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Australian Senate Report Recommends Crypto-Friendly Regulations

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The Australian Senate Committee has suggested that the country should create a robust and friendlier regulatory framework for the crypto industry.

Following the growing interest in cryptocurrencies globally, the Senate’s Committee on Australia as a Technology and Financial Center has recommended that the country should establish favorable digital asset regulations to promote the development of the industry.

Fostering Crypto Growth

The committee said in a report published by Reuters today that the proposed laws should focus on issuing tax discounts for crypto trading and establishing a licensing regime for exchanges, among others.

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According to the recommendations contained in the paper, the new regulations should provide clarity on how various digital currencies should be categorized to identify the relevant rules applicable to them.

The proposed regulatory clarity will also guide banks’ decisions when considering de-banking cryptocurrency clients because the indiscriminate closure of crypto investors’ accounts has hindered the growth of the industry.

Furthermore, an effective crypto taxation rule should be added to the regulation to enable traders to pay taxes on trading the asset class when they record clearly definable capital gain.

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With appropriate digital asset regulations in place, Senator Andrew Bragg, the head of the committee, noted that Australian crypto traders will have more control of their financial destiny instead of endlessly depending on unnecessary intermediaries.

Bragg added that the recommended comprehensive crypto framework will enable Australia to compete with the United Kingdom, Singapore, and the U.S.

Australian Regulator Advocates for Cryptos

Earlier this year, Australia’s Finance Minister Jane Hume urged the government to allow new investors to gain exposure to cryptocurrencies by not imposing tighter regulations.

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According to Hume, implementing a tighter legislative framework could hinder the growth of the industry, adding that the government needs to support citizens: “to be sensible enough to judge for themselves whether to put their hard-earned money into higher-risk assets.”

Irrespective of the risk associated with crypto investments that resulted in Australians losing $25 million to scammers in the first half of the year, Hume stated that the government should not stand in the way of investors looking to gain exposure to the asset class.

Increase in Australian Crypto Adoption

Australian cryptocurrency adoption has been impressive in 2021, with popular researcher finder.com.au reporting that a sixth of Australians now own cryptocurrencies valued at A$8 billion ($6 billion).

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The surge comes as several institutional investors continue to indicate interest in digital currencies and as many consider the asset class, especially Bitcoin (BTC), as a store of value.

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Whistleblower Edward Snowden Issues Crypto Gaming Warning, Highlights Potential ‘Unethical’ Practices

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Whistleblower Edward Snowden says that the use of non-fungible tokens (NFT) in crypto gaming comes with certain consequences.

In a new interview on Parachains, a Polkadot and Kusama-focused YouTube channel, Snowden says he is against the monetization of gaming platforms that use NFTs because they utilize a false sense of scarcity.

“We have people that are trying to sort of – maybe they’re not even trying to – but the ultimate result of what they’re doing is they are injecting an artificial sense of scarcity into a post-scarcity domain. I think that is actually an inherently anti-social urge here.”

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The former Central Intelligence Agency (CIA) employee says gamers who seek a virtual escape can potentially be put at a disadvantage from the NFT-based gaming business model. 

“If you think about the world that people are retreating from to their games, where they live in a cold bare box, if they’re lucky enough to even have a home in some overly expensive city where they spend all their time working, they get home exhausted. 

They make their cheap meal, and then they turn on their device to escape from all that and then in their digital world, where they’re on a beautiful island, they build a beautiful home, and they want to change the color of the wall, and you got to pay $19.99 for the wall or for a token to let you roll for the potential to maybe recolor your wall. There is something horrible and heinous and tragic in that to me.”

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Snowden’s comment comes following the exponential rise of gaming altcoins and the crypto-based metaverse. According to Snowden, the crypto sector is at risk of facilitating unethical practices. 

“I think the community should very much be trying to bend the arc of development away from injecting artificial unnecessary scarcity entirely for the benefit of some investor class into these post-scarcity domains.

One of the promises, one of the privileges of technology, is that it frees us from material limits that only exist in a material space. To try to reimpose material in immaterial space, I think is a little bit unethical.”

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Jack Dorsey’s Decision to Quit Twitter Is Not a Vote of Confidence in Future of Social Media

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When Jack Dorsey made the sudden public announcement that he had quit as CEO of Twitter, it was only ever going to have happened in one place – Twitter itself. It reminded me very much of Elon Musk’s entertaining tweet adventures, as Dorsey tossed his resignation letter onto the social media platform that he co-founded. You could imagine him sitting back to soak up the theatre of reaction and speculation that unfolded.

This isn’t Dorsey’s first resignation letter to Twitter – he was forced out of the CEO chair in 2008 only to return as executive chairman three years later – and no one can say for sure if it will be the last.

According to the email sent to Twitter staff in which he announced his latest resignation, he thinks the firm should “stand on its own, free of its founder’s influence or direction”. In the ensuing tweetstorm, after he then put the news on Twitter, he insisted it had been his decision. So what does it all add up to?

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Social media’s midlife crisis

Dorsey’s move was not entirely unexpected. For more than a year, he has been under intense pressure from activist investors to accelerate Twitter’s development and improve its financial performance.

Wall Street investors have criticised Dorsey’s outside interests, which include running payments giant Square, which he founded during his last Twitter exile, as well as pursuing futuristic projects centred around decentralizing (meaning removing traditional corporate control from) the internet and finance. Notably, Twitter’s share price shot up with the announcement, only to be pulled down with the rest of the market as it worries about the COVID omicron variant.

I sense a similarity here between Dorsey and other digital moguls such as Jeff Bezos and, once again, Musk. Like Dorsey, Bezos and Musk both run two companies in Amazon/Blue Origin and Tesla/SpaceX respectively, as well as seeking different forms of excitement and adventure, with Bezos’ efforts to reach space orbit and Musk sending a Tesla Roadster sports car into space. It all seems to signify mega-tech founders becoming dissatisfied with the monotonous management of their most famous companies and looking for something more.

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In the case of Twitter, there is also the social-media dimension. Platforms like Twitter, Facebook, and YouTube are increasingly burdened by political controversy and complex issues such as disinformation, privacy breaches, and hate speech. Twitter, for example, became the megaphone of choice for Donald Trump before later banning him, and is having to wrestle with hate speech as a global issue. It is sometimes said that these companies are facing a social media midlife crisis.

Cartoon of Donald Trump on a Twitter bird
Lest we forget. Anton Khodakovskiy

There are no simple solutions, so it makes sense that someone like Dorsey might get more thrilled by creating novel things than mending existing ones. It might make sense to hand over control of your empire to others and set off in quest of new horizons.

Dorsey’s reference to “founder ego” in his farewell message to Twitter and staff can only be interpreted as a poke at Mark Zuckerberg, who has shown no signs of relinquishing control over Facebook/Meta. On the contrary, he is looking to further develop the company’s influence by upgrading its operations to a more a virtual reality version of the internet known as the metaverse or 3Dweb.

When Facebook made its historic announcement in October that it was rebranding as Meta, Dorsey’s tweets hinted at his disapproval of Zuckerberg’s decision to stay on. Despite Dorsey insisting this week that he loves Twitter, I suspect he sees difficult times ahead for social media companies and even the concept of these “traditional” platforms.

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In my view, the days are gone when young developers wanted to work for Google, Facebook or Twitter. They now seem more interested in “flipping” NFTs (buying and selling these digital collectibles for a quick profit) and writing applications for the (non-Meta) metaverse. Meanwhile, regulators are increasing the heat on Silicon Valley’s old guard over their ethical standards around content and use of data. And if the metaverse is the future, it raises questions about exactly how a microblogging platform with a narrow user-base fits into this new 3D era.

What next for Jack

While Dorsey has handed control of Twitter to 37-year-old chief technology officer Parag Agrawal, he will have more time to focus on Square. The payments firm is valued at nearly USD 100bn – more than double Twitter – and one of its main focuses has been to move cryptocurrencies into the mainstream.

Square has bitcoin on its balance sheet and is planning to launch a decentralized crypto exchange called tbDEX, as well as potentially moving into Bitcoin mining. Dorsey is also an angel investor in numerous other projects, including music streaming app Tidal, in which rapper Jay Z is a co-investor.

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In many respects, the cryptocurrency landscape has inherited the loose, freewheeling attitude that characterised the early days of social media platforms. Decentralized start-ups like finance platform Compound, crypto exchange Uniswap and stablecoin issuer MakerDao are making big profits and becoming more and more popular.

They are dominated by eccentric geniuses such as Uniswap creator Hayden Adams and MakerDao’s Rune Christensen, who have unusual backgrounds and voracious appetites for risk. It will look like an appealing landing site for burned-out tech professionals trying to rekindle their optimism.

As I always say to my students, we are living in an age of acceleration, where technology is developing at a rate faster than what any individual can keep up with. To survive this, we need a new way of thinking about technology.

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Silicon Valley CEOs like Jack Dorsey were the catalysts for this era, and now they too have to adapt and reinvent the very world they created. Dorsey has the advantage that he has had one foot in this new camp for some time. His departure does not give me a great deal of confidence in traditional social media, but it could give added impetus to crypto and tech start-ups.

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Nascent Crypto Sector Is the Biggest Outperformer After Skyrocketing 37,000% This Year, According to Market Research Firm

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A prominent market intelligence firm has identified one crypto sector that is exponentially outpacing all others in terms of growth.

UK-based market research firm MacroHive created four indices which the company believes capture the popular use cases of cryptocurrencies.

Each index, except for Bitcoin, consists of five tokens that represent the market value of a particular theme or sector.

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One index that’s a cut above the rest is the metaverse sector, according to MacroHive.

“The clear outperformer this year has been the metaverse. It is up a whopping 37,000% this year and has gained 20% over the past seven days alone”

MacroHive says that the metaverse index is made up of play-to-earn game Axie Infinity (AXS), Ethereum-based virtual world The Sandbox (SAND), virtual reality platform Decentraland (MANA), blockchain gaming platform Enjin Coin and player-controlled blockchain gaming platform Gala.

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The next top-performing index is the smart contract sphere consisting of Ethereum, Solana (SOL), Cardano (ADA), Avalanche (AVAX) and Polkadot (DOT). The smart contract index is up 2,355% this year, according to MacroHive.

Third on the list is the decentralized finance (DeFi) index. For the DeFi index, which is up 584% this year, MacroHive selected lending and borrowing protocol Aave, stablecoin governance token Maker (MKR), smart contract DeFi platform Compound (COMP), decentralized exchange Uniswap (UNI) and automated market maker PancakeSwap (CAKE).

Source: MacroHive

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