Biden signs crypto executive order, Binance eyes non-crypto M&A spree, Bain Capital unveils a $560 crypto fund and more.
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Market Recap 📈
Indian benchmark indices ended higher for a third straight day, led by gains in FMCG, public sector banks, and realty sectors, while US stocks logged their best session in two years as investors remained optimistic toward a possible de-escalation of Russia’s war in Ukraine.
Sensex: 55,464.39 (+1.50%) ↑
Nifty 50: 16,594.90 (+1.53%) ↑
Dow Jones: 33,286.25 (+2.00%) ↑
Nasdaq 100: 13,742.20 (+3.58%) ↑
Top Stories 📰
1. Biden signs executive order for crypto
US President Joe Biden has signed a first-of-its-kind executive order on cryptocurrencies, directing the government to examine the risks and benefits of digital assets.
The White House calls on all federal agencies to take a unified approach to regulation and oversight of cryptocurrencies. Under the plan, the agencies have around 90 to 210 days to research and come up with policy recommendations on six core issues: consumer and investor protection, financial stability, illicit trading, US competitiveness, financial inclusion and responsible innovation.
Additionally, the Biden administration has urged departments to research and develop a US Central Bank Digital Currency (CBDC) after China distributed millions of its digital version of yuan in real-world trials across several cities.
This isn’t surprising as back in January, the Federal Reserve had published a white paper suggesting that a potential CBDC could complement existing payment systems.
Treasury Secretary Janet Yellen praised Biden's "historic" executive order in a since-deleted statement on Treasury’s website, saying it strikes the right balance between fostering responsible innovation and addressing potential risks to consumers and the broader financial system.
Shortly after, Bitcoin climbed as much as 10% to $42,427. Other tokens such as Ethereum, Terra, and Cardano also posted huge gains.
Why it matters? While many within the crypto community welcomed the move, others said that directive remained too focused on CBDC, further viewing them as a potential vector for financial surveillance.
2. Binance to go on an acquisition spree
According to the Financial Times, Crypto exchange Binance is planning to boost crypto adoption and expand its revenue streams by acquiring traditional, non-crypto businesses in every sector.
“We want to identify and invest in one or two targets in every economic sector and try to bring them into crypto. The strategy is about making the crypto industry bigger,” Binance CEO Changpeng Zhao said in an interview, adding that he has no intention to grow the company into a conglomerate.
By doing so, the world's largest crypto exchange hopes to increase competition and encourage other players to embrace crypto.
The announcement comes as its core trading business, which generates around 90% of its revenues as trading fees, finds itself in regulatory crosshairs across the globe. Last week, British regulator Financial Conduct Authority raised concerns over a strategic partnership between Binance's in-house card payment services Bifinity and investment firm Eqonex.
Despite such regulatory crackdowns, Binance has no plans of stopping anytime soon as it’s also reportedly in talks to obtain a licence to operate in Dubai to strengthen its presence in the Middle East.
Why it matters? Purchasing firms operating in a different industry isn't new for Binance, which previously acquired crypto data website CoinMarketCap and bought a majority stake in crypto Visa card provider Swipe. Last month, Binance also purchased a $200 million stake in Forbes, two years after suing the 105-year-old media brand for defamation.
Deal Street 🤑
Public buys NFT firm Otis
Investing platform Public has announced that it acquired Otis, a fractional investing company that focuses on NFTs, art, and collectibles. Public, which pioneered real-time fractional investing in stocks in 2019, wants to establish itself as the only platform where "people can invest in — and build a modern portfolio with — any fractional asset,” co-CEO Leif Abraham in a blog post. Last year, the New York-based firm also added crypto trading to its list of offerings. Otis, which launched in 2019, allows investors to own and invest in cultural assets. So far, it has around 100,000 users and 125 listed assets. While diversification opportunities have historically been limited to affluent investors, Public strives to change that by transforming art and collectibles into fractional investable securities.
Bain unveils $560 crypto fund
Bain Captial Ventures, the startup investment arm of private equity firm Bain Capital, has launched a $560 million fund exclusively focused on the crypto ecosystem. Dubbed Bain Capital Crypto, the fund will be co-led by managing partners Stefan Cohen and Alex Evans, with a seven-member team of scientists and engineers. While the fund closed in December, so far, it has deployed $100 million into a dozen undisclosed companies, mainly early-stage, pre-launch protocol projects. Bain Capital is the latest traditional finance company to capitalize on the $2 trillion cryptocurrency sector. Last month, Sequoia Capital also raised $600 million to launch its first-ever crypto fund. The fund is broadly interested in DeFi and Web3 technologies, with a narrow focus on protocols and the native tokens that power them.
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