Cryptocurrency

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.

Capital Calls: Amazon and consumers

29 Apr 2022

Concise views on global finance: People are spending more amid price hikes, while the e-commerce giant struggles with them.

Bitcoin flaws call for replacement, not repair

11 Apr 2022

Greenpeace and others want to change the cryptocurrency's mechanics to make it less wasteful of energy and computing power. It's a nice idea, but they are up against vested interests and engineering challenges. Rival digital coins, or a new alternative, are better solutions.

Coinbase’s first anniversary will be sober affair

5 Apr 2022

A year after the cryptocurrency exchange went public, its shares have fallen 40%. Relying on fees from retail investors has made for volatile cash flows. A planned NFT marketplace and launching derivatives trading could help, but in those areas Coinbase is already behind the pack.

China’s NFTs face long digital purgatory

1 Apr 2022

Blockchain-based assets are catching on with companies like Xtep, which just released metaverse sneakers. Beijing bans cryptocurrencies, however, meaning apps only accept yuan and curb reselling. Absent sanctioned secondary markets, collecting will be merely a token gesture.

Hackers turn crypto’s strength into Achilles heel

30 Mar 2022

Attackers stole $540 mln from a blockchain linked to an online game. Theft is growing as developers roll out untested new blockchain products with shaky security. So-called decentralised finance makes it easy to create new crypto services, but criminals are mopping up the spoils.

War crowdfunding is weapon that cuts two ways

14 Mar 2022

The $100 mln raised by Ukraine through cryptocurrencies and a central bank link puts a new spin on an old trend of outside funding for conflicts. Technology makes it easier and faster to supercharge the fight. The catch is that the tools have potential use for an aggressor too.

Russia crisis is Big Crypto’s coming-of-age moment

3 Mar 2022

Major exchanges like Coinbase and Binance are still open to Russians despite the risk of sanctions evasion. If they fail to spot illicit transactions, regulators will crush the life out of them. If they pass the test – and they might – it may be their ticket to the mainstream.

Bitcoin’s true colours shine in stampede to safety

23 Feb 2022

The cryptocurrency fell 5% as conflict in Ukraine flared, undermining the case for it to be a gold-like refuge. Even earlier, it moved too closely in synch with equities to be much use as a hedge. It comes into its own, however, as an amplifier of ups and downs in riskier assets.

Spending bitcoin is harder than stealing it

9 Feb 2022

Cryptocurrency crime is soaring. But the seizure by U.S. authorities of bitcoin worth $3.6 bln, six years after the theft, shows it’s difficult to turn stolen tokens into cash. Anonymous transactions leave a clear trail. Even if the boom fades, the pursuit of thieves will go on.

MicroStrategy is storing up bitcoin bother

1 Feb 2022

The $4 billion company’s digital currency holdings now account for almost all of its enterprise value. CEO Michael Saylor may be happy running what increasingly looks more like a crypto vehicle than an analytics and software business. But he is inviting more regulatory scrutiny.

Breakdown: Real profit and loss in the metaverse

28 Jan 2022

Mark Zuckerberg is on the case, and nascent virtual spaces like Decentraland could be the next social-networking hit. Breakingviews unpacks the metaverse, what it offers users and investors, and the risks.