With the help of Derek Robertson
In crypto circles, the term “flippening” refers to a hypothetical event where a smaller blockchain network outsizes the bitcoin network.
Right now, the crypto world is witnessing a different kind of flippening: in the dynamics between state and federal regulation of blockchain activity. Recently, the prospect has arisen that crypto supporters will have to worry more about the states than the FBI.
So far, it has been states like Wyoming and Texas, as well as some cities, that have passed laws encouraging cryptocurrency activities. Federal lawmakers have slowed down, while federal agencies have made significant efforts to enforce existing financial regulations for the freewheeling industry.
That momentum hasn’t exactly gone away, but in the past few days, lawmakers in Washington have been developing an accommodating framework for regulating crypto. At the same time, New York policymakers have imposed stricter rules on two fronts.
This week sens. Cynthia LummisR-Wyo., and Kirsten GilbrandDN.Y., introduced their much-anticipated cryptocurrency legislation, which is expected to limit the businesses and users who can be taxed on their crypto.
Some leaders are also expressing fresh optimism about the Biden administration’s stance. Yesterday, the head of ETFs at Grayscale, a cryptocurrency investment firm that has 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 does this. “It wasn’t that long ago that there was really a question as to whether that would happen,” said the board. David La Vallea tan industry get-together in Austin. “And now it’s clearly a question of when it’s going to happen.”
Meanwhile, New York State has recently emerged as the source of tighter crypto regulation. Last week the Parliament passed a two-year moratorium on cryptocurrency mining powered by fossil-fuel power plants that Gov. Kathy Hochula Democrat, is now considering signing legislation.
On Wednesday, the New York Department of Financial Services strictly codified its standards new guide for dollar-backed stablecoin issuers, which would require full support and regular audits. In many details, the guidelines go beyond the stablecoin regulations in the Lummis-Gillibrand billwhich in places defies the rules at the state level.
(Although the guide follows the collapse of algorithmic stablecoin TerraLuna, whose designers tried and failed to maintain a dollar peg through the use of Financial Engineering, New York has stated that it only applies to dollar-backed stablecoins.)
Some issuers welcomed the added clarity, saying it would boost public confidence in stablecoins. Eric Souferwho runs crypto at public affairs firm Tusk Strategies, said his client, stablecoin issuer Paxos, is “happy” with the new rules.
But Soufer, who worked as an advisor to the former Attorney General Eric Schneiderman and other officials in New York, said the industry remains concerned that a spate of state-level rulemaking could quickly become complicated.
“People are concerned about a patchwork quilt in 50 states,” he said. “Most of the regulated companies are looking to the federal agencies to get their way.”
What do the developments outside New York’s borders mean?
The mining moratorium could serve as a model for other states. As for the stablecoin rules, even if other states don’t emulate them, they could still dictate the way the industry works across the country, just like automakers did had to adapt to strict California fuel efficiency standards.
State standards can also have far-reaching effects in the digital sector.
Alexander mourninga crypto lobbyist at Tiger Hill Partners, cited the influence of the California Consumer Privacy Act, a 2018 law that goes beyond federal privacy, when considering the implications of the New York rules.
“Given the importance of New York as a financial hub and the number of crypto and traditional firms there that need to use stablecoins,” he said, “without codified federal standards, it may become a similar de facto national standard.”
Blockchain technology was invented to circumvent government control and circumvent political borders marked on maps. At least that was the vision. For now, its proponents must grapple with the messy realities of American federalism.
This week I wrote in POLITICO Magazine about a certain rocket building zillionaire who happens to overlap with our interests here at DFD – an excerpt is below and you can read it in full essay here. – Derek Robertson
In a something poorly worded tweet, Musk recently described the Democrats as “the party of kindness” that has now become the “party of division and hate.” Whatever he meant by that, one thing the Democratic Party has clearly become: the party of the mods. As social media platforms like Twitter and Facebook have become de facto public spaces over the past decade, liberals have spoken openly about the need for these platforms to remove extremist and misleading content.
Of course there are plenty of them and just as plentiful of evidence that conservatives are more likely to concoct it and share it – hence the liberal appetite for moderation. (To be honest, liberals haven’t exactly covered themselves in credit for policing this information landscape, particularly by targeting the censorship of legitimate stories about the incriminating contents 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 very substance or direction of this censorship is largely irrelevant. And for Silicon Valley-born quasi-libertarians like Musk, moderation is an emergency tactic, if it is to be used at all.
From this perspective, the Internet is an oasis of humanity in its vast, uncontrollable fuzziness, allowing unlimited freedom of expression against the institutions that govern our real lives. This was once a techno-utopian, vaguely liberally coded idea; now it’s one that speaks directly and largely benefits from it Effects of social media algorithmsthe right.
You may have seen some strange images on social media lately. How eerily accurate Courtroom style sketches of the title “Alien” from the film of the same name. now Soviet style propaganda poster by British food celebrity Nigella Lawson. or Trail cam footage of a dinosaur.
None of these are particularly lifelike, and some attempts to create human faces are pretty scary. But these images, created by the AI-powered “DALL-E Mini“Image generator, are only close enough to life to capture our collective imagination open source clone from DALL-E by OpenAIthe use of which this organization (despite its name) retains strictly restricted for now, for fear of possible abuse by bad actors – said Mira Murati, research director of OpenAI, explicitly New York Times that the technology is “not a product”.
But the large datasets such as OpenAI’s DALL-E uses are widely available, as is the computing power required to create highly specific 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 get there.) AI researchers and regulators may fear the potential impact of such a powerful technology on society, but Stunts or gimmicks like it The Mini proves how hard it is to keep a lid on. – Derek Robertson
- Tether, a popular stablecoin, is lose the ground under your feet to various competitors among the investors.
- General Motors’ autonomous vehicle taxi service was approved to drive on certain streets in San Francisco.
- Meta is cutting costs in its Reality Labs division, including push back his plans Launch AR glasses.
- Meet the squad of billionaires push the government to invest in US-based chip manufacturing.
- Jack Dorsey throws his hat into the ring with a plan decentralized web platform.
Keep in touch with the whole team: Ben Schreckinger ([email protected]); Derek Robertson ([email protected]); Konstantin Kakaes ([email protected]); and Heidi Vogt ([email protected]). Follow us on Twitter @DigitalFuture.
Ben Schreckinger reports on technology, finance and politics for POLITICO; he is a cryptocurrency investor.
If you have received this newsletter, you can do that Sign up here. and read our mission statement here.
A clarification on the editorial in Yesterday’s newsletter: Three companies will launch Amazon’s low-Earth satellites into space. Blue Origin is one of them; the other two are Arianespace and ULA.