Mining Impacting Energy Prices, Environment Says NY Times; China’s Blockchain Platform

Mining in focus

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mining – under the microscope

In a 5,000 word article, The New York Times takes a critical look at Bitcoin mining and identifies 34 Bitcoin mining operations across the United States which it says is putting “immense pressure on the power grid and most finding novel ways to profit from doing so. Their operations can create costs – including higher electricity bills and enormous carbon pollution – for everyone around them, most of whom have nothing to do with Bitcoin.” Read more.

Ben Hertz-Shargel of energy research firm Wood Mackenzie which helps aggregate data for the NYT’s piece says that bitcoin mining is a “a massive financial burden to Texans.” It was only two years ago, in April 2021, that Wood Mackenzie penned “How bitcoin mining can support the energy transition.”

The article’s critique leans more toward additional cost burdens absorbed by consumers adjacent to crypto mining operations versus criticism of mining’s environmental impact. But, both are featured.

more tips:

It would not be surprising to see Senator Elizabeth Warren (D, MA) use the substance of this article to reignite her criticism of bitcoin mining. See her July 2022 letter to the Environmental Protection Agency (EPA) and the Secretary of Energy which raised concerns about mining operations’ environmental impact. Continue reading “Mining Impacting Energy Prices, Environment Says NY Times; China’s Blockchain Platform”

FedNow Is Not A Cash Replacement Or CBDC Says The Fed

FedNow and Cash and CBDCs

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FedNow and CBDCs

The U.S. Federal Reserve slid out an “FAQ” on Friday regarding its new FedNow payment system. Among the brief series of questions and answers, the Fed tries to debunk the idea that FedNow is replacing cash or has anything to do with a Central Bank Digital Currency (CBDC). It’s an “instant payment system” launching this July.

In the FAQ, the Fed reiterates previous statements on its CBDC strategy saying, “The Federal Reserve has made no decision on issuing a [CBDC] and would not do so without clear support from Congress and the executive branch, ideally in the form of a specific authorizing law. A CBDC would not replace cash or other payment options.” Read the FAQ.

Circle’s Head of Global Policy Dante Disparte tweeted about the FAQ saying it was “a useful myth busting FAQ from the @federalreserve.” Read more.

Meanwhile, on the Unchained podcast last week, Majority Whip Rep. Tom Emmer (R, MN) remains skeptical about FedNow and CBDCs. On FedNow, Emmer said, “Let the private sector do this stuff. This  is our government once again trying to compete with the private sector. This is our government once again, I believe, controlling all finance. You control the money, you control the water -and you control the people. This is literally what defines our freedom, our financial system in our country – our ability to create an idea and then go out and solicit startup  capital. By the way, I should not need my government’s permission or oversight to go out and seek that. That’s the definition of freedom in this country.” Hear the podcast. Continue reading “FedNow Is Not A Cash Replacement Or CBDC Says The Fed”

New US Treasury Report On DeFi Risk Assessment; India Scaling CBDC

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dark DeFi report

A new publication released Friday from the U.S. Treasury takes a dark look at  Decentralized Finance or DeFi. Touting itself as “the first illicit finance risk assessment conducted on decentralized finance (DeFi) in the world,” Treasury’s press release on the report tries to tackle a definition of DeFi saying, “…the term broadly refers to virtual asset protocols and services that purport to allow some form of automated peer-to-peer transactions, often through use of self-executing code known as ‘smart contracts’ based on blockchain technology. This term is frequently used loosely by the private sector, often for services that are not functionally decentralized.” Read the release.

Get the report: Illicit Finance Risk Assessment of Decentralized Finance (PDF) – U.S. Treasury

The 42-page report lists 6 recommendations to address the threat it sees with decentralized finance:

    • Strengthen U.S. AML/CFT (Anti-Money Laundering/Countering the Financing of Terrorism)  Supervision of Virtual Asset Activities
    • Assess Possible Enhancements to the U.S. AML/CFT Regulatory Regime as Applied to DeFi Services
    • Continue Research, Private Sector Engagement to Support Understanding of Developments in DeFi Ecosystem
    • Continue to Engage with Foreign Partners
    • Advocate for Cyber Resilience in Virtual Asset Firms, Testing of Code, and Robust Threat Information Sharing
    • Promote Responsible Innovation of Mitigation Measures

more tips:

“THIS IS WHY Biden Admin’s anti-crypto strategy to push crypto into the shadows makes no sense: They want compliance w/ AML/CFT laws, but crypto is just code–so compliance can only be assured at the very connection points that they’re actively choking.” – Caitlin Long, CEO, Custodia on Twitter

TradFi, CeFi, DeFi: A Balance Sheet Journey Through Financial Alchemy – Gordon Liao, Chief Economist, Circle

Continue reading “New US Treasury Report On DeFi Risk Assessment; India Scaling CBDC”

Maine Ramps Up Blockchain Legislation; Senator Hagerty Blames Biden Administration

states & blockchain

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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.

more tips:

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. Continue reading “Maine Ramps Up Blockchain Legislation; Senator Hagerty Blames Biden Administration”

Crypto Rulemaking Requires Crypto Ownership Says Former US Treasury Undersecretary

owning is knowing

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Congress needs digital assets

On the World of DaaS podcast, former Undersecretary of the U.S. Treasury for Terrorism and Financial Intelligence Sigal Mandelker discusses crypto’s transformative potential and crypto rule-making challenges in the U.S. government today.

Mandelker believes a hurdle for effective crypto legislation is the inability for members of government to own and interact with crypto technology due to current laws. She says, “[In] order to make smart rules about this particular set of problems, people in the government need to understand what the h*ll this is. And there are massive restrictions today that are ethical restrictions that completely block the ability of the people who have to make the decisions to actually interact with the technology. It’s crazy.”

Mandelker continues, “If you’re in any kind of policy role overseeing crypto, you can’t actually go online and see what Solana is, you can’t send Bitcoin, you can’t have Bitcoin. (…) The rules are massively onerous. (…) People in the government today who are making policy/regulatory decisions about crypto can’t own it/access it.” She worries that this will lead to the United States “disadvantaging itself globally.” Hear more.

Mandelker is a part of Ribbit Capital, a fintech and crypto investment firm.

digital assets help

Bermuda publication The Royal Gazette reports that Bermuda Premier David Burt “used his first official visit to Washington DC since before the Covid pandemic to discuss Bermuda’s digital asset industry ambitions.”

Continue reading “Crypto Rulemaking Requires Crypto Ownership Says Former US Treasury Undersecretary”

Foreign Service Sees Web3 Threat For U.S.; Senator Warren’s Anti-Crypto Army

Web3 Japan

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Web3 foreign service

A Foreign Service Officer named Brandon Poussin who works at the U.S. embassy in Tokyo reached out to Politico about its February coverage of Web3 momentum in Japan and the country’s desire to become a “Web3 leader.”  “Possin believes that countries like Japan are wise to embrace it and that the U.S. government — too focused on the risks and scams that plague existing crypto applications — is missing the bigger blockchain picture,” reports Politico’s Ben Schreckinger. Read more.

anti-crypto army

Senator Elizabeth Warren (D, MA) has come out with a new ad for her campaign which promotes joining the “anti-crypto army.” Bitcoin.com reports on her campaign as well as her appearance on “Meet The Press.” CBDCs appear to be of interest to the Senator: “During her interview with [NBC’s Chuck] Todd, she expressed her belief that, while banks are not perfect, it is time for the government to move towards a central bank digital currency.” Read more.

Cointelegraph covers two crypto-sponsored surveys which say voters do not agree with the Senator about her position crypto. Read that one, too.
Continue reading “Foreign Service Sees Web3 Threat For U.S.; Senator Warren’s Anti-Crypto Army”

ChatGPT Q&A: 100 Use Cases for Blockchain, U.S. Digital Assets Legislation, Most Effective Regulator and More

ChatGPT

Will artificial intelligence someday solve our legislation and regulatory roadblocks? “ChatGPT, can you please make the perfect legislation? -or create the perfect regulatory approach in the United States?”

blockchain tipsheet decided to take artificial intelligence (AI) chatbot ChatGPT for a spin and asked four questions today:

What are 100 use cases for blockchain technology?

What regulation is needed for digital assets in the United States that can be passed quickly?

What is the optimal federal regulatory agency for digital assets in the United States? Or, should the United States create a new federal regulatory agency for digital assets?

Who is the most effective, current commissioner of the CFTC or SEC?

The answers may not have been perfect – there is a repetition on “insurance” and “loyalty”-related use cases, for example – but ChatGPT is thought-provoking at a minimum, articulate, unwilling to share opinion and sometimes wrong.

The second question about legislation and “passed quickly” attempts to press ChatGPT to apply some critical thinking around the complexity of getting legislation passed by both houses of Congress, let alone the President’s signature. ChatGPT seems to be unaware of the very latest legislation – such as coming stablecoin legislation from Rep. Patrick McHenry (R, NC) and Rep. Maxine Waters (D, CA) – by mentioning a rarely-discussed bill from 2021… or is it trying to tell us something?

Let’s begin:

blockchain tipsheet: What are 100 use cases for blockchain technology?

ChatGPT: There are numerous use cases for blockchain technology across various industries, here are 100 examples:

1. Digital Identity Management
2. Voting Systems
3. Supply Chain Management
4. Gaming
5. Copyright Protection
6. Real Estate Management
7. Health Records Management
8. Personal Data Management
9. Digital Asset Management
10. Social Networking
11. Smart Contracts
12. Crowdfunding
13. Insurance Claims Processing
14. Tax Compliance
15. Energy Trading
16. Charity Fundraising
17. Online Payments and Remittances Continue reading “ChatGPT Q&A: 100 Use Cases for Blockchain, U.S. Digital Assets Legislation, Most Effective Regulator and More”

New Self-Regulatory Organization Rules for Digital Assets; CFTC Applauds NFA Initiative

SRO

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SRO for digital assets

Does the digital assets industry need a self-regulatory organization (SRO) to ignite its future amid aggressive enforcement and legislative inaction in the United States?

The National Futures Association (NFA) appears to be doing its part with new rules on digital assets for its derivative industry members. In a press release, NFA announces that it “recently adopted NFA Compliance Rule 2-51, which imposes anti-fraud, just and equitable principles of trade, and supervision requirements on NFA Members and Associates that engage in digital asset commodity activities. The Rule’s scope is currently limited to Bitcoin and Ether.” Read the release.

Commodity Futures Trading Commission (CFTC) Commissioner Caroline Pham applauded NFA’s initiative. “It’s critical to have an effective SRO like the NFA as a partner in the CFTC’s mission. I commend NFA for taking action now on spot digital asset commodity markets, including Bitcoin & Ether, to protect retail with this anti-fraud, conduct, disclosure & supervision rule,” tweeted Commissioner Pham on Friday afternoon.

more tips:

Rule 2-51. Requirements for Members and Associates Engaged in Activities Involving Digital Asset Commodities – National Futures Association

Statement of Commissioner Caroline D. Pham Regarding NFA Rule on Spot Digital Asset Commodity Activities – CFTC.gov

Self-Regulatory Organization (SRO): Definition and Examples – Investopedia

Continue reading “New Self-Regulatory Organization Rules for Digital Assets; CFTC Applauds NFA Initiative”