CoinSmart Crypto Recap March 2, 2023

crypto recap

Welcome to the CoinSmart crypto recap. Let’s look at the hottest stories that came up this past week. Here is an overview:

  • Shanghai fork goes live on Ethereum’s Sepolia testnet.
  • Polygon launches zero-knowledge identification solution.
  • Circle CEO unsure about SEC’s stablecoin regulation.

Shanghai fork goes live

“Shanghai” is the next major Ethereum upgrade and will take place in February. The upgrade’s primary focus will be ether (ETH) staking withdrawals. The upgrade will be deployed in the mainnet in March. Prior to this deployment, the core Ethereum devs deployed the upgrade in the testnets. Recently, they successfully deployed Shanghai on Ethereum’s second testnet – Sepolia. Regarding this development, the core devs said:

 “This upgrade follows The Merge and enables validators to withdraw their stake from the Beacon Chain back to the execution layer. It also introduces new functionality to both the execution and consensus layer.”

Polygon launches zero-knowledge identification solution

Polygon announced a web3 identification service called Polygon ID. The solution leverages zero-knowledge proofs to prove user credentials without compromising sensitive information. NFT projects like Kaleido, Fractal, and Collab.Land, have already started supporting Polygon ID. Zero-knowledge proofs are a cryptographic technique that allows a prover to authenticate data without revealing it to the verifier. Zero-knowledge proofs are at the heart of innovations like zk-SNARKs and zk-Rollups. A project spokesperson said:

“Polygon ID enables compliance for both web2 and web3 industries which strengthens the regulatory framework through KYC/AML checks. The reusability and self-sovereignty of credentials also reduces the cost, time and complexity of user onboarding and user verification.”

Do stablecoins need banking regulators?

Circle CEO Jeremy Allaire believes there are better regulators for stablecoins than the US SEC. Speaking to Bloomberg, Allaire said that the activities of a payment stablecoin like USDC fall under the purview of a banking regulator since governments worldwide classify stablecoins as a payment system. Therefore, Allaire believes that banking regulators such as the U.S Federal Reserve Board or the Office of Comptroller of the Currency (OCC) may be more appropriate for stablecoins. However, the Circle Chief iterated that he’s on board with the SEC’s proposal to subject virtual currencies to qualified custodian requirements. 

Stay tuned for next week’s CoinSmart crypto recap!

Disclaimer: The content of this email is strictly for information purposes only. All of the opinions expressed in this email are not connected to CoinSmart and are not intended to provide you with investment advice. It is important that you do your personal research and/or consult an investment advisor to determine what is right for you.