According to a report from Reuters, the world’s largest payment processor companies, Visa and Mastercard, are pushing back the launch of products and services related to crypto, until market conditions and the regulatory environment improve. Visa and Mastercard already have a card issued in partnership with the cryptocurrency exchange Binance, and it offers a fiat-to-cryptocurrency gateway for Binance users.
Anyhow, companies shared concerns about the future of cryptocurrency regulation in a midst of the recent collapse of large players in the crypto industry, such as the FTX. A hard year for crypto companies, pushed Visa and MasterCard to delay the proposed partnerships and decide the way forward after a clearer regulation perspective is established.
At the outskirts of the G20 summit in India, the International Monetary Fund Managing Director, Ms Kristalina Georgieva answered the questions from media around the cryptoassets and digital currencies. In her words, the IMF is very much in favor of regulating the world of crypto and digital money. The IMF, alongside the Bank for International Settlements and the G20s Financial Stability Board (FSB) believes this is a top-priority in the forthcoming period.
She pointed out the difference between legal tenders (national currencies) which are backed by countries that issue them, and the ‘publicly issued cryptoassets and stablecoins calling them ‘just a speculative asset’. If such assets start to pose a threat to the consumers and/or financial stability for countries we should have a mechanism to ban crytpoassets altogether. We have requests from our members not to rule out the mechanism for the total ban. If there are strong consumer protection laws set in place, we will not need a ban. The ban of cryptocurrencies is indeed a tool of last resort, she added in her interview.
In the recent announcement from the Ministry of technology and science of Zambia Mr Felix Mutati, the central financial institutions in Zambia will soon introduce legislation that would regulate the cryptoassests, and in particular Central Bank Digital Currency (CBDC).
The Zambian Minister for technology and science, pointed out in the statement that: ‘there is a need for a policy framework that supports this revolutionary technology.’
In his words, Zambia is seeking the opportunity to embrace this innovative finance technology and will use the regulatory framework ‘as part of deliberate measures to achieve an inclusive digital economy for Zambia’. ‘Cryptocurrency will be a driver for financial inclusion and a change maker for Zambia’s economy’ he added.
Nigeria is the first African country that introduced the digital version of its national currency. The e-Naira currency has been in use for more than a year now, but still lacks mass adoption. In a country of 200 million people, only 0.5% is using e-Naira on a daily basis. The Nigerian government is already using some of the programmability features of digital money, and it’s looking now to enhance them. According to reports from Bloomberg, the Nigerian government is seeking help from the US private tech companies to improve technology behind the virtual currency. Final idea is that at the end of this process, the Central bank of Nigeria achieves full custody and know-how on the technology needed to run a virtual currency environment.
The Nigerian government confirmed that they are looking at: ‘developing additional features and enhancements.”
This action comes after Paxox received a notice from the US Security and Exchange Commission (SEC) that BUSD stablecoin is a financial security and that Paxos needs to register with the Commission. Stablecoins are cryptocurrencies that are pegged to the US dollar or other national currency. The regulatory battle around the stablecoins will continue as Paxos complained to the decision from the SEC. Meanwhile, all deposits of the BUSD will be halted. BUSD is a stablecoin used on a cryptocurrency exchange Binance as a stablecoin pegged to the US dollar. The Binance online exchange is the world’s second largest cryptocurrency exchange based. Binance announced that this will not affect their business.
Stablecoin regulation will be on the agenda of the G20 Finance Ministers meeting on February 24-25 in India. Regulation around this issue might need an overarching regulatory approach.
The Federal Bureau of Investigation (FBI) confirmed that the DPRK cybercriminal group, Lazarus, is responsible for stealing $100 million of virtual currency from Harmony’s Horizon Bridge. FBI found that the portion of the stolen Ethereum, laundered during the June 2022 heist, was sent to virtual asset providers and converted to bitcoins.
Trend Micro security researchers have identified an advanced remote access trojan (RAT) named CHAOS that enhances Linux cryptocurrency mining attacks. It is based on an open-source project in which the main downloader script and further payloads are hosted in different locations to ensure the campaign remains active and constantly spreading. Investigation shows that the main server appears to be in Russia, which is also used for cloud bulletproof hosting. Trend Micro researchers stated that the infection routine of cryptocurrency mining malware seems minor, but organisations and individuals should stay cautious.
Mining of cryptocurrencies involves highly energy-intensive activities. While proponents argue that innovations like these add value to society, particularly in developing countries, critics question whether the benefits outweigh the high energy use of these new technologies and the social cost associated with increased carbon emissions.
A new paper published in Nature magazine provides economic estimates of the energy-related climate damage of Bitcoin (BTC) mining and explores criteria for indicating when this practice might become unsustainable. Using a global estimate of the location of BTC miners and the local electrical matrix, and regional coefficients of CO2 emission by generation type, the study concluded that there was an increase from 0.9 to 113 tonnes (t) CO2 per coin mined from 2016 to 2021. Considering that most cryptocurrency mining is powered by non-renewable sources, BTC climate damages increased during this period. The total global climate damage from all BTC mined between 2016 and 2021 is estimated at US$12 billion.
The paper presents three conclusions covering the period 2016-2021: (i) as the mining industry matured, climate damage from each BTC mined increased; (ii) in certain periods, BTC climate damages exceeded the price of each coin created; (iii) on average, each US$1 of BTC market value created was responsible for US$0.35 in global climate damage, which resembles the share of market price linked to beef production and crude oil burned.
The authors suggest that, in a hypothetical scenario where the share of renewable electricity sources for 2016-2021 was approximately 88.4%, the associated climate damages per coin mined would have dropped significantly.
