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Shanghai Upgrade of the Ethereum Network Will Allow Users to Withdraw (ETH) From the Network

The COVID-19-induced quantitative easing across global markets was in full swing by the end of 2020 and early 2021, resulting in a nearly year-long mega-bull run. During this time, the price of Ether climbed over tenfold, reaching a high of more than $4,800.

Following the end of the euphoric bullish phase, a difficult cool-down period was aggravated by the UST-LUNA crash, which occurred in early 2022. This reduced Ether’s price to $800. In the third quarter, the market saw a good rebound led by the Ethereum Merge story, which provided a ray of hope.

The transition to an eco-friendly proof-of-stake (PoS) consensus process was a significant step forward. The event also lowered post-merge Ether inflation. ETH peaked at more than $2,000 in the run-up to the Merge on September 15, 2021. The positive momentum, however, evaporated rapidly, turning the Merge into a buy-the-rumour, sell-the-news event.

A similar positive opportunity may emerge in Ether as the impending Shanghai upgrade, scheduled for March 2023, draws market attention. The upgrade will allow withdrawals from Ethereum staking contracts, which are now locked. The improvement will significantly lower the danger of ETH staking.

Shanghai Upgrade of ETH Network:

The Shanghai improvement to the Ethereum network will center on facilitating user withdrawals of Ether (ETH). This upgrade, slated to be live in March, will allow users to access currencies staked on the network as part of the September switch to proof-of-stake consensus.

The engineers intend to offer a public test network for the Shanghai upgrade by the end of February to fulfill the March deadline. During recent core developers call, it was decided not to include the Ethereum Virtual Machine Object Format (EOF) in the upgrade due to worries that it would cause the deployment to be delayed. The Shanghai upgrade prioritizes ensuring the smooth implementation of the withdrawals feature.

Some are anticipating rivalry between LSD and the Shanghai update of the Ethereum network, which is expected in March 2023. (Liquid Staking Derivatives).

What Is Expected of this Upgrade? 

With the Shanghai update of ETH network, following are expected by the users: 

  • Major investors and others looking to liquidate their holdings could increase the market’s selling pressure.
  • Users who have not yet staked their ETH will move it to Liquid Staking Derivatives (LSDs). Investors may transfer their newly unstaked Ethereum to Liquid Staking Derivatives (LSDs) to take advantage of higher returns and more decentralized financial features. This may inspire creative solutions and innovative ways of using the area.
  • Another possibility is that staking behavior will remain unchanged, and players will not destake.

What are your views on this?

Visa is exploring to enable auto-debit feature from your crypto wallet

Visa is attempting to obtain auto-payments on Ethereum by developing a new sort of wallet—a technique known as “account abstraction.” The payments company released a technical paper investigating the feasibility of creating an automated payment mechanism for self-custodial wallets on Ethereum.

The paper maintains, “Online bill pay is rapidly growing, and customers—particularly younger ones—have come to expect the ability to set up recurring payments and take advantage of other conveniences associated with using their Visa cards.” It also claims that ease of payment is the primary reason customers switch payment methods.

Enabling auto-payments for self-custodial wallets is difficult. It includes potentially granting access to one’s private keys and authorising a smart contract to make payments on behalf of one’s account. Auto-payments, in effect, can jeopardize the security given by self-custody.

According to Visa, the solution to this challenge is account abstraction, a mix of a user wallet and smart contracts in a single Ethereum account. This would purportedly add additional flexibility to the process of authenticating a transaction on the blockchain, allowing for multi-owner accounts (via multi-sig) and public accounts from which anybody might initiate a transaction.

In practice, users could construct a whitelist of pre-approved auto-payments on a “delegable account,” eliminating the need for the owner’s signature every time a payment is made.

Visa aimed to make a big push into the crypto space with its recent alliance with FTX, a global crypto exchange. Visa planned to use its innovative solutions to enhance crypto payments technology and enable users to transact with digital currencies in over 40 countries around Latin America, Asia, and Europe. However, they had to cancel the partnership after it collapsed. Despite this setback, Visa stays ahead of the curve by ambitiously exploring viable options for processing digital currency payments within its vast infrastructure.

Australia Preparing to Establish a Crypto Regulatory Framework in 2023

Australia intends to implement a regulatory framework to control the activities of digital asset service providers by 2023. These plans come as each region continues to take bitcoin legislation more seriously.

A section of the framework will cover concerns such as licensing, custody, regulation, and establishing which digital assets are subject to financial services legislation. It would also take into account legislation about client protection.

The Announcement:

The Australian government, led by Prime Minister Anthony Albanese, has declared its intention to issue a consultation document in the first quarter of the following year.

According to Assistant Treasurer Stephen Jones and Treasurer Jim Chalmers, this consultation paper will focus on streamlining which digital assets should be managed by law. This consultation paper is available here. When a final decision is reached, the regulation will be enacted into law once this consultation is completed.

According to the joint media release, the publication of a consultation document in early 2023 will be the next step in the government’s ongoing “token mapping” work. This publication will inform what digital assets should and should not be regulated by financial services law, as well as the development of appropriate custody and licensing settings to protect consumers. 

Development of Australia’s Financial Service Infrastructure: 

In addition to amending cryptocurrency regulation, the Australian government is considering upgrading and modernizing financial services and payments legislation.

The Albanese government is working on a “strategic plan,” and a framework for Buy Now Pay Later (BNPL), which will involve industries, customers, regulators, and other business leaders. BNPL is an abbreviation for Buy Now Pay Later.

Furthermore, the International Monetary Fund (IMF) is pressing for stricter regulation of cryptocurrencies throughout Africa, notably in countries like Nigeria, which has a thriving crypto sector despite periodic setbacks.

Notably, the number of companies that have filed bankruptcy this year, including Voyager Digital, Celsius Network, and Three Arrows Capital (3AC), and the most recent collapse of FTX Derivatives Exchange, has prompted authorities in many regions to tighten compliance standards. The Financial Stability Board (FSB) has stated that it plans to submit recommendations on cryptocurrency regulation in 2023.

Hong Kong Plans to Legalize Retail Crypto Trading

Hong Kong aims to establish new legislation to legalize cryptocurrency trading in the city’s retail sector. The move is part of a strategic ambition to become a global cryptocurrency hub. According to reports, the proposal, which is expected to launch in March of next year, will necessitate licensing for bitcoin platforms.

Will Hong Kong Be The Next Crypto Hub?

Hong Kong aims to regain its reputation as a destination for crypto entrepreneurs after Covid-19, political turmoil, and legislation soiled its reputation.

As Hong Kong reasserts its position as a global financial powerhouse, this contrasts with mainland China, which prohibits cryptocurrencies. The financial and judicial systems of Hong Kong differ from those of the Chinese mainland. This independent governance is part of the “One Country, Two Systems” system that controls the territory.

The notion of Hong Kong’s return to the top of the list for crypto investors has been circulating the market for some time. Last week, Elizabeth Wong, head of the Securities and Futures Commission’s (SFC) fintech unit, hinted at a plan to allow ordinary traders to trade digital assets once again. She announced at an event that the government was drafting its crypto regulation bill.

First and foremost, Hong Kong became a magnet for the world’s largest cryptocurrency exchanges, notably Sam Bankman’s billion-dollar FTX. Bankman-Fried relocated the FTX headquarters from the city to the Bahamas in 2021. The Crypto.com exchange relocated to Singapore over concerns that Hong Kong may follow China’s lead in banning digital asset trading in the same year.

Moreover, if implemented, a proposal against money laundering submitted to the Legislative Council of Hong Kong might create a new licensing regime for digital assets. SFC believes that this regulatory framework will support the orderly and sustainable expansion of the industry while protecting investors.

The licensing mechanism for bitcoin platforms is planned to begin in March 2023. The regulator aims to legalize trading mainly on the more valuable tokens, although specifics still need to be included. The concept will initially be made available for public comment.

Other Listing Cities:

Switzerland has always been the destination for people looking to store enormous wealth. Frequently, the Swiss banking system welcomes these individuals or companies with open arms. Nevertheless, the country is currently studying emerging financial markets. Numerous startups in major Swiss towns seek to become the sector’s epicenters as the crypto-financial business evolves.

In addition, Singapore is preparing to become the cryptocurrency hub of Asia. In contrast to its history of social conservatism, Singapore is renowned for its willingness to embrace financial innovation. The city-state officials have not only highlighted the potential benefits of crypto but have also enacted legislation favoring this perspective.

Dubai and Abu Dhabi also vie for the cryptocurrency crown. UAE has positioned itself as the premier crypto hub in the globe. Significant crypto innovations have occurred in the region over the crypto winter, making it a desirable destination for crypto investors and developers.

Lastly, several cities are in the vanguard of virtual currency adoption. San Francisco, Vancouver, Amsterdam, Tel Aviv, Ljubljana, Slovenia, and Miami, Florida, are included in this list of cities. In addition, the crypto market is controlled by worldwide cities such as New York, London, Portsmouth, New Hampshire, and El Zonte, El Salvador.

Considering the current situation, it is evident that today, countries facing economic instability and currency fluctuations, such as Venezuela and Zimbabwe, are becoming more receptive to bitcoin and other cryptocurrencies.

What to Expect Post the Ethereum Merge?

The Cryptocurrency industry has witnessed 2022 to be quite an eventful year. We are unquestionably in a bear market, with prices dropping by nearly a trillion dollars and fluctuating wildly.

But the year is far from over still. There is likely more in store for the Cryptocurrency industry. The Ethereum Merge, for example, is promising news that might be seen as a way out of the darkness.

What is the Ethereum Merge?

As the digital and blockchain worlds rapidly develop, thousands of firms and projects in the cutting-edge field of decentralized finance are moving to Ethereum for lending, borrowing, and other complex investment alternatives. In addition, Ethereum is also used as the foundation for a large number of digital valuables like nonfungible tokens, NFTs, etc.

Amongst all this, the Ethereum merge is an advanced approach to changing how Ethereum verifies its transactions. In this Eth Ethereum Merge, the Beacon Chain is Ethereum’s next proof-of-stake consensus layer and aims to integrate with Ethereum’s existing execution layer. With the help of this mage, staking ETH instead of mining for network security reduces energy consumption. As a result, this hugely promising development expects more scalability, security, and longevity in the Ethereum network.

How Will This Bring a Positive Change in the Cryptocurrency Industry?

According to Ethereum, the promising development that the Ethereum merge will introduce is a roadway to significant benefits for projects and investors involved in the cryptocurrency industry.

Some benefits that we can expect post the Ethereum merge are:

  • Adoption of Proof of Stake: Proof of Stake is a more efficient consensus technique regarding the network’s logic. It is obvious how Ethereum’s shift from Proof of Work to Proof of Stake will be a massive benefiting factor for everyone involved in the Ethereum ecosystem.
  • Reduced Energy Consumption: Another noteworthy benefit that can be expected post the Ethereum merge is the reduction of Ethereum’s energy consumption by 99.95%. This reduced energy consumption will also be achievable through the transition of Ethereum from Proof of Work to Proof of Stake – shaping into one of the most revolutionary changes in the cryptocurrency industry.
  • Future Scaling Upgrades: With sharding and other future scaling upgrades laying the groundwork for improvements, the Ethereum ecosystem will be better able to prepare and advance itself for the future. Besides, with the cryptocurrency market expanding and evolving, efficient changes and improvements will be the need of the hour for the Ethereum ecosystem.
  • Functioning Transformation: Another positive trait that Ethereum merge will bring along is the fundamental transformation of the functioning of Ethereum’s system. As a result, this transformation will serve as a gateway for extensive potential use cases and successful cryptocurrency investment stories. 

 Conclusion:

While the Ethereum Merge is much-awaited news in 2022, it’s still unclear if its applications will extend beyond the cryptocurrency industry. So let’s wait and see!