Snapshot Web3

November 9, 2023

👨‍⚖️

Regulatory and Legal News

Rep. Tom Emmer proposes to defund SEC’s crusade against crypto

Rep. Tom Emmer has introduced an amendment to the House GOP spending bill, aiming to prevent the SEC from using government funds for enforcing digital asset transactions until Congress establishes jurisdiction. Emmer argues that other agencies like the Department of Justice and the Treasury can handle enforcement. This move is part of broader efforts by Republican lawmakers to reduce funding for federal agencies. The budget must be reconciled by November 17 to avoid a government shutdown. Additionally, various crypto-related bills are awaiting Congressional attention, including those focused on regulatory certainty for blockchain technology and self-custody wallets.

SEC’s first window to approve all 12 spot Bitcoin ETFs to begin today

The U.S. SEC may approve all 12 pending spot Bitcoin ETF applications between November 9 and November 17. This possibility arises from an extension the SEC granted, with November 8 as the final comment day. The approval is not guaranteed, but analysts predict a 90% chance of approval before January 10. Crypto asset manager Grayscale is reportedly in talks with the SEC regarding its application to convert its GBTC trust product into a spot Bitcoin ETF, following its court victory against the regulator. This optimism has led to a more than 30% increase in Bitcoin's price over the past three months, boosting other major assets as well.

Gemini’s Travel Rule measures reflect ‘worrying creep’ of overregulation

Gemini's compliance with the Travel Rule in the UK, restricting users to 58 registered virtual asset service providers (VASPs), is seen by a Trezor analyst as an alarming move toward overregulation. The analyst argues that this approach hinders users from exercising self-custody and goes against the principles of financial freedom and privacy associated with Bitcoin. The Travel Rule mandates VASPs to share sender and recipient information for virtual assets transactions to deter illicit activities. Critics worry about the potential overreach of regulation, potentially infringing on personal financial choices and privacy.

🚀

Innovation and Launches

Progmat stablecoin platform takes shape as wallet, liquidity providers join

Japan's Progmat Coin ecosystem, in collaboration with Mitsubishi UFJ Financial Group (MUFG) and wallet provider Ginco, is progressing toward the launch of yen-denominated (XJPY) and dollar-denominated (XUSD) stablecoins in the summer of 2024. The initiative aims to enhance the efficiency of settlements between crypto exchanges, bypassing traditional banking delays. Other participants in the project include liquidity provider Cumberland, and exchanges Bitbank and Mercoin. Progmat Coin, regulated under Japan's revised Payment Services Act, will support the issuance of "trust-type" stablecoins by trust banks. This move aligns with Japanese law, which permits only banks to issue stablecoins.

HSBC taps Ripple’s Metaco to launch security token custody

HSBC is collaborating with Ripple-owned tech firm Metaco to launch an institutional custody platform for tokenized securities, also known as security tokens. The platform, expected to roll out in 2024, will complement HSBC's existing digital asset issuance platform and offering for tokenized physical gold. This move is in response to growing demand for custody and fund administration of digital assets from asset managers and owners. The new platform will focus exclusively on security tokens and will not include cryptocurrencies or stablecoins. This initiative underscores HSBC's commitment to the development of digital asset markets.

♾️

NFT, Gaming and Metaverse

Champ Medici talks Web3 communities, NFTs, music and gaming

Cordell Broadus, also known as Champ Medici and the son of rapper Snoop Dogg, discusses the intersection of Web3, NFTs, music, and gaming. He highlights his role in bridging legacy artists and communities into the Web3 space. Broadus became a "bridge" to help artists understand the potential of digitizing their businesses. He emphasizes the importance of supporting the community beyond personal endeavors. Broadus shares the success of NFT initiatives, such as releasing Snoop songs and stems on OpenSea. He expresses the uplifting experience of witnessing collaborations between legacy artists and the community through NFTs. Broadus is now involved in Death Row Games, aiming to bring diverse creators and stories into the gaming world.

Blockchain game Illuvium goes mainstream with looming Epic Games Store listing

Illuvium, a blockchain-based game, is set to reach millions of PC and mobile gamers with its listing on the Epic Games Store, known for titles like Fortnite. Illuvium Labs, the game's developer, worked to meet the platform's standards and legal requirements. The game features three different genres within the Illuvium universe to appeal to a wider audience. Illuvium aims to remove barriers for non-Web3 gamers by eliminating the need for wallets and offering free play. This listing marks a significant milestone for the blockchain gaming industry, bridging the gap to mainstream gaming platforms.

💰

Funding

How decentralized platforms democratize crypto funding initiatives

Kriss Baird, from Cardano’s Project Catalyst, discussed the advantages of decentralized funding models over traditional ones. He emphasized that allowing communities to have a say in funding decisions leads to better outcomes. Baird acknowledged the challenge of managing diverse opinions in large, decentralized communities. Project Catalyst launched a pilot to enable community-driven funding with milestone-based accountability. Baird envisions decentralized funding becoming a multi-tenant ecosystem adopted by various blockchain networks and governments. Since 2021, Project Catalyst has funded over 1,300 projects, raising 137 million ADA (about $60 million), with plans to allocate over $100 million in the next four years.

📚

Interesting Reads

Pay and dump? How businesses accepting crypto payments influence adoption

Accepting cryptocurrency payments can potentially boost adoption, but if businesses immediately sell the received cryptocurrency back on the market, it may not significantly contribute to adoption. The essence of adoption lies in consumer willingness to transition to cryptocurrencies for their transactional needs. Studies suggest that cryptocurrency payments can attract new customers and increase sales for merchants. Third-party payment processors can facilitate cryptocurrency acceptance for businesses, but it may dilute the foundational ethos of decentralization associated with cryptocurrencies. The impact of businesses accepting crypto payments on adoption depends on various factors, including how the received cryptocurrency is managed and consumer preferences for using digital assets.

🌐

Miscellaneous

Marathon Digital sees 670% revenue gain in Q3 as Bitcoin production surges

Marathon Digital Holdings reported a 670% increase in revenue in the third quarter of 2023 compared to the same period last year. This growth was attributed to a nearly five-fold increase in Bitcoin production and a 403% boost in the company's hashrate. Marathon also announced a new 27-megawatt hydro-powered mining venture in Paraguay. The CEO stated that the progress has strengthened the company's balance sheet in preparation for the Bitcoin halving event in April 2024. The company is committed to further increasing its hashrate in the short to mid-term.

Stablecoins ‘not a safe store of value’ — BIS

The Bank for International Settlements (BIS) has criticized stablecoins, stating that they are "not a safe store of value." According to the BIS, from January 2019 to September 2023, fiat-backed stablecoins maintained their peg ratio only 94% of the time, compared to the promised 100% in white papers. Crypto-backed and commodity-backed stablecoins fared even worse, with peg ratios of 77% and 50% respectively. The BIS also warned that some stablecoin issuers do not use independent certified public accountants to audit their reserves, and those who do often do not follow a common reporting standard, leading to uncertainty about their ability to convert stablecoins at par on demand.

Liked the newsletter? Share it with your network.

The information provided in this newsletter is for informational purposes only and should not be interpreted as investment advice, endorsement, or recommendation. Cryptocurrency investments carry significant risk due to their volatility. You should consider your financial situation, investment goals, and risk tolerance before making any investments. We strongly recommend consulting a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results.