Blockchain and cryptocurrency executives comment on some of this week’s Web3 news.
The removal of sanctions from Tornado Cash is a signal that crypto developers can innovate without fear of repercussions.
“The recent decision by the US Treasury Department to lift sanctions against Tornado Cash signals to the Web3 community that novel, privacy-preserving technologies are no longer a forbidden art in the US. This win is particularly symbolic because of the fear this case had instilled in many Web3 developers and builders, especially those still building with their original cypherpunk ethos.
“This move is yet another signal that the US regulators and authorities are now willing to work with the Web3 ecosystem to understand the complexities of decentralized finance. This shift leaves the doors more open for developers to focus on building new solutions – especially in the privacy and digital identity space – without the fear of repercussions, which is ultimately good for innovation.
“However, any such innovations must focus heavily on security to avoid being exploited by malicious actors. Because those risks haven’t gone away – indeed, if anything, attacks have become more sophisticated. Finding the right balance between privacy, security and compliance will be a major challenge for builders in web3 over the coming years, but also one of the most important puzzles to solve.”
Harrison Seletsky, director of business development at digital identity platform SPACE ID
Tether’s potential audit with a Big Four accounting firm will mark a new era for crypto that will attract institutional adoption to what is already the biggest stablecoin in the market.
“Tether’s recent talks with Big Four accounting firms to pursue its first-ever audit will lift the shroud of uncertainty that has lingered around USDT since its inception. Up until now, the company has only provided attestations, which have outlined Tether’s assets and liabilities but have not inspired wide confidence.
“After many years of suffering the slings and arrows of detractors, Tether has finally given in. CEO Paolo Ardoino claims that the new crypto-friendly Trump administration inspired the move. However, the fact USDT is due to be delisted from a number of exchanges for European customers because it doesn’t meet the EU’s new MiCA directive on stablecoins may also have played a role.
“An accredited audit from one of the Big Four could be a real game changer for USDT, stablecoins, and the industry at large. It is a pivotal step towards restoring both institutional and retail trust in stablecoins that will also finally bring USDT in line with a core value of Web3: transparency.
“Already the biggest stablecoin in the market by a country mile thanks to USDC’s bowing to US sanctions in 2022 and its huge de-peg in 2023, this will bring even more inflow into USDT, potentially heralding a new wave of stablecoin adoption. USDT has long been the more trusted stablecoin in crypto, but with a Big Four Audit stamp, the sky really will be the limit for it.”
Charles Wayn, co-founder of decentralized Web3 super-app Galxe
CME Group’s plans to partner with Google Cloud to tokenize traditional assets are an entirely missed opportunity to use web3 architecture for Web3 purposes.
“The news that CME Group wants to tokenize assets for 24-hour trading is great for the crypto industry. However, the fact that it plans to use Google Cloud Universal Ledger (GCUL) to do so is not so great. Not so great at all.
“This reflects the long path the financial industry still has to tread to understand Web3 and its infrastructure and how investing in centralization is not the way into a sustainably scalable digital future.
“While this new partnership – set to be tested next year – indicates progress, using old infrastructure to run an entirely new technological ecosystem is a recipe for limitations, vulnerabilities and failure.
“Among the many vulnerabilities of centralized cloud networks is single point of failure, where an outage or attack could bring down an entire network – as we have seen on occasions with several big cloud companies. Other issues include over-reliance on just a handful of companies that have an effective monopoly over the Internet and our data.
“None of that is attractive to an industry like Web3 that is built on the premise of decentralization, is constantly innovating and developing, and needs to operate 24 hours every day of the year.
“Further tokenization is a great development for crypto markets, however how this is done needs significant modernization. Web3 needs a cloud architecture working in the same way and at the same pace it does for it to prosper and grow.”
Kai Wawrzinek, co-founder of Impossible Cloud Network