Crypto Payment Rails and Regulatory Clarity
6 mins read

Crypto Payment Rails and Regulatory Clarity

As Nathaniel Hawthorne wrote in the 1800s, “Families in America are always rising and falling.”

And the same is true for the cryptocurrency and web3 space in 2024.

That's because, whether it's the market valuation of the sector, or education and acceptance around Web 3 technologies, or even the promised land of scalable usability, everything from an arm's length distance of crypto to blockchain-based The journey to possible embrace of solutions has been its own experience. Bitcoin has had a lot of ups and downs in the decade and a half since it first emerged in 2009.

But while awareness, acceptance and adoption are important in driving the growth of cryptocurrencies, it is two other important factors that will determine a crypto's success: its usability and its utility – especially in the payments ecosystem.

Of course, underpinning those two factors is the elephant in the room of establishing a productive regulatory framework to govern Web3.

This, as last week brought with it a basket of news showing that the ice surrounding crypto's regulatory and usability crisis may potentially be melting. That's why, from legal moves to fundraising, to payments use cases and beyond, these are the top stories from the Web3 landscape that PYMNTS has been tracking over the past week.

Read more: Understanding the State of Crypto in 2024

The digital asset sector is headed to Washington

With a 440,000-member-strong nonprofit group, the crypto community is playing politics to win stand with crypto A political action committee (PAC) is reportedly being formed to support cryptocurrency and blockchain-friendly candidates.

The new PAC aims to raise money from Stand With Crypto's nearly half-million members, and comes against the backdrop of the crypto sector's super PACs becoming one of the top three fundraisers in the 2024 election cycle.

The crypto industry is hoping that a friendlier and more educated group of lawmakers can finally put forward a regulatory framework for cryptocurrencies.

And on Friday (May 10), that goal moved one step closer to the finish line, as a bill promising regulatory clarity for digital assets moved one step closer to a vote in the US House.

House Committee on Rules Said on Friday that he would consider it Financial Innovation and Technology for the 21st Century (FIT21) Act (H.R. 4763), meaning the bill could go to a floor vote in late May House Financial Services Committee Said.

FIT21 will characterize whether a cryptocurrency is a commodity or security and will conduct appropriate oversight between the CFTC and the SEC.

But that wasn't the only legal news in Web3 this week. Stablecoin issuer as it prepares to go public circle It is also reportedly planning to move its legal base from Ireland to the United States, as reported on Wednesday (May 15).

On Monday (May 13), US President Biden issued an order. blocked A Chinese-backed cryptocurrency mining firm that owns land near a US nuclear missile base has described the mining firm's proximity to a military base as a “national security risk”.

After all, crypto has its risks. North Korea $147.5 million laundered via virtual currency platform Tornado Cash in March after it was stolen from a cryptocurrency exchange last year, according to a report on Tuesday (May 14).

Pulse Check on Crypto Marketplace

“It's important to know that crypto isn't just Bitcoin and Doge and NFTs,” sheraz sherehead of payment Solana Foundation, told PYMNTS on Monday. “…Blockchains are really alternative rails for payments and financial assets.”

“There are a lot of misconceptions among people in the financial services industry about compliance and regulation and they wouldn't want to touch blockchain with a 10-foot pole,” Shere said. “And I think that may have been true in the past, but now there is a new set of protocol-level controls that provide even more fine-grained control that you often have with traditional financial rails.”

In conversation with PYMNTS, he stressed the need for crypto players and enterprise businesses to focus on real-world use cases, such as cross-border payments, where blockchain solutions offer advantages over traditional systems.

Another use case for blockchain is the use of its immutable ledger to record and store digital identity. Humanity Protocol, a startup that aims to verify people's online identities using scans of their palms, has raised $30 million at a valuation of $1 billion as of Wednesday. Report.

Still, for the everyday retail investor, the recent surge in Bitcoin prices has left crypto wallet recovery firms' phones “off the hook,” according to Thursday. reportBecause investors have locked out their Web3 wallets and are trying to regain access and capture the market surge.

The market boom has resulted in a flood of new coins, as there were nearly 1 million new crypto tokens. created In the last month, this number is 2 times the total number created on Ethereum from 2015-2023.

And PYMNTS wrote in March how representatives of fraudulent businesses claiming to provide cryptocurrency tracing and promising the ability to recover lost funds, contacted victims directly to resolve their lost assets. Are turning to social media and other messaging platforms for.

These recovery scheme fraudsters charge upfront fees and either stop communicating with the victim after receiving the initial deposit, or present incomplete or inaccurate tracing reports and request additional fees to recover the funds. Fraudsters may claim affiliation with law enforcement or legal services to appear legitimate.

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