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Regulators can be notified of stablecoin-related operations now even though the rules don’t take effect until June 2024, the European Banking Authority said.

The EU has bypassed web3 and unveiled a “web4 and virtual worlds strategy.”

Tuesday’s strategy announcement from the European Commission (EC) aims to create “web4 and virtual worlds reflecting EU values and principles.”

Thierry Breton, commissioner for the bloc’s internal market, said: “We will invest in the uptake and scale-up of new technologies, and give people the tools and the skills to safely and confidently use virtual worlds.”

What is web4?

The EC defines web4 as the convergence of artificial intelligence, the Internet of Things, blockchain, virtual worlds and augmented reality. “Beyond the currently developing third generation of the internet, web3, the next generation, called web4, will allow an integration between digital and real objects and environments, and enhanced interactions between humans and machines,” the bloc’s executive said.

Enterprise use cases

The bloc’s strategic plan aims to nurture local web4 businesses and be a global regulatory standard setter. The announcement included support for EU enterprises with a program called the Partnership on Virtual Worlds under Horizon Europe. The program is focused on fostering “an industrial and technological roadmap for virtual worlds.”

Public authority use cases

The statement also described two new web4 public authority initiatives: An immersive urban environment, called CitiVerse, used for city planning and management, and the European Virtual Human Twin, for modeling clinical decisions and personal treatment.

Other initiatives for helping public authorities make informed policy decisions include Destination Earth, and Local Digital Twins for smart communities. “The Web 4.0 and virtual worlds will bring benefits for health, contribute to the green transition and better anticipate natural disasters,” Margrethe Vestager of Europe Fit for the Digital Age said.

Competition from the U.S. and China

The bloc is concerned that its domestic technology will be outpaced by developments in the U.S. and China. A report linked to the statement highlighted U.S. companies working on metaverse technology including Meta, Apple, Microsoft and Nvidia. It also pointed to developments in China, with Alibaba, Baidu, NetEase and Bytedance progressing their metaverse strategies.

“Contrary to these countries, in the EU there are no tech giants to lead the investment in the development of virtual worlds over the next decade. However, the EU is strong in research and innovation for middleware and software,” the report said.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Bitcoin self-custodial Lightning wallet Phoenix has launched its third-generation wallet, introducing splicing technology to reduce fees.

Splicing allows for resizing channels, eliminating the need for multiple channels per user which scatters liquidity, the project said. A common feedback from previous versions of Phoenix was the surprise creation of new channels and associated fees, Phoenix’s development firm Acinq wrote in a blog post on Tuesday. Users will now have a single dynamic channel, providing more predictability and control over incoming Lightning payments.

Lightning Network operates as a network of bi-directional payment channels on top of the Bitcoin blockchain, designed to enable fast and cost-effective micropayments. It offers a solution to the slower transaction speeds and higher fees associated with Bitcoin’s mainnet, enabling users to transact directly without immediate settlement on the main blockchain.

Single dynamic channel

Phoenix’s splicing technology allows users to add or remove funds from their channel without incurring future risk, and it can be priced at the current cost, according to Acinq. With ‘inbound liquidity,’ the capacity to receive Lightning payments that were previously scattered across channels, “it becomes very hard to predict when an incoming payment will trigger the creation of a new channel,” Acinq said. This unpredictability can be frustrating for users, as the opening and closing of Lightning channels have an on-chain cost.

Rather than creating new channels, the new version will “splice-in” funds. The wallet will display a fee warning beforehand, allowing users to adjust the maximum fee they are willing to pay to avoid unexpected charges. If the fee is too high Phoenix will retry later or reject the transaction.

With a single dynamic channel, the previous 1% fee on inbound liquidity (a minimum of 3,000 sats) is replaced by the mining fee for the underlying on-chain transaction, offering a more transparent and cost-effective solution.

“We believe that the efficiency gains brought by splicing are so phenomenal that all wallets will eventually implement it,” Acinq said.

Additionally, the fee for sending Lightning payments is also now shown in advance, fixed at 0.4% rather than a variable up to 0.5%, enabling users to validate fees before making transactions rather than simply trusting the wallet to find the cheapest route.

Trustless swaps

Unlike its previous trusted swap service to bridge between Bitcoin and Lightning, Phoenix will now offer trustless swaps directly in and out of the channel. The “splice-out” feature allows users to remove funds from their channel to a Bitcoin address with the ability to set their own fee rate or adjust it later to expedite confirmation. Similarly, a “splice-in” transaction enables users to send on-chain transactions to their channel.

The wallet is currently available on Android, with an iOS version expected in a few weeks.

Lightning wallets like Phoenix and Muun have been looking at ways to reduce fees since the Ordinals protocol came to prominence earlier this year, enabling the creation of tokens and NFTs on Bitcoin and causing a surge in transactions and fees on the network.

Last month, the Lightning Network hit a record-high capacity of 5,630 BTC ($172 million) for the first time since April. It eclipsed this briefly on July 9 before falling on Monday, according to The Block’s data dashboard.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

“If large stablecoins are linked to some other currency, there is a risk of dollarization,” RBI Deputy Governor Rabi Sankar has said.

Consultations cover authorization and conflict of interest rules for crypto companies under the landmark digital assets law

Trading volumes slumped 55% on Tuesday compared to Monday in a sudden market shift, data shows.

A more robust bitcoin price means the company has a stronger balance sheet, a higher share price and easier debt repayment without the need to sell down its cryptocurrency holdings, the report said.

The committee sought input from the cryptocurrency industry to better understand the tax challenges presented by digital assets.

South Korea will require domestic companies to disclose cryptocurrency holdings from next year as part of new accounting rules, its financial markets regulator said Tuesday.

The country’s Financial Services Commission (FSC) said in a Tuesday statement that companies that issue or hold cryptocurrencies will need to provide detailed crypto disclosures in keeping with fresh accounting standards slated to take effect in January 2024.

The new rules will require crypto issuers to disclose information including token details, business models and internal accounting policies.

Domestic companies that own cryptocurrencies will need to report their holdings’ token classification, book value and market value.

“The government is enhancing accounting transparency in virtual asset transactions by requiring companies to disclose detailed information, following the passage of the Virtual Assets Act in the parliament on June 30,” the FSC said in the statement.

The Korean Accounting Standards Board approved the draft rules on July 7, the FSC added.

New legislation 

In June, South Korean lawmakers passed legislation that aim to better protect crypto investors.

The new legislation, comprised of 19 crypto-related bills, gives the FSC and the Bank of Korea the authority to oversee crypto operators and asset custodians.

The new bill also allows authorities to enforce penalties in cases of unfair trading of virtual assets.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Companies that issue or own crypto will have to make disclosures in their financial statements from next year onwards, say draft rules.