Bitcoin’s the Way to Go As Inflation Records Its Highest Jump in 13 Years

The USD is getting a boost from high inflation concerns, with traders now looking forward to the Fed Chair’s testimony this week. Blackrock CEO is also concerned about inflation which he says “is going to be more systematically,” noting asset owners are the biggest beneficiaries of monetary policy.”

The US dollar continues to be perched above 90 since early last month, now aiming for 93 after data showed that US inflation for June is coming in hotter than expected. Just like the greenback, US Treasury yields also responded to the inflation data with a sharp rise.

US consumer prices rose by the most in 13 years last month as the economic recovery continues its momentum.

The rate of inflation in the 12 months ended in June jumped to 5.4% from 5%.

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However, this is to be expected as up until recently, there was a tight lockdown in the country, and still, not everything is open or operating at a standard rate. The rapid recovery of the economy is having an unwanted side-effect, higher inflation.

Transitory or Not?

In June, the cost of living jumped by the most significant amount, 0.9%, more than expected, since 2008 as inflation spread more broadly through the US economy, raising questions whether this spike in prices will subside as quickly as the central bank is predicting.

While the cost of used cars accounted for over one-third of this increase, prices for food, energy, clothing, hotels, and plane tickets also rose sharply, which also fell sharply in the early stages of the coronavirus pandemic last year.

Another measure of inflation that omits volatile food and energy also surged 0.9% in June, with the 12-month rate increasing to 4.5% to stand at a 29-year high.

While the component not associated with the used car market being twice as large, used car prices should also “probably be seen as some sort of bellwether in this case, instead of something to be ignored,” wrote analyst Mati Greenspan in his daily newsletter Quantum Economics.

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Blackrock CEO Larry Fink is also concerned about inflation. “It is my view that inflation is going to be more systematical. I believe it is a fundamental, foundational change in how we navigate economic policy,” he said in an interview with CNBC.

He further noted that with interest rates low, savers are getting slammed while “asset owners are the biggest beneficiaries of monetary policy.”

Market Reaction

Traders are now looking forward to Federal Reserve Chairman Jerome Powell’s testimony before Congress on Wednesday and Thursday for any signals on potential tapering. Fed officials first made a surprise shift in tone last month about the possibility of US stimulus withdrawal that boosted the dollar in recent weeks.

Powell, however, has repeatedly been stating that high inflation will be transitory as supply chains normalize and adapt.

The stock market waved off these latest figures, with the S&P 500 seeing a slight drop after roaring to new all-time highs on Monday. Greenspan said,

“The stocks really are in a euphoric mode right now, and investors will accept any reason to continue buying the rally.”

Cryptocurrencies meanwhile remain on the back foot since late May when they first started selling-off with the total crypto market cap now at $1.34 trillion.

This week, the crypto market is experiencing losses across the board, with Bitcoin doing its thing and trading above $32,500, recovering some from its fall to $31,565 in the last 24 hours and Ether at just above $1,900 after falling to $1,860.

While down in the past two months, in the past year, when commodity prices rose between 20% to 107%, Bitcoin rallied 250%.

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Author: AnTy

Interest in Cryptocurrencies Are On The Rise, But Volatility Concerns Hold Back Traders: Survey

Interest in Cryptocurrencies Are On The Rise, But Volatility Concerns Hold Back Traders: Survey

Cryptocurrencies have seen wide adoption in the Australian continent, as reflected by a new survey.

Volatility Deterring Widespread Adoption Of Crypto

In a previous survey by The Finder of 1,004 participants in January, about 1 in 4 respondents revealed that they invest in or plan to buy cryptocurrencies.

The number has nearly doubled according to new findings, per reports by The Australian. Of the unknown number of surveyed respondents, about 1 in six Australians (about 17%) said they now own cryptocurrencies. A further 13% said they are interested in cryptocurrencies and would place a stake in the nascent industry as the months go by.

But most of those who participated in the new survey noted that volatility was a huge deterrent. About 43% said that the erratic price swings were a barrier for them to place a stake in virtual currencies. This reflects a 14% increase from the January survey.

Aside from volatility, the knowledge gap of what crypto does comes in at 19%, and limited utility comes in at 18%. Another barrier is that Australians do not know how to buy it, with 22% of respondents stating this fact.

50% of male participants pointed to volatility as a reason they cannot invest in the nascent sector compared to 37% female respondents.

Speaking on the results, Finder personal finance expert Kate Browne said that risk has continued to undermine the adoption of cryptocurrencies. However, she noted that this is a norm for any investment.

Browne noted that the greater involvement of women in the crypto space was a good sign. According to her, this is because more businesses accept BTC payment, and the use of Bitcoin automated teller machines (ATMs) and debit cards was further aiding the growth of the digital asset.

Crypto Is Overvalued

Bitcoin is still the top dog despite volatility with a 9% market share. However, it has lost 4% from the 13% market share it enjoyed in the Jan. survey. Ethereum follows with 8% while parody coin DOGE comes in third 5%. Finally, Bitcoin Cash takes up the rear with 4%. BTC -5.90% Bitcoin / USD BTCUSD $ 35,777.75
-$2,110.89-5.90%
Volume 36.12 b Change -$2,110.89 Open $35,777.75 Circulating 18.74 m Market Cap 670.41 b
2 h NASCAR Driver Becomes the Latest Athlete to Accept Payment in Cryptocurrency In Voyager Sponsorship 3 h Interest in Cryptocurrencies Are On The Rise, But Volatility Concerns Hold Back Traders: Survey 5 h There’s “Significant Desire” for Crypto Among Investor says BBVA as it Launches Bitcoin Trading Service
ETH -5.72% Ethereum / USD ETHUSD $ 2,234.15
-$127.79-5.72%
Volume 22.7 b Change -$127.79 Open $2,234.15 Circulating 116.35 m Market Cap 259.94 b
3 h Interest in Cryptocurrencies Are On The Rise, But Volatility Concerns Hold Back Traders: Survey 7 h Bitcoin, Gold, Stocks, and Yields Take a Beating as Fed’s Bullard Talks of Tapering 10 h Interoperability Project Ren Integrates With Solana, Adds Direct Bridge For Bitcoin
DOGE -4.53% Dogecoin / USD DOGEUSD $ 0.29
-$0.01-4.53%
Volume 1.84 b Change -$0.01 Open $0.29 Circulating 130.08 b Market Cap 38.05 b
3 h Interest in Cryptocurrencies Are On The Rise, But Volatility Concerns Hold Back Traders: Survey 10 h Interoperability Project Ren Integrates With Solana, Adds Direct Bridge For Bitcoin 1 d CoinFlip to ‘Demystify’ Crypto With Actor Neil Patrick Harris who Reveals Himself a Bitcoiner
BCH -5.91% Bitcoin Cash / USD BCHUSD $ 563.24
-$33.29-5.91%
Volume 1.64 b Change -$33.29 Open $563.24 Circulating 18.77 m Market Cap 10.57 b
3 h Interest in Cryptocurrencies Are On The Rise, But Volatility Concerns Hold Back Traders: Survey 10 h Interoperability Project Ren Integrates With Solana, Adds Direct Bridge For Bitcoin 1 d 2.3 Million UK Adults Now Hold Crypto Assets, 10.5% More than Last Year: FCA Report

The survey also noted that one-quarter (about 25%) felt that cryptocurrencies were overvalued. This number has grown 9% higher from the earlier survey. In addition, 32% said they would rather buy shares or place their money in savings than purchase crypto assets.

The crypto market has seen negative price action after concerns about BTC mining protocol were aired by Tesla boss Elon Musk. In addition, following China’s ban of digital assets for payment, the crypto market lost 50% of its value and is still struggling. BTC trades at $35,600 on the 24hr chart.

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Author: Jimmy Aki

Cboe Files for Investment Giant Fidelity’s Bitcoin ETF

Cboe says concerns about potential manipulation of a Bitcoin ETF have been “sufficiently mitigated” as it acknowledges that it will be listing and trading shares of the Wise Origin’s product.

Cboe BZX Exchange has filed a 19b-4 form with the Securities and Exchange Commission (SEC) acknowledging that it will be listing and trading shares of the Wise Origin’s Bitcoin exchange-traded product, saying concerns about potential manipulation of a Bitcoin ETF have been “sufficiently mitigated.”

With this move, it has kicked off the process to the SEC.

Wise Origin, a fund affiliated with Fidelity Investments, first filed the application for its Bitcoin ETF in March. However, for the SEC to consider it, they need an exchange partner to file a corresponding 19b-4 form, which Cboe did on Monday.

Now, it’s the agency’s turn to make a move within 45 days to make a decision on the ETF application. Typically, SEC has taken the full 240 days to evaluate a bitcoin ETF application and has rejected every single one of them so far.

With the appointment of new SEC Chairman Gary Gensler, who is expected to be more crypto-friendly than his predecessor Jay Clayton, along with the matured market, there is a higher expectation for a crypto ETF to be finally approved this year.

Last week, Gensler told Congress that the crypto market “could benefit from greater investor protection.”

Bitcoin market participants claim that such a product would bring in a horde of new investors, including those who either can’t invest in the cryptocurrency directly or who are only able to invest in regulated investment vehicles.

Already, VanEck’s Bitcoin ETF application is undergoing the SEC review, a decision on which was postponed by the agency for June. VanEck, along with WisdomTree and Kryptcoin, have also filed with Cboe exchange. Another company is Valkyrie which is working with NYSE Arca for its Bitcoin ETF.

Last week, VanEck also filed for an Ether ETF, which along with other Bitcoin ETF applications from SkyBridge, NYDIG, and Galaxy Digital, have filed the requisite 19b-4 forms.

Amidst this, Ninepoint Partners LP, which has $6.5 billion in assets under management, is dedicating a portion of its crypto ETFs management fee to offset the fund’s carbon footprint. Alex Tapscott, managing director of digital assets at the Toronto-based firm said,

“For some investors who are concerned about the carbon footprint of mining, they may be wary of investing in a Bitcoin ETF.”

“What we’re doing is creating what we hope is a solution to that problem and giving them the choice that they want and, frankly, that they need.”

Ninepoint is partnering with CarbonX to purchase carbon credits and support forest conservation projects. The company’s Bitcoin ETF was converted from a trust on May 6 and had roughly $320 million in assets at the time.

Alan Howard-backed One River Asset Management is another company that is building carbon neutrality into its existing Bitcoin and Ether funds and planning to seek regulatory approval for an ETF with the same features.

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Author: AnTy

RBI Governor Believes Crypto has ‘Major Concerns’ While Teasing the Launch of a Digital Rupee

RBI Governor Believes Crypto has ‘Major Concerns’ While Teasing the Launch of a Digital Rupee

  • Reserve Bank of India governor Shaktikanta Das expressed ‘major concerns’ on private cryptocurrencies in the country.
  • RBI is still working on a central bank digital currency.

In an exclusive interview with CNBC TV18, Shaktikanta Das, the Reserve Bank of India (RBI) governor, said the central bank has “major concerns on cryptocurrencies.” The central bank has already communicated the government’s concerns, who will “take a call,” and if required, Parliament will also decide on regulating crypto.

“Blockchain, not cryptocurrencies.”

Despite the underlying blockchain technology offering certain benefits that should be exploited, according to Das, cryptocurrencies still present major concerns on the country’s financial stability.

“I also want to make it very clear that the blockchain technology is different,” Das said. “The benefits of it have to be exploited, that is another thing, but on crypto, we have major concerns from the financial stability angle.”

The RBI governor did not expound on the challenges that crypto causes on the financial system but said they had shared the government’s findings. The Indian government will consider the points and take a call on regulating private cryptocurrencies.

RBI governor on CBDC launch

The RBI has been stern on accepting crypto as a usable currency in India. In the past fortnight, local reports stated a ban on cryptocurrency looms as the government plans to eradicate cryptocurrency payments from the country. Citing a senior official at the Indian Finance Ministry, the government is planning on an “absolute ban” on crypto, affecting transactions of Indians on foreign exchanges.

In the past month, the central bank called for the launch of a framework for its public digital rupee. Differentiating cryptos to the digital rupee, Das stated the digital rupee is still a “work in progress” on the technology side and the procedural side with plans being made on how and when the CBDC will be rolled out.

The governor, however, did not give a specific date that the digital currency is expected to launch due to “several loose ends [that] need to be tied up.”

“We are targeting to launch it. But if you ask me a date, at this point, it will be difficult for me to say.”

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Author: Lujan Odera

Senator-Elect Urges Treasury Secretary to ‘Engage with Industry” & Against ‘Hasty’ Wallet Regulations

U.S. Senator-elect from Wyoming, Cynthia Lummis, shares her “deep” concerns with the Treasury Department considering “a hasty rule” to govern the self-hosted digital asset wallets and the Bank Secrecy Act.

Ever since Coinbase CEO Brian Armstrong first tweeted last month about Treasury Secretary Steven Mnuchin planning on imposing new restrictions on businesses that interact with these self-hosted wallets like exchanges, the market has been abuzz with uncertainty and some fear.

As we reported a week ago, several US lawmakers also sent a letter to the Treasury Secretary, expressing their concern about these rumored regulations, saying they will “crush a nascent industry” and “hinder American leadership.”

Now, Bitcoin-friendly and holder Cynthia Lummis has come out in support of the crypto industry, calling for the Treasury to not be in a rush in “America’s battle for competitiveness with China and Russia for the future of finance.” She urged the Treasury to “realize the transformative effects of digital assets.”Lummis added,

“Rather than prematurely adopting a rule on this complex topic, Treasury should immediately begin a transparent process to engage with Congress and industry, building a consensus to drive America forward.”

Lummis has spoken with Secretary Mnuchin and “strongly pressed him for a better path forward.” Congress needs to weigh the competing policy issues that are at stake, she said. “Let the sunshine in, Mr. Secretary,” Lummis added.

Digital assets like Bitcoin, whose hallmark feature is to conduct transactions without intermediaries, promote “financial inclusion and freedom.” And “a rule adopted at this juncture would be a solution in search of a problem,” said Lummis.

Last week, the Financial Crimes Enforcement Network (FinCEN) also opened positions for two “Strategic Policy Officers” that will assist in providing advice and assist in developing policy responses to risks, threats, and challenges posed by digital assets.

The Block illustrated that these regulations could involve requiring crypto companies, as early as Friday, to report on the transactions larger than $10k to or from a self-hosted crypto wallet in a day. Market expert Matt Odell said,

“I already assumed they did this tbh. The concerns Armstrong and Davidson voiced seemed to expect much worse. Maybe the public concern helped. Very bullish if true.”

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Author: AnTy

Bitcoin & Digital Currencies Won’t Succeed: Founder of World’s Largest Hedge Fund

Ray Dalio continues to have his concerns about Bitcoin, which he doesn’t prefer over the traditional safe-haven gold, unlike the latest converts like legendary investors Paul Tudor Jones, Stanley Druckenmiller, and Ben Miller.

In his latest interview with Yahoo Finance, the founder of the world’s largest hedge fund Bridgewater Associates shared his views on digital currencies, which he said is of two types; the first one is the bitcoin type of currency, which will be an “alternative currency in terms of its supply & demand and an alternative storehold of wealth.”

The second ones are the digitized version of fiat currencies, central bank digital currencies (CBDC), and “we’re going to see a lot more of that,” he said.

But his problem with Bitcoin is that though theoretically, it’s good to be a currency, it has to be an effective medium of exchange, store hold of wealth. Moreover, governments want to control it.

He argued, “I can’t take my bitcoin yet and go buy things easily with it.” As for being a storehold of wealth, it is volatile, and so much of it is based on pure speculation as such not an effective one at that, making it not suitable as a “transaction vehicle.”

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Interestingly, while BTC has recorded +120% year-to-date performance, Bridgewater Pure Alpha II Fund is down by 18% YTD.

Another problem with Bitcoin, according to Dalio, is, “if it becomes material, governments won’t allow it. I mean they’ll outlaw it.”

“They’ll use whatever teeth they have to enforce that they would say you can’t transact the bitcoin, you can’t have a bitcoin,” which would make one a felon to use it. He points out how governments even outlawed gold.

Cash is a Risky Asset

According to Dalio, gold will be a vehicle that central banks and countries will use as an alternative to cash, which won’t be devalued by printing it, and already the precious metal is the third-largest reserves of the US.

“I don’t think digital currencies will succeed in the way people hope they would,” he said.

His views on digital currencies are based on the “new era of monetary policy” we are in, which he believes is the third one where the free market will play a much less role in determining capital market flows.

“The two dimensions of the big change environment you’re going to see: much more government influences and direction of where money goes,” said Dalio, adding “the government will play a bigger” which means there’ll be much more debt that is monetized and that has implications for the value of financial assets and the value of the currencies.

By printing the money, governments have already diminished the value of cash and the value of bonds as they promise to receive a lot of currency, Dalio said.

All of this is shifting wealth to financial assets and, as always, sends stocks and gold higher. Another clear thing is that “cash is a risky asset,” he added.

“So many people think if I go to cash, I’m going to be safe because it’s much less volatile, but please realize in this environment of producing a lot more cash the real returns go down, it’s a seductive risk, risky asset,” because of inflation, said Dalio.

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Author: AnTy

Is The Lightning Network Becoming More Centralized? 10% Of Nodes Hold 80% Bitcoin

The Lightning Network has been touted as the possible solution for the Bitcoin scalability concerns. However, various researches have indicated that there is a small percentage of nodes that handle most of the funds in the network. Is the decentralized finance product becoming more centralized?

The widespread adoption of the Bitcoin has now come with the scalability of the technology the BTC is built on. With reports indicating that the Bitcoin has the ability to process only a specific number of transactions per second proportional to the size of a block and its release frequency.

The Bitcoin Lightning Network (LN) has been touted as the solution to the scalability concerns. It is a “Layer 2” protocol that operates on top of Blockchain-based cryptocurrencies. An attempt to create a payment platform that overlaps over a cryptocurrency such as Bitcoin affording users cheaper and faster transactions.

A research paper points out that there is unequal distribution of wealth in the Lightning Network with some nodes holding most of the funds. Notably 10% of the nodes are controlling 80% of the funds in the Network. This exposes the vulnerability as they cannot afford to lose the nodes as they are too essential to operations.

“As only about 10% (50%) of the nodes hold 80% (99%) of the bitcoins at stake in the BLN… Removing hubs leads to the collapse of the network into many components… suggesting that this network may be a target for the so-called split attacks.”

This could be solved by lowering the barriers which may incentivize individuals such as hobbyists to take up running routing nodes. Meaning they could setup infrastructure at reduced costs as Christian Decker lightning engineer at bitcoin tech startup Blockstream explained.

After detailed analysis by researchers on the evolution of the global nodes that carry out transactions in different geographical locations they were able to determine the various nodes transactions pass through.

The end nodes are mostly passive as they just await to send and receive. However, it was the center (routing) nodes that picked up the slack by directing transactions throughout the network. This has resulted to some of them overcharging a little for their services.

In a report by Hebrew University researchers demonstrated how to exploit vulnerabilities and carry out a congestion attack that would render some routes locked for up to days. The results were damning as they proved they could effectively lock up most of lightning’s liquidity causing instability to the network.

Mr. Decker was not worried as he explained that criticizing their model could only lead to progress.

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Author: Lujan Odera

SEC Says Bitcoin is Not a Security, According to Letter to Cipher Technologies

Cipher Technologies Bitcoin Fund applied to become an “investment company.”

Due to multiple concerns that have not been addressed, and the fact that they plan to put their assets in Bitcoin, their request has been denied.

The cryptocurrency industry has to answer to multiple authorities in the financial industry, despite not being considered traditional currency. One of the biggest concerns for assets with the Securities and Exchange Commission is whether the asset is deemed a security. While there have been many cryptocurrencies to be deemed securities, one asset is safe – Bitcoin.

The SEC’s Division of Investment Management staff recently issued a letter to Cipher Technologies Bitcoin Fund, which filed a registration statement to become a closed-end interval fund and an “investment company,” as reported by The Block. In their request, Cipher stated that Bitcoin is a security. However, the SEC staff did not agree.

Based on the Howey test, which analyzes assets, and the current framework by the SEC for analyzing digital assets, Bitcoin isn’t a security at all. This framework was only issued this year, but it is clear that Bitcoin won’t be controlled by the SEC.

The letter stated,

“Among other things, we do not believe that current purchasers of bitcoin are relying on the essential managerial and entrepreneurial efforts of others to produce a profit.”

The letter continues, stating that Cipher doesn’t have the proper criteria to be called an “investment company,” based on the requirements shown in the Investment Company Act. It concludes by informing Cipher that it has “inappropriately filed on Form N-2,” since it plans to invest every asset under the cryptocurrency.

If Bitcoin were deemed a security by the SEC, there would be a slew of other problems, as it would be an “unregistered publicly-offered security.” The staff told Cipher that it wasn’t dealing with multiple “legal and investor protection issues.” Concerns raised earlier this year were brought up in the letter, including

“valuation, custody, and potential manipulation in the bitcoin market.”

The SEC expressed that no further review will be performed, considering the incorrect registration of Cipher. If there are other structures that Cipher wants to propose, then the SEC would be open to another review.

This letter, in no way, establishes a regulation or binding precedent, but it does show a public confirmation that the SEC doesn’t see Bitcoin as being a security, which may give some direction to the industry. Their policy also indicates that the SEC is holding onto a framework that was previously issued for guidance, showing with digital assets should be and should not be considered securities.

The confusion over how to classify cryptocurrencies has been an ongoing struggle, as multiple agencies and authorities in the United States cover different regulations of the industry. However, the SEC has recently issued a letter to one of the companies applying to register, indicating that Bitcoin isn’t security at all. How could this impact the rest of the crypto world?

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Author: Krystle M

UK Legal Committee Will Look to Investigate Libra, Suspecting Its Power Could Pose a Risk for Fraud

UK-Lawmakers-May-Probe-Libra-Suspecting-That-It-Could-Pose-a-Risk-for-Fraud
  • The release of Libra’s whitepaper has sparked concerns from lawmakers.
  • To understand the cryptocurrency better, the UK financial authorities may move to probe the project.

The release of the Libra whitepaper from Facebook last month has been met with many different reactions around the world. In the UK, lawmakers have expressed a fear that this cryptocurrency could ultimately have too much power in the economy. As such, there are suggestions that a parliamentary committee in the UK will end up moving to probe the project.

Damian Collins, the chair of the House of Commons’ Digital, Culture, Media, and Sport Committee, spoke recently to Financial News about the issues regarding privacy within the social media platform. As such, Collins expressed concern that Facebook may not be able to protect the financial details of the individuals that would ultimately use Libra.

In launching Libra, Collins believes that Facebook could be

“almost trying to turn itself into its own country.”

Even though this community wouldn’t be physically within a nation contained by borders, Facebook already has established

“a global community who are solely under the oversight of Mark Zuckerberg.”

He added,

“If we’re going to have this payment system created by Facebook that exists within a Facebook walled garden, which no one really has access to or can question, then our concern has got to be that this system is going to be open to massive fraud.”

David Marcus spoke about these concerns before the Senate hearings, commenting,

“You won’t have to trust Facebook to get the benefit of Libra.”

He added that the Libra Network won’t impose any “special responsibility” on Facebook. However, Marcus stated,

“We’ve been clear about how our approach to financial data separation and we will live up to our commitments and work hard to deliver real utility.”

Throughout the world, regulators have voiced their need for more information from the Libra project before it launches. Furthermore, nearly every regulator has stated that Libra is going to need regulations in their areas to actually move forward.

In France last week, the G7 addressed the stablecoin, saying that these types of cryptocurrency could threaten global financial stability. Creating rules that follow the “highest” standards could be the only chance of reducing the chances of the token being used for money laundering and terrorism funding.

In June, Mark Carney, the Bank of England’s governor, made similar comments, but ultimately expressed an “open minded” attitude on Libra’s utility.

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Author: Krystle M

International Organization of Securities Commission Looks to the Public Crypto Regulation Suggestions

International Organization of Securities Commission Looks to the Public Crypto Regulation Suggestions
  • IOSCO requested feedback from public in new paper on the concerns of regulating cryptocurrency around the world.
  • Some considerations that IOSCO requests feedback for include the protection of access, price integrity, and the technology of the crypto market.

Determining the best way to regulate the cryptocurrency industry has been a goal of multiple jurisdictions around the world. Now, the International Organization of Securities Commissions (IOSCO) has published a recent consultation paper on the matter, which was published on May 28th. The IOSCO is a standard setter for global securities regulations.

In the news release for this paper, the organization clarifies that they regulate about 95% of the securities markets around the world, while impacts 115 jurisdictions. Within the IOSCO, the organization works towards adherence to a mutual and consistent standard, determining the regulations and how they are enforced in the global securities sector.

The consultation paper is called “Issues, Risks, and Regulatory Considerations Relating to Crypto-Asset Trading Platforms.”

The paper requests feedback from the public that will help the organization understand the risks and other concerns associated with the cryptocurrency industry, as identified by IOSCO. The public will need to submit all of their comments by July 29th this year.

In the report, the company outlines certain considerations, which includes:

  • Access to CTPs
  • Protecting assets
  • Conflicts of interest
  • CTP operation
  • Market integrity
  • Price integrity
  • Technology

This innovative approach follows a G20 2018 communique that was already presented to the various entities that set the standards for regulations. The communique discussed the continuance of regulating cryptocurrencies and addressing their risks, “according to their respective mandates, and asset multilateral responses as needed.”

In some cases, the new release states that the cryptocurrency assets will end up covered by the traditional framework of the securities laws already in place. However, that circumstance will only be implemented if the local regulatory authority in that area has determined that the crypto asset is considered a security that would already be covered by the phrasing in their securities laws.

The fact that CTPs could be regulated brings up another potential issue for the authorities, according to IOSCO. For that reason, the paper states that it may be helpful to use their detailed analysis of considerations as a baseline for regulators, as they determine their revised approach.

The IOSCO established the Initial Coin Offering Consultation Network in January 2018, as a way to learn about the experiences of the ICO market. Some of the issues addressed in the annual conference that year revolved around the challenges associated with this budding asset class. As such, the challenges impacted the approaches that securities regulators worldwide took on in their governance of the industry.

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Author: Krystle M