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DeFi’s death by a thousand cuts

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One rule at a time, decentralized finance is gradually being outlawed. It is not that governments specifically aim to make it illegal. Rather, every proposal that comes out lately seems to enact rules that are impossible for decentralized finance to meet.

The United States

The most recent example is the notice for proposed rulemaking by the United States Financial Crimes Enforcement Network, or FinCEN, which requires banks and other money service businesses to verify the identity of customers who transact from “unhosted” wallets (wallets that are not held on registered exchanges or other custody services).

A seemingly reasonable requirement in terms of fighting crime, it does not sit well with DeFi services, such as Compound, which rely on smart contracts to link user funds together. Unlike more traditional crypto assets that are usually traded on exchanges that function as wallets too, thereby allowing the tracking of users’ identities, DeFi projects are often disintermediated and wallets are self-custodied (unhosted).

The danger here is that if financial institutions cannot comply with identity verification and record-keeping requirements in DeFi services, it is only natural to expect that they will not support them. The more rules they risk running afoul of, the less likely it is that DeFi will be supported.

To compound this effect, the Digital Commodity Exchange Act proposed to ban token transactions on exchanges unless the exchange is registered, is ready to share requested information, meets certain capacity and anti-manipulation standards, and does not violate antitrust laws. Of those requirements, registration, information sharing and compliance with antitrust laws are all but certain that decentralized exchanges will fail.

European Union

European regulators are not friends of DeFi either. In the proposed Regulation on Markets in Crypto-assets, or MiCA, the European Commission requires stablecoin issuers to have “robust governance arrangements” in place, including a clear organizational structure with well-defined lines of responsibility and administrative and accounting procedures.

According to another rule, managing bodies of stablecoins and exchanges must be of “good repute and competence.” The problem is that DeFi and DEX projects can, by nature, have dynamic management and decision-making membership and procedures. Even if they comply with MiCA’s requirements initially, they are not designed to freeze their initially approved structures so that they remain compliant.

Where does that leave DeFi?

One possibility is that the conflict between the law and DeFi will continue and that DeFi will gradually be marginalized in favor of regulated and compliant services that users increasingly see as more reliable. Exchanges are a good example of the power of compliance. Many rushed to comply with applicable laws once it became apparent that earning users’ trust after such scandals as Mt. Gox in 2014 and Bitfinex in 2016 was their key to success.

Another possibility is that DeFi will retain its dynamism despite not being sanctioned by the law. It will remain a pariah, albeit a popular one, like illegal peer-to-peer networks that the law has failed for over 20 years to shut down. Users will be caught in the middle of a constant cat-and-mouse game between the law and DeFi until one wins out. This may be a difficult fight for DeFi to win because money is subject to network effects, and if DeFi money cannot interface with legal money, its uses will be limited.

The last option, and hopefully the one that will prevail, is that governments see the potential of DeFi and legislate to include it. Step one would be for regulators to stop pretending that DeFi does not exist and, instead, explicitly consider how the proposed rules apply to it. If their conclusion is that DeFi projects are incompatible with the law’s objectives, so be it — at least we will start having a focused conversation on whether the law is in going in the right direction.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Konstantinos Stylianou is an associate professor of law and the deputy director of the Centre for Business Law and Practice at the University of Leeds School of Law. He researches competition and regulation in digital markets and blockchain, and he has been involved in projects with the EU, the Greek, Swedish and Thai governments, the International Association for Trusted Blockchain Applications and several universities, including Brown, Oxford, Stockholm and Fundação Getulio Vargas. His forthcoming book on Blockchain Antitrust will be published by Oxford University Press.

Source: https://cointelegraph.com/news/defi-s-death-by-a-thousand-cuts

Blockchain

XRP, Tron, Tezos Price Analysis: 01 March

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XRP could be in line for another sell-off as the 200-SMA looked to cross above the 50-SMA. Down the ladder, Tron and Tezos were projected to stick to a fixed channel, with a breakout largely dependent on the future movement of market leaders Bitcoin and Ethereum.

XRP

Source: XRP/USD, TradingView

The bearish nature of XRP’s market was evident on its 4-hour chart as the price remained below the 200-SMA (green) despite a slight recovery at the time of writing. Moreover, the long-term moving average looked positioned to cross above the 50-SMA (blue). The last time this development took place was when a lawsuit was announced by the U.S. Securities and Exchange Commission against Ripple which resulted in a massive price drop and a bear market that lasted for over a month.

The MACD line floated just above the signal line but momentum seemed weak on the buying side. The Stochastic RSI also tipped in favor of the bulls. A strong sell-off could be avoided if the indicators maintain a positive stance. If the sell-off does take place at the current level, $0.25 support could be in focus.

Tron [TRX]

Source: TRX/USD, TradingView

Tron continued to trade rangebound between $0.05 and $0.04 as momentum switched sides between the buyers and sellers. The Awesome Oscillator flashed green at the time of writing as momentum diverted back to the buyers.  The 24-hour trading volumes surged by over 27% and clocked in at $1.76 billion.

While it looked like Tron was poised to rise above its overhead resistance, low volatility according to the Bollinger Bands worked against a bullish outcome. That could change if buying picks up over the coming sessions. Conversely, a pullback in the broader market could see Tron move towards $0.036 support.

Tezos [XTZ]

Source: XTZ/USD, TradingView

A horizontal pattern formed on Tezos‘ 4-hour chart as the price oscillated between a resistance and support line since bouncing back from the $3.2 mark. For traders, sell signals were present on the upper trendline and buy signals on the lower trendline. Considering Tezos’ strong correlation with Bitcoin, the state of the king coin could determine the direction of a breakout from the channel.

The next resistance level lied at $4.3, while the next support rested at $2.7. The MACD line moved above the signal line as bullish momentum was on the up. The RSI also pointed north from around the 50-level.


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Source: https://ambcrypto.com/xrp-tron-tezos-price-analysis-01-march

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Blockchain

Why countries like the US can do better in terms of crypto adoption

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The interest in cryptocurrencies has been on the rise and the general awareness of the technology and its function as a digital asset has risen substantially in the past few years. While the United States has been open to innovation, the lack of regulatory clarity within the country has raised various concerns between people and businesses in crypto.

Whereas Asia has been enabling wide-spread adoption of cryptocurrency with countries like Japan and Hong Kong trying to form guidelines around cryptos. However, apart from the regulatory differences, the biggest difference could also be with regard to user behavior in these two regions.

Amber Group partner, Annabelle Huang, who recently appeared in Anthony Pompliano’s podcast stated that although the innovations were taking place in the United States of America, the greater chunk of adoption was coming from countries in Asia. The continent has also remained a hub for miners and crypto exchanges and according to Messari’s report, by the end of 2019 six out of ten of the largest cryptocurrency firms are located in Asia.

Huang noted:

“…The biggest difference is just the sentiment and the drive of people. I think in the States, just because there are a lot of regulatory constraints and concerns, people sometimes are more hesitant towards driving the business forward. But, in Asia, I think people are more eager to test things out, get things going on the ground. So, we do see a lot of early adoption in Asia.”

Asia has been a focal point for crypto adoption and nearly 42% of the market capitalization is based in the continent.

Source: Messari

The advantage Asia has been offering to new crypto projects is mainly due to the cultural mentality according to Huang who noted that:

“I think we see in Asia, in Korea and Japan, it is hard for people to find yield anywhere. […] Especially like, I guess, in Japan right, all the yields are negative and I think people are perhaps more inclined to find more opportunities and more acceptable to new things, so that’s why I think crypto adoption in Korea and Japan are highest among the world.”

Although China has remained apprehensive about cryptocurrencies, the country has been inching closer to launch its own Digital currency Electronic Payment [DCEP] system. As the market corrects itself, the coming changes in the market could also trigger changes in the sentiment across the globe about crypto, however, the regulations continue to remain in the gray area.


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Source: https://ambcrypto.com/why-countries-like-the-us-can-do-better-in-terms-of-crypto-adoption

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Blockchain

Hathor opens doors for Bitcoin traders

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KuCoin launches trading services for the trading pair HTR / BTC at 10:00 AM on March 2, 2021 (UTC).

The HTR / USDT trading pair is currently open for HTR.

HTR has also launched a grant program for projects that want to develop the Hathor ecosystem and contribute to the global adoption of blockchains.

Apply Now! #BuildOnHathor #HTR

https://landing.hathor.network/grantprogram2021

Disclaimer: This article is a paid post and must not be considered as news/advice. 


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Source: https://ambcrypto.com/hathor-opens-doors-for-bitcoin-traders

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