5 Things Blockchain You Need to Know for June 13, 2022
Blockchain For Sustainable Development
TLDR: Blockchain has the potential to assist in fulfilling the United Nations’ Sustainable Development Goals (SDG) by empowering the underbanked, lowering transaction costs, and creating an alternative source of liquidity.
With the advent of modern globalization and digitization, technological advancements have now progressed to the point that cryptocurrencies are no longer unusual. Blockchain’s ability to be transparent and free of middlemen may benefit the unbanked. As a result, this might open up a new market for financial services, which has generally been controlled by banks. Blockchain-based cryptocurrencies may do everything that banking institutions can do, and more, but without the need for a third party to oversee user data and charge exorbitant fees for basic services.
More than 70 nations are currently developing a digital equivalent of their national currencies. Central bank digital currencies, or CBDCs, refer to a digital representation of national money issued by central banks that may enhance consumer protections and start a regulatory structure for the large portion of the financial system that has so far evaded regulation. Naturally, there are drawbacks: Some degree of privacy and control would be lost by users, while central banks would have absolute power over transactions that they could render, undo, etc. It’s a tremendous opportunity for a model authoritarian regime seeking to tighten its grip on financial transactions and individuals. CBDCs linked with a user-friendly platform, on the other hand, may be the beginning point and entryway through which people can learn about cryptocurrency and become empowered. As a result, individuals may feel inspired to explore cryptocurrency space, strengthening their financial literacy skills.
Cryptocurrencies and blockchain provide an alternative to traditional financial services by addressing issues of inequality and transparency. It is critical to acknowledge cryptocurrency and blockchain for financial inclusion while also looking beyond mobile money and banking infrastructure to cater to people’s demands for access to affordable financial services. A user-friendly platform is required to make it easier for individuals and companies to use. Anyone could utilize the advantages without requiring significant knowledge of blockchain as a result of this. Shops would likely accept cryptocurrencies, which would aid the United Nations’ Sustainable Development Goals in bringing about financial inclusion. Nonetheless, when it comes to fighting economic exclusion, regulatory frameworks and financial education should not be understated.
What Does the New Crypto Bill Means For the Blockchain Ecosystem?
TLDR: If implemented, the new crypto legislation would place the United States on a stronger footing when it comes to interactions with digital assets. The Bill seeks to address several of the gray areas in the cryptocurrency environment, including taxation, regulatory oversight, and the role of stablecoins, just to name a few.
The bill, which has been described as a “landmark bill,” incorporates a number of features, including the label of crypto as either securities or commodities. American crypto investors and stakeholders are frequently divided over how to classify whatever product they’re building; this will determine which regulator they’ll be subject to. With the new Bill, all token issuers will have clarity on their products, drawing on complete knowledge of the “purpose of the asset and the rights or powers it conveys to the consumer.” The majority of digital currencies, including Bitcoin (BTC), Ethereum (ETH), and others are identified as commodities according to the Bill. The Bill’s passage may not serve the needs of a few stakeholders with unrelated demands, but if it is implemented, it will have a significant impact on the United States and around the world. Investors’ concerns about a regulatory tightening on certain projects should also be addressed by the Bill. Projects that are not yet sufficiently decentralized would have to submit basic information to the SEC, which would be less inconvenient than current requirements, but still useful to investors. When a project is fully decentralized, the requirements for reporting would be terminated, and compliance costs would go down.
Many nations are competing to improve their game by giving appropriate regulatory supervision to the crypto industry, beyond the United States. In fact, the recent failure of Terra’s algorithmic stablecoin has helped speed up developments that have resulted in Japan implementing a comprehensive stablecoin regulation, becoming the first country to do so. With the introduction of the U.S. crypto bill, we may expect to see Web3.0 technologies being developed in other countries as well. More governments may eventually join the innovative crypto ecosystem and decide not to miss out on the advancements it portends.
Tokenized Assets Can Bring Trillions of Dollars to DeFi
TLDR: JPMorgan is investing in a digital identity verification network to help bring trillions of dollars of assets into DeFi so that we can use these new mechanisms for trading, borrowing and lending.
As time goes on, tokenizing U.S. Treasurys or money market fund shares, for example, might all lead to their use as collateral in DeFi pools. Institutional DeFi often refers to applying Know Your Customer (KYC)structures on crypto permissionless lending pools, which is already taking place in certain sectors. JPMorgan’s plans to tokenize existing assets indicate a much larger scope. JPMorgan is striving for a new model that would utilize verifiable credentials as a method of identification and proof of identity. Verifiable credentials can provide the scale needed to grant access to these pools without requiring a white list of addresses. Because verifiable credentials aren’t kept on-chain, you don’t have to worry about the same overhead as with writing such information to blockchain, paying for gas fees, and so on. JPMorgan has not yet decided which DeFi platforms and counterparties it will collaborate with, but it will undoubtedly be one of the most well-known. If JPMorgan can provide a KYC-based access layer for DeFi, then each of those protocols should be able to accommodate institutions without requiring major modifications.
Mastercard To Implement Payments For NFTs and Web3 Projects
TLDR: 2.9 billion Mastercard customers will be able to make NFT purchases directly without buying crypto first.
Cryptocurrencies are gaining acceptance among traditional payment companies as a way to diversify their portfolios and extend their customer bases. Mastercard is attempting to integrate payment acceptance for a variety of NFT and Web3 platforms with its cards. This will allow more consumers to join the market as the barrier to purchasing such digital items is lowered via more adaptable payment solutions. Users must currently purchase cryptocurrency to bid on and acquire NFTs, but with the most recent Mastercard collaboration, billions of cardholders can now avoid the trouble of buying a cryptocurrency and transferring it to NFT marketplaces. Visa and Mastercard, the world’s top two major payment processors, have made significant progress from their early days of blocking crypto payments on their network, to becoming frontrunners in the decentralized sector.
Will The Metaverse Help or Hinder Sustainability?
TLDR: There are legitimate worries about how the metaverse will influence environmental efforts. However, if done correctly, it may actually enhance sustainability.
The metaverse, which is still mostly a concept rather than a functioning reality, continues to be the topic of debate. However, discussion has already begun about whether the metaverse will aid or impede environmental sustainability efforts. Fortunately, the metaverse’s sustainability concerns, such as the growing energy demand of cloud computing data centers, are not foregone conclusions. It’s possible that the metaverse will be built and utilized in a manner that improves rather than compromises sustainability efforts. The obvious way to make the metaverse sustainable is to build metaverse platforms that don’t require specialized hardware or significant computer power on either the server or user sides of the equation. To make this happen, metaverse developers must be prepared to make sacrifices in terms of glitz in order to maintain resource profiles lower and more ecologically friendly.
It may also aid in environmental initiatives if metaverse platforms are consolidated into centralized services. Instead of having hundreds or thousands of different metaverses, resources would likely be utilized more effectively if there were simply a few metaverse solutions available to a large number of organizations. This could happen if public cloud providers launched a “metaverse-as-a service” offer that made it easy for businesses to create metaverse environments on demand, using resources shared with other clients. It’s still too early to forecast the metaverse’s role in sustainability. But it’s not too soon for metaverse developers to begin considering this issue, and making decisions that will help the metaverse become a benefit, rather than a liability, for environmental sustainability.
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How do you think the new crypto bill will impact the current blockchain ecosystem? Share your thoughts on the subject in the comments section below.