In our digest, we reviewed several important crypto-industry news over the past week:
- Skepticism about the digital yuan among Chinese civil servants: should we worry about privacy?
- Strengthening control over cryptocurrency mining in Russia;
- Turkey plans to tighten regulation of cryptocurrencies;
- “China is actively developing blockchain and bitcoin despite bans”;
- The Philippines’ central bank approved testing of the PHPC steiblcoin;
- Garlinghouse expressed concern over U.S. pressure on Tether.
Now for more details. Reading time: 9 minutes.
Skepticism about the digital RMB among Chinese civil servants: should we worry about privacy?
There is growing concern among Chinese civil servants about possible surveillance as part of the implementation of the digital yuan. Contrary to the government’s active attempt to expand the use of the state-issued cryptocurrency, officials are expressing concerns about its use.
One of the main concerns is the lack of availability of the digital currency in most places. Officials also express frustration at not being able to earn interest by storing e-CNY in apps and buying financial products using CBDC.
Cheung Kong Dongyan, a researcher at the Graduate School of Business in Beijing, emphasizes the need for greater efforts by authorities to balance privacy and security. He emphasizes that the boundary between information tracking and information security needs to be carefully considered.
Yi Gang, former governor of the People’s Bank of China, supports this view, believing that CBDC privacy is a key issue in the digital asset era. He believes that the digital yuan can provide privacy through “controlled anonymity,” which implies that minor transactions and payments are not tracked.
In light of these developments, the Hong Kong Monetary Authority (HKMA) has begun to explore the benefits of retail and wholesale versions of government-issued stablecoins and their impact on the region’s economy.
Strengthening control over cryptocurrency mining in Russia
Russia intends to strengthen control over cryptocurrency mining. The Expert Council under the government has proposed a new control mechanism: remote meter checks to compare declared and actual electricity consumption. Consumers whose figures exceed the declared ones are considered “shadow miners” and will be fined in the amount of exceeding the allowable electricity costs at higher tariffs, as for industrial enterprises. Such measures are expected to help fight illegal mining and increase market transparency.
The measure is also intended to address the problem of overloading the power grid, which often arises due to the activities of shadow miners. In some regions of Russia, such as the Irkutsk region, Buryatia and Zabaikalsky Krai, there has been a significant increase in electricity consumption due to the increase in mining capacity.
On average, the cost of electricity for households is lower than for industry by about 1.5 rubles per 1 kWh. The proposed fines for miners may reach from hundreds of thousands to millions of rubles.
These proposals will be sent to the government for consideration on May 16. Additionally, experts propose to introduce a new norm in the Code of Administrative Offenses, providing for liability for the use of electricity for purposes other than the tariff.
Turkey plans to tighten regulation of cryptocurrencies
Turkey’s ruling Justice and Development Party is preparing to present a bill in parliament aimed at regulating the cryptocurrency market. The bill envisages strengthening control over transactions with crypto-assets and introducing transaction taxes.
The main objective of the bill is to create an accountable and regulated cryptosphere in the country. Under the proposed measures, the Capital Market Board (CMB) will become the primary regulator responsible for licensing trading platforms, exchanges, brokers and overseeing the relationship between users and these platforms.
In addition, the CMB will be authorized to develop rules for levying fines, imposing sanctions and resolving disputes. The introduction of taxes on cryptocurrency buying and selling transactions is also envisioned.
According to the bill, the development of the cryptocurrency market and blockchain technologies will be handled by the Scientific and Technological Research Council of Turkey.
The Turkish government expects that this initiative will help alleviate questions from the Financial Action Task Force (FATF). It is expected that after the law is passed, Turkey may be removed from the FATF gray list, where it has been placed for insufficient measures to combat money laundering and terrorist financing.
“China is actively developing blockchain and bitcoin despite bans”
Despite a long-term ban on cryptocurrency-related activities, China continues to actively develop and explore blockchain technology. Bitcoin (BTC), which has been circulating in the country for years, is gaining in importance and status. This is evidenced by the Web3 national development plans released at the end of 2023.
In 2024, China plans to push forward the development of an integrated cryptocurrency management system and the determination of bitcoin’s status. The issue of recognizing bitcoin as property is becoming a hot topic for the country’s legal authorities. In particular, the Nanjing People’s Procuratorate is working to determine whether bitcoin is property and can be subject to laws regarding property crimes.
Today, most experts conclude that bitcoin has value and should be treated as property. At the same time, there is debate about how to properly handle bitcoin and how to protect those who have suffered financial loss from BTC theft.
The situation with bitcoin in China at the moment is that it is not completely banned, is not considered contraband, can be traded and has economic value, as Colin Wu emphasizes. This underscores China’s commitment to active participation and development in cryptocurrencies and blockchain technology.
The central bank of the Philippines has approved testing of PHPC stablecoin
The Central Bank of the Philippines (BSP) has approved the testing of a PHPC stablecoin pegged to the national currency, the peso. This was made possible by a special “regulatory sandbox” maintained by the platform, which guarantees to provide monetary reserves in pesos corresponding to the total amount of PHPC in circulation.
The testing of the stablecoin will show its capabilities as well as its potential impact on the local financial system. PHPC will be used to test domestic and international payments, trade digital assets, and provide liquidity in DeFi applications.
The purpose of the pilot project is to explore the use of stablecoin as a means to reduce market volatility. The duration of the testing will range from three to 12 months, depending on the complexity of the project.
PHPC will be the first Philippine steiblcoin available to retail customers. Wei Zhou expects the new steiblcoin to provide fast, cost-effective and transparent digital asset transactions. The first users of the stablecoin will be Filipinos and foreign companies serving the local market.
This is all made possible by the BSP’s desire to explore the potential of digital currencies to enable more efficient transactions between financial institutions. The regulator also plans to use the Hyperledger Fabric blockchain to test Agila, its own wholesale digital currency.
Garlinghouse expressed concern over US pressure on Tether
Brad Garlinghouse, has expressed concern over increasing pressure from U.S. authorities on Tether, the issuer of the USDT stablecoin. On his World Class podcast, Garlinghouse stated that he believes the crypto industry could face a “black swan” with continued pressure on Tether.
Brad Garlinghouse emphasized that active government intervention in Tether’s activities could lead to unintended consequences for the entire digital asset market. He clarified that he was basing this on his own observations and noted that he did not know what impact this would have on the rest of the ecosystem.
In response to Garlinghouse’s statement, Tether CEO Paolo Ardoino emphasized that Tether is actively cooperating with law enforcement, unlike other stablecoin issuers.
Of course, this news has sparked reactions in the market, including concerns from Deutsche Bank about Tether’s dominance and its adequacy of collateral. For now, views on the future of steblecoins vary, but it’s certainly an important area to watch in the near future.
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Info taken from: bit.team/blog/en/cryptonews_en_13_05_2024/
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