Daily Crypto, Finance and Tech News Summary – May 16, 2023

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Ethereum’s “Dencun” Upgrade—The Long Road to Scale

Ethereum’s journey to achieve scalability faces another milestone with the forthcoming Dencun upgrade, set to be launched in late 2023. The upgrade aims to tackle the system’s next notch of scalability, efficiency and security concerns within the Ethereum network through the introduction of “Cancun” and “Deneb” components. These developments, encompassing Ethereum Improvement Proposals (EIPs) 4844, 6780, 6475, and 1153, target expanding data capacity and reducing layer-2 rollup fees.

While these improvements signify Ethereum’s dedication to enhancing scalability, challenges such as increased disk space requirements and data verification issues remain. “Developers caution that there could be potential drawbacks or unforeseen consequences. For instance, the implementation of larger blocks could lead to increased disk space requirements, potentially leading to issues for nodes with limited storage capacity. Moreover, high levels of historical data storage could lead to data availability verification issues and forgetfulness.” Read more here.

In contrast, the Splitchain network, an alternative network to traditional blockchains, offers a different approach to addressing scalability concerns, that we’ll have more details about in coming newsletters. By prioritising layer one scalability and avoiding reliance on layer two stop-gap scaling measures, Zucoins’ Splitchain network is both a simpler and a more efficient system than current major blockchains. This unique design, focused on scalability and user-friendliness, positions the Splitchain network as a strong choice for users seeking a scalable system and a future-proof decentralised platform to build upon.

US Gov SEC Commissioner Highlights US Risk of Falling Behind in Crypto Regulation

US Securities and Exchange Commission (SEC) Commissioner Hester Peirce has issued a warning suggesting that the US is at risk of falling behind the EU and UK in developing clear cryptocurrency regulations. As reported by the Financial Times, Peirce believes the regulatory frameworks established by Brussels and London could serve as models for US legislators.

Peirce criticises the US for not adopting the UK and EU’s approach of applying traditional finance rules to the cryptocurrency industry. She cites the EU’s Markets in Crypto Assets Regulation (MiCA) as a potential model for the US. MiCA, which governs the issuance and provision of services involving crypto assets and stablecoins, is expected to be implemented next year.

The Commissioner argues that the US’s current approach of cracking down on major cryptocurrency companies, such as Coinbase, rather than establishing transparent guidelines, is encouraging these firms to relocate to jurisdictions with consistent rules. She suggests that establishing a robust regulatory regime in the US would attract companies to operate within its jurisdiction. Read more here.

As we’ve regularly covered this fast evolving topic, the US risks being left behind in this fast growing industry due to their indecision in the crypto space. Regions like the UK, Europe, Hong Kong, Dubai and others are expanding official Government support for cryptos. Meanwhile US government regulators are struggling to set clear rules. What’s more, when this US regulator has set a handful of recommendations for crypto companies to follow, they have reportedly avoided responding to requests from crypto companies that attempt these proper processes.

Coinbase Exchange Forms US High-Profile Regulatory Advisory Council To Sort Out US Crypto Landscape

Leading on from the above article, Coinbase, the popular crypto exchange, has established a Global Advisory Council, consisting of three former US lawmakers. This inaugural council comprises ex-senator Patrick Toomey, and former democratic representatives Tim Ryan and Sean Patrick Maloney.

The creation of this council marks a significant move in managing emerging regulatory challenges both domestically, in the US that will no doubt trickle through globally. This is part of Coinbase’s ongoing efforts to build a more positive rapport with US regulators and to encourage the integration of crypto and blockchain technologies into the US economic framework. This initiative mirrors a similar move by Binance, another popular cryptocurrency exchange, which formed an advisory board in September 2022.

Coinbase’s new council is expected to work closely with an existing advisory board that includes influential individuals like Jay Clayton, a former SEC Chair and Courtney Elwood, a former General Counsel for the CIA. This move follows Coinbase’s recent announcement of international expansion, starting with Bermuda and comes amid allegations of securities violations by the SEC. Read more here.

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