Jack Dorsey’s Crypto Exchange Project

Science, Technology, and Innovation

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Twitter CEO Jack Dorsey's online payments company Square has officially released a whitepaper detailing the working of its new decentralised exchange platform called “tbDEX.” As per the information shared, the protocol will allow people to transact between the worlds of cryptocurrencies and fiat currencies (national currencies like Rupees and Dollars) in real time, bridging the gap between physical and crypto finances. To enable this, the tbDEX team is focusing on establishing “social trust” regarding the crypto space, so that more people can join in and benefit from the independent finance system of cryptocurrencies.

In this particular case, tbDEX will allow the conversion of fiats into Bitcoin and vice versa. Trading at $63,350 (roughly Rs. 47 lakh) per token, Bitcoin is the oldest cryptocurrency, dating back to 2009.

“tbDEX is a protocol for discovering liquidity and exchanging assets (such as Bitcoin, fiat money, or real world goods) when the existence of social trust is an intractable element of managing transaction risk,” the whitepaper says. “It provides the infrastructure necessary to create a ubiquity of on-ramps and off-ramps directly between the fiat and crypto financial systems without the need for centralised intermediaries and trust brokers”.

The tbDEX protocol also has an interesting approach towards transaction fees.

The amount of information each party decides to disclose will reduce the transaction fees required to convert their fiat currencies into Bitcoin. Complete anonymity will hence, cost more fees on the tbDEX protocol.

“The tbDEX protocol also facilitates the secure exchange of the minimum necessary identity information acceptable to counterparties in order to satisfy requirements, be they legal, regulatory, or related to any other consideration of risk. The protocol itself neither collects nor records any personally identifiable information,” a blog post shared by the tbDEX team said.

While some Twitter users seemed excited about Dorsey's decentralised exchange app, others feared that this would sneak in more elements of the “know-your-customer (KYC)” details into the crypto space.

The Twitter chief had begun addressing this project since the early months of 2021. The team behind this project is being led by Mike Brock, who keeps tweeting on ongoing developments.

Dorsey, who is a strong crypto supporter, had also announced the development of a hardware wallet and service to make Bitcoin possession more mainstream.

Along with foraying into the crypto space with totally new ventures, Dorsey is integrating elements of the crypto culture within Twitter itself as well.

The microblogging site is getting a new tab for people to showcase their collections of non-fungible tokens (NFTs).

Interested in cryptocurrency? We discuss all things crypto with WazirX CEO Nischal Shetty and WeekendInvesting founder Alok Jain on Orbital, the Gadgets 360 podcast. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, Amazon Music and wherever you get your podcasts.


South Korea Says It Is Exploring Taxing Non-Fungible Tokens

South Korea is exploring ways to tax non-fungible tokens (NFTs) amid controversies surrounding crypto regulations in the country. NFTs are virtual collectibles associated with real life objects like games, artwork, and music among others with ownership locked and transferred on blockchain. The country aims to use one of its existing laws to tax incomes earned from buying or selling these virtual assets. The law that is being considered to tax NFTs in South Korea is the Act on the Specified Financial Transaction Information. It defines cryptocurrency as a “virtual asset” and focuses on a reporting system for cryptocurrency exchanges.

Doh Kyu-sang, the vice chairman of South Korea's Financial Services Commission (FSC) revealed the information to the media this week, The Korea Herald reported.

It has been a while since regulating the NFT space has remained surrounded by controversies in South Korea.

Last month, finance minister Hong Nam-ki said during a parliamentary audit session that NFTs should not be categorised as virtual assets, which is in contrast with what the FSC is now saying about the NFT space.

In fact, earlier this month the FSC had itself said that NFTs are not virtual assets, and will not be subjected to regulation.

At the time, the decision was based on the review of Financial Action Task Force's (FATF). The update was made to the 2019 guidance to a risk-based approach for virtual assets as well as virtual asset service providers (VASPs).

“NFT, or crypto-collectibles, depending on their characteristics are generally not considered to be (Virtual Assets),” the report said.

As per the South Korean law, certificate holders of virtual assets need to pay 20 percent tax on the income that exceeds $2,102 (roughly Rs. 1.5 lakh) from selling the assets, such as NFT artworks of a famous artist, the report by The Korea Herald explained.

The crypto space is under high scrutiny in South Korea.

In September this year, a new rule came into existence in the country that mandated crypto exchanges to register with the Financial Intelligence Unit and partner with banks to ensure real-name accounts.

More than 60 cryptocurrency exchanges in South Korea notified customers of a partial or full suspension of trading services.

Meanwhile, regulating the decentralised finance space has been keeping governments around the world on toes.

The crypto market crashed in India after a Parliament agenda listed by the Indian government – seeking to prohibit all private cryptocurrencies from operating in the country.

Interested in cryptocurrency? We discuss all things crypto with WazirX CEO Nischal Shetty and WeekendInvesting founder Alok Jain on Orbital, the Gadgets 360 podcast. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, Amazon Music and wherever you get your podcasts.