Author: Brian McGleenon

Worldcoin’s plan to decentralize orb production sparks illicit data harvesting concerns

https://www.theblock.co/post/241871/worldcoins-plan-to-decentralize-orb-production-sparks-illicit-data-harvesting-concerns?utm_source=rss&utm_medium=rss

Manufacturing and operating Worldcoin’s iris-scanning orbs could become a decentralized and incentivized process like Bitcoin mining, the co-founder claimed. But experts have concerns about that plan.

India uses G20 presidency to strengthen global crypto regulation

https://www.theblock.co/post/242731/india-uses-g20-presidency-to-strengthen-global-crypto-regulation

India uses its G20 presidency to strengthen the development of globally coordinated rules for regulating crypto assets. The international push for clearer policies on crypto assets has gained momentum under the Indian G20 Presidency which began December 2022.

Bitcoin price trades flat following Bank of Japan’s hawkish policy move

https://www.theblock.co/post/241926/bitcoin-price-trades-flat-following-bank-of-japans-hawkish-policy-move

Bitcoin’s price traded flat on Friday after the Bank of Japan announced a discrete way to tighten monetary policy in a move that jolted financial markets.

The world’s largest digital asset by market capitalization rose 0.1% to $29,358 at 12:45 p.m. ET, according to CoinGecko. The digital asset has stayed within a narrow range between around $29,000 and $31,500 for over a month. 

The BoJ said it would “conduct yield curve control with greater flexibility, regarding the upper and lower bounds of the range and not as rigid limits.” The decision signaled the possibility of higher interest rates for an extended period that could pose challenges for risk assets like bitcoin.

Bank of Japan loosens yield curve control

The BOJ’s decision shook markets in Asia, with the Nikkei 225 seeing a dip of 0.4%. The Stoxx 600 in Europe opened lower, and government bond yields in the region increased.

Wall Street rose on Friday after a cooler than expected inflation reading. The personal consumption expenditures price index rose 3% from a year earlier in June, the smallest increase in more than two years.

The BOJ’s policy move gives it room to make a 50 basis point rate increase on 10-year Japanese Government bonds, effectively ending the central bank’s 0.5% rate cap. Ten-year yields climbed to around 0.57% after the announcement, the highest in nearly a decade. 

The move comes after the International Monetary Fund’s chief economist Pierre-Olivier Gourinchas said Tuesday the BOJ should depart from yield curve control and prepare for future rate rises.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

AI tokens see lowest weekly trading volume since January

https://www.theblock.co/post/241942/ai-tokens-see-lowest-weekly-trading-volume-since-january

Interest in AI-related cryptocurrencies appears to be waning, with Kaiko Research noting sharp declines in trading activity since the beginning of the year.

Data released Thursday on the the top six AI coins by market capitalization — The Graph, Render, Injective, Oasis Network, SingularityNET and Fetch.ai — showed  volumes reaching the lowest levels since January, signaling a dramatic decline in interest. 

AI-related tokens are linked to projects that use artificial intelligence as a tool to improve security, user experience, power decentralized exchanges, or image and text generation services, amongst other things.

Kaiko Research AI-coin trade volume
Kaiko Research AI-coin trade volume

ChatGPT instigated a wave of AI-related crypto projects 

Following the November launch of ChatGPT, AI-related cryptocurrencies gained popularity, prompting a wave of AI/web3 product development and resulting in a strong rally of the top tokens in 2023.

The Graph, a leading AI crypto protocol, saw its token soar 122% from a low of $0.1046 in November to its 2023 peak of $0.2323 on February 7. However, GRT has since plunged 53% to around $0.11 as of July 28.

Enthusiasm after Monday’s launch of Worldcoin’s WLD token, meanwhile, failed to lift other AI-related cryptocurrencies. Worldcoin’s token rose 88% to an all-time high of $3.30 on the day of launch. It has since fallen over 30% to $2.17, according to CoinGecko.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

MarketVector, Figment introduce first staking rewards indexes

https://www.theblock.co/post/241732/marketvector-figment-introduce-first-staking-rewards-indexes

MarketVector Indexes is partnering with staking infrastructure firm Figment to introduce what it says are the industry’s first Ethereum staking rewards indexes.

“We’ve been proud to be on the forefront of digital assets indexing and this partnership with Figment reflects our commitment to providing institutions and investors with exposure to leading assets,” MarketVector digital assets product strategist Martin Leinweber said in a statement.

“Now, asset managers and advisors are able to have customizable access to staking rewards as an industry first,” he continued.

The partnership plans to launch two products — the MarketVector Figment Ethereum Staking Reward Reference Rate and the MarketVector Figment Ethereum Total Return Index.

‘Reliable, robust data’

Figment business development lead Josh Deems said the new products would “address one of the most significant challenges faced by institutions in the digital asset space, which is access to reliable, robust data.”

Deems added the indexes would “unlock new opportunities for institutions offering investors exposure to digital assets.” He said that it would allow asset managers to provide products with staking rewards benchmarked against the new indexes.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Bitcoin ‘stimulated’ by the Fed’s cooler-than-expected inflation data

https://www.theblock.co/post/241684/bitcoin-stimulated-fed-inflation-data

Bitcoin remained above $29,000 despite the U.S. Federal Reserve’s recent rate hike — stimulated by better-than-expected inflation data — an analyst claimed.

The world’s largest cryptocurrency by market capitalization rose 1.0% to $29,503 at 6:45 a.m. ET. The digital asset has stayed within a narrow range between around $29,000 and $31,500 for over a month. 

Post the Federal Open Market Committee’s announcement, Bitcoin and major altcoins traded flat. The decision to raise rates to between 5.25% and 5.50% resulted in a subdued crypto market performance. The total cryptocurrency market cap stands at $1.24 trillion — up by 1.6% in the last 24 hours — according to CoinGecko.

Inflation falls below expectations

Fed officials announced inflation data is below expectations after June’s yearly CPI declined to 3%.

Chief economist at BTCM Youwei Yang said this makes a September interest rate hike much less probable and that overall rate hikes may become less aggressive. “However, the Fed is cautious enough and still kept the door open for some possible additional interest rate hikes, aiming to maintain the current high rate for a longer period, stating that future decisions will highly depend on economic data,” he told The Block

Yang sees the inflation reading as encouraging in the short term and “already stimulating emerging assets, including crypto.”

However, he argued the impact of Fed rate decisions on the crypto market has decayed incrementally. “The market is now looking for new exciting or worrying indicators to move, and I suspect earnings, regulations, or banking credit liquidity might be the next movers,” he added.

Fed Chair Jerome Powell said at a press conference following the FOMC meeting that further rate hikes could come in September if warranted. “I would also say it’s possible that we would choose to hold steady at that meeting. We’re going to be making careful assessments, as I said, meeting by meeting,” he said.

Co-founder of Sei Labs Jeff Feng said risk-on assets like cryptocurrencies could face increased volatility after more monetary tightening measures from the U.S. Central Bank. “Despite the market having largely priced in these interest hikes, this does not negate the possibility of further turbulence,” he told The Block.

Feng said the fundamental drivers of cryptocurrency demand remain in place, “decentralization, transparency, and the potential for risk-adjusted growth,” adding that the market should brace itself for increased short-term volatility — but the long-term outlook for the cryptocurrency market continues to be strong.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Canada’s financial regulator proposes strict new guidance for crypto asset exposure

https://www.theblock.co/post/241669/canada-strict-guidelines-crypto-assets?utm_source=rss&utm_medium=rss

Canada’s financial regulator proposed strict new guidelines for bank and insurance sector crypto-asset exposure. 

The Office of the Superintendent of Financial Institution’s guidelines advise banks and insurers on capital and liquidity risks when dealing with crypto-assets. The OSFI said the new rules “reflect an evolving risk environment and international developments.”

The regulatory guidelines come in two parts — one for banks, the other for insurers. “Today, OSFI announced two draft guidelines, one for federally regulated deposit-taking institutions and another for insurers, on the regulatory capital treatment of crypto-asset exposures,” the regulator said.

Crypto exposure limits and risk weighting

The proposal said crypto-assets should be categorized into two broad groups — one category for tokenized traditional assets and stablecoins, and the other for unbacked crypto assets. The guidelines said banks should have an exposure limit of no more than 1% for unbacked crypto assets.

It gave an example of how banks should consider the risk weighting of tokenized and traditional assets. “A tokenized corporate bond held in the banking book will be subject to the same risk weight as the non-tokenized corporate bond held in the banking book,” the guidelines state. However it underlines that “a tokenized asset may have different market liquidity characteristics than the traditional, non-tokenized, asset.”

The speed with which creditors could take possession of crypto-asset collateral was addressed. Banks are advised to assess whether crypto-asset collateral can be liquidated in a way that meets legal certainty requirements. 

Update on Basel Committee standards

The OSFI said it drafted the detailed guidance on crypto-asset exposure as an update to proposals released by the Basel Committee on Banking Supervision in December 2022. “They have been updated to reflect the Canadian context and the industry for which the guideline has been developed, i.e. banking or insurance,” the OSFI wrote.

“The banking guideline reflects the December 2022 BCBS banking standard and the insurance guideline incorporate the relevant parts of the BCBS standard with adjustments to meet the specific context of the insurance industry,” the report added.

After the OSFI consultation period ends on September 20, the guidelines will come into effect in Q1 of 2025.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Bitcoin’s price rises slightly after Fed hikes rates as expected

https://www.theblock.co/post/241516/bitcoins-price-rises-slightly-after-fed-hikes-rates-as-expected

Bitcoin’s price rose modestly after the U.S. Federal Reserve raised interest rates by 25 basis points, as expected. After Wednesday’s meeting of the Federal Open Market Committee, the target range for the federal funds rate is now 5.25%-5.5%.

The world’s largest cryptocurrency by market capitalization rose 0.3% to $29,354 at 2:56 p.m. in New York, according to CoinGecko. It’s stayed within a narrow range between around $29,000 and $31,500 for over a month now.

Today’s decision by the Fed marks the 11th rate hike in 17 months, after a brief pause in June. The central bank warned that inflation remains elevated and that it’s “strongly committed” to bringing it down to its stated goal of 2%. 

Additional policy firming

“In determining the extent of additional policy firming that may be appropriate to return inflation to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments,” it said in a statement. 

Fed Chair Jerome Powell said at a press conference that further rate hikes could come in September, if warranted. 

“I would also say it’s possible that we would choose to hold steady at that meeting. We’re going to be making careful assessments, as I said, meeting by meeting,” he said.

U.S. stocks were mostly muted just after the announcement, with the Nasdaq dipping 0.3%, the S&P 500 rising 0.1% and the Dow Jones Industrial Average rising 0.4%.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.