Bitcoin is on the table in the US Congress. Fed Chairman Jerome Powell made a statement on stablecoins and BTC. What will happen to the regulation of cryptocurrencies now?
Let’s analyze what updates Ethereum will have on August 4. In addition to burning commissions, the developers will postpone the “difficulty bomb”, disable gas refunds and other changes.
The printing press continues to run. The Federal Reserve System did its best to press the inflation rate up to 5.4% by the end of June. At the same time, as said by the head of the Fed, Jerome Powell, in the coming months, inflation may rise even more. And then she will take it and miraculously disappear.
From this one can only believe in the first part, because if the printing continues at $ 120 billion a month, inflation in America will not go anywhere. But we doubt that the problem will be resolved by itself.
During the hearings in Congress, the head of the Fed was asked a direct question regarding the stablecoin Tether. He said that he was aware of the situation, especially with the security of this coin, for which assets other than the dollar were partially used, for example, bonds. In general, this is normal practice, provided that such assets have high liquidity and can be quickly converted into cash:
But there is a problem, if everyone suddenly wants to take their money, and there is not enough liquidity in the market, then the stablecoin issuer will not be able to fulfill its obligations. In general, in his opinion, this is very similar to a deposit in a bank, this is such a hint from Powell about a partial reservation, and that if all depositors want to withdraw money at the same time, then the bank will simply declare itself bankrupt. Therefore, he believes that stablecoins should be regulated by analogy with banks, provided that they are going to become a significant part of the payment universe, then we need an appropriate regulatory framework that does not exist.
Thus, Jerome Powell admitted that he had no leverage over stablecoins. It sounds ridiculous, but if you remember, then there was already an investigation against Tether and it ended with just a small fine.
Regulators can prohibit the emergence of a new cryptocurrency, as, for example, was the case with the blockchain project from Telegram or the stablecoin from Facebook, which cannot be coordinated with the authorities in any way. But with those who are already on the market and have received widespread use, the US authorities have clear problems. They are not China, where you can simply decide on a complete ban. It doesn’t work that easily, and therefore, soon it is worth waiting for the revitalization of the legislative process in Congress.
Also, the head of the Fed made another equally interesting statement. He remembered about the digital dollar and that they are working on the question of whether it is needed and how best to arrange everything. And then he began to carry outright nonsense that the digital dollar would make it so that people would no longer need private cryptocurrencies such as Bitcoin.
Note that the digital dollar will never cover the need for bitcoin, because the first cryptocurrency was created as a means of freeing people from the need to dance to the tune of banks and states. And we are already silent about the fact that the digital dollar will depreciate as well as the paper dollar, and therefore it has no chance of replacing bitcoin.
The second largest cryptocurrency by capitalization, Ethereum, will soon be hardforked in London. The major update is EIP-1559, which will send some of the transaction fees to a non-withdrawable address. Thus, after each transaction, a part of Ethereum will actually be burned, reducing the emission of the cryptocurrency and increasing its value in the long term. At first, miners tried to oppose this proposal, because they will lose part of their income here and now, but the developers and the community coped with them.
Next comes the proposal EIP-3198, in fact it is the same, only extends the action of the script to burn commissions on transactions related to interaction with smart contracts. That is, you will pay a commission for the exchange for Uniswap and part of it will be destroyed, because Uniswap is a decentralized exchange and is actually a large and complex smart contract.
The next update, EIP-3529, disables the gas reimbursement function for certain operations. There were a number of functions that, as it were, should benefit the network, and for this, users could receive a reward in the form of a fee return. But they misused it, actually trying to cheat the system and make money on it. Therefore, the experiment was declared unsuccessful and will be closed.
Another update, EIP-3541, does not affect the Ethereum network in any way but creates a catalog in it and reserves space for future updates. This is an important step for developers because adding new code to the blockchain is problematic and this is how they pave the way for new updates.
And the last part of London is EIP-3554, which lays the difficulty bomb until December 2021. This is a script that dramatically increases the complexity of mining and actually stops the blockchain from working. It was introduced to the network specifically to encourage developers to quickly switch to the POS algorithm.
We are waiting for the London update itself on August 4, and they have already been successfully launched on the main test networks.
And we are live 😁🇬🇧 https://t.co/a5blKgbZym
All three testnets have now successfully upgraded to London 🎉
Note: because of OpenEthereum being deprecated after London, a block hasn't been set for Kovan yet, and it will likely upgrade after mainnet. https://t.co/rCnLDMjxZj
— Tim Beiko | timbeiko.eth 🦇🔊 (@TimBeiko) July 8, 2021
And now for some cool news. Let’s start with sports star Saakwon Barkley, a popular American football player. He stated that he made it a rule to get paid for any advertising with his participation in Bitcoin – a cool way to get cryptocurrency.
Next, let’s talk about the airdrop from the ShapeShift exchanger. It is a popular service built into various wallets that allows you to quickly swap one cryptocurrency for another. But due to fears of problems with regulators, they introduced user verification, after which these users themselves became several times less. Realizing what the problem is, ShapeShift decided to go back to the origins of cryptocurrencies and make their service decentralized. Those who have previously used their services will receive an airdrop of FOX tokens, which will be used as management tokens. Further, their owners will determine the future of the service.
And one more very interesting thing is the launch of a new tool called bitcoin microfutures. Virtually anyone can trade them. They launched this tool recently to attract new traders.
Cryptocurrencies are still very young in comparison with other financial markets, and they are developing as rapidly as the Internet in its time. This path will not necessarily be easy, but the general motion vector is set and it points straight up.