Here are some of the major developments from the world of crypto over the past few days.
Grayscale, a company dealing with digital assets, has applied again for a Bitcoin ETF (Exchange-Traded Fund) from the U.S. government's securities regulator. This move coincided with the CEO of Grayscale's parent company, Barry Silbert, announcing his departure from Grayscale's board. Some believe Silbert leaving might improve the chances of the Bitcoin ETF getting approval from the Securities and Exchange Commission (SEC).
There's speculation that Silbert left to enhance the ETF's approval odds, given the ongoing SEC investigation into him and Digital Currency Group. The official announcement of Silbert's departure came on December 26, with Mark Shifke, DCG's chief financial officer, succeeding him as the chairman of the board at Grayscale.
Apart from Silbert leaving, a significant change in Grayscale's approach is shifting to a "cash creation" model for the ETF, differing from the typical "in-kind" model used by most funds. This change is crucial, considering the SEC's caution regarding direct dealings with Bitcoin. Critics, like Scott Johnsson from VB Capital, express concerns about the SEC's preference for the cash creation model, suggesting it might pose greater risks for investors seeking exposure to Bitcoin through an ETF.
A new way of trading special tokens across different computer systems has been introduced by a protocol called 20Exchange (20EX). This happened as a result of Bitcoin starting a new system with blockchain, and it got even more advanced when the Ethereum network and smart contracts came into play. After dealing with meme tokens, non-fungible tokens (NFTs), and Web3 gaming, the crypto community has now turned its attention to something called inscriptions.
Inscriptions are unique pieces of information tucked inside transactions on blockchains. The popular ones are ORDI and BRC-20 tokens. This concept began with Bitcoin ordinals, a clever method to use Bitcoin’s blockchain for creating unique digital assets. ORDI tokens use the Bitcoin blockchain, attaching special identifiers ('ordinals') to tiny units of Bitcoin called satoshis. BRC20 tokens, on the other hand, are a type of inscription token used on the BNB Smart Chain (BSC). The world of inscriptions expanded significantly when the crypto community realized they could apply similar methods to other blockchain networks, like Ethereum. This led to the need for a platform, and that's where 20EX comes in, to help people trade inscription tokens across different blockchains. They aim to make this process simpler and more user-friendly.
Hong Kong is contemplating regulations for stablecoins, a form of digital currency tied to traditional currencies like dollars or euros, with the aim of ensuring safe and responsible practices in the digital financial landscape. According to CoinTelegraph, outlined in a consultation paper, Hong Kong proposed that companies issuing stablecoins might need a special license. This license would entail certain conditions, including sufficient financial backing for the stablecoins, secure handling of the backing funds, and regular public reporting. Notably, algorithmic stablecoins may not be allowed. These potential regulations, as reported by CoinTelegraph, are seen as an effort to mitigate risks associated with stablecoin use in Hong Kong's financial system. The plan is open for discussion until February 29, 2024, with potential approval offering a means to manage risks linked to stablecoin usage in the local financial system.