Consensus 2022: Web3, unpacking regulations, and optimism for crypto’s future

“All the pieces is greater in Texas” proved to be true throughout Consensus 2022. The crypto convention befell June 9–12 in Austin, Texas, this yr, attracting 17,000 folks from throughout the globe, regardless of the 100-degree plus climate. In keeping with the occasion sponsors, Consensus 2018, which was held on the Hilton Resort in New York, had beforehand drawn in virtually 9,000 attendees.
Caitlin Lengthy, CEO of Custodia — the Wyoming-based digital asset financial institution — advised Cointelegraph that the occasion this yr speaks volumes. “New York has despatched lots of this trade fleeing to locations like Austin, Wyoming and Miami. It is going to be fascinating to see if New York makes a comeback.”
Other than its new location, present market situations had been one other defining issue of the occasion. Nevertheless, attendees remained optimistic concerning the crypto ecosystem as an entire. Generally, new initiatives and the rise of Web3 had been the principle dialogue factors relatively than cryptocurrency costs. Ray Youssef, founder and CEO of Paxful — a peer-to-peer cryptocurrency market — advised Cointelegraph that crypto winters permit for constructing phases to start out, which he totally helps. “We are actually seeing initiatives construct platforms which can be actual and empowering.”
Constructing the crypto ecosystem in a bear market
To Youssef’s level, Web3 and new instruments to advance crypto ecosystems had been sizzling subjects of debate. For instance, Meltem Demirors, chief technique officer of CoinShares — a digital asset funding agency — advised Cointelegraph that regardless of the bear market, she has seen a rise in folks excited about completely different sides of the crypto trade:
“There are completely different niches and pockets of crypto I’m now seeing, a few of which I haven’t even heard of. For instance, the STEPN group is right here, which is an entire move-to-earn motion. The music NFT and trend NFT scene can also be huge right here. These are newer communities I’ve examine and have engaged with, however seeing them congregate and host their very own occasions has been actually enjoyable.”
Demirors gave a keynote on the occasion on cults and the way the crypto neighborhood is at present creating shared identification, perception programs and life-style rituals round rising initiatives. “Cults normally have a destructive connotation, however there’s a huge disaster of that means in our world right now. Folks now not give attention to their occupation, faith or nationality. Crypto is filling this fascinating position, bringing collectively folks by way of memes, capitalism and neighborhood values,” she defined. As such, Demirors famous that she believes “crypto cults” are attracting many individuals as a result of it gives a way of objective, together with capital. “There may be an fascinating convergence taking place,” she mentioned.
Whereas the crypto house continues to draw extra members, Staci Warden, CEO of the Algorand Basis, advised Cointelegraph that Alogrand views this crypto winter as a chance for constructing. “We expect that there will probably be some shakeout within the trade and we’re able to innovate,” she remarked.
Particularly, Warden defined that one space the Algorand neighborhood is concentrated on is what Web3 means for monetary inclusion. “With Web2, the whole lot went again to large platforms, however with Web3, creators and contributors obtain incentives and advantages for his or her participation.” With the rise of Web3 on the horizon, Warden shared that Algorand is “laser targeted on actual world use instances of economic inclusion and the monetization of creators for the work they do.”Web3 can also be impacting a variety of mainstream industries similar to trend and the creator financial system. Shedding gentle on this, Justin Banon, co-founder of the Boson Protocol — a decentralized community for commerce — advised Cointelegraph that final yr, the crypto sector witnessed the nonfungible token (NFT) craze, which has prompted the style trade’s participation.
“Bodily trend isn’t going away, however digital is arriving. It’s change into apparent that the 2 will mix and change into sides of the identical factor,” he mentioned. Banon additionally talked about {that a} majority of the world’s inhabitants will undoubtedly spend extra time within the digital world, which is why he believes there will probably be a necessity for digital trend. “This may permit us to establish and differentiate ourselves,” he mentioned.
Relating to the creator financial system, Solo Ceesay, co-founder of Calaxy — an open social market for creators — advised Cointelegraph that Calaxy lately raised $26 million in strategic funding to broaden its operations and growth efforts.
Whereas the emergence and development of Web3-focused initiatives are notable, it’s additionally vital to level out that present market situations have been difficult for different key gamers. Peter Wall, CEO of Argo Blockchain — a cryptocurrency mining firm — advised Cointelegraph that many Bitcoin miners raised fairness in 2021, however this has change into tough for some, given the bear market.
“There are solely two methods for miners to boost capital now, which is both by way of debt or by promoting Bitcoin,” he mentioned. Though this can be, Wall elaborated that solely miners with a good observe document will obtain loans. “They want to have the ability to execute with clear plans, whereas not being over dedicated to machine purchases and payments they’ll’t pay.”
Crypto’s regulatory panorama in america
Laws had been additionally closely mentioned on the convention. This shouldn’t come as a shock, as a variety of key regulatory occasions befell main as much as the occasion. For instance, the bipartisan crypto invoice, also called the “Accountable Monetary Innovation Act,” was launched in america Senate on June 7, 2022. According to a press release, the bipartisan invoice sponsored by senators Cynthia Lummis of Wyoming and Kirsten Gillibrand of New York, “addresses CFTC and SEC jurisdiction, stablecoin regulation, banking, tax remedy of digital property, and interagency coordination.”
Senator Pat Toomey, the rating member of the Senate Banking Committee, advised Cointelegraph that he thinks the bipartisan invoice is “terrific,” additional noting that the invoice accommodates modest variations in how stablecoins are handled in contrast together with his stablecoin strategy, which was drafted in April this yr. Toomey added that whereas he has not launched a invoice but, there are “bridgeable variations” between his draft and the laws from Lummis and Gillibrand:
“Kirsten Gillibrand mentioned on our panel that we are able to bridge these variations on a number of the issues I mentioned, but it surely’s additionally very constructive to have a Democrat and Republican senator introducing a reasonably complete invoice that sensibly creates a regulatory framework that’s meant to permit this house to thrive. From that perspective, I believe it’s very constructive.”
Echoing Toomey, Lengthy talked about that the bipartisan invoice is a vital development for the crypto sector, stating, “That is the invoice to observe in Washington. There are actually 50 completely different crypto payments which have been launched in Congress and there is just one that’s bipartisan sponsored by the highly effective senator from New York State, together with the highly effective senator on senate banking from Wyoming, which is the state main digital property. That’s fairly a mixture.”
Lengthy added that stablecoin laws and central financial institution digital currencies (CBDCs) will probably be main subjects of debate this yr. As an example, though President Biden released an government order in March 2022 calling for the analysis and growth of a possible U.S. central financial institution digital foreign money, Lengthy remarked that she doesn’t imagine the U.S. will situation a CBDC. “The Federal Reserve will put out the FedNow Service by the top of this yr, which is barely six months away. Nevertheless, no guidelines have been revealed but, so we don’t know what this can appear to be.”
Furthermore, Lengthy predicts that stablecoins will probably be a fundamental focus for regulators, mentioning that Wyoming’s particular objective depository regime falls into this class, alongside The New York State Division of Monetary Providers (DFS) regulatory steerage for U.S. dollar-backed stablecoins issued by DFS-regulated entities. But, Lengthy defined that “it will likely be a few years earlier than we realistically see what occurs when it comes to a regulation that truly passes” relating to stablecoins. She additional remarked that regulators have had the chance to create laws round stablecoins however have but to behave. She mentioned:
“Regulators have sat on professional purposes of events which have sought permission, whereas the scams have proliferated on this trade. It’s robust, however I firmly imagine the regulators may have acted sooner. Lots of people wouldn’t have been harm if they’d performed so.”

To Lengthy’s level, Toomey mentioned that he thinks there’s now stress and momentum to cross stablecoin laws. “U.S Secretary of the Treasury Janet Yellen mentioned in entrance of the banking committee that we should always do it this yr and I believe that’s sensible,” mentioned Toomey. He added that the stress has change into better because of the current collapse of the Terra ecosystem.
“I believe it influences laws within the sense that it has drawn consideration to the crypto house, and it’s a get up name to the federal authorities. My very own view is that algorithmic stablecoins needs to be handled individually from fiat/asset backed stablecoins,” he mentioned, including, “However let’s be clear: Terra was very massive, and when one thing that giant can collapse, the pure inclination of a regulator is to look out throughout the sphere to see what different related devices and merchandise are there, and the hazards that will come up.”
Optimism reigns
Given the present state of cryptocurrency markets, it’s notable that many ecosystem members remained optimistic concerning the future. Particularly, Austin’s cryptocurrency neighborhood seems to be thriving, because it has change into a sizzling spot for crypto mining corporations and a variety of Web3 initiatives.
Patrick Stanley, core contributor to Metropolis Cash — the cryptocurrency undertaking that has been carried out in New York State and Miami — advised Cointelegraph that AustinCoin (ATX) might be activated at any time, noting that there’s a group at present engaged on a proposal for getting new CityCoins up and working.
“We need to be extra deliberate about launching AustinCoin. We have already got folks on the bottom in Austin, we now have the capital, and there’s clear dedication. We simply need to guarantee all of this earlier than activating AustinCoin.” Stanley added that Austin Mayor Steve Adler is a “cryptocurrency progressive,” noting that he understands that CityCoins leaves much less of a footprint than having huge tech corporations transfer to Austin. “CityCoins is like getting the tax income of a big firm with out the footprint and actual property going up. This has been very compelling to Mayor Adler,” he shared.
Demirors additionally identified that she is happy concerning the development of crypto infrastructures, similar to new information facilities, semiconductors and the general “plumbing” that makes cryptocurrency and any expertise operate correctly. “We’d like to ensure the U.S. is a pleasant jurisdiction for folks to develop not solely software program, but in addition {hardware} to deploy at scale,” she mentioned.
Whereas Demirors acknowledges that the majority laws at present isn’t being drafted round this facet, she is hopeful that Texas and different states proceed to take a welcoming strategy to initiatives similar to mining. Demirors additionally famous that the appropriate to shopper and monetary privateness isn’t being thought of in crypto laws, remarking that the majority of those payments need extra monetary surveillance. “I believe as an trade, it’s vital for us to push again on that, notably in a world the place CBDCs are being explored.”
Lastly, it’s vital to level out that the crypto trade is continuous to convey on key gamers to assist with developments. For instance, Grayscale Investments lately employed Donald B. Verrilli, a former U.S. Solicitor Common, to affix the agency to assist push for a spot Bitcoin exchange-traded fund (ETF). Verrilli talked about throughout a press convention at Consensus final week that he’s making an attempt to take public coverage and transfer it in a constructive course.
As such, Verrilli goals to persuade the U.S. Securities and Alternate Fee (SEC) to transform Grayscale’s Bitcoin Belief (GBTC) right into a spot-based ETF. With a purpose to accomplish this, Verrilli defined that it’s “arbitrary and capricious” to deal with instances which can be alike in a special method, through which he referenced the SEC’s approval of a Bitcoin futures ETF, however not a Bitcoin-spot ETF. “It looks like it is a widespread sense level. I’m new to this, however taking a look at it thus far, it’s totally laborious to see what argument there might be for treating this stuff in another way.”