2024-11-14 21:51

“The Trump administration understands it, I think Senator Lummis understands it … that’s why it will happen,” Saylor said during a presentation at an event in Miami Thursday. Michael Saylor believes the U.S. government should and will build a strategic reserve of bitcoin. If a bill by Sen. Cynthia Lummis (R-Wyo.) becomes law, it would be the "greatest deal of the 21st century," he said. The idea of strategic stockpiling isn't new, Saylor pointed out — the government has made many of such moves in the past. Although the idea that the United States should build a reserve of bitcoin (BTC) is currently merely a thought rather than a concrete plan, Michael Saylor thinks the proposal should – and will — get done. In July, then presidential candidate Donald Trump assured a crowd of crypto enthusiasts at the Bitcoin 2024 conference that he would hold onto the current U.S. government holdings of roughly 200,000 bitcoin. Shortly after, Sen. Cynthia Lummis (R-Wyo.) went one step further and presented a bill that would add to the country’s existing holdings until it reaches one million tokens, purchased over a period of five years. This would be the greatest deal of the 21st century, Saylor said during a presentation at the Cantor Crypto, Digital Assets & AI Infrastructure Conference in Miami on Thursday. “The best way to protect the dollar is make sure you retire the debt and become rich," said the MicroStrategy (MSTR) executive chairman. "The next best way to protect the dollar is to make sure that if anybody ever considers a different capital asset other than the treasury bill, you own it,” he said. That asset is bitcoin, according to Saylor. The idea of the U.S. buying strategic assets isn’t new, reminded Saylor, pointing to the acquisition of Manhattan, the Louisiana Purchase and the buying of California and Alaska in the 19th century. All resulted in multi-trillion dollar returns for the county, he said. There have also been several other strategic purchases made in the history of the nation like gold, oil, grain and helium, noted Saylor. Saylor: “It’s been done before, it’s a very simple idea: figure out where the value is going to be, go buy it cheap and hold it. You’re a nation, this is what nations do. … Bitcoin is manifest destiny for the United States. I think the Trump administration understands it, I think Senator Lummis understands it … that’s why it will happen." If Sen. Lummis’ bill passes as drafted – which has a better chance now that Republicans will have majorities in the Senate and House next year — the U.S. could see a $16 trillion benefit from the one million bitcoin purchase, according to Saylor. Saylor also described a "Trump Max" scenario in which the country purchases four million bitcoin. That, said Saylor, might result in a return of $81 trillion. The Trump Max is the “rational way,” Saylor concluded. https://www.coindesk.com/markets/2024/11/14/strategic-bitcoin-reserve-has-precedent-in-other-big-us-government-purchases-michael-saylor/

2024-11-14 20:50

A December rate cut from the U.S. central bank might not be as sure of a thing as previously thought. It's hardly a blip on the charts after the major run higher following the election of Donald Trump, but crypto markets did turn somewhat lower late in the U.S. trading day Thursday after a speech from Federal Reserve Chairman Jerome Powell. "The economy is not sending any signals that we need to be in a hurry to lower rates," said Powell in prepared remarks at a Dallas conference. "The strength we are currently seeing in the economy gives us the ability to approach our decisions carefully." The price of bitcoin (BTC) fell about 1.5% to $88,300 in the minutes following Powell's comments. The price at press time had dipped a bit further to $88,000, down 3.2% over the past 24 hours. Ether (ETH) is down by a similar amount. The broader CoinDesk 20 Index, however, is up 0.5% over the same time frame. It's being led by a 13% advance for Ripple's (XRP), perhaps cheered by remarks from Securities and Exchange Commission Chair Gary Gensler which could be interpreted as his planning to quietly exit his job in wake of the Trump victory. Just a few hours ago thought to be a certain thing, the chances of a Fed rate cut at its next meeting in mid-December have fallen to 62% in the wake of Powell's speech, according to CME FedWatch. One day ago, those chances stood at 83%. Also on a tear of late, traditional markets pulled back a bit on the hawkish tone, led by the Nasdaq's 0.75% decline to a session low just a few minutes before the close of the trading day. Crypto markets, of course, remain sharply higher of late, with bitcoin still sporting a 15% week-over-week gain and names like Cardano's (ADA), (XRP), (NEAR) and (XLM) higher by 20%-40%. https://www.coindesk.com/markets/2024/11/14/fed-chair-jerome-powells-hawkish-comments-throw-some-cold-water-on-crypto/

2024-11-14 17:39

The tokenization platform is part of Tether's ambition to diversify its business from its $126 billion USDT stablecoin. Tether, the crypto firm behind the third-largest cryptocurrency (USDT), said on Thursday it has launched its asset tokenization service after CEO Paolo Ardoino teased the project for months. The platform, called Hadron, was designed to simplify the process of converting a wide range of real-world assets including bonds, commodities, stocks, other stablecoins and loyalty points into digital tokens on blockchain rails. Tether's goal with the new platform is to unlock "alternative financing and capital markets opportunities for nation states and corporations," according to a blog post. The service encompasses the full life-cycle of tokenization, including tools for risk management, know-your-customer (KYC) and anti-money-laundering (AML) compliance and secondary market monitoring. The platform at the beginning supports Ethereum, Avalanche and Bitcoin scaling network Liquid by Blockstream, and "soon" will add the Telegram-adjacent TON network and other smart contract chains, a Tether spokesperson said in an email to CoinDesk. "We believe 'Hadron by Tether' will significantly improve the financial industry," Tether CEO Paolo Ardoino said in a statement. "Our goal is to create new opportunities for businesses and governments, while also making the digital asset space more accessible and transparent." Tether's ambition to venture into asset tokenization, a red-hot trend at the intersection of crypto and traditional finance, has been well-documented as the company strives to diversify from its highly-profitable stablecoin business. The company issues the $126 billion dollar stablecoin USDT and the $600 million gold-backed token XAUT, and reported f $7.7 billion in group-wide net profits this year so far, in large part from the yield on its $80 billion stockpile of U.S. Treasuries. It has used the profits to invest in startups, bitcoin mining, energy production and AI. Tokenization is potentially a multi-trillion industry, as global banks and digital asset companies race to bring traditional financial instruments onto blockchain rails pursuing more efficient, transparent and cheaper operation. Ardoino first outlined plans for Tether's tokenization platform in April. The firm also invested $100 million in a Latin American agricultural firm that was a founder and partial owner of agricultural commodities tokenization startup Agrotoken. https://www.coindesk.com/business/2024/11/14/tether-unveils-new-platform-to-simplify-asset-tokenization-for-businesses-nation-states/

2024-11-14 15:00

What can offshore crypto companies practically do to stop Americans from accessing their services – and what do regulators expect them to do? Polymarket is reportedly under investigation by the Department of Justice for allowing U.S. residents to trade on its platform, despite a regulatory settlement prohibiting such activity. Even though the prediction market blocks U.S. IP addresses, legal experts said that this alone may not be sufficient to comply with U.S. regulations, especially for companies with a history of regulatory issues like Polymarket. Aside from geofencing, the only real way to prevent people in restricted countries from accessing a site is by requiring identification, but this means law-abiding users must trust a platform with sensitive personal data, cybersecurity experts said. Polymarket's current predicament highlights long-simmering compliance questions facing the crypto industry. You might call them Very Persistent, Nagging questions. At the heart of matter is how blockchain protocols or even centralized crypto firms can address the widespread practice of users turning to virtual private networks, or VPNs, to circumvent geographical restrictions imposed by governments. On Wednesday, federal law enforcement raided the New York home of Shayne Coplan, Polymarket's 26-year-old founder and CEO. Although it is not yet clear exactly why the raid took place, and neither Coplan nor his company has been charged with wrongdoing, Bloomberg and The New York Times reported the Department of Justice is conducting a criminal investigation of whether Polymarket let U.S. residents trade on its site, in violation of a 2022 regulatory settlement. Founded in 2020, Polymarket is one of crypto's breakout successes this year, logging billions in trading volume and hundreds of millions in open interest, or contracts outstanding. Bets on the platform are settled in USDC, a stablecoin, which is a cryptocurrency that trades one-for-one with dollars. Traders use the prediction market to bet on the outcomes of real-world events, everything from whether Jake Paul or Mike Tyson will win their boxing match to which actor will be next to play James Bond. But the most popular subject by far has been the U.S. presidential election. Polymarket odds ahead of the vote presciently signaled that Donald J. Trump was in the lead while polls showed a tossup. In the weeks leading up to the election, media reports speculated that the market was being manipulated to show Trump ahead, potentially as a way of somehow influencing the outcome, but prediction market experts found the evidence for such claims wanting. A Polymarket spokesperson called this week's raid political retribution by the outgoing Biden administration for correctly predicting Trump's victory – an interpretation widely echoed on social media. If that take is correct, the investigation may be short-lived, with a crypto-friendly president-elect set to take office in January. Even so, the situation underscores broader questions that may need to be addressed if the new administration and Congress try to foster a more accommodating environment for digital assets. Polymarket is forbidden to serve U.S. residents under a 2022 settlement with the Commodity Futures Trading Commission. It has been blocking users with U.S. IP addresses from trading. But crafty American traders have been using VPNs to disguise their locations to bet on the platform. (CoinDesk verified at least two such cases). Unlike regulated financial middlemen, Polymarket does not collect customers' personal information. Aside from an IP address, it has little way of knowing where its generally pseudonymous traders are located. That's the rub, not just for Polymarket but for a host of crypto entities trying to avoid U.S. jurisdiction, such as projects that "airdrop" tokens. What can companies that geofence the U.S. practically do to prevent Americans from accessing their services through VPNs? And what does the government expect firms to do? Practical questions According to privacy and cybersecurity researcher Runa Sandvik, the main thing a company can do to prevent people in restricted jurisdictions from accessing its services is to make them go through a know-your-customer (KYC) process. "They'd need KYC," she told CoinDesk. "It's too easy to get around simple IP address blocks." Of course, KYC has downsides for users, including law-abiding users, who are asked to share sensitive personal information. It "adds more friction to the sign-up process because you need to verify your identity; also need to trust the site is going to keep your data safe," Sandvik said. Aaron Brogan, a crypto industry lawyer, said that hypothetically, a company could strengthen IP address blocks by incorporating GPS data from users' mobile devices, "but this might be impractical in commercial use." A customer using a laptop without a GPS, for example, might have a hard time logging on without two-factor authentication. Other ways to mitigate risk would include "not advertising into the United States, clearly stating on all relevant products that they are not available to U.S. users, and so forth," Brogan added. Polymarket has a mobile app available to U.S. users, but it only displays the odds generated by its markets and does not enable trading. The company has marketed aggressively on social media, but such platforms are global by definition. One thing companies can do is to "monitor for users who change their IP address in a way that suggests the use of a VPN to circumvent a geofence," wrote Jake Chervinsky and Daniel Barabander, chief legal officer and deputy general counsel, respectively, for venture capital firm Variant Fund, in a Sept. 30 blog post. "For example, if a company observes a user attempting to access a geofenced product using a U.S. IP address and then immediately reconnect the same wallet address or account using a non-U.S. IP address," that's a sign of a wily American trying to get around the geoblock. An exchange could then block the rascal's account or wallet address. Generally, "it is an open question whether companies need to block all VPN use," Chervinsky and Barabander wrote. However, "regulators have cited screening IP addresses against known VPNs as a positive factor for effective geofencing." Last year, in settling sanctions violation charges against CoinList Markets, the U.S. Treasury's Office of Foreign Assets Control approvingly noted that among other remedial measures, the San Francisco-based crypto exchange had invested in "tools to detect the use of VPNs that can obscure users’ location." Legal obligations Part of Polymarket's challenge is that, having previously settled with CFTC, it may be held to a higher standard than a company with no history of running afoul of the U.S., said David Ackerman, a seasoned compliance executive and lawyer. "A company that did not have a track record of violations, practically speaking, is held to a different standard," Ackerman told CoinDesk. "Now, obviously [Polymarket] had a track record of violations, and they had a settlement. So the standard of care for somebody like that is going to be different." In Ackerman's view, simply blocking IP addresses from the U.S. would not be sufficient to comply with such an order. "Geo-fencing is one thing, but it isn't very easy. Everyone has to KYC," he said. "So if there is a discrepancy between the information provided in the KYC and the IP address that is being used, that is a very easy monitor." Brogan said geofencing should be viewed as "more of a risk mitigation strategy than a legal strategy." The Commodity Exchange Act, which appears to be the law Polymarket is being investigated under, "likely applies whenever an entity is, in fact, serving U.S. Persons." In a 2018 speech, Brian Quintenz, then a CFTC commissioner, articulated a forgiving standard for determining whether blockchain projects are liable for user behavior. The "appropriate question is whether these code developers could reasonably foresee, at the time they created the code, that it would likely be used by U.S. persons in a manner violative of CFTC regulations," Quintenz said. Since that speech, Brogan said, "there has been a sense among some practitioners that taking steps to block U.S. persons might forestall enforcement, but that is not necessarily what the law says." The CFTC's 2022 order against Polymarket "required them to wind down non-compliant markets but did not specify what that compliance would require," he said. "I don’t know if the CFTC told them privately that geofencing was sufficient, or if they’ve just been in détente for two years." Polymarket isn't a regulated organization in the U.S., and the entity that operates it, Adventure One QSS Inc., is formally organized in Panama, according to its terms of service. But that doesn't necessarily mean it can ignore U.S. law, according to Ackerman. A "common misconception is you need to domicile in the country in order for their laws to apply," he said. "So long as your business has an effect in the jurisdiction, you are usually held to their laws." https://www.coindesk.com/policy/2024/11/14/polymarkets-probe-highlights-challenges-of-blocking-us-users-and-their-vpns/

2024-11-14 14:33

The French financial services firm said earlier this year it will also expand EURCV to the Solana network after struggling to attract users on Ethereum. SG-FORGE will roll out the EURCV stablecoin on XRP Ledger after launching the token on Ethereum in 2023 and announcing plans in September to expand to Solana. The multichain strategy is set to kick in next year. SG-FORGE, the digital assets-focused subsidiary of French bank Societe Generale, said it will deploy its euro stablecoin, EUR CoinVertible (EURCV), on the XRP Ledger (XRPL) network as it looks to expand across multiple blockchains. This "multi-chain approach" is planned to kick in next year, pending final technical integrations, the company said. EURCV started on Ethereum in 2023 as a highly regulated product to compete with top dollar stablecoin issuers Circle and Tether. The token gained limited traction, with 38 million in issuance compared with Circle's 92 million EURC. Both are dwarfed by the dollar-linked coins: market leader Tether's $126 billion USDT and Circle's $37 billion USDC. The firm announced plans earlier this year to deploy the token on Solana, hoping to get better traction with the network's faster and cheaper transactions. "This is just the beginning," Guillaume Chatain, chief revenue officer at SG-FORGE, said in a statement. "We look forward to further innovation and expanding the reach of our portfolio of digital solutions." With the deployment on XRPL, SG-FORGE is looking to benefit from the network's cross-border payment and tokenization capabilities, touting its fast settlements and low-cost transactions. EURCV will use Ripple Custody services for issuance. "Bringing trusted, banking-grade stablecoins like EURCV onto the XRPL is critical to enabling institutional use cases, like payments, which is a core focus for Ripple," said Markus Infanger, SVP at RippleX. Stablecoins, which are cryptocurrencies with their price anchored to government-issued currencies, are increasingly popular for payments across the globe, offering a more efficient and cheaper way to move money. As countries roll out regulations for the asset class, more banks are getting interested in issuing their own stablecoin. Spanish bank BBVA, for example, said it plans to issue a stablecoin on Ethereum next year using payment firm Visa's tokenization platform. Ripple is also at an advanced stage of issuing its own U.S. dollar stablecoin, RLUSD. The token is "operationally ready," awaiting regulatory approval by the New York Department of Financial Services, Ripple president Monica Long said in an interview with CoinDesk last month. https://www.coindesk.com/business/2024/11/14/socgen-crypto-arm-to-bring-its-euro-stablecoin-to-xrp-ledger-lays-out-plan-for-going-multichain/

2024-11-14 13:50

Ethereum is by far the most popular blockchain for issuers of tokenized traditional assets with a current market cap of $1.6 billion. Franklin Templeton's OnChain U.S. Government Money Market Fund can now be traded on Ethereum. The fund is already available on several other blockchains, including most recently Base, Aptos, and Avalanche. Ethereum is by far the most popular pick among issuers, handling $1.6 billion worth of tokenized assets. Franklin Templeton has expanded the trading of its OnChain U.S. Government Money Market Fund (FOBXX) to the second largest blockchain by market cap, Ethereum (ETH). The asset manager has added a series of new blockchains to support the fund this year, including, most recently, Coinbase’s Base, Aptos, and Avalanche. It uses the Stellar network as the primary public blockchain. FOBXX launched in 2021, becoming the first money market fund to use a public blockchain to track transactions and ownership. It currently stands at a $410 million market cap, making it the third-largest tokenized money market fund. BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL) moved to the top of the list just six weeks after its launch in late March. It currently stands at $545 million, while the second largest fund, Ondo’s U.S. Dollar Yield (USDY), is at $452 million. Among issuers, Ethereum is by far the top choice to issue shares of tokenized treasuries, with the largest blockchain handling over $1.6 billion of assets, followed by Stellar (XLM) and Solana (SOL), according to data by rwa.xyz. Asset manager Grayscale, in a report in April, argued that Ethereum is “meaningfully decentralized and credibly neutral for network participants, likely a requirement for any global platform for tokenized assets” and, therefore, has the best chances among smart contracts to benefit from tokenization. https://www.coindesk.com/business/2024/11/14/franklin-templeton-expands-410m-money-market-fund-to-ethereum-blockchain/