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Bitcoin Mining Geographical Distribution Shifts as U.S. Becoming the Biggest Beneficiary

by Blockchain NewsJuly 19, 2021

Things were not rosy for Bitcoin (BTC) mining even before the Chinese authorities intensified the crackdown on this sector in May.

Recent research conducted by the Cambridge Centre for Alternative Finance (CCAF) indicates that China’s share of mining fell from 75.5% in September 2019 to 46% in April 2021.

As a result, BTC mining has become more geographically distributed, as acknowledged by Documenting Bitcoin. The crypto analytic firm explained:

“Bitcoin mining is becoming more geographically distributed—China now has less than 50% of the total hash rate, with the United States being the largest beneficiary. Like the open Internet, a wealth transfer from East to West.”

Therefore, the United States has emerged as the biggest beneficiary, and the BTC mining sector seems to be shifting from the East to the West.

These sentiments were echoed by the CCAF study, which disclosed that the US share of hashrate skyrocketed to 16.8% from just over 4%. Kazakhstan, Russia, and Iran were the other beneficiaries.

The hashrate is used to measure the processing power of the BTC network. It, therefore, allows computers to process and solve problems that would enable transactions to be approved and confirmed across the network.

Bitcoin’s hashrate fell by 52.5% following the Chinese ban

According to on-chain metrics provider CryptoCompare:

“Following China’s ban, BTC’s hash rate fell by 52.5% – from 181.61Mn TH/s on May 13 to 86.19Mn TH/s on July 2. These levels haven’t been seen since 2019 when the hash rate averaged 90.45Mn TH/s.”

On July 14, Anhui, an eastern Chinese province, became the latest region to shut down all crypto mining activities, citing an acute power shortage.

Some crypto analysts had previously acknowledged that BTC mining might become more profitable and more accessible following China’s ban and the US looks set to reap big from this development.

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Facebook Diem Project to Launch USD Stablecoin after Dropping Swiss License Application Plan

by Blockchain NewsMay 13, 2021

Facebook-backed digital currency project Diem has revealed new plans to launch a US dollar stablecoin in the United States.

Diem Association has disclosed that it is relocating its main operations from Switzerland to the US and has withdrawn its payment system license application with the Swiss Financial Market Supervisory Authority.

The Diem Association states that it plans to shift its operational headquarters from Geneva, Switzerland to Washington, D.C where its US unit is based.

Diem Network US, a unit of the Diem Association, will register as a money services business with the US Department of The Treasury’s Financial Crimes Enforcement Network and will also run a blockchain-based payment system that allows a real-time transfer of Diem stablecoins, the association stated.

The Diem Network US has partnered with Silvergate bank based in California to issue the Diem USD stablecoin and manage the Diem USD currency reserve. Silvergate bank has become a go-to for crypto businesses shunned by traditional lenders.

“While our plans take the project fully within the US regulatory perimeter and no longer require a license from FINMA, the project has benefited greatly from the intensive licensing process in Switzerland and the constructive feedback from FINMA and more than two dozen other regulatory authorities from around the world convened by FINMA to consider the project,” Stuart Levy, Diem’s CEO, said.

The Swiss financial regulator confirmed Diem’s decision to withdraw its application for a payment license.

“Diem is planning to launch the payment system from the USA in a first phase because initially, the project will focus on the USA as its target market,” the regulator said.

Currently, Diem has plans to issue a US dollar-backed stablecoin, recognized as Diem USD.

Diem is making preparations to launch a pilot with its dollar-pegged stablecoin later this year. The pilot would be small scale, focusing mainly on transactions between individual consumers.

Scaling Back Global Currency Ambitions

In June 2019, Facebook first developed plans for Libra stablecoin as part of its efforts to expand beyond social networking into global payments and e-commerce. It stated that together with its founding partners like credit card firms and payment companies, Libra would create a digital currency backed by a wide mixture of currencies and short-term government debt.

Facebook hoped that Libra would power transactions between businesses and consumers across the world, and provide more people with access to financial services.

However, the Libra project immediately faced fierce opposition from policymakers around the globe, who worried that it could harm users’ privacy, enable crime, and erode their control over the money system.

In April 2020, the Libra Association pulled back from its original vision of a global digital currency, which would be backed by a basket of national currencies, an effort to appease global regulators.

As a result, the association planned to create a handful of stablecoins each representing a different fiat currency (for example, one Libra coin would be pegged to the US dollar, another one would be backed by the Euro, and so on). The Libra Association sought a license approval from the Swiss regulator.

In December 2020, the Libra project was rebranded as Diem as an effort to emphasize its independence as it sought regulatory approval for a 2021 launch, with its scope scaled back further to a single dollar-backed digital currency.

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Tagged : FACEBOOK DIEM PROJECT / Stablecoin / SWISS LICENSE APPLICATION / THE UNITED STATES / USD STABLECOIN

Canada Security Regulator Approves Three Ethereum ETFs In A Single Day

by Blockchain NewsApril 17, 2021

The Canadian regulator, the Ontario Securities Commission, has approved three Ethereum ETFs (exchange-traded funds). CI Global Asset Management company, Purpose Investments Inc., company, and Evolve Fund Group Inc., have both received approval to launch three separate Ether ETFs.

The Ether ETFs would be available on Toronto Stock Exchange (TSX) to give investors exposure to the second-largest cryptocurrency by market capitalization, Ether.

Evolve and Purpose already have Bitcoin ETFs trading on Toronto Stock Exchange (TSX).

CI Global Asset Management is collaborating with Galaxy Digital holdings Ltd to launch CI Galaxy Ethereum ETF on April 20 on the Toronto stock exchange, subject to TSX approval. Steve Kurz, the partner and head of Asset Management at Galaxy Digital, said: “We are thrilled to continue building our advisory relationship with CI. The CI Galaxy Ethereum ETF gives investors a simplified path to benefit from the explosion of decentralized applications being built on Ethereum.”

Likewise, Evolve Fund Group Inc. plans to start the trading of its Ether EFT (ETHR) on April 20 on the Toronto Stock Exchange. Raj Lala, the CEO and president at Evolve, stated: “We are very excited to have launched one of the world’s first bitcoin ETFs and now plan to launch the world’s first Ether ETF. Similar to bitcoin, investors will now be able to trade Ether as simple as buying shares through their bank or brokerage. ETHR will provide daily liquidity, transparency and security through a regulated ETF structure.”

Purpose Ether ETF is designed to provide investors with exposure to Ether by investing directly in physically settled ether. The Purpose Ether ETF is set to offer three classes of units: US dollar units (ETHH.U), Canadian dollar non-currency hedged units (ETHH.B), and Canadian dollar currency-hedged units (ETHH).

EFTs are investment vehicles that allow investors to purchase shares that represent a certain asset – this case, Ether. Investors can trade them continuously throughout the day without worrying about owning the asset themselves or holding cryptocurrency, like storage.

In other words, Ether ETFs would allow investors to buy into the ETF without going through the complicated process of trading Ether itself. Furthermore, since holders of the ETFs would not be investing in Ether directly, they would not have to worry about the complex storage and security procedures required of crypto investors.

Bitcoin ETF Problem in the US

While the neighbouring US regulators are still yet to approve Bitcoin ETFs, Canada has appeared to be progressive toward the regulated cryptocurrency instruments. In early February, Canada approved its first Bitcoin ETF which witnessed a huge demand from investors. And recently, Canadian regulators approved two Bitcoin ETFs that allow investors to take short positions in the cryptocurrency.

A Bitcoin ETF in the United States is still a long way from being approved. Currently there is long list of prominent companies (such as NYDIG Asset Management, Valkyrie Digital Assets, Galaxy Digital, SkyBridge Capital, VanEck, Cboe, WisdomTree, and Fidelity Investments) applying to the SEC for Bitcoin ETF approval. But the US Securities and Exchange Commission (SEC) has repeatedly rejected applications for firms that intend to launch Bitcoin ETFs.

The SEC claims that Bitcoin is traded on unregulated exchanges, thus leaving it susceptible to manipulation and fraud. However, there are still hopes that the new SEC boss Gary Gensler could change the regulatory agency’s attitude towards the novel investment product.

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Tagged : Canada / Ethereum / ETHEREUM ETFS / Exchange-Traded Funds / THE ONTARIO SECURITIES COMMISSION / THE UNITED STATES / THE US SECURITIES AND EXCHANGE COMMISSION