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Tom Emmer proposes bill to bar a Federal Reserve CBDC

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Tom Emmer has previously shown a preference for a decentralised digital currency as it would uphold user privacy and retain the elements of cash

The US representative for Minnesota’s 6th congressional state, Tom Emmer, revealed yesterday that he intends to introduce new regulations around crypto. The proposed law from Emmer, who had hinted of it a day earlier, would bar the Federal Reserve from conducting any activity as a retail ban.

In effect, it would prevent the Fed from issuing a central bank digital currency directly to consumers in the US. He insisted that unlike other countries, such as China, that have developed tokens lacking the “benefits and protections of cash,” a US digital currency should guarantee privacy to users and retain the US dollar’s hegemonic status.

Privacy, innovation, and the Dollar’s dominance at the heart of it

Emmer further explained that CBDCs that are not built with these pillars in mind would make users’ privacy vulnerable. In that way, an institution like the Fed could muster itself into a retail bank and easily collect personal information. He warned that such a body could also track user transactions for an indeterminate period.

“Not only would this CBDC model centralise Americans’ financial information, leaving it vulnerable to attack, but it could also be used as a surveillance tool that Americans should never tolerate from their own government,” Emer explained.

The Minnesota rep cautioned that were the Fed to require that users open an account with it to access a CBDC, the US would be on a path emulating “China’s digital authoritarianism.”

He also noted that it was imperative that the Fed is not allowed to offer retail banking, adding that the minimums for any CBDC developed in the US were openness, privacy and a permissionless nature.

“Regardless, any CBDC implemented by the Fed must be open, permissionless, and private. This means that any digital dollar must be accessible to all, transact on a blockchain that is transparent to all, and maintain the privacy elements of cash,” Emmer opined.

He also maintained that to retain the Dollar’s status into the digital age, the US needs to ensure that it takes an approach prioritising innovation rather than one in competition with the private sector (other cryptocurrencies).

Notably, though the text in his bill was quite brief, it keenly suggested amendment of Section 13 of the Federal Reserve Act include a clause that reads,

Except as specifically authorised under this Act, a Federal reserve bank may not offer products or services directly to an individual, maintain an account on behalf of an individual, or issue a central bank digital currency directly to an individual.”

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Budget 2022: As the Centre introduces a tax on digital assets in Budget 2022, the crypto sector is hopeful of regulatory approval.

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Budget 2022: Crypto Sector is hopeful of Regulatory Approval

Finance Minister Nirmala Sitharaman has proposed a 30% tax on income generated from the sale of any digital asset, despite the fact that the regulatory structure for them is unknown.

The crypto ecosystem has welcomed Finance Minister Nirmala Sitharaman’s proposal for a 30% tax on digital assets to legitimise bets on assets deemed extremely risky by the RBI, even as a law governing such activity is awaited.
In her Budget Speech, Sitharaman proposed a tax on income generated by the sale of any digital asset without any deductions, despite the fact that the regulatory structure for such assets, such as Bitcoin, remains unclear.

“India is finally on the path to legitimising the crypto sector in India,” said Nischal Shetty, founder and CEO of cryptocurrency exchange WazirX.

According to Rishad Manekia, founder and MD of Kairos Capital, the taxation, along with the introduction of an Indian CBDC in 2022, provides a much clearer picture of the future of the blockchain ecosystem in India and how the government views this space.

BankBazaar.com According to CEO Adhil Shetty, India will now join a small group of countries in launching its own blockchain currency.

Polytrade CEO Piyush Gupta anticipates that the government will continue to support and encourage digital currencies in the near future, propelling the gross domestic product (GDP) to the government’s target of USD 5 trillion.

Despite a lack of regulatory clarity, crypto exchanges raised over $638 million in venture capital funding last year as investors flocked to the sector.

“The implementation of TDS (tax deducted at source) on crypto-transfers will allow the government to better monitor crypto transactions,” said Amit Singhania, partner at Shardul Amarchand Mangaldas & Co, in a statement.

However, Pranay Bhatia, partner and leader for tax and regulatory services at the consultancy firm BDO India, appeared to hold a different opinion, stating that tracking such transactions in the absence of a central regulator could be difficult.

The regulatory aspects of crypto investments remain unclear in the absence of a crypto law, which was scheduled to be tabled in the winter session of Parliament itself.

App for Bitcoin Reward “While we eagerly await the crypto Bill,” Gosats co-founder and CEO Roshan Aslam said, “we expect positive and well-thought-out regulations to go forward, which are desperately needed for consumer protection.”

Sumit Gupta, co-founder and CEO of cryptocurrency exchange CoinDCX, described the Budget as “forward-thinking and inspirational.”

“Taxation of virtual digital assets, or crypto, is a positive step. It provides the industry with much-needed clarity and confidence. The government of India’s emphasis on digital innovation and the promotion of blockchain technology is encouraging “He continued.

However, Ashok Shah, founding partner of accounting and tax firm N A Shah Associates, called the move a “deadly blow” to the virtual digital ecosystem. “The proposed measure is a harsh provision that will have a negative impact on investment and trading in digital assets.”

Meanwhile, industry participants welcomed the RBI’s announcement to launch central bank digital currency in FY23, which it had planned to do by the end of 2021.
Kashyap Mahavadi, founder and CEO of fintech Dinero, stated that with the introduction of the central bank digital currency (CBDC) and the legalisation of cryptos, India is now ushering in a financial system revolution.

According to Sumit Ghosh, co-founder and CEO of Chingari App (whose $GARI Social Tokens are listed on 19 global crypto exchanges), information and awareness about crypto/digital currency are currently limited in India, which is also a major challenge that must be addressed.

According to Ashish Singhal, co-chair of the Blockchain and Crypto Assets Council (BACC) and founder and CEO of CoinSwitch, the government’s regulatory guidance on tax furthers the mainstreaming excitement of this emerging asset class, which has over USD 6 billion in investments in India.

According to Amarjeet Singh, partner and national lead (emerging giants and start-ups) at KPMG in India, the recognition of virtual digital assets and the establishment of a proper tax regime will result in the establishment of many more start-ups in this space.

According to Bhaskar Majumdar, managing partner at Unicorn India Ventures, the tax on crypto/NFTs will “now make it legalised, and users will no longer be able to circumvent tax and other financial regularities.”
NFTs are one-of-a-kind digital assets with verified ownership rights that are recorded on a blockchain.

According to Rameesh Kailasam, CEO of IndiaTech.org, the decision to recognise cryptocurrency and NFTs as virtual digital assets is a positive step.

“However, more clarity on taxation is needed for someone trading in cryptocurrency as an exchange.” Clarity on the cost of acquisition is also required to ensure that all related costs to enable the transaction are considered.

“The tax rate should have ideally been around 20% rather than 30% as it could potentially become a deterrent for many trading in India,” he added.

According to Keyur Patel, co-founder and chairman of GuardianLink and BeyondLife.Club, the government’s classification of virtual assets as one implies that crypto and NFTs are in the same category.

“NFTs are in their infancy in their classes, and with such taxation, (it) will eventually have to adjust to grow the developing ecosystem,” Patel added.

Financial inclusion initiatives, according to Financepeer CEO Rohit Gajbhiye, will benefit banks and NBFCs if appropriate infrastructure is provided. “When digital banking and fintech emphasis are combined with efforts to make doing business easier, the already-growing fintech space will gain momentum.”

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Today’s cryptocurrency prices: Bitcoin climbs, while Ethereum, Cardano, and Solana fall.

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Over the last 24 hours, the global cryptocurrency market capitalisation fell 0.48 percent to $2.00 trillion, while trading volumes increased 8.54 percent to $103.29 billion.

While DeFi accounted for 12.48 percent of 24-hour cryptocurrency trading volume at $12.89 billion, stablecoins accounted for 79.21 percent at $81.81 billion. On the morning of February 8, Bitcoin’s market dominance increased by 0.33 percent to 41.75 percent, and the currency was trading at $44,076.20.

In terms of rupees, Bitcoin rose 0.04 percent to Rs 34,62,615, while Ethereum fell 0.84 percent to Rs 2,45,582.

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Avalanche rose 4.77 percent to Rs 6,872.5, while Cardano fell 5.49 percent to Rs 92.80. Polkadot fell 3.86 percent to Rs 1,703.16 in the last 24 hours, while Litecoin fell 2.42 percent to Rs 10,538.65. Tether increased by 0.4 percent to Rs 78.8.

Memecoin SHIB fell 5.58 percent to Rs 12.41, while Dogecoin fell 3.71 percent to Rs 12.41. Terra (LUNA) dropped 3.65% to Rs 4,500.

Ubisoft, a major video game publisher, is venturing into new territory in Web3, announcing a partnership with The Sandbox to bring its well-known game franchises into the Ethereum-based metaverse game world. Ubisoft’s Rabbids franchise will enter this market, bringing blocky recreations of the goofy, rabbit-like alien creatures that users can use in the game’s VoxEdit and Game Maker tools. Notably, Ubisoft will have its own LAND plot in The Sandbox’s shared online world, which it will be able to customise and monetize.

Separately, the Federal Deposit Insurance Corporation (FDIC) announced that cryptocurrency, and specifically the risks associated with the crypto industry, will be a priority area of focus for 2022. “The rapid introduction of a variety of crypto-asset or digital asset products into the financial system may pose significant safety and soundness and financial system risks,” FDIC Acting Chairman Martin J Gruenberg said recently in a statement.

In addition, Picasso’s great-grandson Florian Picasso is having difficulty selling Pablo Picasso’s Ethereum-based NFTs. After a family feud derailed branding them as Pablo Picasso NFTs, only 10% of the NFTs offered via Origin Protocol were sold.

The Picasso Administration, which oversees the use of the Picasso name and assets still held by descendants, issued statements clarifying that the NFTs would not be official Pablo Picasso works. The organisation stated that Florian’s NFTs would be “his own creation, independent of any claim vis-à-vis Pablo Picasso and his works.”

Florian had released 1,000 more Ethereum NFTs inspired by his great-work grandfather’s through the Origin Protocol marketplace for two Ethereum ($6,011) each, but only about 100 of those (spread across five editions) had sold since February 1.

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Nayib Bukele bullish on Bitcoin reaching 100k this year

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Bukele, a Bitcoin proponent, also said he expects to see two other countries take up Bitcoin as legal tender this year

Nayib Bukele’s Bitcoin campaign soldiers into the New Year, with the El Salvador President giving his predictions on the coin yesterday. Though most of the predictions were seemingly quite bold and ambitious, Bukele has never been irresolute in his belief in Bitcoin.

The El Salvador president said he expects Bitcoin to notch a price point of $100,000 this year and that two additional countries would adopt it as legal tender. His country, El Salvador, became the first and sole country in the world, so far, to assume the use of Bitcoin as an accepted official currency at the beginning of September last year.

The move was plagued with criticism and technical hitches, but the Latin American country went forward with it. Bukele’s comments are to be watched since El Salvador’s ambassador to the US, Milena Mayorga, has in the past suggested that if the nation’s Bitcoin adoption becomes successful, other countries will get more confident in taking the same route.

The US is split on crypto adoption and usage

On the state of the world’s largest crypto coin in the US, he said that it would “become a major electoral issue in US elections this year,” alluding to the current indecision by the country’s political class on where the fate of crypto lies.

Split into two extremes, supporters of Bitcoin and crypto include Cynthia Lummis, who has proposed a crypto overhaul through a comprehensive crypto bill to establish regulations for the sector. On the other end lies a more conservative anti-crypto crowd, to which Democrat Elizabeth Warren conforms. The senior US senator has criticised the industry as one meant for the rich and questioned its ties to illegal monetary dealings.

Plans to build a Bitcoin city are still on the table

The President also said he expects his country to develop a Bitcoin City to kick off this year, further claiming that Volcano bonds would be oversubscribed. He had announced plans to establish the envisioned city back in November, where he explained that it would be set up along the Gulf of Fonseca near a volcano.

The city would reportedly be backed by $1 billion worth of Bitcoin bonds and is ideated to offer efficient and sustainable public transport systems, education, and technology. It is also meant to attract foreign investment to make the country the world’s financial centre.

Bukele set forth that he expects to see a huge surprise at the Bitcoin conference this year to be held in Miami. He first brought out his Bitcoin plan for El Salvador during a previous edition of the conference before it went on into execution months later.

In typical bullish fashion, Bukele finished off with an accompanying comment that read, “This tweet will age well.” We can only wait and see how many of his predictions come to fruition.

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