Crypto Guides, Knowledge & Insights

Higher Taxes and More Regulation: What’s in Store for Bitcoin in 2021?

As the crypto industry inches closer to the $2 trillion market cap mark, its refreshed hype cycle is all but certain to capture the attention of regulators.　　Coming on the heels of a global pandemic, which sent global markets into a tailspin, 2021 has ushered in a Democrat led administration, the rollout of the long anticipated COVID-19 vaccine, and skyrocketing bitcoin (BTC) prices.　　While many crypto enthusiasts love the crypto markets “wild-west” nature, a turbulent season of increased regulation and taxation will certainly be a growing pain for the industry.　　IRS sets a trap　　As Benjamin Franklin famously said, “The only two certainties in life are death and taxes.” Without letting its reputation precede itself, it shouldn‘t be any surprise to see the Internal Revenue Service (IRS) take a more proactive role in carving out its share of profits from bitcoin’s explosive growth.　　It was recently reported that the IRS could be setting its sights on as much as $40 billion in revenue from crypto alone — enough to make up 5% of its total gap of revenue lost due to the pandemic — assuming a 50% compliance rate at a market cap of $830 billion.　　The market cap has since doubled, meaning that, with full

2021-04-01Deep Dive

Swiss startup launches tokenized grain trading pilot

Tokenization of real-world commodities could drastically reduce trading costs, says one Swiss startup as it pilots a new non-fungible token system.　　A Swiss agricultural startup has piloted the use of a non-fungible token for cutting down the costs of trading grain. The system implemented by Swiss firm Cerealia SA sees the tokens reportedly backed by 30,000 metric tons of Mexican white corn.　　Although the Cerealia platform only facilitates two-way deals at the time being, an upcoming addition will allow for third-parties to trade and speculate on grain deals using the token. A digital system naturally reduces the costs incurred by grain traders in executing deals, such as storage fees, while reducing the onus on paperwork.　　The tokens were reportedly used by Mexican firm Mercanta, representing grain it had stored at a local warehouse. Other grain holders and trade houses can issue their own version of the token, which can then trade on Cerealias platform while acting as a marker for actual grain held.　　Cerealia chief operating officer Filipe Pohlmann Gonzaga said the tokenized system could open up digital grain trading to the likes of banks, hedge funds and other investors, without them having to take physical delivery of the grain.　　Cerealia has reportedly attracted buying

2021-04-01Deep Dive

Tether Is Trying to Be More Transparent. But Questions Linger

Yesterday, stablecoin issuer Tether released an attestation regarding its reserves—the amount of assets that “back” each coin.　　It‘s the first such attestation from Tether in years, and it hasn’t exactly reassured the skeptics.　　According to the document—which consists of Tethers own report, plus a statement from a small Cayman Islands accounting firm called Moore Cayman—as of February 28, Tether had around $35.3 billion in assets and $35.2 billion in liabilities. $35.1 billion of those liabilities “relate[d] to digital tokens issued,” which is to say they were backing the Tethers in circulation at that time.　　It‘s a gesture toward transparency from a company that’s faced intense scrutiny for its evasiveness in the past. The New York State Attorney General‘s office recently concluded its long-running probe into Tether’s operations and fined the company $18.5 million as part of a settlement agreement.　　The new document isn‘t nothing, but it doesn’t mean there arent any outstanding questions.　　Just February 28？　　According to the attestation, Tether had $35.3 billion on February 28, supporting the $35 billion in Tether circulating at that time. But what about before the 28th？　　As part of its investigation into Tether, the New York AG‘s office determined that a previous “transparency update” regarding Tether’s reserves was “misleading”—the note

2021-04-01Deep Dive

Spain Is 'Close' to Regulating Crypto-Related Ads in the Streets, Says CNMV President

Spanish financial authorities don‘t seem to be happy with the massive crypto-related advertising campaigns deployed across Madrid’s streets. The National Securities Market Commission (CNMV) is rushing to approve a regulation on such ads that promote bitcoin in Spain.　　Proposal Comes in the Wake of a Bitcoin Advertising Campaign Ran by a Local Exchange　　During a speech at the “Observatory of Finance” conference hosted by El Español, Rodrigo Buenaventura, CNMV president, was vocal on his stance against these ads, considering them “risky.” He referred to all crypto-related advertising, rather than just only promoting bitcoin (BTC).　　Although, he didnt mention specifically the reasons behind the sudden interest in regulating crypto advertising on streets, it came just after a local crypto exchange, Bit2me, deployed a massive campaign promoting bitcoin in Madrid.　　In fact, the firm put over 800 posters across the Spanish capital city, and some of them very close to the CNMV headquarters. Buenaventura mentioned how the regulations approval would be handled:　　We will conduct a broad public consultation, consult our advisory committee, and submit it to the Council of State before approval. It is also necessary to emphasize that what is controlled by the CNMV are not the assets (cryptocurrencies) or the providers or the operations,

2021-04-01Deep Dive

South Korea to launch blockchain-based vaccine passports

South Korea will introduce blockchain-powered vaccine passports via a smartphone app later this month, the countrys prime minister said Thursday.　　South Korea is joining a number of other nations in introducing vaccine certificates that enable cross-border travel while mitigating the risk of infections.　　Prime Minister Chung Sye-kyun suggested there could be substantial benefits for citizens at home too:　　“The introduction of a vaccine passport or ‘Green Pass’ will only allow those who have been vaccinated to experience the recovery to their daily lives,” he said during a daily inter-agency pandemic response meeting.　　The government developed the app using blockchain technology as a way to provide security against the possibility of identity theft. “[Systems] in other countries also do not store personal information while allowing the verification of vaccination statuses,” Chung noted.　　While 77,000 people have been vaccinated against COVID-19 in South Korea so far, the country saw another 551 daily cases on Wednesday. The Government hopes to have vaccinated 12 million people by June.　　Brazil is also using a blockchain-based system to track vaccinations, while IBM helped New York develop the Excelsior Pass, which uses blockchain technology for information security. The New York state government said of the pass:　　“Businesses and venues can scan and validate your

2021-04-01Deep Dive

Terra Virtua releases ‘Godzilla vs. Kong’ NFTs to coincide with movie release

Nonfungible tokens, or NFTs, seem to be popping up everywhere lately — so, why not on the big screen？　　Digital collectibles and virtual reality platform Terra Virtua is planning to launch today a line of Godzilla vs. Kong NFT collectibles created in collaboration with film production giant Warner Bros. — among the first-ever NFT drops to coincide with the release of a major film.　　Currently, collectors can buy retro-themed Godzilla and Kong Island posters for $75, but more elaborate animations will be released later today. The Terra Virtua homepage currently has a themed waitlist active, with users granted a 10-minute window on the site to make purchases.　　Utility vs. recognizability　　While Godzilla and King Kong are battling it out on the big screen, when it comes to NFT platforms, its increasingly a race to see who can offer the most functionality and gain access to beloved brands.　　Multiple virtual reality and gaming projects are cooking new ways to add utility to NFTs. Ecomi, a rival VR/NFT project has been flexing a slick “vault” feature on Twitter, where users can enjoy their collection in augmented reality:　　Likewise, Terra Virtua is working on an “art gallery” VR feature.　　In addition to the technical push, many of these projects are

2021-04-01Deep Dive

Digital Euro Will Be Decided On Within Months: ECB’s Lagarde

The president of the European Central Bank, Christine Lagarde, said that the release of a digital euro will take at least another four years.　　A decision on a digital Euro will be made in the next few months—but the actual release of such a currency could take years, European Central Bank boss Chirstine Lagarde said today.　　The ECB president told Bloomberg that the whole process of developing a central bank digital currency (CBDC) could take at least another four years, though the Bank plans to make a decision on whether to move on the initiative by “mid-2021.”　　A CBDC is a digital version of a fiat currency (in this case, the euro) that is backed by a central bank. Countries around the world are currently researching the benefits of developing such an asset.　　“But the whole process—let‘s be realistic about it—will in my view take another four years,” Lagarde said. “Maybe a little more, but I would hope that we could keep it within four years because it’s a technical endeavor as well as a fundamental change.”　　She said that the ECB would make a decision soon on whether to actually release a CBDC. After all, that “mid-2021” target is only three months away. If

2021-04-01Deep Dive

Is blockchain decentralized enough? This middleware provider doesn’t think so

A decentralized platform that provides infrastructure services for DApp developers and users says its goal is to deliver safety and stability.　　According to Apron, the world remains reliant on the centralized artifacts of the Web 2.0 era — and its network is designed to serve as the foundational layer for the next generation.　　While the team acknowledges that Ethereum has contributed to DApps exploding in popularity, they say operating nodes on this blockchain is both expensive and energy intensive — prompting a centralized support structure to emerge.　　Apron Network is designed to shake things up by improving the infrastructure service ecosystem of the Web 3.0 world. Based on the Substrate framework, it can serve as a parachain of both Kusama and Polkadot, and delivers solutions that power the effective development of DApps and DeFi developers.　　Aprons service marketplace matches infrastructure service providers with DApp developers — and provides rankings for each of the options available.　　 ‘The Polkadot of middleware’　　Apron says that its goal is to become the middleware of blockchain — and pave the way for cross-chain collaboration and scalability.　　The platform has been conducting technical docking with Seascape, Stafi, Dora, SubDAO and a plethora of other projects, and is establishing cooperation with the likes

2021-04-01Deep Dive

Britain to Focus Crypto Rules on Stablecoins Rather Than the Whole Industry

Britain will concentrate first on controlling stablecoins rather than the more comprehensive cryptocurrency industry. Its financial services minister said on Tuesday, acknowledging the threat to competition should any significant private initiative dominate the emerging sector.　　Facebook Incs move in 2019 to launch its own stablecoin Diem, then known as Libra, sparked fears among governments and central banks that a major payments rival could surface overnight.　　Cryptocurrencies to Face Light Approach　　Three months ago, a consultation paper on possible regulatory methods for crypto-assets and stablecoins was released by Britains government. It planned a very light-touch approach to crypto-assets, partially because the sector is still at an expansive niche and customers seem to be aware of the substantial speculation risk.　　The most recent study from the FCA concludes that crypto equivalents‘ primary aim is to invest speculatively and that customers are aware of the risks. The FCA functions as a financial management agency. In the survey, 47% reported that they bought cryptocurrencies ’as a money-making game, and 89% appreciated the lack of regulatory security. The explanations for the light approach are this recognition and niche acceptance.　　It reported, however, that it plans to add stablecoins to the regulatory perimeter. This decision is due to mainstream utilization capacity

2021-04-01Deep Dive

Ethereum Improvement Proposal 1559: Is the squeeze worth the juice?

Ethereum Improvement Proposal 1559, set to be bundled together with the “London” upgrade in July, has caused as much excitement as fear and panic. On the surface, EIP-1559 is nothing more than a change in Ethereum‘s gas fee structure. And to spice it up, it has also been labeled as Ethereum’s scarcity engine, or burn mechanism, as it will destroy Ether (ETH) used in transaction fees, making the cryptocurrency deflationary, and perhaps more valuable down the line.　　Curbing Ether‘s inflation will make the digital asset as deflationary as Bitcoin (BTC), meaning that its buying power will only increase over time. However, the relevance of the EIP-1559 proposal is based on fixing the runaway gas fees. The upgrade has been in the works for some time, but its timing couldn’t have come at a better time. Ethereum‘s sky-high transaction fees are a result of the network being the most used blockchain in the world. This is partly due to its smart contract functionality, something that Bitcoin’s blockchain is limited in.　　Ethereums functionality has seen it being used as the backbone of several booms in the sector. First, it was initial coin offerings, then came decentralized finance and now nonfungible tokens. To have a

2021-04-01Deep Dive

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