While “Not an Issue Yet,” BoE Deputy Gov Sees Growing Appetite for Crypto Among Both Retail and Institutions

While “Not an Issue Yet,” BoE Deputy Governor Sees Growing “Appetite” for Crypto Among Both Retail and Institutions

While not wanting to stop firms from doing things that make commercial sense, Sam Woods calls for a “very conservative view” on capital measures.

The Bank of England Deputy Governor doesn’t want the banks to have big exposure to crypto-assets not backed by sufficient capital, and for that, if they would have to front-run global rules, he would.

Sam Woods said on Thursday that Britain’s banks at the point “don’t have material exposures to crypto” but added that there is certainly “an investor appetite and not just retail, also institutional investor appetite to have a little bit of this stuff.”

He further noted that some of the banks have announced their plans to provide ancillary services “that may be OK but as that develops and if it develops into something big, we are going to need to make sure the capital treatment is pretty robust,” Woods told Reuters.

The Basel Committee on Banking Supervision (BIS), which is a global banking supervisory authority, has already laid down capital requirements for banks that hold crypto assets. The committee has proposed punitive charges for not meeting them that lenders said would make their involvement in the cryptocurrency sector prohibitive.

According to Woods, Basel’s proposals were “quite sensible,” and that the regulatory community was starting to get a better grip on the cryptocurrency sector.

Still, it can take years to adopt norms that would need to be implemented by members like the European Union, the US, and Britain.

“We would not want to stop firms doing things that make commercial sense, but we would take a very conservative view on capital treatment, and if necessary, we would therefore front run, maybe not exactly in the same way, but we would put some capital measures in place,” Woods said. “It’s not an issue yet.”

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Author: AnTy

NAB Observing Crypto As An ‘Emerging Issue’ After Being Accused of Refusing to Do Business with the Industry

National Australia Bank Observing Crypto As An ‘Emerging Issue’ After Being Accused of Refusing to Do Business with the Industry

Local crypto exchanges told a parliamentary committee exploring how to regulate the sector that none of the ‘Big Four’ banks, which control nearly 80% of the Australian market, would do business with them.

National Australia Bank (NAB) and Westpac, two of the largest lenders in Australia, said on Thursday that they are not hindering competitors by refusing to do business with cryptocurrency providers. NAB CEO Ross McEwan said,

“It’s one of the emerging issues that we are looking at – what should our relationship be, if at all, with cryptocurrency.”

Local crypto exchanges Aus Merchant Pty Ltd and Bitcoin Babe Pty Ltd told a parliamentary committee exploring how to regulate the sector that none of the ‘Big Four’ banks would do business with them.

It makes sense that these banks don’t want to do business with the crypto industry as NAB and Westpac, along with Commonwealth Bank of Australia and New Zealand Banking Group, control nearly 80% of the Australian market, and by revolutionizing finance, crypto is working on putting them out of business for good.

Anti-Competitive Practice

At a regular parliamentary hearing, NAB CEO McEwan said the bank did not have a policy excluding crypto-related customers but did not service any of them either. He further said they would only service them if it was profitable and the bank could tolerate the risks. McEwan added,

“We have to look at where does cryptocurrency go, along with … the reserve bank and regulators. And what’s the risk inside the bank of dealing with cryptocurrency providers as well.”

Singapore-based payment firm Nium also said that Australia is the only country out of the 40 it operates in where it had been “de-banked.” “It’s time to cast an appropriate light on this anti-competitive practice,” said Nium APAC head of consumer Michael Minassian.

Meanwhile, the CEO of the country’s second-largest lender Westpac said at the same hearing that crypto’s anonymity made it “very hard” to meet their anti-money laundering and counter-terrorism financing requirements.

Largest Investment Bank Joins In

Many top institutions in Australia have not engaged with the crypto sector. Similarly, the stock exchange ASX Ltd. hasn’t allowed crypto-related listings either, which forced some firms overseas to seek public listings on the likes of Nasdaq.

Amidst this, blockchain firm Blockstream Mining partnered with Australian financial conglomerate Macquarie Group to develop bitcoin mining facilities using renewable energy. The partnership would initially include mining hardware hosting with the potential to scale in stages.

Macquarie is Australia’s largest investment bank and fund manager.

Earlier this year, the Canada-based firm partnered with Norwegian company Aker ASA and Jack Dorsey’s Square to build renewable-power bitcoin miners.

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Author: AnTy

German Bank to Issue Blockchain Listed Shares, Financial Regulator Approves the Securities Prospectus

German Bank to Issue Blockchain Listed Shares, Financial Regulator Approves the Securities Prospectus

German-based WEG Bank AG announced on Tuesday that it had a breakthrough in equity tokenization. And with this, it has become the first company to put all of its shares on the blockchain, as per the company’s announcement.

“We have been looking forward to the publication of this company news for a long time,” said Matthias von Hauff, CEO of TEN31 Bank, the fintech division of WEG Bank AG.

BaFin, the country’s financial regulator, has also approved the bank’s related securities prospectus for public fundraising. Matthias von Hauff said,

“With the approval of the prospectus, BaFin acted and made a decision in a forward-looking manner. We followed the appeal that banks must become more innovative and wrote a piece of German financial history with our prospectus.”

Soon, private investors will be able to buy shares in the bank, which is expected to issue 2,830,000 new shares starting October. The bank will be releasing further details on the shares offering shortly.

Through “Blockchain Listed Shares,” or BLS for short, the bank aims to provide the necessary transparency and evidence of ownership of the company’s shares which will also protect them from manipulation or data loss.

The bank will also make secondary trading possible, opening up the possibility for any company to trade its shares on a crypto exchange. “This form of financing helps enormously, especially for medium-sized companies, as stocks could suddenly be made available worldwide,” said Matthias von Hauff.

Meanwhile, recently, leading cryptocurrency exchange Binance discontinued its derivatives and futures products offerings in Germany and other regions of Europe.

Amidst this, on August 2nd, the law came into effect in the country that allows certain institutional funds to invest up to 20%, billions of dollars, in crypto assets for the first time.

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Author: AnTy

Coinbase Is Still Reporting Stellar (XLM) Having ‘Degraded Performance’

Coinbase Is Still Reporting Stellar (XLM) Having ‘Degraded Performance’

The issue has been several validator nodes on the Stellar blockchain not validating transactions which SDF says is now online while they investigate the root cause for the same.

Cryptocurrency exchange Coinbase reported delays in Stellar (XLM) deposits and withdrawals earlier this week, which continues today. The network status Stellar reads

“Degraded Performance.”

As of April 8, 02:22 PDT, the exchange said, “We’ve been working with the Stellar team to fix the delays of deposits and withdrawals.”

Coinbase is reportedly also planning to roll out a crypto rewards debit card in the U.S. that will pay back 4% in Stellar lumens (XLM), as per The WSJ.

However, it wasn’t just Coinbase that was having issues; many other exchanges like Binance, Bitstamp, and Bitfinex have been dealing with XLM withdrawal issues as well.

The issue turned out to be several validators on the Stellar blockchain were disconnected from the network, causing the transaction issues.

Stellar Development Foundation (SDF) released an official report on the matter, saying, “both the SDF nodes and the public-access Horizon are now back online.”

According to Stellarbeat, which keeps track of the network’s node count, a few nodes are still down.

XLM deposits and withdrawals were paused on centralized crypto exchanges “out of an abundance of caution,” and now SDF is in communication with them, reads the announcement.

Reporting on the incident, SDF said it was early Tuesday morning that the validator nodes temporarily stopped validating transactions. While the SDF node was experiencing downtime, for reportedly at least 10 hours, the network itself remained online, which it said: “is just the way a decentralized network is intended to work.”

Due to sufficient validator redundancy, the network continued to function as normal despite the temporary unavailability of SDF’s infrastructure.

As for what caused this, the team is still investigating what the root problem was and, so far, has narrowed the trigger down to a single ledger and single operation in that ledger.

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Author: AnTy

Concentration of Power is the ‘Only Real Issue’ with DOGE says Tesla’s Elon Musk

Concentration of Power is the ‘Only Real Issue’ with DOGE says Tesla’s Elon Musk

While Dogecoin’s original creator, Billy Markus, can’t comprehend the insanity going around the meme cryptocurrency’s prices, Tesla CEO will “literally pay” actual dollars to get its major holders to sell their coins.

During this week’s sell-off, the popular Dogecoin has taken the hardest beating among the top cryptocurrencies.

The meme cryptocurrency went down to $0.0473, about halving its value from last week’s high above $0.088. As of writing, DOGE/USD has found its way above $0.062, much like the rest of the crypto market, which recovered fast after the dip which has been propelled by the highly leveraged traders.

The cryptocurrency is still a long way from $1 that many degens have been targeting for this token, which its original creator Billy Markus, not Tesla CEO Elon Musk, just can’t comprehend. He doesn’t have any DOGE except what has been tipped to him recently, shared Markus in his Reddit post last week.

While Markus has nothing to do with the coin now, having left around 2015, Musk has shared his concern about the concentration of power among DOGE holders. Musk tweeted,

“If major Dogecoin holders sell most of their coins, it will get my full support. Too much concentration is the only real issue IMO,”

“I will literally pay actual $ if they just void their accounts.”

According to Bitinfocharts, 28.7% of DOGE’s supply is held by just one address, which owns more than 36.8 billion DOGE worth over $2 billion.

A mere 11 addresses hold 19.85% of coins, a total of 25 billion DOGE worth nearly $1.4 billion, while another 91 addresses have a total of 25.2 billion DOGE that is worth almost $1.38 billion.

The largest number of holders, over 1 million addresses, own between 1-10 DOGE. As per this, 87.68% of addresses hold 0% of the DOGE supply.

Dogecoin rich list

Source: bitinfocharts – Dogecoin Distribution

There are only 58 addresses that are richer than $10 million and 393 addresses that are richer than $1 million.

These numbers clearly show the ownership of DOGE is highly skewed, with very few having nearly all the DOGE coins.

And the answer to this, as one DOGE enthusiast recommended and Musk agreed with, “Whales will have to consider Elon’s ultimatum here. If they comply, Dogecoin becomes the currency of the internet. If they don’t, or “cheat” by distributing their coins across multiple wallets, then it loses Elon’s endorsement. Easy decision for the whales. Do the right thing.”

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Author: AnTy

BIS: Central Banks Should Issue Digital Currencies; Stablecoins ‘More Credible than Bitcoin”

BIS GM: Central Banks Should be the Ones to Issue Digital Currency; Find Stablecoins ‘More Credible than Bitcoin”

Fiat-backed crypto still needs to be “heavily regulated and supervised,” says Agustín Carstens, according to him Bitcoin may well break down altogether.

According to the Bank for International Settlements, Bitcoin is inherently risky, and only a central bank should be issuing digital currencies.

These latest remarks on “Digital currencies and the future of the monetary system” came from Agustín Carstens, General Manager at Bank for International Settlements.

“Investors must be cognizant that Bitcoin may well break down altogether,” said Carstens during his speech for the Hoover Institution on Wednesday.

This isn’t anything new coming from Carstens, who runs the Basel-based central bank for central banks, and has always been critical of Bitcoin, which has jumped more than 1,000% from its March lows and currently trades around $31,000.

This time, his skepticism cites the system being vulnerable to majority attacks as the digital asset gets close to its maximum supply of 21 million coins.

According to him, its volatility not only “undermines” its use as a means of exchange but also makes it a “poor store of value.”

“Bitcoin is more of a speculative asset than money,” he further noted, adding “the actual value backing is lacking” in the leading digital currency as such should be seen as a community of online gamers.

He also cited price manipulation and mining using “more electricity than all of Switzerland,” reasons for this complete breakdown.

Issues with Currency Issue

As for fiat-backed cryptos, stablecoins like Facebook’s Libra renamed Diem, Castens sees it “more credible than Bitcoin,” but finds serious governance concerns in terms of a private entity responsible for issuing it and maintaining the asset backing.

“Private stablecoins cannot serve as the basis for a sound monetary system,” he added: “They need to be heavily regulated and supervised.”

Castens basically wants central banks to keep full control of money, which, as we saw over the last year, the policymakers printed at unprecedented levels. He said,

“Clearly, if digital money is to exist, the central bank must play a pivotal role, guaranteeing the stability of value, ensuring the elasticity of the aggregate supply of such money, and overseeing the overall security of the system.”

Since the beginning of 2020, the US Federal Reserve has printed more than $4 trillion US dollars.

“If digital currencies are needed, central banks should be the ones to issue them,” Carstens said.

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Author: AnTy

Law Firm Warns That IRS Is Cracking Down On Coinbase Users Evading Taxes

David W. Klasing, a boutique Californian tax firm, had its Tax Law Office issue out a public release. This release warned investors that the US Internal Revenue Service, or IRS, is going to start a severe bout with users of Coinbase.

Time To Right Your Wrongs

The dual-licensed capital allowance specialist and tax lawyers of the firm state that IRS enforcement activity has begun to increase against Coinbase users, in particular, that fail to comply with the reporting and tax requirements.

The firm warned that tax evaders run the risk of serious criminal and civil trouble going down the line. Urging anyone that has failed, truthfully or otherwise, to report their virtual currency holdings in their past returns, they should correct this now. The same goes for anyone that had filed a misleading or otherwise incomplete picture of your respective cryptocurrency holdings. The firm stated that when the IRS mandates an audit or criminal tax investigation, it’s too late to make amends or use the voluntary disclosure program.

US Agencies Going Hard Against Coinbase Tax Evaders

In October, Coinbase had released a new transparency report, which the law firm claims must be a major wakeup call for the various users of the exchange. The report itself made it incredibly clear that both the Criminal Investigation Unit, the CIA, and the FBI, not to mention the IRS, are filing information requests with the exchange.

The uptick in the IRS doing enforcement activity against Coinbase users dodging tax, in particular, makes it clear that the exchange itself is now working closely with the federal authorities.

Coinbase Not Refusing IRS Demands

The firm noted that the data the IRS requested, as shown by the October report, makes it clear that the agency is expressly investigating these transactions and comparing it to its own taxpayer data. From there, it’s a simple matter of finding discrepancies and then hunting down those Coinbase users who thought it’d be easy to dodge the taxman.

As is already reported, the US courts seemed to be on the IRS’s side, upholding its authority when it comes to summoning comprehensive financial records and data as part of their respective investigations within Coinbase and its users.

Always An Agenda

It should be noted, however, that the tax law firm had a very clear agenda through doing this warning. At the end of its warning, it stressed the skill of its tax attorneys and CPAs, promising the best possible advice for any “errors” someone could have done in that position. Further promises range from preventing future “mistakes” and mitigating any damages for things that already happened.

As the crypto industry at large becomes more and more regulated, it’s a natural expression that taxation will become the norm. Make no mistake, this is a financial asset, and speculation could reap some serious rewards for those with their ears on the ground. As such, the government will demand its cut, as it demands it from any other booming industry.

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Author: Ali Raza

Russia’s Central Bank Joins the CBDC Bandwagon; Issues Consultative Paper on Digital Ruble Consideration

Russia’s Central Bank is the latest monetary authority to issue a CBDC consultative paper amidst the ongoing craze; the bank confirmed its interest in issuing a digital ruble, noting that it can operate alongside cash or non-cash forms of money that already exist in the country. This development comes barely a week since the BIS and 7 major central banks published a report highlighting the key principles that should guide CBDCs at least for now.

According to the consultative paper released on Oct 3, a digital ruble will require Russia’s central bank to develop advanced payment ecosystems. Consequently, the bank intends this digital asset to carry along the properties of money, given its prospective fundamentals as part of the state-backed legal tender in circulation. The paper further notes that the digital ruble will be instrumental in making payments seamless based on its underlying architecture.

In terms of a macroeconomic and political outlook, the bank also plans to curb capital outflow with its prospectus digital ruble,

“The national digital currency will also limit the risk of reallocation of funds into foreign digital currencies, contributing to macroeconomic and financial stability.”

Notably, the digital ruble will be accessible to all Russian economy agents, including government agencies, businesses, financial market stakeholders, and private citizens. These digital assets will be storable on mobile devices and e-wallets, with the holders having an option to use their CBDC tokens both online and offline. The digital ruble’s main functions, as per the paper, will include a medium of exchange, a unit of account, and a store of value.

Given the ongoing CBDC momentum, Russia’s debut at the party further suggests that monetary authorities are taking more interest in the evolving digital currency space. China is currently the most progressive jurisdiction; the digital yuan pilot has been ongoing for some months with scaling recently done to prominent cities. The EU also filed for a ‘digital euro’ trademark as it gears up to join the CBDC bandwagon in preparation for the paradigm shift to digital ecosystems.

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Author: Edwin Munyui

China Should Seize the ‘First Mover’ Advantages of Launching A CBDC: PBoC

China should aim at becoming the first country to issue digital currency as part of its efforts to internationalize the yuan and lessen its over-dependence on the world’s dollar-dominated payment system, the People’s Bank of China (Chinese central bank) said.

The commentary appearing in China Finance, a People’s Bank of China run magazine, opined that the rights and capacity to offer and control digital currencies is set to become the ‘new battlefield’ among various sovereign nations. The article also claims that issuance and the circulation of virtual currency will alter the current international financial system.

The article argues that China should aim at becoming a first mover in the digital currencies space and calls for the acceleration of the development of the country’s CBDC.

“China has many advantages and opportunities in issuing fiat digital currencies, so it should accelerate the pace to seize the first track,” says the article.

Also, the article argues that data feedback from a Chinese central bank-issued digital currency (CBDC) would be vital for the development of a national monetary policy, which is imperative for economic recovery in the post-pandemic landscape.

The article also revealed that PBoC’s digital currency research outfit had filed approximately 130 patents related to crypto applications touching on issuance, circulation, and implementation.

The People’s Bank of China’s research institute was founded in 2015 to look at the feasibility and implementation process of digital currencies, to reduce the costs of circulating fiat currency and enhance policymakers’ grip in the money supply ecosystem.

Last month, various state-run Chinese commercial banks embarked on large-scale piloting of the digital wallet, which is a step closer to the highly awaited official launch of the digital currency. PBoC revealed last month that about 400 million people are involved in the piloting program for a digital yuan.

The Chinese central bank is looking forward to using the digital yuan during the 2022 Winter Olympic Games.

The article concludes that digital yuan can help in breaking the dollar hegemony in the international monetary system.

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Author: Joseph Kibe

Filecoin Is Currently Testing EIP 1559, A Proposal to Restructure Ethereum’s Gas Fees

The issue of rising gas costs on Ethereum might soon come to an end, should an Ethereum Improvement Proposal (EIP) currently being tested on the Filecoin network go through. Dubbed ‘EIP 1559’, this proposal is among those that have been suggested to reduce Ethereum’s network fees.

Announcing the development on Twitter, Ethereum’s founder Vitalik Buterin, highlighted that the solution seems to be working well on Filecoin,

“In case you missed it: recent writing on fee market reform (EIP 1559) …. Oh and it seems to be working great on Filecoin:”

Notably, Filecoin, which is a decentralized storage network, shares fundamentals with Ethereum hence the compatibility of innovations within both ecosystems. The project is, however, still in its early stages and is set to launch a Mainnet in September as per the latest Filecoin progress update.

The EIP 1559 Proposed Network Fee Solution

With activity rising in DeFi, Ethereum’s network continues to suffer congestion problems to an extent where profits end up being eaten up by transaction costs. The suggestions to work on these shortcomings gained momentum back in 2019 but have now become more critical than ever for Ethereum’s survival in the blockchain space.

Well, ETH-oriented developers seem to be catching up and could soon solve the rising gas cost problem. The EIP 1559 proposal, in particular, suggests the use of a ‘base fee’ for dynamic fee adjustments on Ethereum’s network. Ideally, this approach will constrain gas fee increments by altering the current calculation of gas fee on Ethereum.

The proposal introduces an automatically increasing base fee if the network is more than 50% utilized while decreasing the same if it is below 50%. In doing so, ETH users still have an option to get ahead of the queue by paying a tip in addition to the base fee. These funds will then be delivered to miners while the ETH used for paying the base fee is burnt.

Filecoin Marking Milestones!

As EIP 1159 makes progress, the Filecoin testnet in totality is also marking milestones as its native ‘FIL’ token launch approaches. The project recently incentivized developers to stress test its network under the ‘Filecoin Space Race’ program,

“Compete and collaborate at the same time. The top 50 miners in each region and the top 100 globally are eligible for rewards. The greater the total storage power, the bigger the total prize pool.”

This incentivized testnet has since recorded around 22 petabytes in total raw byte storage power with contribution from 295 miners. Going by the International Electrotechnical Commission 1998 metrics, this data can roughly be compared to 12,500 two-hour-long films.

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Author: Edwin Munyui