Still Working with Binance.US, Clarifies Silvergate Bank After the Reports of Cutting Ties with Binance

Still Working with Binance.US, Clarifies Silvergate Bank After the Reports of Cutting Ties with Binance

Crypto-friendly Silvergate Bank took to Twitter to confirm that they are working with cryptocurrency exchange Binance.US in “good standing.”

Binance.US is “an active participant on the Silvergate Exchange Network,” added the bank late on Thursday.

This clarity came after the reports that the Silvergate Bank has abruptly cut ties with leading exchange Binance.

Binance has reportedly sent an email to customers in English and Spanish language, informing them that the exchange will no longer support USD deposits and withdrawals via Silvergate Bank over SWIFT from June 11, reported The Block.

“Rest assured, we are working hard to provide an alternative USD solution,” further reads the email.

In December, Binance launched the Silvergate funding option for international users that allow customers to deposit and withdraw USD from their accounts.

In response to this, Binance.US said on Twitter, “We are proud to continue working with Silvergate Bank as one of our banking partners.”

However, no such confirmation has been made in regards to Binance.

In separate news, Binance’s Chief Finance Officer (CFO) Wei Zhou has left the company after working for three years. Zhou’s track record in initial public offerings ignited the rumors at the time that Binance might be considering going public, but CEO Changpneg Zhao has denied any such plans.

“After three years at Binance, Wei has decided to leave for personal reasons,” the spokesperson said.

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Author: AnTy

The Debate on Bitcoin’s Energy Consumption Continues

Twitter CEO Jack Dorsey, along with Cathie Wood’s Ark Invest, are working towards using Bitcoin mining to “accelerate the global energy transition to renewables.” According to CoinShares, an estimated 74% of the energy used in bitcoin mining actually comes from renewable sources.

While people argue that given the majority of Bitcoin’s hashing power comes from China, that it energy consumption is based on coal, but that’s not true because most of the Chinese miners depend on hydroelectric power; which is the cheapest power source.

Inner Mongolia, the second-largest coal producer, has shut down crypto mining, which could further push miners towards using renewable sources.

As a step towards making the world greener, the CEO of crypto exchange FTX announced the donation of $1 million to offset the blockchain resources it uses. Another exchange, BitMEX, has joined FTX in its green efforts.

Amidst the energy consumption discussion, Sam Korus, an analyst at Ark Invest, posted an update to ARK’s open-source solar, battery, and Bitcoin mining model, which now allows one to test how the system would have performed in historic Bitcoin bull and bear markets.

“The takeaway is that regardless of a Bitcoin bull or bear market, Bitcoin mining can incentivize additional solar and battery installations,” he said. “The next step is to dimension solar+battery+Bitcoin mining at the household level.”

Elon Musk also chimed in here.

As Brett Winton, Director of Research at Ark Invest, talked about Bitcoin mining being able to allow solar and battery systems to economically scale to provide a larger share of grid energy, Musk took part in this conversation by agreeing that “this can be done over time.”

However, “recent extreme energy usage growth could not possibly have been done so fast with renewables,” he added.

Musk then goes on to say how Bitcoin’s energy usage has started to exceed that of medium-sized countries, making it “almost impossible for small hashers to succeed without those massive economies of scale.”

As Bitcoiners have been pointing out, Bitcoins’ energy usage is what makes the network so secure and decentralized.

“Achieving truly decentralized finance – power to the people – is a noble & important goal. Layer count depends on projected bandwidth & compute, both rising rapidly, which means single layer network can carry all human transactions in future IMO,” said Musk. “For now, Lightning is needed.”

In a separate tweet, he continued to share his love for Dogecoin as he demonstrated a Doge dollar sticker that a Tesla supporter gave him in Berlin.

Musk further revealed that he actually owns DOGE, the sixth-largest cryptocurrency by the market of $50.3 billion, trading at $0.3574, and that he has no plans to sell any. DOGE -10.22% Dogecoin / USD DOGEUSD $ 0.36
-$0.04-10.22%
Volume 7.42 b Change -$0.04 Open $0.36 Circulating 129.69 b Market Cap 46.44 b
6 h The Debate on Bitcoin’s Energy Consumption Continues 3 d FTC Data Reveals Big Jump In Crypto Investment Scams, Losses Totaling $80M 3 d Coinbase Enables its Over A Million Wallet Users to Use DeFi — DEXs, NFTs, & More

“I haven’t & won’t sell any Doge,” said Musk.

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Author: AnTy

Israel Releases Working Paper on Possible Digital Shekel Program

Israel Releases Working Paper on Possible Digital Shekel Program

Israel is continuing with its exploration of the likely issuance of its central bank digital currency (CBDC), the digital shekel, per an official statement,

Bank of Israel Accelerates CBDC Research Efforts

This follows the release of a working paper that requires feedback. Despite its reluctance to commit to a CBDC plan, the Bank of Israel said it was only preparing an action plan, which will ensure its preparedness to launch a CBDC if the situation arrives.

The action plan would prepare it to launch the digital fiat should the benefits outweigh the costs and potential risk. Its impact could be enormous on the existing monetary system.

The working paper details a draft model for a potential CBDC and how it would operate. It details the role of the apex bank and how it would handle issuance. Local payment service providers will be tasked with distributing the CBDC. Payment providers will also be tasked with offering enhanced functionality for the CBDC, including building the technology.

The bank believes a CBDC would allow a payment system that could adapt to a digital economy and create an efficient and inexpensive infrastructure for cross-border payments. It also thinks the digital shekel can usher in a cashless society.

Israel Remains Wishy-washy on CBDC

The Bank of Israel first started examining the possibilities of a digital currency in 2017. At the time, the governor set up a group to explore the issue. Still, a year later, the central bank announced that it was not issuing one because no advanced economy had issued a digital currency.

While countries like Israel continue to slowly research and tread carefully to issue a CBDC, numerous central banks worldwide actively explore the project with increased zeal.

China has long started piloting its digital yuan project in major cities across the country. Banks in cities like Shanghai have been active in promoting the digital yuan, persuading merchants and retail clients to download digital wallets and use the digital currency.

Norway is also another country exploring CBDCs. It recently disclosed that it would start testing technical CDBC solutions. Other countries like South Korea, Japan, and the United Kingdom are positioning themselves for a potential CBDC.

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Author: Jimmy Aki

India To Criminalize Private Crypto Ownership Despite Community Outcry

According to a senior government official familiar with the situation, the Indian government is working on legislation that will see private ownership of cryptocurrencies criminalized.

India’s Crypto Ban Is Still On Course

In a Reuters report published on Monday, an unnamed government official said the legislation banning cryptocurrencies in the country is in its final stages. According to the report, this will see the possession, issuance, mining, holding, and digital assets swap criminalized.

While India seeks to criminalize crypto ownership, the government official said that the government does not have any issues with blockchain technology, the technology behind Bitcoin. He said fines would be imposed and not jail terms in speaking on how the government plans to dissuade private crypto ownership this time around. A 2019 proposed ban had recommended jail terms of up to 10 years for private crypto holders.

The proposed legislation is hugely supported by the Reserve Bank of India (RBI) its apex bank. The RBI had imposed a blanket ban in 2018 on cryptocurrencies in the country, making it unlawful to issue, mine, hold, and exchange digital assets for other asset classes. The central bank had cited financial instability occasioned by the volatile digital assets as a reason for the decision.

A Supreme Court ruling overturned the embargo in March 2020, leading to massive crypto adoption. The court asked the financial governing body to provide regulatory goalposts in the crypto space.

The RBI promised to continue its fight against what many in the government considered a “Ponzi scheme” and made another attempt last month, saying the volatile nature of digital assets could pose a risk to investor funds.

According to the financial body, cryptocurrencies like Bitcoin were a bubble and could affect market sentiments leading investors to invest large portions of their capital. A fall in value could see many financial markets sliding into depression and harming the country’s already fragile economy. The RBI is currently exploring blockchain technology to issue a state-backed digital currency (digital rupee) to combat the rise of cryptocurrencies.

Finance Chief Taking A “Calibrated” Position

But, a contrary view has been aired by the Minister of Finance and Corporate Affairs Nirmala Sitharaman. According to the 61-year-old technocrat, the government is taking a more considerate outlook. Sitharaman made this comment in a separate event saying the government is looking at how experiments can happen in the digital world and cryptocurrency. These experiments would invariably lead the government to take a “calibrated” position on the issue.

Sitharaman further stated that the Finance Ministry would allow a certain amount of “window” for people to experiment with blockchain and Bitcoin as they will not be shutting off all options.

Even though the RBI is under the Ministry of Finance jurisdiction, operates independently from the government body due to how the Indian financial system is structured. The Reserve Bank of India caters to economic activities like monetary policies, issuing the national currency- the Rupee, and regulating the entire Indian banking system.

The Ministry of Finance focuses on macroeconomic policies, public financing, inflation, and the stock markets’ supervision. Their disparate outlook on economic issues has seen disputes erupt between the two Indian finance arms.

Crypto holders may likely be caught up in a show of strength between the RBI and the Finance Ministry, but many investors are still trooping in despite the proposed ban.

The government has said crypto investors would be given a six-month grace period to liquidate their crypto assets before penalties are exerted. But still, crypto exchanges are seeing traffic into the space growing by the day.

With Bitcoin breaking through a new ATH of $60,000 on Saturday, tripling its market value from 2017 after being backed by several institutions, the Indian crypto markets have grown astronomically. Since documented, a daily transaction volume showed 8 million investors holding 100 billion rupees (about $1.4 billion) in crypto investments.

Unocoin, India’s oldest crypto exchange, said 20,000 new investors came on board in January and February despite growing concerns about the ban being enforced.

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Author: Jimmy Aki

Indian Securities Regulator to Restrict IPO Promoters from Holding Bitcoin: Report

India’s securities regulator is reported to be working on barring all IPO organizers from holding cryptocurrencies. This is another statement move from the government following its cryptocurrency ban.

The Indian government has shown no subtlety in its approach to banning cryptocurrencies from the country.

Now, it appears to be extending its anti-crypto stance to the traditional financial industry. Initial Public Offerings (IPO) promoters would be the first to feel its wrath.

No Crypto for Fundraisers

Recently, the Economic Times reported that the Securities and Exchange Board of India (SEBI), India’s securities regulator, is planning to force all IPO participants to divest all crypto holdings before proceeding with their listings.

Per the report, crypto selloffs will most likely become a prerequisite for anyone looking to raise funds through an IPO, forming what the latest in New Delhi’s plans to eradicate digital assets is.

The news source reported that the SEBI plans to send notices to merchant banks, underwriters, securities lawyers, and all other stakeholders in India’s IPO space, warning them to stay off digital assets.

A securities lawyer told the news source that this would most likely be a government directive, as they could believe that an IPO promoter holding an illegal asset could pose a risk to investors.

Some investment bankers have also explained that the SBI might move ahead with the restriction even if the Reserve Bank’s ban on digital assets doesn’t pass parliamentary approval – an improbable process on its own.

Mahesh Singhi, an executive at investment banking firm SInghi Advisors, explained that SEBI is looking to avoid a situation where IPO promoters divers their raised funds to crypto investments, which remain highly speculative.

SEBI has yet to release any written notifications to that effect, but many stakeholders seem to believe that this restriction will come into effect soon.

No Time to Waste

The IPO restriction is the latest approach from the Indian government, which has vowed to disrupt the crypto sector in the country. First announced last month, the ban is gaining traction ahead of a presentation at the country’s lower parliament.

Titled the “Cryptocurrency and Regulation of Official Digital Currency Bill,” the proposal is already in consideration at the Rajya Sabha, India’s upper house of parliament. However, the current budget session is expected to run till April 8, with a recess session already ongoing until March 7.

Earlier this month, local news source CNBC-TV18 reported that the government might as well skip the parliamentary process altogether. Per the report, it could look to take the “ordinance route” to ban the use of private digital assets while also allowing the Reserve Bank to create a digital framework for its planned Central Bank Digital Currency (CBDC).

CNBC-TV18 reported that all appropriate parties had already begun drafting the ordinance as they look to pass the crypto ban proposal within a month. Ordinances usually allow the Indian government, through President Ram Nath Kovind, to bypass parliament and take action.

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Author: Jimmy Aki

Sweden Is Working with Corda’s DLT for the e-Krona CBDC Proof-of-Concept

Sweden Is Working with Corda’s DLT for the e-Krona CBDC Proof-of-Concept

The Swiss central bank is already working with Corda’s Distributed Ledger Technology (DLT) for its CBDC proof-of-concept in the proposed e-krona digital currency. Cecilia Skingsley, the bank’s deputy governor, confirmed this development while speaking yesterday at the CFC St. Moritz conference panel. Sweden had recently announced the commencement of e-krona’s exploratory phase.

According to Skingsley, Corda was recommended by Accenture, which began working with Riksbank as early as 2019 on the possibilities of a CBDC. This DLT provider was apparently selected because of its current fit with e-krona’s proposed criteria. Skingsley emphasized that,

“The reason we use Corda is not that we necessarily think that Corda is the best and optimal choice for an eventual future e-krona, but when we did our procurement process, the proposal from Accenture based on Corda we found was the one that fitted our criteria the best.”

With the exploratory phase kicking off, Sweden’s population, which is used to cashless money, could soon witness a transition to digital monetary policy as well. The country has been actively involved in CBDC research and development, ranking among the frontrunners in this space. Nonetheless, Skingsley noted that the developments are but an exploration into the CBDC ecosystem,

“Although we are exploring this issue, the Riksbank has not decided to issue an e-krona. We are still in the phase when we are investigating different options.”

Other prominent jurisdictions like the U.S and France have also started the year with a keen interest in the value proposition in CBDCs. The Fed Reserve Chairman Jerome Powell recently mentioned in an interview that CBDCs are of high priority in the combat against ‘bad private money.’ Meanwhile, China has continued with the digital yuan pilot, having rolled out ATMs in the Shenzhen region.

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Author: Edwin Munyui

Bancor’s Approach to Handling Impermanent Loss Shows Financial Viability

Bancor has been working on a reliable method to address impermanent loss and it seems to have struck gold with its insurance-based approach

The Bancor Network has been busy trying to solve the issue of impermanent loss on its decentralized exchange. In a recent report, the protocol showed significant success with its approach, leading to the belief that it might be able to handle the protection of temporary loss of funds in the long term.

Impermanent Loss on DEXs

Yesterday, Bancor released a Protocol Health Report for its v2.1 decentralized exchange (DEX) upgrade.

The report covered the exchange’s financial and operational performance for the past quarter, showing significant liquidity and revenue gains.

As the report showed, liquidity across the DEX rose by 100 percent over the past three months, resulting in about 700,000 BNT (worth $1.12 million) in earnings from swap fees. However, the platform’s strategy on impermanent loss appeared to have faltered.

When Bancor launched the DEX late last year, it focused primarily on effective impermanent loss management.

Also known as divergence loss, the impermanent loss is a problem that affects mostly exchanges that run on the automated market maker (AMM) protocol. It occurs when liquidity providers (LPs) lose funds due to the volatility of a trading pair. It basically describes how much revenue an investor would have earned if they had held on rather than provide liquidity to the market.

The effect of this divergence is a loss of value, compared to the benchmark “buy and hold” portfolio.

The loss is termed “impermanent” because it could be reverted if the prices returned to their original state. However, even in the best scenarios, losses due to divergence will reduce liquidity providers’ profits from price swings.

Possible Long-Term Benefits

Bancor had initially tried to solve the problem with oracles, which reads token prices and render arbitrage virtually unnecessary.

However, front-running issues rendered this approach impractical. So, the exchange deployed an insurance mechanism to cover the cost of impermanent loss.

The project implemented a vesting schedule to incentivize LPs to stake their tokens in the long term.

The protocol’s strategy was to incentivize more altcoin holders to become LPs instead of adopting the buy-and-hold strategy. Another strategy Bancor plans to explore is to encourage projects to use their treasuries to provide liquidity to AMMs. Just like proof-of-stake (PoS) rewards, the method could allow projects with considerable token reserves to increase liquidity on token pairs and also get additional rewards.

The vesting schedule will see Bancor provide one percent coverage on liquidity capital for up to 100 days. However, LPs who make withdrawals before 30 days won’t get any compensation for losses in that period.

Bancor’s approach appears to be yielding benefits. As the company reported, the total impermanent loss associated with withdrawn liquidity amounted to 41,000 BNT ($64,000). On the flip side, the protocol also earned 350,00 BNT ($560,000) in fees.

Bancor added that some LPs withdrew their deposits before getting 100 percent insurance. These LPs got partial protection, which was paid based on their coverage level. The report pointed out,

“As the proportion of insurance policies with 100% protection increases over time, it stands to reason that the associated cost to the protocol will rise. However, various factors suggest the protocol is able to handle this insurance burden.”

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Author: Jimmy Aki

South Korea Finalizes New 20% Tax Regime on Crypto Starting in 2023

South Korea has been working towards a suitable tax system for crypto trades and profits for a while now, with different proposals and deadlines.

However, after much deliberation, the government has now put forth a viable tax plan for crypto gains.

Pay the Tax Man

Asia Today reported this week that the South Korean Ministry of Economy and Finance had issued an amendment to introduce a new tax rate for crypto trading profits. The amendment could be enacted into law in February, following a legislative notice that will last until January 21, according to the reports. However, the new tax rates won’t be levied until 2023.

Per the report, the government’s new proposal will introduce different additional taxes on capital gains. Crypto traders who make annual incomes of over 2.5 million won ($2,300) will be taxed 20 percent from their trading activities. Comparatively, the threshold is much lower for traditional stocks, with only gains higher than 50 million won ($46,000) receiving the same tax rate.

The tax rate goes even higher, reaching 25 percent for assets over 300 million won. Investors with annual profits of over 50 million won will also need to pay transfer taxes, regardless of whether they are major shareholders or not.

As for cryptocurrencies owned before the tax schedule’s 2023 implementation, authorities are still considering imposing taxes on the market price immediately before 2023 or the acquisition price.

What Date is Appropriate?

The new tax rate isn’t especially a novel development. The Ministry of Economy finalized the regime last July, following a Tax Development Review Committee meeting. The meeting concluded the government’s mission to ensure effective taxation of individuals’ and corporations’ virtual asset holdings – which, up to that point, had been non-taxable.

However, the new regime also ran into a bit of a hiccup, with industry insiders asking that the government delays its implementation. In October, the Korea Blockchain Association (KBA), one of the country’s most powerful blockchain advocacy groups, asked that the government delay implementation until January 2023

Per a report from News1 Korea, the KBA had explained that companies require a “reasonable period” to prepare for the new tax regime. The advocacy group explained that there was a short window between regulations applying to the old tax scheme and the expected start of the new one as crypto exchanges would still be allowed to report on trades falling under the previous tax code until September 2021.

Since the Income Tax Act is expected to be enforced from October 2021, companies would find it challenging to comply with the new regulations in less than 24 hours.

Last month, the South Korean national assembly ruled to extend the tax regime’s implementation to January 2022. With the new ruling setting an implementation date for 2023, crypto companies now have enough time to get in line.

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Author: Jimmy Aki

Ukraine’s CBDC, the Digital Hryvina, Will Run on Stellar’s Blockchain

Ukraine’s CBDC, the Digital Hryvina, Will Run on Stellar’s Blockchain

Besides working on a central bank digital currency, Stellar Development Foundation (SDF) will also help with the development of digital assets and regulation of stablecoins in the country.

The Ministry of Digital Transformation of Ukraine signed a Memorandum of Understanding and Cooperation with Stellar Development Foundation (SDF) on Dec. 28.

SDF announced on Monday, this week, that as per the memorandum they will work on the development of virtual assets in Ukraine.

In response, XLM recorded gains, going to nearly $0.17 XLM 20.28% Stellar / USD XLMUSD $ 0.19
$0.04 20.28%
Volume 2.57 b Change $0.04 Open $0.19 Circulating 21.95 b Market Cap 4.28 b
2 h Ukraine’s CBDC, the Digital Hryvina, Will Run on Stellar’s Blockchain 2 w Stellar Invests $3 Million in Digital Assets Settlement Network Across LATAM 3 w XLM Records Impressive Volume; Co-founder says Team Is Making Stellar ‘Useful for Real People’
.

The latest efforts align with the country working on creating a legal environment for the development of digital assets in Ukraine and enhancing its status as an innovative digital country in the financial market in Eastern Europe.

“Another important aspect of this cooperation is contributing to the development of the infrastructure for a Ukrainian national digital currency,” said Oleksandr Bornyakov, Deputy Minister of Digital Transformation for IT Development.

The National Bank of Ukraine has been researching the possibility of CBDC implementation since 2017, Bornyakov said.

As per the memorandum, both will cooperate on the development of the virtual assets market in Ukraine, supporting projects related to virtual assets; implementation and regulation of stablecoin circulation in the country; and development of the digital currency of the Central Bank (CBDC) in Ukraine.

“We look forward to working with the Ministry and other stakeholders to digitize the hryvnia, to bring Stellar-based tools and services to the people and businesses of Ukraine, and to introduce new partnership opportunities in Ukraine to businesses in the Stellar ecosystem.”

Denelle Dixon CEO: Stellar Development Foundation

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Author: AnTy

Bitcoin Hits a New All-Time Record High Against the Traditional Safe Haven Gold

The Bitcoin market is working on broadening the universe of its investors even more.

On New Year’s Day, Bitcoin made yet another all-high against USD at about $29,620.

But in 2020, USD and several other fiat currencies aren’t the only ones against BTC which made new highs. Even against gold, the digital asset hit new highs.

Bitcoin made a new all-time record high against gold at the end of the year.

2020 has been a roller coaster ride for the world and the asset classes as we saw deep retracement in March. But ever since then, every other asset class has jumped to new highs.

Bitcoin, however, was the clear winner of the year, with 318% gains.

While oil still remains deep in red, -22% returns in 2020, other asset classes rallied but are nowhere even close to Bitcoin’s levels. Private assets were up 9% while equities recorded a 15% uptrend in the year, cash 16%, and bonds 20%.

The precious metal had only 28% year-to-date performance after breaking the ATH in August, which was last seen in 2011. After the consolidation for the last nearly four months, the bullion managed to rise back to $1,900 to mark the end of the year.

Bitcoin, on the other hand, had a wild year. Up 675% from the March lows, and in the past fortnight, it broke several levels in succession without any meaningful pullbacks ever since the uptrend started in Sept.

Broaden the Universe Some More

This year, things are going to get even more interesting as the rate at which institutions started to trickle in gained speed towards the end of the year will flood in in 2021.

Another exciting and bullish thing is the Bitcoin ETF. After getting rejected every single time over the past couple of years, this week VanEck filed another proposal for a Bitcoin exchange-traded fund (ETF) with the SEC, and this one will also physically hold BTC.

A change in SEC leadership, Jay Clayton not being a chairman anymore, has the cryptocurrency market’s hopes high of approval this time. Also, with all the institutions, big names, corporates, insurance companies, and high net worth individuals jumping on Bitcoin, the odds of regulatory approval have improved.

“All indications from the SEC are that a bitcoin ETF still faces an uphill battle,” said Nate Geraci, president of the ETF Store, an investment advisory firm.

“That VanEck has the confidence to file for a Bitcoin ETF might indicate some shifting viewpoints within the SEC. Clearly, a key to watch as this drama continues unfolding is who President Biden taps as SEC chair.”

In the case of the precious metal, the launch of the gold ETF had a very significant impact on the gold market. The first gold-backed ETF in the US was launched in Nov. 2004. The largest gold ETF, GLD, is one of the biggest funds in terms of the value of the assets it manages.

And the same is expected to happen with the digital gold – Bitcoin, once its ETF gets approved.

An ETF “could be taken as bullish for Bitcoin because it does broaden the universe of investors who could be aware of Bitcoin,” said Everett Millman, a finance expert with Gainesville Coins.

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Author: AnTy