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Wyoming – Malta of the Americas

Last month, amidst the regulatory uncertainty over the future of cryptocurrencies, the state of Wyoming made a landmark decision towards defining digital assets, and recognizing cryptocurrencies as digital assets. The regulation also allows banks to act as custodians of digital assets, which should draw a lot of interest from legacy banks as most of them have broached the idea of entering the crypto custody business. Asset management major/crypto pioneer Fidelity is already in the crypto custody space.

In addition, other crypto-friendly laws passed concurrently will legalize tokenized security offerings in the state of Wyoming. This is a watershed moment for STOs; tokenized securities have always questions over their legality. The new law makes the tokenized form of traditional assets as legal as their non-blockchain version of securities. STOs are considered to be a trillion dollar opportunity that can unlock large pools of global liquidity and 24×7 global markets for traditional assets. With doubts around STOs slowly clearing up, we can expect positive developments on the tokenization front. At least that is the ‘money crypto’ narrative. We are cautiously optimistic on STOs, but it will likely take a while, and it is not the 0-to-1 transformation that truly harnesses the complete potential of DLT, as we have opined before.  

The final crypto law is perhaps the most favorable for both incumbent and prospective crypto businesses and start ups, as it allows crypto-focused businesses, which have been deprived of traditional banking services, to gain access to banking services through the creation of special purpose depository access institutions. During the unexpected crackdown on crypto businesses in late 2017, a lot of startups dealing with digital assets were put out of business as their bank accounts were summarily closed after a compliance review. Banking rails are literally the holy grail for crypto; with banking rails reinstated, Wyoming could quickly become a fertile breeding and stomping ground for crypto businesses. Access to banking channels for crypto companies has been a weak link that has been regularly exploited by regulators and centralized institutions to stifle the growth of cryptocurrencies and their associated disruptive use cases.

In the context of Bitlicense in New York, and the proposed Texas cryptocurrency laws, Wyoming’s approach to crypto regulation, led by former Wall Street Executive Caitlin Long, comes as a breath of fresh air. Like Malta, Estonia, Slovakia etc that are smaller nations punching above their weight in crypto, Wyoming has clearly identified the opportunity here and is clearly on to something.

Meanwhile in Crypto Wonderland….

“Swiss Online Retailer to Accept Crypto” The Digitec Galaxus Group, Switzerland’s first online retail store, announced today that its two web platforms would accept payments in cryptocurrencies. It concerns the popular bitcoin, but also half a dozen other cryptocurrencies, including ether, bitcoin cash, and litecoin. Customers of Digitec and Galaxus will be able to pay for carts exceeding 200 francs through a third-party service, Coinify. The Denmark-startup would convert crypto payments to fiat in real-time, thereby protecting the merchants from cryptocurrencies’ notorious price volatility. That explains that Digitec and Galaxus will not hold cryptocurrencies themselves but would anyway enable users to spend them unobstructedly.

“Visa Looking to Hire Crypto Talent” VISA is recruiting project managers to work on its crypto team. VISA’s decision to create a crypto team appears to be in line with the corporation’s goal of being the “best method of making payments globally. The recent move to create a crypto team could be a response to the growing number of fintech products aimed at making cryptocurrency payments cheaper, faster, and more convenient. For instance, while there has been a lot of progress on the Bitcoin Lightning network, several crypto payment systems involving cards and point of sale terminals are being developed by various startups, with mixed success.

“Citi’s U-turn on Their Own Cryptocurrency” Bitmain, the Beijing-headquartered cryptocurrency mining giant, has officially released the Antminer Z11 machine. Crypto winter might be taking its toll on many cryptocurrency miners, and thus the companies that supply them with equipment, but the technological arms race to develop the fastest rigs never stops. This is exemplified by Bitmain’s release of an Equihash miner that is three times more powerful than its predecessor. The company noted in the announcement for the new machine how it is showing commitment to the Zcash community as well as to transparency, an issue that is critical for miners who in the past had to wait a long time for the equipment they purchased to reach them.

“$4 Million in Less Than 18 Minutes”Binance Launchpad, the token sale platform of major cryptocurrency exchange Binance, has hosted a token sale for Celer Network (CELR) today. The token sold out within less than 18 minutes – slightly slower than BitTorrent Token (BTT), which sold out in 15 minutes, and Fetch.AI (FET) which took 22 seconds. The number of contributors was 3,129, raising around USD 4 million in total. Celer Network is a layer-2 scaling system, meaning it is not built into a blockchain but rather functions on top of it. The startup raised USD 7.46 million in a seed round in April 2018 and another USD 23.25 million during a private token sale in July 2018.

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