes.indiatimes.com/blog/crypto-cyber-resilience-in-2024-strategies-for-safeguarding-crypto-assets/111074132

Anndy Lian

www.anndy.com

j j j

April 2nd, 2024

How the EU is regulating crypto-assets with MiCAR and why you should care

The EU has recently adopted the Markets in Crypto-Assets Regulation (MiCAR). This groundbreaking legislation aims to provide a clear and consistent framework for regulating crypto-assets and related services in the EU. MiCAR will apply from the end of 2024, with some provisions applying from mid-2024.

MiCAR defines crypto-assets as “a digital representation of value or rights which may be transferred and stored electronically, using distributed ledger technology or similar technology.” This definition covers various types of crypto-assets, such as cryptocurrencies, tokens, stablecoins, and non-fungible tokens (NFTs). It excludes crypto-assets already regulated under existing EU financial services legislation, such as financial instruments, deposits, electronic money, or insurance products. I agree with this definition, as it is broad and neutral enough to capture the diversity and innovation of crypto-assets while also respecting the existing regulatory frameworks for other types of assets.

Furthermore, it classifies crypto-assets into three main categories: e-money tokens (EMTs), asset-referenced tokens (ARTs), and other tokens. EMTs are crypto-assets pegged to one official currency, such as Tether or USD Coin. ARTs are crypto-assets backed by a pool of assets, such as fiat currencies, commodities, or other crypto-assets. Other tokens are crypto-assets that have various purposes and characteristics, such as utility tokens, payment tokens, or governance tokens.

As mentioned above, MiCAR also introduces the concept of significant tokens for EMTs and ARTs, which are subject to additional requirements due to their potential impact on financial stability or monetary policy. The European Banking Authority (EBA) will identify and monitor significant tokens based on criteria such as the number of users, transaction values, interconnectedness with the financial system, or innovation or complexity of the token. I think this classification is reasonable and valuable, as it reflects the different functions and risks of crypto-assets while also allowing for some flexibility and adaptation. Personally, when I spoke to EU-based bankers who are considering ESG-related crypto funds, they mentioned that MiCAR should also consider the environmental and social impact of crypto-assets, especially those that consume a lot of energy or resources or those that may affect human rights or privacy. I did not comment on that, but I am well aware of their “crypto agenda”. Additionally, I also think that they should actively involve other stakeholders, such as consumers, investors, or developers, in identifying and monitoring significant tokens, as they may have valuable insights and feedback.

MiCAR imposes different authorization and supervision requirements for crypto-asset issuers and crypto-asset service providers (CASPs), depending on the type and significance of the crypto-asset. Crypto-asset issuers offer crypto-assets to the public or seek their admission to trading on a trading platform for crypto-assets. CASPs provide or perform services or activities related to crypto-assets, such as custody, exchange, execution, advice, or portfolio management. Crypto-asset issuers of EMTs and ARTs must obtain authorization from the competent authority of their home member state before offering or admitting such tokens to trading. They must also prepare and publish a white paper that discloses essential information about the crypto-asset project, such as the features, rights, and obligations of the crypto-asset, the risks and costs involved, the governance and technical arrangements, and the identity and contact details of the issuer. Do note that they do not need authorization but must comply with the white paper requirement and other general obligations.

CASPs must obtain authorization from the competent authority of their home member state before providing or performing any crypto-asset services or activities. They must also comply with prudential requirements, the conduct of business rules, safeguarding requirements, and anti-money laundering and counter-terrorism financing (AML/CTF) obligations. I support these requirements, as they aim to ensure the transparency, accountability, and responsibility of crypto-asset issuers and CASPs and protect the interests and rights of consumers, investors, and the public. On top of this, I think that MiCAR should also provide some incentives and benefits for crypto-asset issuers and CASPs that comply with these requirements, such as lower fees, faster processing, or broader access. I also think that MiCAR should promote cooperation and coordination among the competent authorities of different member states and other international regulators and organizations to avoid duplication, inconsistency, or conflict.

MiCAR also provides some transitionary provisions and exemptions for crypto-asset issuers and CASPs already operating in the EU before the application date of MiCAR. For example, those authorized or registered under national regimes in one or more member states may continue to operate in those member states until mid-2025 without obtaining authorization under MiCAR. However, they must comply with the relevant national rules and regulations and apply them by mid-2024 if they wish to operate in the EU after mid-2025.

They also established a pilot regime for distributed ledger technology (DLT) market infrastructures, which are a new type of market participants that use DLT to provide trading and settlement services for crypto-assets that qualify as financial instruments. The pilot regime aims to test the use of DLT in trading and post-trading crypto-assets while ensuring high investor protection and market integrity. The pilot regime will apply for five years from the application date of MiCAR, with a possibility of extension. These provisions are good in my opinion, as they recognize the diversity and maturity of the existing crypto-asset market in the EU and can provide a smooth and gradual transition to the new regulatory framework. They should also ensure a fair and equal treatment of all crypto-asset issuers and CASPs, regardless of origin, size, or status, and avoid creating undue advantages or disadvantages for some over others. If they can encourage and support the participation and experimentation of different actors and stakeholders in the pilot regime, such as incumbents, newcomers, or innovators, and foster a collaborative and inclusive environment for the development and adoption of DLT. This will be a big plus for them.

MiCAR does not apply to crypto-assets issued or guaranteed by central banks, member states, third countries, or public international organizations. It also does not apply to crypto-asset services or activities provided or performed by central banks or other public authorities in performing their public tasks or functions. These exemptions aim to preserve the monetary sovereignty and policy of the EU and its member states and facilitate the development of central bank digital currencies (CBDCs) and other public initiatives in the crypto-asset space. While I understand these exemptions, as they reflect the special and privileged status of central banks and public authorities and their role and responsibility in the monetary and financial system. However, I think MiCAR should also ensure a close and constructive dialogue and cooperation between the public and the private sectors and foster a balanced and complementary relationship between the traditional and innovative forms of money and finance. I also think that MiCAR should monitor and assess the impact and implications of CBDCs and other public initiatives on the crypto-asset market and address any potential issues or challenges that may arise.)

I also want to highlight that there are also some implications for investment firms and the travel rule, which are relevant to the crypto-asset market. Investment firms are those who provide or perform investment services or activities on a professional basis, such as execution of orders, portfolio management, or investment advice. The travel rule is a requirement that obliges financial institutions to exchange certain information about the originator and the beneficiary of a funds transfer, such as their names, addresses, account numbers, and transaction amounts.

They allow investment firms that are authorized under the Markets in Financial Instruments Directive 2014/65/EU (MiFID II) to provide or perform crypto-asset services or activities in relation to crypto-assets that qualify as financial instruments without obtaining additional authorization under MiCAR. However, they must comply with the relevant MiFID II rules and regulations, as well as some specific requirements under MiCAR, such as the safeguarding and AML/CTF obligations. Investment firms that wish to provide or perform crypto-asset services or activities concerning crypto-assets that do not qualify as financial instruments must obtain authorization and comply with its rules and regulations.

The travel rule applies to crypto-asset transfers, which are any transactions resulting in the change of ownership of one or more crypto-assets from one person to another. MiCAR requires CASPs that are involved in crypto-asset transfers to exchange certain information with other CASPs, such as the name and account number of the originator and the beneficiary, the amount and type of crypto-asset transferred, and the date and time of the crypto-asset transfer. The CASPs must ensure that the information is accurate, complete, secure, and confidentially transmitted. They must also keep records of the information for at least five years. They must implement the travel rule by mid-2024, the same date as applying the Financial Action Task Force (FATF) standards on virtual assets and virtual asset service providers.

They aim to establish a level playing field and a single market for crypto-assets and related services within the EU. This is achieved by harmonizing and simplifying the current national regulatory frameworks, thereby eliminating regulatory fragmentation and uncertainty. They also acknowledge the need for a degree of regulatory flexibility and discretion at the national level, which opens the door to regulatory arbitrage and competition among EU member states in specific areas. Some of the leading EU jurisdictions for MiCAR compliance and regulatory arbitrage are France, Germany, and Malta. These jurisdictions have already adopted national regimes for crypto-assets and related services, which are solid, flexible, favorable, attractive, and clear and consistent. They also have supportive and innovative regulators, such as the AMF, BaFin, and MFSA, which have issued several guidance and recommendations on crypto-assets and related services. They also have robust and diversified crypto-asset ecosystems, with several established and emerging players. These jurisdictions are likely to maintain and enhance their leading positions in the crypto-asset market under MiCAR, as they have a competitive edge and a first-mover advantage over other member states.

To sum up, MiCAR is a landmark legislation shaping the future of crypto-assets in the EU. It will introduce legal certainty, consumer protection, market integrity, and financial stability and foster innovation and competition by enabling cross-border activities and passporting rights for crypto-asset issuers and CASPs within the EU.

They are visionary and ambitious legislation that reflects the importance and potential of crypto-assets and related services and that responds to the needs and expectations of the crypto-asset community and society at large. It is also a complex and dynamic legislation that requires constant monitoring and evaluation and may face some difficulties and uncertainties in its application and enforcement. I hope that MiCAR will be able to adapt and evolve with the changing and growing nature of crypto-assets and related services and that it will be able to achieve its objectives and benefits.

I look forward to seeing the development and implementation of this framework, and I hope it will contribute to the growth and maturity of the crypto-asset industry in the EU and beyond.

Source: https://www.financialexpress.com/business/digital-transformation-how-the-eu-is-regulating-crypto-assets-with-micar-and-why-you-should-care-3434243/