UK Treasury-Ordered Report Calls for A 5 Point Plan; Includes FinTech Fund & Crypto Regulation

UK Treasury-Ordered Report Calls for A 5 Point Plan; Includes FinTech Fund & Crypto Regulation

Treasury report based on the U.K. fintech, concludes govt needs to run a specific regime for Crypto-asset’s regulations and control.

U.K. chancellor, Rishi Sunak, triggered that review back in March 2020, under Ron Khalifa’s supervision (former WorldPay boss). Afterward, the Treasury-ordered review points out a plan to make U.K.’s fintech a leading market in the world.

According to the report named “Khalifa Review of U.K. Fintech,” the country can play a vital role in crypto-mania and become a globally recognized center for trade, issuance, clearance, and exchange of cryptocurrencies.

Khalifa addressed the European finance’s progress after the crypto favored the proposal, MiCA (Markets in Crypto-assets), has come in force, so the U.K. also has to “act quickly” to put its fintech firms ahead of the curve. Khalifa’s Review states,

“The U.K. should aim to be at least as broad in ambition as MiCA – but should also consider whether it can develop a bespoke regime that is more innovation-driven. A bespoke regime for crypto assets should adopt a functional and technology-neutral approach, in line with the principles of the current regulatory framework, as well as the concept of ‘same risk, same regulation,’ while being tailored to the risks arising from crypto asset-related activitie.”

Also, there are no reasons to be ‘flexible’ to do with future challenges such as Decentralized Finance (DeFi), another spot that needs attention for being regulated in the state, says the report.

The review concludes that to have engagement in deploying policies and regulations for crypto-favored areas, U.K. must join the group of international regulators, Global Financial Innovation Network (GFIN).

The U.K. Treasury has announced a consultation worldwide that started in January to depict the regulatory experience approached digital currencies and stablecoins. The program is still accepting feedback till March 3.

U.K. commissions have been aggressive to crypto trading and investments so far. On January 6, derivatives and exchange-traded notes sale was shut down by Financial Conduct Authority (FCA) which alleged the products ill-suited due to the potential harm they pose.

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Author: James W

Janet Yellen Torches Bitcoin Again, Calls it ‘Extremely Inefficient’ As A Payment Option

Janet Yellen Torches Bitcoin Again, Calls it ‘Extremely Inefficient’ As A Payment Option

U.S. Treasury Secretary is rooting for a digital dollar, but remains unconvinced about Bitcoin, which she describes as an inefficient asset.

U.S. Treasury Secretary Janet Yellen is not backing down with her criticism of Bitcoin. Yellen has gone on to describe the leading cryptocurrency as an “extremely inefficient” and “highly speculative asset.”

Bitcoin is Dangerous

Yellen commented at the New York Times’ “DealBook” conference, where she spoke on the country’s road to recovery post-covid-19.

Yellen had previously served as Federal Reserve chair under the Obama administration, having been appointed to replace Ben Bernanke from 2014 to 2018. She makes history as the first woman to be appointed as Treasury Secretary.

Her comments come as Bitcoin witnessed a sharp decline in prices, shedding off around $11,000 to $47K on Bitstamp. Bitcoin bounced back some moments later, regaining support and climbing back up to $51,500.

For Yellen, Bitcoin’s issues trump its benefits. While she acknowledges the role cryptocurrencies play in the financial system by creating quicker payment methods, she believes they have numerous problems. She raised concerns around its legitimacy and stability as an asset, bashing Bitcoin for its illicit financing links.

“People should beware it can be extremely volatile, and I do worry about potential losses that investors could suffer…I fear it’s often for illicit finance. It’s an extremely inefficient way to conduct transactions.”

Yellen also hinted at the possibility of the Federal Reserve hopping on the central bank digital currency (CBDC) bandwagon. While countries like China and Russia are making headway with their CBDCs, the U.S. has remained indecisive and is still unsure of what it plans to do.

Crypto’s Criminal Links

For Treasury Secretary Yellen, there’s one awful smell that hangs around cryptocurrencies—criminality. The crypto market should have gotten used to Yellen’s negative crypto comments by now. It has become a recurring theme with the high-ranking official. Earlier this month, she raised the alarm on how bitcoin was being abused for illicit purposes at a financial sector innovation roundtable. Yellen explained at the event,

“I see the promise of these new technologies, but I also see the reality: cryptocurrencies have been used to launder the profits of online drug traffickers; they’ve been a tool to finance terrorism.”

While cryptos like Bitcoin and Ether are attractive to criminals due to their pseudonymous nature, recent studies from researchers show the tides are changing. Research from famed blockchain analysis firm Chainalysis revealed a decline in crypto-related crimes in 2020. The share of criminal activity was roughly $21.4 billion in 2019 of all crypto transaction volume, according to Chainalysis. That figure fell to 0.34$ or $10 billion in total transaction volume. Chainalysis believes the identification of criminal wallet addresses was a major catalyst for the drop in numbers.

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Author: Jimmy Aki

CNBC Mad Money Host, Jim Cramer, Calls Companies Not Owning any Bitcoin ‘Irresponsible’

CNBC Mad Money Host, Jim Cramer, Calls Companies Not Owning any Bitcoin ‘Irresponsible’

According to the “Mad Money” host, every treasurer should be calling for putting a portion of their cash in Bitcoin.

It’s “almost irresponsible” for companies not to own Bitcoin, says Jim Cramer, the host of “Mad Money” in an interview with CNBC’s Andrew Sorkin.

Just this week, Tesla announced that they had bought $1.5 billion worth of Bitcoin (around 7.7%), and this endorsement from the major US has released a flurry of speculation regarding which company would be the next to join in.

While some don’t feel the same way, much like JPMorgan strategists who see it “unlikely” that more mainstream corporations would follow Tesla in BTC allocation, others expect the herd is coming.

“As far as a way to be able to have a pastiche of things to do with your cash, I’m all for it.” said the former hedge fund manager on Tuesday.

“I think it’s almost irresponsible not to include it. Every treasurer should be going to boards of directors and saying should we put a small portion of our cash in Bitcoin.”

Hedge against Fiat Currency

Cramer shared that he personally owns Bitcoin — “I own bitcoin. I’ve owned it for some time” — and called it “an alternative to a cash position, where you make absolutely nothing.”

Last year in December, Cramer tweeted that he was thinking of buying some BTC, and shortly after, in an interview with TheStreet, he decided to buy some under $18k but didn’t mention just how much exactly.

“Bitcoin is exciting,” he said on Tuesday, adding that he believes in the validity of the cryptocurrency while arguing that it could be used as a hedge against inflation or an equity portfolio.

“It seems to be an interesting way to hedge against the rest of the environment, nice hedge against fiat currency.”

A Trip to Higher Levels

Though Cramer noted that there are a lot of buyers and promoters of the leading digital currency, which is not the case for the seller at this time,

“you have to have some kind of hedge on it. Because if you take it and it goes down, I think that you’re gonna end up saying why did I use bitcoin when I could actually transact in dollars.”

The price of Bitcoin, which shot past a record high of $48,000 following the Tesla announcement, for now, is keeping around $46,500.

Calling Bitcoin a “little inflated,” he pointed out that “there’s plenty of people who say it could go to $100,000.”

Michael Novogratz of crypto investment firm Galaxy Digital is one such bull who sees the prices of Bitcoin going to $100,000 by the end of this year. He is also of the same opinion as Cramer and sees “every company in America do the same thing.”

“Young people are buying into the future, and they see cryptocurrencies – bitcoin and other cryptos – as their currencies.”

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Author: AnTy

Bitwise 10 Large Cap Index Adds AAVE and Uniswap; CIO Calls DeFi Inclusion a ‘Milestone Event’

Bitwise 10 Large Cap Index Adds AAVE and Uniswap; CIO Calls DeFi Inclusion a ‘Milestone Event’

The DeFi virus is spreading.

Cryptocurrency asset manager Bitwise Asset Management has added two new DeFi blue chips to its Bitwise 10 Large Cap Crypto Index as part of the January month-end index rebalance.

“DeFi assets entering the Bitwise 10 Large Cap Crypto Index is a milestone event,” said Matt Hougan, Chief Investment Officer at Bitwise.

The Bitwise 10 Large Cap Crypto Index (BITX) tracks a total return of the 10 largest crypto assets, which is measured and weighted by their free-float market capitalization and is currently trading at $36,286.

The Index now tracks Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Bitcoin Cash (BCH), EOS, Tezos (XTZ), Stellar (XLM), Chainlink (LINK), Uniswap (UNI), and Aave (AAVE). Hunter Horsley, chief executive officer at Bitwise, said,

“The last few weeks has seen de-platforming & censorship by some of our country’s leading companies. In response, new decentralized services—with no corporation, executives, or board—are growing in popularity. Today, the 1st decentralized exchange (UNI) entered the Bitwise 10.”

Just last month, Bitwise liquidated its just over $9 million worth of position in XRP, representing approximately 3.8% share of the Fund, in response to the US Securities and Exchange Commission (SEC) suing Ripple And its top executives for allegedly selling unregistered securities XRP.

“The Bitwise 10 Crypto Index Fund does not invest in assets that are reasonably likely to be deemed securities under federal or state securities laws,” said the company at the time.

Bitwise is not the only one to provide its clients exposure to the world of decentralized finance through the popular DeFi tokens. As we reported, the largest asset manager Grayscale Investments has also filed with the SEC for several single-asset trusts that cover various DeFi tokens, including Aave.

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Author: AnTy

Fundstrat Raises ETH Target Price to $10,500; “The Best Risk/Reward Investment Play In Crypto”

Fundstrat Raises Ethereum Price Target to $10,500; Calls It “The Best Risk/Reward Investment Play In Crypto”

The second-largest cryptocurrency could surge more than 700% from its current level to $10,500, according to Fundstrat Global Advisors LLC.

The prediction is made by digital asset strategist of Fundstrat, David Grider, who wrote, Ether is “the best risk/reward investment play in crypto.” “Blockchain computing may be the future of the cloud,” added Grider, who sees setbacks in the Ethereum 2.0 network upgrade or a crypto bear market as the risks.

The first phase of ETH 2.0, the Beacon Chain, already has 2.57 million ETH locked in its deposit contract. Calling the launch “a resounding success,” developer Danny Ryan says, thus far, it has proved to be “stable and robust.” Ryan in a blog post on Wednesday wrote,

“The successful launch of the beacon chain was a huge milestone for engineers, stakers, and the community at large. We now have the foundation for Ethereum’s sustainable future. Although there are many moving pieces and innumerable winding threads, across the board, the Ethereum community has shown its unbelievable resilience and ability to deliver.”

Besides the network upgrade, Grider’s prediction is also based on the popularity of decentralized finance (DeFi), a growing sector that has over $23 billion in total value locked (TVL).

This moon target came a day after Ether hit its all-time high at $1,440 before seeing a decline today in tandem with Bitcoin. Eth’s new high came with an “overheated” derivatives market seen in the recent high funding rate.

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Eth’s more than fivefold gains last year beats Bitcoin’s uptrend, which quadrupled in 2020. The crypto market expects ETH to outperform Bitcoin yet again, as it did during the 2017 bull cycle as well.

Crypto derivatives platform Deribit actually added ETH options contracts with a strike price of $10k in the first week of January 2021. On Tuesday, Deribit added another ETH options contract at a strike price of $20,000 with the December expiry.

On Feb. 8, the regulated platform, CME, will also launch the Ethereum futures contract, which is further expected to bring in institutional investors by legitimizing the cryptocurrency for institutions to make it part of their investment portfolio.

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Author: AnTy

Trump Calls for $2,000 Stimulus Checks; Pelosi Agrees to Push Markets to the Moon

Trump Calls for $2,000 Stimulus Checks; Pelosi Agrees to Push Markets to the Moon

The US government is preparing to push the prices in all markets higher.

Calling the recently-passed coronavirus relief bill a “disgrace,” President Donald Trump is demanding Congress to increase stimulus payments from $600 to $2,000 and get rid of “wasteful and unnecessary items.” Trump said in a video,

“I am asking Congress to amend this bill and increase the ridiculously low $600 to $2,000, or $4,000 for a couple.”

However, the $900 billion COVID-19 stimulus bill was passed on Sunday in both houses of Congress with veto-proof majorities which means Trump might not be able to raise the direct payment limit. The good thing is top Democrats in Congress are in favor of bigger cheeks to people.

“Democrats are ready to bring this to the Floor this week by unanimous consent. Let’s do it!” House Speaker Nancy Pelosi tweeted in response to Trump’s video.

It is not known if the $2,000 will replace the $600 check yet. Meanwhile, the recently passed pandemic recovery bill includes direct payments of up to $600 to eligible adults plus $600 per child dependent. Individuals earning up to $75,000 in adjusted gross income, or $112,500 as head of household and $150,000 as a married couple qualifies for the maximum benefit of this stimulus payment.

As we reported, Treasury Secretary Steven Mnuchin said on Monday that qualifying Americans could get their direct benefits as early as “at the beginning of next week.”

Now, if the latest $2,000 direct payments become a reality, “All markets will moon,” said one trader.

Up over 14% YTD, S&P 500 hit a new all-time high last week while the US Dollar index is at multi-year lows, down more than 12% from its March uptrend. When it comes to precious metals, gold is enjoying a 22.3% uptrend this year trading at $1,862 but down from its August peak of $2,075. As for silver, it rallied 47% year-to-date, currently at $25.5 but down from August’s nearly $30 high.

Bitcoin, however, is the leading asset with 227% gains in 2020, making a new ATH at $24,300 just this past weekend.

Canadian fund managers are also revamping their portfolios and bringing BTC into the mix as COVID-19 vaccines roll out and central banks provide a historic level of stimulus. The Bitcoin Fund has actually soared 65% since it began trading in Canadian dollars in October.

“It’s a hedge against all the money printing that is going on,” said Arthur Salzer, chief executive officer of Northland Wealth Management, noting “institutional investors are embracing” this asset class.

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Author: AnTy

Indian Think Tank Founder Says Bitcoin Should Not Be Legalized As A Private Currency

Indian entrepreneur and founder of BEGIN Think Tank, Deepak Kapoor, calls on the countries’ financial authorities and government to implement regulations on the cryptocurrency space in a bid to prevent the illicit use of the “innovative technology.”

Speaking to BusinessWorld on Monday, in a panel shared by Ratan Sharda, noted Author, Editor, and TV Panelist, Kapoor further said cryptocurrencies should be treated in a similar bracket to company securities or stocks.

India’s total ban on cryptocurrency, stipulated by the Reserve Bank of India, was quashed earlier this year as the Supreme Court ruled it unconstitutional. Ratan echoed the Supreme Court decision as final, stating the current bill in parliament looking to affect the total ban “will not work” in its current state.

“Just like you cannot ban porn, you cannot ban cryptocurrency.”

A better view would be to place controls on the market and ecosystem, the author stated.

Nonetheless, the privatization of Bitcoin (and similar cryptocurrencies) will not be accepted by governments any time soon, Kapoor shared. Controls will only effect a smooth transition into digital payments, but acceptance of private cryptocurrencies could generally collapse economies, he explained.

“Globally, everyone wants to make bitcoin into a private currency, which will not be allowed because it will lead to the collapse of the economies.”

Kapoor praised cryptocurrencies as a technology that cannot be hacked but warned legalizing Bitcoin and private currencies “might put the entire economy of the country at risk.”

How should the government control and regulate these new innovative digital assets?

According to the think tank CEO, Bitcoin should be treated similarly as stocks or company securities. He further stated,

“That is the only legal status that it can get, and it should get this status. This could be the most secure technology cryptographically that we have ever seen in our lifetimes.”

India’s monumental Supreme Court decision to destroy the blanket ban on crypto opened up the country to a new wave of interest in these digital assets. However, Kapoor believes the country should be doing more on the regulation side of things to curb cybercrime using Bitcoin and cryptocurrencies.

“We do not even have cryptocurrency crimes as a category of crimes registered in the country. Let us start acknowledging that first,” he said. “I would want senior people from investigative and law enforcement agencies to first at least know about it and to know what the world is moving towards.”

He called on the government to introduce a body specifically looking into virtual assets or give the Securities and Exchange Board of India (SEBI) the mandate over these assets.

India’s regulation on cryptocurrencies is still miles off peer countries. Since February’s ruling on the lift on the total crypto ban, the RBI has given contradictory statements on what is legal and what isn’t. In May, the central bank announced it had not prohibited any banking services from conducting business with crypto service providers despite reports it had done so.

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Author: Lujan Odera

Ethereum Classic To Lose Over 50% Of Nodes As Top Client, OpenEthereum, Moves On

  • Open Ethereum, led by Gnosis, calls quits on supporting Ethereum Classic (ETC) development.
  • The client, formerly Parity Technologies, holds nearly 50% of ETC nodes.
  • Will ETC still hold its immutability properties?

The largest developer client on Ethereum Classic, OpenEthereum (OE), completed a vote to deprecate development on the blockchain in a bid to focus their efforts on Ethereum and other projects.

Following the vote, only Core Geth and Hyperledger Besu clients – which hold less than a third of the nodes – will continue supporting the development of ETC.

The vote on GitHub raised concerns for ETC’s immutability as the third-largest client, Multi-Geth, also deprecated ETC development on any future hard forks.

Over 50% of ETC Nodes set to go off

According to ETCnodes.org, the total number of clients on ETC blockchain totals to 631 and will be reduced to 199 nodes (Core-Geth with 194 nodes and Hyperledger Besu accounting for five nodes) when developers update or hard fork the blockchain.

Image: etcnodes.org

OE is a project that replaced Parity Technologies once the latter transferred the entire client codebase to decentralized exchange, Gnosis. Since the start of 2020, ETC developers and OE developers have been at loggerheads on the overall implementation of the Phoenix hard fork on ETC.

Speaking on why Open Ethereum is moving from ETC client support, Martin Köppelmann, CEO and Founder of Gnosis, stated OE didn’t want to get into internal governance squabbles of ETC. He further said:

“We explored various options to work with different players from ETC, but in the end, we felt we want to focus on the thing we know and that is Ethereum.”

Other developers at Open Ethereum claim it is the “perfect time for divorce” as “supporting Classic is more trouble than what it’s worth.”

Ethereum Classic Developers Respond

The animosity between the two development camps has been ranging for some time, as shown in the tweet below:

However, responding to the latest deprecation, CEO of ETC Labs, Terry Culver, had a more friendly approach towards Parity developers. As the leading developer on Core-Geth client, ETC Labs will have a larger pie on the development of ETC, but the reduction of nodes may be harmful to ETC’s security.

To prevent this, he called on ETC developers to find a balance between innovation and immutability developments on the blockchain.

Another lead developer, ETC Coop’s Executive Director, Bob Summerwill, does not focus much on Multi-Geth and OE, leaving the project calling on developers to switch to the available options. He stated:

“Multi-geth is dropping ETC support too, but both core-geth and Hyperledger Besu are both viable options which we will be recommending to end-users. Best wishes.”

Immutability: The backstory on Open Ethereum, ETC

The story can be traced back to 2016 when the Ethereum blockchain split after the DAO hack. The hard fork rolled back the transactions before the hack (forming the current ETH blockchain).

Still, some developers and users saw this as interference in the core principle of blockchains – immutability. This group remained on the original chain – renamed to Ethereum Classic.

Fast forward to 2020, and the Phoenix hard fork by ETC raised questions on immutability due to the “upgrade in the op-code pricing to align with ETH’s.” The op-code implementation raised questions on changing the tokenomics of ETC, which means the blockchain no longer holds immutability as a value proposition.

According to Multi-Geth and Parity core developer, Wei Tang, the lack of immutability on ETC makes the blockchain the same as ETH; hence it would be double work continuing to develop on both chains. His conclusion?

“I think for a healthy ecosystem of Ethereum, we should follow the majority consensus of ETH, or support a merge of ETH and ETC.”

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Author: Lujan Odera

European Union Economic Council Aims to Introduce ‘Tougher’ Laws On ‘Global’ Stablecoins

  • Chief economic minister in the European Union calls for tougher and more stringent regulations to govern the cryptocurrency industry
  • Targeting global stablecoin projects such as Facebook’s Libra

In a speech made during the Digital Finance Outreach Conference 2020, Executive Vice President of the European Commission, Valdis Dombrovskis, spoke on the regulation of the digital finance industry, urging EU states to take the step forward in guiding proper regulation of the digital assets.

As the world continues its battle to stop the spread of COVID-19, many states and organizations have turned to digital payments, and Valdis does not expect this trend to go away any time soon. He said,

“Once the crisis passes, I would not expect the process of embracing digitalization to slow down – given how quickly technology evolves and the strong demand.”

The future is pointing towards a digital finance economy, and Dombrovskis is urging the European Union to take the step forward to “embrace digital finance and make it mainstream.” However, the challenge of regulation always arises in light of new technologies given the rapid movement in the field.

To remove these regulatory barriers, the commission is looking to launch a digital finance strategy for Europe later in the year. The strategy will focus on creating laws and regulations to make the most out of digital finance, enabling the continent to compete with the U.S, parts of Asia, and Russia in the space.

Crypto assets at the test

Crypto assets and distributed ledger technologies are the first tests for the commission. The fragmented regulation of crypto across European countries is making it difficult for market integration and companies to carry out businesses freely across the trade bloc. Dombrovskis said,

“Lack of legal certainty is often cited as the main barrier to developing a sound crypto-asset market in the EU.”

While the speech gives little away on the planned crypto regulation regime, Valdis said the new regulation strategy would boost innovation and development in digital finance across Europe through a harmonized rulebook.

A closer look at stablecoins

Valdis also differentiated the need to have a separate regulation handbook for “global stablecoins” backed by fiat currency. He believes global stablecoins such as Libra “are likely to raise additional challenges in terms of financial stability and monetary policy,” hence the need to adopt stringer policies on them.

The speech did not state any specific stablecoin, but the rise of Facebook’s Libra currency has seen several financial authorities take a keen look at the stablecoin.

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Author: Lujan Odera