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Women in Tech Say Proposed STABLE Act Harms Those It Claims to Protect

Women of color from the cryptocurrency industry are concerned the STABLE Act would make wealth disparities in the U.S. much worse.

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Dec 11, 2020 at 5:38 p.m. UTC

Women in Tech Say Proposed STABLE Act Harms Those It Claims to Protect

Although the STABLE Act, proposed Dec. 2 by U.S. Reps. Rashida Tlaib (D-Mich.), Jesús “Chuy” García (D-Ill.) and Stephen Lynch (D-Mass.), is being portrayed by its supporters as protecting low-income communities, many women from marginalized communities fear it would actually make their situation much worse.

Several Black women in the tech industry, including Maker Foundation board member Tonya Evans, tweeted a plea to reconsider this bill. Olayinka Odeniran, chairwoman of the Black Women Blockchain Council, told CoinDesk her group of seven board members joined dozens of other professionals in signing a letter to the incoming Biden presidential administration asking for minority industry leaders to help draft such blockchain regulations.

“I come from the financial industry, so I know when any policy is in the early stages of being created they ask for the community’s input. The potential policy they are creating doesn’t have community input,” Odeniran said in an interview. “This will limit the amount of stablecoins out there that people from my community can use to on-board into the space. And it will limit the companies that are interested in using them to serve underprivileged or underbanked minorities.”

Stepping back, the STABLE Act would require stablecoin issuers to secure bank charters and regulatory approval before circulating stablecoins, the tokenized cash either backed by or representing the value of one dollar. In short, projects like the Maker Foundation would need to get an American banking license in order to shepherd ecosystem development of the Ethereum-based MakerDAO, a protocol built to issue a stablecoin called dai.

Dai is particularly popular among Latin American communities for remittances and among students or junior developers who aren’t wealthy enough to be considered accredited investors.

People making more than $200,000 annually, under the STABLE Act, would still generally retain access to a broader spectrum of crypto assets. Licensed entities that prioritize such customers could still issue stablecoins. Coinbase, for example, issued the stablecoin USDC by way of the Centre consortium with Circle Financial – a team that could probably afford to apply for a banking license.

The claim that this is something to be proud of because it somehow protects minorities and low-income people from being bullied is nothing short of bullshit.

Odeniran said that, despite legislation like the Equal Credit Opportunity Act, historically banking institutions offer different rates or requirements from people of color. As such, raising the compliance cost of participating in blockchain networks would inevitably mean, she argued, that fewer institutions will serve populations with slimmer profit margins.

Silicon Valley unicorns are already taking the approach of “empowering” Venezuelan families by using cryptocurrency. This hasn’t appeared to ruffle regulatory feathers in California. The STABLE Act may soon undermine the choice Americans have to empower themselves with cryptocurrency, rather than simply exporting this tool for “freedom” to the developing world.

Repercussions

Washington, D.C.-based nonprofit Coin Center issued a statement warning the STABLE Act is so broad it could also make crypto node operators in the United States vulnerable to arrest.

That’s why pseudonymous Cosmos developer Chjango Unchained told CoinDesk in a direct message this bill could outlaw the use cases that help unbanked or underserved fintech users. As a woman of color from a low-income, immigrant household, now a junior professional in Silicon Valley, she tinkers with nodes and uses stablecoins to trade with the same type of systems that wealthier tech investors also use.

“I think the [bill’s] verbiage is paying lip service to those communities, but in reality the second-order consequences of it will play out to disenfranchise exactly those communities they seek to ‘protect,’” Chjango said in a text interview. “Stablecoins now enable users to never have to exit back into fiat, where all of those old guardrails protecting the incumbents are firmly in place. And the kinds of users who benefit from having access to such liquidity are exactly people of color.”

This is especially true if prospective wallet regulations simultaneously hinder those who hold their own crypto, rather than entrusting it to an exchange. On Wednesday, U.S. Reps. Warren Davidson (R-Ohio), Tom Emmer (R-Minn.), Ted Budd (R-N.C.) and Scott Perry (R-Pa.) sent a letter “expressing our concern” about rumors that Treasury Secretary Steven Mnuchin intends to unveil self-hosted wallet regulations in the coming weeks.

Undermining bitcoin

Given this context, the STABLE Act strikes at bitcoin’s underlying thesis, where network contributors aren’t inherently financial service providers.

If American lawmakers disagree and enact legislation that could apply to node operators or wallet users, then a wide range of cryptocurrency users suddenly become legal targets.

Crypto “is a means to financial freedom for so many who would otherwise have to submit themselves to a lifetime of indentured servitude to their student loans, all without requiring a credit check,” Chjango said.

It remains to be seen how this bill would impact the variety of crypto users beyond blockchain network operators – from hobbyist node operators to international activists. The bill’s advisory scholar, Willamette University law professor Rohan Grey, tweeted: “You have to accept that running an open blockchain network means you are, at some level, liable for the actions that take place on that network.”

Limiting access

Palestinian-American entrepreneur Mona El Isa, the Goldman Sachs trader turned CEO of Melonport AG, told CoinDesk in a direct message she is worried this bill could “raise barriers” for “low- and moderate-income” households that “will now be shunned from the same system that currently doesn’t bank them anyway.”

Plus, El Isa said Palestinian tech enternpreuers and freelancers with limited banking services sometimes accept cryptocurrency payments from clients abroad because it’s one of the only ways for them to “earn an honest living.”

“The claim that this [STABLE Act] is something to be proud of because it somehow protects minorities and low-income people from being bullied is nothing short of bulls**t,” El Isa said.

Likewise, an American stablecoin user named Inna Dominus described Grey’s tweets about blockchain technology as “toxic.” As a lawyer who uses stablecoins as an educational tool with her family, Dominus told her daughter this bill is a prime example of why women of color need to keep fighting against prospective laws that would further marginalize minorities with fewer financial options.

Dominus said she believes the way ambiguous bills are carried out by government agencies may systematically put marginalized groups at an even further disadvantage.

“It seems silly that we’re still fighting the perception that crypto is more predatory than, say, large institutional banks,” she said in a text interview. “The difference between crypto and the banks is that banks have much better lobbying. … We need better representation on Capitol Hill or we will continue to see these promulgations, these kinds of misinformed bills.”

Source: https://www.coindesk.com/women-in-tech-say-proposed-stable-act-harms-those-it-claims-to-protect

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World’s Oldest Central Bank Extends Digital Currency Test Till 2022

Riksbank said it would continue developing a technical solution for a central bank-issued e-krona under its pilot project.

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Sweden’s Riksbank said it would continue work with Accenture on a potential e-krona digital currency until next year.

(Mario Ortiz/Shutterstock)

Feb 17, 2021 at 10:12 a.m. UTC

World’s Oldest Central Bank Extends Digital Currency Test Till 2022

The world’s oldest central bank, Sweden’s Riksbank, is to extend its pilot project for a potential central bank digital currency (CBDC) for another 12 months.

According to a press release on Friday, the project, which is being carried out with assistance from professional services firm Accenture, will run until February 2022.

The Riksbank said it would continue developing a technical solution for a central bank-issued e-krona “as a complement to cash,” with the primary objective being for the bank to increase its knowledge around the technology.

For 2021, the institution will continue developing its potential digital currency offering with a focus on performance and scalability. Testing offline functions and bringing external participants into the test environment is also on the table.

The project has raised some concerns from Sweden’s commercial banking sector over the viability of a sovereign CBDC and how that would impact the entire banking system.

There is no final decision over the issuance of the e-krona despite strong lobbying from the central bank to government last year. But with traditional cash seeing falling use, even more so during the coronavirus pandemic, Sweden has been mulling a switch to the CBDC.

However, questions still remain over the digital currency’s ultimate design and underlying technology, according to Friday’s release.

Source: https://www.coindesk.com/sweden-central-bank-digital-krona-extension

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Bitcoin Mining: Wasted Energy or a Better, Greener System?

Harry Sudock, VP of strategy at GRIID Infrastructure on the modern energy landscape, how far we’ve come and where bitcoin mining fits.

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Is it wasteful to use electricity mining bitcoin? As the Biden Administration settles into power with an ambitious agenda around clean energy, notably promising to eliminate carbon emissions from the US power generation sector by 2035, the question of bitcoin mining and it’s ever-growing use of energy bubbles up once more.

In this episode of ‘On Purpose, With Tyrone Ross,’ Harry Sudock, VP of strategy at GRIID Infrastructure joins the show to discuss the modern energy landscape, how far we’ve come and where bitcoin mining can fit into a sustainable energy system.

The greatest number of people living in poverty are children, we need to change that. If you can, get involved and give back to NoKidHungry.org. Love and Light. I appreciate you!

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Source: https://www.coindesk.com/podcasts/on-purpose-with-tyrone-ross/bitcoin-mining-harry-sudock

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Deutsche Bank Quietly Plans to Offer Crypto Custody, Prime Brokerage- CoinDesk

The bank’s game plan was hidden in plain sight in a widely overlooked report by the World Economic Forum.

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The bank’s game plan was hidden in plain sight in a widely overlooked report by the World Economic Forum.

Deutsche Bank headquarters in Frankfurt, Germany (Thomas Lohnes/Getty Images)

Feb 13, 2021 at 2:10 a.m. UTCUpdated Feb 13, 2021 at 2:18 a.m. UTC

Deutsche Bank Quietly Plans to Offer Crypto Custody, Prime Brokerage

Deutsche Bank has joined the growing ranks of large financial institutions exploring cryptocurrency custody, with aspirations to offer high-touch services to hedge funds that invest in the asset class.

The Deutsche Bank Digital Asset Custody prototype aims to develop “a fully integrated custody platform for institutional clients and their digital assets providing seamless connectivity to the broader cryptocurrency ecosystem,” according to a little-noticed report by the World Economic Forum, host of the annual gathering of muckety-mucks in Davos, Switzerland.

In a passage buried on page 23 of the December 2020 report, Germany’s largest bank says it plans to create a trading and token issuance platform, bridging digital assets with traditional banking services, and managing the array of digital assets and fiat holdings in one easy-to-use platform.

Big banks are now announcing plans to enter crypto custody on an almost daily basis, with Bank of New York Mellon, the world’s largest custodian bank, joining the party earlier this week.

U.S. banks were given some regulatory clarity thanks to last year’s interpretation letters from the Office of the Comptroller of the Currency. In Germany, firms are queuing up to get their hands on special crypto custody licenses from the country’s regulator, BaFIN.

Deutsche, the world’s 21st largest bank, said it aims to “ensure the safety and accessibility of assets for clients by offering an institutional-grade hot/cold storage solution with insurance-grade protection.” No specific cryptocurrencies or tokens are mentioned.

The digital asset custody platform would be launched in stages. It would eventually provide clients with the ability to buy and sell digital assets via a partnership with prime brokers (which act sort of like concierges for hedge funds), issuers and vetted exchanges.

The bank says it would also provide “value-added services such as taxation, valuation services and fund administration, lending, staking and voting, and provide an open-banking platform to allow onboarding of third-party providers.”

The service would be aimed at asset managers, wealth managers, family offices, corporates and digital funds, the bank said.

In terms of a business model, the bank would start out collecting custody fees, it said, later charging fees for tokenization and trading.

Deutsche said it has completed a proof of concept and is aiming for a minimum viable product in 2021, while exploring global client interest for a pilot initiative.

The bank’s press office could not be reached for comment Friday evening. A spokesperson had declined to comment on potential plans for a digital asset custody business when contacted last week by CoinDesk.

Source: https://www.coindesk.com/deutsche-bank-crypto-custody-prime-brokerage

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