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BlackRock bought Bitcoin through the bear markets amid receiving $100k Seed on its ETF Applications

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BlackRock, the world’s largest asset manager, has been accumulating Bitcoin quietly during the recent market downturn, according to a new report. The report, published by CoinDesk, claims that BlackRock has been using a private trust, launched in 2022, to buy and hold Bitcoin on behalf of its institutional clients. The trust, which is not registered with the SEC, has Coinbase as its custodian and charges a 2% annual fee.

The report cites anonymous sources familiar with the matter, who say that BlackRock has been buying Bitcoin since early 2022, when the price of the cryptocurrency dropped below $30,000. The sources also claim that BlackRock has invested hundreds of millions of dollars in Bitcoin through the trust, and that it plans to increase its exposure in the future.

BlackRock’s interest in Bitcoin is not surprising, given that the company has expressed positive views on the digital asset in the past. In January 2021, BlackRock’s chief investment officer Rick Rieder said that Bitcoin could replace gold as a store of value. In February 2021, BlackRock filed documents with the SEC indicating that it could add Bitcoin futures to some of its funds. In March 2021, BlackRock’s CEO Larry Fink said that he was fascinated by Bitcoin and that it could become a global asset.

BlackRock received $100,000 as “seed capital” for its proposed bitcoin ETF

BlackRock, the world’s largest asset manager, has taken a significant step towards launching a bitcoin exchange-traded fund (ETF) in the US. The company announced that it has received $100,000 from an unnamed investor as “seed capital” for its proposed BlackRock Bitcoin Trust, which would track the performance of the leading cryptocurrency.

A bitcoin ETF is a type of investment product that would allow investors to gain exposure to the price movements of bitcoin without having to buy or store the digital asset directly. Instead, they would buy shares of the ETF, which would hold a pool of bitcoins on behalf of the investors. The ETF would trade on a regulated stock exchange, making it easier and cheaper for investors to access the bitcoin market.

BlackRock is not the first company to pursue a bitcoin ETF in the US. Several other firms, including VanEck, Valkyrie, and NYDIG, have filed applications with the Securities and Exchange Commission (SEC) to launch their own bitcoin ETFs. However, none of them have received approval from the regulator yet, as the SEC has expressed concerns about the potential for fraud, manipulation, and volatility in the bitcoin market.

BlackRock’s announcement suggests that the company is confident that it can overcome these regulatory hurdles and become the first to launch a bitcoin ETF in the US. The company has a strong reputation and track record in the ETF industry, managing over $9 trillion in assets across various funds. It also has experience in dealing with cryptocurrencies, as it offers two mutual funds that invest in bitcoin futures contracts.

The $100,000 seed capital is a symbolic amount that shows that BlackRock has secured at least one investor for its proposed bitcoin ETF. The company will need to raise more funds from other investors before it can launch the product. According to its filing with the SEC, the minimum investment amount for the BlackRock Bitcoin Trust is $50,000.

If BlackRock succeeds in launching a bitcoin ETF in the US, it could have a significant impact on the cryptocurrency market. A bitcoin ETF would provide a convenient and regulated way for institutional and retail investors to access bitcoin, potentially increasing the demand and liquidity for the digital asset. It could also boost the credibility and legitimacy of bitcoin as an alternative asset class, attracting more mainstream adoption and acceptance.

However, BlackRock’s use of a private trust to invest in Bitcoin is a novel and secretive approach, which could give it an edge over other institutional investors. By using a private trust, BlackRock can avoid the regulatory scrutiny and disclosure requirements that come with publicly traded products such as ETFs or trusts. Moreover, by using Coinbase as its custodian, BlackRock can benefit from the security and liquidity of one of the largest and most reputable crypto platforms in the world.

BlackRock’s private trust could also signal a growing demand for Bitcoin among institutional investors, who are looking for alternative ways to gain exposure to the cryptocurrency without dealing with the technical and regulatory challenges of owning it directly. As more institutions enter the Bitcoin market, the price and adoption of the cryptocurrency could increase significantly in the long term.

City of Lugano in Switzerland now accepts Bitcoin for payment of municipal taxes

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Lugano, a city in southern Switzerland, has announced that it will accept Bitcoin as a form of payment for municipal taxes and services. This is a major step forward for the adoption of cryptocurrency in the country, which is already known for its innovation and openness to new technologies.

The city council approved the proposal to allow Bitcoin payments on November 30, 2023, after a pilot project with Bitcoin Suisse, a leading crypto service provider in Switzerland. The project tested the feasibility and security of using Bitcoin as a payment option for local residents and businesses.

According to the city’s official website, Lugano will accept Bitcoin payments for up to 250 Swiss francs (about $270) per invoice. The payments will be processed by Bitcoin Suisse, which will convert the Bitcoin into Swiss francs and transfer them to the city’s bank account. The city will not incur any additional costs or risks from accepting Bitcoin.

Lugano’s mayor, Marco Borradori, said that the initiative is part of the city’s strategy to promote digital innovation and attract new businesses and talent. He also said that Lugano wants to position itself as a pioneer in the crypto space and support the development of the local blockchain ecosystem.

Lugano is not the first city in Switzerland to accept Bitcoin payments. In 2016, Zug, another Swiss city known as the “Crypto Valley”, became the first city in the world to accept Bitcoin for municipal services. Since then, several other Swiss cities and cantons have followed suit, such as Zermatt, Chiasso, and Zug.

Switzerland is widely regarded as one of the most crypto-friendly countries in the world, thanks to its favorable regulatory environment, supportive government, and strong financial sector. The country hosts many crypto companies and organizations, such as the Ethereum Foundation, Libra Association, Tezos Foundation, and Bitmain.

However, Bitcoin is not the only cryptocurrency that exists. There are thousands of other cryptocurrencies that have different features, functions, and values. Some of them are based on similar technology as Bitcoin, such as Litecoin, Bitcoin Cash, and Dogecoin. Others are based on different technology, such as Ethereum, Cardano, and Solana. How does Lugano’s decision affect these other cryptocurrencies?

One possible effect is that Lugano’s decision could increase the demand and popularity of other cryptocurrencies as well. If people see that Bitcoin can be used as a legitimate form of payment in a city like Lugano, they might be more interested in exploring other cryptocurrencies that offer different benefits or solutions. For example, some cryptocurrencies might have faster transaction speeds, lower fees, or more privacy than Bitcoin. Others might have more functionality or utility than Bitcoin, such as smart contracts or decentralized applications.

Another possible effect is that Lugano’s decision could create more competition and innovation among other cryptocurrencies. If Bitcoin becomes more widely accepted and used as a form of payment in Switzerland and other countries, other cryptocurrencies might have to improve their features or services to attract more users or investors. For example, some cryptocurrencies might have to increase their scalability, security, or interoperability with other platforms or systems. Others might have to develop more use cases or partnerships with other organizations or sectors.

In conclusion, Lugano’s decision to accept Bitcoin payments is a significant milestone for the cryptocurrency industry. It could have positive impacts on both Bitcoin and other cryptocurrencies in terms of adoption, awareness, and innovation. It could also encourage more cities and countries to follow Lugano’s example and embrace cryptocurrency as a viable form of payment in the future.

The decision by Lugano to accept Bitcoin payments is another sign of the growing acceptance and adoption of cryptocurrency in Switzerland and beyond. As more people and businesses use Bitcoin as a form of payment, it could pave the way for more innovation and opportunities in the crypto industry.

Circle launches open-source protocols to address on-chain theft of illicit funds

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Circle, a leading global financial technology firm, has announced the launch of two open-source protocols to address the challenges of on-chain theft and the risks of illicit finance in the crypto ecosystem. The protocols, called Freeze and Blacklist, aim to provide a standardized and transparent way for crypto platforms and users to freeze and unfreeze stolen or compromised assets, as well as to identify and block transactions involving blacklisted addresses.

Freeze is a protocol that allows crypto platforms and users to freeze or unfreeze their own assets in case of theft, loss, or other emergencies. Freeze works by embedding a freeze function into the smart contract of an asset, which can be triggered by the owner of the asset or by a designated freeze agent.

The freeze function can also be revoked by the owner or the agent, restoring the normal functionality of the asset. Freeze is designed to be compatible with any ERC-20 token, as well as other smart contract platforms that support similar functionality.

Blacklist is a protocol that allows crypto platforms and users to identify and block transactions involving addresses that are associated with illicit finance, such as money laundering, terrorism financing, or sanctions evasion. Blacklist works by creating a public registry of blacklisted addresses, which can be updated by a network of trusted blacklist agents.

The registry can be queried by any crypto platform or user to check the status of an address before sending or receiving funds. Blacklist is designed to be compatible with any blockchain network that supports address-based transactions.

Circle; Barrier to Entry: Theft and Security

Annual losses due to token theft and accidents are in the billions of dollars. In 2021, $3.3 billion was stolen in crypto hacks, and that number jumped to $3.8 billion in 2022.

The immutability, or irreversibility of blockchain transactions is a fundamental characteristic that offers key benefits. However, it also presents challenges, such as rendering thefts and illicit activities permanent and irretrievable by default. This reality makes it hard for many retail users, consumers, and businesses to adopt blockchain systems.

Recoverable Wrapped Tokens

One way to protect assets from theft is to strengthen the security of asset keys and to improve the quality of Web3 code. A complementary approach, explored in depth last year by Stanford researchers including Dan Boneh, is to extend the ERC-20 interface to support asset recovery with the “ERC-20R.” In the same vein, the Circle Research team explored recoverable wrapper tokens, building upon the aforementioned Stanford research paper. Our effort aims to construct a configurable and programmable recovery mechanism to benefit both developers and users of ERC-20 tokens.

This proposed mechanism revolves around recoverable wrapper tokens. Users can wrap their ERC-20 asset by locking them in the recoverable wrapper token contract in order to receive an equal number of wrapper tokens in return. Wrapping the tokens protects users from thefts, and still maintains most of the utility found in the token’s base form.

One core difference, however, is that recoverable wrapper tokens can be recovered back to the sender within a certain time window post-transaction (say, 24 hours). Consequently, each user will have two distinct balances of the token: a settled balance (non-recoverable) and an unsettled balance (recoverable). Only settled tokens may be unwrapped back into their base form.

Building beyond the thesis put forth in the ERC20R paper, we present multiple configuration sets, or ways to implement and design a recoverable wrapper token, each with their own use cases and attributes. For instance, one version is an arbitrated wrapper appropriate for a targeted, designated ecosystem with a trusted governance.

Another version offers more of a cancellable send button, where transactions simply take a longer, custom period of time to settle than the chain’s finality. Different configuration sets can still be interoperable with each other, as long as they conform to a shared interface. We provide the IERC20R contract as this interface.

As an example, we developed the arbitrated wrapper version for protecting USDC or any token (completed audit report coming soon). This will soon be available for Circle’s recently unveiled Smart Contract Platform, so developers have a template to experiment with and provide token recoverability features to their users.

Circle believes that these protocols can enhance the security and compliance of the crypto ecosystem, while preserving the core principles of decentralization, transparency, and user sovereignty. Circle invites other crypto platforms and users to join them in adopting and contributing to these protocols, which are available as open-source projects on GitHub.

Implications of Multiplex World Order for Global Governance, Security, and Development

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Flags of member nations flying at United Nations Headquarters.

The global landscape is undergoing a profound transformation as new actors and forces emerge and challenge the established order. While the US remains a key global actor, the world order is becoming more pluralistic and ‘multiplex’, meaning that different dimensions of power and influence are distributed across multiple actors and regions. ‘‘While the US remains a key global actor, the world order is becoming more pluralistic and ‘multiplex’’.

The world is witnessing a shift from a unipolar to a multipolar order, where multiple centers of power and influence coexist and compete for global leadership. This has profound implications for global governance, security, and development, as well as for the role of international organizations and civil society.

One of the main challenges of a multiplex world order is how to manage the diversity and complexity of interests, values, and norms among different actors. The multiplex world order is not only characterized by the rise of emerging powers such as China, India, Brazil, and South Africa, but also by the emergence of new actors such as transnational corporations, non-governmental organizations, regional organizations, and city networks.

These actors have different agendas, capabilities, and legitimacy in the global arena, and often challenge the existing rules and institutions of global governance. How can these actors be integrated into a more inclusive and representative system of global governance that can address the common problems facing humanity?

Another challenge of a multiplex world order is how to ensure the stability and security of the international system in the face of increasing competition and conflict among major powers. The multiplex world order is not only marked by the diffusion of power from the West to the rest, but also by the redistribution of power within the West itself.

The United States, the European Union, and other traditional allies are facing internal divisions and external pressures that undermine their cohesion and leadership. How can these actors maintain their strategic partnerships and alliances in a changing world? How can they prevent or manage the escalation of tensions and disputes with other powers over issues such as trade, technology, human rights, and territorial claims?

A third challenge of a multiplex world order is how to foster the sustainable development of all countries and regions in the context of growing interdependence and inequality. The multiplex world order is not only shaped by the convergence of economic growth and social development among different regions, but also by the divergence of environmental impacts and human security among different groups.

How can these actors balance their national interests and responsibilities with their global obligations and opportunities? How can they cooperate to achieve the Sustainable Development Goals (SDGs) and address the existential threats posed by climate change, pandemics, and terrorism?

Despite these challenges, a multiplex world order also offers some opportunities for enhancing global governance, security, and development. One opportunity is to leverage the diversity and creativity of different actors to generate innovative solutions and best practices for global challenges.

The multiplex world order is not only a source of fragmentation and competition, but also a source of experimentation and learning. How can these actors share their experiences and expertise with each other? How can they create platforms and mechanisms for dialogue, consultation, coordination, and collaboration across different levels and sectors?

Another opportunity is to harness the potential and dynamism of emerging powers and regions to provide new sources of leadership and resources for global cooperation. The multiplex world order is not only a reflection of the decline of the West, but also a manifestation of the rise of the rest.

How can these actors contribute to the reform and renewal of global institutions and norms? How can they mobilize their political will and financial capacity to support the implementation and monitoring of global agreements and commitments?

A third opportunity is to strengthen the participation and empowerment of civil society and citizens in shaping the agenda and outcomes of global governance. The multiplex world order is not only a challenge to the legitimacy and effectiveness of state-centric governance, but also an opportunity for the emergence and recognition of bottom-up governance.

How can these actors voice their concerns and demands in the global public sphere? How can they hold their governments and other actors accountable for their actions and inactions? How can they build coalitions and networks for advocacy and action at local, national, regional, and global levels?

A multiplex world order presents both risks and opportunities for global governance, security, and development. The key question is how to manage the complexity and uncertainty of this new reality in a way that promotes cooperation rather than confrontation, inclusion rather than exclusion, innovation rather than stagnation, solidarity rather than fragmentation, justice rather than injustice.

This requires a collective vision, a shared responsibility, a flexible approach, a long-term perspective, a constructive attitude, a pragmatic spirit, a respectful dialogue, a mutual trust, a common action.

Canada Reaches A $100m Agreement with Google Over Online News Act

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The Canadian government and tech giant Google have struck an agreement, bringing an end to the prolonged dispute stemming from the Online News Act.

The Honourable Pascale St-Onge, Minister of Canadian Heritage, unveiled a breakthrough last week, announcing Google’s commitment to provide $100 million annually in financial support as part of a framework aimed at ensuring Canadians have access to credible news content.

St-Onge highlighted the culmination of constructive discussions, expressing satisfaction in finding common ground with Google for the implementation of the Online News Act.

“Following weeks of productive discussions, I am happy to announce that we have found a path forward with Google for the implementation of the Online News Act,” she stated. “This will benefit the news sector and allow Google to continue to play an important role in giving Canadians access to reliable news content.”

Under this framework, Google will allocate $100 million in yearly financial assistance, indexed to inflation, to a diverse array of news businesses across Canada. This support extends to independent news outlets, Indigenous publications, and those representing official-language minority communities.

Google will have the option to collaborate with a single collective to distribute these contributions among eligible news businesses, based on the number of full-time equivalent journalists engaged by each entity.

Emphasizing the broader societal importance of a sustainable news ecosystem, Minister St-Onge stressed the critical role news and journalism play in informing communities, fostering civic engagement, and combating the proliferation of disinformation. She highlighted the necessity for Canadians to have access to news to fully participate in a democratic society, especially amidst the challenges faced by newsrooms, including position cuts and closures.

Addressing the Online News Act’s objectives, St-Onge reiterated the government’s confidence in this framework, affirming its viability and equity for both news organizations and digital platforms.

The Online News Act was introduced in 2021 in response to concerns over fair commercial relationships between tech giants and Canadian news outlets. Apart from the financial contribution, Google has committed to providing various programs to support Canadian news businesses, including training, business development tools, and assistance for non-profit journalism projects.

Moreover, Google has assured that Canadian news entities will be treated fairly in comparison to their global counterparts. In the event of any deviation from this commitment, Google has agreed to engage with both the Government and the industry to address concerns and seek resolution.

The enactment of the Online News Act in Canada echoes similar moves globally, following precedents set by countries like Australia. It represents a stance taken by governments and media entities against tech monopolies such as Google and Facebook, aiming to ensure fair compensation for publishers contributing content used by these platforms to generate substantial ad revenue.

Pending approval by the Treasury Board of Canada, Canadian Heritage will provide additional details on the final regulations before the Act takes effect on December 19, 2023.