After sanctions from the West, Russia is constantly working on creating an alternative for the international settlements, and now it seems they are at the last stage of deploying that alternative. Recently they announced that Russia will accept Bitcoin for international trade and now the gold-backed stablecoin. And nowadays the most normal thing in the crypto space, is a company filing for Chapter 11 Bankruptcy, this time it's the crypto lending giant Genesis Global. Will look into these two pieces of news in today's Crypto-Bulletin, so let's get started!
1. Russia & Iran Working on Gold-Backed Stablecoin for International Trades
We all know the west sanctioned Russia for invading Ukraine, it sorts of backfired on the US and other Western countries. As Russia is banned from the SWIFT network, which is a major network that is used for international trade, Russia needed an alternative to carrying out the international settlements. In the last week of December, we saw the Deputy Finance Minister of Russia, Alexey Moiseyev speaking of alternative solutions for international trade including the use of Bitcoin and a gold-backed solution, and they also confirmed the use of Bitcoin from 2023. Moiseyev gave the following statement regarding developing a gold-backed stablecoin:
“We offer mutually acceptable tokenized instruments that will be used on these platforms, which are essentially clearing platforms that we are currently developing with these countries. Stablecoins can be pegged to some generally recognized instruments, for example, gold, the value of which is clear and observable for all participants.”
Now looking at the conditions, Russia is not just trying to fulfill its needs of international settlements, but they are working on creating a new gold-backed stablecoin along with Iran and other friendly allies to use it in the Special Economic Zone (SEZ). If this idea is implemented, then this certainly would minimize the dependence on US Dollar and the US will lose one of the most powerful weapons which helped them in controlling the world. From the perspective of economics, if this idea of gold-backed stablecoin is implemented successfully then it won’t take long for others to join the force and re-establish the economic order!
2. Crypto Lending Giant Genesis Filed for Bankruptcy
It’s been rumored that one of the crypto giants and a leader in crypto lending, Genesis Global is preparing to file for Bankruptcy, and the rumors are confirmed and Genesis officially filed for Chapter 11 Bankruptcy. It had been reported that the company was in confidential talks with other creditors groups to get out of the liquidity crunch but seems like negotiations do not go as planned and finally Genesis Global filed a Chapter 11 Bankruptcy in Manhattan Federal Court.
This fall of Genesis came after the FTX crash, the lending unit of Genesis was showing the signs as they lay off a considerable amount of their staff and accepted the liquidity crunch. It is so crazy to see how a single bear market can crash this number of companies in the crypto space, this clearly shows how unprepared companies are in the crypto space and how reckless they are in their businesses. But the saddest part is retail investors like you and me pay that price.
Not sure how long this will take and how much they can offer back to their creditors but hope things go smoothly and retail investors of Genesis get back most of their investments. If you are one of the investors who lost in Celsius Network, FTX, or Genesis, Stay Strong!
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Thanks for reading!