Cosmic Wire’s seed funding, SEC’s Bitcoin ETF reviews, and the UK’s permanent Digital Sandbox launch
In this week’s highlights:
🌐 Cosmic Wire secures $30 million in a seed round led by Polygon and Solana Foundation, pushing the boundaries of blockchain interoperability.
📈 The U.S. SEC embarks on a review of six Bitcoin ETF proposals, paving the way for more diversified investment in the crypto sector.
💻 The UK’s Financial Conduct Authority takes a bold step towards fostering fintech innovation by launching a permanent Digital Sandbox.
1. Polygon and Solana Back Web3 Firm, Cosmic Wire
In a remarkable show of support for innovation in the blockchain industry, Polygon and Solana Foundation led a $30 million seed financing round for Cosmic Wire, a web3 company focused on developing interoperable blockchain technologies. The startup’s unique proposition lies in its goal to empower users to exert better control over their data and online interactions, a growing concern in the increasingly digital world.
Cosmic Wire’s technology stands out with its focus on enabling seamless data transfer across different blockchains, which is a significant step forward in achieving interoperability in the crypto ecosystem. The firm’s admission to Google Cloud’s web3 startup program further underscores its potential to reshape the blockchain industry.
Moreover, Cosmic Wire’s Miami base could also have geopolitical implications, enhancing Miami’s reputation as a budding tech hub and possibly encouraging similar blockchain-focused initiatives to establish themselves in the region. It also paints a picture of the growing global interest in, and support for, the development of web3 and blockchain-based solutions.
2. The US SEC Opens Door to Bitcoin Spot ETFs
In a potential game-changer for the crypto investment sector, the U.S. Securities and Exchange Commission (SEC) has accepted applications to create spot bitcoin exchange-traded funds (ETFs) from six prominent firms, including BlackRock. This move represents a positive shift in the SEC’s stance, which previously rejected many such proposals citing the need for robust anti-fraud and investor protection standards.
The impact of this development cannot be overstated, given the role of ETFs in allowing mainstream investors to gain exposure to bitcoin. While the first bitcoin futures ETF was approved in 2021 and gave bitcoin prices a significant boost, the spot ETFs, which directly track the price of bitcoin, provide a different value proposition.
Notably, Nasdaq — the exchange where BlackRock proposed to list its ETF — said it would address previous SEC concerns by partnering with Coinbase, a leading U.S. crypto exchange, to supervise trading in the underlying bitcoin market. This collaboration represents a new trend of traditional financial institutions partnering with crypto platforms to ensure compliance and foster wider adoption of crypto-assets.
3. FCA Launches a Permanent Digital Sandbox
The UK’s Financial Conduct Authority (FCA) has shown a progressive stance towards fintech innovation with the launch of a permanent Digital Sandbox. This sandbox serves as a safe environment for early-stage innovative projects in sectors ranging from banking and investment to insurance and pensions. The sandbox’s utility extends beyond providing a testing ground; it introduces regulators to innovative concepts at an early stage, thus facilitating dialogue and understanding between regulators and innovators.
The launch of the Digital Sandbox is the culmination of two successful pilots and holds promise for even more participants, from start-ups to established businesses and data providers. The sandbox’s emphasis on sustainability, which includes the use of eco-friendly decentralized ledgers, sends a clear signal about the FCA’s priorities in the fintech sector.
Participants in the sandbox will have access to over 200 datasets and more than 1000 APIs, providing a rich foundation for testing and validating their innovations. This initiative not only fuels technological innovation but also fosters a culture of growth, as seen from the positive developments among past participants.
4. Societe Generale Receives France’s First Crypto License
In a landmark event for crypto in France, Societe Generale’s crypto division, SG Forge, has been granted the first license to offer crypto services by the country’s financial regulator. As part of the licensing conditions, SG Forge will have to comply with specific requirements related to organization, financial resources, and business conduct, implying a high level of regulatory compliance.
While other crypto firms, including Binance, are registered with the Autorité des Marchés Financiers (AMF), SG Forge’s license is a first in France. This regulatory approval strengthens SG Forge’s role in the crypto-assets ecosystem and can be seen as a vote of confidence from the French regulator.
This license will pave the way for SG Forge to provide services like buying and selling, exchanging, and custody of digital assets. This progress in regulatory approval for crypto operations is an important step forward for the broader crypto industry in France.
5. RFK Jr. Proposes Bitcoin-Friendly Policies
U.S. Democratic presidential candidate Robert F. Kennedy Jr. has turned heads with his proposed approach to cryptocurrency. His plans include exempting bitcoin from capital gains tax when converted into U.S. dollars and using hard assets, including bitcoin, to back U.S. debt obligations and the dollar.
Kennedy’s plans could be transformative for the U.S. economy and the cryptocurrency industry. Backing the dollar and U.S. debt obligations with hard assets could restore strength to the dollar and curb inflation. Additionally, the move would reinforce the legitimacy of bitcoin and potentially bring a new era of American financial stability.
The Democratic candidate’s stance extends to advocating for citizens’ right to self-custody bitcoin and run blockchain nodes from home. His support for industry-neutral energy regulation also strikes a note of balance, given recent concerns about the environmental impact of cryptocurrencies. These proposals could incentivize ventures to grow their business and tech jobs in the U.S., rather than seek friendlier regulatory environments overseas.
While regulatory clarity remains a significant issue for the cryptocurrency industry in the U.S., Kennedy’s proposals might signal a shift in approach towards cryptocurrencies at the policy level. Whether these ideas would be enacted in the event of his presidency remains to be seen, but such high-level discourse undoubtedly moves the conversation around cryptocurrencies forward.
Conclusion
This week’s events in the cryptocurrency world have underscored the interplay between technology, regulation, and the broader financial landscape. The participation of major blockchain companies in seed funding rounds, the willingness of financial regulators to engage with fintech innovation, the achievement of licensing milestones, and the increasing incorporation of cryptocurrencies in political discourse highlight the dynamism and maturing nature of the cryptocurrency industry.
From RFK Jr.’s proposed bitcoin-friendly policies to Societe Generale receiving France’s first crypto license, the narrative of mainstream acceptance continues to strengthen. It is clear that governments, financial institutions, and individuals are beginning to grasp the transformative potential that cryptocurrencies and blockchain technology possess. The accelerated rate of change underscores the importance of keeping pace with developments in this space and highlights the incredible potential and challenges that lay ahead.
Thank you for joining us for another insightful week. As always, the world of cryptocurrencies continues to offer fascinating developments and an exciting vision of what lies ahead. Stay tuned for more updates next week.
Disclaimer: This report is for informational purposes only and does not constitute financial advice. It is based on sources believed to be reliable, but its accuracy or completeness cannot be guaranteed. Investing involves risks, including the potential loss of principal. Past performance is not indicative of future results. Investors should carefully consider their own circumstances and risk tolerance before making investment decisions. The views expressed herein are those of YouHodler as of the date of this report and are subject to change without notice.
