Biden’s executive order was enough of a “nothing burger” (so far) that crypto prices responded with a relief rally on the day. What else is happening in Washington, DC – and how are other governments approaching digital currencies and blockchain projects these days?
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Senate hearing on crypto and sanctions this Thursday
It appears that members of the US Senate Banking Committee are having trouble “understanding the role of digital assets in illicit finance”… So they are holding a hearing on the subject Thursday morning.
The speaker will be Jonathan Levin, co-founder of Chainalysis, which publishes the Global Crypto Adoption Index and other fascinating macroeconomic reports. Levin’s expertise on the subject was also recently featured on CoinDesk’s Money Reimagined podcast, where he vowed, “There is unprecedented transparency to understand in real-time what flows are happening across the cryptocurrency economy.”
Speaking of transparency, the Economist ran a whole article today on “Why crypto is unlikely to be useful for sanctions evaders”. Like my colleague Tom Yeung from Moonshot investor summed it up at a staff meeting this morning: “TLDR, the US government has actually been more effective than most realize at getting crypto exchanges to collect personal information. That’s fine for Ukrainian fundraising. Bad for Russian oligarchs or citizens trying to hide money.”
We’ll see if Jony Levin offers a similar take on Senators on Thursday. Meanwhile, the European Parliament goes beyond hearings to a landmark vote today.
EU lifts proof-of-work ban from crypto regulation
Since 2020, laws have been on the table that Europe would crack down on Bitcoin (BTC USD) and ether (ETC USD)…big time. The Markets in Crypto Assets (MiCA) bill “previously attempted to create a framework that would ban crypto services from using PoW-based cryptocurrencies like Bitcoin and Ether,” effective 2025, as Blockworks reports.
But today, the EU’s Economic and Monetary Affairs Committee rejected that proof-of-work ban. Instead, cryptos should be “subject to at least ecological sustainability standards,” reports Blockworks.
Blockworks’ source argues that this is just as bad…
But is it? Ethereum is already scrapping proof-of-work on its planned upgrades. Also, the Bitcoin Mining Council — which represents 46% of the network — is moving towards renewable energy.
For the fourth quarter, the industry group reported that “BMC members and survey respondents are currently using electricity with a sustainable electricity mix of 66.1%.”
What about the other miners? “Based on this data, the sustainable power mix of the global mining industry is estimated to have grown by approximately 58.5% in the fourth quarter of 2021,” the BMC report continues, “making it one of the most sustainable industries globally.”
Analysts at Cathie Wood make a similar argument in their ARK Big Ideas for 2022:
Precisely because mining requires so much energy, “Bitcoin provides incentives for new and more efficient forms of energy production,” says ARK. “Bitcoin mining can extract natural gas that would otherwise be vented or flared. Bitcoin mining can encourage investment in intermittent energy systems and increase the share of renewable energy in powering the grid.”
Austin’s Steve Adler is running for the title of ‘Mayor of Crypto’
Remember all the techs that travel to Austin, Texas? Why not make crypto’s new capital? That seems to be what Mayor Steve Adler is aiming for.
Adler just directed its city manager, Spencer Cronk, to “support the creation and development of 46 blockchain technologies that benefit Austin residents and the city government.” The laundry list in Adler’s resolution includes smart contracts, cryptocurrencies, supply chain and notary solutions, and almost every industry imaginable.
Austin also reviews “what would be required for the city to accept a donation of bitcoin or other cryptocurrency and possible avenues for the city to use those funds to meet public service needs, as well as an analysis of financial stability and security of cryptocurrency,” according to the mayor’s second resolution on Friday.
CityCoins on the stack (STX USD) network is possibly the most efficient option. Miami, another top rival on the road to becoming a crypto capital, received its first $5 million MiamiCoin in February to fund its Rental Assistance Program. AustinCoin is also already in the works.
In the meantime, the Turkish nation might be open to accepting a memecoin as legal tender! Special, Shiba Inu (SHIB USD). That’s right: one of the many clones of Dogecoins (DOGE USD).
These “pupcoins” have rabid fan bases – and Shiba Inu Türkiye managed to get a meeting with Turkey’s Economy Minister Mustafa Elitaş last week! As the Turkish lira continues to struggle, SHIB, BTC and tether (USDT USD) are becoming increasingly popular among Turks.
Credit Suisse: “Money” will never be the same again
Ultimately, “‘money’ will never be the same again… and bitcoin (if it still exists then) will likely benefit from all of this.”
This is the conclusion reached by economist Zoltan Pozsar, who came to Credit Suisse from the US Treasury Department. It’s not so much that he’s a bitcoin maximalist; Rather, we are heading towards “a new world monetary order that will eventually weaken the current dollar-based system,” as CoinDesk put it, triggered by the current commodity crisis.
Columnist George Kaloudis did a great job explaining Credit Suisse’s note, the historical context, and what this could mean for crypto yesterday.
With smaller currencies in turmoil — and countries like Russia cut off from larger currencies — “there may be a greater focus on external money like gold and other commodities as countries build reserves. Or they turn to Bitcoin,” writes Kaloudis.
Time will tell… And we’ll be sure to keep you updated here in The New Digital World and our other InvestorPlace publications.
Ashley Kassel
Contributing Editor, The New Digital World
At the time of publication, Ashley Cassell held no position (neither directly nor indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s publicity guidelines. To receive more updates from The New Digital World in your inbox, click here to sign up for the newsletter.
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