The United States, a global economic titan, seems to be treading water in the vast ocean of cryptocurrency regulations. Despite the tumultuous year for the crypto industry, marked by scam incidents, company collapses, and layoffs, it’s far from its end. However, the narrative that the US government could potentially obliterate the crypto industry persists, fueled by the media and public opinion. This narrative is not only misleading but also detrimental to the progress of blockchain technology in the country.
The Misconception: Crypto’s Apocalypse
The crypto industry’s recent turmoil has been largely attributed to its own failures. Major industry players had initially pledged self-regulation, but the actions of a handful of bad actors over the past year have extinguished any possibility of such a system. The remaining legitimate crypto companies, despite their resilience and continued operation, are often viewed with skepticism and doubt, likened to the living dead of the digital asset sector.
The Reality: Crypto’s Potential
Contrary to these bleak portrayals, the crypto industry is not dead nor dying. It’s merely undergoing a metamorphosis, navigating through the growing pains associated with any revolutionary technology. The potential of blockchain technology is vast, and it’s beginning to permeate various aspects of the global financial system.
Crypto is more than just a new form of currency; it’s a foundational layer for future global commerce, banking, communication, and individual ownership. This is reflected in its widespread adoption, with hundreds of millions of people worldwide using crypto for various purposes and believing in its potential.
The Regulatory Challenge: SEC’s Approach
The Securities and Exchange Commission (SEC) has been heavily criticized for its aggressive approach to crypto regulations. The SEC’s actions, heavily influenced by public opinion rather than a comprehensive understanding of blockchain technology, have been seen as overreaching and heavy-handed, stifling innovation rather than fostering it.
Despite the high stakes, with crypto becoming increasingly integrated into the global financial system, the SEC’s approach remains largely unchanged. This regulatory approach not only undermines the potential of blockchain technology but also puts the US at a disadvantage globally.
The Global Perspective: Crypto Regulations Elsewhere
Other economic powerhouses, such as the EU, UK, Japan, Singapore, UAE, and even China, have introduced or are in the process of introducing comprehensive regulatory frameworks for crypto. The absence of the US from this list is conspicuous, highlighting the country’s lag in addressing this frontier technology at a federal level.
As a result, the crypto industry is rapidly shifting offshore. According to a recent report by Electric Capital, the US’s share of the world’s open source blockchain developers dropped from 42% in 2018 to 29% in 2022.
The Implications: Economic and Technological Consequences
The lack of a fully regulated financial market for crypto in the US contradicts the global economic interdependence observed in other major economies. The risk of losing crypto to other world powers is severe. Imagine if tech giants like Google or Twitter had been founded in a country like China. The internet, as we know it today, would look drastically different.
The Solution: A Path Forward
Despite the slow progress at the federal level, there are promising signs that a clear regulatory framework is on the horizon. A recent draft bill provides a pathway for digital assets that start as securities to eventually be regulated as commodities.
The proposed framework would allow tokens offered as part of an investment contract to remain under the SEC’s purview, while those qualifying as commodities would fall under the jurisdiction of the Commodity Futures Trading Commission (CFTC). There are also ongoing discussions about the classification of an asset as a commodity if it belongs to a decentralized blockchain network.
The Recommendations: Shaping the Future of Crypto
As the US navigates its way towards a comprehensive regulatory framework for crypto, several key considerations come to the fore.
The US government should actively invest in blockchain R&D. The country has a track record of incubating world-changing technology, and this should be no different.
Policymakers should familiarize themselves with the technology. Understanding the fundamentals of the technology they’re regulating is crucial. Other governments, including the European Commission, are already doing this.
The US government should establish a sandbox to experiment with compliant and mutually beneficial ways to engage with the private sector and the technology itself.
Conclusion: The Inevitability of Crypto’s Survival
Predicting the demise of crypto is a misguided narrative. The US, with its history of embracing and regulating frontier technologies, will undoubtedly adapt to the rise of crypto. The industry will only strengthen as meaningful regulations replace the current strong-arm enforcements. The future of crypto in the US is not a question of ‘if’ but ‘when.’
THE WORLD’S FIRST-EVER NFT AUCTION OF AUTOMOTIVE ART WILL BE HELD BY RICK ROSS IN CRYPTOCURRENCY
With the release of his history-making debut, Rick Ross is the latest hip-hop star to make a splash in the cryptocurrency market.
In a report from Forbes, the music mogul and producer duo Cool & Dre teamed up with Porsche 911 art car designer Rich B. Caliente to create an NFT.
As Rick Ross wrote in an email, “Painting with the can as art is both a way to express the culture and to do something new and creative.”
In sum, Caliente stated, “We had a lot of synergy and energy while doing this project.” A tangible asset is created when all of our relationships and passions are brought together.
Slashdot, a management consulting firm affiliated with the NFT, helped launch the Bitcoin collaboration. In contrast to most NFTs, the Porsche auction also included ownership of the art and the purchase of the car.
Forbes reports that Producer Dre from Cool & Dre said that NFTs will prosper in the music space. Being able to keep our creations is satisfying and exciting.
Based upon the Metaverse and 3D animation the Porsche 911 NFT was built upon, Slashdot co-founder Brad Flaherty described the Porsche 911 NFT as a virtual reality creation that will “come to life inside of a digital world.”
A portion of the proceeds from the NFT auction, reported by Reuters last Friday (June 4), went to the South Florida-based Irie Foundation. Up until June 14, blockchain cryptocurrency, Ethereum, will be accepted as payment for the NFT.
With the market getting bigger and bigger, music-cryptocolumbia collaborations represent a huge opportunity. In addition to the NFT space, hip-hop artists such as Waka Flocka have also gotten involved as a way to return money and ownership back to creatives.
Among the musicians who have entered cryptocurrency and NFT are Lil Yachty, Akon, Quincy Jones, and many others.
This article was penned by Jonathan P. Wright. Jonathan is a freelance writer for multiple mainstream publications and CVO of RADIOPUSHERS. You can read more of his work by clicking here.
Image Credit: Photo by Benjamin Suter on Unsplash
Chris Lehane, the Chief Strategy Officer at Haun Ventures, Lehane has built a formidable reputation, both as a prolific investor and a shrewd strategist in the business world.
An Insightful Journey
Before being a part of Haun Ventures, Lehane had an illustrious career in various high-profile roles. His journey includes being an executive at Airbnb and co-founding a strategic consultancy firm, Fabiani & Lehane. His firm has an impressive clientele, spanning political figures, corporate giants, technology firms, entertainment industry, and professional sports personalities.
Lehane’s experience isn’t limited to the corporate world. He has served in government roles, notably as the press secretary to Vice President Al Gore and special assistant counsel to President Bill Clinton in the 1990s.
Embracing the Crypto World at Haun Ventures
Lehane’s career took an exciting turn when he entered the world of crypto at Haun Ventures, a venture capital firm primarily focusing on the web3 world. At Haun, he uses his expertise to help shape the firm’s investment strategy and growth.
In addition to his role at Haun, Lehane is also a member of Coinbase‘s Global Advisory Council. Coinbase is globally recognized as the second-largest crypto exchange, and Lehane’s association with it only amplifies his stature in the crypto world.
Investment Strategy: A Deep Dive
Haun Ventures operates with two investment vehicles – a $500 million early-stage fund and a $1 billion acceleration fund. The firm invests across sectors, identifying the most innovative areas and deploying capital strategically.
Their approach to investing, especially in a bear market scenario, is a topic of interest for many. Lehane’s insights into the firm’s investment strategy and how he advises Coinbase are eagerly anticipated by the tech and business community.
Image Credit: Photo by Giorgio Trovato on Unsplash
In the vast crypto landscape, Kotani, a Nairobi-based startup, stands out with its ambitious vision to simplify cross-border payments for Africa’s enormous underbanked population. This two-year-old startup is specifically focusing on a use case that directly affects the lives of hundreds of millions of individuals in countries like Kenya, Ghana, Zambia, and South Africa.
Securing $2M Pre-Seed Funding
Kotani recently announced the completion of a successful $2 million pre-seed funding round. The funding was led by P1 Ventures, with significant contributions from other prominent investors, including DCG/Luno and Flori Ventures. This financial boost is poised to propel Kotani’s mission to promote financial inclusion through the use of cryptocurrency.
Aiming for Expansion
With this newfound capital, Kotani plans to amplify its operations and extend its reach to other African nations. The countries in sight for expansion include Rwanda, Senegal, Ivory Coast, Tanzania, and Nigeria.
Remittances: The Lifeline of Sub-Saharan Africa
Remittances to the Sub-Saharan region are estimated to reach $55 billion this year, according to the World Bank. In certain African countries, remittances make up as much as 20% of the GDP, as reported by the United Nations. Despite playing a critical role in the African economy, remittances are plagued by high transfer fees.
High Transfer Fees: The Insurmountable Challenge
In some nations, transfer fees can gobble up to 20% of the transferred amount. The reasons for these exorbitant costs are multifaceted, ranging from a poorly developed banking system, lack of information, and currency volatility. Kotani aims to overcome these challenges by leveraging blockchain technology to facilitate remittances to Africa.
Stablecoins: The Solution for Remittances
Specifically, Kotani is utilizing stablecoins, a type of cryptocurrency pegged to fiat currencies like the USD. The startup’s goal is to enable the transfer of money across borders using stablecoins, thus significantly reducing the cost of remittances.
Integrating with Local Payment Networks
To allow users to cash out their stablecoins and make payments in local currencies, Kotani has developed a middleware that connects blockchains to local payment networks. This system works with networks that enable users to send money on feature phones without internet connectivity, using a protocol known as Unstructured Supplementary Service Data (USSD).
B2B Solutions and Partnerships
Kotani offers its technology as a B2B solution, connecting crypto platforms’ smart contracts on one end and mobile money APIs on the other. Some of its major crypto partners include Yellowcard, DCG, Fonbank, Celo’s Valora, Mercy Corps, UNICEF Crypto Innovation Fund, and Stellar.
On-Ramping: Converting Local Currencies
In addition to cross-border remittances, Kotani also enables users to “on-ramp,” i.e., convert their local currencies into USD. This service is primarily offered to businesses but could potentially be extended to retail users in the future.
Image Credit: Photo by Per Lööv on Unsplash
Teamshares: A Novel Approach to Business
First on our list is an intriguing venture by Teamshares. This startup has been attracting a substantial amount of capital and has embarked on an ambitious mission of acquiring numerous small and medium-sized businesses (SMBs). However, this is merely the tip of the iceberg. Teamshares also plans to offer its employees the opportunity to earn stock through prolonged service, while simultaneously providing centralized fintech services to all its subsidiary companies. This novel business model has ignited much discussion in the startup community.
MoonPay: Stepping into the Venture Game
Next, we turn our attention to MoonPay, a crypto payment infrastructure company that is venturing into the world of investments. MoonPay is setting its sights particularly on crypto, gaming, and fintech. The confluence of these three sectors invariably leads to crypto games. We are keenly observing MoonPay’s investment decisions, as new funds that are crypto-themed or crypto-adjacent are becoming increasingly scarce. Therefore, MoonPay’s entry into the market is indeed exciting news.
Rent Butter and Kiki: Revitalizing Renting
With the zero interest rate era drawing to a close and the experimental phase of building new iBuying and mortgage service startups partially concluded, renting is back in vogue. Consequently, startups that focus on rentals are also gaining traction. Two such startups are Rent Butter and Kiki, both of which are making waves in the rental market.
The Elusive Tech IPOs
The long-awaited tech IPOs have been more elusive than anticipated. Using data from Crunchbase, we have noted the extended wait for authentic tech IPOs. The good news, however, is that they are gradually making a comeback.
Lean Startup Ideology Meets AI
Lastly, we explore what happens when the lean startup ideology infiltrates the realm of Artificial Intelligence (AI). As it turns out, this combination leads to an abundance of experiments.
And with that, our roundup of this week’s most significant startup and tech news concludes. Please note that due to an American holiday, our next episode of Equity will be broadcasted on Tuesday instead of Monday. Until then, keep innovating and stay tuned!