US lawmakers want to outlaw certain software


Join thousands of others who receive this daily analysis of crypto markets & news in their inbox every morning - subscribe now.


The US government is becoming more vigilant around cryptocurrencies.

Lawmakers are specifically becoming aware of the possibility that nation states could use cryptocurrency to circumvent US sanctions. A bill was recently introduced by a bipartisan group of US senators that is initially targeting tighter sanctions on the petro, Venezuela’s attempt at a national cryptocurrency backed by oil reserves.

The proposed law states “All transactions by a United States person or within the United States that relate to, provide financing for, provide software for, or otherwise deal in any digital currency, digital coin, or digital token, that was issued by, for, or on behalf of the Government of Venezuela are prohibited beginning on the date of the enactment of this Act.

The specific language is important for two reasons:

  1. The bill is targeting any digital offering by the Venezuelan government. Given the nature of open source software, coupled with the common pseudonymity of crypto, it would not be hard to imagine a world where Venezuela’s government was behind a project but no one knew. How will this be enforced or audited?

  2. The bill explicitly states it would be illegal to “provide software for” the anticipated target of the sanctions. This brings into question how strictly it could or would be enforced. For example, if Facebook is used by the Venezuelan government to promote the petro, is Facebook liable for providing software? What if Venezuela’s government uses a developer tool like Github to write the software code for their cryptocurrency — is Github in violation of this law?

There are many more questions than answers at this point. One thing is clear though: the rise of cryptocurrencies will present unique macro economic and geopolitical challenges. Thankfully, our lawmakers appear to be taking a patient and measured approach so far. It will be imperative that they continue to do so.

As with all great technology evolutions, the same thing that brings power to the people can be used by those in power to further extend their influence and dominance. Crypto has the potential to create economic, social and political equality. The question is, do those in power actually want that?

-Pomp


The “Off The Chain” podcast has been downloaded 100,000+ times in 120 countries. You can listen to the latest episode with Andy Bromberg, President of Coinlist now: Click here for Off The Chain podcast


THE RUNDOWN:

Cryptocurrency custodian BitGo adds Stellar and Dash: BitGo, a Palo Alto-based startup that helps investors store cryptocurrency holdings, is adding compatibility with two new digital coins. Starting Friday, BitGo said it will enable customers to keep Dash, a digital currency based on a tweaked version of the code behind Bitcoin, in digital wallets provided by the company. Read more.

Circle acquires crowdfunding platform and broker-dealer SeedInvest: Circle Internet Financial Ltd., one of the most valuable U.S. cryptocurrency marketplaces, agreed to acquire crowdfunding firm SeedInvest as it seeks to help startups issue digital tokens and allow its own customers to trade a wider variety of coins. Read more.

Venezuela mandates passport fees must be paid in controversial Petro: Venezuelans can only use the state-backed cryptocurrency, the Petro, to pay for passport fees starting next week, the country’s vice president Delcy Rodriguez said in a press conference Friday, Oct. 5. Ahead of Petro’s official “launch” in November, Rodriguez confirmed that as of Monday, Oct. 8, fees for all passport applications will only be payable in Petro, and will cost an increased amount: 2 petros for a new passport and 1 petro for an extension. Read more.

Early Coinbase executive Adam White is leaving the firm: Cryptocurrency exchange Coinbase said its head of institutional platform group and fifth employee, Adam White, is stepping down from his role. White’s departure comes a day after the company said former chief executive of brokerage Instinet Jonathan Kellner will be the managing director of its institutional coverage group. Read more.

Blockchain use in the life science organizations has tripled since 2017: Blockchain adoption in the life sciences has risen exponentially in the last one year despite the existence of significant barriers. According to The Pistoia Alliance, a global nonprofit of life science firms, 60% of the professionals in the pharmaceutical and life science sector are either currently using blockchain technology or at least experimenting with it. This compares to a figure of 22% recorded when a similar survey was conducted in the sector last year by the nonprofit. Read more.


If you enjoy reading “Off The Chain,” click here to tweet to tell others about it.

Nothing in this email is intended to serve as financial advice. Do your own research.