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Canada could be on the way toward having its own official blockchain strategy. 

A group of lawmakers in the country has called on the government to roll out a nation-wide strategy that would bring further regulatory clarity to the market, according to recommendations released this month.

The first recommendation in a report from the country’s House of Commons Standing Committee on Industry and Technology calls on the government to “recognize blockchain as an emerging industry in Canada, with significant long-term economic and job creation opportunities.”

Among a total of 16 recommendations, the report also calls on the government to “pursue opportunities for international cooperation in the development of blockchain regulations and policies including with our major trading partners.” 

Regulatory safeguards

The committee said it held 5 meetings over the course of the study, where it heard from 31 witnesses and received six briefs. 

“While many emphasized Canada’s strong regulatory safeguards, such as provincial securities regulation and federal anti-money laundering and anti-terrorism financing obligations, witnesses stated that governments need to partner with industry to better understand this rapidly evolving sector and enact regulations that protect consumers without unnecessarily hindering innovation,” the report stated. 

© 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.

Legislation for regulating crypto and stablecoins has become law in the UK, after a more comprehensive law reforming post-Brexit financial regulations in the country passed the last stage of the UK’s parliamentary procedure.

Among other provisions, the Financial Services and Markets bill gives regulators powers to tailor a framework for the digital asset sector in support of Prime Minister Rishi Sunak’s ambition to turn the UK into a a global crypto-hub.

On Thursday, it passed the final stage of the UK legislature’s law making process, after being given Royal Assent by King Charles.

The law allows for regulatory ‘sandboxes’ to allow for further experimentation with blockchain use cases by businesses, in addition to formalizing the UK’s treatment of stablecoins as a form of payment. On its passage through parliamentary review stages, the bill was amended to treat all crypto as a regulated activity and to give regulators power to supervise crypto promotions. 

 “This landmark piece of legislation gives us control of our financial services rulebook, so it supports UK businesses and consumers and drives growth,” said UK Economic Secretary to the Treasury Andrew Griffith in a statement. “By repealing old EU laws set in Brussels it will unlock billions in investment, cash that can unlock innovation and grow the economy.”

Parts of industry also embraced the law, among other recent digital asset-related policy developments in the UK.

“The UK is making good on its promises to position the country as a leading crypto hub. Today’s passing of the Financial Services and Markets Bill – which follows closely on the heels of yesterday’s report from the Law Commission recommending UK law to accommodate crypto assets – is a crucial step in this journey, providing certainty and clarity for the crypto industry,” Andrew Whitworth, Policy Director for EMEA at Ripple. Whitworth added the legislation positions the UK as a leading destination for global crypto and blockchain companies. 

© 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.

Polygon Labs said it plans to unify new zero-knowledge chains using mechanisms such as re-staking and a common bridge in a move toward transitioning Polygon into a Layer 2 ecosystem.

The design for Polygon 2.0 is intended to utilize a shared zero-knowledge infrastructure to power all networks within the ecosystem, pending approval by its governance body. This development comes on the heels of a recent community proposal to upgrade Polygon’s proof-of-stake network to a Layer 2 zkEVM Validium, which would operate alongside the existing Polygon zkEVM, another Layer 2 chain that the team launched in March 2023.

The transition to Polygon 2.0 is slated to occur in the first quarter of next year, with progress being made throughout this year.

“Polygon 2.0 aims to create an ecosystem where we can continuously add block space and unify them with a shared bridge and an interoperability layer,” Polygon Labs VP of Community & Governance Brendan Farmer said in an interview with The Block. “Unified liquidity is everything for Polygon in the coming year.”

The interoperability layer

The proposed Polygon 2.0 network will incorporate an Ethereum Virtual Machine client and a shared ZK proving implementation, referred to by the team as an “interoperability layer” or a “common bridge.” The interoperability layer will be powered by an in-house developed cryptographic algorithm, Plonky3, and the end result will be a single, high-performance proving system that will underpin the entire network.

Polygon Labs’ Farmer explained that the common bridge will link all Polygon chains and settle ZK-based security proofs back on Ethereum to secure all the Polygon chains at once. The mechanism simplifies the process of converting or securely transferring native Ethereum assets from one chain to another.

“The common bridge will be a single contract that checks the validity of cross-chain transactions, manages state updates, and verifies proofs for every chain in the Polygon ecosystem,” Farmer said.

Polygon 2.0 will include re-staking

Another significant proposal for Polygon 2.0 is the implementation of a decentralized staking layer that allows for the “re-staking” of Polygon’s native Matic tokens across different networks. The concept is similar to the Eigen Layer on Ethereum, and in practical terms, it means that network participants can repurpose their stake, which secures one network, to ensure the security of other Polygon chains.

While the security of Polygon 2.0 is ultimately guaranteed by zero-knowledge proofs and the Ethereum mainnet, Farmer said that the ecosystem needs a mechanism to ensure that the operation of these chains is censorship-resistant. He further explained that the sequencing and ordering of transactions and blocks on various L2 networks will often be performed by validators that stake Matic tokens through re-staking.

“When it comes to operating those chains in a decentralized manner, re-staking is a crucial component because it allows us to use existing Matic validators as sequencers at no additional capital cost,” Farmer added.

© 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.

The new Ethereum scaling solution’s architecture will include a shared bridge and a “coordination layer” that connects all of Polygon’s chains, including an emphasis on zero-knowledge technology that has become one of this year’s hottest blockchain trends.

The approval does not absolve Rpay of its compliance duties, but does eliminate the growing compliance risk, the company said.

Americans want safe, regulated crypto products that include spot bitcoin ETFs, according to Coinbase Chief Legal Officer Paul Grewal. 

“We think that the market is responding to the American public’s desire to have safe regulated products as part of their portfolio of financial services,” Grewal said in a Thursday interview on Bloomberg TV when asked if he thought the U.S. Securities and Exchange Commission would end up approving one. 

His comments came as a flood of applications for a spot bitcoin ETF have been filed over the past month, with asset management giant BlackRock announcing plans for one on June 15 that would see Coinbase Custody Trust Company as its custodian. Invesco, WisdomTree, Valkyrie Funds and ARK Invest are also all in the race to have a spot fund approved.

The SEC has yet to approve a spot bitcoin ETF, citing concerns of manipulation and fraud in the markets over previous years. 

“When the U.S. government, the SEC in particular, stands in the way of that access, they are really standing in the way of what the American people have said, clearly, they want,” Grewal said.

The SEC versus Coinbase

Earlier in the day, Coinbase filed a motion to dismiss a lawsuit lodged against it by the SEC, arguing that digital assets in question were not securities and raising concerns about the agency’s interpretation of securities laws. 

Grewal also cited Coinbase’s public listing back in April 2021 when speaking with Bloomberg, citing its “six month exhaustive review” with the agency. 

SEC Chair Gary Gensler has said many cryptocurrencies are securities and has repeatedly said exchanges need to register with the agency. 

© 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.

The expansion would be the private bank’s first for its crypto offering beyond its native Switzerland, where it has provided digital asset services since the start of 2020.

Working together under the Candy Digital name, the two startups will bring their digital experiences within sports, entertainment, arts and culture across major brands including MLB, NASCAR, Netflix and more.

Working together under the Candy Digital name, the two startups will bring their digital experiences within sports, entertainment, arts and culture across major brands including MLB, NASCAR, Netflix and more.