Category: Infrastructure

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Google, Oracle and Microsoft Have Web3 Plans

INTEROP Summit

As part of the buildup to last weekend’s ETHDenver Ethereum ecosystem conference, a “satellite “conference titled INTEROP took place on February 27-28. Produced by Axelar, a cross-chain infrastructure provider,  the conference’s main focus was the Web3 developer community.

And developers are arguably what drew some of the biggest technology companies in the world who showed up to tout their Web3 wares – particularly as it relates to the cloud – including Google, Oracle and Microsoft.

The “elephant” that was not in the room: Amazon.

Below is a selection on each company’s positioning in Web3 according to their participants at INTEROP. (edited for clarity and brevity)

Rich Widmann, Global Head of Strategy, Web3, Google Cloud

“Our goal at Google Cloud is to be the default space for developers to build in Web3. I think a lot of the pain points that that we’ve observed over the last three to four years really happen at that developer level. It’s starting companies; it’s getting familiar with on-chain data; it’s standing up the infrastructure (RPC nodes, validators, etc.); and then there’s a whole host of other issues that relate to storage.”

“If you think about how to get and scale horizontally your node infrastructure – we actually just saw this this weekend with one of the [recent Solana] outages . One of the difficulties was pulling snapshots of the full ledger in order to update validators to get them back up and running and in consensus.”
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Rep. Krishnamoorthi Makes Case for ‘Seat at the Table’ of Crypto Legislation

Rep. Raja Krishnamoorthi (D, IL), who represents Illinois’ 8th Congressional District – a large part of the northwest suburbs of Chicago, asked on August 30 that key financial regulators and digital asset exchanges turn around by Monday, September 12, what they are doing to prevent fraud in the crypto markets.

Another letter from Congress, another deadline unfulfilled?

What it means

Federal agencies may need to prioritize their responses given the expected delivery of reports pertaining to the President’s Executive Order on blockchain technology and cryptocurrency this coming week. For executives at the exchanges, it could be an opportunity to connect with a pro-blockchain industry congressman. Krishnamoorthi is a member of the bipartisan Congressional Blockchain Caucus.

Also, with fall elections ahead and a potential for House committee chairmanships flipping from Democrat to Republican, this may be an effort by Krishnamoorthi to use his perch as Chair of the Subcommittee on Economic and Consumer Policy while he’s got it.

Last but not least, the timing of the release – the week before Labor Day Weekend – helped amplify coverage during a notoriously slow news week and perhaps reinforced the congressman’s goal of having a “seat at the table” in future distributed ledger technology regulation discussions.

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The New ‘American Data Privacy and Protection Act’ and Blockchain Technology

American Data Privacy and Protection Act

To be clear – there is no mention of blockchain technology and cryptocurrency in the new American Data Privacy and Protection Act (ADPPA). But, with its introduction, it may raise the question for some of when/where privacy can be a part of the blockchain discussion.

A track of content at last Saturday’s crypto conference Consensus 2022 in Austin, Texas said it “all” with its title: “Can We Solve Privacy?”

Later in the day, Carole House, Director for Cybersecurity and Secure Digital Innovation for the White House National Security Council, told the audience she is hopeful that one day uniform KYC AML (Know-Your-Customer Anti-Money-Laundering) crypto rules can be applied globally for financial transactions – an application at the opposite end of privacy. Yet, she also indicated that consumer privacy is a conundrum that needs to be solved for today’s blockchain tech.

Similar to recent blockchain policy efforts such as the Responsible Financial Innovation Act in the Senate and the Digital Commodity Exchange Act in the House, creating a “a strong national framework” – and this time for a national government data privacy policy – is taking centerstage this week with hearings for the ADPPA.

The bill was released as a draft on June 3:
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In Wake Of FASB Decision, Taxes And Compliance Take Centerstage With DeFi

IRS Taxes and Reporting

Tax reporting, compliance and DeFi, oh my!

Two weeks ago, The Financial Accounting Standards Board (FASB) agreed to take up a new review of accounting and disclosure standards for digital assets. The blockchain industry hailed it as a needed addition to FASB’s “technical agenda” and an indication of further acceptance of what the standards board calls “plain vanilla” cryptocurrencies – Bitcoin and Ether.

At last week’s Permissionless conference, Miles Fuller, a former IRS employee and current Head of Government Solutions for TaxBit, echoed industry frustration with today’s reporting standards saying in a discussion with Chamber of Digital Commerce’s Perianne Boring, “You need your balance sheet to be a full reflection of reality.”

As late as October 0f 2020, the not-for-profit accounting standards board, which guides all publicly traded companies such as digital asset holders Tesla and MicroStrategy, said that if the value of Bitcoin goes down, for example, a company must record the decrease in assets on its balance sheet on an annual basis. But if it goes up, the same companies only get to record a gain if the assets are sold.

TaxBit’s Fuller expanded the reporting pain point to the IRS and its intersection with decentralized finance (DeFi) noting how – as a former insider at the IRS – the agency was close to providing guidance to consumers on tax compliance with digital assets, but then Congress got in the way. Fuller added, “Sometimes I hear people put the onus on the IRS, but it’s Congress – the IRS is just trying to administer it.”

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Treasury Secretary Yellen’s Annual Testimony on International Financial System (VIDEO)

The Annual Testimony of the Secretary of the Treasury on the State of the International Financial System

Time: Wednesday, April 6, 10am ET

House Financial Services Committee Memorandum here:

“The International Financial Institutions Act (22 U.S.C. §262r-4) requires the Secretary of Treasury to present testimony annually before the House Financial Services Committee on the state of the international financial system and U.S. priorities with respect to U.S. participation in the international financial institutions. The Secretary of the Treasury will also discuss other issues related to U.S. global economic cooperation and major international developments affecting the U.S., including Treasury’s role in implementing and enforcing sanctions against Russia.”

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Banque de France on the Central Bank CBDC and Privacy

Banque de France CBDC

Today’s presentation to the Blockchain NYC Meetup group reviewed the Banque de France‘s recent research on a Euro approach to a central bank digital currency (CBDC). Though still a couple of years away – at best – according to the Banque’s representatives, the central bank’s many moving parts offer opportunity with distributed ledger technology (DLT) and blockchain.

Where CBDC product development mixes with privacy was a topic in the Q&A section of the presentation.

Light editing for clarity…

Jamiel Sheikh, Blockchain NYC meetup moderator

[A question from a professor], and this may be applicable to retail CBDC, how will Bank of France design of CBDC affect consumer privacy? How [do you] address the trade off between protecting consumer privacy and mitigating risks to financial integrity?

Adeline Bachellerie, Head of Digital Currency and Innovation, Banque de France

Your quick question if I understand right is about retail CBDC here. So yes, as you know, we are working within Euro system on the Investigation Phase for [muffled, perhaps “exterior”] which could be Central Bank digital money for retail purposes. So, we do that work in this investigation phase on CBDC for wholesale purposes.

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