Riding The Wave News Summary #35
IMF’s DeFi Governance Recommendations Include These Two Steps, IMF Warns Russia Could Use Bitcoin Mining to Evade Sanctions, & more
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Table of Contents
Tweets
IMF’s DeFi Governance Recommendations Include These Two Steps
IMF Warns Russia Could Use Bitcoin Mining to Evade Sanctions
Making Bitcoin legal tender in Mexico will be ‘an uphill battle,’ says Ricardo Salinas
Ex-Chinese Central Bank Chief Says Digital Yuan Not Intended for International Trade
Deadfellaz Ethereum NFT Collection Lands Exclusive Deal with UTA
Tweets
IMF’s DeFi Governance Recommendations Include These Two Steps
The International Monetary Fund (IMF) has proposed a series of measures aimed at regulating the decentralized finance (DeFi) sector.
In the document, the report’s authors recommended that “as a first step,” regulation should focus on “some elements of the crypto ecosystem that have enabled the development of DeFi” – namely stablecoin issuers, centralized crypto exchanges, and hosted wallet service providers.
the authors also outlined a “second step” in regulatory policy that would involve national authorities “directly” regulating what they called “key functions within DeFi.”
Such “measures,” the authors explained “could include” a “public-private collaboration on code regulation” through “either ex-ante guidelines on operational and risk parameters or ex-post code reviews and audits that can identify areas vulnerable to risk and help deliver policy objectives.”
There is a large focus within crypto on stablecoins as they are forming into an effective bridge to turn initially non-crypto owners into crypto owners. Crypto critics as well as supporters have noticed this so you can expect a lot of discussions on how laws should be approached and crypto, in general, to focus on this.
Regulations on defi would be challenging to implement due to how varied the space currently is, there are large coins & tokens that provide defi services, and then there are also DAOs formed without a project beyond investing.
IMF Warns Russia Could Use Bitcoin Mining to Evade Sanctions
The International Monetary Fund has said Russia could evade economic sanctions levied in the wake of its invasion of Ukraine by pivoting to cryptocurrency mining.
The report specifically warns that Russia could martial its vast energy resources to power crypto mining and generate revenue.
“Over time, sanctioned countries could also allocate more resources toward evading sanctions through mining. Mining for energy-intensive blockchains like Bitcoin can allow countries to monetize energy resources, some of which cannot be exported due to sanctions,” the IMF said.
President Vladimir Putin previously has said Russia has a “competitive advantage” when it comes to Bitcoin mining. According to Cambridge University, Russia is one of the leading jurisdictions in the world when it comes to Bitcoin mining, ranking third in a study published last year.
It's important to note that while it's unlikely cryptocurrencies could enable Russia—as a nation state—to entirely blunt the force of international sanctions, specific sanctioned entities could pivot to crypto to provide revenue.
Other than mining, other methods could—and have—been used in the past. One such example is ransomware, an industry which lined the pockets of Russian-affiliated actors more so than any other group last year.
A great example of this playing out is North Korea recently stealing funds from Axie with other countries having limited options to respond due to them North Korea also being a country.
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