- US Senators held another crypto hearing which led to one positive consensus — blockchain innovation is inevitable and the US ought to lead.
- Crypto whiz kid Justin Sun may cancel his infamous $4.6 million charity lunch with Warren Buffet, amid pressure from the Chinese government.
- 85% of the world’s Bitcoin has been mined, but there’s no need to panic — at the current rate, the tipping point won’t be reached for more than a century.
- Following the unveiling of Facebook’s Libra, the Chinese government seeks to create a centralized digital currency that might cement that country’s lead in the payments sector.
On Tuesday, the Senate Banking Committee gathered once again to hear testimony on cryptocurrencies — this time, expanding the focus beyond Libra to encompass blockchain regulations more broadly. Although Facebook’s crypto was grilled several times over the course of the hearing, a positive consensus emerged around these technologies in general. Witnesses and senators alike, seem to believe that the rise of cryptocurrencies and blockchain is inevitable, and the US ought to take a leading role in the sector.
The session, called “Examining Regulatory Frameworks for Digital Currencies and Blockchain” had a fairly balanced witness panel. It included Jeremy Allaire, CEO of Circle, who represented the Blockchain Association; Rebecca M. Nelson, a specialist in international trade and finance at the Congressional Research Service; and a law professor Mehrsa Baradaran from the UCI school of law. Allaire emphasized the need for a new regulatory category to represent digital assets. Meanwhile, Professor Baradaran criticized Facebook’s claims that crypto could solve societal ills, such as banking deserts. Following the hearing, litigation specialist Cal Evans noted that the structure of the US legislative system is the biggest hinderance to progress where crypto regulation is concerned.
“It seems to me that digital technology innovations are inevitable, could be beneficial, and I believe that the U.S. should lead in developing these innovations and what the rules of the road should be…If the United States were to decide — and I’m not saying that it should — if the United States were to decide we didn’t want cryptocurrency to happen in the United States and tried to ban it, I’m pretty confident we couldn’t succeed.” — Sen. Mike Crapo
“There is a fundamental mismatch between the regulatory structure and guidance that we have here in the U.S. and the nature of these digital assets. Markets around the world are adopting these, not just Bermuda but Singapore, Switzerland, even jurisdictions like France introducing tailor proposed definition of digital assets so that issuers can feel comfortable.” — Jeremy Allaire
“The biggest problem with the U.S. system is the Federal and State governments compete with each other… The Federal government seems to be conflicted as to which direction to take. It is not so much restrictive laws or rules which hinder Crypto adoption in the U.S. it is more the total lack of any clarity which leaves people confused as to their legality and status.” — Cal Evans, US litigation specialist
The crypto whiz kid who paid $4.6 million to have lunch with Warren Buffett and invited Donald Trump along might cancel permanently
Crypto whiz kid Justin Sun, founder of Tron, made headlines over the last month when he bid $4.6 million for a charity lunch with Warren Buffet. His goal was to use this lunch to convince Buffet of the viability and progress of crypto. Sun also responded to President Trump’s anti-crypto tweets, inviting him to join the lunch and gain a new perspective.
Things took an unexpected turn last week, when Sun postponed the lunch citing health issues. This came amid speculations that the Chinese government had barred him from travel. Now sources in China say the Chinese government wishes Sun to call off the lunch entirely, implying that it has exacerbated trade tensions. According to Bloomberg, Chinese officials detained several Tron executives and released them after Sun postponed the lunch. Later, on Chinese social media, Sun posted a public apology saying he regretted hyping the lunch and vowed to put China’s interests before his own. Now sources say the lunch is likely to be cancelled altogether, given these pressures from Chinese government.
[Sun] had planned to turn Buffett, a notorious crypto skeptic, into a true believer. He also offered the same opportunity to Trump.”Mr. President, you are misled by fake news,” Sun tweeted after Trump attacked bitcoin and cryptocurrencies. “#Bitcoin & #Blockchain happens to be the best chance for US! I’d love to invite you to have lunch with crypto leaders along with @WarrenBuffett on July 25. I guarantee you after this lunch, nobody will know crypto more than you!”
“Sources in China say the Chinese government believed that @justinsuntron “promoting” the Warren Buffett lunch was a ‘provocative’ act given current trade tensions,” Ran Neuner tweeted on Saturday. “He has been told not to pursue the lunch. My source believes the lunch won’t happen at all.”
The Next Web
This week, market information websites, including CoinMarketCap noted that over 17,850,000 BTC has been mined — roughly 85% of its supply limit of 21 million coins. This news caused some crypto watchers to sound the alarms, though there’s no need to panic yet. Right now, every time 210,000 blocks are added to the blockchain, the mining reward is halved. This generally happens every four years. When the 21 million coin limit is reached, mining rewards will become insignificant. However, with the coin’s current production rate of 1,800 BTC per day until May 2020, this tipping point remains in the distant future — likely the year 2140.
There are just over 3,000,000 Bitcoin left to mine, until we inch closer to that fabled 21 millionth coin. There’s no need to panic, though. The fact that Bitcoin has a limited supply is generally regarded as a good thing, it gives the coin anti-inflationary properties.
With the coin’s current production rate of 1,800 BTC per day until May 2020, and the projection this will halve every 210,000 blocks, it’ll be the year 2140 by the time we get close to Bitcoin’s 21 million coins limit…That’s plenty of time to prepare. In fact, it’s really a problem for the next generation to deal with, assuming the world doesn’t disintegrate into a ball of fire fueled by single-use plastics by then.
China, an early adopter of digital payments, has had taken a steady lead with the success WeChat and Alipay. Now Facebook’s Libra threatens to overtake the foundation they’ve laid. Even a ban won’t solve the issue entirely — if Libra is successful, then Chinese businesses would lose in the global market. If they accept it, on the other hand, Libra could overtake China’s existing mobile payments platforms.
David Marcus, the Facebook executive in charge of Libra, has pointed out the potential of Libra to US regulators, saying that, “If America does not lead innovation in the digital currency and payments are, others will.” Chinese officials have now turned their attention to the creation of a centralized digital currency that might cement China’s lead in the sector.
“We will keep a close eye on the new global digital currency,” Wang Xin, research director at China’s central bank, said of Libra at a conference in early July in Beijing. “We had an early start … but lots of work is needed to consolidate our lead.”
“China relies on the mobile payments sector immensely. We have had a long lead time [over Libra] with the success of WeChat and Alipay, but Libra represents a huge threat on mobile payments,” says Chuanwei Zou, chief economist at Bitmain, a large Chinese company that sells equipment used to create or “mine” cryptocurrencies.
“The problem for China is if Libra is really successful around the world and it’s banned in China then China is in a losing position and its companies might be in a disadvantage in the digital economy versus companies that are able to accept Libra,” says the Peterson Institute’s Chorzempa. “That’s quite a scary prospect.”
That’s the roundup for August 3rd. Check in next week for the latest news of cryptocurrency innovation and regulation around the world!
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