🟩 FTX was a gold mine. Now the big money wants in...
plus: one CBDC to rule them all | Caitlin Long sounds off on the Fed
The New Money Brief covers the global revolution underway in our shared financial infrastructure, brought on by the rise of digital currencies.
Delivered several times a week. Created and edited by Marc Andrew
A new cryptocurrency exchange backed by Citadel Securities, Fidelity Investments and Charles Schwab is seeking business from brokers and investors interested in digital assets but wary of troubles at FTX and Binance.
The venture, EDX Markets, quietly began executing trades in recent weeks. EDX released a statement about the launch Tuesday, nine months after its backers unveiled their plans for the crypto marketplace.
The launch shows that some Wall Street firms remain interested in crypto despite a regulatory onslaught by the Securities and Exchange Commission and a market that has cooled off substantially over the past 18 months.
A spokeswoman for Citadel Securities, an electronic market-making firm with a huge presence in stocks and options, confirmed it was trading cryptocurrencies on EDX. Citadel Securities’ billionaire founder Ken Griffin was earlier a very public critic of crypto.
EDX says its approach draws on standard practices in traditional, regulated financial markets and differs in key ways from how crypto exchanges typically operate.
Source: WSJ
The Federal Reserve on Friday published a list of firms that have access or are seeking access to the central bank’s master accounts and payment services.
The Fed, which said it is making the list public in an effort to promote transparency, said it will update the database on a quarterly basis.
The move follows calls from Republicans for the central bank to shed light on the process by which it grants master accounts, and comes as an increasing number of uninsured firms are vying for access to the Fed’s system.
Source: Banking Dive
from Caitlin Long, CEO of Custodia Bank, whose application for a master account at the Fed was declined last year:
The International Monetary Fund (IMF) is working on a platform for central bank digital currencies (CDBCs) to enable transactions between countries, IMF Managing Director Kristalina Georgieva said on Monday.
"CBDCs should not be fragmented national propositions... To have more efficient and fairer transactions we need systems that connect countries: we need interoperability," Georgieva told a conference attended by African central banks in Rabat, Morocco.
"For this reason at the IMF, we are working on the concept of a global CBDC platform," she said.
The IMF wants central banks to agree on a common regulatory framework for digital currencies that will allow global interoperability. Failure to agree on a common platform would create a vacuum that would likely be filled by cryptocurrencies, she said.
A CBDC is a digital currency controlled by the central bank, while cryptocurrencies are nearly always decentralised.
Already 114 central banks are at some stage of CBDC exploration, "with about 10 already crossing the finish line", she said.
"If countries develop CDBCs only for domestic deployment we are underutilizing their capacity," she added.
Source: Reuters
OCC chief Michael Hsu – a crypto critic – argues asset tokenization is the future, but he said centralized efforts are the way ahead.
Self-styled crypto skeptic Michael Hsu, the acting head of the U.S. Office of the Comptroller of the Currency (OCC), said tokenization of assets is a serious advance into the future of finance, but decentralized blockchains may be too problematic to handle that movement.
Achieving decentralization, security and scale all at once “is not possible with a public blockchain,” Hsu said at an American Bankers Association event on Friday.
“As a result, the crypto industry remains largely self-referential and disconnected from the real world,” he said. The sector is “immature and rife with risks, despite several years in the mainstream spotlight, billions of dollars of venture capital investment and millions of hours of code commits.”
Source: CoinDesk
There is a glaring omission in the stablecoin bill recently introduced in the House that should concern both Republicans and Democrats, says Christopher Giancarlo.
The flaw is that the bill does not deny government licensing authorities the discretion to coerce stablecoin protocols to deny services to lawful but politically disfavored businesses. This gap needs to be addressed to prevent political pressure being placed on stablecoin promoters to bar transactions with legal, but unpopular industries.
It is entirely foreseeable that private-sector sponsors of stablecoins or even commercial servicers such as wallet providers and others could be put under political pressure to disable financial transactions with disfavored groups in a similar way to how many social media platforms, most notably Twitter, have censored a broad range of constitutionally protected speech to appease government officials.
Source: The Hill
A new report predicts that 2% of global money supply could be tokenized over the next five years via stablecoins and CBDCs, setting up a total market value of about $3 trillion.
Tokenization is the process by which real-world assets are converted into blockchain-based tokens.
“Over the next five years, we expect a swell in the stablecoins and CBDC tokens in circulation, led by China’s CBDC program,” analysts led by Gautam Chhugani wrote. “Stablecoins and CBDC tokens, coupled with yield farming in decentralized markets, will compete with bank deposits as an investment or saving instrument,” the analysts wrote.
Still, the broker notes current regulatory uncertainty, and says that “tokenization using blockchain can only succeed when policy-makers appreciate the benefits of blockchains and how crypto tokens are an indispensable part of blockchain operations.”
Source: CoinDesk
The European Commission is on track to publish legislation on a digital euro on June 28, after the controversial topic was previously removed from the executive’s agenda, the bloc’s lead financial services official said on Tuesday.
Commissioner Mairead McGuinness confirmed she would be pressing ahead with a bill to underpin the central bank digital currency, set to cover topics such as privacy, distribution and offline transactions.
"We’re looking forward to presenting both proposals next week," McGuinness told an event in Brussels of the digital euro plans and a parallel law on the legal status of cash.
Source: CoinDesk
Fidelity is rumored to be planning a “seismic move” in the crypto markets, according to Andrew Parish, co-founder of Arch Public.
The asset management firm describes itself as “crypto-curious,” having mined Bitcoin since 2014. By 2018 it launched a separate cryptocurrency-dedicated business – Fidelity Digital Assets (FDA,) which has since received a New York Trust Charter and launched its European operations in 2020.
Examples of FDA initiatives include its Fidelity Crypto offering – enabling users to trade Bitcoin and Ethereum alongside traditional stocks – pushing for 401(k) digital asset investing.
Rumors suggest that Fidelity, the world’s third-largest asset manager with $4.24 trillion under management, may be considering either a buyout of Grayscale or an application for a Bitcoin spot ETF.
Parish also speculated that, with these potential moves and other recent events, BlackRock and Fidelity could dominate the U.S. digital asset space.
CryptoSlate reached out to Fidelity for further comment. A reply was not received as of press time.
Source: CryptoSlate
As Europe charges ahead on the path to a central bank digital currency, political opposition to a digital dollar is only growing in the U.S.
Though a potential U.S. CBDC remains merely a subject of government study, mainstream Republicans, Silicon Valley libertarians and anti-establishment leftists have all converged in their opposition to the idea, citing concerns over privacy and government control.
These domestic political obstacles leave a lane open for other monetary authorities to influence the design of digital money systems. The European Central Bank, for example, is expected to propose a digital euro design in October, a step that would help establish it as a global leader in the creation of digital sovereign currencies.
Source: POLITICO
Mastercard is continuing its move into the volatile crypto sector. The payments giant has submitted a trademark application claiming plans for software for crypto and blockchain/DLT transactions, as well as interconnecting virtual asset service providers for crypto transfers.
It appears as if Mastercard has filed a trademark application for several cryptocurrency and DLT-powered digital tools, a move that confirms its focus on embracing virtual currencies.
Source: Crowdfund Insider
The Federal Reserve on Friday published a list of firms that have access or are seeking access to the central bank’s master accounts and payment services.
The Fed, which said it is making the list public in an effort to promote transparency, said it will update the database on a quarterly basis.
The move follows calls from Republicans for the central bank to shed light on the process by which it grants master accounts, and comes as an increasing number of uninsured firms are vying for access to the Fed’s system.
Source: Banking Dive
Indonesia's Commodity Futures Trading Supervisory Agency has revised its list of tradable cryptocurrencies, demonstrating its dynamic stance towards digital assets.
The updated roster of over 501 cryptos contrasts starkly with the US SEC's more conservative approach, sparking a potential new era for global crypto trade regulation.
This action emphasizes Indonesia's commitment to nurturing its digital economy and fostering an environment conducive to blockchain technology growth.