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states – Maine blockchain voting
A new bill titled “LD 1070: An Act to Increase Ballot Transparency with Blockchain Technology” by Maine State Senator Eric Brakey, a Republican, aims to bring blockchain to the voting process. Brakey explained on Twitter, “This bill would build upon our existing system of paper ballots — requiring the digital images of those ballots be uploaded onto a publicly viewable Blockchain. This would ensure that anyone who would like to count the votes for themselves can do so. Full transparency.” Yesterday, during a hearing of the Maine Veterans and Legal Affairs Committee which included public comment, Senator Brakey presented the legislation.
An Act to Increase Ballot Transparency with Blockchain Technology (PDF)- MaineLegislature.org
State of Maine Legislature, Summary of LD 1070 – MaineLegislature.org
states – Maine and Custodia
Another bill pulsing in the Maine Senate and also driven by State Senator Brakey is a digital assets bill “which would authorize certain financial institutions in Maine to accept virtual currency deposits while maintaining 100% in reserves,” according to new testimony submitted by crypto advocate John Deaton.” See his testimony (PDF).
The bill received a hearing from the state’s Committee on Health Coverage, Insurance and Financial Services on Tuesday and appears to echo previous legislation from Wyoming on Special Purpose Depository Institutions (SPDI).
The Federal Reserve’s recent rejections of Custodia Bank’s master account and member bank applications centers on Custodia’s SPDI status received in October 2020. Read a brief summary from law firm Poyner Spruill.
An Act to Authorize State Special Purpose Depository Institutions
for Digital Assets (PDF) – MaineLegislature.org
State of Maine Legislature, Summary of LD 990 – MaineLegislature.org
Post-hearing, Deaton expressed resignation that it’s still “early” in crypto given the beginner-level questions asked by Maine lawmakers. – “Thinking Crypto” podcast
states – Texas mining incentives
A Texas Senate committee has pushed forward a bill which will remove incentives in the state for crypto miners to turn off their rigs during periods of high energy usage. Miners had been flocking to the state due to its competitive energy prices. “However, the tide started to turn for the industry around the summer 2022 as the Texas grid operator slowed approvals for new facilities due to influx of miners,” notes CoinDesk. Read more. The new bill would not take effect until September 1 if it makes into law.
The bill is sponsored by three Republicans. Among them is Texas State Senator Lois Kolkhorst who explained to CBS News in Austin, “[Texas is] trying to produce all this new power. We’re going to have a lot of this new power taken up by virtual currency mining. And then we’re going to pay them to go off the grid at different times, which I believe is a part of their business model.” Read that one.
SB 1751 – Bill History – Relating to the regulation and tax treatment of facilities in the ERCOT power region that demand a large load of interruptible power. – Texas.gov
Senate Bill No. 1751 (PDF) – Texas.gov
Sen. Bill Hagerty (R, TN) chose the calm waters of a Congressional recess to unleash a tweet thread yesterday on the Biden Administration and its treatment of crypto. Referring to his questioning of witnesses at a Senate Banking Hearing in December regarding Binance, Hagerty tweeted, “The uncertainty created by the Biden Administration’s hostility to crypto has only benefited companies like Binance and prevented American champions from emerging.” Read the thread.
mind the international gap
In a nod to the New York City subway system, Elizabeth McCaul, a member of the Supervisory Board of the European Central Bank, pens “Mind the gap: we need better oversight of crypto activities.”
In the wake of crypto exchange FTX, McCaul is concerned about a gap in regulation and concludes, “The [European Banking Authority] and European Securities and Markets Authority should set up mechanisms for effective cross-border cooperation to ensure there is a sound basis for home-host supervision on which international banking is built. In addition, the requirement to establish intermediate parent undertakings should be extended to [crypto-asset service providers] to remove opportunities for regulatory arbitrage, such as the exposure limits under the [Basel Committee on Banking Supervision] standard on crypto-assets.” Read it.
McCaul has experience across public and private banking including as Superintendent of New York Department of Financial Services (NYDFS) and at Goldman Sachs- more here.
blockchain for ID
An updated paper from the Congressional Research Service (CRS) titled “Challenges with Identifying Minors Online” notes how states are exploring the digital IDs for individuals. “Some firms are using blockchain technologies to identify users, such as for digital wallets and for individuals’ health credentials. However, a uniform national digital ID system does not exist in the United States. Creating such a system could raise privacy and security concerns, and policymakers would need to determine who would be responsible for creating and maintaining the system, and verifying the information on it…” Read it (PDF).
fragility of safe assets
A new working paper titled “The Fragility of Safe Assets” has been published by U.S. Treasury’s Office of Financial Research. In a blog post summarizing their research which is on the market crash in March 2020, Thomas Eisenbach of Federal Reserve Bank of New York and Gregory Phelan of Williams College explain, “When the market is fragile, standard fight-to-safety can have a destabilizing effect and trigger a ‘dash for cash’ by liquidity investors. Well-designed policy interventions can reduce market fragility ex ante and restore orderly functioning ex post.” Read more.
Smart contracts for TradFi? Not yet. This is non-crypto research and a deep dive on market earthquakes which could mix with the capabilities of distributed ledger technology and blockchain in the future.
Working Paper: Fragility of Safe Asset Markets (PDF) – Office of Financial Research
Bob Lee, creator of Block’s CashApp and chief product officer of MobileCoin, stabbed to death – TechCrunch
Regulator Turf War Heats Up Ahead of Ethereum Shanghai Upgrade (subscription) – Bloomberg
State regulators target AI scams as investment surges (subscription) – Politico
What Regulators Still Don’t Get About Crypto – Five classic crypto misconceptions, refuted – Bankless Daily Brief
Winners and Losers of the Stablecoin Shakeout (subscription) – The Information’s Crypto Global
Earnings Report: “Increased Bitcoin Production 21% Month-Over-Month, Producing a Record 825 BTC in March 2023 and a Record 2,195 BTC in Q1 2023” – Marathon Digital Holdings
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