Bills

Bitcoin mining and increasing energy bills — Sen. Warren vs. Crypto Twitter

“I’ve been ringing the alarm about the risks that Bitcoin poses to our power grids and climate,” said Senator Warren, agreeing with a New York Times article on the matter.

United States Senator Elizabeth Warren blamed the Bitcoin (BTC) mining industry for rising energy prices in American households based on unverified mainstream reporting. However, Crypto Twitter was not ready to let it slide and unanimously decided to clarify the disinformation. 

While Senator Warren has prominently spoken against the crypto ecosystem, the latest dig at Bitcoin mining comes based on a New York Times article. The report accuses Bitcoin miners of cashing in on electricity and indirectly forcing the public to pay the price. The narrative fit Warren’s perception of the crypto industry as she stated:

“I’ve been ringing the alarm about the risks that Bitcoin poses to our power grids and climate. U.S. Environmental Protection Agency and Department of Energy should use their authority to require cryptominers to disclose their energy use and emissions.”

To help Warren rethink and make an informed decision, numerous entrepreneurs responded, trying to fix the misconception. Bitcoin podcaster Stephan Livera straight up dismissed the NYT report, stating that the “NYT report is filled with disinformation.”

On the other hand, MicroStrategy founder and chairman Michael Saylor contradicted Warren’s statement. He explained how Bitcoin mining does not contribute to pollution but helps decrease energy bills.

Others from the Crypto Twitter community sought to tag Tesla CEO and Dogecoin (DOGE) supporter Elon Musk in the conversation, who has been actively trying to eradicate disinformation campaigns on his newly-owned social media platform.

The New York Times was one of the first news publications to become a victim of Musk’s attack against disinformation and propaganda. Twitter recently stripped the verified blue mark from NYT’s primary account after the organization refused to comply with the subscription requirement. Cointelegraph reported on a method to find out who paid for Twitter Blue verification.

Related: Elon Musk reportedly buys thousands of GPUs for Twitter AI project

In a recent FOX interview, Musk revealed the development of a ChatGPT rival known as TruthGPT. According to the entrepreneur, TruthGPT is a large language model that will be trained to explore the mysteries of the universe. In his words:

“I’m going to start something which I call TruthGPT, or a maximum truth-seeking AI that tries to understand the nature of the universe.”

In the interview, Musk told Fox anchor Tucker Carlson that ChatGPT “is programmed by left-wing experts, which train the chatbots to lie.”

Magazine: US enforcement agencies are turning up the heat on crypto-related crime

Circle exec to join US Congressional committee hearing on stablecoin payments, legislation

The Financial Services Committee issued a memorandum to announce an upcoming hearing titled “Understanding Stablecoins’ Role in Payments and the Need for Legislation.”

The United States House Committee on Financial Services will hold a hearing on April 19 to discuss stablecoins’ position as a means of payment and whether the ecosystem needs supporting legislation.

The committee issued a memorandum to announce an upcoming hearing titled: “Understanding Stablecoins’ Role in Payments and the Need for Legislation.” The hearing will include information collected by various federal government agencies over the last year.

List of individuals testifying at the upcoming House Financial Services Committee hearing. Source: house.gov

Participants testifying at the hearing include Circle’s chief strategy officer and head of global policy, Dante Disparte. Last month, on March 11, Circle’s in-house stablecoin offering, USD Coin (USDC), depegged from the U.S. dollar after it revealed it had $3.3 billion of funds stuck at the collapsed Silicon Valley Bank (SVB).

However, following a bailout of SVB depositors by the U.S. government, USDC repegged its value to the U.S. dollar. During this timeline, hackers managed to gain access to Disparte’s Twitter account and started promoting fake loyalty rewards to long-time users of USDC.

The upcoming committee hearing will focus on various stablecoins and their use in the payments landscape. Moreover, the committee will explore the need for stablecoin legislation depending on their underlying collateral structures.

Related: Circle and BlockFi questioned on banking with SVB by Warren and AOC

Just days before the upcoming hearing, a draft bill providing a framework for stablecoins in the United States was published in the House of Representatives document repository.

Draft of the bill, including stablecoin regulations. Source: docs.house.gov

Speaking about the draft bill, Circle’s CEO Jeremy Allaire said, “There is clearly the need for deep, bi-partisan support for laws that ensure that digital dollars on the internet are safely issued, backed and operated.“

As Cointelegraph reported, the draft further allows the U.S. government to establish standards for interoperability between stablecoins.

Magazine: Bitcoin in Senegal: Why is this African country using BTC?

Consumer Federation of California reattempts to regulate crypto companies

Assemblymember Timothy Grayson introduced the Digital Financial Assets Law to protect Californians from financial hardship and foster responsible innovation.

The Consumer Federation of California (CFC), a nonprofit advocacy organization working for consumer rights, sponsored a bill that seeks to license and regulate the activities of cryptocurrency exchanges.

The legislation demanding regulatory oversight of crypto businesses — the Digital Financial Assets Law — was introduced by Assemblymember Timothy Grayson with the aim of protecting Californians from financial hardship and fostering responsible innovation. Grayson believes that licensure is the next natural step for the crypto industry, adding:

“And it is equally clear that until we take that step, Californians will continue to be vulnerable to prevalent and preventable financial scams.”

This marks the CFC’s second attempt to license and regulate digital assets and cryptocurrency companies. The bill (AB 39) was first introduced in 2022, but California Governor Gavin Newsom vetoed it.

If passed, the bill will become law on Jan. 1, 2025, prohibiting citizens from engaging with crypto businesses until “certain criteria are met.” AB 39 will license crypto companies under the California Department of Financial Protection and Innovation, ensuring regulatory clarity and investor protection.

“The bankruptcies and scams of the past year only bolster our collective interest in ensuring basic and foundational consumer protections in this marketplace, which has up to now looked like the Wild West in terms of ‘anything goes’ behavior by key players in the cryptocurrency industry,” added Robert Herrell, executive director of the CFC, while revealing the intent behind the move.

The CFC believes the first hearing of this bill in the Assembly will be taken up in April.

Related: California cannabis producer adopts blockchain to track its weed

While Californian politicians try to introduce crypto regulations, the California Department of Motor Vehicles (DMV) tests the digitization of car titles and title transfers via a private Tezos blockchain.

As Cointelegraph reported, the agency wants to have the shadow ledger ironed out within the next three months, according to the California DMV’s chief digital officer Ajay Gupta.

Central African Republic eyes legal framework for crypto adoption

A 15-member committee is tasked with working on a legal framework that will allow cryptocurrencies to operate in Central African Republic and expedite the development of the national economy.

Central African Republic (CAR), a developing country in Central Africa, set up a 15-member committee responsible for drafting a bill on the use of cryptocurrencies and tokenization in the region.

According to Faustin-Archange Touadéra, the president of CAR, cryptocurrencies can potentially help eradicate the country’s financial barriers. He believed in creating a business-friendly environment supported by a legal framework for cryptocurrency usage. A rough translation of the official press release reads:

“With access to cryptocurrencies, the monetary barriers existing until now will disappear, the main objective of the measures adopted by the government being the development of the national economy.”

The committee responsible for drafting the crypto bill comprises 15 experts from five ministries of CAR — Ministry of Mines and Geology, Ministry of Waters, Forest, Hunting and Fishing, Ministry of Agriculture ad Rural Development, Ministry of Town Planning, Land Reform, Towns and Housing and Ministry of Justice, Promotion of Human Rights and Good Governance.

Through collaboration, the members are tasked with working on a legal framework that will allow cryptocurrencies to operate in Central African Republic and expedite the development of the national economy.

Related: Bitcoin, Sango Coin and the Central African Republic

Crypto initiatives from the African continent marked another milestone as Nigerian crypto exchange Roqqu bagged a virtual currency license for the European Economic Area after two years of waiting for permission from regulatory authorities.

Roqqu CEO Benjamin Onomor told Cointelegraph that off-shore Africans send back over $5 billion to their relatives, and the current remittance system slows the process.

“It makes a lot of sense to solve this problem by using crypto as the vehicle. Crypto is a faster and cheaper route that can bridge the gap and help reduce fees in moving money globally. This is the core of the problem we want to solve,” he added.

US senator bill seeks to cushion crypto exchanges from SEC enforcement actions

The Digital Trading Clarity Act of 2022 aims to provide regulatory clarity around classifying digital assets and related liabilities under existing securities laws.

United States Senator Bill Hagerty, a member of the Senate Banking Committee, introduced legislation seeking a safe harbor for cryptocurrency exchanges from “certain” Securities and Exchange Commission (SEC) enforcement actions.

The Digital Trading Clarity Act of 2022, introduced by Senator Hagerty, aims to provide regulatory clarity around two primary concerns plaguing crypto exchange establishments — (i) the classification of digital assets and (ii) related liabilities under existing securities laws.

A bill to provide digital asset intermediaries with a safe harbor from certain enforcement actions by the Securities and Exchange Commission, and for other purposes. Source: congress.gov

Sen. Hagerty outlined an overview of the problems amid regulatory hurdles:

“The current lack of regulatory clarity for digital assets presents entrepreneurs and businesses with a choice: navigate the significant regulatory ambiguity in the U.S., or move overseas to markets with clear digital asset regulations.”

The aforementioned regulatory uncertainty, according to Sen. Hagerty, discourages investments in the crypto spaces and hampers job creation opportunities in the United States. As a result, the blockade “jeopardizes the United States’ leadership in this transformational technology at such a crucial time.”

The senator believed that the legislation, when passed, would not only provide “much-needed certainty” to crypto businesses but also improve the growth and liquidity of U.S. cryptocurrency markets.

To establish the legislation as law, the bill needs approval from the Senate, the House and the President of the United States.

Related: US lawmakers propose amending cybersecurity bill to include crypto firms reporting potential threats

Running parallel to the regulatory reforms recommended by the US senators, the federal government amped up efforts to study the feasibility of central bank digital currencies (CBDCs) in the American market.

Under Biden’s directive, the Office of Science and Technology Policy (OSTP) analyzed 18 CBDC design choices, outlining various pros and cons of each system:

“It is possible that the technology underpinning a permissionless approach will improve significantly over time, which might make it more suitable to be used in a CBDC system.”

The technical evaluation for a U.S. CBDC system highlighted the department’s inclination toward an off-ledger, hardware-protected system.

California Gov. Newsom vetoes crypto licensing and regulatory framework

Opposing Assembly Bill 2269, Newsom recommended a “more flexible approach” that would evolve over time while considering the safety of consumers and related costs.

Adding to the existing regulatory hurdles for the crypto ecosystems, California Governor Gavin Newsom refused to sign a bill that would establish a licensing and regulatory framework for digital assets.

Assembly Bill 2269 sought to allow the issuance of operational licenses for crypto companies in California. On Sept. 1, the California State Assembly passed the bill with no opposition from the assembly floor and went on to the governor’s office for approval.

Letter of rejection from Gov. Mewsom. Source: leginfo.legislature.ca.gov

Opposing the notion, Newsom recommended a “more flexible approach” that would evolve over time while considering the safety of consumers and related costs, adding:

“It is premature to lock a licensing structure in statute without considering both this work [in-house efforts to create a transparent regulatory environment] and forthcoming federal actions.”

The governor stated that the bill, in its current form, would require loaning “tens of millions of dollars” from the state’s general fund:

“Such a significant commitment of general fund resources should be considered and accounted for in the annual budget process.”

Newsom highlighted that he is waiting for federal regulations to “come into sharper focus for digital financial assets” before working with the legislature to establish crypto licensing initiatives.

Related: Biden’s anemic crypto framework offered us nothing new

The Office of Science and Technology Policy (OSTP) submitted an analysis to the White House regarding design choices for 18 central bank digital currency (CBDC) systems for the United States.

The technical evaluation for a U.S. CBDC system highlighted the OSTP’s inclination toward building an off-ledger, hardware-protected system while considering the various trade-offs inherited by each design choice.

Congress demands crypto payments notification from State Department when helping Ukraine

The bill amendment demands the Secretary of State submit reports to congressional committees explaining why the State Department made the determination to pay out rewards in cryptocurrency.

A new bill demanding a congressional notification prior to payments of United States Department of State rewards using cryptocurrencies has surfaced as Congress raises concerns about the evasion of sanctions.

The Rewards for Justice Program, a counterterrorism rewards program run by the Secretary of State, offers rewards for information that prevents international terrorism. Citing examples of Russia and Belarus as previously sanctioned regimes that have used cryptocurrencies to circumvent sanctions, the bill H. R. 7338 demands that:

“The Secretary of State shall notify the appropriate congressional committees not later than 15 days before paying out a reward in cryptocurrency.”

Congress highlighted the United Nations’ findings that 12 million Ukrainian residents would need humanitarian assistance and that cryptocurrencies have “been used as an effective cross-border payment tool to send millions to the Ukrainian Government, Ukrainian army, and Ukrainian refugees with limited access to financial services.”

The bill amendment demands the Secretary of State submit reports to congressional committees explaining why the State Department made the decision to pay out rewards in cryptocurrency.

If signed into law, the bill will require the State Department to list each crypto payments that were previously provided. Moreover, the federal department will also need to provide evidence as to why cryptocurrency payments would encourage whistleblowers to share intel when compared to rewarding with U.S. dollars or other prizes.

In doing so, the State Department must showcase an analysis of how crypto rewards could undermine the dollar’s dominance as the global reserve currency.

Related: White House OSTP department analyzes 18 CBDC design choices for the US

Following U.S. President Joe Biden’s executive order on Ensuring Responsible Development of Digital Assets, federal agencies joined hands in publishing a fact sheet to articulate a clear framework for responsible digital asset development.

The “first-ever” fact sheet published by the White House consisted of seven sections, namely: (1) Protecting Consumers, Investors, and Businesses; (2) Promoting Access to Safe, Affordable Financial Services; (3) Fostering Financial Stability; (4) Advancing Responsible Innovation; (5) Reinforcing Our Global Financial Leadership and Competitiveness; (6) Fighting Illicit Finance and (7) Exploring a U.S. Central Bank Digital Currency (CBDC).

While some of the sections don’t contain any particularly new information, federal agencies recommend the creation of a federal framework for nonbank payment providers in addition to encouraging the adoption of instant payment systems like FedNow, which is expected to launch in 2023.