An overview of current news in the crypto space

Bit Team
7 min readMay 20, 2024

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In our digest, we reviewed several important crypto-industry news over the past week:

  1. Venezuela bans cryptocurrency mining due to power supply issues;
  2. Hong Kong launches pilot program for digital yuan payments;
  3. Bank of Russia supports inclusion of digital assets in investment funds;
  4. El Salvador mined 473 bitcoins using geothermal energy from a volcano;
  5. Elvira Nabiullina is confident in the bright future of digital financial assets;
  6. Russia issues first CFAs collateralized by warehouse certificates;
  7. Ghana plans to become Africa’s first digital government on blockchain.

Now for more details. Reading time: 10 minutes.

Venezuela bans cryptocurrency mining due to power supply problems

Venezuela has decided to completely ban cryptocurrency mining in the country. This decision is due to power supply problems and the need to reduce the load on the national power grid.

Venezuela has faced an increasing number of accidents and overloads at electrical substations due to the activities of cryptocurrency mining farms. The situation has become particularly urgent as of 2019. The Governor of Carabobo State, Rafael Lakawa, has called on the public to report the activities of such farms to prevent power grid failures.

The country’s Ministry of Electricity has already announced a power cut to all cryptocurrency mining farms. The aim is to reduce the demand for electricity and ensure uninterrupted power supply to the public.

The Venezuelan government claims that the ban on mining is part of an anti-corruption campaign. Earlier, several high-ranking officials, including the former head of the national crypto-asset authority Joselit Ramirez, were arrested for conducting oil deals to circumvent the law.

At the same time, Enrique de los Reyes, president of the Venezuelan crypto-business association Cavemcrip, announced that preparations have begun to lift restrictions on digital currency transactions from 2024.

Venezuela has become the next country to impose restrictions on cryptocurrency mining due to high energy consumption. Earlier, the Russian authorities also took similar measures.

Hong Kong launches pilot program for digital yuan payments

Hong Kong has introduced a pilot program for digital RMB payments, allowing its residents to register for a personal digital RMB e-wallet by linking it to a mobile number. This was a collaboration between the Hong Kong Monetary Authority (HKMA) and the People’s Bank of China (PBoC).

The wallet balance in e-CNY is scheduled to be topped up through the instant payment system (FPS) operated by the Digital Currency Institute (DCI). This is made possible by the participation of major banks including Bank of China, Bank of Communications, China Construction Bank and Industrial and Commercial Bank of China.

However, it should be noted that e-CNY circulation within Hong Kong will be prohibited, as the Chinese central bank’s digital currency is intended solely for organizing settlements with counterparties from the Chinese mainland. The move is part of a larger strategy to strengthen Hong Kong’s ties with mainland China.

The digital currency intervention in Hong Kong has attracted attention as it is the first time RMB e-wallets are available outside of mainland China. This represents a significant development in China’s drive to popularize its digital currency.

The Bank of Russia supports the inclusion of digital assets in investment funds

The Bank of Russia has expressed its readiness to support the inclusion of digital financial assets (DFAs) in unit investment funds (UIFs). This was announced at the Russian Stock Market 2024 conference, where Olga Shishlyannikova, Director of the Investment Financial Intermediaries Department of the Bank of Russia, confirmed that the regulator is ready to assist in the development of relevant legislative amendments.

Shishlyannikova pointed out that the current legislation does not allow management companies to include CFAs in mutual funds, and emphasized the need to amend the legislation accordingly. At the same time, she noted that the task of their development has been undertaken by the market. The amendments will be aimed at minimizing the risks associated with the probable mixing of assets of clients and management companies.

Nevertheless, Shishlyannikova clarified that in the case of unqualified investors the issue becomes more complicated. In order to develop the necessary criteria for such instruments, the market demand is necessary, which is not yet present in the CFA sphere.

NAUFOR President Alexei Timofeev emphasized that further improvements in the CFA area are required from information system operators. Maxim Khrustalev, CEO of the Tokeon platform, confirmed the readiness to issue CFAs for mutual funds.

This announcement is important in the context of an earlier statement by Bank of Russia Governor Elvira Nabiullina about the usefulness of the existence of digital financial assets legally issued in the country and the great potential she sees in them.

El Salvador has mined 473 bitcoins using geothermal energy from a volcano

El Salvador has been mining bitcoins using geothermal energy from the Tecapa volcano for the past three years. The mining center, located next to a 102 MW power plant, uses 1.5 MW to run its 300 units.

This unique project was implemented by LaGeo on behalf of President Nayib Bukele of El Salvador, despite protests from local environmentalists who feared the excessive use of water resources.

The application of geothermal energy resulted in the mining of 473 bitcoins in three years. President Bukele has been actively promoting the development of bitcoin-related infrastructure to attract investors and digital nomads.

Although bitcoin was legalized in El Salvador in 2021, its use among the population remains low. In 2023, only 13% of residents have used the cryptocurrency at least once.

El Salvador, however, continues to invest in bitcoin, purchasing one bitcoin every day. The government now has 5,748 bitcoins in its account, valued at more than $360 million dollars.

El Salvador continues to look for new ways to obtain bitcoins. Among these initiatives is a $1 million citizenship program for crypto investments. Through this program, El Salvador can receive up to $1 billion in cryptocurrency every year.

Elvira Nabiullina is confident in the bright future of digital financial assets

The head of the Bank of Russia Elvira Nabiullina expressed confidence in the bright future of digital financial assets (DFA) on the Russian stock market. Such a bright forecast was made at the conference “Russian Stock Market 2024”.

Nabiullina emphasized that DFAs provide businesses with new opportunities for trading, and it is in many ways a convenient form of structuring transactions. She also noted that the potential of CFAs has not yet been fully unlocked and expressed hope that the development of this market will show that traditional instruments may be too rigid.

Moreover, Nabiullina emphasized the importance of speeding up the adoption of a draft law on cross-border settlements in digital currencies, but suggested that these settlements should start in a pilot mode. This proposal came amid news that the Central Bank has already received three applications from companies wishing to use CFA in foreign trade activities.

However, despite all these positive trends, Nabiullina emphasized the need for robust investor protection for the long-term development of the stock market. She expressed concern about the precedent related to the decision of the Arbitration Court of Perm Krai, which, in her opinion, may undermine confidence in exchange trading.

The first DFAs secured by pledge of warehouse certificates were issued in Russia

The first digital financial assets (DFAs) secured by pledge of warehouse certificates were issued in Russia. A warehouse certificate of a digital financial asset is a security confirming the holder’s right to receive the said asset. The value of the collateral is linked to the price of gold and is approximately RUB 670,000.

This is an innovative approach in the country that offers unique advantages to holders of digital assets. According to the Civil Code, if a certificate is pledged, it means that the property whose right to receive is evidenced by the digital asset is pledged. This allows owners of warehouse CFAs to obtain pledged property both in Russia and abroad.

In April, Anatoly Aksakov, chairman of the State Duma’s Financial Market Committee, announced the launch of mechanisms for using digital financial assets in cross-border settlements by the end of this year. This new type of CFA reflects Russia’s commitment to innovation and development in the digital economy.

Ghana plans to become Africa’s first blockchain-powered digital government

Ghana could become Africa’s first country with a digital government using blockchain technology. Ghana’s Vice President, Mahamudu Bawumia, announced the government’s plans to implement blockchain to ensure transparency and protection of data and transactions in the public sphere. This, he believes, will help fight corruption and ensure control over social support.

The digital transformation program also plans to create a single electronic identifier for public services and financial transactions. This will help prevent identity theft and ensure control in the provision of social support.

Also, Ghana continues to actively develop digital state platforms. More than 26 such platforms are already operating in the country and their number continues to grow. Ghana is ranked 106th in the UN E-Governance 2022 development level ranking, but is among the top 10 countries in Africa for this indicator.

All of these initiatives aim to create a fully digital government powered by blockchain. If Ghana succeeds in realizing this, it will be the first country on the African continent with such a system.

Thank you for being with us. Crypto-industry news on Bit.team — always up to date.

Info taken from:https: bit.team/blog/en/cryptonews_en_20_05_2024/
Read more at https://bit.team/blog

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