1. RBI Says Banks Can’t Quote 2018 Circular to Restrict Crypto Transactions
RBI’s circular comes as Indian banks warn customers against using their services for crypto trading.
In a relief for the crypto community, the Reserve Bank of India (RBI) issued a clarification on Monday stating the commercial banks cannot quote its now-invalid April 2018 crypto banking ban to deny services to customers involved in digital assets dealings.
“It has come to our attention through media reports that certain banks/regulated entities have cautioned their customers against dealing in virtual currencies by making a reference to the RBI circular dated April 06, 2018,” the RBI said in a circular released Monday. “Such references to the above circular by banks/regulated entities are not in order as this circular was set aside by the Hon’ble Supreme Court on March 4, 2020.”
“As such, in view of the order of the Hon’ble Supreme Court, the circular is no longer valid from the date of the Supreme Court judgement, and therefore cannot be cited or quoted from,” the statement added.
2. Bitcoin Eyes Second-Biggest Monthly Drop on Record
The 37.5% decline in May is beat only by September 2011’s 40%.
Bitcoin is on track for the second-biggest monthly percentage decline on record, despite bouncing from session lows in Asia.
The cryptocurrency changed hands near $36,200 at 9:00 am UTC, representing a 37.5% loss for May. Prices hit a low of $34,195 early today.
The monthly decline beats the 37% drop seen in November 2018 and is just short of the record 40% slide in September 2011, according to Bitstamp data.
Ether, the second-largest cryptocurrency by market value, is on track to end May down 12%, the first monthly loss since September 2020. Meanwhile, gold has gained 7%, its biggest monthly rally since July 2020, and the S&P 500 is little changed on the month, per data provided by TradingView.
The bitcoin market looked weak earlier this month amid continued selling by whales, or large investors with an ability to make or break price trends. The cryptocurrency took a beating after Tesla disowned bitcoin as means of payment, citing environmental concerns. The move dashed hopes for widespread corporate adoption raised by the carmaker’s decision to adopt bitcoin in February.
3. Ex-Head of China’s Digital Yuan Effort Says CBDCs Could Operate on Ethereum
Central bank digital currencies will one day be more “smart,” and not merely digital versions of cash, Yao Qian said.
The former head of the digital currency initiative at the People’s Bank of China (PBoC) said central bank digital currencies (CBDCs) are set to become more “smart” and could one day operate on blockchain networks like Ethereum.
Yao Qian, now director of the Science and Technology Supervision Bureau of the China Securities Regulatory Commission, said over the weekend that CBDCs shouldn’t attempt to be just a digital form of physical cash, but should incorporate smart contract functionality, Sina Finance reported Monday.
Smart contracts are automatically executing pieces of blockchain code that carry out functions when certain conditions are met, and can also be designed to complement or replace legal contracts.
4. Bitcoin Miner Marathon Will No Longer Censor Transactions, CEO Says
“Marathon is committed to the core tenets of the Bitcoin community, including decentralization, inclusion, and no censorship.”
Bitcoin mining firm Marathon Digital Holdings will update to Bitcoin Core version 0.21.1 and will validate transactions transactions on the blockchain “in the exact same way as all other miners who use the standard node,” CEO Fred Thiel said.
MaraPool, the bitcoin (BTC, +7.09%) mining pool run by Marathon, had previously described itself as an “OFAC (Office of Foreign Assets Control) compliant” pool. In an effort to “stay “compliant with U.S. regulatory standards,” the bitcoin mining company pledged to exclude any transactions from its blocks that originated from addresses associated with sanctioned entities.
On May 7, the pool drew criticism from the Bitcoin community when it announced it had mined its first fully compliant block by censoring certain transactions.
At the time, Marathon stated that its compliance efforts originated from desire to placate investors and regulators by giving them “peace of mind that the bitcoin we produce is ‘clean’, ethical and compliant with regulatory standards.”
Thiel, who has been in his role as CEO for about a month, appears to be taking Marathon in a new direction.
“We look forward to continue being a collaborative and supportive member of the Bitcoin community and to realizing the vision of Bitcoin as the first decentralized, peer-to-peer payment network that is powered by its users rather than a central authority or middlemen,” he said.
Thiel also announced that Marathon will signal in favor of the new Taproot upgrade, which will enable improvements to Bitcoin’s scaling, privacy and custody software.
5. Voting on a Proposal to Reimburse Mt. Gox Victims Begins Today
The proposal to reimburse Mt. Gox victims requires a majority vote from all creditors in order to pass.
The trustee presiding over the Mt. Gox civil rehabilitation case has taken the next step toward partially reimbursing victims who lost money to the cryptocurrency exchange in hacks that date back nearly a decade. As of today, claimants can begin to vote on whether or not they will accept the civil rehabilitation proposal.
The deadline for claimants to cast their vote online is Oct. 8.
Significantly, the notice from the trustee states:
“If you do not vote, you will be deemed to have voted against the Draft Rehabilitation Plan for the requirement of the amount of the voting rights.”
Since a minimum threshold of 50% of votes is required in order for the proposal to pass, there is a chance that the proposal could fail even if the majority of votes actively cast vote in favor of acceptance.
How the payouts could work
According to a letter sent to claimants last year, the proposed payout would reimburse creditors in both JPY and BTC/BCH. The total value of each claim is denominated in Japanese yen (JPY) with each bitcoin (BTC, +6.94%) being pegged to nearly $7,000, the rough price of bitcoin when the civil rehabilitation began in 2018 (not the $37,000 price of today, but also not the few hundreds of dollars bitcoin was trading at when Mt. Gox fell).
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June 1, 2021