ICO 2.0? Blockstack, a startup trying to build a new version of the internet that uses blockchains to give users control over their personal data, just got approval from the US Securities and Exchange Commission to move forward with a new type of crypto-fundraising. Count it as a landmark achievement for the blockchain industry.
The company will be allowed to raise $28 million via a token sale that complies with a rule called Regulation A+. Part of legislation passed in 2012, Regulation A+ creates an alternative to a traditional public stock offering that is supposed to be cheaper to pull off and thus would give smaller business a new tool for raising money. Cryptocurrency enthusiasts have long seen Regulation A+ as a pathway to do token sales that raise similar sums as those launched during the initial coin offering (ICO) craze in 2017 and early 2018, but which also comply with financial regulations. That's the idea behind the buzzwords "security token" and "digital security."
According to the Wall Street Journal, Blockstack spent months and about $2 million trying to secure this approval. Cofounder Muneeb Ali told the WSJ that it took so long and was so expensive because the company had to work with the SEC to create a new regulatory protocol from scratch. Now other companies can use it as a template. "My joke has been that the $2 million is our donation to the crypto industry," Ali said.
Libra has put China's central bank on high alert. The People's Bank of China is paying close attention to Libra, the digital currency Facebook has created. And it may inspire the bank to accelerate its plans to speed up its own project to develop a digital currency.
Speaking at an academic conference at the University of Peking, Wang Xin, director of the PBOC's research bureau, expressed concern over how Libra might affect the world's financial system if it takes off, according to the South China Morning Post. "Would it be able to function like money, and accordingly, have a large influence on monetary policy, financial stability, and the international monetary system?"
One thing China wants to know is what role the US dollar will play in the basket of fiat currencies that will supposedly back Libra coins, Wang said. If it is most closely associated with the dollar, he added, "there would be in essence one boss, that is the US dollar and the United States. If so, it would bring a series of economic, financial, and even international political consequences."
China's central bank was one of the first central banks to begin studying digital currencies, back in 2014. Though few details about it have been revealed publicly, the work is ongoing. If Libra takes off, we might see central banks across the world issue their own digital currencies to compete, and it wouldn't be surprising to see China out in front. "We had an early start ... but lots of work is needed to consolidate our lead," said Wang.
How blockchains might transform online gaming: Gods Unchained hasn't even fully launched, but it already has more hype around it than any blockchain game ever. This week, the collectible card game opened its beta version to the public after months of private testing. But Fuel Games, the startup developing it, says it has already generated $4 million in revenue and sold millions of cards in pre-sales. Just like the wildly popular physical card game Magic: The Gathering, which is similar in the way it is played, Gods Unchained will let players own their own cards. How will you know a rare digital card isn't a fake? Thanks to a blockchain network, which can cryptographically verify its authenticity. Read more about it here.
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Loose Change
Fill your pockets with these newsy tidbits.
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Visa has invested millions in Anchorage, a little-known startup that securely stores crypto-assets for large investors. Both firms have been named founding members of Libra. (Fortune)
- Facebook has said that it won't launch its digital wallet service in India, citing regulatory restrictions. (CoinDesk)
- Privacy coin Monero has disclosed nine security vulnerabilities, including one that could have let hackers steal the currency from exchanges. (TheNextWeb)
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In March of 2018 I wrote about how the city of Berkeley, California was exploring the idea of issuing bonds using a blockchain. Now Wired has an update on the project: though the startup the city was originally working with has dropped out, the effort is still alive. Now Berkeley is looking for vendors to conduct a pilot.
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The US Federal Election Commission appears prepared to let a politician running for office in Florida create his own Ethereum token to compensate volunteers. (CoinDesk)
- tZero, the crypto-focused subsidiary of Overstock.com, will create and sell tokens that represent shares of future earnings from a major motion picture about the founder of Atari, Nolan Bushnell. (Decrypt)
