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U.S. Senate passes infrastructure bill – Crypto weekly update

Published: 12. 08. 2021 · Author: Daniel Mitrovsky

This week, the total market capitalization exceeded 1.61 trillion EUR. Increase at the 7-day interval is 19.25 %. Bitcoin increased by 16.62 % during the week to a current value of over than 38 600 EUR. Bitcoin dominance is 44,9 %.

Source: Coinmarketcap

Infrastructure bill passes U.S. Senate

The U.S. Senate approved the Infrastructure Bill on Tuesday evening, which attracts huge attention from the crypto community all around the world.

In a 69-30 vote, the Senate passed a bipartisan bill, which suggests implementing tighter rules on cryptocurrency “brokers”. Under this law, brokers and cryptocurrency companies would be obliged to collect personal data about their users. Under the term “brokers” are perceived not just cryptocurrency brokers, but also cryptocurrency miners, validators, node operators or software developers.

In addition, the law expanding reporting requirements for brokers, mandating that digital asset transactions worth more than $10,000 (€8,400) are reported to the IRS.

The main problem in this law is the definition of the word "broker". The original draft law also includes entities focused on cryptocurrency mining, transaction validation, software development or node operators as “brokers”. It would be probably impossible to comply with these rules in the way how cryptocurrencies working, which would probably mean that these “brokers” would have to cease their activities because they would be breaking the law.

A group of six senators, led by Pat Toomey and Cynthia Lummis, proposed a compromise amendment on Monday. The amendment would have exempted software developers, transaction validators and node operators as brokers, while suggesting that tax reporting requirements “only apply to the intermediaries.”

Although the Amendment by Tommey and Lummis got the support of the Treasury Department, headed by Janet Yellen, the amendment was suspended by Senator Richard Schelby, who objected to it.

The lawmakers in the House still have the opportunity to amend the language on crypto before a full vote in the chamber and the bill being signed into law by President Joe Biden. Source

Circle plans to become a federal bank

Circle, the issuer of one of best-known stablecoins USDC, has detailed its plans to become a National Digital Currency Bank operating under federal oversight.

In a Monday blog post, CEO Jeremy Allaire revealed that the issuer hopes to become a federal bank.

To become a federal bank, the most notable change in Circle’s strategy would see it level up in terms of oversight. At the moment, Circle works under state banking regulations. The proposed changes would see Circle become a bank under the supervision of the Federal Reserve and other relevant U.S. authorities.

State banking regulations are less stringent than the federal regulations that would come with Circle’s announced move. Federal oversight will inevitably see the company under more scrutiny, but Allaire is not worried. He remarked that Circle has always held itself to the highest regulatory standard. Source

Ethereum and deflation

An important upgrade called "Ethereum London Hard Fork", which was activated last Thursday, should ensure that transaction fees on Ethereum network are burned and Ethereum becomes a “deflationary asset”.

The Ethereum network has been subjected to enormous load in recent days as Ethereum again surpassed a significant price level of $3000 (€ 2500). A huge load in the network resulted in the burning of a huge amount of Ether through gas fees.

On Wednesday at midnight, the "Ethereum Burn Bot" recorded an instance when 545 ETH was burned within a one-hour period. With Ethereum issuance reported at 532 ETH per hour, it resulted in the asset seeing deflation of -13 ETH for that brief period.

Around 2am on Wednesday, Ethereum Burn bot found that up to 945 ETH tokens were burned within the hour resulting in a temporary negative issuance of -417 ETH. It calculated this as an annualized deflation rate of -3.12%.

When the amount of ETH burned is greater than the mining reward, deflationary blocks are produced and the supply temporarily decreases. This has been observed on a tracker from advisory firm Carbono, which is currently reporting that there have been 791 deflationary blocks so far and defines them as blocks where the burned fee exceeded the mined ETH.

According to web ultrasound.money, which tracks the amount burned, more than 31,940 ETH has been burned at the time of writing. The surge in demand for Ethereum block space has been driven by nonfungible tokens, with the OpenSea marketplace, Gala Games’ Vox and Uniswap. Source

Cardano and smart contracts are getting closer

CEO of Cardano and IOHK, Charles Hoskinson, said in his latest video that the community that the company would announce on Friday when Cardano would fully support smart contracts.

Hoskinson revealed that the launch of smart contracts that will allow run decentralized applications on Cardano will be before the upcoming Cardano Summit 2021, which is to be held next month.

Cardano began onboarding users to its Alonzo Purple testnet over the weekend, marking the third and final stage of its Alonzo upgrades.

The upgrade is also expected to support an ERC-20 converter, allowing ETH tokens to run on the Cardano network. Source

PolyNetwork exploited for $600M

An interoperable protocol from the decentralized finance sector called Poly Network has been exploited on Binance Smart Chain, Polygon, and Ethereum on Tuesday evening. The hackers exploited for $600 million (€504 million) in ETH, BNB and USDC.

The team behind the project indicated that assets stored on Binance Smart Chain, Ethereum, and Polygon had been transferred to other addresses belonging to the hackers. PolyNetwork also urged cryptocurrency exchanges to blacklist any tokens coming from these addresses.Additionally, the team promised to “take legal actions” and asked the hackers to return the stolen funds.

According to the latest news, the hacker has already contacted Poly Network's development team and decided to return all stolen funds. Source

Coinbase sees record Q2 revenue

One of the world's leading cryptocurrency exchanges, Coinbase, revealed in its second-quarter shareholder letter, released on August 10. The crypto trading platform acknowledged that the period was a strong one for growth on the back of a crypto market bull run.

The company's net revenue for the second quarter was as high as $2 billion (€1.68 billion), its highest quarter ever. This has resulted in a whopping net income of $1.6 billion (€1.36 billion) for the period.

Profits were more than double that of the previous quarter, which saw the company net $771 million (€ 656.38 million). Coinbase’s earnings per share came in at $3.45, much higher than analyst estimates of $2.33. Source

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