The cryptocurrency business is thriving, but many things are happening, including, BNP Paribas linking Digital Yuan to bank accounts for promoting CBDC, Memecoin hype driving Bitcoin transaction fees, Deloitte integrating Blockchain for digital credentials, and much more!
In this issue:
- BNP Paribas will link Digital Yuan to bank accounts for promoting CBDC use.
- Memecoin hype drives Bitcoin transaction fees to multi-year highs.
- 3% tax on Crypto transfers part of Kenya’s proposed budget: Bloomberg.
- Deloitte integrates Blockchain for digital credentials.
- Kazakhstan collected $7M in crypto mining taxes in 2022.
- Alibaba Cloud launches its Metaverse launchpad on Avalanche.
- Stripe unveils fiat-to-crypto onramp for US Web3 companies and users.
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BNP Paribas will link Digital Yuan to bank accounts for promoting CBDC use.
French bank BNP Paribas (BNP) is promoting the use of China’s digital yuan by linking wallets to bank accounts, the South China Morning Post (SCMP) reported on Friday.
BNP Paribas’ corporate clients will be able to connect to China’s central bank digital currency (CBDC), or “e-CNY” as it is known – through a connection to the Bank of China’s (BOC) system. BOC is one of eight banks authorized to handle China’s digital currency business.
The system will link clients’ “digital yuan wallet to [their] bank accounts” to enable “efficient real-time and convenient” use of the CBDC, BNP said in a statement according to SCMP’s report. The bank will also be exploring the use of the CBDC for smart contracts, supply chain finance, and cross-border payments, it added.
China’s digital yuan development is the most advanced among CBDC projects in major economies, its testing phase having commenced in 2020. The country’s central bank the People’s Bank of China (PBOC) said in January that the digital yuan accounted for 0.13% of the total cash in circulation.
Memecoin hype drives Bitcoin transaction fees to multi-year highs.
Bitcoin transaction fees surged in early May, reaching their highest point over the past two years, according to data from Crypto Fees.
On May 3, the total amount of fees paid on the Bitcoin blockchain reached $3.5 million, jumping about 400% from late April. The average Bitcoin transaction fee reached as much as $7.2, according to YCharts. The ongoing trading frenzy of memecoins like Pepe Coin (PEPE) has triggered an unwanted consequence for Bitcoin (BTC) driving its transaction costs to multi-year highs. The latest increase in BTC transaction fees is primarily attributed to a surge in Bitcoin activity involving BRC-20 transactions. According to data from Galaxy Research, 50% of all Bitcoin transactions on May 2 were related to BRC-20 transactions.
Modeled after Ethereum’s ERC-20 token standard, BRC-20 is an experimental token standard allowing users to issue and transfer fungible tokens on the Bitcoin blockchain. The standard was introduced in March 2023 by a pseudonymous on-chain analyst known as Domo. The BRC-20 token standard has quickly become a major trend in the cryptocurrency industry, specifically amid the sharp growth of the PEPE memecoin. The token has rallied more than 600% over the past seven days, reaching its all-time high of $0.00000216 on May 5.
The Bitcoin blockchain isn’t the only blockchain affected by the ongoing memecoin hype. Gas fees on the Ethereum blockchain have also been skyrocketing to new multi-month highs recently. On May 2, ETH transaction fees hit an aggregate amount of more than $19 million, a level not seen since May 2022, according to Crypto Fees. The Ethereum blockchain remains the most expensive network in terms of transaction fees at the time of writing.
Despite the latest spike in Bitcoin transaction fees, the current BTC transaction cost is still far from all-time high levels. The highest Bitcoin transaction fees were recorded in April 2021, when the average BTC transaction cost almost reached $70 amid a major decline in the Bitcoin network hash rate. The previous highest point in BTC transaction fees was in 2017, with transaction costs surging above $60.
3% tax on Crypto transfers part of Kenya’s proposed budget: Bloomberg.
Kenya’s Finance Ministry, the National Treasury, has proposed a 3% tax on the transfer of digital assets for the coming budget year, according to a Bloomberg report that cites proposals presented to lawmakers. The nation’s budget will be presented on June 8.
Kenya elected William Ruto as its President in 2022 when its regulators had not yet proposed any sort of actual crypto rules. President Ruto was assumed to be more crypto-positive than losing candidate Raila Odinga. Later in 2022, lawmakers considered a bill that would allow for the taxation of crypto exchanges, digital wallets, and transactions.
The proposed tax on digital assets appears to be a first without necessarily legitimizing the space, a move that other nations have undertaken in recent times too. Roughly 8.5% of the Kenyan population or 4.25 million people own cryptocurrencies, ranking the nation fifth in the world in the global adoption of crypto, according to a report by the United Nations.
The Finance Bill 2023, seen by local news outlet Kenyans.co.ke, defines the term “digital asset.” “Digital asset” includes anything of value that is not tangible and cryptocurrencies, token codes, and numbers held in digital form and generated through cryptographic means or otherwise, by whatever name called, providing a digital representation of value exchanged with or without consideration that can be transferred, stored or exchanged electronically; and a non-fungible token or any other token of similar nature, by whatever name called; and the income derived from transfer or exchange of a digital asset” means the gross fair market value consideration received or receivable at the point of exchange or transfer of a digital asset,” read part of the Finance Bill 2023, according to Kenyans.co.ke.
Deloitte integrates Blockchain for digital credentials.
Big Four accounting firm Deloitte has integrated blockchain technology to enable its customers to verify themselves with a single credential wallet, to streamline the “typically inefficient” verification processes.
In a May 4 statement, Deloitte announced it has integrated KILT blockchain technology, a Polkadot (DOT) parachain, to issue reusable digital credentials to streamline Know Your Customer (KYC) and Know Your Business (KYB) verification processes.
The integration aims to streamline the typical verification procedures that can be inefficient and repetitive, such as paper-based certificates and identity verification requests that require multiple data points. Additionally, the traditional verification processes that store data and personal information across multiple platforms and databases were noted to put consumer data privacy at risk. The credential wallet will be provided as a browser extension and customers can set it up without any prior knowledge of blockchain. While the wallet will be stored on the customer’s device and remain under their control at all times, Deloitte retains the ability to modify it if circumstances change, as noted in the statement.
Ingo Rübe, founder of KILT Protocol said that the streamlined identity solutions built on KILT allow customers to use verifiable digital credentials across multiple services, whilst maintaining control “over when and where to share personal information.” As a Polkadot parachain, it also provides the “scale and security needed by enterprise partners,” he added. Polkadot tweeted shortly after the announcement on May 4 that Deloitte leveraging KILT’s solutions to support its KYC and KYB processes is vital for safeguarding itself against illegal activity.
Kazakhstan collected $7M in crypto mining taxes in 2022.
The government of Kazakhstan received 3.07 billion tenges (approximately $7 million) in tax payments from crypto mining entities in 2022, following the implementation of an amended law regulating the fiscal burden of mining cryptocurrencies, according to local media reports.
Preliminary data from the government for 2023 shows that mining fees collected by April 27 totaled 240 million tenge – worth over $541,000 at the time of writing. The figures are much lower than the 652 million tenge (~$1.5 million) in fees paid in the first quarter of 2022.
Kazakhstan ranks among the world’s top Bitcoin mining hubs. As of January 2022, the Central Asian country contributed to 13.22% of the total Bitcoin hash rate, just behind the United States (37.84%) and China (21.11%), shows data from Cambridge Centre for Alternative Finance.
The country introduced taxes on digital mining on January 1, 2022, based on electricity consumption by mining entities. The law came into effect amid growing national frustration with undertaxed usage of the national power grid by crypto miners, Cointelegraph reported. The amended legislation was also considered a legal path for further adoption amid tightening regulations around the world.
A wave of foreign mining operators relocated to Kazakhstan in 2021 during the last bull market, affecting already difficult relations between the country and miners. Some estimates indicate that more than 87,849 rigs have been brought to the territory by November 2021 following China’s crackdown on mining activities. Recently, the government announced plans to introduce new crypto regulations to curb tax fraud and unlawful business operations. One of the proposals calls for government approval for secured digital assets issuers, while another would require miners to sell at least 75% of crypto earned via registered exchanges. The move is expected to reduce tax evasion.
Alibaba Cloud launches its Metaverse launchpad on Avalanche.
The Avalanche team announced via a Medium post on Thursday that Alibaba Cloud has built a launchpad for businesses to rapidly deploy metaverses on Avalanche.
Cloudverse is a one-stop, end-to-end solution for businesses to seamlessly customize, launch, and maintain their own metaverse space, creating new dimensions for engaging customers. All of Cloudverse’s blockchain elements including digital land, wearables, and other digital assets are built on Avalanche.
Cloudverse is built with the top tech available to metaverse initiatives and is now available to millions of Alibaba Cloud clients and billions of users worldwide, the Avalanche team added.
Avalanche is an open-source platform for launching Decentralized Finance (DeFi) applications and enterprise blockchain deployments in an interoperable, highly scalable ecosystem.
Stripe unveils fiat-to-crypto onramp for US Web3 companies and users.
Stripe, a prominent internet payment company, has announced the launch of a new fiat-to-crypto onramp specifically designed for US-based Web3 companies and users. This move aims to simplify cryptocurrency purchases for American customers, making it more accessible and convenient.
The Stripe-hosted onramp will enable Web3 companies to provide a seamless and efficient crypto purchasing experience for their US users, without having to rely on third-party exchanges. This streamlined process is expected to increase the adoption of cryptocurrencies among American customers.
By venturing into the Web3 space, Stripe showcases its commitment to staying ahead in the rapidly evolving fintech industry. The new onramp is poised to enhance the overall user experience for Web3 customers in the United States, further promoting the growth of cryptocurrency use.
In conclusion, Stripe’s US-focused fiat-to-crypto onramp is a significant development for Web3 companies and users in the country. By simplifying the process of acquiring cryptocurrencies, Stripe is playing a crucial role in driving innovation and adoption within the US market.
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