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Crypto Payment Rails and Regulatory Clarity
As Nathaniel Hawthorne wrote in the 19th century, “Families are always rising and falling in America.”
And the same goes for cryptocurrency and the Web3 space in 2024.
That’s because, whether it’s the industry’s market valuation, or the education and acceptance around Web3 technologies, or even the promised land of scalable usability, the journey from a move away from cryptography to a potential adoption of blockchain-based solutions has had its good part of the ups and downs in the decade and a half since bitcoin first burst onto the scene in 2009.
But while awareness, acceptance and adoption are crucial to driving the evolution of cryptocurrencies, two other critical factors will determine the success of cryptocurrencies: their usability and their usefulness – particularly in payment ecosystems.
Underlying these two factors, of course, is the elephant in the room of establishing a productive regulatory framework to govern Web3.
This, as last week brought with it a basket of news showing that the ice around crypto’s regulatory and usability issues was potentially melting. That’s why, from legal action to fundraising to payments use cases and more, these are the top stories from the Web3 landscape that PYMNTS has been tracking over the past week.
Read more: Understanding the State of Crypto in 2024
The digital asset sector heads to Washington
The crypto community is playing politics to win, with the 440,000-member nonprofit group Stick with Crypto reportedly forming a political action committee (PAC) to support candidates who are cryptocurrency friendly and blockchain.
The new PAC aims to raise money from Stand With Crypto’s nearly half-million members and comes amid a backdrop where the crypto sector super PACs have become one of the top three fundraisers in the 2024 election cycle.
The crypto industry is hoping that a friendlier and more educated group of lawmakers can finally pass a regulatory framework for cryptocurrencies.
And on Friday (May 10), that goal moved one step closer to the finish line, as a bill promises regulatory clarity for digital assets has moved one step closer to a vote in the US House.
O House Rules Committee said Friday that it will consider the Financial Innovation and Technology Law for the 21st Century (FIT21) (HR 4763), which means that the project could go to a plenary vote at the end of May, which House Financial Services Committee he said.
FIT21 would outline when a cryptocurrency it is a commodity or security and allocates oversight appropriately between the CFTC and the SEC.
But that wasn’t the only legal news on Web3 this week. As stablecoin issuer prepares to go public Circle is also reportedly planning to transfer its legal base from Ireland to the United States, as reported Wednesday (May 15).
While on Monday (May 13), US President Biden issued an order blocking a Chinese-backed cryptocurrency mining company to own land near an American nuclear missile base, citing the mining company’s proximity to the military base as a “national security risk.”
After all, encryption has its dangers. North Korea laundered US$147.5 million through virtual currency platform Tornado Cash in March after stealing it last year from a cryptocurrency exchange, according to a report on Tuesday (May 14).
Pulse Check on Crypto Marketplace
“It is important to know that encryption is not just bitcoin and Doge and NFTs”, Sheraz Sherehead of payments Solana Foundation, PYMNTS said on Monday. “…Blockchains are truly alternative paths to payments and financial assets.”
“There are a lot of misconceptions among people in the financial services industry about compliance and regulation, and that they wouldn’t want to touch blockchain with a 10-foot pole,” Shere added. “And I think in the past that may have been true, but now there is a whole new set of protocol-level controls that provide even finer-grained control than you typically have with traditional financial rails.”
In the conversation with PYMNTS, he emphasized the need for crypto players and businesses to focus on real-world use cases, such as cross-border payments, where blockchain solutions offer advantages over traditional systems.
Another blockchain use case being experimented with is using its immutable ledger to record and store digital identities. Humanity Protocol, a startup that aims to verify people’s online identities using palm scanning, has raised $30 million at a $1 billion valuation, according to a Wednesday. report.
Still, for the average retail investor, the recent rise in bitcoin prices has caused crypto wallet recovery companies’ phones to “ring off the hook,” according to one Thursday. reportas investors locked out of their Web3 wallets attempt to regain access and capture the market surge.
The market surge is resulting in a wave of new coins as there were nearly 1 million new crypto tokens created in the last month, a number that is 2x the total number ever made on Ethereum from 2015-2023.
AND PIMNOS wrote in March about how representatives of fraudulent companies that claim to provide cryptocurrency tracking and promise the ability to recover lost funds are turning to social media and other messaging platforms to contact victims directly about resolving their lost assets.
These recovery scam fraudsters charge an initial fee and cease communication with the victim after receiving an initial deposit, or produce an incomplete or inaccurate tracking report and request additional fees to recover funds. Fraudsters may claim affiliation with law enforcement or legal services to appear legitimate.
See more at: Blockchain, China, circle, Congress, cryptographic regulation, cryptocurrency, cryptocurrency mining, House Financial Services Committee, News, PYMNTS News, regulations, Stick with Crypto, This week on Web3, Web3