In this recap of the crypto world, we will explore the events and news that had the most significant impact in the past week of May 15. Our focus will be on the following developments:
- Binance Closing Shop in Canada
- Cardano Launches Hydra Node
- Ledger Recover Sparks Controversy
- Tether to Bolster Reserves by Acquiring BTC
- Ripple Launches CBDC Development Platform
Binance Closing Shop in Canada
In a recent announcement, crypto exchange Binance announced its decision to halt operations in Canada due to the country’s challenging regulatory environment. The company expressed its disappointment and shared its aspirations for the Canadian blockchain industry in a tweet, stating, “We had high hopes for the rest of the Canadian blockchain industry. Unfortunately, new guidance related to stablecoins and investor limits provided to crypto exchanges makes the Canada market no longer tenable for Binance at this time.”
Since the announcement, Binance has sent an email to its Canadian users instructing them to close their open positions by September 30, 2023. The email also warned that from October 1, 2023, Canadian users would be placed in liquidation-only mode, indicating that they would only be able to sell their existing holdings without the ability to make new purchases or deposits.
While Binance expresses its disagreement with the new regulations, it remains hopeful for future collaboration with Canadian regulators to develop a regulatory framework that better accommodates the cryptocurrency industry. The exchange recognizes the need for ongoing dialogue and aims to work alongside regulators to refine the regulatory landscape surrounding cryptocurrencies. Read more on this here.
Cardano Launches Hydra Node
Cardano, known for its versatility and adoption in various sectors, has achieved a significant milestone with the activation of “Hydra Head” on its mainnet. This groundbreaking achievement unlocks the potential for faster and more streamlined transactions on the Cardano blockchain, marking a significant leap forward for the platform and its users.
Hydra Head, now live on the Cardano mainnet, represents a scaling tool designed to enhance transaction speed and efficiency. Serving as the inaugural offering within a comprehensive suite of products, each Hydra Head acts as an off-chain “mini ledger” shared among a small group of participants. By doing so, it expedites transaction processing while substantially reducing associated fees. This innovative approach accelerates transaction speed and paves the way for significant cost savings for users. Additionally, developers can leverage Hydra Heads to incorporate specialized and complex Decentralized Finance (DeFi) protocols on the Cardano blockchain.
Cardano has established a solid reputation as a promising blockchain platform that caters to a wide array of use cases, including DeFi and NFTs. With the introduction of the Hydra node, Cardano’s capabilities and competitiveness in these domains are poised to experience significant improvements. The ability to process transactions at an accelerated pace while concurrently reducing fees positions Cardano as an enticing choice for developers and users seeking a robust blockchain infrastructure. Read more on this here.
Ledger Recover Sparks Controversy
On May 16, Ledger made an announcement that captured the attention of its 500,000 followers. The company unveiled its latest development, the launch of Ledger Recover, through a firmware update (version 2.2.1). This feature offers additional security to Ledger users who misplace or forget their private keys.
This new feature operates as a subscription service that divides the user’s seed phrase into three fragments and sends each fragment to a unique external entity. The fragments are encrypted and, upon reaching the user, can be combined and decrypted to reconstruct the original seed phrase. Essentially, it serves as an identity-based key recovery service that backs up users’ seed phrases.
However, the introduction of Ledger Recover has sparked outrage within the crypto community. The controversy stems from the belief that seed phrases should remain solely in possession of users to maintain the highest level of security and self-custody. Critics argue that by offering a recovery service, Ledger compromises the fundamental principle of cold storage and undermines the trust in hardware wallets.
Despite the controversy, it remains to be seen how the broader crypto community will receive Ledger Recover and whether users will embrace this service. It is worth noting that the latest update is not mandatory, as Ledger has affirmed that the subscription feature is optional, allowing users to decide whether or not to utilize this service. Read more on this here.
Tether to Bolster Reserves by Acquiring BTC
Tether, the company responsible for the widely used stablecoin USDT, has announced its plans to buy Bitcoin to strengthen its excess reserves regularly. In a tweet released on May 17, the stablecoin issuer revealed that it would allocate up to 15% of its net realized operating profits towards purchasing the world’s largest cryptocurrency starting this month.
In explaining the rationale behind this move, Tether highlighted the decentralized nature of Bitcoin and its long-term value retention as key factors that make it an obvious choice for the stablecoin issuer. Paolo Ardoino, Chief Technology Officer (CTO) of Tether, emphasized the resilience of Bitcoin and its emergence as a long-term store of value with substantial growth potential. Paolo further pointed out that Bitcoin’s limited supply, decentralized nature, and wide adoption have positioned it as a favored investment option among institutional and retail investors.
It is worth noting that Tether already holds approximately $1.5 billion worth of Bitcoin in its reserves, as confirmed by an assurance report released in March of this year. And with this new investment strategy, Tether aims to strengthen its BTC holdings by allocating funds from net realized operating profits, excluding unrealized gains from price increases in its portfolio.
Ripple Launches CBDC Development Platform
In a significant move toward advancing the digital currency landscape, Ripple has unveiled its proprietary platform designed specifically for Central Bank Digital Currencies (CBDCs). This innovative platform opens up new possibilities for central banks, governments, and financial institutions to create and manage their digital currencies, leveraging the power of the XRP Ledger (XRPL) blockchain technology. With Ripple’s CBDC Platform, users can effectively oversee the entire life cycle of fiat-based CBDCs, including transactions and distribution, while enjoying the benefits of blockchain technology.
The platform offers a range of features that empower central banks and financial institutions to manage CBDC operations efficiently. These features include:
- Ledger Technology – secure handling of wholesale and retail CBDC operations.
- Issuer Functionality – complete control over the CBDC life cycle, from minting, and distribution, to destruction.
- Operator Capabilities – efficient and seamless operations between different organizations.
- End-user Wallets – online and offline payments, ensuring convenient access to a wide range of users.
The introduction of Ripple’s CBDC Platform highlights the increasing role of blockchain technology in reshaping the global financial landscape. Ripple aims to drive financial inclusion, enhance payment efficiency, and support governments and financial institutions in their CBDC initiatives by providing robust infrastructure and extensive customization options. As governments and central banks explore the potential of CBDCs, Ripple’s platform stands ready to provide the necessary infrastructure and tools to help them navigate this transformative journey. Read more on this here.