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Crypto lobbyists face defeat with House set to block tax rule changes

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House Democrats on Tuesday were poised to block attempts to scale back digital currency tax rules tucked into President Joe Biden’s infrastructure plan, in a new setback for crypto industry advocates fighting the proposal.

The House Rules Committee, which drafts the terms of debate for bills headed to the floor, agreed to a process that would prohibit any amendments from being considered for the infrastructure bill. The full House was scheduled to vote to lock in the procedure Tuesday afternoon. The plan would also set up a floor vote on the infrastructure package by Sept. 27.

The House was set to close the door to infrastructure bill changes despite calls from Democrats and Republicans to pare back the cryptocurrency tax proposal that the Senate passed as part of the legislation earlier this month.

At issue in the fight are proposed requirements that would force cryptocurrency exchanges and other firms to report transaction information to the Internal Revenue Service, similar to rules in place for stock brokers. As drafted, industry lobbyists and sympathetic lawmakers say the plan threatens technological innovation and the viability of a growing sector of the U.S. economy.

Crypto industry groups are now considering other legislative vehicles to revise the policy, after being blindsided by its inclusion in the infrastructure bill. One possibility is Democrats’ $3.5 trillion budget package, said Michelle Bond, CEO of the Association for Digital Asset Markets.

“The industry’s biggest test will lie in efforts to forge positive relationships in Washington,” Bond said.

Source: https://www.politico.com/news/2021/08/24/crypto-lobbyists-house-tax-rule-infrastructure-506756
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The Article Was Written/Published By: Kellie Mejdrich

Corporate America Is Building Its Own Surveillance State. Will the FTC Stop It?

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Americans are used to hearing about what a great country they live in—how lucky they are to have been born in, or to have immigrated to, the United States. “American exceptionalism”—a phrase, funnily enough, coined by Joseph Stalin—is an idea that, on the whole, is still embedded in the country’s collective identity.…

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Source: https://gizmodo.com/corporate-america-is-building-its-own-surveillance-stat-1847389626
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The Article Was Written/Published By: Dell Cameron

Bitcoin Plunges as China’s Sichuan Province Pulls Plug on Crypto Mining

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Bitcoin continued its dramatic plunge to $32,281 Monday morning, down 17.65% from a week earlier as some of China’s largest bitcoin mining farms were shut down over the weekend. The bitcoin mining facilities of Sichuan Province received an order on Friday to stop doing business by Sunday, according to Chinese state…

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Source: https://gizmodo.com/bitcoin-plunges-as-chinas-sichuan-province-pulls-plug-o-1847139438
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The Article Was Written/Published By: Matt Novak

Attempting to reform gig work via co-ops

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Ride-hailing service The Drivers Cooperative recently debuted in New York City, claiming that its lack of VC funding would result in better driver pay and lower passenger costs.

Why it matters: TDC’s approach is a direct rebuke to the venture capital-fueled gig economy model.


Details: The organization is incorporated as a “worker cooperative corporation” and currently lets every signed-up driver enroll as a member of the co-op, which means receiving one share in the company and one shareholder vote.

  • The co-op takes a 15% cut of rides (compared to Uber and Lyft’s roughly 20%) to fund its operations, and any leftovers at the end of the year will go back to drivers via profit-sharing.
  • The company says its drivers currently make on average about 30% more than they would driving for Uber or Lyft, and that riders pay slightly less.

The big picture: A number of companies have tried (and often failed) to reform the model popularized by Uber and Lyft, including:

  • Juno: The NYC-born startup promised it would give drivers equity in its company. It eventually sold to U.K.-based Gett and backtracked on its equity promise because regulators wouldn’t allow it.
  • Austin’s indies: A crop of upstarts, including a nonprofit and a Facebook group matching drivers and riders, emerged in Austin a few years ago when Uber and Lyft ceased operating for a year.
  • Dumpling: The startup, which charges drivers a monthly fee for using its app instead of taking a cut from each transaction, recently expanded into ride-hailing after getting its start in grocery delivery. Unfortunately, it’s reportedly also run afoul of some workers with changes made to its apps.

Between the lines: “We’re actually selling things for the price that they cost,” says TDC co-founder Erik Forman, adding that Uber and Lyft’s lack of profits are a sign that their approach isn’t actually working.

  • The argument for the venture-backed model has been that it takes a lot of upfront capital to set up operations and grow very quickly to capture market share and compete with rivals.
  • That’s also meant price wars on all fronts — including price cuts for riders and earnings bumps for drivers — which has mostly been financed by venture capital for the first several years of a company’s life.
  • TDC has only raised about $300,000 via mostly debt and is preparing to raise just over $1 million.

And it’s not the only one to take this approach. Driver’s Seat, an app for drivers to collect and analyze data about their hours and earnings, is also set up as a cooperative. While free for drivers, it sells access to aggregate data and insights to municipalities.

  • Co-founder Hays Witt says the aim is to give drivers back some ownership and control over their work data.

Yes, but: It remains to be seen how a smaller, local upstart can fare in the face of multibillion-dollar public companies that are already household names.

  • While its brand can certainly appeal to many drivers’ and passengers’ sense of using a more “ethical” service, some will undoubtedly prefer convenience or sticking with the familiar.
  • And while Forman sees the technology as a commodity, companies like Uber and Lyft spend tremendous resources on developing, maintaining and fine-tuning their apps to keep drivers and riders happy.

The bottom line: Uber and Lyft proved there’s a market for smartphone-enabled urban transportation — but the quest to meet that demand via a radically different approach to business is ongoing.

Source: https://www.axios.com/reform-gig-work-co-ops-ride-hailing-uber-lyft-ee4848cf-d80c-4fa7-9297-10a19b23196d.html
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The Article Was Written/Published By: Kia Kokalitcheva

Semiconductor shortages continue to worsen, causing record order delays

Robotic arms assemble tiny electronic devices.

Enlarge / This machine is checking silicon wafers in a cleanroom lab—class 1 chip facilities must limit dust to 10 particles per cubic meter, 1/1000th the amount found in hospital operating theaters. (credit: Monty Rakusen via Getty Images)

Susquehanna Financial Group analyst Chris Rolland noted Tuesday that the wait time for all major semiconductor product categories is up considerably—from 16 weeks in March to 17 weeks in April. This represents the longest lead time—the elapsed time between placing an order and receiving products—that the industry has faced since 2017, when the firm began tracking this data.

Rolland said this lengthened lead time puts the industry in a “danger zone,” noting further that “elevated lead times often compel bad behavior [from] customers, including inventory accumulation, safety stock building, and double ordering.” In other words, major companies seeking VLSICs don’t behave very differently from consumers seeking toilet paper.

These shortages impact nearly all industries to some degree, with the heaviest impact falling on industries with long lead times of their own. In particular, the automotive sector is projecting $110 billion in lost sales this year due to factories sitting idle while waiting for components. Again mimicking last year’s pandemic-related toilet paper shortages, hoarding tends to make the gaps worse. As the lead times get longer, buyers become more likely to overorder and make supply chain problems worse.

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Source: https://arstechnica.com/gadgets/2021/05/chip-supply-lead-times-stretch-to-a-record-17-weeks/
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The Article Was Written/Published By: Jim Salter

China leads the world with new state-backed digital currency

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In a push to dominate global financial technology, the Chinese government is aiming to roll out the world’s first state-backed digital currency.

Why it matters: China’s new currency could set global standards for the use of national digital currencies — and give Beijing unprecedented visibility and control over domestic financial transactions.


  • At least 60 countries are exploring the use of an official digital currency, but China is furthest along in making those plans a reality, while the U.S. has largely sat on the sidelines.

What’s happening: The Chinese government has started pilot programs in Beijing, Shanghai, and other cities that give small amounts of the currency, known as the Digital Currency Electronic Payment (DCEP), to residents on a lottery system, with a limited number of retailers participating.

  • Chinese officials have stated they hope DCEP is ready for wider use in time for the Beijing Olympics in February 2022.
  • Some officials also hope DCEP could help internationalize China’s currency, though China’s tight capital controls have made the renminbi less attractive for international transactions.

The big picture: Rolling out a national digital currency offers several advantages.

  • Improving efficiency in the financial system. Cash and coins are inefficient and expensive to store.
  • Reducing systemic risk. “The existing system is owned by private companies. Should Alipay or WeChat pay [go] bankrupt, which is extremely unlikely, it creates systematic risk,” Trivium China analyst Linghao Bao told CNBC. A government alternative would provide a layer of security.
  • Spurring innovation. A state-backed digital currency could potentially provide a host of new opportunities for businesses, tech companies, and trade.

But it isn’t just about efficiency and innovation. Chinese officials have made it clear that they view the digital currency as a key staging ground for global geopolitical competition, according to a January report by Yaya Fanusie and Emily Jin of the Center for a New American Security.

  • “Fintech is the commanding heights of future global financial competition,” Chinese central bank vice-governor Fan Yifei said in November 2019. “Whoever grasps this advanced productive capability will possess the strongest core competitiveness in finance.”

Background: Cryptocurrencies like Bitcoin and Ethereum exist on a decentralized ledger and are intended to skirt controls by governments or companies. But DCEP would be managed directly by China’s central bank, the People’s Bank of China (PBOC).

  • Chinese officials have said DCEP offers “controllable anonymity” — meaning payments could be anonymous to companies and other users but not to the government.

In the hands of an authoritarian government, a digital currency also offers unprecedented surveillance and control. “Never before has a government ever had access to individual user transactions directly. Technology hasn’t allowed that,” Fanusie told Axios.

  • “DCEP offers a direct route for the government to cut a person off from payments, from their funds, from their accounts. Right now, the government has to go through a private company or a bank to do that.”
  • This capability could be used to reduce criminal abuse of the financial system, but also in theory to monitor and shut down the accounts of dissidents, human rights activists, persecuted groups such as Uyghurs, and others engaging in non-criminal behavior that the Chinese Communist Party may want to suppress.

What to watch: Though DCEP could help internationalize the renminbi to a moderate degree, it’s unlikely to challenge the U.S. dollar any time soon.

  • But international DCEP transactions could bypass SWIFT, the most widely used international payments system, making it easier for people and governments to evade U.S. financial sanctions.

Go deeper: What central bank digital currencies mean for crypto

Source: https://www.axios.com/china-digital-currency-dd20ff05-7562-4e10-966e-43caf00e629e.html
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The Article Was Written/Published By: Bethany Allen-Ebrahimian

The U.S. Is Closer to a Zero-Carbon Grid Than It Seems

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The U.S. has a lot of work to do to draw down carbon emissions. But a new report shows that when it comes to the energy grid, things are actually in better shape than researchers thought it’d be by this point.

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Source: https://earther.gizmodo.com/the-u-s-is-closer-to-a-zero-carbon-grid-than-it-seems-1846682644
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The Article Was Written/Published By: Dharna Noor on Earther, shared by Brian Kahn to Gizmodo

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