NOTABLE MOVES 

As of Tue, Jan 22, 08:00 Singapore Time zone UTC+8

USDJPY, 0.00%, $109.68
EURUSD, +0.02%, $1.1367
GBPUSD, +0.30%, $1.2891
USDCAD, +0.15%, $1.3296
AUDUSD, -0.07%, $0.7158
NZDUSD, -0.18%, $0.6728

S&P500 (Closed)
Nasdaq (Closed)
Nikkei Futures, -0.47%, 20,755.0

CURRENCY MARKET WRAP 

  • The U.S. stock and bond markets were closed in observance of Martin Luther King Day.
  • The main event of the day was the “Plan B” announcement by UK PM May to Parliament. It was much of the same, but in doing so, the impetus is put back on the lawmakers to propose other plans that will be debated on, and then voted. While May stuck doggedly to her deal, she also acknowledged that control over Brexit wasn’t entirely in her hands. Assuming they are approved, the EU would then need to review and approve. May said that she had heeded politicians’ concerns over an insurance policy known as the “backstop” that is intended to guarantee there are no customs checks along the border between EU member Ireland and the UK’s Northern Ireland after Brexit.
  • May’s immediate goal is to win over pro-Brexit Conservatives and her party’s Northern Irish ally, the Democratic Unionist Party. Both groups say they won’t back the deal unless the border backstop is removed. Pro-Brexit U.K. lawmakers fear Britain could become trapped in it, indefinitely bound by EU trade rules. In a nod to opposition parties’ concerns, she promised to consult lawmakers, trade unionists, business groups and civil society organisations “to try to find the broadest possible consensus” on future ties between Britain and the EU, and said the government wouldn’t water down protections for the environment and workers’ rights after Brexit.

Some takeaways from PM May:

  • She rejected the idea of holding a second Brexit referendum, saying it would threaten “social cohesion” in Britain.
  • She refuses a no-deal exit from EU.
  • She was ambiguous with regards to extending the Article 50 date, but later in questioning did not rule out an extension of the March 29 end date
  • She wants EU to work on an Irish backstop framework that would be more palatable to UK
  • In a concession to many lawmakers, she has dropped the charge that was to be levied on EU nationals who wanted to apply for settled status and was hoping that the EU would do the same

BLOCKCHAIN & CRYPTOCURRENCY NEWS

Digital Garage to Test Yen-Pegged Stablecoin on Blockstream Network

An arm of Tokyo-listed internet group Digital Garage is working with bitcoin infrastructure startup Blockstream to test the issuance of a Japanese yen-pegged stablecoin. Reportedly, Crypto Garage has launched a new platform dubbed SettleNet that would allow app development on Blockstream’s inter-exchange settlement network Liquid, including the issuance of stablecoins. The initiative, slated to last for a year, is one of the first proof-of-concept trials authorized under a regulatory sandbox program managed by the Japanese government. The project aims to let participating members – specifically, crypto exchanges licensed in Japan at this stage – test the SettleNet platform to issue the stablecoin and to provide a settlement service between the stablecoin and crypto assets. Blockstream also participated in building the platform. Liquid is a bitcoin sidechain project that went live in October. For the trial, transactions will be conducted in limited volume. Digital Garage initially collaborated with Blockstream in November 2017 with an aim of fostering blockchain development in Japan.

Japan: Regulators Approve Startup’s Bitcoin Sidechain Trial for Exchanges

Japanese blockchain development company Crypto Garage announced it had gained regulatory permission to trial its settlement system using Blockstream’s Liquid Sidechain. Crypto Garage will conduct a one-year pilot with a group of participating cryptocurrency exchanges. The product, dubbed Settlenet, uses Liquid as part of an arrangement allowing exchanges to issue yen-pegged stablecoins and trade against Liquid Bitcoin (L-BTC), Blockstream’s sidechain. The feature also makes use of so-called ‘atomic swaps,’ the ability to make cross-blockchain transactions without manually converting assets. That will enable rapid, secure and confidential transfer of the crypto assets while eradicating counterparty risk. Settlenet will provide the regulatory authorities with the functionality to monitor any unlawful trade, including money laundering. Blockstream launched Liquid as the first public, production-ready Bitcoin sidechain in October 2018.

Wyoming Bill Would Clear the Way for Crypto Custody at Banks

Wyoming may soon become the first state in the U.S. to provide clear banking permissions for cryptocurrencies and digital assets. Caitlin Long, co-founder of the Wyoming Blockchain Coalition, said that the bill is a major step forward for the state. “A lot of companies are setting up as New York trust companies … the [Wyoming proposal] is a much better license than a New York Trust license because it’s [aimed at banks] and it’s in a state that has clarified the legal status of digital assets. Those two things are equally important,” she said. “There isn’t another state that’s providing that clarity.” One of the most notable aspects of the bill is the support it has upon its introduction. The leadership of both Wyoming’s House and Senate are cosponsoring the bill, which includes members from both the Democratic and Republican parties. There had also been an alternative proposal in the works, Long explained, which would have classified cryptocurrencies similarly to securities and would have forced owners to store such assets through intermediaries.