Anza, a dev collective behind Solana, recommended the adoption of Agave v1.18.12 into the blockchain’s devnet and testnet. This new version of the mentioned client ships with a central scheduler that aims to reduce congestion by increasing fee collection and reducing conflicting transactions. Anza is calling for increased testing on this functionality. Anza Calls for […]
Bitcoin News
House Financial Services Committee Advances Bill to Repeal SEC Bulletin Preventing Banks From Offering Crypto Custody Services
The House Financial Services Committee of the U.S. Congress has advanced a resolution that seeks to disavow SEC SAB 121, a bulletin that leaves banks and financial institutions out of the cryptocurrency custody provider market. However, the resolution, advanced with bipartisan support, is unlikely to be passed at a vote on the House floor, according […]
Bitcoin News
Kenya Advances Toward Digital Asset Hub Ambition With Virtual Assets Bill – Kenya Blockchain Association
The Blockchain Association of Kenya (BAK) is reportedly on the verge of launching a community-led draft bill, a significant stride towards its objective of transforming Kenya into a hub for digital assets. BAK has expressed its intention to integrate feedback from stakeholders into a revised draft. This updated version of the draft bill is due […]
Bitcoin News
In Social Media Buzz, Investment Giant Franklin Templeton Commends Ethereum and Solana’s Advances
Based in San Mateo, the prominent investment management firm, Franklin Templeton, has been actively posting about digital assets on social media following the recent approval of its new spot bitcoin exchange-traded fund (ETF). The firm’s U.S. X account now sports a modified logo featuring Benjamin Franklin with laser eyes. This Wednesday, the account prominently recognized both Ethereum and the Solana blockchains, further expressing that it was “impressed” by the Solana network’s activity in the fourth quarter.
Franklin Templeton Applauds Crypto, Ethereum, and Solana
Since its ETF launch, Franklin Templeton, as of Jan. 17, 2024, oversees 1,160 BTC, as reported by the EZBC web portal. This marks a 2.56% increase in its bitcoin (BTC) holdings, up from 1,131 BTC last Friday. Throughout the past week, the company, managing .5 trillion in assets under management (AUM), has been actively posting about digital assets and sharing memes.
On Thursday, Franklin Templeton’s X account praised blockchain technology. “We believe as blockchains improve in fees and performance, the potential use cases that are unlocked grow exponentially,” the investment manager said. “Improving the economics and experience for the end user cannot be overstated.” In another X post, Franklin Templeton wrote, “Other L1s outside of [Bitcoin, Ethereum, and Solana] have massive potential, and we are continuing to support, monitor, and develop on these networks as they grow and mature.”
.5 trillion AUM institution out here memeing today. https://t.co/LAAUkNlZ0v
— Lyn Alden (@LynAldenContact) January 17, 2024
While it launched a BTC ETF, Franklin Templeton lauded Ethereum and Solana as well. “We are excited about ETH and its ecosystem. Despite the midlife crisis it’s recently experienced, we see a bright future with many strong tailwinds to push the Ethereum ecosystem forward,” the firm remarked on X while also mentioning some of ETH’s pros. As far as Solana, the asset manager said it was “impressed” by the layer one (L1) blockchain. The company stated:
On Solana, we see Anatoly’s vision of a single atomic state machine as a powerful use case of decentralized blockchains, lowering information asymmetry. And we are impressed by all the activity seen on Solana in Q4 2023.
Moreover, the firm’s X account expressed criticism towards private blockchains, stating, “Private blockchains are a rehypothecation of the intermediary.” Indeed, the firm’s social media presence has recently taken a slightly divergent path, actively sharing its perspectives on the digital asset ecosystem. “In crypto, speculation is a feature, not a bug,” the asset manager said in another X post. Franklin Templeton also touched upon Bitcoin’s Ordinals and layer two solutions.
“Ordinals [and] Layer 2 solutions on Bitcoin shouldn’t be ignored. These are vital to solving Bitcoin’s economic security problem and increasing BTC’s utility as a SoV,” the company’s social media account wrote. “Crypto is improving how we interact with each other financially, just as the internet did with information. We intend to participate and lead the development of this future through investing and building,” another social media post explains.
What do you think about Franklin Templeton’s X posts about blockchains, Ethereum, and Solana? Share your thoughts and opinions about this subject in the comments section below.
Hong Kong Monetary Authority Advances e-HKD Tests, Mbridge Project
The Hong Kong Monetary Authority (HKMA) has recently completed a series of tests regarding the programmability of the e-HKD, the proposed Hong Kong central bank digital currency (CBDC). While still in its initial phases, the e-HKD presents “interesting” use cases, HKMA CEO Eddie Yue stressed. He also revealed that the Mbridge project aims to have a minimum viable product for mid-2024.
Hong Kong Monetary Authority Advances e-HKD Research
The Hong Kong Monetary Authority (HKMA) has recently offered new insight into the different tests conducted with the e-HKD, a proposed central bank digital currency (CBDC). Eddie Yue, CEO of the HKMA, revealed that these tests focused on the programmable function of the e-HKD, allowing the issuer to establish certain limits in which the digital currency can be used.
According to the South China Morning Post (SCMP), this feature was tested by the Bank of China in Hong Kong this month. Furthermore, the bank has teamed up with ten firms, allowing customers to use the e-HKD in various retail payment promotions.
On the significance of these tests, Yue stated:
There are some interesting use cases of e-HKD in the areas like programmable payments, and in new areas like tokenised deposits and tokenised assets.
However, Yue detailed that e-HKD was still just in its trial stages, stressing that the HKMA had to “find a use case that is better than the current retail payments. Because if you are not either safer, faster, or more convenient, then it will not be doable.”
Project Mbridge
The HKMA is also a part of Project Mbridge, a CBDC network currently being tested jointly with the People’s Bank of China (PBOC) and the central banks of Thailand and the United Arab Emirates. Regarding this test, Yue stressed that the four participants were working out “important policy issues like governance and liquidity provisions,” getting ready to launch a minimum viable product by mid-2024.
Yue’s estimations differ from what Reuters, citing four people with knowledge on the subject, reported in August when it informed that Mbridge might have a minimum working product ready by year-end. Mbridge is currently under the watch of several central banks, which fear it could be used to move funds beyond the limits and sanctions of Western countries.
What do you think about the e-HKD tests conducted by the Hong Kong Monetary Authority and the Mbridge project? Tell us in the comments section below.
Latam Insights: Bitcoin Farm Found at Venezuelan Jail, Bill Protecting Crypto From Seizure Advances in Brazil
Welcome to Latam Insights, a compendium of Latin America’s most relevant crypto and economic news during the last week. In this issue: a Bitcoin mining farm is discovered during a raid on a Venezuelan jail, a bill that protects crypto from seizure advances in Brazil, and the Chilean police find a Bitcoin farm during a drug raid.
Bitcoin Farm Found in Venezuelan Jail
A Bitcoin mining farm was dismantled during a mega raid on the Venezuelan penitentiary center of Tocoron, located in the Aragua state. The raid, which involved the participation of more than 11,000 officers, found an undisclosed number of Bitcoin miners inside a makeshift mining farm, which was allegedly operated by the gang that held control of the national jail, called “Aragua’s Train.”
During the raid, the police also found drugs, rifles and ammo, C4 explosives, and more eccentric elements, like a disco where events were held, a swimming pool, a baseball stadium, and even a zoo.
Authorities have not issued statements on how long the mining farm operated inside the jail or if they had seized the funds that were obtained by the operation of this farm. Nonetheless, after the raid, the Tocoron Penitentiary will be closed, with more than 1,600 inmates being transferred to other jails in Venezuela.
Bill Protecting Crypto From Seizure Advances in Brazil
A bill that protects digital assets from creditor seizures is advancing in the deputy chamber of the Brazilian Congress. The bill, which also forbids the confiscation of salaries, pensions, and money in savings accounts in amounts of up to 40 minimum wages, was modified by Deputy Fernando Marangoni, who called to include cryptocurrency as part of its scope.
However, the final modification included the term “digital assets” instead of “cryptocurrency,” and will have to be reviewed by the Constitution, Justice, and Citizenship Commission of the Deputy Chamber.
Chilean Police Find Bitcoin Farm During Drug Operation
The Chilean Intelligence Police found a Bitcoin mining operation during a drug raid in southern Santiago. During Operation “Lucerna,” the police found 36 kilograms of cannabis, ecstasy, and ketamine pills. But they also stumbled upon a room with 19 Bitcoin miners, of which only 10 were active.
Eduardo Gatica, head of the Anti-Narcotics Brigade, stated this operation was directed to terminate a series of violent crimes linked to a drug trafficking ring. He stated:
It is the first time that drug trafficking has been so directly linked to cryptocurrency virtual data mining. It had not happened before in the country.
Gatica stated that cryptocurrency mining allowed these groups to launder assets, turning dirty money into clean money ready to be introduced in the market.
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What do you think about this week’s Latam Insights report? Tell us in the comment section below.
Palau’s Stablecoin Audit Process Advances
Palau’s Ripple-backed stablecoin pilot audit process is advancing, with the Ministry of Finance collaborating with auditors and turning in more than 200 documents for review. Jay Hunter Anson, a Palau Ministry of Finance member, explained he was ready to show auditors that every transaction can be traced thanks to the public ledger tech.
Palau’s Ministry Of Finance Advances Stablecoin Audit Process
The audit process on Palau’s stablecoin (PSC) pilot, a project that uses Ripple’s xrpl ledger to issue a dollar-backed stablecoin as a central bank digital currency (CBDC), is advancing, as the Ministry of Finance collaborates with the government auditors.
Jay Hunter Anson, a member of the Ministry of Finance, offered an update about how blockchain technology would help in the process due to the traceability of each transaction.
In a post on social media, Hunter Ansen stated:
In-brief with auditor complete. 202 documents printed and will be submitted for review. Ready to walk the auditor through the public xrpl ledger where all PSC transactions are visible to everyone and can be traced from minting to destruction.
Furthermore, Hunter Anson reinforced the total transparency and disclosure of the team behind the pilot, explaining that they had “nothing to hide.”
Palau’s Stablecoin Pilot Audit Background
The audit on the test phase of Palau’s Stablecoin, qualified by Hunter Anson as “very small, secure, and controlled,” was requested by Senator Mark Rudimch. Earlier this month, he directed a letter to Public Auditor Satrunino Tewid, where Rudimch explained his concerns about the test process.
Rudimch criticized the legality of the program and the funds used for its implementation, stating that the Ministry of Finance might not have the faculties needed to organize the pilot.
Hunter Anson has personally answered some of Rudimch’s inquiries, explaining that PSC was not another cryptocurrency like Bitcoin, being more akin to Alipay, a Chinese payment system used widely in Palau without requiring special laws to be passed.
Also, Hunter Anson rejected Rudimch’s statements that implied the pilot hid monetary transactions, creating money laundering risks. Hunter Anson declared:
The public ledger is fully transparent and KYC/AML/CFT compliance strictly enforced. All money and spending is 100% visible, traceable, and attributable. It is impossible to launder money using PSC.
The fate of Palau’s stablecoin is still uncertain, as the government announced that the program would be evaluated for two months, with its upcoming expansion depending on the review of its impact, among other aspects.
What do you think about the audit of Palau’s stablecoin pilot? Tell us in the comments section below.
Mbridge Project Has Observers Worried About Advances of the Digital Yuan
The Mbridge project, a central bank digital currency (CBDC) international payment system, is starting to worry observers. Such a system, when completed, could ostensibly allow the digital yuan to reach more countries in trade settlements, chipping away at the world dominance of the U.S. dollar and bypassing established sanctions systems.
Mbridge Project Worries Observers
The Mbridge project, a structure that would leverage central bank digital currencies (CBDCs) to move value in seconds, has American and European observers worried about the possible implications of its completion and implementation. While Mbridge is still in its construction and prototyping stages, Bloomberg reported it might have a minimum working product ready by year-end, according to four people with knowledge of the subject.
The system, which is being built with the participation of the Bank of International Settlements (BIS), would allow the digital yuan to further its reach as a trade settlement currency and challenge the U.S. dollar’s dominance in the global payments arena.
Even the International Monetary Fund (IMF) is concerned with Mbridge’s implementation, as undisclosed sources allegedly told Bloomberg that the institution held meetings to discuss the possibility of bringing it under the control of an undefined international organization.
Bringing CBDCs a Step Further
Experts fear that Mbridge could upend the traditional international finance system, as it would allow payments to move beyond the limits and sanctions established by countries like the U.S.
The system would use its own blockchain-based rails, sidestepping restrictions relying on organizations like the Society for Worldwide Interbank Financial Telecommunication (SWIFT), which provides the standard messaging system for cross-border payments. While Mbridge only encompasses China, Hong Kong, Thailand, and UAE, the total goods exchanged by these nations was 4 billion in 2021.
According to statements from the Bank of Thailand, Mbridge would be far superior to traditional payment rails, allowing settlements to be processed in seconds rather than in days. The bank also hinted at the possible addition of more nations to the project, stating that it would “offer more benefit to end-users and commercial banks if there are more participating jurisdictions to join.”
Russia, a nation facing sanctions from Western countries, is on the verge of starting a pilot test for its own CBDC, the digital ruble, involving 13 commercial banks. The Bank of Russia is also discussing the integration of the digital ruble with other friendly nations to complete cross-border payments and settlements.
What do you think about the Mbridge project? Tell us in the comments section below.
TSMC Advances Towards 2-Nanometer Chips in Taiwan; A Breakthrough That Could Revolutionize Bitcoin Mining
Taiwan Semiconductor Manufacturing Co. (TSMC) is taking bold strides toward the future of semiconductor technology, planning to manufacture next-generation 2-nanometer (nm) chips at a new plant in Kaohsiung, Taiwan. Reports detail that the date for mass production remains undecided, with the company also targeting Hsinchu County in northern Taiwan for 2nm production by 2025.
Kaohsiung to Become TSMC’s Second Hub for 2nm Chips; Mayor Commits Support for Billion Initiative
This latest development follows the recent discovery of Samsung’s 3nm chips being used in a commercial setting, a milestone in the industry. TSMC’s 2nm chips, boasting processing speeds 10% to 15% faster than their 3nm counterparts, could significantly transform industries like artificial intelligence (AI) and bitcoin (BTC) mining.
Nikkei reports that the Kaohsiung plant, currently under construction, will be the second hub for these advanced semiconductors, following Hsinchu county. The decision comes after a board meeting on Tuesday, where the company allocated roughly billion for capital investments in Taiwan, with a portion going toward the Kaohsiung facility.
The company’s plans reflect a shift in focus, as it originally intended to produce older legacy semiconductors in Kaohsiung. However, a change in plans was considered following the flagging demand for computer chips, which started after the pandemic. The new venture towards 2nm chips aligns with the global trend of advancing chip technology, aiming to meet the demands of fields like AI and cloud computing.
Nikkei staff reporter Hideaki Ryugen disclosed that Kaohsiung Mayor Chen Chi-mai expressed support for TSMC’s new initiative, committing to adjustments to water and electricity supply to ensure smooth construction. Ryugen further noted that TSMC is also seeking a site for a new plant in Taichung, which could become its third 2nm chip hub in Taiwan.
In the context of the broader industry, TSMC’s advancement towards 2nm chips echoes the recent discovery of Samsung’s 3nm Gate-All-Around (GAA) semiconductor in Microbt’s Whatsminer M56S++ bitcoin mining rig. This marked the first known application of the 3nm technology, discovered by Techinsights. Samsung’s breakthrough has long been speculated, and its commercialization can aid in the production of even more advanced chips.
The discovery of Samsung’s 3nm chip in the bitcoin mining machine is a crucial development, enhancing performance and energy efficiency. The Whatsminer M56S++ bitcoin mining rig produces an estimated 230 to 254 terahash per second (TH/s), and the utilization of Samsung’s technology could be a harbinger of things to come in the industry. For instance, Microbt’s rival, Bitmain, is believed to utilize chips supplied by TSMC, the same company venturing into 2nm technology.
What do you think about TSMC expanding to build out 2nm semiconductor production? Share your thoughts and opinions about this subject in the comments section below.
House Financial Services Committee Advances Clarity for Payment Stablecoins Act
On July 27, 2023, The U.S. House Financial Services Committee advanced a stablecoin-focused bill for the first time. The Clarity for Payment Stablecoins Act of 2023 would establish a federal regulatory framework for stablecoins with the U.S. Federal Reserve playing a pivotal role. The bill would grant the Federal Reserve the power to write requirements for issuing stablecoins but would not infringe on the authority of state regulators.
The following editorial was written by guest authors Wyatt Noble and Michael Handelsman for Kelman.Law
Under this bill, stablecoins are generally understood as digital assets which an issuer must redeem for a fixed monetary value, a definition that all those involved in blockchain technology and cryptocurrency are likely familiar with. However, this bill’s controversy largely stems from what or who can become a permitted issuer. Permitted issuers would be the only entities allowed to issue a payment stablecoin for use by people in the United States.
Permitted Issuers
The bill would require that permitted issuers be “a subsidiary of an insure depository institution that has been approved to issue payment stablecoins,” “ a Federal qualified nonbank payment stablecoin issuer that has been approved to issue payment stablecoins,” or “ a State qualified payment stablecoin issuer.” The third category of permitted issuers opens the door for appropriate state legislators and represents a carve-out for states looking to develop their own approach with respect to stablecoins.
Some Democratic politicians, including Representative Maxine Waters, opposed the bill on the grounds that issuers could simply opt to be regulated under relaxed state regimes. Another concern is that the language and definitions concerning issuers would allow commercial companies to effectively issue their own money.
Additionally, permitted issuers would be required to maintain reserves that back their stablecoins on a one-to-one basis in assets such as U.S. coins and currency, funds held as insured demand deposits or insured shares at insured depository institutions, treasury bills with a maturity of 90 days or less, repurchase agreements with a maturity of seven days or less backed by the aforementioned treasury bills, central bank reserves deposits, and other assets that the “primary Federal or State payment stablecoin regulator determines appropriate.”
Other digital assets such as cryptocurrencies are notably absent from the list of assets that can be used as reserves for payment stablecoins, and that is probably because of the volatile nature of most cryptocurrencies, along with the recent slew of bankruptcies in the industry fueled by that price volatility. In light of this exclusion, the bill would place a two-year moratorium on payment stablecoins that rely on the value of another digital asset created or maintained by the same originator to maintain the fixed value.
The bill would also create requirements for the rehypothecation or reuse of reserves, custodial or safekeeping services for stablecoins or private keys, and supervisory, examination, and enforcement authority over non-state qualified issuers.
Clarifying That Stablecoins Are Not Securities
Importantly, the bill’s final section clarifies that stablecoins are not securities or commodities as those terms are defined under the Investment Advisers Act of 1940, the Investment Company Act of 1940, the Securities Act of 1933, the Securities Act of 1934, or the Securities Investor Protection Act of 1970. This final section of the bill would definitively remove stablecoin issuers from the Securities Exchange Commission’s jurisdiction, so long as they operate within the confines of the bill.
What Should You Do in the Meantime?
In light of ongoing regulatory uncertainty and the increasing frequency of enforcement actions by the SEC, it’s more important than ever to consult with legal experts well-versed in digital assets. Consulting with the lawyers here at Kelman PLLC early on is the most efficient way to ensure compliance with potentially applicable laws and regulations, and avoid legal pitfalls and expenses that could otherwise handicap your business.
Fill out our contact form here to set up a free 30-minute consultation.
What do you think about the House Financial Services Committee’s Stablecoins Act? Share your thoughts and opinions about this subject in the comments section below.