The cryptocurrency business is thriving, but many things are happening, including, The European Parliament adopting crypto-focused MiCA legislation, Telegram allowing wallet users to buy, exchange, and withdraw Bitcoin, EU Parliament approving crypto licensing, funds transfer rules, and much more!
In this issue:
- The European Parliament adopts crypto-focused MiCA legislation.
- Ripple Counsel: U.S. crypto policy is driving the industry offshore.
- Telegram allows wallet users to buy, exchange and withdraw Bitcoin.
- Ethereum’s Shanghai upgrade spurs Institutional investment into staking.
- EU Parliament approves crypto licensing, funds transfer rules.
- Societe Generale’s crypto division introduces Euro stablecoin on Ethereum.
- Intel signals end of Bitcoin mining chip business amid cost-cutting effort.
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The European Parliament adopts crypto-focused MiCA legislation.
After two consecutive delays, the European Parliament has finally conducted the final vote on the Markets in Crypto-Assets Act, known as MiCA. Now the legislation, introduced in 2020, should grant approval from the European Council to be published as an effective regulation.
On April 20, immediately after the voting, MiCA’s rapporteur and the Member of the European Parliament reported that the bill has been adopted.
With MiCA, European policymakers aim to set a standard regulation to establish harmonized rules for crypto assets at the EU level, thereby providing legal certainty for crypto assets. The regulation will establish guidelines for the operation, structure, and governance of issuers of digital asset tokens. It will also offer rules on transparency and disclosure requirements for issuing and trading crypto.
The regulation is being perceived mostly with cautious optimism. There are, however, several issues with the 400-paged document, assembled for the most part several years ago. The current draft generally lacks any mention of decentralized finance (DeFi), fails to address the growing sector of crypto lending and staking, and doesn’t specify any rules for nonfungible tokens (NFTs).
At the recent panel during Paris Blockchain Week 2023, Janet Ho, head of EU policy at Chainalysis, pointed out that the success of MiCA would be dependent on robust feedback and the reworking of certain parts of the documentation. He was joined by Nadia Filali, Caisse des Dépôts Group’s blockchain program director, who stressed the importance of governments, regulators, and industry participants developing the regulation together.
However, EU officials emphasize the safety of the investors as the major task of MiCA. As Joachim Schwerin, one of the principal economists within the European Commission, told in his interview with Cointelegraph, MiCA should minimize the negative consequences of incidents like the insolvencies of FTX and BlockFi in the future.
Ripple Counsel: U.S. crypto policy is driving the industry offshore.
Susan Friedman, the International Policy Counsel for Ripple, recently took to Twitter to highlight the consequences of American crypto firms moving abroad due to the United States’ failure to adopt an appropriate regulatory regime for the crypto industry.
Friedman’s comments came in response to a Twitter spaces session titled “Crypto Policy and National Security”, which saw participation from Coinbase CEO Brian Armstrong, Haun Ventures’ Chief Policy Officer Tomicah Tillemann, Coinbase’ Chief Policy Officer Faryar Shirzad and Ripple board member Anja Manuel.
According to Friedman, the United States’ failure to adopt clear crypto regulations has led to crypto activity moving offshore. With the industry moving out of American jurisdiction, the ability of US law enforcement to monitor illicit and criminal activity has been restricted considerably. Friedman argued that this was the exact opposite outcome of what critics had been calling for.
Faryar Sharzad, who previously served as the Deputy National Security Advisor for the George Bush administration, pointed out that the technological edge that the country derives from domestic innovation, was a crucial part of the United States. One of the latest leaps in innovation has been in the crypto space and that space is now looking to move offshore.
All the speakers in the spaces session agreed that the offshore push by crypto firms in the United States was a concern in terms of national security. Gemini has become the latest crypto firm to announce a non-U.S. crypto derivatives platform that will not be available to clients in the US. Last week, reports started circulating about Coinbase setting up a crypto derivatives platform in Bermuda.
Telegram allows wallet users to buy, exchange and withdraw Bitcoin.
Users of the Telegram app can now buy, exchange and withdraw Bitcoin. Both the Wallet bot and related services that enable such functions were established by a third party rather than Telegram itself. Third-party developers who use the open bot API of Telegram have created the Wallet bot and related services. Having said that, the API can be used by anyone to develop their crypto-based bot with Telegram’s involvement.
@wallet web interface users can access, purchase, exchange, withdraw as well as make P2P transactions via the web interface of Telegram in Bitcoin, according to the April 21 announcement from the @wallet account.
The announcement mentions that this decision has been created upon the current services based on cryptos renowned inside the chat program. With Bitcoin being available on the @wallet web interface with a new instance exchange, purchasing Bitcoin through a bank card or the P2P market is possible in the “Buy & Sell” section of the user-friendly interface.
The announcement reminded users that the platform’s upgraded exchange can instantly swap Tether, Bitcoin, and Telegram Open Network with each other. With the consistent increase in the popularity and adoption of cryptos, it is interesting to see how Telegram as well as other third-party industry players further innovate and adapt to the changing requirements and expectations of users worldwide.
Telegram’s move to introduce peer-to-peer trading for Bitcoin besides expanding the scope of cryptos is nothing less than a major step in the company’s attempts towards emerging as a major participant in the rapidly-developing DeFi world.
Ethereum’s Shanghai upgrade spurs Institutional investment into staking.
Early signs show that Ethereum’s seamless Shanghai upgrade has spurred institutional investors’ interest in staking.
Top institutional-grade ether (ETH) staking service providers have already recorded about three times larger inflows in April compared to all of last month, Michiel Milanovic, analyst of Ethereum blockchain developer firm ConsenSys told. Some 80% of the inflows happened after the Shanghai upgrade went live on April 12, he added.
Ethereum’s highly anticipated tech update, often referred to as the Shanghai or Shapella upgrade, starting April 12 enabled withdrawals of some 18 million tokens, worth $35 billion, previously locked up in staking contracts. After the upgrade, ETH’s price rallied to $2,100, its highest level in 11 months, defying earlier concerns the unlocking could lead to significant selling pressure and a price crash. The token recently has dropped below $1,900, aligning with a broader crypto market decline.
Allowing withdrawals also reduced the liquidity risk associated with locking up ETH for staking, which has kept some investors at bay. “We expect this to naturally increase staking rates after the initial drawdown of ETH from long-term validators,” Milanovic said.
According to a survey by Kiln, an institutional-grade staking service provider, 68% of investors said they intend to start staking or increase their staked amount after Shanghai. The survey was conducted in February, before the Shanghai upgrade. Thomas de Phuoc, Kiln’s co-founder and chief operating officer, said the firm experienced a fresh wave of interest in staking, even from traditional finance (TradFi) firms. “Our sales team noted 60% more deals in the pipeline than at the same time last year, including from traditional institutions,” Phuoc said. “We are discussing at the moment with some brokerage firms, investment banking services holding companies in the U.S. or Europe.” The kiln has recorded $47 million (24,640 ETH) of new deposits since the Shanghai upgrade, according to a Dune dashboard by crypto venture fund Dragonfly’s analyst. Rival platform Staked.us booked $111 million (58,592 ETH) in inflows, more than double the $51 million (26,667 ETH) of staking rewards withdrawn, per Dune data.
Still, it is early to draw definite conclusions, Milanovic noted, because not all staking providers have enabled withdrawals immediately.
EU Parliament approves crypto licensing, funds transfer rules.
Lawmakers in the European Union on Thursday, Apr 20 voted 517-38 in favor of a new crypto licensing regime, MiCA, with 18 abstentions, making it the first major jurisdiction in the world to introduce a comprehensive crypto law.
The European Parliament also voted 529-29 in favor of a separate law known as the Transfer of Funds regulation, which requires crypto operators to identify their customers in a bid to halt money laundering, with 14 abstentions.
The vote follows a Wednesday, Apr 19 debate in which lawmakers largely supported plans to make crypto wallet providers and exchanges seek a license to operate across the bloc and require issuers of stablecoins tied to the value of other assets to maintain sufficient reserves.
The Markets in Crypto Assets regulation was first proposed by the European Commission in 2020, and to pass into law has to be approved by the parliament and the EU’s Council, which represents the bloc’s member states. Its main provisions start to apply just over 12 months after publication in the EU’s official journal, likely in June.
Societe Generale’s crypto division introduces Euro stablecoin on Ethereum.
Societe Generale’s (GLE) crypto division, SG Forge, has introduced a stablecoin pegged to the euro (EUR) on Ethereum, saying it is the first such asset deployed on a public blockchain.
EUR CoinVertible (EURCV) will be offered to institutional clients as a means of bridging the gap between traditional capital markets and digital assets, the Paris-based bank’s unit said on its website on Thursday.
SG Forge said it is addressing increasing demand from clients for a robust settlement asset for on-chain transactions, as well as a means for on-chain liquidity funding and refinancing.
While U.S. banking giant JPMorgan’s in-house stablecoin JPM Coin has been in use since 2020 as a settlement token between financial institutions, it trades on the bank’s internal Onyx network, not a public blockchain.
The Societe Generale division won registration from France’s Autorité des Marchés Financiers (AMF) to offer cryptocurrency trading and custody services last September, in a sign of the gathering momentum of institutional adoption of digital assets in France.
Intel signals end of Bitcoin mining chip business amid cost-cutting effort.
Intel (NASDAQ: INTC) will discontinue its Blockscale Bitcoin mining chip line, a year after it debuted the product.
Tom’s Hardware reported that, per a spokesperson with the tech giant, Intel has “end-of-life the Intel Blockscale 1000 Series ASIC while we continue to support our Blockscale customers.” When asked about what the move meant for the future of Intel’s Bitcoin mining chip business altogether, the spokesperson reportedly said: “We continue to monitor market opportunities.”
The Blockscale chip line was unveiled last April. Companies like Block Inc. and Argo Blockchain were among Intel’s initial customers. “The Intel Blockscale ASIC is going to play a major role in helping bitcoin mining companies achieve both sustainability and hash rate scaling objectives in the years ahead,” Jose Rios, general manager of Blockchain and Business Solutions in the Accelerated Computing Systems and Graphics Group at Intel, said at the time. Yet Intel’s interest in bitcoin mining stretches back years, and despite the end of this specific product, Intel could in theory revive it in the future.
Intel has in recent months undertaken a cost-cutting effort that has seen its top executives take pay cuts. Intel said in February that it is seeking $3 billion in cost savings for 2023 and between $8 billion and $10 billion in annual savings by 2025. The tech giant’s IDM 2.0 manufacturing plan, announced in 2021, was cited by Tom’s Hardware as a factor in the Blockscale sunset decision, suggesting that Bitcoin mining is being deprioritized in a cost-cutting environment.
Still, Intel is among some technology companies positioned to receive billions of dollars in new federal subsidies intended to fuel growth in the U.S. computing chip sector.
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