Last week on Friday, July the 16th, a bill banning the use of digital assets such as Bitcoin, Ethereum and NFTs as forms of payment for services or products in Russia was signed into law by President Putin.
“It is prohibited to transfer or accept digital financial assets as a consideration for transferred goods, performed works, rendered services, as well as in any other way that allows one to assume payment for goods (works, services) by a digital financial asset, except as otherwise provided by federal laws,” the law read. The new law also requires that crypto exchanges and providers decline transactions in which digital assets could be interpreted as a form of payment.
The new law comes into effect on the 25th of July 2022 and will however continue to allow Russians to invest in cryptocurrencies, NFTs and other digital assets.
The Bank of Russia had been pursuing an outright ban on crypto, with the Russian Ministry of Finance deciding to continue its relatively pro-crypto stance saying, “regulation is sufficient to protect our citizens”.
This latest development comes amid global concerns that blockchain-based currencies were enabling the evasions of sanctions by Russia and implicated companies and individuals for their roles in the invasion of Ukraine, whilst following a global trend towards tightening of crypto regulations by the EU and US last week.
President Putin had earlier expressed his pro-crypto views in January, citing Russia’s “surplus” of energy and other “competitive advantages” when it came to the crypto space.
China’s biggest city Shanghai plans to grow a $52 billion metaverse, NFT and Web3-powered digital hub by 2025.
Last week, Shanghai’s government released its draft policy paper “The 14th Five-Year Plan for the Development of Shanghai’s Digital Economy” outlining aims at “strengthening cutting-edge technological breakthroughs” and “promoting the deep integration of digital technology and the real economy”.
The guidelines proposed in the new paper aim to accelerate the development of the full range of immersive technology innovations. These include using blockchain-related technologies such as the metaverse, NFTs, distributed data storage and further explorations of their use cases.
Hardware-specific innovations will receive significant investment, such as as virtual reality (VR) and extended reality (XR) headsets, 5G networks, artificial intelligence (AI) and cloud computing.
There are also specific plans to cultivate 10 enterprises that can compete on an international level, as well as 100 companies focusing on core metaverse technologies.
The initial funding for the plan was originally announced in June starting with a $1.5 billion pledge following a draft development plan from December last year.
Other governments have also planned similar metaverse transformations. South Korea plans to invest $177 million as part of a “Digital New Deal” to modernize the country. Dubai has its Metaverse Strategy which aims for a 1% contribution to UAE’s GDP by 2030.
‘The Merge’, when the smart-contract platform Ethereum switches to an energy-efficient proof-of-stake (PoS) network, has been tentatively pencilled in for September 19, 2022, according to the latest tweet from Ethereum community member Superphiz.
This new PoS layer, which is also known as the Beacon chain, promises more scalability, security and sustainability. It is estimated that the network could see a 99.95% reduction in total energy use, with PoS being around 2000x more energy efficient than PoW. Ethereum’s current energy-intensive Proof-of-Work (PoW) consensus model has been criticized for its environmental impact and has been cited as a major obstacle to mainstream crypto adoption.
The excitement around the Merge, which will be the most significant upgrade in Ethereum’s history, had been gradually building and now that the final trials on the Goerli testnet are to begin, market sentiment for Ethereum has flipped bullish which is currently up 35% the past four weeks.
“There are a lot of tech companies that have openly said, ‘we are not going to do anything until after the Merge.’” (Jon Charbonneau, analyst for Delphi Digital)
While post-merge Ethereum promises to significantly lower carbon footprint, many misconceptions still persist regarding lower transactional ‘gas fees’ and greater network capacity. The Merge refers only to the change of the consensus model, and not to an increase in network capacity.
Ethereum network demand has seen gas fees spike to sometimes ridiculous levels but real reductions in gas fees will likely only be realized through scaling technologies that aim to package many transactions together to reduce gas fees significantly. Increased network speeds will have to wait until sharding is implemented.
Review written by Quoc Nguyen