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Now every interested user has a chance to leave their mark on a crypto bill that could define the industry guidelines in the United States in the near future, the Responsible Financial Innovation Act (RFIA). The document was uploaded on GitHub, a platform populated by software and product experts, by its co-sponsors to get public feedback.
On Wednesday, June 22, Senators Cynthia Lummis and Kirsten Gillibrand uploaded the full content of their Responsible Financial Innovation Act on GitHub. As Lummis’ representatives commented:
“The senators seek comments from industry stakeholders, consumers and interested parties to ensure that this landmark legislation reflects the innovative nature of the industry it regulates, while also adding confidence, trust and stability for consumers.”
By the press time, there are six commentaries available on the act page, with some of them being more of a solitary battle-cry (“Taxation is theft”), while others suggesting debatable edits to the document.
A user called Stduey explains why Bitcoin is different and should not be included with risky “assets” due to its “absolute scarcity” feature. In his opinion, that makes a case for an absolutely separate bill for Bitcoin:
“If you buy 5,000 satoshis for $1, you will have 5,000/2.1 quadrillion satoshis, forever, and no one can change that. People cannot understand the magnitude of this yet but this subtle difference is what separates Bitcoin from every other crypto, fiat, precious metal, and commodity.”
Another commentator, savage1r, elaborates on the inconsistency of the current framework in regard to airdrops — it ties the taxable value of coins to its entry price, which might be significantly higher than at the cash-out phase:
“Airdrop receivers should only have to pay short or long term taxes on the coins they cash out assuming the initial value is $0 because they do not realize the gains until they trade or sell.”
The highly awaited RFIA was introduced in the U.S. Senate on June 7. There is a broad consensus among the community that the bill is favorable to crypto.
ANZ’s stablecoin A$DC has been used to buy Australian tokenized carbon credits, marking another critical test of the asset’s use cases in the local economy.
In March, the “Big Four” bank became the first major Australian financial institution to mint its own stablecoin after overseeing a pilot transaction worth 30 million AUD ($20.76 million) between Victor Smorgon Group and digital asset manager Zerocap.
ANZ’s stablecoin is fully collateralized by Australian dollars (AUD) held in the bank’s managed reserved account. So far, A$DC transactions have primarily been conducted over the Ethereum blockchain.
According to a June 27 report from the Australian Financial Review (AFR), the latest transaction saw its long-time institutional partner Victor Smorgon use A$DC to purchase Australian Carbon Credit Units (ACCUs).
The carbon credits were tokenized and provided by BetaCarbon, a blockchain-based carbon trading platform that issues digital security assets dubbed “BCAUs,” which represent one kilogram of carbon offsets per credit.
The transaction also saw participation from Zerocap again, who provided market-making services and liquidity by exchanging the A$DC sent from Victor Smorgon into USD Coin (USDC) so that BetaCarbon could accept the deal. The value of the transaction has not been specified, however.
In terms of the bank’s outlook on the crypto/blockchain sector, ANZ’s banking services portfolio lead Nigel Dobson told the AFR that the firm is looking at blockchain tech as a means of “pursuing the transition of financial market infrastructure” and is not necessarily interested in speculative crypto assets themselves.
“We see this is evolving from being internet-protocol based to one of ‘tokenized’ protocols. We think the underlying infrastructure – efficient, secure, public blockchains – will facilitate transactions, both ones we understand today and new ones that will be more efficient.”
Dobson echoed similar sentiments at the Chainalysis Links event in Sydney on June 21, noting that ANZ promptly “banned the word crypto immediately in all of our internal communications and narrative” when it started exploring blockchain tech a few years ago.
He went on to add that the bank has explored multiple use cases for blockchain tech, such as supply chain tracking and providing on-ramps via stablecoins for institutions to invest in digital assets. However, Dobson suggested that tokenized carbon credits were a key area that the bank has been gearing up for:
“Another area where we have a strong position in terms of sustainability is where we feel the tokenization of carbon credits and marketplaces driven by tokenized assets and tokenized value exchange will be really efficient.”
At the start of this month, ANZ ruled out offering any crypto exposure to retail investors due to their lack of financial literacy.
Maile Carnegie, an executive for retail banking, noted at the Australian Financial Review Banking Summit that “the vast majority of them don’t understand really basic financial well-being concepts.”
Various prominent Bitcoin experts, including Adam Back, Jimmy Song and Andreas Antonopoulos, have raised some concerns over the implementation of restrictive covenants, in particular with the BIP119.
In particular, Antonopoulos has voiced concerns over “recursive covenants” that the new update could convey, thereby deteriorating the network. A recursive covenant occurs when a programmer restricts a transaction, but he does it in a way that restricts another transaction after that, starting a domino effect resulting in future limitless recursive covenants.
While locking up where a Bitcoin can be spent is advantageous to ensure more security, it also provides grounds for censorship, and control by governments, which would hinder the very existence of Bitcoin. Authorities could potentially force exchanges to withdraw only to covenants with some control over the coin.
While this same risk already exists, since governments can ask exchanges to send only to addresses with a taproot spend path or multi-sig controlled by them, could the implementation of covenants facilitate malicious purposes where it would make it easier for governments to enforce a sort of on-chain KYC?
Covenants might interfere with Bitcoin’s fungibility — the ability of each Bitcoin to be identical in function and quality.
While useful for security and scalability, covenants would change the properties of specific Bitcoin units, essentially creating different types of digital currency, distinct according to what could be spent or where it could be sent.
As a result, those who oppose the change argued that limiting how you can spend your Bitcoin would ultimately limit Bitcoin’s use as a digital currency, with inevitable consequences in its value.
There are strong opinions on covenants’ pros and cons; however, debates are healthy and necessary to improve a decentralized and leaderless network. Ultimately, the final decision will be down to the users and node operators who will download the software that better reflects their viewpoint.
Tether, the blockchain-enabled stablecoin platform, today has announced that it will be launching Tether tokens (GBP₮) pegged to the British Pound Sterling in early July.
Initial blockchain support will include Ethereum.
The newly launched GBP₮ will join four other fiat-currency pegged tokens Tether has in the market: the U.S. dollar-pegged USD₮, the Euro-pegged EUR₮, the offshore Chinese Yuan-pegged CNH₮, as well as the recently launched MXN₮, the Mexican Peso-pegged stablecoin.
British Pounds on the blockchain via GBP₮ will provide a faster, less costly option for asset transfers. GBP₮ will be built by the team of developers behind Tether USD₮ and operate under tether.to.
In April of this year, The UK Treasury announced plans to make the country a global crypto hub.
According to its website, the government will also make moves to see stablecoins recognized as a valid form of payment. This initiative, paired with hundreds of millions of people using crypto around the world, makes the United Kingdom a prime location for the next wave of industry innovation.
“We hope to help lead this innovation by providing crypto users worldwide with access to a GBP-denominated stablecoin issued by the largest stablecoin issuer. Tether is ready and willing to work with UK regulators to make this goal a reality and looks forward to the continued adoption of Tether stablecoins.”
– Paolo Ardoino, CTO of Tether
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