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After the collapse of Terra LUNA and UST, India’s Central Bank Governor issues a warning about cryptocurrency.

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Following the collapse of cryptocurrency terra (LUNA) and stable coin terra USD, India’s central bank, the Reserve Bank of India (RBI), has issued a warning against investing in the crypto market (UST). Governor Shaktikanta Das said, “We have been warning against crypto, and look at what has happened to the crypto market now.”

The governor of the Reserve Bank of India (RBI), Shaktikanta Das, discussed the crypto market downturn and the regulation of crypto assets in an interview with CNBC TV18 Monday.

“We have been cautioning against crypto and look at what has happened to the crypto market now,” the governor said, stressing:

Had we been regulating it already, then people would have raised questions about what happened to regulations.

Since November last year, the crypto market has shed over $1.5 trillion and almost $500 billion since the beginning of the month. The market slump was exacerbated by the fall of cryptocurrency terra (LUNA) and algorithmic stablecoin terrausd (UST).

Das described cryptocurrency: “This is something whose underlying (value) is nothing.” He added:

There are big questions on how do you regulate it. Our position remains very clear, it will seriously undermine the monetary, financial and macroeconomic stability of India.

The RBI also recently warned that crypto could lead to the dollarization of the Indian economy.

The governor believes that the Indian government shares the central bank’s stance on crypto. “We have conveyed our position to the government and they will take a considered call,” the central bank chief noted. “I think the utterances and statements coming out from the government are more or less in sync. They are also equally concerned.”

Das was also asked about the statement made by Brian Armstrong, the CEO of cryptocurrency exchange Coinbase, who claimed that Coinbase India disabled payments by the Unified Payments Interface (UPI) days after launch due to “informal pressure” from the RBI.

“I would not like to react on speculative observations made by individuals outside,” the governor replied.

The Indian government has been working on cryptocurrency legislation for quite some time. Finance ministry officials have consulted with the International Monetary Fund (IMF) and the World Bank on crypto regulation. Indian Finance Minister Nirmala Sitharaman said in April that the decision on crypto regulation will not be rushed.

Meanwhile, cryptocurrency income is currently taxed at 30% in India, and a 1% tax deducted at source (TDS) will start levying on crypto transactions in July.

Sumitomo Mitsui Trust, a major Japanese bank, is launching a cryptocurrency custody service.

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Sumitomo Mitsui Trust, a major Japanese bank, is reportedly planning to enter the cryptocurrency custody business. The company is forming a joint venture with Bitbank, a Tokyo-based cryptocurrency exchange, to launch a new company dedicated to providing institutional-grade custody for digital assets and NFTs.

Sumitomo Mitsui Trust Bank, a major financial institution in Japan, has decided to enter the cryptocurrency custody business. The company announced that it will launch a digital assets custody company in partnership with Bitbank, a Tokyo-based cryptocurrency exchange. The company, which will be named Japan Digital Asset Trust — and owned 15% by Sumitomo Mitsui Trust and 85% by Bitbank — will focus on providing custody of crypto and NFTs to institutional customers.

According to local media, the objective behind the move is to capture the local institutional market that still sees the issue of custody as a deterrent to investing in these new products. Sumitomo Mitsui Trust believes that investors will be more comfortable holding digital assets if the custody is provided by recognized institutions in the financial world instead of crypto exchanges, which often don’t face the same scrutiny from the established regulatory bodies.

The capital of the company is reportedly 300 million yen ($2.3 million) at its start, with the two companies expecting other investors to dive into this proposal to reach 10 billion yen ($78 million).

Operations and Competition

The new company aims to start its operation this year, as others competitors are also rushing to bring these services to the Japanese market. Nomura and Crypto Garage are also launching a joint venture to offer similar services to their customers.

However, the Japan Digital Asset Trust will also be offering a different product. According to reports, the new company has plans to issue a yen-pegged stablecoin, supported by regulations allowing banks to launch this kind of product. There have been no further details on this from any of the players in the partnership.

While the company is entering the crypto sector during a downturn in the market, with bitcoin and other cryptocurrencies losing a large part of their value, the rise of the metaverse and blockchain gaming could power the interest in cryptocurrency during this period. Japan Digital Asset Trust is said to expect demand for stablecoins, which usually don’t suffer the same volatility problems that other cryptocurrencies do, to increase as metaverse worlds rise to prominence.

El Salvador will receive assistance from the International Monetary Fund in compiling Bitcoin adoption statistics.

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The International Monetary Fund has stated that it is assisting the government of El Salvador in a variety of ways. According to Gerry Rice, the organization’s spokesperson, the group is in talks with Salvadoran government officials about tax and money laundering issues, including critical issues raised by the IMF in previous reports.

International Monetary Fund in Talks With El Salvador

While the International Monetary Fund disagreed with the move that El Salvador made last year by declaring bitcoin as legal tender, it is still having regular talks with representatives of the Salvadoran government. In a press conference offered last week, Gerry Rice, a spokesperson of the organization, stated there was contact with the government about several issues related to bitcoin adoption in the country.

Rice declared:

IMF staff and Salvadoran authorities continue to hold regular conversations on the critical issues that were emphasized by our Executive Board in January of this year.

Even though the fund warned that the decision made by approving the Bitcoin Law in the country might pose stability risks for the nation, El Salvador has stayed its course, with president Nayib Bukele investing public funds and purchasing more than 2,300 BTC, and maintaining bitcoin as legal tender.

Technical Help

Rice also specified the purpose of the ongoing talks, mentioning tax, money laundering, and providing technical help to the government regarding bitcoin adoption statistics. Rice clarified this by stating:

The discussions are ongoing, including the advancement of the authorities in the collection of statistics on the use of bitcoin and other information related to the adoption of bitcoin as legal tender in El Salvador. Therefore, we provide technical assistance on this topic.

However, the spokesperson did not specify in which ways it was providing help to quantify the use of bitcoin and crypto in the country.

El Salvador’s credit score has suffered greatly due to the lack of transparency that some agencies, like Moody’s, attribute to the bitcoin investments made by Bukele. Jaime Reuschem, senior vice-president of the agency, stated that this happened due to the lack of information on the subject, having only Bukele’s tweets to account for these purchases.

According to local media, the country’s talks with the International Monetary Fund could contribute to closing a $1.3 billion deal to order its finances, with the organization asking El Salvador to tighten its policies on several subjects, including the fight against money laundering, fiscal transparency, accountability in the use of public funds, and strengthening of the anti-corruption framework.

Bitcoin Adoption in the Central Africa Republic: The Real Work Must Begin Now

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The Central African Republic’s (CAR) unexpected adoption of bitcoin demonstrates that the top cryptocurrency can be used as a substitute for fiat currency. However, the African country’s telecommunications infrastructure still requires significant investment. The CAR should also prioritize education to help the general public become more familiar with cryptocurrency fundamentals.

There is little doubt Central Africa Republic’s decision to designate bitcoin (BTC) as legal tender has surprised many. Few people expected CAR — one of Africa’s most impoverished countries and one whose economy has been ravaged by a civil war — to be the first to adopt bitcoin.

For critics still trying to understand why another nation has joined El Salvador in making bitcoin legal tender, the CAR’s move is perplexing. To begin with, they cannot understand how a country with such a low internet penetration rate — less than 12% — has chosen the top cryptocurrency as its transacting currency.

The Central Africa Republic’s reported infrastructure deficit and the fact that mobile connections are only available to 30% of the population seemingly renders the case for adopting bitcoin less convincing. Also, according to a 2018 ICT Profile of the CAR, the country’s then “uncertain institutional situation” was said to be constraining investment in broadband networks and access to cross-border submarine cables.

As a result of this and many other factors, the Central Africa Republic, according to the ICT profile, has had to rely on expensive satellite connections for most of its international internet bandwidth and this translates to high internet prices. Expensive internet is one of the many barriers that impede adoption efforts.

Despite these seemingly insurmountable challenges, proponents of bitcoin and supporters of an alternative financial system are adamant the Central Africa Republic’s decision proves digital currencies have a role to play. This is particularly true for countries that are cut off from the global financial system.

For followers of Friedrich Hayek, a famous Austrian economist and proponent of private money, the adoption of bitcoin by El Salvador and now the Central Africa Republic proves he was right — there is indeed a place for private money.

Despite the strong opposition from institutions like the International Monetary Fund (IMF), some believe more countries will still make bitcoin legal tender. In fact, reports that some 44 countries were represented at El Salvador’s recent bitcoin exhibition suggest more countries might follow in the footsteps of these two countries.

While it is logical to assume that the CAR plans to invest heavily in the development of the telecommunication infrastructure, the mere increase in the sum of funds earmarked for this is no guarantee this will also lead to changed attitudes towards bitcoin.

The CAR must therefore ensure it has funds reserved for efforts that are aimed at boosting the population’s understanding of bitcoin and how to buy bitcoin for the first time. Indeed, education is still key to eradicating ignorance, not just in the Central Africa Republic but across much of the developing world.

A majority of the CAR’s more than 5 million inhabitants must become acquainted with the basics such as a bitcoin wallet, recovery phrases or a wallet’s public address. When that is achieved, the chances of the CAR succeeding in becoming a country where bitcoin functions as legal tender and a transactional currency will be greatly enhanced.

On top of educating its population, the CAR needs to work with players in the crypto space like cryptocurrency exchanges, payment processors, and wallet providers. Just like the first country to adopt bitcoin El Salvador, which has since sought the services of a cryptocurrency exchange, the African country also needs to partner with a reputable player in the industry.

If the Central Africa Republic decides to follow the recommendations suggested in this article, it could well achieve its goal of seeing bitcoin become the country’s reference currency much sooner. The same is true for any other country that wants to make bitcoin an alternative legal tender.

Crypto Has No Valuable Output — It Doesn’t Add to Society Like Other Investments, Says Bill Gates

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Bill Gates, a co-founder of Microsoft, has explained why he does not own bitcoin or other cryptocurrencies. “I prefer to invest in things that produce a valuable output,” Gates said, adding that crypto “doesn’t add to society like other investments.”

Microsoft co-founder Bill Gates shared his opinion about bitcoin and cryptocurrencies in a Reddit AMA (Ask Me Anything) session Thursday.

One of the questions he was asked was “What do you think about bitcoin and cryptocurrencies?” Gates replied:

I don’t own any. I like investing in things that have valuable output.

He added: “The value of companies is based on how they make great products. The value of crypto is just what some other person decides someone else will pay for it so not adding to society like other investments.”

Gates’ stance on cryptocurrency echoes that of Berkshire Hathaway Warren Buffett. The Oracle of Omaha explained in detail why he would not invest in bitcoin or cryptocurrency earlier this month.

“It doesn’t produce anything,” Buffett described BTC, noting that he wouldn’t pay $25 for all of the bitcoin in the world. “What would I do with it? I’d have to sell it back to you one way or another. It isn’t going to do anything,” he opined.

The Microsoft co-founder and co-chair of the Bill and Melinda Gates Foundation has long been a critic of bitcoin and cryptocurrency.

In February last year, he said he didn’t own bitcoin, adding that he has taken “a neutral view.” However, he also said crypto was one tech innovation the world would be better off without. Gates noted: “The way cryptocurrency works today allows for certain criminal activities. It’d be good to get rid of that.”

Gates also commented on Tesla CEO Elon Musk owning bitcoin in February last year. “Elon has tons of money, and he’s very sophisticated, so I don’t worry that his bitcoin will randomly go up or down,” Microsoft co-founder said. “If you have less money than Elon, you should probably watch out,” he warned.

Vietnam forms a Blockchain Association to conduct research and make recommendations on regulations.

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A newly formed blockchain association aims to assist Vietnam in promoting its digital economy and establishing its place on the global technology map. The organization aims to bring together Vietnam’s experts in the field and seek collaboration with blockchain communities around the world for blockchain research and development.

Vietnam Blockchain Association, the first such entity in the country’s crypto space, was launched in the capital city Hanoi on Tuesday when it held its first congress. The new body’s primary purpose is to allow blockchain experts to join forces in promoting the development of Vietnam’s digital economy and help the Asian nation to find its place on the global tech stage.

The association will be tasked to expand relationships with similar organizations and communities worldwide, Việt Nam News reported. Another key objective will be to attract investment for the country’s blockchain industry and provide training for human resources in the digital sector.

It will also be tasked to create favorable conditions for its members to share experience and resources for the research, testing, and deployment of blockchain technologies while abiding by relevant Vietnamese legislation.

According to a statement by the organization’s chairman, Hoàng Văn Huây, the Vietnam Blockchain Association is committed to raising community awareness and advising the government on the development and adoption of standards and regulations to govern the offering of blockchain-based products and services.

The decision to establish the association comes from the Ministry of Home Affairs, VNS noted. Vietnam has been focusing on researching blockchain applications that can be deployed in many industries such as finance, logistics, and retail. Vietnamese authorities have also supported the development of blockchain solutions that can bring socio-economic benefits.

The Vietnam Blockchain Association begins activities as the government in Hanoi is taking steps to create a legal framework for cryptocurrencies. As Bitcoin.com News reported in March, Vietnamese Deputy Prime Minister Le Minh Khai has instructed several ministries to work with the State Bank of Vietnam on the new framework.

Cyprus is drafting crypto rules and may implement them ahead of EU regulations.

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According to a government official, Cyprus has prepared its own legislation to regulate crypto assets and is likely to adopt it before Europe completes a common regulatory framework. He added that the authorities in Nicosia support the “judicious” use of cryptocurrencies.

According to the European Innovation Scoreboard, Cyprus has an “enviable position” in the EU when it comes to innovation, with the second-best progress last year, according to the country’s Deputy Minister for Research, Innovation, and Digital Policy Kyriacos Kokkinos. Digital assets, entrepreneurship, and financial technology were all discussed at the event.

The minister walked a fine line between embracing innovation and adhering to laws when commenting on the future of digital assets in Cyprus, including cryptocurrencies, the Cyprus Mail reported on Thursday. Kokkinos elaborated as quoted by the English-language daily newspaper:

I can tell you that Cyprus welcomes the use of digital and crypto assets, but we still need to be very careful and respect not only the regulations currently in place but also the absence of any regulations.

The government representative gave an example with Malta, the regulatory framework of which attracted many crypto companies and investors but also led to increased scrutiny and investigations into some of its companies and banking institutions. “We have to be careful of the frameworks of the European Union since we are a member state,” Kokkinos emphasized.

The deputy minister then revealed that the Cyprus government has already drafted a “very attractive bill on crypto assets.” The legislation has been published and interested parties can review it, he pointed out. The executive power has also commissioned a New York-based firm to assist the island nation with the implementation of the regulations.

“Our challenge is not being aligned with the EU, it’s about the dilemma of whether to wait for the ECB to finalize their own regulatory framework or do we go alone on our own, with the former scenario also involving the possibility of that framework being overregulated,” Kyriacos Kokkinos remarked. “My answer is that we will go at it alone while respecting the rules,” he added.

The deputy minister acknowledged that certain challenges exist, including some disagreements between the government and the Central Bank of Cyprus (CBC). “We must remember that the CBC is subject to the ECB and central banks tend to be conservative, so our job is to challenge them through the debates we are having with them,” he told the audience at the event which took place in Larnaca.

Coinbase’s hiring is slowing due to the market downturn.

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Coinbase, the largest crypto exchange in the United States, is slowing hiring, citing the current market downturn as a reason to reconsider its staffing strategy. The trading platform’s management believes that the move will allow it to better match its hiring needs to its business objectives.

Coinbase, a cryptocurrency exchange, has changed its staffing plans. After previously aiming to triple its size this year, the company now believes it is prudent to slow hiring and reassess its personnel needs against its business goals. As Coinbase President and Chief Operating Officer Emilie Choi explained in a press release on Tuesday:

“To ensure we’re best positioned to succeed during and after the current market downturn, we’re announcing we’re slowing hiring so we can reprioritize our hiring needs against our highest-priority business goals.”

Choi further elaborated that Coinbase had made the decision in order to emerge stronger from this down cycle. She emphasized the step is part of managing the business to the scenarios the company had planned for, and assured the changes will not affect its expense outlook for the second quarter and the whole of 2022.

The digital asset exchange now intends to focus on integrating its recent hires and becoming more rigorous in determining its priorities. “We know this is a confusing time and that market downturns can feel scary,” the top executive noted while pointing out that the company has been through other, similar challenges in the past.

Choi’s announcement comes after Coinbase revealed in its earnings report earlier in May that it holds $256 billion in fiat and crypto assets on behalf of its customers. It also admitted that if the company declared bankruptcy, its users can potentially lose access to the crypto funds in their accounts as these could be subject to bankruptcy proceedings.

An Argentine NGO is bringing crypto education to schools.

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Bitcoin Argentina, a non-governmental organization dedicated to the promotion and expansion of Bitcoin and cryptocurrency in Argentina, is bringing Bitcoin education to high schools. The “Schools and Bitcoin” project will teach high school students about the importance of Bitcoin and the differences between it and traditional fiat finance.

According to data published by Chainalysis, Argentina is one of the countries in Latin America with a high crypto adoption rate. Because of inflation and exchange controls, some citizens of the country have turned to crypto and bitcoin. This is why Bitcoin Argentina, a non-profit dedicated to the growth of the Bitcoin ecosystem in Argentina, has decided to launch a Bitcoin education project for high school students.

The “Schools and Bitcoin” project, which was launched in collaboration with the humanitarian organization Built with Bitcoin, aims to educate high school students about this new alternative finance system.

 The endeavor is the continuation of an earlier pilot project in which students of Argentina showed great enthusiasm and interest in learning about Bitcoin, according to Jimena Vallone of Bitcoin Argentina. She explained:

There is a desire to innovate, to know what is happening with Bitcoin and blockchain, and to train and learn. All this was the starting point to start thinking about the project, which begins with 40 schools, but we hope to have a larger number.

“Schools and Bitcoin” aims to reach more than 4,000 high schoolers, with classes and the content of this Bitcoin course to be adapted to each of the regions where these classes will be held. On this, Vallone stated:

“The content used will be varied, changing with each school. Argentina is a diverse country, so it is necessary to think about each context when introducing the material.”

However, the core will be the same, teaching students about the “transparent, open, inclusive, traceable and secure” traits of Bitcoin. This is reportedly the first initiative of this kind in Latam, where countries like Brazil and Venezuela are also known to be active in the cryptocurrency sector.

The approval of the education project is noteworthy, in view of the debt restructuring deal signed between Argentina and the International Monetary Fund, which introduced a clause suggesting the government discourage the use of crypto in the country.

Cloudflare, an internet service provider, will run Ethereum validator nodes as part of its Web3 focus.

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Cloudflare, a provider of internet services and DDoS protection, has announced a new Web3 experiment strategy. As part of its commitment to help scale the internet by using proof-of-stake (PoS) consensus technologies, the company announced it will run Ethereum validator nodes. This will ostensibly give the company access to the technology’s energy efficiency and consistency.

Cloudflare, leading content delivery and DDoS mitigation company, has announced a new Web3 initiative that will take advantage of Ethereum’s upcoming proof-of-stake network. The company announced that as part of its experiment, it will run Ethereum validator nodes to determine the future viability of the scaling technology.

According to Cloudflare, blockchain technologies may become a part of the internet’s long-term story, and these experiences may aid in the decentralization of such networks. The company stated the following:

“For the Ethereum ecosystem, running validator nodes on our network allows us to offer even more geographic decentralization in places like EMEA, LATAM, and APJC while also adding infrastructure decentralization to the network.”

Cloudflare specified that these actions will be conducted in the coming months before The Merge, the change of consensus mechanism the Ethereum network aims to execute later this year.

Proof-of-Stake Preference

Cloudflare made clear that it supports proof-of-stake networks due to the low energy usage compared to proof-of-work-based counterparts, declaring that “the energy required to operate a proof of stake validator node is magnitudes less than a proof of work miner.” About proof-of-work-based networks, like Bitcoin, Cloudflare stated:

Proof of work networks are wasteful. This waste is driven by the fact that proof of work consensus mechanisms are electricity-intensive.

The company also declared that, as part of its commitment to sustainability, “Cloudflare has not and will not run our own proof of work infrastructure on our network.” While Cloudflare will start experimenting with Ethereum first, it also mentioned another consensus mechanism, “proof of spacetime,” in its press release.

This consensus mechanism is the one used by Filecoin, a decentralized storage network that uses incentives to maintain the files of the participants. This may hint at the possibility of the inclusion of this network in the set of experiments that the internet company will be conducting in the future.

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