State-federal “flipping” of Crypto – POLITICO

With the help of Derek Robertson

In crypto circles, the term “flipping” refers to a hypothetical event in which a smaller blockchain network outnumbers the Bitcoin network.

Right now, the crypto world is experiencing a different kind of upheaval: in the dynamics between state and federal regulation of blockchain activities. Recently, the prospect has arisen that crypto advocates will have to start worrying more about the states than the feds.

Until now, states such as Wyoming and Texas, as well as some cities, have enacted laws to encourage crypto-currency activities. Federal legislators have been slower to act, while federal agencies have made significant efforts to enforce existing financial regulations in the free industry.

This dynamic has not gone away, but in recent days, lawmakers in Washington have developed a flexible framework for regulating cryptocurrencies. At the same time, politicians in New York have put forward stricter rules on two fronts.

Sens this week. Cynthia LummisR-Wyo., and Kirsten GillibrandDN.Y., have unveiled their long-awaited cryptocurrency legislation, which, as expected, limits the businesses and users who can be taxed on their cryptocurrency.

Some leaders are also expressing renewed optimism about the Biden administration’s stance. Yesterday, the head of an ETF at Grayscale, the cryptocurrency investment firm that launched an aggressive campaign to pressure the Securities and Exchange Commission to approve a spot Bitcoin ETF, said it was only a matter of time before the agency did so. “Not too long ago, the question was really about whether this would happen,” the chief executive said. David LaValleTan gathering industry in Austin. “And now it’s clearly a question of when that will happen.”

Meanwhile, it was the state of New York that late became the source of stricter regulation of cryptocurrencies. Last week, the state legislature passed a two-year moratorium on cryptocurrency mining using fossil fuel power plants, which the governor Kathy HochulDemocrat, now considering signing the law.

On Wednesday, the New York City Department of Financial Services rigorously codified its standards. new leadership for issuers of dollar-backed stablecoins that will require full collateral and regular checks. In many of its details, the guide goes beyond the stablecoin provisions in Lummis-Gillibrand billwhich in some places depends on the rules at the state level.

(Though the guide follows the collapse of the algorithmic stablecoin TerraLuna, whose developers tried and failed to maintain a dollar peg through financial engineering, New York indicated that this only applies to dollar-backed stablecoins.)

Some issuers welcomed the additional clarity, saying it would bolster public confidence in stablecoins. Eric Suferwho leads crypto at public relations firm Tusk Strategies, said his client, stablecoin issuer Paxos, was “pleased” with the new rules.

But Sufer, who worked as an adviser to the former Attorney General Eric Schneiderman and other officials in New York, said the industry remains wary that the flow of statewide rulemaking could quickly get complicated.

“People are worried about the patchwork quilt in 50 states,” he said. “Most regulated organizations are looking for the feds to make a name for themselves.”

What do events outside of New York mean?

A moratorium on mining could serve as a model for other states. As for the rules of the stablecoin, even if other states do not emulate them, they can still dictate how the industry works across the country, as automakers have done. had to adapt meeting stringent California fuel efficiency standards.

Government standards can have a far-reaching impact in the digital realm as well.

Alexander Grievea crypto lobbyist at Tiger Hill Partners, cited the impact of the California Consumer Privacy Act, a 2018 law that goes beyond federal data privacy protections, when thinking about the implications of New York’s rules.

“Given the importance of New York as a financial nexus, and the number of crypto and traditional firms that will need to use stablecoins,” he said, “this could become a similar de facto national standard in the absence of codified federal standards.”

Blockchain technology was invented to circumvent government control and circumvent political borders drawn on maps. Anyway, that was the vision. For now, his supporters will have to contend with the dirty realities of American federalism.

This week in POLITICO, I wrote about a rocket science millionaire whose interests coincide with our interests here at DFD. essay here. – Derek Robertson

In a few awkwardly worded tweetMusk recently called the Democrats the “kindness party,” which has now become “the party of division and hate.” Whatever he means by that, the Democratic Party has clearly become one thing: a party fashion. As social media platforms such as Twitter and Facebook have become the de facto public space over the past decade, liberals have been open about the need to remove extremist and misleading content from these platforms.

Of which, of course, there are plenty, and just as enough evidence that conservatives are more likely to come up with and share it – hence the liberal appetite for moderation. (To be fair, liberals have not quite covered themselves in the glory of guarding this information landscape, especially in promoting censorship. legitimate stories about the incriminating content of Hunter Biden’s laptop.)

The key to understanding Musk’s “free speech” crusade is to understand that for a large number of Americans, the actual content or direction of this censorship is largely irrelevant. And for Silicon Valley quasi-libertarians like Musk, moderation is an extreme glass-breaking tactic, if it can be used at all.

From this point of view, the Internet is an oasis of humanity in its vast, uncontrolled furry, allowing unlimited freedom of expression in defiance of the institutions that govern our real life. It was once a techno-utopian idea with an indefinite liberal code; now it’s one that directly attracts and largely benefits due to Effects of Social Network Algorithmsright.

You may have seen some strange images floating around on social media lately. How eerily accurate courtroom sketches title “Alien” from the film of the same name. Or Propaganda poster of the Soviet sample. British gastronomic celebrity Nigella Lawson. Or trail camera footage dinosaur.

None of them are particularly realistic, and some attempts to create human faces have failed. pretty scary. But these images are created with the help of artificial intelligence.”DALL-E MiniImage Generator simply close enough to reality to stir our collective imagination. DALL-E Mini is open source clone or DALL-E by OpenAIthe use of which this organization (despite its name) retains strictly limited at the moment due to fears of potential abuse by malicious actors,” Mira Murati, head of research at OpenAI, bluntly stated. The newspaper “New York Times that the technology is “not a product”.

But large datasets like those used by OpenAI DALL-E are widely available, as is the processing power needed to create very accurate images from them. (DALL-E Mini’s servers are often overloaded due to its popularity, but refresh the page a few times and you’ll be there). The Mini proves how hard it is to keep a dick on it. – Derek Robertson

  • Popular stablecoin Tether lose ground various competitors among investors.
  • General Motors has launched an autonomous taxi service. approved drive on certain streets in San Francisco.
  • Meta is cutting costs across its Reality Labs division, including pushing back your plans to launch AR glasses.
  • Meet the Billionaires government push invest in US chip manufacturing.
  • Jack Dorsey throws his hat into the ring with a planned decentralized web platform.

Stay in touch with the entire team: Ben Schrekinger ([email protected]); Derek Robertson[email protected]); Konstantin Kakaes (ur.[email protected]); and Heidi Vogt ([email protected]). Follow us on Twitter @DigitalFuture.

Ben Schrekinger writes for POLITICO on technology, finance and politics; he is a cryptocurrency investor.

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Explanation of the leading point in yesterday’s bulletin: Three companies will deliver Amazon low-orbit satellites into space. Blue Origin is one of them; two others Arianspace as well as ULA.