US Senate Confirms Janet Yellen as Treasury Secretary; What Does This Mean for Crypto?

US Senate Confirms Janet Yellen as Treasury Secretary; What Does This Mean for Crypto?

The U.S Senate has confirmed Janet Yellen on Monday as the Treasury Secretary in the newly inaugurated Biden administration with an overwhelming 84-15 vote. She takes over this position from Steven Mnuchin, who served in the Trump administration and left office last week following Biden’s inauguration.

Yellen’s era comes when crypto stakeholders are especially keen on the regulatory developments that might affect the industry. The previous Fed chairwoman had stated that she is ‘not a fan of Bitcoin,’ referring to it as a highly speculative asset.

Recently, she rubbed shoulders with the crypto community following her take that most crypto activity is attributed to illegal operations. During the Senate Financial Committee oral testimony, Yellen’s written testimony further elaborated her stance on the issue.

“I think many [cryptocurrencies] are used, at least in a transactions sense, mainly for illicit financing, and I think we really need to examine ways in which we can curtail their use.”

Nonetheless, she recognizes the underlying potential in cryptocurrencies and their supporting technology. Yellen suggested that a more prudent approach would be keeping up with the changing tech dynamics that malicious actors leverage to circumvent U.S authorities or interests.

“We need to make sure that our methods for dealing with these matters, with tech terrorist financing, change along with changing technology,”

Pending Crypto Regulations

With Yellen assuming the Treasury Secretary office, she can pick up on some active issues that Mnuchin left pending. These include crypto-focused regulatory proposals such as imposing stricter oversight for crypto wallets; it is currently frozen as part of President Biden’s recent decision to halt all pending agency rulemaking.

Other proposed FinCEN rules include reporting $10,000 or more for U.S citizens who hold an equivalent amount of crypto assets overseas. The financial regulatory body also wants to place a KYC threshold requirement of $250 for U.S cross-border crypto and fiat transactions; this is currently capped at $3,000. Finally, the OCC proposed a regulation that favors an extension of banking services to crypto, which was yet to be forwarded to the Federal Register before Trump’s exit.

Yellen has since vowed that she would collaborate with the mandated financial bodies to advance Fintech regulatory frameworks’ work. She particularly vowed to,

“work closely with the Federal Reserve Board and the other federal banking and securities regulators on how to implement an effective regulatory framework for these and other fintech innovations.”

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Author: Edwin Munyui

Nasdaq-Listed Bitcoin Miner Marathon Buys 4,812 BTC ($150M) for Treasury Reserves

Nasdaq-Listed Bitcoin Miner Marathon Buys 4,812 BTC ($150M) for Treasury Reserves

Marathon Patent Group, the North America-based Bitcoin mining company, has purchased 4,812 Bitcoin for an aggregate price of $31,168.

The company purchased $150 million worth of Bitcoin through the New York Digital Investment Group (NYDIG). Merrick Okamoto, Marathon’s chairman & CEO said,

“By leveraging our cash on hand to invest in Bitcoin now, we have transformed our potential to be a pure-play investment into a reality.”

These BTC are held in Treasury reserves, which Marathon describes as a better long-term strategy than holding US Dollars.

The cryptocurrency miner has contracted to purchase 103,060 mining machines, which are expected to be delivered and deployed by the end of the first quarter of 2022. This capacity, based on the current difficulty rate, which is at an all-time high of 20.82 trillion, Marathon would be able to produce 55-60 BTC per day.

As of writing, BTC is trading around $35,000, down 23.5% from its all-time high of $42,000 hit earlier this month.

Meanwhile, the shares of Marathon are $18.30, down from $26.39 on Jan. 8 but up from $0.40 on April 1st, 2020.

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Author: AnTy

Congress Members Request Treasury to Extend Comment Period on FinCEN’s Crypto Regulation

Congress Members Request Treasury to Extend Comment Period on FinCEN’s Latest Crypto Regulation

3,257 comments have been submitted so far to FinCEN’s midnight rulemaking.

Nine congress members have sent a letter to Treasury Secretary Mnuchin requesting an extension of the 15 day comment period on FinCEN’s proposed rulemaking related to “Requirements for Certain Transactions Involving Convertible Virtual Currency or Digital Assets.”

Tom Emmer, Tom Cotton, Bill Foster, David Schweikert, Darren Soto, Warren Davidson, Suzan K. DelBene, Ted Budd, and Tulsi Gabbard are the congress members who shared their concerns.

The letter states the concern that the midnight rulemaking does “not afford the American public a reasonable opportunity to respond” in what is “highly complex rulemaking.”

The members say while they do support the law enforcement in their efforts to combat criminals engaging in money laundering and illicit financing, “it would be impossible for the public to give meaningful comment with so little time.”

Not only a rushed process threatens the legitimacy of this rule but it would make the new regulations susceptible to legal challenges, reads the document.

They asked the department to extend the review period to 60 days and consider an extension of potentially six months to the proposed rule.

Meanwhile, the crypto community can submit their comments before the end of day on Jan. 4 on the government’s site. So far, 3,257 comments have been submitted.

“If we can get enough substantive comments in, they won’t have time to consider all of them adequately before Jan 20 and it will be out of Mnuchin’s hands,” advised Jerry Brito, executive director of CoinCenter while urging the community to comment no matter what part of the world they live in.

Joe Biden is to be sworn in as the President of the US on Jan. 20 and the Biden admin has announced that they will halt ongoing midnight rulemaking the day they get into office.

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Author: AnTy

Miami Mayor ‘Definitely Open’ to Allocate 1% of City’s Treasury Reserves into Bitcoin

Miami Mayor ‘Definitely Open’ to Allocate 1% of City’s Treasury Reserves into Bitcoin

Meanwhile, Francis Suarez is working on accepting Bitcoin as a means to pay for services/bills in 2021.

Mayor Francis Suarez declared his Bitcoin friendliness on Twitter Tuesday when BTC proponent Anthony Pompliano urged him to allocate Miami’s reserves into the world’s largest cryptocurrency.

“Definitely open to exploring it,” said Suarez who is working on bringing tech talent to the city.

With COVID-19 bringing in more remote-working opportunities, many tech entrepreneurs are contemplating or have already moved out of the San Francisco Bay Area. Some are considering Miami as an option thanks to Suarez actively endorsing the city on Twitter.

The Mayor’s Bitcoin positive response has been to Morgan Creek Digital co-founder Pomp’s tweet, “Retweet this if you would move to Miami if Mayor Francis Suarez put 1% of the city’s treasury reserves in Bitcoin.”

The tweet received much love — 1.3k retweets and 5.3k hearts. The Bitcoin community is already on board with this idea which has already seen adoption from public listed companies.

MicroStrategy was the one to herald it which was then taken further by Jack Dorsey’s Square. Now, in small and big enterprises, everyone is slowly replacing cash with Bitcoin as a reserve asset in their balance sheet.

“Would be the first US city to do it. If Bitcoin works out, it would bring significant resources to the city. If it doesn’t work out, it would be best spent economic development dollars because of how many people would move,” said Pomp of such a move.

While Bitcoin in Miami’s treasury reserves may take time, the city could soon accept Bitcoin and crypto as a means to pay for services and bills.

“We are definitely going to be working on that in 2021…” is what Suarez said of this.

Charlie Shrem, host of Podcast UntoldStories also chimed in and called out the state of Florida to be the flag bearer of Bitcoin friendliness.

However, Jimmy Patronis, Florida’s Chief Financial Officer & State Fire Marshal isn’t keen on the idea as he said, “Got to keep public money safe. It’s not the future, it’s now. I love that the Mayor is fired up about expanding the global financial sector in Florida!”

While Florida might not be ready for that now, the crypto community already has Wyoming which has been leading with its digital assets favorable regulations. And of course, the state has already elected the first Bitcoin owner, Cynthia Lummis to the US Senate.

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Author: AnTy

NexTech AR Solutions Announces $2M Bitcoin Investment; Plans to Add More BTC in Treasury in 2021

NexTech AR Solutions Announces $2M Bitcoin Investment; Plans to Add More BTC in Treasury in 2021

The company says “the timing is right for this move,” and “a paradigm shift to digital gold is underway.”

The list of companies adding Bitcoin to their Treasury keeps on getting bigger and bigger.

The latest one to join, NexTech AR Solutions (NEXCF), plans to make an initial investment of $2 million in Bitcoin. The company is planning to add more BTC to its stash in 2021.

This decision has been made in the light of Bitcoins’ widespread adoption by the institutions this year. Besides Grayscale holding 607.14k BTC for its accredited and institutional investors, big names like Guggenheim, Mass Mutual, Square, and MicroStrategy have gone deep into the cryptocurrency.

The company feels that “the timing is right for this move,” as the widespread adoption of Bitcoin continues, as per the official announcement.

Much like other companies, NexTech aims to maximize the long-term value for its shareholders with the new capital diversification and allocation strategy. NexTech CEO, Evan Gappelberg said,

“This initial investment reflects our belief that Bitcoin is a long-term store of value and an attractive investment asset with more long-term appreciation potential than holding cash, which is currently yielding 0.06%.”

Gappelberg further notes that as a digital version of gold, Bitcoin only has a market cap of half a trillion dollars compared to precious metal’s $10 trillion market capitalization. He said,

“We think that as part of the digital transformation a paradigm shift to digital gold is underway and as Bitcoin is seen more and more as a store of value, just like gold, it will catch up to gold.”

As we reported, another company Greenpro Capital announced that it will be launching a $100 million Bitcoin fund and will also replace cash with Bitcoin in its balance sheet.

As Anthony Scaramucci, founder and co-managing partner of Skybridge Capital said while Bitcoin has “caught fire.. we’re still in very very early innings” and this is a “wave of early adoption by the institutional community.”

Currently trading around $26,700, Bitcoin has rallied more than 275% this year.

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Author: AnTy

MicroStrategy Pumps its Bitcoin Stash to 70,470 BTC The Day Treasury Announces New Stimulus

MicroStrategy Pumps its Bitcoin Stash to 70,470 BTC, The Day Treasury Secretary Announces New Stimulus Checks Coming Next Week

The company buys another 29,646 BTC as it believes bitcoin will continue to provide “the opportunity for better returns and preserve the value of our capital over time compared to holding cash.”

Publicly-traded MicroStrategy has added another 29,646 BTC, as expected, in its balance sheet at an average price of $21,925 per BTC.

These Bitcoin have been bought from the proceeds of the $650 million senior convertible notes issued just this month. Michael J. Saylor, CEO of MicroStrategy, said,

“The acquisition of additional bitcoins announced today reaffirms our belief that bitcoin, as the world’s most widely-adopted cryptocurrency, is a dependable store of value. We believe the proactive management of our balance sheet, combined with the improved revenue and profitability performance of the Company, have been significant factors in the recent appreciation in our stock price.”

Michael J. Saylor CEO of MicroStrategy

Now, as of December 21, 2020, the company holds an aggregate of 70,470 bitcoins, 0.37% of BTC’s circulating supply, acquired at an aggregate purchase price of approximately $1.125 billion through Coinbase.

With this, MicroStrategy now holds more BTC than the US Government, which has 69,420 BTC in its stash but less than the Chinese government’s 194,775 BTC holdings. Phong Le, President & CFO of MicroStrategy, said,

“The Company continues to believe bitcoin will provide the opportunity for better returns and preserve the value of our capital over time compared to holding cash. We also remain dedicated to our customers and our goal of operating a growing profitable business intelligence company.”

Phong Le President & CFO of MicroStrategy

Start that Money Printer

Interestingly, just today, Treasury Secretary Steven Mnuchin said that Americans who qualify for direct payments could get money in their bank accounts in a matter of days. Mnuchin told CNBC on Monday,

“The good news is this is a very, very fast way of getting money into the economy. Let me emphasize: People are going to see this money at the beginning of next week”

Steven Mnuchin Treasury Secretary

This came just hours after Congress approved the $900 billion Covid-19 relief bill in which individuals, including children, are receiving $600 in direct payments. Mnuchin expects this money to “take us through the recovery.”

“So it’s very fast, it’s money that gets recirculated in the economy,” he added.

“People go out and spend this money, and that helps small businesses and that helps getting more people back to work.”

Encouraging others to do the same

The announcement of MicroStrategy’s big bet on Bitcoin’s future also came on the day the digital asset fell under $22k from the high of $24,300.

Over the weekend, Saylor also encouraged Tesla CEO Elon Musk to make a similar decision to MicroStrategy and replace cash with bitcoin in their balance sheet.

“Do your shareholders a $100 billion favor,” said Saylor adding, “Other firms on the S&P 500 would follow your lead & in time, it would grow to become a $1 trillion favor.”

During the exchange with Musk, Saylor shared that he has purchased more than $1.3 billion in Bitcoin and offered to “share my playbook with you offline – from one rocket scientist to another.”

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Author: AnTy

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

FinCEN Opens Job Positions for Crypto Policy Advisers Ahead of Proposed Wallet Regulation

The Financial Crimes Enforcement Network (FinCEN), a top policy enforcement arm of the Treasury Department, has been rumored to be in the process of developing crypto regulations for a while.

These rumors have now been given new life as the regulator recently posted two job listings for crypto advisers.

Qualified Applicants Only

Published last week, the listings showed openings for Strategic Policy officers. These professionals will primarily assist the agency in developing policy responses to cryptocurrencies. They will also issue advisories to liaise with financial institutions and engage in crypto policy collaborations with private and public sectors.

The details of the job listings show that FinCEN wants to improve its crypto policy acumen. Both positions will receive top clearance, and they are full-time positions. Candidates are to have experience in strategizing, drafting, and researching crypto policy.

These requirements show that FinCEN is looking to get more than just washed-down regulatory policies that will do no good for the crypto space.

Talks of policy developments from the FinCEN have swirled throughout the year. In February, Treasury Secretary Steve Mnuchin alluded that the agency was working on drafting regulations for cryptocurrencies across the countries.

Many Talks, Little Action

Speaking to Congress on the President’s $4.8 trillion budget proposal, the Treasury Secretary explained that the budget was also set to address effective cryptocurrency monitoring and enforcement against criminals. He said in part:

“We’re about to roll out some significant new requirements at FinCEN [Financial Crimes Enforcement Network]. We want to make sure that technology moves forward but on the other hand, we want to make sure that cryptocurrencies aren’t used for the equivalent of old Swiss secret number bank accounts.”

The Treasury Secretary revealed that his department would collaborate with several other regulators, including the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

So far, there hasn’t been much in terms of regulatory oversight from the agency. In September, it issued an announcement stating that it would seek public comments on forthcoming proposals that would strengthen rules on monitoring and reporting financial institutions’ requirements.

The announcement claimed that the proposals would address terrorist financing, money laundering, and others, suggesting that crypto-related firs would also be in the regulator’s crosshairs.

Last week, Coinbase CEO Brian Armstrong revealed on Twitter that the FinCEN was most likely looking to rush through crypto regulations with the current administration on its way out. Mnuchin is set to be replaced by Janet Yellen at Treasury, and according to Armstrong, the current administration will be looking to make one last mark.

The CEO accused the FinCEN of trying to track self-hosted wallets. This move could essentially break down a significant anonymity barrier on which the crypto industry stands.

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Author: Jimmy Aki

Fidelity Digital Assets Dives Into Why Institutions Are Adding Bitcoin to Treasury Reserves

Over the year, several companies have chosen to add Bitcoin to their Treasury reserves, including MicroStrategy, Square Inc., and Tudor Investment Corporation. The latest two, Canada-based BIGG Digital Assets and MassMutual, a 169-year old insurance firm, also added $3.6 million and $100 million in BTC to their reserves in 2020, respectively.

As one of the first institutional investment-focused firms on Bitcoin, Fidelity Digital Assets released a synthesis report on the growing number of institutions adding BTC as a treasury reserve asset – and crucially, why more companies will consider adding Bitcoin-backed treasuries in the future.

From August through October, a billion-dollar publicly traded firm, MicroStrategy, added over 40,000 Bitcoin for $475 million into its Treasury coffers. Less than three months later, Michael Saylor, MicroStrategy’s CEO, announced a doubled down bet on BTC selling $635 million of senior convertible notes to purchase the ‘digital gold.’

The huge bet paid off wonderfully across Q4 2020 for MicroStrategy’s stock (MSTR), which reached a 20-year high after the firm recorded over 50% profit on its BTC Treasury reserves. Despite CITI Bank downgrading its stock from “neutral” to “sell” in their latest report (due to “disproportionate focus on BTC), the firm looks to add even more, Saylor confirmed.

Additionally, Square Inc., founded by Twitter CEO and Bitcoin enthusiast Jack Dorsey, introduced BTC buying and selling through Cash App earlier in the year. The payments firm purchased $50 million worth of bitcoin (or 4,709 bitcoins) in October 2020, representing 1% of their Treasury reserve.

Other institutions such as Stone Ridge, Mode Global Holdings PLC, and Tudor Investment Corporation have also announced Bitcoin allocations this year.

So what is causing a sudden increase in corporations adopting Bitcoin-backed Treasury reserves?

Damaged financials, cash flows, and profitability

According to the report, three main issues affect a corporation’s decision to hold BTC in its reserves. First, the global COVID-19 pandemic “damaged corporate balance sheets, cash flows, and profitability,” which put most corporations in a precarious position. The sudden reduction in cash flows raises the importance for these institutions to put away excess cash in uncorrelated investments to fight off the recession.

Bitcoin is well-diversified from the demand shocks that health and economic crises cause on stocks, bonds, and traditional finance markets. The report further states,

“Companies may also benefit from bitcoin’s diversification benefits, potential outperformance, and liquidity profile when the core business and other potential investments are disadvantaged by the state of the economy”.

Moreover, BTC offers companies the potential of a longer-term investment profile while also offering liquidity to shorter-term investors. This will help companies maintain their liquidity while diversifying their investments, providing a buffer in difficult times.

Ultra-low interest rates across the world

Secondly, interest rates across the world reached yearly lows as the pandemic struck to stimulate borrowing. However, while corporations may rejoice in having a cheaper leeway for acquiring debt or refinancing existing debt at lower rates, companies with excess cash reserves may suffer as they cannot find attractive rates, the report explains.

While safe-haven assets like gold and Bitcoin generally do not generate interest yields, having these assets in your portfolio prevents cash-filed companies from avoiding negative or ultra-low interest rates, the report also states.

Inflation strikes

Finally, there has been an increase in monetary and fiscal policies globally, with money printing reaching “unprecedented levels.” McKinsey’s report showed that the top 54 economies contributing to 93% of global GDP made over $10 trillion in stimulus payments in two months – over three times more than the 2008 financial crisis. This unchecked and unbalanced economic stimulus could cause a sudden hike in asset and consumer price inflation leading to corporations having less purchasing power with cash.

Bitcoin offers a verifiable and inelastic monetary supply, which differs from the expansive monetary and fiscal currently being broadcast globally. Some companies view BTC as a wealth preserving asset that could prevent inflation risk and store value.

The entry of MicroStrategy, Home Ridge, Square Inc., and Tudor Investment Corporation signals a start of the institutional investment wave in Bitcoin – and who can predict how far it can go?

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Author: Lujan Odera

Janet Yellen and the Fed Will Continue to Push Bitcoin to New Highs in the Next 5 Years

US Treasury Secretary Steven Mnuchin hasn’t been really good for cryptocurrencies. As we reported, the Treasury said in a statement on Monday, “There is strong support across the G7 on the need to regulate digital currencies.”

The G7 finance officials discussed the responses to the evolving landscape of cryptocurrencies to prevent their use for “malign purposes and illicit activities,” Treasury said.

Just last month, Coinbase CEO Brian Armstrong said that Mnuchin is planning to “rush out some new regulation regarding self-hosted crypto wallets before the end of his term,” although exchange’s former employer Brian Brooks, the acting Comptroller of the Currency, said there is no plan on killing cryptos.

However, Munchin hasn’t much time left in his term with Janet Yellen chosen as the new Treasury Secretary by President-elect Joe Biden.

Yellen’s views on crypto aren’t positive; she has called Bitcoin a “highly speculative asset” in the past and expressed concerns about its volatility when she should have shown more concern about the decreasing value of the US dollar.

However, Yellen won’t be bearish for Bitcoin price rather the opposite, wrote Alex Mashinsky, founder & CEO of Celsius Network, in an article on Monday.

According to him, Yellen’s track record as an economist and a civil servant is unimpeachable, but her ability to manage the current economic crisis and mounting debt is something to be worried about.

MMT FIAT maximalists in the House

Coming from a long line of Keynesian believers in MMT, Yellen advocates for creating endless amounts for fiat to grow the economy, said Mashinksy.

The Fed has already been printing money like crazy, with over 20% of dollar supply created in 2020 alone.

“Joe Biden along with Janet Yellen and J-Pow are gonna drive the Dollar into the ground,” said analyst Mati Greenspan.

Mashinksy argues that MMT is a dangerous ideology that injects boatloads of cash into the market, pushing the asset prices up, which only benefits large corporations and billionaires.

Although Yellen’s appointment can lead to Bitcoin restrictions and regulating DeFi but the fact that Yellen and Biden Administration need to ensure that the US Dollar remains the reserve currency, it would involve “funding new businesses and technologies in future industries such as Blockchain, Machine Learning, and AI.”

Mashinsky said it is “overdue” for the Fed and Treasury to give up their old ways and start taking advantage of crypto.

“The FED and the White House will be filled with Keynesian MMT FIAT maximalists in 2021. This guarantees that Bitcoin continues to hit new highs during the 2021–2025,” he wrote.

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Author: AnTy