CEO Jesse Powell Says Kraken Exchange Could Go Public Next Year

CEO Jesse Powell Says Kraken Exchange Could Go Public Next Year

Jesse Powell, Chief Executive Officer of crypto exchange Kraken, has confirmed that the firm plans to go public next year.

In an interview with Bloomberg, Powell said the exchange’s initial public offering (IPO) could happen anytime between 12 to 18 months.

Kraken Could Become Second US-based Crypto Firm To Go Public

When it happens, Kraken would become the second US-based crypto firm to go public after Coinbase. Coinbase went public through a direct listing on the Nasdaq Stock exchange in April with a valuation of around $65 billion at the time.

According to Powell, Kraken is already going through the rigors of becoming a publicly traded company. Although he declined to give the firm’s target valuation, he said their valuation would reflect their success in bringing crypto to the world. Powell’s words,

“We’re on a mission achieving to bring crypto to the world, and our valuation hopefully will be a reflection of our success in that mission.”

This is not the first time news of Kraken’s IPO plans would be revealed. In March, a Fox Business reporter, Charles Gasparino, claimed that the company was looking at going public through a special-purpose acquisition company (SPAC) or an initial public offering (IPO).

However, a Kraken spokesperson said the company was “too big” to go public via a merger. With the SPAC and direct listing route probably off the table, Powell’s announcement means Kraken may pursue an initial public offering.

Speaking further during the interview, when asked if people are trading differently after the recent sell-off, Powell said that the people selling are mostly newer to the market.

According to him, the old investors that have been holding for a long time are still accumulating. He said that the new investors who are yet to understand the market are not willing to hold onto their assets.

Powell added that people who came into crypto for the quick gains leave once the price drops, while those who truly understand the fundamentals remain.

Kraken Expanding Services

With more than 6 million clients in almost 190 countries, Kraken is one of the five largest crypto exchanges in the world.

The firm has done remarkably well this year as it continues to boost crypto adoption. According to Powell, the firm got more sign-ups this year than in any other year.

Kraken also expanded the reach of its services by launching its mobile app for both iOS and Android users in Europe and the United States.

Earlier this year, reports had it that the San Francisco-based exchange was in talks to raise a new funding round to boost its valuation to surpass $20 billion.

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Author: Jimmy Aki

Fed Reserve Chair Jerome Powell Calls BTC A ‘Speculative Asset’ Amid Coinbase Direct Listing

Federal Reserve Chairman Jerome Powell Calls BTC A ‘Speculative Asset’ Amid Coinbase Direct Listing

Cryptocurrencies have been around for more than a decade and have just gained global relevance in the last two years.

This has been largely due to institutional investors seeing digital assets like Bitcoin as a hedge against inflation. However, the US Federal Reserve boss believes that crypto-assets are still not ripe for payments.

Crypto Is Just For Speculation

In a virtual interview organized by the Economic Club of New York, Powell said that cryptocurrencies are ideal as vehicles for price speculation. According to him, they have not attained the status of becoming a payment option.

Powell also said that cryptocurrencies like Bitcoin could be rightly compared to precious metals like gold, given the difficulty of mining them. And since humanity has always placed gold on a high pedestal, he feels that Bitcoin can transform into the same mold.

Powell’s comments may seem contradictory to crypto owners who believe that Bitcoin was created for payment services. The jury is still out on whether Bitcoin would function as a medium of exchange effectively. This is due to the development of solutions like sidechains and Lightning Network.

Companies like Tesla now accept Bitcoin as payment for their sedans, and many more businesses would tow the same line soon. The adoption rate in the traditional markets has also been growing.

Just yesterday, the U.S-based bitcoin exchange Coinbase made its debut on Nasdaq as a publicly-traded company.

The milestone, which is a first for the crypto industry, is poised to attract more investments into the space.

Coinbase opened its shares to the investing public at a whopping $381 per share against the $250 reference price.

The company also made its Q1 report for 2021 public, noting that it generated over $1.8 billion in revenue and onboarded 56 million unique users since its founding.

BTC Better Store Of Value Than Gold

Powell’s views on cryptocurrencies are not entirely novel to the crypto universe. Last month, U.S Treasury Secretary Janet Yellen called Bitcoin a highly speculative asset and not fit to be used as a value transmission mechanism.

According to the well-known Bitcoin critic, value transmission through cryptocurrencies is an extremely inefficient way of conducting transactions. Her comments have not slowed down investments in the sector. Software company MicroStrategy owns Bitcoin worth billions of US dollars. The company’s CEO Michael Saylor sees Bitcoin as a better store of value than gold and other precious metals.

Recently, the company announced that non-employee board members will now be paid using Bitcoin.

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Author: Jimmy Aki

Kraken CEO Jesse Powell: You Can’t Rule Out A Crackdown On Cryptocurrencies

Kraken CEO Jesse Powell: You Can’t Rule Out A Crackdown On Cryptocurrencies

Kraken CEO Jesse Powell believes the crypto industry could be subject to regulatory crackdowns from governments around the world soon.

Governments Clamping Down On Cryptocurrency

With the rate at which cryptocurrencies have surged lately, the Bitcoin exchange CEO said there could be some crackdown. According to him, regulatory uncertainty around crypto isn’t going away anytime soon.

Not only did Bitcoin just hit a record high price of more than $63,000 today, BTC 5.98% Bitcoin / USD BTCUSD $ 63,647.18
Volume 70.07 b Change $3,806.10 Open $63,647.18 Circulating 18.68 m Market Cap 1.19 t
4 h Kraken CEO Jesse Powell: You Can’t Rule Out A Crackdown On Cryptocurrencies 6 h Riot Blockchain Now Holds 1,565 BTC on Balance Sheet After Mining 104 BTC in March 6 h House Republican Leader Urges Govt. to ‘Better Start Understanding’ Bitcoin
but there has also been an explosion of the NFT market, and the DeFi space has seen massive growth in recent times.

The total market cap of all crypto assets also expanded by 600% to well over $2 trillion this year.

In this vein, Powell said there was a probability that governments would lay out tougher rules.

Speaking in a recent CNBC interview, Powell also noted that the US has only considered immediate consequences when it comes to the crypto industry.

“I hope that the US and international regulators don’t take too much of a narrow view on this. Some other countries, China especially, are taking crypto very seriously and taking a very long-term view.”

However, even though the US is treading carefully, Powell does not think the country would ban cryptocurrency. He said that banning cryptocurrency at this stage would only make more people interested in investing in it, and it would also mean that the government sees the asset as superior to its currency.

Apart from the US, another country taking a tough stance against crypto is the Asian nation, India. India is one of the strictest countries when it comes to cryptocurrencies. Rumors have been spreading about how the government is considering banning digital currencies and penalizing anyone who holds or trades them.

Regulators Sounding The Alarm About Crypto

For a long time, cryptocurrencies have often been associated with illicit activities. One reason for this is that transactions with it are usually pseudonymous, and another reason is its high volatility.

In March, the European Securities and Markets Authority (ESMA) warned investors about the increasing risks associated with crypto investing. The warning was published in its latest report on Trends, Risks, and Vulnerabilities.

US Treasury Secretary Janet Yellen has also previously warned about the use of Bitcoin for money laundering, terrorist financing, and other illegal activities.

Meanwhile, a new crypto council called the Crypto Council for Innovation had been formed by crypto firms Fidelity, Coinbase, Square, and Paradigm to lobby for fair regulations surrounding cryptocurrency in the U.S.

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Author: Jimmy Aki

US Fed Chairman Jerome Powell Hinges Digital Dollar’s Fate on Lawmakers

US Fed Chairman Jerome Powell Hinges Digital Dollar’s Fate on Lawmakers

Jerome Powell, the U.S. Federal Reserve Chairman, has hinted that the Fed is eyeing a digital dollar, an initiative that will see the apex bank control digital assets.

According to the Federal Reserve chief, in the course of the year (2021), members of the public and lawmakers will likely debate the project.

Nationwide Consultations Needed

During a House Financial Services Committee hearing, which held on Wednesday, February 24, 2021, Powell admitted that there are many concerns surrounding the digital dollar project, hence the forum for lawmakers to engage with the public for common ground.

“This is going to be the year in which we engage with the public pretty actively, including some public events that we’re working on. In the meantime, we’re working on the technical challenges and also collaborating and sharing work with the other central banks around the world that are doing this.”

In the meantime, Powell revealed that the central bank is advancing on solutions to the technical challenges it has so far identified regarding the digital dollar, adding that it is also in talks with other central banks that are exploring or issuing the Central Bank Digital Currencies (CBDC).

Addressing why the Federal Reserve needs consultations from lawmakers before kickstarting the digital dollar, Powell explained that the health of other markets is essential to the US government, especially as it relates to creating a digital dollar.

“We could well need legislative authorization for such a thing. It isn’t clear until we see which way we’re going.”

Why the US Reserve is Eyeing CBDCs

It would be recalled that last year, while Powell was addressing his fellow panelists during a cross-border payments program that was hosted by the International Monetary Fund (IMF), he explained that the digital dollar would improve the payment system of the country by modernizing payment infrastructures.

Powell also mentioned that the digital dollar would be helpful in bridging the gap between the banked and unbanked, as it will reach consumers who are traditionally underserved by financial institutions. When asked why the Federal Reserve was yet to decide if the digital dollar was the way to go, Powell responded that,

“There’s a great deal of work yet to be done as well as extensive public consultation to be had with all stakeholders before making such a decision.”

In spite of the fact that many central banks across the globe have already adopted the digital dollar policy, Powell maintained that the Federal Reserve is not in contention on who’s first to do it.

“I think it’s more important for the United States to get it right than it is to be first. Getting it right means that we not only look at the potential benefits of a CBDC but also the potential risks and also recognize the important trade-offs that have to be thought through carefully.”

Digital Dollar Fuss

For the Federal Reserve and other apex banks, the primary objective for the consideration of the digital dollar is the need to limit the risks associated with cashless payments.

Should the digital dollar be institutionalized, the Federal Reserve will have a stronger and authoritative presence in the digital payments environment, which is expected to reduce the risk of fully relying on private payment systems for individuals.

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Author: Jimmy Aki

Jerome Powell: Fed is Studying Risks of Stablecoins As A ‘Very High Priority’

Jerome Powell: Fed is Studying Risks of Stablecoins As A ‘Very High Priority’

Meanwhile, the central bank isn’t feeling the “urge or need to be first” on CDBC’s as they already got the first-mover advantage with the U.S. dollar being the reserve currency.

The US Federal Reserve Chairman, Jerome Powell, said on Thursday that the central bank needs to find “better regulatory answers” for global stablecoins, and it is their “high-level focus.”

“That’s been a high-level focus, and that will continue to be a high-level focus because they could become systemically important overnight,” Powell said while speaking at an online event hosted by Yahoo Finance and conducted by the Princeton economist Markus Brunnermeier in New Jersey.

“We don’t begin to have our arms around the potential risks and how to manage those risks. The public will expect that we do and have every right to expect that. So that’s something that we’ve been working on with our colleagues around the world… It’s a very high priority.”

Just last month, the U.S. President Trump’s Working Group on Financial Markets said stablecoins must meet the same regulatory standards as banks and other financial institutions.

European Central Bank President Christine Lagarde shared similar views when in November, she warned in an op-ed that if stablecoins became widely adopted, they could “threaten financial stability and monetary sovereignty” around the world.

This week, she called Bitcoin a “highly speculative asset” that is facilitating “funny business.” As such, “there has to be regulation,” Lagarde added, “This has to be applied and agreed upon.”

No Need for CBDC Yet

The Fed, meanwhile, is in no hurry regarding a central bank digital currency (CBDC); it is actually estimated to take “years rather than months” before the central bank releases a CBDC, said Powell. “We don’t feel an urge or need to be first” on CDBCs, reiterated Powell while continuing,

“Effectively, we already have a first-mover advantage because (the U.S. dollar is) the reserve currency.”

Still, the Fed is “investing heavily” in understanding the technology and studying all the policy risks CBDCs pose.

According to him, it was when private-sector money, like Bitcoin and other cryptos, was created that the Fed looked into CBDC. But while people think of these cryptocurrencies as money, “at some point, they find out that it’s not money and that’s a really bad thing we need to avoid,” he said.

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Author: AnTy

The Fed & ECB Are ‘Committed’ to CBDC But ‘Not Racing to be First’

Jerome Powell, Chairman of the Federal Reserve, reaffirmed this week that he is committed to evaluating the costs and benefits of the digital dollar.

“Here at the Fed and in the US, we are committed to thoughtfully and carefully evaluating the potential costs and benefits of a central bank digital currency,” said Powell during his speech at a virtual conference hosted by the European Central Bank.

He further shared that the Fed has been actually actively participating with other central banks on this, adding: “We feel that’s been a very productive collaboration.”

While the central bank head clearly specified his commitment to a central bank digital currency (CBDC) being a matter of when not if, at the same time, a digital dollar isn’t coming anytime soon.

“We haven’t made a decision to issue a CBDC, and we think there’s quite a lot of work yet to be done as we engage with public constituencies here in the US and around the world,” said Powell dashing any hopes of the US competing with China’s digital yuan which already had a series of pilot tests last month.

Because the US Dollar is “the world’s principal reserve’s currency,” Powell said they would approach the question of a digital dollar with “great care” and “it’s critical that we really get it right as opposed to trying to be the first.”

The main focus for the Fed is on how a digitized version of currency could improve what is “already a safe, effective, and dynamic payments system,”’ said Powell. He further added that in the US, there is still a “strong demand for cash.”

Earlier this week, Fed had released a “Central Bank Digital Currency: A Literature Review,” where it talked about exploring the intrinsic features of CBDC as a means of payment and store of value.

Another report this week came from Deutsche Bank in which it said that in the long term, “central bank digital currencies will replace cash.” But advanced economies need to overcome the challenges of low interest rates and privacy first to succeed.

The bank also said that while the EU has been talking about the need for a digital transformation, its efforts have been disappointing.

During the event, Christine Lagarde, President of the European Central Bank, also mirrored Powell’s sentiments saying they are “not racing to be first.”

But maintained that if it is going to facilitate cross-border payments and contribute to better monetary sovereignty, then “I think we should explore it.”

Her “hunch” is that it will come, but it will not be a substitute for cash rather be a “complement” to it.

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Author: AnTy

Bitcoin & Gold Make An Inverted V on Fed’s Inflation Sacrifice; Stocks Roared Even Higher

The Federal Reserve will allow inflation to run above 10%, said Fed Chairman Jerome Powell during the much-awaited virtual speech from the central bank’s annual Jackson Hole, Wyoming symposium.

Bitcoin’s price responded to the news quite visibly, forming an inverted V, as the digital asset jumped from $11,290 to just above $11,600. But only to come back down under $11,400, so it was all for nothing.

The good thing is Bitcoin has lately been reacting to the macro events in line with other assets. The digital gold acted exactly like the precious metal as gold pumped over 2% only to retrace it whole within the next minutes.

The US stocks meanwhile opened higher — S&P 500 made a new all-time high at 3,494, the ever-rising Nasdaq went to $11,688, and the Dow Jones Industrial average also went higher but is still down about 2% from its peak hit in February.

“Yields are spiking, driving the dollar up and metals down, together with crypto. Financial stocks are roaring, helping indices stay up,” noted trader and economist Alex Kruger.

Source: @ClassicMarco

“Even more central bank stimulus: That’s what markets–across the board–have taken away, at least for now, from Fed Chair Powell’s remarks on changes to the Monetary Policy framework,” said Mohamed A. El-Erian, Chief Economic Adviser at Allianz.

This means everything that has already been going up will continue to go up.

However, tech stocks showed a weakness with Amazon, Facebook, Netflix, and Alphabet falling. Meanwhile, bank stocks moved higher.

The yields on benchmark 10-year Treasury notes dropped to 0.734% after the Fed said it would stop the practice of preemptively lifting interest rates to prevent inflation from rising.

The US dollar index, however, enjoyed the Fed’s dovish tone to make a strong rebound from 92.5 to over 93.

The chairman clarified that the “Fed will not hesitate to act if inflation rises above levels consistent” with its goal to support the labor market and broader economy. He also said that there is no particular method to define average inflation, moreover, “policy will not be dictated by any formula.”

“Many find it counterintuitive that the Fed would want to push up inflation,” Powell said in prepared remarks. “However, inflation that is persistently too low can pose serious risks to the economy.” And we need to support workers from the most affected sectors, he said.

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Author: AnTy

US Fed Chair Jerome Powell Rules Out The Private Sector in Creation of a Digital Dollar

Jerome Powell, the U.S Fed Reserve Chairman, has said that private entities should not be part of the creation process of a digital dollar. Appearing before the House Financial Services Committee on June 17, the Fed Chair highlighted that monetary policy functions should be left to the central banks regardless of the operating ecosystems.

On the digital dollar progress, Powell noted that the Fed owes it to the public to be up to speed with developments in the space. Consequently, the financial watchdog has emphasized understanding the intricacies of digital assets to evaluate their public good.

Private Entities Ruled Out of Digital Dollar Creation

Earlier this year, a digital dollar proposition was launched by the former CFTC Chairman, Christopher Giancarlo, together with other notable stakeholders in the financial services industry.

This recommendation had proposed private entities and the Fed to work together towards creating the digital dollar. According to the suggested layout, this digital currency would leverage the current U.S banking system to provide two-tiered services with the Fed’s backing.

This issue was raised as a question to Powell by Rep. Tom Emmer (R-MN) hence triggering the clarification on monetary policy functions. In his opinion, a collaboration with the private sector would invalidate the idea of the public good:

“The private sector is not involved in creating the money supply. That’s something that the central bank does. […] I don’t [think the public would welcome the idea that private employees who are not accountable solely to the public good would be responsible for something this important.”

Notably, Powell also addressed some shortcomings with the proposition of a digital dollar. One of the main concerns is striking a balance in what would be a fair oversight of the digital dollar.

According to Powell, there are a lot of questions when it comes to transactional privacy, which means it would be difficult to cap where the Fed’s control ends. However, he was keen to reassure the House Financial Services Committee that the Fed will not shy away from something beneficial to the world’s reserve currency, U.S. dollar.

China on Sunrise Phase

As the U.S continues to debate on the value proposition of a digital dollar, China has already launched a pilot for the digital renminbi (RMB). This initiative had been in the works for around five years and is quite promising, given China’s extensive use of mobile app payments such as Alipay and WeChat.

It, therefore, follows that a complete sweep up of fiat money within China’s economy in replacement with the digital yuan could soon be a reality. Despite this progress, China is not guaranteed to displace the U.S dollar as a reserve currency given its substantial market dominance. Also, the Euro is still significantly ahead of the CNY in FX markets.

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Author: Edwin Munyui

Fed Chairman Calls for More Fiscal Support as Recovery will be Slow, Rules Out Negative Rates

Federal Reserve Chairman Jerome H. Powell said on Wednesday that policymakers might need even stronger fiscal and monetary measures to restore the economic downturn that cost at least 20 million jobs.

“The recovery may take some time to gather momentum,” which can turn the ongoing liquidity problem into “solvency problems,” Powell said in a webcast event with the Peterson Institute for International Economics.

Coronavirus has triggered a situation that is unlike previous recession the US endured as such Congress is required to respond with more.

Negative rates not coming yet But more stimulus is

In the first quarter, the Fed cut its benchmark rate to near zero and Congress passed $3 trillion for the stimulus package. He said,

“While the economic response has been both timely and appropriately large, it may not be the final chapter, given that the path ahead is both highly uncertain and subject to significant downside risks.”

As for the negative interest rates, which President Donal Trump has been in favor of, Powell said, “it’s not something that we’re considering.”

Traders meanwhile have been pricing the rates edging into negative territory by the end of 2020 or in early 2021.

Recovery may take some time to gather momentum

The prepared remarks from the central bank came days after the Labor Department reported nonfarm payroll fell by 20.5 million last month and the unemployment surged to 14.7%, both the worst since the Depression.

Source: TradingEconomics

“The scope and speed of this downturn are without modern precedent, significantly worse than any recession since World War II,” added Powell while noting that

“the job gains of the past decade have been erased.”

GDP is expected to plunge as well by record levels in the second quarter with Goldman Sachs forecasting quarter-on-quarter annualized hit in Q2 to be -39% but it will be followed by a faster recovery in Q3 +29%.

But according to Powell, this recovery “may take some time to gather momentum,” as the longer the health risks persist the more likely business will fail and households will be short for income.

Stock Market Drops, Bitcoin Rising

The worst-case outcome will leave the economy in “an extended period of low productivity growth and stagnant incomes.”

“Additional fiscal support could be costly but worth it if it helps avoid long-term economic damage and leaves us with a stronger recovery,” Powell said which could be a direct call for Congress to allocate more funds for economic relief.

“This tradeoff is one for our elected representatives, who wield powers of taxation and spending.”

These remarks from the central bank chief resulted in both the Dow Jones Industrial Average and S&P 500 siding more than 3% from yesterday’s high.

Bitcoin meanwhile jumped above $9,100, up 2.33% while managing the daily trading “real” volume of $1.5 billion.

With this latest development, bitcoin and stocks continue to decouple as such the equity market is losing relevance for the crypto market.

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Author: AnTy

Governments Get Aggressive & MMT is Coming Ahead of Bitcoin Halving

Investor confidence was tested today as Federal Reserve Chairman – Jerome Powell – suggests that the central bank may not have the firepower to combat the next recession.

To soothe investor fears, Powell issued a short statement on Friday, reaffirming that the central bank would use its tools and “act as appropriate to support the economy.”

The “fundamentals of the US economy remain strong” Powell argued, further noting that “the coronavirus poses [an] evolving risk to economic activity” and the Fed “is closely monitoring developments and their implications for the economic outlook.”

This statement came as markets in the US tumbled for the seventh day, as the continued spread of the coronavirus has investors fearful that the world is on the cusp of a pandemic and recession.

50bps Rate Cut Now Priced for March

As new cases of coronavirus outside China continue to grow, Powell’s comment has a 50bps cut now fully priced in for March.

“It was certainly an attempt to calm things down,” Torsten Slok, an economist at Deutsche Bank, explained. “This is the strongest hint you can make that a rate cut is coming.”

President Trump also played down the economic threat to the US from the virus and added his hopes that the Fed would cut rates soon.

“I hope the Fed gets involved and I hope it gets involved soon,” Trump told reporters. This isn’t anything new coming from the president that has regularly criticized the Fed for not cutting rates more aggressively.

Last week, Powell said the current low level of interest rates “means that it would be important for fiscal policy to support the economy if it weakens.”

James Bullard, the president of the Federal Reserve Bank of St. Louis, also said during his speech in Florida that “we could cut rates if we got a global pandemic that actually develops with health effects that seem to be approaching the same level as seasonal influenza, but that doesn’t look like the baseline as of today.”

European Central Bank President Christine Lagarde however, told European lawmakers that “Monetary policy cannot, and should not, be the only game in town.”

Stock Market’s Worst Day is Business as Usual for Bitcoin

Stock market indexes have slumped amid deadly virus worries, with money pouring into gold, which has surged to 7-year highs alongside US govt securities as people look for safe investments, driving prices up while pushing yields to record lows.

The stocks have suffered their biggest weekly fall since 2008. With Dow Jones Industrial Average shedding 10% of its value in February, the S&P 500 also lost 8.4%, and the Nasdaq down by 6.4%.

During this financial uncertainty, the Hong Kong government is handing out cash to its adult permanent residents.

Its aim appears to be an attempt to boost spending and ease the financial burden, with the government explaining that the “economy is facing enormous challenges this year.”

The government has announced that $10,000 Hong Kong dollars ($1,280) will be given to approximately seven million people over the age of 18.

The German government has temporarily suspended constitutional limits on public borrowing to provide debt relief to struggling municipalities.

Also, Italy has put a hold on payments due between Feb. 21 and March 31, from residents and businesses in towns subject to containment measures to stop the spread of coronavirus.

Govt. to Use its Tools as we Head Into Bitcoin Halving

“Governments are getting aggressive,” says economist and trader Alex Kruger. “The coronavirus may be triggering a new age of fiscal policy. And MMT is getting closer.”

Cutting interest rates and printing money are the central banks’ tools and “they’re going to abuse them at the exact moment we head into the Bitcoin halving,” says Morgan Creek Digital co-founder – Anthony Pompliano.

The solution to these aggressive policies could be as analyst PlanB points out – Bitcoin (BTC). The leading cryptocurrency is currently hovering around $8,600 but could see a boost with all the free money being pumped into the market by the central bank.

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Author: AnTy