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38% of US voters will consider candidates’ position on crypto in midterms: Survey

Initiated by Grayscale, the survey suggests crypto regulation is a bipartisan issue, with the majority of Democratic and Republican respondents saying they want clarity.

Roughly a third of eligible voters in the United States will be “considering crypto policy positions” when choosing candidates in the 2022 midterm elections, according to a new survey.

In the results of a 2,029-person survey conducted by The Harris Poll between Oct. 6 and 11, 57% of likely midterm voters say they would be more likely to vote for a political candidate interested in staying informed about cryptocurrencies, while 38% said they would consider positions on crypto policy when voting in the midterms. The survey, initiated by Grayscale Investments, also suggests that crypto regulation is a bipartisan issue, with 87% of Democratic and 76% of Republican respondents saying they want clarity from the U.S. government.

“Voters and lawmakers alike have been hearing about crypto, and it seems they’ve taken the opportunity to learn about the asset class,” says the Grayscale summary. “Despite political divisions, the survey found broad familiarity with crypto across party lines and a majority of both Republicans and Democrats who agree that crypto represents the future of finance.”

Early voting for the U.S. midterms has already begun in many states, with Election Day set for Nov. 8. The future majority control of both the House of Representatives and Senate hangs in the balance, with a number of issues driving many voters to the polls, including abortion, gun control, free and fair elections, and the economy — including crypto.

Speaking to Cointelegraph, Jeff Howard, North American head of business development at digital assets platform OSL, suggested that many may consider digital assets as part of financial inclusion efforts, but the space largely isn’t big enough to appeal to single-issue voters in the United States:

“I don’t think crypto has seeped into the psyche of American voters as much yet. In every topic or every issue, you have a hardcore group that supports or a group that is against, but I don’t think crypto in and of itself as a one-issue vote has gotten big enough to matter yet.”

Related: Crypto and decentralization could influence voters in 2022 US midterm elections: Report

In the current session of Congress, 220 representatives in the House caucus with the Democrats, while Republicans hold 212 seats, and three remain vacant. All 435 House seats are up for election, as are 34 of those in the Senate. Democrats currently hold control of both chambers by a slim majority, giving Republicans a chance to flip both on Nov. 8.

New regulatory bill grants Uruguayan Central Bank control over the nation’s crypto industry

The Uruguayan government introduced legislation to the parliament on Sept. 5, accelerating industry regulation.

The Uruguayan government has introduced legislation to the parliament that accelerates the regulation of the crypto space in the country and establishes the central bank as the regulatory authority.

Introduced on Sept 5, the bill strives to clarify the country’s regulatory framework for cryptocurrency assets, stating that all companies that provide digital asset-related services, including initial coin offerings (ICOs) are under the supervision of the Superintendency of Financial Services (SSF), a central bank entity. Cryptocurrency exchanges, custody services and any financial services relating to these digital assets should also adhere to Anti-Money Laundering regulations and best practices.

Additionally, the document defined four types of digital assets: stablecoins, governance tokens, tradable assets and debt tokens, saying:

“If the activity carried out with these instruments involves the exercise of financial intermediation or financial activity, it will be subject to the regulation and control of the Central Bank of Uruguay.”

Last year, Uruguayan Senator Juan Sartori introduced a draft bill to regulate cryptocurrency and enable businesses to accept digital payments, seeking to “establish a legitimate, legal and safe use in businesses related to the production and commercialization of virtual currencies.”

This development is part of an ongoing wave of legislation or regulations being pursued by governments or legislators in Latin America. Brazil’s Securities and Exchange Commission is reportedly pursuing to change its legal framework to recognize tokens as digital assets or securities. In August, Paraguay’s president vetoed a bill that sought to recognize cryptocurrency mining as an industrial activity, arguing that mining’s high electricity consumption could hinder the expansion of a sustainable national industry.

New finance minister Kwasi Kwarteng leaves crypto policy in the UK unclear

While serving as the secretary of state for business, energy and industrial strategy, prior finance minister Nadhim Zahawi was part of a department suggesting support for blockchain technology in 2021.

Recently elected Conservative Party Leader and Prime Minister of the United Kingdom Liz Truss has appointed Kwasi Kwarteng as the country’s newest chancellor of the exchequer, or chief financial minister.

In a Tuesday announcement, Truss’ office named Kwarteng as the next U.K. finance minister, replacing Nadhim Zahawi, who served as chancellor of the exchequer for three months following Rishi Sunak’s resignation in July. Kwarteng was most recently the U.K. government’s secretary of state for business, energy and industrial strategy in addition to being a Member of Parliament since 2010.

Queen Elizabeth formally appointed Truss as the next U.K. prime minister and first lord of the treasury on Tuesday following Boris Johnson’s resignation. While Truss said in 2018 that the U.K. “should welcome cryptocurrencies in a way that doesn’t constrain their potential,” Zahawi has largely not spoken publicly on his plans for crypto and blockchain in the country.

Related: BoE official compares current crypto market regulation to ‘unsafe aeroplanes’

According to a June 2021 report on the U.K.’s innovation strategy from the department of business, energy and industrial strategy — in which Zahawi served as secretary of state — blockchain technology had “transformative potential,” citing its ability to build trust in digital services. In July 2021, the government department announced $61 million in funding for projects driving “data-driven innovations,” including the use of blockchain in supply chains.

The U.K. government is currently considering different legislative paths to regulate stablecoins and determine crypto’s role in the economy. In May, the prime minister’s office introduced two bills on the potential seizure of and regulatory support for cryptocurrencies.

CFTC and SEC propose amending reporting rules for large hedge funds on crypto exposure

The two U.S. financial regulators cited the growth in the hedge fund industry as the reason for the proposed change, due in part to digital asset investments becoming more common.

The United States Securities and Exchange Commission, or SEC, and the Commodity Futures Trading Commission, or CFTC, has proposed requiring large advisers to certain hedge funds to report any exposure to digital assets.

In a Wednesday notice, the SEC and CFTC proposed amending their confidential reporting form for certain investment advisers to private funds of at least $500 million. The Form PR would require qualifying hedge funds to not include exposure to cryptocurrencies when reporting “cash and cash equivalents,” but rather add them under a different category “to report digital asset strategies accurately.”

The two U.S. financial regulators cited the growth in the hedge fund industry as the reason for the proposed change, due in part to digital asset investments becoming more common since Form PR was introduced in 2008. According to the SEC and CFTC, having investment advisers provide more detailed information on strategies and exposure to certain assets would allow the Financial Stability Oversight Council to better assess potential risks to the U.S. economy.

“In the decade since the SEC and CFTC jointly adopted Form PF, regulators have gained vital insight with respect to private funds,” said SEC chair Gary Gensler. “Since then, though, the private fund industry has grown in gross asset value by nearly 150 percent and evolved in terms of its business practices, complexity […] If adopted, [this proposal] would improve the quality of the information we receive from all Form PF filers, with a particular focus on large hedge fund advisers.”

A fact sheet on the proposal released on Wednesday showed the number of private funds has increased by roughly 55% between 2008 and the third quarter of 2021. According to data from market research firm IBISWorld, there were 3,841 U.S.-based hedge funds as of 2022.

Related: Within five years, US hedge funds expect to hold 10.6% of assets in crypto

PricewaterhouseCoopers reported in June that roughly one-third of the traditional hedge funds it surveyed globally were invested in crypto, but more than half had less than 1% exposure to digital assets out of their total assets under management. According to the firm, respondents cited “regulatory and tax uncertainty” as the greatest barrier to investing in crypto.

Crypto firms failed to deliver ‘promised benefits’ from lawmaker-backed incentives, says nonprofit

“At a minimum, the public should have a say in these crypto handouts,” said the Tech Transparency Project.

The Tech Transparency Project, or TTP, a research initiative of the United States-based nonprofit watchdog group Campaign for Accountability, has released a report claiming crypto firms “provided little in return” for state governments offering financial incentives. 

In a report released Thursday, the TTP said that many crypto firms based in certain U.S. states have “reaped special benefits” for setting up operations while not always delivering jobs, economic growth or tax benefits for residents. According to the group, crypto lobbyists worked on behalf of firms to gain tax breaks and discounted energy prices while state governments have “faced budget shortfalls, surging energy consumption and serious environmental damage.”

The research group cited policies going back to 2017 in which state governments including those of Nevada, Wyoming, Montana and Kentucky passed pro-crypto legislation to incentivize firms to set up shop. In Montana, for example, the TTP reported policymakers passed a law in 2017 that cut property taxes on the data centers used to mine cryptocurrency. Mining firms moved in, only to later see residents complain “about excessive noise, waste and power use” and call for a moratorium.

In Wyoming, where lawmakers passed bills exempting crypto firms from property taxes and there is no state income tax for residents, the TTP reported that blockchain-based payments firm Ripple offered no jobs in the state while crypto exchange Kraken listed only one. In 2020, Wyoming Governor Mark Gordon reported having to consider “devastating but necessary” budget cuts for government departments, with legislators reportedly considering similar action on K-12 education in 2021 — though the economic impact of the pandemic may have also played a role.

The group added:

“At a minimum, the public should have a say in these crypto handouts. Especially in states suffering economic woes, the perception of innovation shouldn’t come before material taxpayer benefit.”

Related: Georgia lawmakers consider giving crypto miners tax exemptions in new bill

Kentucky lawmakers voted to remove sales tax from electricity purchased by local crypto mining operators in 2021 and made mining firms eligible for state tax incentives aimed at clean energy businesses. A report released by the Office of the State Budget Director in November 2021 estimated these incentives cost the state roughly $11.6 million each year.

“It’s too soon to tell how much these measures, which went into effect on July 1, will actually cost Kentuckians,” said the TTP. “But several state programs are already facing significant budget pressure, which could be exacerbated by the cryptocurrency incentives […] The tax incentives are also unlikely to create new jobs in Kentucky.”

Final candidates for next UK prime minister have made pro-crypto statements

The Conservative Party is expected to decide between Rishi Sunak and LizaTruss as the next party leader by Sept. 5, at which point Johnson will officially step down

Rishi Sunak, the former chancellor of the Exchequer, and Liz Truss, Secretary of State for Foreign, Commonwealth and Development Affairs, two of the final candidates to become the next prime minister for the United Kingdom, have both previously expressed pro-crypto views.

With Prime Minister Boris Johnson soon to be out of office, Sunak and Truss are competing to be the next leader of the Conservative Party and the country, with their views on digital assets likely to influence financial policy. Under Johnson, Sunak requested that the country’s Royal Mint create a nonfungible token as part of an effort to make the United Kingdom a global crypto hub.

A member of Parliament who served as chancellor from 2020 until resigning in July, Sunak previously said the U.K. government would prioritize financial technology, including central bank digital currencies and stablecoins, aiming for the country to keep pace with innovation. He has also been behind many proposed financial services reforms promoting the adoption of cryptocurrencies and stablecoins.

Truss, who has been the Secretary of State for Foreign, Commonwealth and Development Affairs since 2021 and Minister for Women and Equalities since 2019, serving under three prime ministers, called for an anti-regulatory approach to crypto in 2018 in an effort for the U.K. to embrace the technology. In her role as Secretary of State for International Trade, the MP launched a digital trade network in 2020 whose measures included promoting fintech firms that “enable[d] digitisation and resilience in priority export markets.”

Related: Majority of British crypto owners revealed to be hodlers: Survey

Amid Johnson’s expected departure, policy decisions have continued to move forward in the United Kingdom. Nadhim Zahawi, who replaced Sunak as chancellor of the Exchequer, introduced a Financial Services and Markets Bill on July 20, which contained a regulatory framework for stablecoins. The Treasury Committee of the House of Commons also opened an inquiry allowing U.K. residents to write in about the role of crypto assets in the country.

The Conservative Party is expected to decide between Sunak and Truss as the next leader by Sept. 5, at which point Johnson will officially step down. On Tuesday, the two candidates took part in a televised debate that was cut short after moderator Kate McCann fainted while on air.

Crypto Council for Innovation hires government insiders to build leadership team

Linda Jeng and Brett Quick will be joining the council in support of its policy and regulatory affairs team.

The Crypto Council for Innovation, or CCI, a crypto advocacy group that establishes dialogues with governments and regulatory agencies on the benefits of crypto, has hired two new experts with experience in financial regulatory policy in the United States.

In a Tuesday announcement, the CCI said Linda Jeng, a former Federal Reserve Board and Treasury Department employee, and Brett Quick, former deputy chief of staff for House Financial Services Committee chair Emeritus Spencer Bachus, would be joining the council in support of its policy and regulatory affairs team. Jeng will be the council’s chief global regulatory officer and general counsel, having previously worked in a similar role at the Circle- and Coinbase-founded Centre Consortium, while Quick will join as the CCI’s head of government affairs for North America.

Formed in April 2021, the CCI’s supporters include Coinbase, Gemini, Fidelity Digital Assets, Paradigm, Ribbit Capital, Andreessen Horowitz and Block. Sheila Warren, the former head of blockchain and distributed ledger technology at the World Economic Forum, joined the CCI as CEO in February. Since that time, the CCI announced former U.S. Senator Cory Gardner would take a position on the advocacy group’s leadership team.

According to the CCI, its current focus has been supporting lawmakers on issues related to evading sanctions using cryptocurrencies, the European Union’s Markets in Crypto-Assets (MiCA) law, which aims to harmonize regulations for crypto among EU member states, and legislation introduced concerning digital assets in the United States. Congress members in both the House of Representatives and Senate have put forth different bills on how to handle crypto-related products in the country, from stablecoins to determining where to draw the regulatory lines between the Securities and Exchange Commission and Commodity Futures Trading Commission.

Related: WEF 2022: Serious people will stay in crypto despite market setbacks, says CCI CEO Sheila Warren

The CCI hosted a virtual event in July 2021 on Bitcoin (BTC) adoption called “The ₿ Word,” featuring speakers including Tesla CEO Elon Musk and Jack Dorsey. Many other crypto policy advocate groups in the United States, including Coin Center, often weigh in on laws and regulations related to digital assets.

US Treasury calls for public comment on digital asset policy, following Biden’s executive order

President Joe Biden’s executive order on crypto from March directed the Treasury Department to take the lead among other government agencies in developing policy recommendations.

The United State Department of the Treasury has requested comments from the public on the potential opportunities and risks of digital assets in compliance with President Joe Biden’s executive order from March.

In a Tuesday announcement, the U.S. Treasury said it was asking for input from the public that will “inform its work” in reporting to the president the possible implications of digital assets on the financial markets and payment infrastructures. Biden’s executive order directed the Treasury Department to take the lead among other government agencies in developing policy recommendations aimed at mitigating both systemic and consumer risks around cryptocurrencies.

“For consumers, digital assets may present potential benefits, such as faster payments, as well as potential risks, including risks related to frauds and scams,” said Nellie Liang, Under Secretary of the Treasury for Domestic Finance. “The Treasury Department is seeking to benefit from the expertise of the American people and market participants by soliciting public comment as we engage in this important work.”

In the request for comment published in the Federal Register on July 8, Treasury noted that the lack of financial education when handling digital assets could be a factor in rolling out any related policy to vulnerable communities:

“The rise in use of digital assets, and differences across communities, may also present disparate financial risk to less informed market participants or exacerbate inequities. It is critical to ensure that digital assets do not pose undue risks to consumers, investors, or businesses, and to put in place protections as a part of efforts to expand access to safe and affordable financial services experienced by more vulnerable populations.”

The public has until August 8 to submit comments to Treasury on what people believe could be the implications of mass adoption of crypto, both for individual investors and businesses, and the potential impact of introducing new financial products and services. In addition, the government department requested Americans weigh in on potential risks, including losing private keys and the “authenticity of digital assets, including NFTs.”

Related: Biden’s executive order promises great things for the crypto industry — Eventually

On July 7, Treasury delivered to President Biden a framework on crypto for U.S. government agencies to work with their foreign counterparts, in accordance with the executive order. Liang has previously called on Congress to pass legislation around stablecoins, and worked to promote financial literacy of digital assets among people who have limited access to mainstream financial services.

US Treasury calls for public comment on digital asset policy, following Biden’s executive order

President Joe Biden’s executive order on crypto in March directed the Treasury Department to take the lead among other government agencies in developing policy recommendations.

The United State Department of the Treasury has requested comments from the public on the potential opportunities and risks of digital assets in compliance with President Joe Biden’s executive order from March.

In a Tuesday announcement, the U.S. Treasury said it was asking for input from the public that will “inform its work” in reporting to the president on the possible implications of digital assets on the financial markets and payment infrastructures. Biden’s executive order directed the Treasury Department to take the lead among other government agencies in developing policy recommendations aimed at mitigating both systemic and consumer risks around cryptocurrencies.

“For consumers, digital assets may present potential benefits, such as faster payments, as well as potential risks, including risks related to frauds and scams,” said Nellie Liang, Under Secretary of the Treasury for Domestic Finance. “The Treasury Department is seeking to benefit from the expertise of the American people and market participants by soliciting public comment as we engage in this important work.”

In the request for comment published in the Federal Register on Friday, Treasury noted that the lack of financial education when handling digital assets could be a factor in rolling out any related policy to vulnerable communities:

“The rise in use of digital assets, and differences across communities, may also present disparate financial risk to less informed market participants or exacerbate inequities. It is critical to ensure that digital assets do not pose undue risks to consumers, investors, or businesses, and to put in place protections as a part of efforts to expand access to safe and affordable financial services experienced by more vulnerable populations.”

The public has until August 8 to submit comments to the Treasury on what people believe could be the implications of mass adoption of crypto, both for individual investors and businesses, and the potential impact of introducing new financial products and services. In addition, the government department requested Americans weigh in on potential risks, including losing private keys and the “authenticity of digital assets, including NFTs.”

Related: Biden’s executive order promises great things for the crypto industry — Eventually

On July 7, the Treasury delivered to President Biden a framework on crypto for U.S. government agencies to work with their foreign counterparts in accordance with the executive order. Liang has previously called on Congress to pass legislation around stablecoins and worked to promote financial literacy of digital assets among people who have limited access to mainstream financial services.

IMF recommends eco-friendly CBDCs and non-PoW mechanisms for payments

In addition to eco-friendly components, the IMF recommended central banks include other features in their CBDCs, such as compliance, higher resilience and offline capabilities.

An International Monetary Fund study on energy consumption has reveale the importance of design choices within the crypto ecosystem to build an environmentally friendly mainstream payment system.

In the study, titled “Digital Currencies and Energy Consumption,” the IMF examines the energy consumption of crypto assets based on their distinct design elements to evaluate the ideal mechanism for developing central bank digital currencies (CBDCs).

Estimates of energy use (in kWh) per transaction for the core processing of different payment systems. Source: IMF

Sharing the groundwork for policy discussions around the environmental impacts of digital currencies, the IMF recommends moving away from proof-of-work-based distributed ledger technology applications, adding:

“In particular, Bitcoin, the best known application of this type, is estimated to consume much energy (about 144 TWh [terawatt-hours]) per year. Although scalability solutions reduce the energy cost per transaction, they do not reduce the overall energy spending.”

However, the international organization acknowledged the high energy efficiency brought about by non-PoW, permissioned crypto assets when compared with the traditional financial system:

“The potential of non-PoW permissioned crypto assets to reduce energy consumption relative to the existing payment system comes about from energy savings on both core processing architectures and user payment means.”

The IMF recommends the central banks “design CBDCs with the explicit goal to be environmentally friendly.” This means selecting platforms, hardware and design options with “a lower carbon footprint than the central banks’ legacy systems” right from the experimentation phase.

In addition to eco-friendly components, the IMF recommended central banks include other features in CBDCs, such as compliance, higher resilience and offline capabilities.

The IMF also points out that the policymakers will consider the mainstreaming of crypto or CBDCs by weighing the environmental impact of the technology’s underlying design. It estimates that the global payment system’s annual energy consumption stands at 47.3 TWh — roughly matching the yearly consumption of economies like Portugal and Bangladesh.

Joining in the cause to address climate change, the Iota Foundation, a nonprofit DLT ecosystem provider, partnered with Dell Technologies to develop a real-time carbon footprint tracking system.

The initiative will bring about near-real-time tracking of carbon emissions from BioE’s sustainable energy and composting facility. Mathew Yarger, head of sustainability at the Iota Foundation, stated:

“We’re now able to track and verify data around climate change and how we’re actively trying to address it at a level that’s never been achieved before.”