As venture capital (VC) funds squeeze the flow of money to traditional startups and invest in emerging tech like Web3.0, Binance Labs, the venture capital and incubation arm of leading cryptocurrency exchange Binance, on Wednesday announced closing of a $500 million investment fund to boost Blockchain, Web3.0 and value-building technologies.
The fund is supported by leading global institutional investors such as DST Global Partners, Breyer Capital, as well as other major private equity funds, family offices, and corporations as limited partners, Binance said in a statement.
The new fund will invest in projects that can extend the use cases of cryptocurrencies and drive the adoption of Web3.0 and Blockchain technologies.
"The goal of the newly closed investment fund is to discover and support projects and founders with the potential to build and to lead Web3 across DeFi, NFTs, gaming, Metaverse, social and more," said Changpeng Zhao 'CZ', Founder and CEO of Binance.
Since 2018, Binance Labs has invested in and incubated more than 100 projects from over 25 countries.
Its portfolio includes industry-leading projects such as 1inch, Audius, Axie Infinity, Dune Analytics, Elrond, Injective, Polygon, Optimism, The Sandbox, and STEPN.
With the new fund, Binance Labs will make investments across three different stages: incubation, early-stage venture, and late-stage growth.
Early-stage venture investments include token and equity investments across all sectors of cryptocurrency and Web3.0, including infrastructure, DeFi, NFTs, gaming, Metaverse, social, and crypto adoption platforms.
Late-stage growth investments target more mature companies looking to scale or bridge into the Web3.0 ecosystem with the Binance ecosystem as a solid strategic partner, said the company.
Earlier, US-based investment firm Andreessen Horowitz (A16Z) announced two new funds -- a massive $4.5 billion fund for crypto and Blockchain companies and Web3.0 startups and a $600 million 'Games Fund One' that is exclusively focused on the gaming industry.
A group of former executives from one of the largest cryptocurrency exchanges Binance has also reportedly created a $100 million venture fund.
Web3, or Web 3.0, represents the next generation of the Internet.
The Indian currency rupee touched yet another all-time low against the US dollar earlier this morning.
The rupee fell 14 paise to 77.69 per US dollar.
Money market participants are currently closely watching the domestic share market for clues to fund flows.
An expectation of tightening monetary policy rates in the US also weighed on the rupee as any rate hike in the advanced markets typically follows with fund outflows from the emerging markets in order to accumulate higher returns.
Rupee has been under pressure after the global central banks started the normalising policy and last week RBI too started raising key interest rates.
Besides, the rupee weakened on account of a surge in the global crude oil prices.
Shares of the much-awaited Life Insurance Corporation of India (LIC) made a weak listing on the stock exchanges on Tuesday.
The Indian insurance major listed on the stock exchanges at a discount of 8.62 per cent at Rs 867, from its Initial Public Offering (IPO) issue price of Rs 949.
The initial public offering of LIC had, however, received robust response from investors as the insurance major's offer has been subscribed 2.89 times.
It received bids for 46.77 crore equity shares against IPO size of 16.2 crore equity shares.
The portion set aside for policyholders has been subscribed 5.97 times, employees bid 4.31 times the allotted quota and retail investors 1.94 times, while the reserved portion of qualified institutional buyers has booked 2.83 times and that of non-institutional investors 2.8 times.
The long-awaited IPO for the LIC was open for subscription till May 9.
The government has brought down the issue size from 5 per cent to 3.5 per cent -- Rs 21,000 crore.
It will be a landmark public issue in the history of the Indian capital market and is poised to be India's biggest IPO till date.
The IPO values LIC at Rs 6 lakh crore.
The issue offer of the LIC was in the price band of Rs 902 to Rs 949.
Also, the policyholders were offered a Rs 60 discount, while for retail investors, the discount was at Rs 45.
The Pakistani currency depreciated by Rs 0.60 to an all-time low of Rs 188.66 against the US dollar in the interbank market on Tuesday, as looming uncertainty over the resumption of the International Monetary Fund (IMF) loan programme took a toll on the local unit, Geo News reported.
The local currency surpassed its April 7 record low of Rs 188.18.
Currency dealers believe that a delay in the IMF programme, lack of immediate financial support from friendly countries, depleting foreign exchange reserves and surging trade deficit kept the pressure on the domestic currency.
The new government's reluctance to remove subsidies on fuel and electricity -- which are the pre-conditions for the revival of the IMF programme -- dampened investors' sentiment.
Moreover, investors are concerned about the falling foreign currency reserves -- as the inflows from remittances and export proceeds are not sufficient to meet the market demand -- and growing external debt payments and soaring imports. This is putting pressure on the rupee, Geo News reported.
There is also ambiguity over the financial support from Saudi Arabia, UAE and China. The political temperature was also rising following the former Prime Minister Imran Khan's announcement that he would march with his supporters to Islamabad after May 20 to demand new elections.
Hailing the India digital payments growth story, Alphabet and Google CEO Sundar Pichai has said that the company's payments strategy is very similar to the strategy it has for commerce overall.
During the company's quarterly earnings call, Pichai said that the digital payments work in India is "certainly what really got everything started".
"We now have 150 million people across 40 countries using Google Pay. We're making sure it works across the board, works well, easy to use for all the sites. And then over time, we will innovate and build new digital experiences," Pichai said late on Tuesday.
He emphasised that the company seeks Google Pay to work smoothly, both on the merchant and the financial institution side, "and making sure they can connect with the customers well".
'We are really building for scale, building for simplicity. And then over time, we will layer on additional helpful features," Pichai added.
According to the National Payments Corporation of India (NPCI), unified payments interface (UPI) processed 5.04 billion transactions till March 29, amounting to Rs 8.88 trillion.
This was 11.5 per cent higher than the volume of transactions processed in February and 7.5 per cent higher in terms of value of transactions processed.
The Indian digital payment space is currently dominated by PhonePe, Google Pay and Paytm.
High crude oil prices combined with fears of rising inflation are expected to keep the Indian rupee under pressure, next week. Lately, the Brent crude oil price has remained elevated due to the Russian-Ukrainian war.
The price has hovered in the range of $100-$110 in the last few weeks. "Rupee has been under pressure due to rising US bond yields, inflation and high crude oil prices," said Sajal Gupta Head Fx & Rates Edelweiss.
"These circumstances are going to be tough for the Indian rupee to appreciate. Expect rupee to trade between 75.50 and 76.25 in the next week." Last week, the rupee closed at 75.90 to a greenback.
"Next week is a relatively shorter week but market participants will be keeping an eye on the inflation and industrial production number to gauge a view for the currency," said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.
"Expectation is that inflation could remain elevated following the recent rise in energy and food prices. On the other hand, industrial production could grow at a slower pace in January and could further weigh on the currency."
The Central Statistics Office (CSO) is slated to release the macro-economic data points of Index of Industrial Production (IIP), Consumer Price Index (CPI) on March 12.
On the other hand, expectations of India Inc's healthy Q4FY22 results season should attract fresh equity-focused foreign funds which might cub any sharp weakness in the Indian rupee versus the US dollar.
"Dollar index has surged past week and it is now trading near the crucial psychological mark of 100," said Devarsh Vakil, Deputy Head of Retail Research, HDFC Securities.
"Rupee is likely to consolidate next week on back of improving sentiments for equity markets. In the near term, spot USD INR is expected to trade in the range of 76.20 to 75.70. with a bias towards appreciation."
As the Reserve Bank of India (RBI) barred Paytm from taking on new customers for its Payments Bank, a new report on Thursday said that fintech platforms' dominance in digital payments may not result in significant data advantage over banks.
According to Moody's Investors Service, the introduction of the Unified Payment Interface (UPI) in 2017, which allows funds to be transferred instantaneously, has been a key catalyst to the development of digital payments due to the ease of use of apps running on the system.
"However, their dominance may not lead to significant advantages over banks, because the UPI's open architecture means that a large user base does not necessarily make a particular service provider more competitive than others on the system," said Srikanth Vadlamani, Moody's Vice President and Senior Credit Officer.
Also, banks that are playing a crucial role in facilitating UPI payments, have access to transactions on the network.
"Because of this, fintechs' dominance in digital payments may not result in a significant data advantage over banks," the report mentioned.
Large Banks, on the other hand, have significantly improved their digital capabilities for key retail services.
Private sector banks and industry leader State Bank of India have significantly improved their own digital products in other areas, with customers adopting them widely.
"This will help these banks fend off competition from fintechs outside the payment segment. On the other hand, public sector banks other than SBI have relatively weak digital offerings and will be negatively impacted from the heightened competitive intensity," the report noted.
Fintechs will continue to try to expand into other financial services, particularly personal loans and loans to small merchants.
"However, at the same time, the overall market may also expand as technology creates more opportunities, allowing banks to counter pressure on margins with business growth," the Moody's report said.
Overall, fintech payment companies in India have led the rapid growth of digital payments in the country, but their dominance may not translate to competitive advantages to expand into other financial services.
In addition, India's major banks have significantly beefed up their digital product offerings and can withstand the competition from fintech, according to the report.
There is no plan by the government to introduce cryptocurrency, the Parliament was told on Tuesday.
There is no plan to introduce a cryptocurrency and currently, it is unregulated in India, Minister of State for Finance Pankaj Chaudhary told Rajya Sabha in a written reply.
"Reserve Bank of India (RBI) does not issue cryptocurrency. Traditional paper currency is legal tender and is issued by RBI in terms of provisions of RBI Act, 1994. A digital version of traditional paper currency is called Central Bank Digital Currency (CBDC)," the minister said.
In reply to another question, the minister informed the upper house that the RBI is currently working towards a phased implementation strategy for introduction of CBDC and examining use cases that could be implemented with little or no disruption.
He stated that the introduction of CBDC has the potential to provide significant benefits such as reduced dependency on cash, higher seigniorage due to lower transaction costs, etc
The minister further informed the house that printing of notes has declined over a period of time. "During 2019-20 notes worth Rs 4,378 crore were printed, while in 2020-21, notes worth Rs 4,012 crore were printed. In 2016-17, notes worth Rs 7,965 crore were printed," he said.
India's public sector banks (PSB) are expected to achieve credit growth as well as adhere to the minimum capital requirements without any fresh capital infusion from the Centre.
According to Brickwork Ratings, in FY23, banks will be able to achieve credit growth of 8-9 per cent.
"Between FY17-FY20, the government injected Rs 3,000 billion in PSBs in order to help the banks maintain the minimum capital requirement, as well as manage huge amounts of bad assets in their books," the agency said.
"The funds not only improved the Capital to Risk weighted Assets Ratio (CRAR) of PSBs from 11.7 per cent in FY18 to 14 per cent in FY21, but also acted as a cushion for the banks against the potential shocks of the pandemic."
Notably, the Centre had further infused Rs 200 billion and Rs 150 billion in FY21 and FY22, respectively.
"There has been no further announcement of capital infusion in FY23 as per Union Budget FY23."
As part of the restructuring of the banking sector of India, Centre has merged 10 PSBs into four banks in 2021.
"This has provided a larger capital base for the banks and has reduced the need for capital infusion from the government."
Besides, the agency cited that credit growth has been anaemic over the past few years due to the economic slowdown, as well as the stressed balance sheets of banks in India.
"The Covid-19 pandemic proved to be another setback as credit growth slipped on account of huge business disruptions."
"However, with economic revival being faster than expected, credit growth for banks is expected to be around 7.5-8.5 per cent in FY22 and to further improve to 8-9 per cent in FY23."
Luxembourg's foreign minister said Friday that the 27-nation European Union was “very close to agreement” for asset freeze of Russian President Vladimir Putin and Foreign Minister Sergey Lavrov.
Jean Asselborn said before a meeting of EU foreign ministers to discuss Russian sanctions “I think we are very close to an agreement, that we will find an agreement here,” for sanctions on the two.
“There will be a discussion but I think we agree that Putin and Lavrov, as far as the freezing of assets is concerned, that we will find a consensus here,” he said.
EU leaders largely agreed it was too soon to impose a travel ban on Putin and Lavrov because negotiating channels needed to be kept open.
The world has made it clear that a military intervention in Ukraine is off the books, so most countries on Friday were throwing ever more punishment at Moscow — from financial to football sanctions — anything to force President Vladimir Putin to stop the brutal invasion of Russia's neighbour and unleash a major war in Europe.
Undeterred in the game of punitive sanctions, Russia started its own tit-for-tat measures, banning British flights to and over its territory in retaliation to a similar U.K. Ban on Aeroflot flights.
Yet with the Kremlin's eyes fully targeted on expanding the attacks on Ukraine, almost of the action was still going one way.
European Union leaders discussed until the early hours Friday any ways to hit Putin even harder than the two sets of sanctions that it already approved.
“We are hitting the regime at all levels and we are hitting it hardest,” Dutch Prime Minister Mark Rutte said early Friday.
The 27-nation bloc and other Western powers like the United States and the United Kingdom have agreed on a slew of sanction hitting everything from the banking sector to oil refineries and the defense sector.
EU foreign ministers will push the approval process further later in the day.
And just as Russia was making a pincer movement to choke Ukraine and its capital Kyiv, Western powers were implementing measures aimed at "asphyxiating Russia's economy,” in the words of French Foreign Minister Jean-Yves Le Drian.
Seeking to buttress its eastern flank, the NATO alliance was holding a virtual summit of government leaders, including US President Joe Biden, later Friday.
In terms unheard since the Cold War, threats were flying from all sides and ran through society.
In a sign of papal anger, Pope Francis went to the Russian Embassy himself to “express his concern about the war", the Vatican said. It was an extraordinary, hands-on gesture, since usually popes receive ambassadors and heads of state in the Vatican.
For Francis, the Vatican head of state, to leave the city state and travel a short distance to the Russian embassy to the Holy See was a sign of his displeasure.
The May 28 UEFA Champions League final, the Superbowl of European soccer, was stripped from St. Petersburg and replaced by Paris after the involvement of French President Emmanuel Macron. Formula One also dropped this season's Russian Grand Prix at Sochi in protest.
Action wasn't only limited to Western powers. Countries in Asia and the Pacific have joined the United States, the 27-nation European Union and others in the West in piling on punitive measures against Russian banks and leading companies.
The nations have also set up export controls aimed at starving Russia's industries and military of semiconductors and other high-tech products.
“Japan must clearly show its position that we will never tolerate any attempt to change the status quo by force,” Prime Minister Fumio Kishida told reporters Friday while announcing new punitive measures that included freezing the visas and assets of Russian groups, banks and individuals, and the suspension of shipments of semiconductors and other restricted goods to Russian military-linked organisations.
New Zealand Prime Minister Jacinda Ardern said “an unthinkable number of innocent lives could be lost because of Russia's decision,” and announced targeted travel bans against Russian officials and other measures.
Taiwan announced Friday that it would join in economic sanctions, although it did not specify what those would be. They could potentially be focused on export control of semiconductor chips, where Taiwan is the dominant producer.
While most nations in Asia rallied to support Ukraine, China has continued to denounce sanctions against Russia and blamed the United States and its allies for provoking Moscow.
Beijing, worried about US power in Asia, has increasingly aligned its foreign policy with Russia to challenge the West.
“Tthe Chinese government is following through on easing trade restrictions with Russia and that is simply unacceptable,” Australian Prime Minister Scott Morrison complained. “You don't go and throw a lifeline to Russia in the middle of a period when they're invading another country,” he added.
South Korean President Moon Jae-in said his nation will join international sanctions, but won't consider unilateral sanctions.
Indian Prime Minister Narendra Modi phoned Putin late Thursday and appealed for an “immediate cessation of violence,” his office said in a statement.
His permanent UN representative stopped short of either condemning Russia or acknowledging Ukraine's sovereignty.
The cautious statement reflects India's delicate position. It relies heavily on Russia, a historic partner, for military equipment but has sought to strengthen ties with the West over the years.
At the United Nations, officials set aside $20 million to boost UN humanitarian operations in Ukraine. Separately, the UN Security Council is expected to vote Friday on a resolution condemning Russia and demanding the immediate withdrawal of all its forces. Moscow, however, is certain to veto it.
The European Union Aviation Safety Agency extended to 200 nautical miles the airspace it considers risky, and warned of “the threat of missile launches to and from Ukraine.”
Protests by Ukrainians and their supporters were planned Friday across Asia and Europe. Public buildings, sports stadiums and landmarks in the Australia and Europe were illuminated in Ukraine's national colours of blue and yellow.
A status quo in repo rate underlines RBI's priority in supporting GDP growth amid the lingering impact of the pandemic, while additional measures for MSMEs, contact-intensive sectors and digital transactions augurs well for the overall economic health, financial market participants said on Thursday.
For the 10th time in a row, the six-member rate setting Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) kept the key repo rate unchanged at 4 per cent, mainly to support growth as well as to manage inflationary pressure.
The MPC decided, with a 5 to 1 majority, to continue the accommodative stance as long as necessary to revive and sustain growth on a durable basis and continue to mitigate the impact of COVID-19 on the economy.
The monetary policy stance of the central bank suggests that it will follow a more calibrated approach towards policy normalisation.
George Alexander Muthoot, MD, Muthoot Finance said: "We are hopeful and optimistic about broad-based economic revival in 2022 as both RBI and the government are working together to revive and sustain growth on a durable basis post the challenges posed by the pandemic. We welcome RBI's stance of enabling better infrastructure for MSME receivables and extension of on-tap liquidity window for contact-intensive sectors."
Continuing the accommodative stance means RBI and the government still want to prioritize economic recovery above all else, Sandeep Bhardwaj, CEO, Retail, IIFL Securities said.
Payments and financial technology solutions provider Euronet Worldwide's MD, India and South Asia, Pranay Jhaveri said RBI's decision to raise the e-RUPI limit to Rs 1 lakh would accelerate DBT (direct benefit transfer) dissemination by the government and allow accrual, ultimately resulting in improved welfare of the underprivileged section of the economy.
The Reserve Bank on Thursday increased the cap on the e-RUPI prepaid digital vouchers to Rs 1 lakh from Rs 10,000 and permitted its usage multiple times to facilitate digital delivery of various government schemes to the beneficiaries.
The e-RUPI is a prepaid digital voucher, developed by the National Payments Corporation of India (NPCI).
Built on UPI rails, e-RUPI removes friction, works in an offline mode, and enables the large population of people receiving DBT to grow their digital payments footprint.
RBI has also decided to raise the limit for MSME financing on TReDS platform to Rs 3 crore from Rs 1 crore.
"The increase in NACH (National Automated Clearing House) limit to Rs 3 crore is a welcome move from RBI as we receive frequent requests to handle invoices up to Rs 8-10 crore and onwards at RXIL.
"The increased limit, on the other hand, will help MSME financing because it will make it easier to submit fewer invoices given the revised limit of Rs 3 crore. We hope in the near future RBI will consider our recommendation to raise this limit to Rs 5 crore," Ketan Gaikwad, CEO and MD of RXIL (TReDS platform) said.
Arun Singh, Global Chief Economist, Dun & Bradstreet said the extension of on-tap liquidity for emergency health services and contact-intensive sectors, and increase in NACH limit for TReDS related settlements will provide some respite to MSMEs.
The status quo on repo rate will accelerate growth momentum in the economy and it remains committed to supporting sustained growth activity, Rajiv Sabharwal, MD & CEO, Tata Capital Ltd said.
"The recent spike in crude oil prices and the spillover effect on the inflation trajectory is being monitored closely by RBI. The softening in food inflation and strong agricultural output will help manage inflation within the comfort corridor of RBI," Sabharwal said.
The accommodative stance indicates that there will be no aggressive rate hikes in 2022, which is a positive for consumers, Umesh Revankar, Vice Chairman & MD, Shriram Transport Finance said.
"Any hike in rates would have impacted MSMEs which are in revival mode. Both the RBI and the government with its thrust on capital spending in the recent budget are working in tandem to revive and support broad based economic recovery," he added.
With RBI Governor Shaktikanta Das dousing fears of premature tightening and no additional MPC member voting for a stance change, a shift to a neutral stance in April 2022 appears to be ruled out, unless the CPI inflation exceeds the upper threshold of 6 per cent in both January and February 2022, Aditi Nayar, Chief Economist, ICRA said.
"MPC's forecast of a 4.3-4.5 per cent GDP growth in H2 FY2023 belies conviction in a back-ended pickup in growth driven by government and private capex," she said.
V Swaminathan, CEO, Andromeda and Apnapaisa said:"Keeping the rates unchanged is a signal that growth is being prioritised over all else. It remains to be seen what happens over the next quarter."