Dispatch #126: Britcoin Ahoy?

Feb 11, 2023 3 min read

Dispatch

In this patch of your weekly Dispatch:

Britain moves towards a CBDC
Gemini and Genesis reach deal
Taproot adoption on Bitcoin soars

The Big Idea

Britcoin and the Latest in CBDCs

Alongside growing scrutiny of cryptocurrencies is a rising interest among governments of the world in central bank digital currencies (CBDCs).

The Indian government, which is no fan of decentralized crypto, launched two CBDC pilots late last year. Their retail CBDC pilot was initially started in four cities but has recently been extended to 15 cities.

The motivation behind a digital rupee seems to be not only trying to block out cryptos but positioning the Indian currency to compete with rival China.

In the United Kingdom, meanwhile, the UK Treasury and the Bank of England kicked off a public consultation period until June on a proposal to adopt a CBDC dubbed “Britcoin.”

They wrote that “the Bank of England and HM Treasury judge that it is likely a digital pound will be needed in the future.” Many have seized on the suggested limits capping citizen CBDC holdings between 10,000 and 20,000 pounds as an example of CBDC’s fundamentally changing the nature of money as a freely exchangeable good.

Between digital yuans, digital euros, and now the potential of a Britcoin, the CBDC conversation is certainly heating up.

The Latest In…

Contagion Subsiding?

Since the collapse of FTX, crypto investors have been keeping an eye out for other signs of contagion. Genesis' solvency was questioned when they halted withdrawals, leaving users of the Gemini Earn program with some $900M in assets stranded.

This week’s reports claim that Genesis/DCG have reached a provisional agreement with major creditors, including Gemini, which has some feeling like the worst of the contagion has passed.

The Latest In…

Bitcoin Mining

Even by 2022 standards, Bitcoin miners have had a rough go of it. Depressed prices, combined with significant hashrate competition, combined with debt overhangs from leverage taken on during the bull market created an incredibly challenging environment. Some of the recent news:

Cloud mining BitFuFu delayed its SPAC IPO
Stronghold Digital restructured $55M in debt
Hut 8 merged with US Bitcoin Corp
Kazakhstan’s President has signed crypto mining limit legislation into law
Core Scientific extinguishes $38.6M in debt to NYDIG
New Hampshire state report seeks to incorporate Bitcoin mining

The Latest In…

Nexo Products

It’s never boring in the Nexo product kitchen. Among the highlight this week:

Trading on Nexo Pro? We just added OCO orders – the type that helps you cut losses early and cash on your wins in an automated way. Unpack the order type on Nexo Pro.
We increased the Nexo Staked Ethereum (NETH) Loan-to-Value ratio to 50%, which means you can borrow more. Another cool thing? NETH earns you rewards even when used as collateral, making it the smartest way to optimize your borrowing.

The Week’s Most Interesting Data Story

Taproot Adoption Soars Thanks to Ordinals

Bitcoin’s Taproot upgrade was supposed to bring a number of benefits to Bitcoin, including lower fees, better privacy, and more.

And yet, over the last year, Taproot adoption had been fairly minimal. All of that is now changing with more people running their own Bitcoin nodes to inscribe JPEGs to sats in a Bitcoin-native form of NFTs that we told you about last week.

In the last month, Taproot adoption jumped from about 2% to 7.47%, according to Glassnode.

Put one point in the column of those who think inscriptions are bringing new energy and unforeseen benefits to Bitcoin!