Cryptocurrency

D.C. turf war opens crypto regulatory arbitrage

18 Aug 2022

The Fed issued the latest salvo in a regulatory tussle, requiring banks to alert the agency when they offer services for bitcoin and its ilk. The SEC and CFTC are also fighting to oversee the $1 trln market. It’s an opportunity for digital currency outfits but hurts token owners.

Moelis’ crypto foray is a bottom-ticking flier

25 Jul 2022

Investment banks often launch advisory initiatives at the top of hot markets. The boutique led by Ken Moelis is instead pushing into blockchain as the market is imploding. The business looks ripe for consolidation. If Moelis culls market share, it may have cracked a new model.

Comatose watchdogs evoke Great Recession flashback

14 Jul 2022

Crypto lender Celsius slipped through regulatory cracks at the state and federal level. Failures in isolation aren’t big enough to be systemic. But SPACs, too, are crumbling, and people are getting hurt. As sirens wail, like 15 years ago, financial police sleep through it.

EU crypto rules will cheer banks and deter minnows

6 Jul 2022

Europe’s digital asset legislation set clearer guidelines on cross-border transactions. That’s good for big banks keen to mix it with the likes of Coinbase and Binance. But while those bigger crypto beasts are able to swallow higher compliance costs, smaller fry will struggle.

Sam Bankman-Fried bailouts flag crypto’s fragility

22 Jun 2022

The wunderkind’s businesses coughed up $750 mln to help ailing brokers Voyager Digital and BlockFi. The rescues suggest the sector cannot easily withstand the failure of just a few players. And winners like Bankman-Fried may not save the $900 bln industry if prices tank again.

Bankman-Fried derivatives plan too clever by half

17 Jun 2022

Crypto wunderkind Sam Bankman-Fried wants to disrupt how derivatives are cleared. The plan relies on tech rather than human discretion to manage risk. While it’s innovative and could bring in retail traders, large customers aren’t excited. It’s a solution in search of a problem.

MicroStrategy is a conglomerate with bitcoin twist

16 Jun 2022

The software firm sits on a $3 bln pile of deflating bitcoin, bought as part of an unusual bet by founder Michael Saylor. While the shares have collapsed, the company oddly trades above the value of its component parts. There’s no reason it should.

Crypto crash lays bare upstarts’ minimal progress

13 Jun 2022

The plunge in bitcoin and other digital currencies has vaporised $2 trln of market value since November. But the pain falls mostly on punters trading tokens rather than banks or companies. Crypto fans will have succeeded the day that everyone else must worry about their blowups.

Crypto smackdown does more harm than good

8 Jun 2022

The SEC wants firms that safeguard digital assets to mark that risk on their balance sheets. That means certain lenders may have to hold more capital against crypto. Though guardrails are useful, the measure could shut out banks like Goldman and incentivize more shadowy businesses.

Venture royalty bets $4.5 bln on self-disruption

26 May 2022

Andreessen Horowitz’s new crypto fund comes less than a year after its last one. The former backer of Facebook and Airbnb reckons blockchain-based giants will conquer the web by rewarding users. If true, that should also mean less money for venture capitalists.

Review: War on digital payment fails to hit target

20 May 2022

Brett Scott’s “Cloudmoney” seeks to remind the world of the value of physical cash. It’s true that an overly automated system of money carries risks like the potential for surveillance. But the campaigner underestimates consumer demand for digital transactions.

Capital Calls: Stablecoin’s safety measures

19 May 2022

Concise views on global finance: As crypto assets wobble, Tether, with $75 bln worth of digital tokens in circulation pegged to the U.S. dollar, is boosting its reserves of cash and U.S. Treasury bills while shrinking its commercial paper holdings.

Crypto’s day of reckoning, Goldman holiday perks

19 May 2022

Terra unravelled while $75 bln Tether wobbled. In this Viewsroom podcast, Breakingviews columnists discuss why reforming stablecoins which are supposedly linked to the dollar could dent their allure. Also, the Wall Street firm’s vacation offering is unlikely to benefit staff.

Hong Kong can afford slow road to digital currency

19 May 2022

There’s some FOMO in the local e-HKD effort. Central banks elsewhere have better reasons to act faster, including low rates of financial inclusion and less use of physical cash. Hong Kong would do well to think longer about privacy concerns and to learn from other experiments.

Stablecoin panics may be a feature not a bug

17 May 2022

Crypto tokens like Terra and $80 bln Tether were supposedly pegged to the dollar. Yet the former failed and the latter wobbled. Holding 100% cash reserves would help. But there’s no fun, or money, in that. Users can always flock to the new, sketchy coin offering juicy rewards.

Fed has a spreading inflation problem

11 May 2022

U.S. consumer prices rose at an annual rate of 8.3% in April. While that was lower than the four-decade high seen a month earlier, food costs leapt by the most since 1981 and shelter grew more expensive. Broadening price pressures mean there’s no respite for Chair Jerome Powell.

Stablecoin crash drags crypto ideals back to earth

11 May 2022

TerraUSD, a digital token supposedly pegged to the U.S. dollar, slumped to a fraction of that. The popular store of value is vulnerable because its design is based on trading incentives, not hard reserves. For crypto fans there’s a tradeoff between decentralisation and stability.

Stars align for UAE to become a global crypto hub

6 May 2022

Big exchanges Binance, FTX and Kraken are expanding in Dubai and Abu Dhabi as local regulators grant licences to trade virtual assets. The world’s leading financial regulators have been wary of cryptocurrencies. A variety of factors give UAE the chance to steal a march on them.

Goldman’s financial alchemy extends to crypto too

4 May 2022

The U.S. bank made a bitcoin-backed loan to $27 bln Coinbase. Regulatory suspicion of cryptocurrency means a third party will hold Goldman’s collateral, which the latter won’t touch. If it avoids censure, the loan’s lucrative nature means the rest of Wall Street could pile in.

Bitcoin’s African outpost raises several red flags

2 May 2022

War-torn Central African Republic is following El Salvador in adopting the crypto unit as legal tender. The surprise of the region’s central bank and Bangui’s use of sanctioned Russian mercenaries are warning signs. Bitcoin’s quest for mainstream acceptance just got harder.