HSBC enters The Sandbox, The truth behind crypto's impact on Russia’s sanction dodgers, China’s Pledge to Support Its Market
HSBC enters The Sandbox
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HSBC offers educational finance games
HSBC, one of the largest European banks, with total assets of $2.4 trillion, announced its intention to buy a virtual plot of LAND within The Sandbox for an undisclosed amount.
The banking giant will reportedly focus on financial literacy offerings and "work with our sports partners, brand ambassadors and Animoca Brands to co-create experiences that are educational, inclusive and accessible,” according to Suresh Balaji, HSBC's chief marketing officer for the Asia-Pacific region.
This partnership comes at a time when many financial institutions are closing physical branch locations due to the shift to digital banking, which was accelerated by the pandemic.
JP Morgan leads the charge
HSBC, however, is not the first bank to enter the metaverse. Last month, J.P. Morgan officially became the first major bank in Decentraland, having opened a virtual lounge in its metaverse. The global metaverse market is estimated to reach $1 trillion by 2030.
The truth behind crypto's impact on Russia’s sanction dodgers
3 reasons Crypto is not useful for sanctions dodging
Crypto’s decentralised network is supposed to be supranational and its users are meant to be anonymous which makes it seem like a useful tool for sanctions-dodging. However, if for example an oligarch was looking to dodge sanctions, crypto has three main flaws which make it unfeasible.
1. Difficult to convert large sums
The first is that the infrastructure, such as large exchanges, do not really exist in Russia. Thus Russians’ ability to convert significant amounts of wealth into crypto is limited.
2. Crypto is transparent
it is not possible to buy most everyday items or financial assets with crypto, which means that a sanctions-dodger must at some point leave the crypto-sphere. “Ultimately what they really need to do is get access to some form of fiat currency, which becomes more challenging,” said Christopher Wray, the head of the FBI, in a us Senate hearing on the Russian invasion.
Binance, the largest exchange, implemented a KYC policy in 2021, requiring those using it to identify themselves to the firm. Coinbase, another large exchange, has frozen 25,000 Russian accounts. Binance has said it will freeze the assets of people who have been targeted with sanctions.
3. Crypto is traceable
Moving money around in crypto is not as private as is widely thought. Government sleuths have invested time and energy in trying to link supposedly anonymous wallets with real people, with some success.
Also, as blockchain transactions are public, once identified, it is easy to trace the history of funds. In December the FBI managed to seize $3.6bn-worth of crypto-assets related to a theft from an exchange in 2016.
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“Crypto may turn out to be far more useful to those looking to move in the open, rather than in the shadows”
China’s Pledge to Support Its Market
China reassures the market
In a brief statement by state media, China’s top financial policy body vowed to ensure stability in capital markets, support overseas stock listings, resolve risks around property developers and its crackdown on the technology sector should end soon.
While the pledges to support the market and the economy put a floor under stocks for now, a durable recovery will require authorities to follow up their vague talk with action.
Geopolitical risk is the main factor
Yet if U.S. and Chinese regulators reach a compromise to avoid mass delistings, internet stocks would be among the biggest beneficiaries. That’s why the U.S. listings of Chinese stocks have become even more undervalued than their foreign counterparts; if they are delisted by the U.S. government, investors will book a total loss. The biggest risk is still geopolitics. China continues to walk a fine line between publicly aligning itself with its ideological friend Russia while trying to not run afoul of Western sanctions.
President Joe Biden in a two-hour video conference with Xi on Friday underscored the consequences if China provides material support to Russia in Ukraine, while Xi noted that conflict and confrontation was in no one’s interest.
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