Tag: that
South Korean Exchange Suspends Withdrawals to External Wallets, Govt. Reaches Out to Apple & Google
One of the four regulated cryptocurrency exchanges in South Korea, Coinone, has announced that it will no longer allow withdrawals to non-verified external wallets starting Jan. 24, 2022.
If Coinone users want to withdraw their crypto assets to another digital wallet, they would have to register their wallet address with the exchange, "in accordance with the fulfillment of the customer verification system obligation," it said.
These external wallets include both hot and cold wallets offered by third parties. Since wallets like Ledger and MetaMask do not require KYC (know-your-customer information), Coinone users won't be able to withdraw their funds to these wallets. But custodial wallets offered by other exchanges are verifiable by Coinone.
"It is impossible to register a wallet address that cannot verify identity information."
The exchange has made this move to ensure that Coinone customers are not using crypto for illegal activities. As such, its users are required to register their wallets by submitting information such as name, email address, and phone number to withdraw funds.
Further Restriction on P2E Games
The South Korean government has also begun to block the release of play-to-earn games (P2E), according to a local report.
The regulators have also requested tech giants like Apple and Google to block these apps on their App Store and Play Store respectively. They recently strengthened the monitoring of blockchain games.
The Game Management Committee (GMC) under the Ministry of Culture, Sports, and Tourism recently sent an official letter to game operators to block the domestic distribution of these games.
The distribution of P2E games in Korea is being prohibited by the Game Commission based on the 'prohibition of prizes' of the Game Industry Promotion Act. Under the Act, the winning prize is capped at 10,000 Korean Won ($8.43).
This year, we saw a rise in the popularity of P2E games, such as Axie Infinity, in emerging economies. Interestingly in South Korea, six of their ten best-performing stocks of the year either belong to the non-fungible tokens (NFTs) category or the metaverse.
Domestic gaming companies in the country have also released their P2E mobile games, but the government has asked them to be blocked by service providers.
Game companies have now started to counterattack as well. SkyPeople, the developer of 'Five Stars for Clayton' whose rating was canceled, won the injunction lawsuit against the administrative disposition received from the Game Board in June. As such, until the lawsuit settles, the game can be distributed.
In South Korea, the games are required to get an age rating from the GMC before its domestic distribution. In case they are being distributed through other app stores, like those of Google and Apple, they can rate themselves. GMC said in a statement,
"It is reasonable to keep P2E games from getting age ratings under the current law because cash rewards in games can be considered prizes."
The Game Committee has decided to cancel more than 15 blockchain games this year. The GMC calls these P2E games "speculative money-making games."
However, the gaming industry strongly opposes the government's move and points to the global trend of growing P2E games. An official from the game industry said,
"If there is no legal basis for blockchain games, chaos will continue until the court's ruling on the first related lawsuit, 'Five Stars for Clayton', is issued."
Last month, Kim Gyu-Cheol, the chairman of the GMC, clarified that they aren't banning blockchain games or the new technology such as NFT, rather just those using the P2E model.
"The game industry promotion act, unlike other laws promoting culture, is established to prevent speculation."
Paraguayan Senate Passes Bill to Regulate Crypto Trading and Mining
The Senate of Paraguay has passed a bill that will regulate the trading and mining of cryptocurrencies in the country.
Paraguayan Senator Fernando Silva Facetti, one of the three authors of the bill, confirmed this on Twitter, saying Paraguay's Chamber of Deputies will discuss the bill next year.
After an "intense debate" that the Senate approved the bill that regulates the industry and commercialization of crypto assets, said Facetti.
In July, Paraguayan congressman Carlos Rejala presented a bill to regulate crypto ownership and registration of crypto mining operators.
Paraguay's low cost of electricity is the main attraction for crypto mining companies. Besides being the lowest in the region at around $0.05 per kilowatt-hour, the South American country produces 100% of its energy via hydroelectric sources.
The bill states that Paraguay only consumes a third of the energy it produces, and regulating crypto mining activity could help them consume "thousands of megawatts" that they currently have in "surplus."
With the new legislation, Facetti said, Paraguay aims to recognize crypto mining as an industry and establish the grounds to guarantee access to energy and requirements for the formalization of an expanding sector.
He further said, for crypto transactions, the National Securities Commission (NSC) will establish the registration requirements for intervening agents for negotiation, compensation, custody, and intermediation in the securities market.
The bill proposes a registry for any individual and the legal entity seeking to provide crypto trading and custody services.
According to the bill, the country's Industry and Commerce Secretariat will supervise crypto mining along with the NSC, Anti-Money Laundering Office, and National Electricity Administration.
Coinbase Urges SEC to Approve Grayscale Bitcoin Trust's (GBTC) Conversion to ETF
Coinbase sent a letter to SEC arguing that treating spot Bitcoin ETPs differently from futures-based ETPs can "undermine confidence" in the agency.
Cryptocurrency exchange Coinbase sent a letter to the US Securities and Exchange Commission (SEC) to approve the conversion of Grayscale's Bitcoin Trust (GBTC) into an exchange-traded fund (ETF).
In its letter, Coinbase said that GBTC is already a tried and tested way for retail investors to gain exposure to Bitcoin at prices closely reflecting spot BTC price without holding the crypto asset themselves.
GBTC shares are held in more than 600,000 retail and institutional brokerage accounts in all 50 states, it noted, adding that in 2019, GBTC was the 5th largest holding in millennial retirement accounts, ahead of Microsoft, Disney, and Berkshire Hathaway.
But in its current structure, GBTC shares are not eligible for redemptions which leads them to trade at premiums or discounts. And this issue can be solved by approving Arca's proposal, it said.
What's right is right. @coinbase sent a letter yesterday urging the @SECGov to approve Arca's application to convert Grayscale's BTC Trust to an ETF. https://t.co/GoLqBObU8k
— Paul Grewal (@iampaulgrewal) December 15, 2021
In its statement in support of Arca's proposal, Coinbase said the proposal also addresses SEC's concerns of fraud and manipulation as it relies on Bitcoin's underlying price in the spot markets.
Because a futures-based ETP and spot Bitcoin ETP both are reliant on Bitcoin's spot price, "we believe ETPs that invest in Bitcoin futures contracts present a substantially similar risk of manipulation as a spot Bitcoin ETP," said Coinbase, which has 73 million verified users.
In October, SEC approved the first futures-backed Bitcoin ETF on the grounds that it offers greater investor protection while it has yet to approve a single ETF in the last eight years since the first application was filed.
According to Arca's proposal, while Bitcoin itself isn't inherently resistant to fraud and manipulation, the Index represents an effective means to prevent such practices.
Much like Grayscale itself, Coinbase argues that spot Bitcoin ETPs shouldn't be treated differently than futures-based ETPs, and a rejection of Arca's proposal would be "in direct conflict" with that.
"The Commission's resistance to making such a conclusion with respect to a spot ETP does not appear warranted by public interest and investor protection policy considerations."
And if the SEC applies different standards for the products, such a treatment may "undermine confidence" in the agency as a neutral administrator, which may further stifle innovation. Coinbase said,
"Market participants should not be left guessing about what criteria the Commission will employ when reviewing a specific product, nor should market participants be left in the dark with respect to what evidence is necessary to gather and present to the Commission when seeking approval for a novel product. This lack of consistency seems to us, unfair and is without policy justification."
$100 Trillion Market Showing Growing Interest in Digital Gold (Bitcoin) and Web 3.0 (Ethereum)
"Every single institution that you can think of in every vertical," working on crypto and "much further along" than one would expect," says Galaxy Digital's global head of asset management.
Bitcoin is back around $65,500 after falling to about $62,300 ahead of the weekend. The weakness in the second half of the last week came after BTC hit a new all-time high at just above $69,000.
In tandem with Bitcoin, altcoins are also seeing some green now, as a result, the total crypto market cap is back above $3 trillion, after the fall below this mark on Wednesday.
The biggest winners in the past week have been Loopring (100%), Livepeer (89%), Crypto.com (39%), and Litecoin (35%), while SPELL Token and Crypto.com are leading in the past 24 hours with 20% gains.
Ether meanwhile is also back above $4,700, steadily uptrending since September when it traded between $3,200 and $2,800. Compared to Bitcoin's 123% YTD gains, Ether is up 550% this year so far.
According to Vijay Ayyar, head of Asia Pacific with crypto exchange Luno, Ether has consolidated in the last few days. "You're going to see Ether and the altcoin market move faster than Bitcoin in the interim," he said.
However, technical indicators suggest a pause in the rally. As per Fibonacci ratios, which are used to identify market reversals, the scope of Ether's most recent rally is about the same as a June to September surge that subsequently ended, and we may see a similar pullback this time as well.
Another indicator, DeMark, is also flashing red with $5k as the key level to watch for, which implies unexpected Ether strength.
Crypto Curious
Cryptocurrency prices may have taken a breather, but the money hasn't stopped flowing into the market, and according to Steve Kurz, the global head of asset management at crypto asset manager Galaxy Digital, a growing interest is also seen in cryptos among big institutional investors like pension and endowment funds.
Kurz describes Bitcoin as digital gold, Ethereum as Web 3.0, and decentralized finance (DeFi) as an entire construct.
In an interview with Bloomberg, Kurz said pension funds, endowments, and sovereign-wealth funds "believe in the crypto future" and Web 3.0, but do not know how to start.
"So it was a real pain-point for large institutions to access this more active body of the asset class," leading Galaxy to both provide education tools and access to the asset class.
When discussing the climate among institutional investors and what kind of allocations they are thinking about, Galaxy is focusing on indexing first because these institutional allocators, that is, "a $100 trillion-plus market globally," requires a number of necessary structural impediments to doing anything different in place.
Kurz further explained that between the period of time when crypto was down 95% to today, a lot was happening behind the scenes in the form of conversations, developing product structures, and working on valuation frameworks "so that when you came out of this, and the world exploded and had a catalyst for crypto to really matter — which is Covid — you're not starting from zero."
"Every single institution that you can think of in every vertical, they have people who have done work on this. It's been socialized with their committees, and they're much further along than you would expect."
SEC Rejects VanEck Spot Bitcoin ETF, But its Futures ETF Finally Coming Next Week
The US Securities and Exchange Commission (SEC) rejected rule changes that would have allowed the listing and trading of the VanEck Bitcoin exchange-traded fund (ETF).
In March, the Cboe BZX Exchange filed a proposed rule change to list and trade shares of the Bitcoin Trust, but the SEC again rejected the physically-backed ETF after delaying the decision on the application twice.
This time, the regulator reiterated its long-stated concern that a product based on the spot price of Bitcoin could violate securities rules because the market is too prone to abuse. The SEC in its order, said,
"The Commission applies the same standard used in its orders considering previous proposals to list bitcoin-based commodity trusts and bitcoin-based trust issued receipts — that it must be designed to prevent fraudulent and manipulative acts and practices"
"The Commission concludes that BZX has not met its burden."
Meanwhile, the agency let the future-based Bitcoin ETFs start trading last month.
As per the document, SEC believes actors could manipulate the spot Bitcoin market without impacting the CME Bitcoin futures pricing, which doesn't make sense to the crypto industry and the ETF experts.
"Since the SEC has already approved a futures-based bitcoin ETF, we strongly believe it should approve a spot ETF as well. We encourage the SEC to give bitcoin the fair and equal treatment it deserves, and hope future ETF proposals receive their due consideration," wrote Blockchain Association on Twitter, showing their strong disagreement with the SEC's decision.
2/ VanEck proposed an ETF that would hold actual bitcoin rather than expensive futures contracts that track bitcoin's price. Most experts believe this type of product is better for investors than the already-approved futures ETFs, because it's less complex and incurs fewer costs.
— Blockchain Association (@BlockchainAssn) November 12, 2021
Two bitcoin futures ETFs, the ProShares Bitcoin Strategy ETF (BITO) and the Valkyrie Bitcoin Strategy ETF (BTF), began trading in late October and led to a rally in the price of the leading cryptocurrency.
While its proposal for a spot Bitcoin ETF has been rejected, VanEck has set a date to launch its own futures-based Bitcoin ETF. The ETF (XBTF) is set to launch next week on Nov. 16 on Cboe Global Markets.
At an expense ratio of 0.65%, XBTF undercuts the 0.95% charged by the other bitcoin futures ETFs. The fund is actively managed and reserves the right to invest in bitcoin-related companies closely tied to the price of bitcoin futures.
VanEck has been initially eligible to launch since Oct. 23, but the issuer held off launching.
BITO saw massive attraction as it amassed $1 billion in assets in its just first two days of trading. Meanwhile, after BITO, demand for BTF was far less dramatic as it only has $63 million in assets under management.
64,507.3817$387.040.60%
Change $387.04
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Risk-on Assets Rally on Priced-in Tapering, But Aggressive Rate Hikes Would Be "Extremely Bearish"
The US Federal Reserve has announced that it will soon begin reducing the speed of its monthly bond purchases.
Tapering will start "later this month," said the policymaking Federal Open Market Committee (FOMC) in its post-meeting statement. Under this process, monthly purchases will be reduced by $15 billion – from the current $120 billion a month that the Fed is currently buying.
The move came "in light of the substantial further progress the economy has made toward the Committee's goals since last December," it added.
As for raising the interest rate from near zero, the FOMC voted a unanimous no on that one. Fed Chairman Jerome Powell said he wants to see the labor market "heal further" before taking that action.
"We don't think it's time yet to raise interest rates," Powell said. "There is still ground to cover" before the Fed reaches its economic goals.
The paring of bond purchases is expected to conclude around July 2022 on its current schedule, and the central bank officials do not envision a rate hike before that.
Meanwhile, the Fed altered its view on inflation slightly, acknowledging that price increases are rapid but maintaining that it is "transitory" still.
"Inflation is elevated, largely reflecting factors that are expected to be transitory," the statement said, attributing this jump to supply and demand imbalances driven by the pandemic and the reopening of the economy.
Powell said he expects inflation to remain elevated "well into next year" but said as supply chain bottlenecks abate and growth moves up, inflation will decline, which will support "continued gains in economic activity and employment."
The Bank of England is now set to meet on Thursday, and the market expects the central bank to hike rates in the face of surging inflation.
Market Reacts Positively
While the Fed is ready for its first step towards pulling back on the massive amount of help it had been providing markets and the economy since last year, it was already priced in as we saw in the markets reaching for fresh highs.
"Fortunately, the taper has long been priced in. Aggressive hikes, though, if they were to materialize, that'd be extremely bearish. And yes, the Fed will hike," commented trader and economist Alex Kruger.
Global stocks traded at new record-high levels while the US Treasury yields and the dollar edged down.
Much like the traditional market, crypto rallied. The total market cap went on to hit $2.89 trillion as Ether made a new all-time high at $4,675.
"Ethereum has been the clear winner of the Layer-1s for what we believe will be a substantial shift in a potentially prolonged market sentiment uplift. Ethereum will also continue to play a major role in the NFT and metaverse ecosystem build-out," said Ryan Rabaglia, global head of trading at digital asset platform OSL.
Other notable gainers in the past 24 hours include AMP (20%), HOT (17%), ENG (16%), OMG (13%), EGLD (12%), AXS (11%), AVAX (9%), and SOL (5%).
Altcoins are hitting new highs while Bitcoin is trading at $61,600, 8% away from its $67k peak last month.
In response to the Fed's tapering, Bitcoin's first reaction was a drop to $61,135 from $62,600, only to reverse the move to hit $63,470.
"The correlation of crypto versus equities and risk-on sentiments is high," said Danny Chong, CEO of decentralized asset tracking platform Tranchess.
"Everyone is expecting a bull run with the absence of negative news. To decide the depth of the move, one should ask what can bring it down?"
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FATF Releases Updated Guidance on Crypto Covering P2P, Stablecoins, DeFi, and NFT
Financial Action Task Force (FATF), the agency that makes anti-money laundering (AML) rules for governments to follow worldwide, released its updated guidance for crypto on Thursday.
Based on prior guidelines issued in 2019 and the follow-up report from last year, the FATF has laid down new rules on everything from custodians to crypto exchanges. They "expect that the countries will implement this as soon as possible." The members of the organization come from about 200 countries.
In its guidelines, the global watchdog said, the involvement of smart contracts on a blockchain "does not relieve the controlling party of obligations."
FATF says many of these parties may be defined as Virtual Asset Service Providers (VASPs), and they will have to abide by related anti-money-laundering rules, be licensed or registered, and be supervised.
On stablecoins, FATF said its providers, along with custodians and exchanges that support them, will have to conduct AML and anti-terrorism-financing checks throughout.
The agency urges countries to mitigate risk before new stablecoins are launched and continue monitoring the efforts even after that. It also asks them to take into account the evolving risk if the stablecoins become mass-adopted.
"Reduction of volatility could encourage their widespread use as a means of payment or transferring funds, particularly where they are sponsored by large technology, telecommunications or financial firms that could offer global payment arrangements."
Peer-to-Peer Transactions
FATF wants countries to impose requirements such as additional record-keeping or limiting transactions to only certain approved addresses because these could potentially be used to avoid AML/CFT controls in the FATF Standards.
"The rapid evolution of this sector means that changes in the level and nature of the risk are likely to come quickly and to merit concerted supervisory attention."
FATF further notes that while it hasn't observed a distinct trend towards their increased usage, it remains a potential risk as VA transactions may move to P2P to avoid regulations/supervision as more jurisdictions implement the standard as such related ML/TF risks should be monitored in an ongoing and forward-looking manner.
It urges countries to understand what types of P2P transactions pose a higher or lower risk and understand their drivers and different risk profiles.
DeFi & NFT
According to FATF, a DeFi application is not a VASP; however, "creators, owners, and operators or some other persons who maintain control or sufficient influence in the DeFi arrangements," even if they seem decentralized, may fall under their VASP definition where they are providing or actively facilitating VASP services.
While NFTs are not considered VASPs either, here as well, the agency says, it is important to consider their nature and its function in practice.
"Some NFTs that on their face do not appear to constitute VAs may fall under the VA definition if they are to be used for payment or investment purposes in practice," it said, noting those NFTs that are digital representations of other financial assets are excluded from the FATF definition of VA but would be covered by their Standard of a financial asset.
Non-Binding Guidance
The good part of this guidance is the FATF clearly describes who may qualify as VASP. It explicitly states that persons who "merely provide ancillary infrastructure," including "verifying the accuracy of signatures," will not be within the scope of surveillance obligations. As for the travel rule, the new guidance concedes that the
"full requirements of [the travel rule] apply to [a traditional wire transfer] and [a virtual asset transfer between two VASPs] but not [a virtual asset transfer between a VASP and an "unhosted wallet"]."
"It clarifies that fees paid to miners and validators are not subject to travel rule originator and beneficiary information collection," noted Peter Van Valkenburgh of CoinCenter. He further said that these travel rule changes, however, don't go far enough and keep the VASP definition extremely verbose.
A silver lining is that this guidance is entirely non-binding.
Cryptocurrency Market Dips, Bitcoin's Correlation with Commodities Climbs
Early on Wednesday, the markets took a dip that saw Bitcoin's price going down to nearly $58,000, from $63,800. Trading around $59k as of writing, exactly a week back, the cryptocurrency hit a new all-time high at $67,000.
The stock market, including S&P 500, the Dow Jones Average, and tech-focused Nasdaq, all edged down as well on Wednesday after closing at a record high on Tuesday.
Same as Bitcoin, Ether went to $3,940 but is already back above $4k. In tandem with the leading cryptocurrency, the majority of the coins fell too, dragging the total crypto market cap to $2.57 trillion. Last week, the crypto market capitalization climbed to a new peak of $2.76 trillion.
While price is down, fundamentals are strong, as seen in the Bitcoin hash rate, which climbed to 172.7 TH/s earlier this week, last seen in April and near mid-May ATH of 197.6 TH/s.
Hash rate has only been higher than today on just 6 other days in history. We are knocking on new all time highs in network security. That's kind of unbelievable.#Bitcoin is Hydra pic.twitter.com/zRPuc7nMLb
— Charles Edwards (@caprioleio) October 27, 2021
Meanwhile, this latest drop in prices ended up liquidating 175,983 traders for $742.25 million in the last 12 hours and $890 million in the last 24 hours – the highest since September 19.
With this, the funding rate has also normalized to the highest for Bitcoin perpetual contracts currently on Bybit at 0.0551%.
Its effect was also seen in open interest but not much. The total OI on Bitcoin futures has slid to $24.38 bln from a $26.47 bln high last Wednesday. While the OI on CME, which hit a new ATH at $5.75 bln on Monday, has now fallen to $4.95, it still leads the market, with Binance coming in second at $5.35 bln, according to Skew.
Amidst this, Bitcoin's correlation with commodities continues to climb. The correlation has been rising ever since the start of Q3, noted crypto data provider Kaiko in its latest report.
Historically, Bitcoin's correlation with commodities has performed well during times of unexpected inflation. And with inflation continuing to rise, it makes sense.
Officials, however, maintain that they haven't lost control of inflation, with Treasury Secretary Janet Yellen saying this week,
"On a 12-month basis, the inflation rate will remain high into next year because of what's already happened. But I expect improvement by the middle to end of next year – second half of next year."
Bitcoin's 30-day rolling correlation with industrial copper and oil has been increasing since September. Both the commodities rose over the past few weeks boosted by growing demand and record low inventories. The report states,
"By contrast, Bitcoin's correlation with safe-haven gold has been mostly negative this year despite briefly turning positive in September."
The precious metal is up 3.72% this month compared to Bitcoin's more than 34% uptrend. This year, Bitcoin is also up 112%, while the bullion is down by 5.34%.
As we reported, JPMorgan Chase analysts have attributed the perception of Bitcoin as a better inflation hedge than gold for the recent price rally rather than ETF euphoria.
In its previous report from earlier this month, Kaiko had noted that Bitcoin is no longer in inverse correlation with the U.S. Dollar. In September, the dollar strengthened for the second month in a row and peaked at over a year high of 94.56 on Oct. 11. This week, the USD Index is back on the rise at 94.
Historically, Bitcoin has moved in the opposite direction to the DXY, a trend that seems to have largely dissipated in 2021. Now both are on an upward trajectory in contrast to traditional equities.
Interactive Brokers Founder Already Red Pilled, Has Been "Itching" to Offer Crypto Trading for a Long Time
"There is a small chance that these cryptocurrencies could become very, very valuable, and you don't wanna not be exposed to them," said Thomas Peterffy, who has been a Bitcoiner since the 2018 bear market.
While the brokerage service provider started offering crypto trading services just now, the firm's founder has been involved with Bitcoin in a personal capacity for the past three years.
In an interview with CNBC, Thomas Peterffy, the founder of Interactive Brokers, revealed that he has been a Bitcoiner since 2018. This means, Peterffy bought Bitcoin during the bear market, showing his conviction in the leading crypto asset.
"I have had Bitcoin for three years in my portfolio," said Peterffy on Thursday.
Earlier this week, Interactive Brokers, which manages $360 billion worth of assets, partnered with New York-based crypto broker Paxos — which was also chosen by payment giant PayPal to enable their digital asset services — to start offering its 1.5 million customers the option to trade Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Bitcoin Cash (BCH).
In the interview, Peterffy also revealed that he wanted to do this for some time now and finally took the step.
"I've been itching to do this because many of our customers have been asking for this, especially registered investment advisors whose clients are asking for some crypto exposure so we've been wanting to do this for quite some time."
"Great Compression" Coming
The founder of one of the leading traditional brokers also shared that they are offering crypto trading services at low prices, at 0.12%, which he said is about half as much as the next lowest platform Gemini and one-third of Coinbase.
"So yes we have been itching to do this for a long time and we're really happy to be able to do it."
He actually believes that there is "great compression" coming in trading cost, which is going to go down in cryptos just as it has gone down in securities.
As for crypto being used as a payment mechanism, AMC Theaters CEO tweeted this week that they will be accepting Bitcoin, Ether, and other cryptos as payment for online tickets and commissions; Peterffy doesn't really see crypto that way.
"Frankly, it doesn't make sense to me because what is the advantage of these cryptocurrencies visibly," said Peterffy, adding stablecoins are stable "just like the dollar" while being "better, easier regulated," and the mechanism of using it for payment equally as simple.
"So, I don't see it as but you never know so I think there is a small chance that these cryptocurrencies could become very very valuable and you don't wanna not be exposed to them."
Call for Clarity
When it comes to regulation with the SEC Chair working overtime to regulate the crypto industry and saying the space is troubled with fraud, hype, and abuse, Peterffy said these "criticisms are fine" but called for clarity.
"We really need to know what to do, and nobody is telling us," but at the same time, the regulators come after companies two to four years down the road, and they accuse them of not doing things right, but they didn't ever clear what to do in the first place, he said.
Commenting on the crypto offering high-yield, Peterffy does not understand how they can be so high yield, especially for a stablecoin. While it can be so long as people want to borrow the crypto and are willing to pay a lot for it, "otherwise I don't see where the yield is coming from, and then I don't see where the money comes from, it usually doesn't come from a good place," said Peterffy.
ECB President Says, Cryptocurrencies Are Highly Speculative Assets That Claim Their Fame As Currency
Christine Lagarde says, "we have to stand ready" for CBDC, which will be available side by side with paper currencies while calling for stablecoins to be regulated.
"Cryptos are not currencies. Full stop," said Christine Lagarde, President of the European Central Bank (ECB).
In an interview with Bloomberg this week, when asked if she thinks cryptocurrencies are a plus for the global economy or if it's too early to tell, Lagarde blasted cryptos, saying while they possibly can be, cryptocurrencies are not currencies.
"Cryptos are highly speculative assets that claim their fame as currency."
She then talked about the need to distinguish between cryptos that are highly speculative, even suspicious occasionally, and have high intensity in terms of energy consumption.
Lagarde also talked about stablecoins during the interview, which she said are "beginning to proliferate." The total market cap of stablecoins has now surpassed $124 billion, with USDT, USDC, and BUSD leading the market with their respective market share at 58.5%, 23.65%, and 10.27%. Stablecoins, she said,
"need to be regulated where there has to be an oversight that corresponds to the business that they are actually conducting irrespective of how they name themselves."
Lagarde also noted that some big techs are also trying to promote stablecoins and push along the way, which she said are "a different animal."
Tech giant Facebook first announced its stablecoin Diem in 2019 with a plan to be backed by a wide mix of fiat currencies and government debt and instantly ran into regulatory scrutiny. Last month, David Marcus said they seek necessary regulatory clearances and have already secured approvals for its digital wallet Novi in nearly every state in the US.
Central banks are also "prompted" by the demand of customers to produce digital fiat money, "something that will make the central bank and central bank currencies fit for the century we're in," she said.
This is why every central bank, including the ECB and the Federal Reserve, is looking into central bank digital currency (CBDC) so that instead of having banknotes and cash, "we can have exactly the same thing. But in a digital form."
"So all of us are working on this and certainly always keen to push the CBDC issue on our agenda because I believe that we have to stand ready for that."
When launched, they will be available side by side with paper currencies,
"because we want customers to have their preference. If they still want to hold those banknotes and cash, fine. And it should continue to be available in the long run."