Update: August 29th - September 11th, 2022
Argentina's Mendoza Province will now allow millions of citizens to use stablecoins for tax payments...
Welcome back,
There are some exciting news coming out of Argentina this week, while the US continues its conversations around crypto regulation. Although not covered in this newsletter, I thought I would share an interesting chart on one of the ways the traditional banking industry is venturing into the blockchain space: through the metaverse.
Enjoy and see you soon.
-Katja
August 29th - September 11th, 2022
Argentina's Mendoza Province will now allow millions of citizens to use stablecoins for tax payments.
Mendoza’s government issued the following statement,
“This new service is part of the strategic objective of modernization and innovation carried out by the Mendoza Tax Administration for the purpose of providing taxpayers with different means to meet their tax obligations.”
This comes on the heels of news from July, when Argentinians turned to stablecoins in light of economic uncertainty and rising inflation. As CoinDesk reported,
“Following the resignation Saturday of Argentina's economy minister Martin Guzmán amid an economic crisis, Argentines purchased between two and three times as many stablecoins as they do on a typical weekend, crypto companies in the country told CoinDesk…
Three major crypto exchanges said consumers were looking to hedge against a potential devaluation of the Argentine peso (ARS), whose buying power has plummeted over the past year as inflation skyrockets.”
[For more information, see this article.]
Although Mendoza is the first in the country to implement such a system, it's not the only one with such ambitions. Buenos Aires also announced plans to allow tax payments using crypto, which it would implement next year. Looking at South America more broadly, Rio de Janeiro has ambitious plans to not only accept crypto tax payments but also extend crypto services to taxi rides and stimulate the arts and tourism through NFTs.
The White House Office of Science and Technology Policy released a report on crypto mining energy consumption.
This report is a response to President Biden’s executive order on digital assets from earlier in the year and fits into the current administration’s focus on the climate. The White House issued the following statement,
“Depending on the energy intensity of the technology used, crypto assets could hinder broader efforts to achieve net-zero carbon pollution consistent with U.S. climate commitments and goals.”
As to be expected, the report focused on the electricity-intensive nature of crypto, a topic that has come up time and time again. Even though the report did not outline any concrete policy recommendations to accomplish those goals, it made the following suggestions:
Collect more data to understand and monitor the electricity use
Create a set of energy standards for crypto-assets
Conduct further research on electricity usage estimates and sustainability
[For more information, see my previous article “House hearing on crypto energy consumption.”]
Around the same time that this report came out, Arcane Research, a prominent research institution providing data-driven analysis of the crypto industry, released a report on how Bitcoin mining can transform the energy industry. Without diving into the details behind this idea, the report covers four areas,
Strengthening electricity grids
Improving the economics of renewable energy
Mitigating natural gas flaring
Repurposing waste heat
If you’re interested in reading more, find the link to the (free) report here or see this article for a summary.
[In other related news, EU lawmakers shot down a Green Party proposal to ban proof-of-work mining for a second time. Paraguay’s president also vetoed a bill on regulating crypto mining (and trading).]
More news …
For those following the Tornado Cash case: Coinbase, one of the largest crypto exchanges, is backing the first legal challenge to the U.S. Treasury’s sanctions on the mixing service.
Bank of Russia, the country’s central bank, moves to legalize cross-border crypto payments, despite Russia’s anti-crypto attitude in the past.
The Australian Federal Police set up a new crypto unit to target criminals engaged in money laundering.