Yesterday in Crypto - Issue #5

Read time: ~7 minutes

Here’s what you missed yesterday, 7/20/23:

U.S. House Republicans have introduced a significant piece of legislation, the "Financial Innovation and Technology for the 21st Century Act," aimed at clarifying the regulatory landscape of the digital asset industry. The bill seeks to establish clear definitions of "blockchain" and "digital asset" within existing financial laws and create a comprehensive regulatory framework for the digital asset sector, including new regulations for digital asset exchanges.

The proposed legislation outlines the roles of the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) in overseeing cryptocurrencies. It also introduces a certification process for blockchains to be recognized as decentralized. This could allow the SEC to challenge claims made by token issuers about meeting the outlined standards, potentially introducing a gray area that could create uncertainty for decentralized finance (DeFi) projects.

Moreover, the bill provides guidelines for classifying digital assets, stating that the presence of an investment contract does not automatically categorize a token as a security. This is a significant point as most of the crypto tokens in existence are more appropriately considered commodities than securities. However, this leaves room for interpretation and could lead to inconsistent regulatory decisions, potentially complicating matters for DeFi projects.

The bill has received support from influential members, including Rep. Glenn Thompson (R-Pa.), Chair of the House Agriculture Committee, and Reps. French Hill (R-Ark.) and Dusty Johnson (R-S.D.) as co-sponsors. Rep. Tom Emmer (R-Minn.) and Rep. Warren Davidson (R-Ohio), both active crypto advocates, have also joined as co-sponsors. Note that Patrick McHenry is no longer listed as a sponsor… Perhaps because he understands DeFi needs to be protected.

Islamic Coin, a cryptocurrency that complies with Sharia law, has secured a significant investment of $200 million from ABO Digital. This funding is expected to provide the crypto project with a long and stable runway for growth and development.

Sharia law is the religious law forming part of the Islamic tradition, and has specific rules for financial transactions. Islamic Coin has been designed to adhere to these rules, making it a unique offering in the crypto market.

The substantial investment from ABO Digital, a prominent digital asset company, underscores the potential seen in this unique crypto project. The funding will likely be used to further develop the project and expand its reach within the global crypto market.

This development is just one example of the fascinating and diverse innovations taking place in the global crypto landscape. As digital assets continue to gain traction, we're seeing a wide range of unique projects emerge, each catering to different markets and needs. From Sharia-compliant coins like Islamic Coin to environmentally-friendly cryptos, the industry is constantly evolving and pushing boundaries. This dynamism not only underscores the versatility of blockchain technology but also highlights the potential of crypto to cater to diverse cultural, economic, and environmental contexts worldwide.

In a bold move that underscores its commitment to the crypto industry, the UK government has firmly pushed back against a proposal to regulate crypto trading as if it were gambling. This proposal, put forward by the House of Commons Treasury Committee in May, was based on the notion that crypto assets, due to their perceived lack of intrinsic value, should be treated like gambling.

The Treasury, however, expressed concerns that if crypto trading were treated like gambling, it could stifle innovation and push crypto activity out of the UK. This would be a significant setback for the country's ambition to become a global hub for crypto and blockchain technology.

Instead of adopting a gambling-like regulation, the government is forging its own path. It's currently working on its own set of crypto regulations, with proposed legislation already being debated in parliament last month. This legislation, which is expected to come into force by late 2023, aims to ensure that crypto firms operating in the UK are fully aware of the standards required for approval.

In a nutshell, the UK government's decision to reject the proposal to regulate crypto trading like gambling sends a clear message: the UK is committed to fostering innovation in the crypto industry and is determined to establish itself as a leading player in the global crypto landscape. The US better get the lead out…. the worldwide crypto race has begun.

That’s all for today. We’ll see you on Monday with a summary of this weekend’s news. Go touch some grass.

“I do think Bitcoin is the first [encrypted money] that has the potential to do something like change the world.” - Peter Thiel, Co-founder of PayPal