October 30th, 2023

Navigating the UK’s Cryptocurrency Landscape

The United Kingdom’s recent proactive stance towards the cryptoasset sector is indicative of its commitment to provide clarity, assurance, and protection for both consumers and businesses. With these new regulations slated for implementation earlier this month, the purview spans a vast spectrum of crypto activities, right from trading, and lending, to custody and promotion. However, they also inadvertently weave in a layer of complexity, especially for foreign entities and those yet to be registered, who are vying for a foothold in the UK market.

Central to this regulatory framework is the Payment Services Act (PSA) of 2019, which lays the groundwork for payment service providers, and by extension, entities involved in the realm of cryptoassets. The PSA defines cryptoassets as digital representations of value or rights, which are secured cryptographically and can be transferred and used for investment purposes. It’s pertinent to note that these definitions exclude cryptoassets that squarely fit within the classifications of electronic money or controlled investments already in existence. A further demarcation within the PSA categorizes services as digital payment token (DPT) services and e-money token (EMT) services. The former encompasses platforms, brokers, and those involved in custody and lending, while the latter is predominantly focused on assets that are pegged to a fiat currency or another asset, such as stablecoins.

A salient feature of these regulations is the directive that mandates all DPT service providers to be registered with the Financial Conduct Authority (FCA). The underpinning rationale is anchored in the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs). These are intricate by design and compel DPT service providers to uphold stringent standards to combat the dual threats of money laundering and terrorist financing. This translates to rigorous customer due diligence, monitoring of transactions, and meticulous record-keeping, especially in scenarios where activities appear suspicious. The mantle of ensuring compliance with the MLRs rests with the FCA.

Expanding the horizon further, there is the inclusion of a financial promotion regime specifically for DPT services. This is orchestrated to integrate the Financial Services and Markets Act 2000 (FSMA) within its scope. The FSMA has always been instrumental in regulating the promotion of financial products and services to consumers in the UK, ensuring they are transparent, accurate, and devoid of misleading information. The implications of this integration are multifaceted. It means DPT service providers will now be obligated to provide clear risk warnings, assess the suitability of consumers, instate a cooling-off period, especially for those new to the investment landscape, and disallow certain incentives that might be deemed inappropriate.

Moreover, there are plans to introduce a market abuse regime, which will widen the reach of the Market Abuse Regulation (MAR) to include DPT service providers. This will scrutinize practices that include but are not limited to, insider trading, manipulation of the market, and unauthorized dissemination of information. This initiative is primarily to clamp down on deceptive activities that encompass tactics like spoofing, front-running, and the notorious pump-and-dump strategies that have plagued many an investor.

In the realm of consumer protection, the introduction of a statutory trust requirement is noteworthy. What this signifies is that by the close of 2023, service providers would need to hold the assets of customers in a trust arrangement. On this front, the FCA is in the process of formulating guidelines.

The landscape, with the advent of these regulations, becomes a double-edged sword for crypto businesses aspiring to set their footprint in the UK market. While clarity is a boon, the challenges are manifold. Non-compliance or even partial adherence could lead to businesses having to restructure their operations, which could span from customer due diligence, and transaction monitoring to rethinking their promotional strategies.

For the consumer, the landscape is both protective and cumbersome. While they will be cushioned by enhanced protective measures, they would also need to wade through increased verification processes and other regulatory protocols.

One of the foremost challenges is the delineation of DPT services. There might be grey areas when it comes to categorizing certain cryptoassets or services under the DPT umbrella. Additionally, challenges on the jurisdictional front arise as the actual enforceability of these regulations on businesses based overseas remains to be seen. Lastly, adaptation by the industry is pivotal. The crypto industry, which has been relatively unbridled, might encounter resistance when adapting to these norms.

The trajectory of the UK’s cryptocurrency regulations, while poised in the right direction, necessitates a harmonious effort from regulators, businesses, and consumers to ensure a seamless transition and integration.

Source: https://intpolicydigest.org/navigating-the-uk-s-cryptocurrency-landscape/

Anndy Lian

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com

j j j

October 16th, 2023

Israel-Palestine crisis: Navigating the intersection of conflict, aid and blockchain

Top blockchain and crypto news: Gaza tensions, digital tremors, NFTs are not dancing in September, Joe Lubin talks traditional system’s twilight.

In this issue

Gaza tensions, digital tremors
NFTs: not dancing in September
Lubin talks twilight: Traditional system’s eclipse

From the Editor’s Desk

Dear Reader,

It’s a geopolitical conflict with roots stretching back over more than a century. Yet the latest escalation of violence in Israel and Palestine this past week feels particularly shocking. Not least because the Hamas-led attacks throughout Israel over the weekend apparently caught the Israeli government, intelligence services and military — one of the world’s most well-provisioned — completely off-guard.

Reports have emerged suggesting that the militant group Hamas, the de facto political leadership in the Palestinian region of Gaza, used crypto transfers to raise millions of dollars in funds for the weekend’s attacks. It therefore appears we have once again seen financial access weaponized, as it always is in modern day conflict.

The hope now is that crypto steps up to take on a more positive role in what happens next. The blockchain, after all, is advertised as stateless, and permissionless. In its truest guise, it bypasses politics. It could be used here to get much needed humanitarian aid to civilians on both sides of this bloody conflict.

Local Web3 entrepreneurs set up an emergency crypto fund for Israeli victims of the violence — a move that we applaud and recommend readers seek out. But there are also more than 2 million Palestinian civilians inside Gaza who could benefit from financial aid delivered in the form of crypto.

As we have seen in this abhorrent incursion, civilians have cruelly been included in the attack equation. From afar, the complex web of history, politics, and homeland intertwine. On the ground, there are simply lives at stake.

Until the next time,

Angie Lau,
Founder and Editor-in-Chief
Forkast.News

1. Crisis? Bitcoin’s dual response

Israel’s cyber crimes unit, in conjunction with the National Headquarters for Economic Warfare, has announced the freezing of cryptocurrency accounts believed to be instrumental in raising funds for the Gaza-based Palestinian militant group, Hamas.

Israeli authorities have reportedly urged Binance, the world’s largest crypto exchange, to transfer the confiscated funds into Israel’s state treasury.
That follows a devastating series of attacks on Israel by Hamas over the weekend. The attacks, which included multiple atrocities against civilians, killed an estimated 1,200 people and wounded at least 2,700 others as of noon Thursday in Hong Kong.
In retaliation, Israeli warplanes have bombarded Gaza, a tiny strip of land some 40 km in length and home to over 2 million people. The air strikes have reduced large parts of the area to rubble, with 900 people reported killed and 4,500 injured. Reports indicate that the Israeli military has called up 350,000 reservists and may now be preparing for a ground assault on Gaza.
In response to this humanitarian crisis, a consortium of Israeli crypto companies has launched Crypto Aid Israel. This emergency fund aims to support Israeli citizens affected by the ongoing conflict. It is spearheaded by local crypto industry figures and companies such as Fireblocks, 42Studio, Market Across and CryptoJungle. They have teamed up with non-profit organizations to receive and deliver humanitarian aid to affected Israeli communities using cryptocurrencies such as Bitcoin, Ether and stablecoins like USDT and USDC.

Crypto has been used in conflict before. On-chain data shows that combatants and civilians on both sides of the Russo-Ukrainian war make use of cryptocurrencies as a way to receive and send funds. The use of crypto on both sides of the divide reveals crypto’s dual-edged nature as a tool designed to increase financial access, regardless of political affiliation, location, or intended use.

Six months into the conflict with Russia, Ukraine had already raised US$54 million in crypto donations, channeling it towards the provision of military essentials, medicine, and vehicles for their armed forces. On the flip side of that, pro-Russia militias also received over US$20 million in cryptocurrencies in the first year of the conflict.

Forkast.Insights | What does it mean?

The Middle East, as a pivotal hub for global oil production and transit, has long been a focal point of geopolitical tension reverberating through the global economy. When conflicts arise in the region, the immediate concern for markets is often the threat to oil supply chains. Physical infrastructure can be damaged, while fear of wider escalation stokes market uncertainties. Locations like the Suez Canal and the Strait of Hormuz become choke points for global oil supply.

However, the market impact is felt beyond the oil sector. Rising oil prices lead to higher transportation and production costs. As these costs surge, consumers feel the pinch, leading to inflationary pressures. Central banks, in a bid to stabilize economies, adjust monetary policies, which in turn further fuel inflation.

In the midst of these economic fluctuations, investors begin to search for stability. Historically, this stability was sought in gold, a time-tested “safe haven.” However, the digital age has ushered in another contender: Bitcoin.

Dubbed “digital gold” by some, Bitcoin offers certain features that make it attractive in times of uncertainty. Its capped supply makes it a potential hedge against fiat currency depreciation, especially at times of high inflation. Additionally, in regions with limited banking, the decentralized nature of Bitcoin can offer an alternative means of accessing financial services.

But Bitcoin’s journey amid geopolitical unrest is not a straightforward one. While some investors view it as a refuge, others might liquidate volatile assets like cryptocurrencies to cover losses or rebalance portfolios. This duality in investor sentiment can lead to sharp, unpredictable price movements in the Bitcoin market. On top of that, as Bitcoin’s ecosystem intertwines with the broader economy, significant spikes in global oil prices could impact the energy-intensive process of Bitcoin mining, affecting its network dynamics.

2. Wake me up when September ends

The NFT production on Ethereum reached an all-time low of US$17.55 million in September, marking a 12.4% decline from August’s US$20.05 million, according to data from Forkast Labs.

Prestigious NFT collections like Bored Ape Yacht Club and CryptoPunks saw a significant drop in their valuation, pointing to a potential shift in the broader market sentiment.
Forkast ETH NFT Composite, an index tracking the top 250 NFTs on Ethereum, plunged 48% year-to-date, hitting its low of 715.22 points in September.
Polygon’s NFT production experienced a dip, with September’s figures at a seven-month low of US$4.7 million. That was, nonetheless, an overall year-to-date increase of 219%.
Anndy Lian, NFT author, suggests the NFT hype from 2021 has tapered off, leading to a selective and realistic approach from buyers.
Major NFT marketplaces like OpenSea and Blur reported drops in monthly trading volumes by 31.8% and 38.3% respectively in September.
While the market faces challenges, global brands like Starbucks are still adopting NFTs, showcasing new innovative use cases that could reignite interest in the sector.

Forkast.Insights | What does it mean?

There has been a fundamental shift in the way NFT investors collect and trade. They’re finally looking for real value.

Where they aren’t finding value is in new mints, currently at all-time low NFT production levels. Those new NFT mints typically represent run of the mill profile picture collections, which can make creators enormous profits in an instant during a bull market. Today, you’ll be lucky to flip a new mint for what you paid.

After major projects like the CyberKongz’ Genkai, and NWay’s Wreck League failed to sell out their primary sale over the summer, creators hit the brakes on minting new collections.

Still, even with declining primary sales and plummeting value for NFTs on secondary markets, some NFT collections are proving resilient even today. Those collections offer more tangible value, like the Pudgy Penguins NFTs who offer royalties on toy sales to select NFT holders.

Similarly, the Winds of Yawanawa collection by Refik Anadol offers a more abstract, but equally attractive value as pure art. Refik’s art has been featured both on the Las Vegas Sphere, and now in the Museum of Modern Art as the first NFT creator to have his NFT backed digital art welcomed into their collection.

Even more value has been uncovered in new SoFi (social finance) platforms, which have themselves been a main contributor to the decline of the NFT markets. Total new users of the new Friend.tech platform have climbed to over 299,000 unique users, up from 130,000 on Sept. 1. Total locked value in the platform also rose from around 3,260 ETH to approximately 29,200 ETH over the month of September.

Innovation is for now mostly coming from outside NFTs. Until it returns to the non-fungible token market, expect to see September’s trend of all-time-low sales to continue well into October and beyond.

3. Monetary system’s impending sunset

Joe Lubin, chief executive of blockchain technology platform Consensys and a co-founder of Ethereum, spoke to Forkast during the recent Token2049 conference in Singapore. He discussed the parallels between today’s crypto bear market and the dotcom bubble of the late ’90s. Lubin attributes the current crypto downturn to similar waves of unbridled enthusiasm followed by market corrections. He predicted that a marriage between AI and blockchain could be the crypto industry’s route back to prominence.

Amid escalating global financial challenges, such as inflation and interest rate hikes, Lubin said that traditional monetary systems might be approaching their twilight.
Regulators in the U.S. are scrutinizing the crypto industry. Lubin sees this as a veiled effort to either “slow-roll” or outright suppress the budding industry.
Looking abroad, regions like Europe, Asia, and the Middle East are painting a contrasting picture. Those regions, he said, see decentralized tech as an equalizing force against the might of U.S. financial power.
A tech marriage is on the horizon, Lubin said. He highlighted the importance of weaving artificial intelligence into the fabric of blockchain technology — and vice versa.
There’s no need for society to be overly concerned about artificial intelligence, according to Lubin. He remains buoyant about AI’s potential, particularly in collaboration with decentralized protocols that prevent the concentration of AI control in a small number of hands.

Forkast.Insights | What does it mean?

Lubin is no AI doomer. He made that clear during his interview with Forkast. But while the blockchain mogul and Ethereum godparent outlined a lot of the good that can come from AI’s impending global takeover, he touched on some of its more dystopian aspects also.

Tech is never inherently bad, was the primary thrust of Lubin’s argument on artificial intelligence. The Consensys boss should know. He graduated from Princeton with a degree in computing and electrical science before kicking off his working life in the university’s robotics lab. So he enjoys a pretty solid grasp on the nascent field.

The only danger of artificial intelligence, he said, is if those now working on it allow its power to become entirely concentrated in a small number of hands — the bevy of private companies driving much of today’s AI advances. That would be “failure mode for humanity,” he said, without so much as a flinch.

The remedy for that, Lubin argued, is open source building and the incorporation of decentralized blockchain protocols. That way, the capabilities explored on the back of large language models (LLMs), generative pretrained transformers (GPTs) and the like will remain visible for all to see and make use of.

Your next open source coding tutor? Look no further than AI.

“We need to level up humanity in a big way,” Lubin said. “Our AI allies are going to get better and better at that.”

Source: https://forkast.news/israel-palestine-navigating-conflict-aid-blockchain/

Anndy Lian

www.anndy.com

j j j

September 22nd, 2023

Navigating The Path To Greener Bitcoin: Is The Premium Justified

Bitcoin, the renowned digital currency celebrated for its decentralized nature, fast transactions, and privacy, has encountered an environmental dilemma due to its energy-intensive mining process. In response, the notion of a “green” Bitcoin, sourced from renewable energy, has gained momentum. In this opinion piece, we will look into whether paying a premium for a greener option is a proposition worthy of consideration.

Understanding Bitcoin Mining And Green Bitcoin

Bitcoin mining entails verifying transactions on the blockchain through intricate mathematical computations, demanding substantial computational power and energy. Concerns over its environmental footprint have arisen. However, recent studies have contested the idea that Bitcoin mining significantly contributes to carbon emissions. The University of Cambridge’s report reveals that over 50% of its mining utilizes renewable energy sources like hydroelectric, wind, and solar power.

This global shift towards sustainable energy isn’t confined to Bitcoin mining alone. Nations and corporations worldwide are investing significantly in renewable energy sources, with renewable energy projected to surpass coal as the primary electricity source by 2025, according to the International Energy Agency (IEA). This transition is likely to benefit crypto mining, as renewable energy becomes more accessible and cost-effective.

“Green Bitcoin” denotes the use of sustainable energy sources during the mining process. This concept has gained traction as environmental consciousness grows among investors and stakeholders in the cryptocurrency sphere. Integrating sustainable energy into not only reduces the industry’s carbon footprint but also fosters social and economic development. Renewable energy projects can generate jobs and stimulate local economies.

Nonetheless, adopting sustainable energy sources in Bitcoin mining is not without challenges. Availability and reliability of these sources can fluctuate based on geographical regions and climates. Additionally, the initial investment for renewable energy projects can be substantial, potentially deterring miners from transitioning.

Despite these challenges, the advantages of green Bitcoin are substantial. Embracing sustainable energy in mining enables the industry to diminish its carbon footprint, stimulate economic opportunities, and encourage sustainable development. Furthermore, it can enhance the cryptocurrency sector’s reputation, which has previously faced criticism over its environmental impact.

Would You Pay A Premium For Greener Bitcoin?

The pivotal economic question emerges: Would you pay a premium for greener Bitcoin? The environmental consequences of cryptocurrency mining are significant. Estimates suggest that cryptocurrency mining consumes as much energy as an entire country, like Argentina. This high energy consumption mainly stems from fossil fuels, contributing to climate change.

Consequently, the idea of a greener cryptocurrency holds allure, as it could alleviate cryptocurrency mining’s environmental footprint. The debate centers on whether individuals would be willing to pay extra for greener cryptocurrency. Advocates argue that consumers are increasingly environmentally conscious and willing to pay more for eco-friendly products. A recent research paper found that sustainability-certified products can command higher prices. The study, spanning 2,000 consumers across countries, demonstrated a 12% greater willingness to pay for certified sustainable products compared to non-certified ones. It also identified factors influencing consumer preferences, including environmental awareness, social responsibility, perceived quality, and trustworthiness. This implies a potential market for environmentally friendly cryptocurrency, with consumers willing to pay a premium.

On the contrary, opponents contend that cryptocurrency mining’s environmental impact is exaggerated. Some argue that producing greener cryptocurrency would incur prohibitively high costs, rendering it economically unfeasible. Consequently, consumers may not be willing to pay a premium if the cost is excessive.

The Potential For A Green Bitcoin ETF

To address this issue, one potential solution is the creation of a Bitcoin green exchange-traded fund (ETF). This ETF would primarily invest in Bitcoin mining companies using renewable energy sources like solar, wind, or hydropower. Such an ETF aims to allow investors to participate in Bitcoin’s price fluctuations while promoting a shift towards a sustainable, eco-friendly economy.

For a Bitcoin green ETF to be viable, several critical criteria must be met. It should attract sufficient demand from investors interested in both cryptocurrency and environmental, social, and governance (ESG) factors. Additionally, it must identify and verify the renewable energy sources employed by the cryptocurrency mining companies within its portfolio while ensuring compliance with ESG standards and jurisdictional regulations. Moreover, the ETF should offer liquidity and transparency to investors, avoiding excessive fees and tracking errors that could harm performance.

Creating a Sustainable Bitcoin ETF poses challenges too. It’s inherent price volatility could affect the profitability and stability of the companies in the ETF’s portfolio. Competition from other cryptocurrency ETFs or alternative products with lower costs or higher potential returns could present a hurdle. Additionally, the intricate regulatory landscape surrounding cryptocurrency and ESG investing could introduce legal and operational risks.

In My Humble Opinion

In my view, the concept of a greener Bitcoin is commendable and merits exploration. However, the decision to pay a premium for it hinges on cost and consumer willingness. If the cost is prohibitive, it may not justify the premium. Yet, if the expense remains reasonable and consumers are willing to invest more for an eco-friendly option, greener option could be a practical response to the environmental concerns surrounding Bitcoin mining.

The idea holds both advantages and drawbacks. Paying extra for a more sustainable cryptocurrency could incentivize miners to shift to cleaner energy sources, lowering the network’s overall carbon emissions and enhancing cryptocurrency’s social and ethical appeal. Conversely, it could raise the cost and complexity of cryptocurrency usage, necessitating energy source verification for transactions and potentially creating market segmentation.

Ultimately, the decision rests on personal preferences and priorities. If you prioritize environmental sustainability and social responsibility, you may opt for cryptocurrencies mined with renewable energy, despite the premium. If cost efficiency and simplicity are paramount, you may prefer cheaper but conventionally mined cryptocurrencies. Nevertheless, awareness of cryptocurrency’s environmental impact should inform your choices as a user.

In summary, the question of whether it’s worth paying a premium for a greener Bitcoin is multifaceted. While arguments exist both for and against the idea, the answer hinges on production costs and consumer willingness, supply, and demand too. As global environmental consciousness rises, exploring eco-friendly options for all industries, including Bitcoin mining, becomes increasingly important.

Source: https://www.benzinga.com/23/09/34800608/navigating-the-path-to-greener-bitcoin-is-the-premium-justified