Exploring transformation of value in the digital age By Michael J. Casey, Chief Content Officer Was this newsletter forwarded to you? Sign up here. |
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With U.S. midterm elections up next week, it felt right to make much of Money Reimagined this week about what the outcome might mean for the crypto industry and for how the world will interact with the technology in the future. My conclusion, laid out in the column: There's a hell of a lot riding on these elections. Also, check out Punk 6529's tweet thread, linked in "The Conversation," for speculation on how to tackle a worst-case policy scenario in the future: political pressure for an all-out ban on cryptocurrencies. And in this week's "Money Reimagined" podcast, we talk to two Washington insiders about what changes on Capitol Hill might mean for some of the crypto legislation currently in play: Brett Quick, the Head of Government Affairs for North America at the Crypto Council for Innovation (the organization for which my co-host Sheila Warren is CEO) and Washington strategist Alex Sternhell. They spoke about what to expect now, during the "lame duck" Congress, and next year, when a new Congress is in place. |
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Launched in September 2017, KuCoin is a global cryptocurrency exchange with its operational headquarters in Seychelles. As a user-oriented platform with focus on inclusiveness and community action reach, it offers over 700 digital assets, and currently provides spot trading, margin trading, P2P fiat trading, futures trading, staking, and lending to its 20 million users in 207 countries and regions. In 2022, KuCoin raised over $150 million in investments through a pre-Series B round, bringing total investments to $170 million with Round A combined, at a total valuation of $10 billion. KuCoin is currently one of the top 5 crypto exchanges according to CoinMarketCap. Forbes also named KuCoin one of the Best Crypto Exchanges in 2021. In 2022, The Ascent named KuCoin the Best Crypto App for enthusiasts. |
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At Stake in the US Midterms: The Future of Money |
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(Rachel Sun/CoinDesk) Tuesday's midterm U.S. elections are monumentally important for how they'll shape the regulation of blockchain technology and digital assets – not just for crypto natives, but for everyone. We all have a great deal at stake in how the next Congress enacts new crypto laws. It's vitally important that the laws that will define the digital evolution of money are drafted, deliberated over and enacted in an open way that takes humanity's best interests into account. Let's look at two equally impactful bills under consideration: The Senate's DCCPA The first is the Senate Agriculture Committee's Digital Commodities Consumer Protection Act (DCCPA). Given depositors' losses from the collapse of crypto lending platforms such as Celsius Network and Voyager Digital, the bill's intent seems reasonable: imposing greater accountability on such providers and setting strict rules for protecting customers' assets. Yet, many are concerned that the sweeping proposal that "all digital commodity platforms register with the [Commodity Futures Trading Commission]," could render DeFi operations unworkable. Why does this matter to the average voter? Because, as the Cato Institute's Jennifer Schulp and Jack Solowey argue, the open, composable structure of decentralized finance (DeFi) is necessary to remove the "intermediary risk" of traditional finance – the very issue at the heart of the collapse of centralized (CeFi) custodians Voyager and Celsius. Also, if you insert licensing rules and a regulating authority into that system, much of DeFi's powerful "permissionlessness" could disappear. The House's stablecoin legislation Then there's the House's work-in-progress stablecoin bill. There's a key question over which federal agency should regulate stablecoin issuers. As currently designed, the proposal appears to subject issuers to robust regulation by either the Federal Reserve or some other special purpose watchdog. That leads to further questions around whether non-bank stablecoin issuers should have the kind of federal backing that banks enjoy and around what that means for the rights of their depositors and for their potential competitors in the traditional financial sector. Finding balance… Done right, regulation of both these areas could address such risks and create the right balance between innovation, customer protection, competition and geopolitical stability. Done wrong, legislators could do a great deal of harm. So, yes, the crypto impact of next week's election matters – to everyone. |
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Off the Charts: Doge Has Its Day
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The Elon factor is always there with dogecoin. This week's chart, prepared by Sage Young, shows dogecoin posting a 163% increase between Oct. 25 and Nov. 1 and thus revealing how speculation around Tesla CEO and new Twitter owner Elon Musk's interests continues to influence the meme coin's market performance. |
News last week of Musk's acquisition of Twitter appears to have spurred speculation that the altcoin for which he has periodically tweeted his support – perhaps in jest, perhaps for real – might get some favorable treatment on the social media platform, such as via a future payments integration. To be clear, there is nothing official to suggest this could happen. For the bigger picture, though, is this speculative outbreak a signal for other altcoins. Delphi Digital pointed out in a tweet that similar breakout moves for DOGE have in the past signaled an upcoming outperformance for altcoins versus bitcoin. |
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The Conversation: Preparing for the Worst
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A good cryptographer is trained to be paranoid, to consider all possible threats, including the worst-case scenario. That was the apparent intent behind a somewhat alarming but thought-provoking tweet thread from the influential commentator Punk 6529, who goes by a pseudonym derived from an NFT from the CryptoPunks series. They posited that an all-out ban on crypto is not as hard to imagine as some might conclude and laid out the steps that might lead to it. Then they argued that education and mass adoption, which would create more political incentives for leaders to support the industry, were the most valuable protection against this threat. |
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Relevant Reads: Twitter Tales |
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(Brett Jordan/Unsplash) Elon Musk's acquisition of Twitter is what we at CoinDesk like to call a "crypto-adjacent story." It's not specifically about cryptocurrencies or blockchain technology, but raises questions about the centralized power of social platforms and about issues around internet censorship that are part of the crypto mindset. Also, Twitter is the crypto community's main forum. It's natural that the saga would stoke massive interest among CoinDesk readers. (And not just DOGE hodlers.) So, inevitably we covered the story in ways that applied a special crypto lens to it. |
- On Thursday evening last week, Michael Bellusci and Shaurya Malwa reported on the immediate, sudden dismissals of senior executives that followed Musk's completed acquisition of Twitter and noted that dogecoin was rallying.
- The next day, in his State of Crypto newsletter, Nikhilesh De tried to "read the tea leaves" on what's behind Musk's stated intention to allow freer, less-moderated speech on the platform, given that his own patterns of behavior around the issue are little contradictory.
- The team on CoinDesk TV's "The Hash" discussed Musk's plan to charge users $8 for a blue check mark. Their conversation included speculation that the pay-for-status model could function as a "Sybil resistance" mechanism to exclude bot impersonators and that payments in crypto might negate the need for a bank-intermediated know-your-customer (KYC) identification system.
- In his daily podcast, "The Breakdown," Nathaniel Whittemore speculated that the $8 plan might be less about controlling bots and more about breaking the advertising-dependent business model that has led to invasive data mining at all social media platforms.
- In a spot on CoinDesk TV's "First Mover" show, Emily Parker picked up on Musk's suggestions that he wants to turn Twitter into a "super app." She described life in China, where Tencent's WeChat is so dominant for everything from payments to COVID-19 monitoring, that "generally there's this sense that if you don't have WeChat you can't really survive."
- In The Node newsletter, Daniel Kuhn wrote about three "Web3 Twitter fixes Elon Musk could actually try": NFT verification, NFT-enhanced advertising, crypto payments.
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