Nasdaq-listed cryptocurrency exchange Coinbase has argued that a recent proposal from the U.S. Internal Revenue Service (IRS) could pose a risk to the cryptocurrency sector and the privacy of Americans.

Mastercard has completed a pilot on central bank digital currency (CBDC) with the Reserve Bank of Australia and the Digital Finance Cooperative Research Centre. The initiative probed the mechanisms through which vetted entities, compliant with know-your-customer procedures, could manage, utilize, and redeem CBDCs.

The queue for new validators on the Ethereum blockchain has almost vanished for the first time since the “Shapella” upgrade in April, which completed Ethereum’s transition to a fully-functional Proof-of-Stake network.

Top stories in the Crypto Roundup today:

• Coinbase Challenges IRS Crypto Tax Proposal That Would Impose “Unprecedented” Tracking
• Mastercard Completes CBDC Pilot with Australia’s Central Bank
• Ethereum Validator Queue Hits Record Low as Staking Rewards Fall
• Crypto Market Movers – LOOM, LQTY, T

Coinbase Challenges IRS Crypto Tax Proposal That Would Impose “Unprecedented” Tracking

Nasdaq-listed cryptocurrency exchange Coinbase has argued that a recent proposal from the U.S. Internal Revenue Service (IRS) could pose a risk to the cryptocurrency sector and the privacy of Americans.

The IRS recently put forth a rule aiming to define crypto brokers clearly and guide them and their customers on adhering to tax obligations. Coinbase has, however, said in a comment letter to the agency that the proposed rule represents “an unprecedented, unchecked, and unlimited tracking on the daily lives of Americans.”

The letter, from Coinbase Global vice president of tax Lawrence Zlatkin, reads:

 “These rules would establish an incomprehensible and unduly burdensome set of new reporting requirements that will degrade and displace the same taxpayer services the IRS is seeking to improve,”

The Blockchain Association, a U.S. crypto advocacy group, had warned that the industry in the U.S. could be destroyed if these provisions were adopted. Meanwhile, the IRS blamed crypto for reducing tax revenues in its latest estimate of the “tax gap”, which measures how much tax money the agency is missing out on.

The Treasury Department released its proposed rule in August in a nearly 300-page long document. It aimed to follow the 2021 Infrastructure Investment and Jobs Act, and defined reporting requirements for centralized crypto exchanges, payment processors, some hosted wallet providers, some decentralized exchanges and people or entities that cash out crypto tokens.

Coinbase has now asked the agency to re-write the proposal to “limit compliance requirements to those parties that directly effectuate transactions in digital assets similar to those in traditional finance.”

Mastercard Completes CBDC Pilot with Australia’s Central Bank

Mastercard has completed a pilot on central bank digital currency (CBDC) with the Reserve Bank of Australia and the Digital Finance Cooperative Research Centre. The initiative probed the mechanisms through which vetted entities, compliant with know-your-customer procedures, could manage, utilize, and redeem CBDCs.

The project also experimented with how a holder could buy an NFT on Ethereum by locking the pilot CBDC and creating an equal amount of wrapped coins on Ethereum, Mastercard said.

Mastercard’s pilot collaborated with Cuscal, an Australian financial services firm, and Mintable, a blockchain tech firm. The global payments giant has shown interest in exploring CBDCs since at least 2020.

The firm aimed to be a private-sector partner for CBDCs in 2021 and joined a CBDC program with Ripple and Consensys in August 2023.

Ethereum Validator Queue Hits Record Low as Staking Rewards Fall

The queue for new validators on the Ethereum blockchain has almost vanished for the first time since the “Shapella” upgrade in April, which completed Ethereum’s transition to a fully-functional Proof-of-Stake network.

Blockchain data shows there are now 598 validators waiting to go onto the network, down from over 96,000 seen in early June. The queue nearly disappearing means new validators are joining the network in less than five hours, down from the significant 45-day wait validators faced when the demand to stake Ether was higher.

Ethereum’s rules limit how many new validators can enter every blockchain “epoch”, which is about 12 seconds long. Validators help to keep Ethereum’s proof-of-stake blockchain running and verify transactions by staking ETH. They get staking rewards in return, and with Shapella staked ETH started being withdrawable for the first time.

The upgrade led to a wave of staking inflows, which have now started to cool. According to David Lawant, head of research at institutional crypto exchange FalconX, an “empty activation queue implies a slowdown in the growth of staked ETH.”

The slowdown comes as staking rewards dropped from between 5% and 6% earlier this year to around 3.5% over sluggish network activity that led to lower fee revenue. Meanwhile, the Federal Reserve’s interest rate hikes have published short-term U.S. Treasury yields above 5%.

Crypto Market Movers – LOOM, LQTY, T

Several tokens are leading the charge in the last 7-day period. Some of these are well-known cryptocurrencies with more liquid trading pairs, so we’ll be focusing on these over low-cap cryptos that may have higher percentage changes.

Loom Network (LOOM) - Loom Network is a blockchain-based platform designed to allow developers to create and deploy decentralized applications (dApps). It was launched in March 2018 as an open-source project that provides developers with the tools they need to build scalable blockchain applications that can be easily integrated into existing systems.

Liquity (LQTY) - LQTY is the governance token of the Liquity protocol. It is used to participate in the governance decisions of the protocol, allowing holders to vote on proposals and changes to the system parameters. Additionally, LQTY also entitles the holders to a share of the fees generated by the protocol. Users can borrow, lend, and interact with the protocol without holding LQTY.

Threshold Network Token (T) - Threshold Network Token (T) is the utility and governance token of the Threshold Network, a network that provides cryptographic primitives for various decentralized applications (dApps). It was launched on January 1, 2022, following the merger of Keep Network and NuCypher. The T token serves as a key component of the Threshold Network ecosystem.

State of the Crypto by Top Tier Exchange Volume

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