DigitalAssetEconomics
293 views
3 Posts
Hot
Latest
SEC softens stance around SAB-121: Galaxy Research #SECCryptoRegulation
In May, United States congressional lawmakers voted to repeal Staff Accounting Bulletin-121 in a 228-182 bipartisan vote.
During a speech on Sept. 9, Paul Munter, chief accountant for the United States Securities and Exchange Commission, appeared to backpedal on the SECâs Staff Accounting Bulletin-121 (SAB-121) measures limiting banks from providing digital asset custody services to clients.
According to an analysis from Galaxy head of research Alex Thorn, Munter provided exemption criteria that would allow bank holding companies and introducing brokers to circumvent the custody provisions laid out in SAB-121.
Banks can avoid the SAB-121 reporting requirements if they receive written permission from state regulators, custody client assets in a âbankruptcy remoteâ manner, outline clear standards in contracts, and conduct regular risk assessments.
Introducing brokers can also exempt themselves from the SAB-121 requirements by meeting three criteria.
The brokers cannot possess client private keys, cannot be third parties in the transaction, and cannot be agents of the introducing broker. Lastly, the introducing broker must obtain a legal opinion attesting to its status as an exempt introducing broker of digital assets.
#DigitalAssetEconomics
Thorn explained that these exemptions would âcarve out a giant portionâ of entities initially subject to the reporting requirements introduced by SAB-121. However, large national banks â which are under the control of the Office of the Comptroller of the Currency (OCC) â likely wonât be able to qualify under the SAB-121 exemptions and likely still have to appeal directly to the SEC if they want relief.
Despite these limitations for large, nationally-chartered banks, the Galaxy head of research ultimately concluded that the easing of the SAB-121 provisions was a positive development for the crypto industry and the adoption of digital assets.
In May, United States congressional lawmakers voted to repeal Staff Accounting Bulletin-121 in a 228-182 bipartisan vote.
During a speech on Sept. 9, Paul Munter, chief accountant for the United States Securities and Exchange Commission, appeared to backpedal on the SECâs Staff Accounting Bulletin-121 (SAB-121) measures limiting banks from providing digital asset custody services to clients.
According to an analysis from Galaxy head of research Alex Thorn, Munter provided exemption criteria that would allow bank holding companies and introducing brokers to circumvent the custody provisions laid out in SAB-121.
Banks can avoid the SAB-121 reporting requirements if they receive written permission from state regulators, custody client assets in a âbankruptcy remoteâ manner, outline clear standards in contracts, and conduct regular risk assessments.
Introducing brokers can also exempt themselves from the SAB-121 requirements by meeting three criteria.
The brokers cannot possess client private keys, cannot be third parties in the transaction, and cannot be agents of the introducing broker. Lastly, the introducing broker must obtain a legal opinion attesting to its status as an exempt introducing broker of digital assets.
#DigitalAssetEconomics
Thorn explained that these exemptions would âcarve out a giant portionâ of entities initially subject to the reporting requirements introduced by SAB-121. However, large national banks â which are under the control of the Office of the Comptroller of the Currency (OCC) â likely wonât be able to qualify under the SAB-121 exemptions and likely still have to appeal directly to the SEC if they want relief.
Despite these limitations for large, nationally-chartered banks, the Galaxy head of research ultimately concluded that the easing of the SAB-121 provisions was a positive development for the crypto industry and the adoption of digital assets.
The Bitcoin Halving: A Predetermined Scarcity Event Reshaping the Cryptocurrency Landscape
On April 19, 2024, the Bitcoin network underwent its fourth halving, a meticulously programmed protocol update that bisects the block reward for miners. This preordained scarcity mechanism, a fundamental tenet within Bitcoin's design, has profound implications for the cryptocurrency's future trajectory.
Understanding the Halving Mechanism
Satoshi Nakamoto, the pseudonymous creator of Bitcoin, established a finite supply of 21 million bitcoins. To gradually release these coins into circulation, the protocol incentivizes miners to verify transactions on the blockchain with a block reward. The halving, occurring roughly every four years (or 210,000 blocks), reduces the rate at which new bitcoins are introduced into the market.
Impact of the Halving on Bitcoin
The primary effect of the halving is a constriction in the supply of new bitcoins. This scarcity event can potentially trigger several consequences:
Enhanced Scarcity: With a diminished influx of new coins, existing bitcoins become scarcer, potentially driving up their price if demand remains constant or increases. This aligns with established economic principles of supply and demand.
Shifting Miner Landscape: The halved block reward may incentivize miners to optimize their operations for greater efficiency or explore alternative revenue streams, potentially leading to a consolidation phase within the mining industry.
Psychological Influence: The halving is often viewed as a bullish signal for Bitcoin, attracting new investors and bolstering overall market sentiment. This positive perception can be a self-fulfilling prophecy, influencing market behavior.
Historical Context and Future Considerations
Bitcoin has experienced three previous halving events, each followed by a significant price increase, although not always immediate. However, the cryptocurrency market is inherently intricate, and various factors can influence the halving's impact.
Looking Ahead
The Bitcoin halving is a cornerstone event that reshapes the future trajectory of the cryptocurrency. With a reduced supply and the potential for increased demand, the coming years will be critical for Bitcoin's continued development and its broader influence on the financial and technological landscape.
#BitcoinHalving #CryptocurrencyScarcity #DigitalAssetEconomics #BlockchainTechnology #ProgrammedMonetaryPolicy
Understanding the Halving Mechanism
Satoshi Nakamoto, the pseudonymous creator of Bitcoin, established a finite supply of 21 million bitcoins. To gradually release these coins into circulation, the protocol incentivizes miners to verify transactions on the blockchain with a block reward. The halving, occurring roughly every four years (or 210,000 blocks), reduces the rate at which new bitcoins are introduced into the market.
Impact of the Halving on Bitcoin
The primary effect of the halving is a constriction in the supply of new bitcoins. This scarcity event can potentially trigger several consequences:
Enhanced Scarcity: With a diminished influx of new coins, existing bitcoins become scarcer, potentially driving up their price if demand remains constant or increases. This aligns with established economic principles of supply and demand.
Shifting Miner Landscape: The halved block reward may incentivize miners to optimize their operations for greater efficiency or explore alternative revenue streams, potentially leading to a consolidation phase within the mining industry.
Psychological Influence: The halving is often viewed as a bullish signal for Bitcoin, attracting new investors and bolstering overall market sentiment. This positive perception can be a self-fulfilling prophecy, influencing market behavior.
Historical Context and Future Considerations
Bitcoin has experienced three previous halving events, each followed by a significant price increase, although not always immediate. However, the cryptocurrency market is inherently intricate, and various factors can influence the halving's impact.
Looking Ahead
The Bitcoin halving is a cornerstone event that reshapes the future trajectory of the cryptocurrency. With a reduced supply and the potential for increased demand, the coming years will be critical for Bitcoin's continued development and its broader influence on the financial and technological landscape.
#BitcoinHalving #CryptocurrencyScarcity #DigitalAssetEconomics #BlockchainTechnology #ProgrammedMonetaryPolicy