The cryptocurrency market remains rangebound with Bitcoin (BTC) hovering around $17,000. While preparing this report, Bitcoin was trading at $16,839, up 0.60% in the past 24 hours. Ethereum (ETH) gained 1.90% to trade at $1,253. XRP was trading at $0.3450, reflecting a loss of 0.60% in the same period.
Major cryptos, which have gained ground in the past 24 hours, are ChainLink (LINK – $5.77, 0.90%), VeChain (VET, $0.0166, 2.30%), EOS (EOS – $0.9043, 1.70%), Binance Coin (BNB – $257.98, 4.30%), Polkadot (DOT, $4.64, 0.10%), Polygon (MATIC – $0.8036, 0.40%), Avalanche (Avax- $12.05, 3.80%), Bitcoin Cash (BCH, $102.85, 2.50%), Dogecoin (DOGE – $0.0730, 1.80%), Cardano (ADA, $0.2673, 3.50%), Tezos (XTZ, $0.7738, 1.80%), Stellar (XLM, $0.0738, 0.10%).and Shiba Inu (SHIB, $0.00000841, 2.60%).
Major crypto, which has lost ground in the past 24 hours, is Solana (SOL, $13.24, 4.50%), and Internet Computer (ICP, $3.90, -1.40%).
Government level initiatives
Governance of Public Blockchains: BoE Examines Ethereum and Permissionless Systems
The Bank of England summarized its examination of the administration of public blockchains in a blog article. It examines how such a blockchain that evolves into a vital component of the financial framework should be governed. The emphasis was on permissionless blockchains and Ethereum (ETH) for the time being, despite the fact that the blockchain is not deemed essential.
The article highlighted the Ethereum Merge, a complex initiative to shift from Proof of Work to Proof of Stake consensus mechanism to safeguard the network. The BoE believes that it is difficult to criticize the shift based on technical aspects. Whether traditional institutions could have managed the transition is also a subject of argumentation.
Nevertheless, the central bank wants to have clarity on how things would have changed in case the initiative had gone wrong. Specifically, the BoE is interested in knowing who would have taken responsibility for the failure. Obviously, as per the BoE, the investors (ETH crypto token holders) would have borne the loss.
The central bank also pointed out that the UK intends to hand over some of the major responsibilities to third parties, including cloud hosting enterprises.
Basel Committee Releases Final Rules for Digital Assets
The Basel Committee for Banking Supervision released the last version of the rules for digital assets to be enforced by January 1, 2025. The rules, drafted after two rounds of negotiations, detail the capital needs for risk exposures associated with digital securities, stablecoins, and cryptos. The second version of the rules, relatively stricter than the first, received total backing from the banking sector. The latest rules, although strict, have been relaxed in key areas.
The notable features of the rules are:
- Unhedged crypto exposures continue to have a risk weighting of 1,250%, meaning that one dollar of capital must be put aside per each dollar of exposure.
- The weighting for high risk is not applicable to assets kept in custody. If this scenario is maintained, banks would not have been able to provide crypto custodial service on a large scale.
- Basel has previously recommended a 2.5% infrastructure risk premium for digital assets and stablecoins. This has been cleared automatically. Nevertheless, it may be enforced on a bank if a framework risk is identified.
- Earlier, Basel suggested including an infrastructure risk addition of 2.50% for digital securities and stablecoins. This was relinquished by default. Nevertheless, it can be enforced on a bank if there is an observed infrastructure risk.
- Cryptocurrency risks are still restricted to 1% of Tier 1 capital, although hedging restrictions have been significantly loosened. The 1% threshold may be surpassed, but not beyond 2%.
- The criteria for evaluating stablecoins with minimal risk have been modified. It is currently a mix of redemption hazard and regulatory oversight but is subject to change.
Private sector initiatives
Boston Federal Reserve and MIT Complete CBDC Research Initiative
The Boston Federal Reserve has completed Project Hamilton, a central bank digital currency (CBDC) research initiative, in collaboration with the Massachusetts Institute of Technology (MIT). The Boston Federal Reserve intends to disclose additional information on the technical feasibility trial in the months ahead. The initial report was released in February. As per the US Treasury, the US will likely take a few years before deciding on the subject of issuing a digital dollar.
Boston Fed EVP Jim Cunha opined that “Project Hamilton has taken crucial initial steps for an in-depth understanding of how money might work in a better manner for everyone.”
Project Hamilton was created on the experience gained from the MIT Media Lab Digital Currency Initiative (DCI) and therefore avoided creating a blockchain solution for a retail digital dollar because of execution speed issues. Nevertheless, it borrowed certain concepts, including Bitcoin’s unspent transaction output (UTXO) design, which in certain ways mirrors physical cash. MIT is also centered on privacy.
The open source code, referred to as openCBDC, was disclosed for any other interest parties to capitalize. With respect to scalability, it backs 1.84 million trades per second and transactions are completed in less than a second.
Further functionality, including programmability and audit abilities, were integrated since February and will be an aspect of the reports to be released in the months ahead.
MIT has many more central bank partnerships, including with the Bank of England and the Bank of Canada.
Diesel and HAPE Release NFT Series
Popular Italy-based fashion label Diesel has joined hands with blockchain firm HAPE to release a distinct non-fungible token (NFT) series. Glenn Martens, creative director of Diesel, and Digimental, Hape’s designer, will jointly design the NFTs, which are supposed to offer investors both physical and digital value.
Every unique digital collectible will compose of a limited number of 1 DR POD cross-body bag, and also access to select events and other community rewards.
Notably, Diesel started its web3 journey by establishing a fresh unit, Brave Virtual Xperience (BVX) to sketch products and experiences for games and the metaverse, for instance, NFTs. Last year, Diesel unveiled D:VERSE, an NFT platform focused on physical and digital wearables, in addition to a digital community on Discord.
Similarly, HAPE Prime’s initial airdrop of 8,192 NFTs on the Ethereum blockchain includes 3D ape avatars. The blockchain firm produces digital fashion models in the metaverse with replaceable clothes and accessories that brands can utilize to display their collections.
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