The biggest crypto news and ideas of the day Oct. 19, 2021 If you were forwarded this newsletter and would like to receive it, sign up here. Sponsored by Welcome to The Node.
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Today's must-reads Top Shelf RESERVE ASSET: Crypto tracer Chainalysis has added bitcoin to its corporate balance sheet. The $4.2 billion software company said Tuesday it purchased an undisclosed amount of BTC through NYDIG, an institutional bitcoin management firm popular on Wall Street. CEO Michael Gronager called it Chainalysis' first crypto buy: "We will continue to pursue other digital assets as potential future investments," he said in a statement.
SPOT ETF: Grayscale Investments, the world's largest digital currency asset manager, has filed with the U.S. Securities and Exchange Commission (SEC) to convert its Grayscale Bitcoin Trust (GBTC) into a bitcoin spot ETF. GBTC first launched in 2013 and has become the largest bitcoin investment vehicle in the world, with assets under management of close to $40 billion. It holds roughly 3.44% of all bitcoin in circulation, according to Grayscale, a CoinDesk sister company.
CBDC BONDS: France's central bank has executed a series of bond transactions leveraging blockchain using its own digital currency as part of a 10-month pilot. The Banque de France, along with a group of France's largest financial market participants, executed the transactions using a system developed by U.S.-based IBM, according to a statement from securities depository Euroclear.
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What will 2022 bring? Crypto 2022 is CoinDesk's ambitious effort to scope out what's next. This week it's Policy Week, a week devoted to exploring the complex ways governments are interacting with the cryptocurrency ecosystem, and how policy decisions or lack thereof will affect the year ahead. Read more here.
"This is really the first significant instance where they've said 'listen, we're willing to overcome our doubts in order to permit this thing to exist and I think it's an unalloyed good sign."
What others are writing... Off-Chain Signals
A message from ADALend ADALend — decentralized native Cardano protocol governed by DAO
ADALend protocol based on Cardano will power flexible finance markets by providing for larger instant loan approval, automated collateral, trustless custody, and liquidity.
ADALend seed round was 400% oversubscribed, those who did not make it into the seed stage have been whitelisted for the private sale.
Putting the news in perspective The Takeaway Will the New CFTC Look Like the Old CFTC? On Sept. 29, 2021, the U.S. Commodity Futures Trading Commission (CFTC) announced it had filed 14 complaints against various crypto trading platforms. It was the busiest day of action for the nation's top commodities regulator and a noted departure from its usual course. Between 2015 and the end of June 2020 the watchdog had only brought 19 separate enforcement actions related to crypto businesses.
Despite that seemingly paltry number of investigations, for years many participants and observers of the crypto industry viewed the CFTC as the de facto overseer of virtual currencies. The agency of about 700, responsible for monitoring hundreds of trillions of dollars in derivatives trading, first classified bitcoin as a commodity in 2014.
"There has often been a grossly inaccurate oversimplification offered which suggests [crypto assets] are either securities regulated by the Securities and Exchange Commission, or commodities regulated by the Commodity Futures Trading Commission," Stump said in August. "Even if a digital asset is a commodity, it is not regulated by the CFTC."
This goes a long way in reducing the tension between the CFTC and SEC, in what some commentators call a turf war between agencies with overlapping jurisdictions. Crypto presents a unique challenge for legacy frameworks: Pure cryptos disintermediate builders and stakeholders from the underlying asset. But in their beginning stages, before they're broadly adopted or "sufficiently decentralized," they more often resemble investment contracts. Then there's the question of who is at the center of a smart contract; Gensler wants coders to take ownership of their code. Stump and Gensler's statements also seem to reduce the importance of the supposed continuum between securities and commodities. For years, developers have operated under the understanding that a crypto, issued by a team, could eventually "morph" into a commodity that belongs to the world. That's what happened with Ethereum's native currency, ETH, which both SEC and CFTC officials stated point blank was a security during the initial coin offering (ICO).
Then, there's the possibility that certain cryptos would qualify for a "de minimis" exception, making them more like foreign currencies.
"The SEC's proposed greenlighting this week of ETFs on bitcoin futures rather than on the spot bitcoin markets suggests lingering hesitancy at the SEC about the stability and health of the spot market.
–D.K.
What will 2022 bring? Crypto 2022 is CoinDesk's ambitious effort to scope out what's next. This week it's Policy Week, a week devoted to exploring the complex ways governments are interacting with the cryptocurrency ecosystem, and how policy decisions or lack thereof will affect the year ahead. Read more here.
The Chaser...
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