Good Morning, Asia. Here’s what’s making news in the markets:
Welcome to Asia Morning Briefing, a daily summary of top stories during U.S. hours and an overview of market moves and analysis. For a detailed overview of U.S. markets, see CoinDesk’s Crypto Daybook Americas.
A stablecoin backed by the ruble and linked to a sanctioned Russian defense bank unexpectedly became a sponsor of Singapore’s largest crypto event, causing compliance issues and highlighting how financial sanctions can overlap internationally.
On Friday morning, former White House Crypto Policy Director Bo Hines spoke at Token2049, praising Tether – his current employer – and its compliant stablecoin, USAT, which he described as a supporter of U.S. dollar dominance, something the global market appears to favor.
Hours later, Oleg Ogienko, director for regulatory affairs at A7A5, the issuer of a ruble-backed stablecoin targeted by authorities globally, took the stage with a contrasting message.
His appearance and speech made the conference more intriguing, but attendees are left wondering how a sanctioned entity managed to fund its sponsorship.
A7A5, a ruble-backed stablecoin from Old Vector utilized on the A7 LLC payments platform – which is intended to help businesses bypass sanctions – is supported by Russia’s state-owned Promsvyazbank (PSB), a bank under sanctions by the U.S., U.K., and various other jurisdictions due to its role in financing Russia’s military.
Following Russia’s aggression in Ukraine, Singapore altered its longstanding neutrality policy and aligned with the West to impose sanctions on pivotal Russian banks and defense-related entities, including PSB, distinguishing itself from its ASEAN counterparts, who did not follow suit.
On March 14, 2023, the Monetary Authority of Singapore (MAS) issued notice SNR-N01 which prevents financial institutions in Singapore from engaging with major Russian banks including Promsvyazbank (PSB) – the custodian of A7A5’s reserves.
This effectively bars any MAS-regulated entities and crypto service providers from facilitating transactions, sponsorships, or partnerships with A7A5 or other PSB-supported digital assets.
However, Token2049 is organized by BOB Group, based in Hong Kong. Hong Kong follows Beijing’s policies on sanctions, which still maintains financial relations with Russia despite Western pressures.
Token2049’s organizers did not respond to multiple requests for comments. MAS also did not provide feedback by the time of publication.
While BOB Group adhered to local legislation in Hong Kong, other sponsors grew uneasy about associating their brands with A7A5. Several companies that spoke to CoinDesk described the presence of the stablecoin issuer as a “compliance nightmare,” with one stating they felt a “heart attack” upon seeing A7A5 mentioned.
Responding to the concerns, BOB removed A7A5 references from their sponsor list, though the Internet Archive still holds the record.
For its part, A7A5 continues to proudly identify itself as a conference sponsor on social media, including the official Token2049 massage area, which boasts a lounge “where deals are closed while you unwind.”
Market Movement
BTC: Bitcoin has climbed to a record high exceeding $125,000, marking an 11% weekly increase, driven by significant inflows into U.S. spot ETFs and increased demand for safe-haven assets amidst the U.S. government shutdown and evolving global liquidity expectations.
ETH: Ethereum is trading approximately at $4,500, gaining traction ahead of December’s Fusaka upgrade, which VanEck claims will reduce rollup costs through PeerDAS, boost scaling efficiency, and solidify ETH’s status as the monetary foundation of the network, beyond being merely a fee-generating asset.
Gold: Gold remains on the rise, trading above $3,880 as investors flock to safe-haven assets amid a prolonged U.S. government shutdown.
Nikkei 225: Japan’s Nikkei 225 jumped over 4% to a record high after the ruling LDP selected Sanae Takaichi as its new leader, with investors optimistic that her pro-growth “high-pressure” economic approach will maintain the BOJ’s accommodating policies.
