Tether, one of the largest companies in the stablecoin arena, has announced the launch of Alloy, a series of assets pegged to the value of another asset, but collateralized with gold. The first token in the Alloy lineup is AUSDT, which will track the value of the U.S. dollar using Tether Gold (XAUT) as collateral. […]
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RFK Jr. and Donald Trump Both Vow to Stop the Fed From Issuing US Central Bank Digital Currency if Elected
U.S. presidential candidates Robert F. Kennedy Jr. (RFK Jr.) and Donald Trump have independently promised the American people to stop the creation of a central bank digital currency (CBDC) in the U.S. if elected President. “I will protect Americans from government tyranny,” Trump said, adding that a CBDC “would be a dangerous threat to freedom.” Kennedy similarly warned that a digital dollar “will allow the government to surveil all our private financial affairs.”
Donald Trump and Robert F. Kennedy Jr. Both Vow to Stop CBDC Creation if Elected
U.S. presidential candidates Donald Trump and Robert F. Kennedy Jr. (RFK Jr.) have independently voiced strong opposition to the creation of a central bank digital currency (CBDC) in the U.S.
Kennedy posted on social media platform X last week that he has been discussing financial freedom in the 21st century with Dr. Joseph Mercola, an osteopathic physician and best-selling author. The presidential hopeful promised: “As president, I will end the efforts to move toward a CBDC.”
Dr. Joseph @Mercola and I discuss financial freedom in the 21st century. As president, I will end the efforts to move toward a CBDC. #Kennedy24 pic.twitter.com/gao3D1HAeM
— Robert F. Kennedy Jr (@RobertKennedyJr) January 24, 2024
In October last year, Kennedy promised that if he is elected President of the United States, he will “make sure that bitcoin is protected, that people can keep their own wallets, that the current White House war on bitcoin will be over, that transactions will be protected and encouraged.”
RFK Jr. also previously stated that “Cryptocurrencies like bitcoin give the public an escape route from the splatter zone when this bubble invariably bursts,” emphasizing: “We should be wary since CBDCs are the ultimate mechanisms for social surveillance and control.” He cautioned: “While cash transactions are anonymous, a CBDC will allow the government to surveil all our private financial affairs. The central bank will have the power to enforce dollar limits on our transactions restricting where you can send money, where you can spend it, and when money expires.”
Similarly, former U.S. President Donald Trump made a promise to the American people during a recent rally that as President, he will never allow the creation of a digital dollar. “I will protect Americans from government tyranny,” he exclaimed, adding that a central bank digital currency would give the federal government “absolute control over your money.” Trump stressed:
This would be a dangerous threat to freedom, and I will stop it from coming to America.
The former U.S. president credited Vivek Ramaswamy for bringing the danger of CBDCs to his attention. Ramaswamy, a former presidential candidate, recently exited the race and threw his support behind Trump. Following Trump’s CBDC statement, Rep. Tom Emmer (R-MN) said he looks forward to working with Trump to stop the Fed from creating a CBDC.
Despite the buzz surrounding central bank digital currencies, the Federal Reserve remains far from launching its own CBDC. Fed Chair Jerome Powell stated in September last year that no decision has been reached on a digital dollar, and it won’t come for “at least a couple of years.”
What do you think about Donald Trump and Robert F. Kennedy Jr. vowing to stop the creation of a central bank digital currency in the U.S.? Let us know in the comments section below.
South Korea Mulls Issuing Crypto Mixing Regulations to Curb Money Laundering
Financial authorities are preparing to issue cryptocurrency mixing-specific regulations in South Korea to stop criminal groups from using these tools to launder funds obtained illegally. The Korean authorities are discussing whether to allow virtual asset service providers (VASPs) to reject transactions from these privacy-enhancing services.
South Korea Starts Discussing Cryptocurrency Mixing Regulations
Korea might enact regulations against cryptocurrency mixing platforms in the future. According to local reports, the Financial Intelligence Unit (FIU) would be considering the introduction of a legal framework targeting cryptocurrency mixing platforms, aiming to curb illegal money laundering by criminal groups.
The Korean authorities would be studying if to allow virtual assets service providers (VASPs) to reject transactions from addresses having used these services.
Mixing, a process that encompasses the obfuscation of the origin of the funds of a transaction or a series of transactions, has been targeted by the U.S. Treasury Department Financial Crimes Enforcement Network (FinCEN), which has proposed rules that seek to increase the transparency around platforms providing these services.
In October, the Office of Foreign Assets Control (OFAC) sanctioned Sinbad, a mixing platform linked to the North Korean hacking collective Lazarus. In August 2022, the office also flagged Tornado Cash, an Ethereum-based mixing platform.
The stance that the U.S. is taking on virtual assets mixing platforms has influenced the regulatory discussions now taking place in Korea. A FIU official stated:
Last year, when the United States introduced mixer regulations, discussions began in Korea as well.
These are only early talks about the issue, and a definitive decision on the subject is not expected to be announced anytime soon, given the nascent trait of the problem and the lack of international coordination in facing it. Another FIU officer stressed:
Mixing is an issue shared internationally, so cooperation from each country is necessary. As this is the first system introduced by the United States, international discussions have not yet progressed in depth.
What do you think about issuing specific cryptocurrency mixing regulations in South Korea? Tell us in the comment section below.
Coinbase Reveals ‘Project Diamond’ Initiative, Targets Institutions Issuing Native Digital Assets
Coinbase, the largest U.S.-based crypto exchange, has revealed Project Diamond, an initiative that seeks to provide the tools for institutions to issue native digital assets. The project, which integrates several technologies, including Coinbase’s layer 2 product Base, the USDC stablecoin, Coinbase Prime custody services, and its Web3 wallet, has received approval from the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM).
Coinbase Announces Native Blockchain Assets Issuance Tool ‘Project Diamond’
Coinbase has taken the first steps into bringing native digital assets to the institutional arena. The exchange recently revealed its Project Diamond initiative, which seeks to give institutions the tools to issue native digital assets using blockchain technology, targeting commercial markets.
The initiative includes an all-Coinbase-engineered tech stack: Base, the Ethereum layer 2 rollup, the USDC stablecoin, Coinbase Prime-based custody services, and the Coinbase Web3 wallet. The platform has already issued its first digital asset in feature demos for the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM), which gave in-principle approval to the platform for developing financial technology services.
The exchange discussed the improvements this transaction brings to institutions, stating that it “marks a powerful upgrade to operational efficiency; a simplification of an important financial process that further unlocks institutional participation in the cryptoeconomy.”
Coinbase argues that only 0.25% of global assets are represented on-chain, which wastes the potential efficiency advantages that leveraging this tech would bring. Referring to the matter, Coinbase CEO Brian Armstrong declared:
We’re starting to tokenize real-world assets in a regulated way onchain.
This statement hints at another possibility, the tokenization of already existing assets like stocks, which would also help companies tackle targets outside of the reach of traditional markets.
The tokenization of real-world assets (RWA) is a business estimated to exceed the trillion mark by 2030, attracting the interest of financial giants like HSBC and Itau, among others.
What do you think about Project Diamond and establishing native institutional digital assets markets? Tell us in the comments section below.
BRICS to Promote National Currencies Before Issuing Common One
The BRICS bloc is now focused on expanding the use of the currencies of its members, according to the representative of one of them. The establishment of a single currency for the group is not an immediate task at this point in time, the diplomat indicated in an interview.
Wider Use of National Fiats of BRICS States to Precede Launch of Single Currency
Experts at BRICS are putting efforts into deepening ties between the economies and financial markets of its member states, with the aim of creating a common currency. However, its possible introduction is a medium-term and even longer-term task, South Africa’s ambassador to the organization, Anil Sooklal, told Russian media.
“Right now we are working on expanding the use of BRICS national currencies in mutual trade. BRICS has a corresponding agreement, and now we are implementing it in practice, so that the trade of the BRICS countries among themselves is increasingly based on our national currencies,” the top representative explained, speaking to the Tass news agency.
Sooklal emphasized that an increase in the use of national currencies in trade and investment should precede the creation of a single currency. Different scenarios related to trade and currencies are being considered at the moment, he pointed out and stated:
National currencies should be increasingly used by the BRICS states not only in trade, but also in investments and other transactions. Only this way can the foundation for the single BRICS currency be created.
Officials from the BRICS group of emerging economies — Brazil, Russia, India, China, and South Africa — are expected to meet in Cape Town, in early June. Anil Sooklal recently told Bloomberg that enlargement will be in the focus of their talks, with a total of 19 other countries showing interest in becoming members of the organization.
The idea to issue a common BRICS currency, which is supported by its current members who hope to use it to increase their influence and sidestep Western sanctions, has caused concerns in the United States that the dominant role of the U.S. dollar on the world stage will be undermined. The matter will be discussed at the next BRICS leaders’ summit in August.
Do you expect the leaders of BRICS nations to speed up the development of a single currency? Share your thoughts on the subject in the comments section below.
Breaking: New York Regulator Orders Paxos To Stop Issuing Binance’s BUSD
Binance’s BUSD which is issued by Paxos continues to be one of the largest stablecoins in the crypto market. However, it looks like the stablecoin has now made it onto regulators’ radar as New York regulators have ordered Paxos to stop issuing new tokens.
No More BUSD Tokens From Paxos, Say NY Regulators
On Monday, the Wall Street Journal reported that New York regulators had asked Paxos to stop issuing the Binance BUSD stablecoin. These moves come ahead of the expected enforcement action that is supposed to be brought again crypto companies such as Paxos as more regulation swims into view.
This fact that a Wells Notice was issued to the company is particularly important because more often than not when regulators issue such a notice, legal action is expected to follow. As of this time, Paxos will stop issuing BUSD which the SEC says could qualify as an unregistered security.
After receiving the Wells Notice, the company now has 30 days to respond to it before further action is brought against them. But what’s more alarming for investors in the space is that Fox reporter Eleanor Terrett says more Wells Notices will reportedly be handed out in the next few weeks in an effort to take on the crypto industry.
Crypto Market Takes A Hit
Hours after news broke of the Wells Notice being served to Paxos, the crypto market is already seeing some downside. Bitcoin and Ethereum, the two largest cryptocurrencies by market cap are already trading in the red.
BUSD is also seeing a decline after dropping below its dollar peg following the news. The stablecoin which is the third largest in the space with a market cap of .1 billion fell to .991 briefly before recovering to be trading at .999 at the time of this writing.
The stablecoin is still trading 0.08% below its Sunday price but the news does seem to have affected other stablecoins in the market. USDT, the largest stablecoin issued by Tether, is still maintaining its 1:1 peg with the U.S. dollar, while USDC, the second-largest stablecoin issued by Circle, is slightly down 0.01% and is sitting at .9999.
Report Reveals El Salvador Plans For Issuing A Stablecoin
El Salvador recently became the first country to adopt Bitcoin as a legal tender in financial transactions, and now it plans to issue a stablecoin.
The President, who calls himself “the coolest president in the world,” took the first step to equip his citizens with a digital means of paying for goods & services.
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The world is waiting for the commencement of his plans by September. Moreover, the law for bitcoin legalization has already been signed.
While the wait continues for the execution, the president’s brothers make a bigger plan for the country. From the latest news on the country, it seems that the president’s brothers are planning the development of a stablecoin as they’re already presenting the idea to investors.
The news came from the reports of a digital newspaper in Latin America, El Faro. The information has it that El Salvador consumers will use stablecoin for services.
Comments From Bukele Brothers
According to what the president brothers revealed to investors, the crypto, which they call the “Colon dollar,” will become a reality before 2021 ends.
Ibrahim & Yusuf Bukele had pitched the proposal to investors, and the report from the digital newspaper also pointed to the video recordings about it.
In the proposal discussion, the brothers told the prospective investors that they’re representing the interests of the El Salvador President.
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The Latin American newspaper had obtained the documents about the proposal, and that’s where they got the details of the discussion.
Earlier before now, the Central American government approved the bitcoin law, which the El-Salvador president initiated.
The law centered on making Bitcoin a legal tender in the country and thereby mandating businesses operating in the State to accept it.
Bitcoin finally steps out of the bearish zone and follows a bullish momentum | Source: BTCUSD on TradingView.com
With the approval of this law, residents can use Bitcoin to pay for goods & services come September 2021. Also, the residents can pay taxes and other bills using bitcoin.
Will El Salvador Issue A Stablecoin?
Concerning the plan to create a stablecoin in El Salvador, the government spokesperson revealed that it is no longer in play. But another source who wishes to remain anonymous stated that the plan is still on track.
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Also, the digital newspaper revealed that the brothers to the El Salvador President have been meeting some representatives from Algorand, Cardano, and WhizGrid.
These meetings have always occurred on different occasions. All these indicate that the brothers are very much interested in a stablecoin for El Salvador.
While we can’t say with confidence that the plan is still in play, the launch of Bitcoin as a legal tender is still in play.
Also, given the several meetings between the brothers and different blockchain representatives, there might still be some upcoming developments in the pipeline.
Featured image from CoinDesk, chart from TradingView.com
MicroStrategy Issuing Up To $1B In Common Stock To Buy More Bitcoin
MicroStrategy is back at it again. Fresh off the heels of selling 0M worth of privately offered notes in a securities offering this week, the leading business analytics firm is looking for more.
Stock Offering
MicroStrategy is rapidly approaching 100K worth of BTC in the firm’s Bitcoin-holding subsidiary, MacroStrategy LLC. The recent common stock offering for the company suggests that they could be looking to cross the 100K threshold sooner rather than later.
This week’s SEC filing will enable MicroStrategy to sell up to B worth of their class A common stock $MSTR over time; in the SEC prospectus, the firm stated that they “intend to use the net proceeds from the sale of any class A common stock offered under this prospectus for general corporate purposes, including the acquisition of bitcoin, unless otherwise indicated in the applicable prospectus supplement.”
Of course, with over 92K BTC in the newly-formed subsidiary’s account, MicroStrategy could already cross the 100K mark even with just the recent bond offering. At current pricing, the company could secure over 10K bitcoin with the money raised from the senior secured note sales, making the common stock announcement just icing on the cake for the MacroStrategy BTC holdings. Even with the firm’s current numbers alone, they are far and away the corporate leader when it comes to BTC holdings, with over twice as much BTC on hand than Tesla.
Related Reading | MicroStrategy Discloses A M Bitcoin Purchase
More From The Filings
The SEC filings share a bit of the macro perspective for the firm: “We view our bitcoin holdings as long-term holdings, and we do not plan to engage in regular trading of bitcoin and have not hedged or otherwise entered into derivative contracts with respect to our bitcoin holdings, though we may sell bitcoin in future periods as needed to generate cash for treasury management and other general corporate purposes”.
Additionally, the firm stated in the filings that they are “exploring opportunities to apply bitcoin-related technologies such as blockchain analytics into our software offerings”. The company to-date has looked at their operations as a two-pronged business, growing their enterprise analytics software business and acquiring and holding bitcoin.
MicroStrategy stock has responded positively to the recent fundraising with the firm’s sentiment focused on buying more bitcoin. One analyst, Lark Davis, on Twitter jokingly said that he was surprised that any furniture remained at the MicroStrategy offices – “could just sell it all and buy bitcoin!”, he said. MicroStrategy CEO Michael Saylor responded to the tweet with the unamused and thinking face emojis.
Despite a wild ride this year for MicroStrategy $MSTR, the recent SEC filings seem to have resulted in positive investor feedback.| Source: $MSTR-NASDAQ on TradingView.com
Related Reading | MicroStrategy Receives Over .5B In Orders For 0M Notes To Fund Bitcoin Purchases
Featured image from Pixabay, Charts from TradingView.com
Central Banks Issuing Digital Currency Could Be a Bluff; Here’s How
Going by recent headlines, it appears as though central banks around the world are planning to or in the process of creating their own digital currencies.
The coins, by their disruptive nature, are bound to attract attention from these banks. And with Facebook’s plans to launch the Libra, there are ever-growing challenges to their monetary authority and uncertainty about how money will be used in the coming years.
Central Bank Digital Currency, a Bluff?
Despite all this talk about central banks launching their own digital currencies, it’s an “elaborate bluff,” according to Financial Times.
Christine Lagarde at the European Central bank (ECB) gave a contradictory position this week when she told the European Parliament that central bank-issued digital currencies (CBDCs) were “an area where we have to rush slowly.”
“There is clearly a demand and there is clearly a technology that would support it, but clearly there are also risks for the international monetary system and financial stability at large,” she added.
It is clear that the idea of the Libra — a digital currency that promises to make payments quicker, cheaper, and easier for Facebook’s almost 2.5 billion users — has been a serious wake-up call for central bankers. They worry about all kinds of risks, including its operational robustness, customer protection, money laundering, terrorism finance, and data privacy.
But the biggest concern is that Libra, and other digital currencies like Bitcoin, have the potential to dilute the main power of central banks: their ability to control the supply of money.
Benoît Cœuré, the ECB director who led the G7 working group on the Libra, has likened Facebook’s digital currency to an “elephant in the sandbox;” French finance minister Bruno Le Maire warned the country could ban the Libra.
Faced with such concerns, central banks are moving cautiously.
Contradictions Apparent
Of note is that ECB insiders say it has no laboratory working on a digital euro and little intention to create one any time soon.
It seems most of these recent comments seem designed push private sector banks into improving inefficient, costly, and time-consuming cross-border payments.
Cœuré recently praised an initiative by about 20 large European banks including BNP Paribas and Deutsche Bank to create a new digital payments system: the Pan European Payment System Initiative (Pepsi). The idea is to enable instant cashless payments through a European rival to ApplePay in the US and Alipay in China.
In the same speech, Cœuré again touched on the possibility of the ECB issuing its own digital currency, saying: “Potential central bank initiatives should not discourage or crowd out private market-led solutions for fast and efficient retail payments in the euro area.”
With the contradictions apparent, this talk of central banks issuing digital currencies could just be a distraction as they are secretly hoping the private sector will come up with solutions that make issuing a CBDC unnecessary altogether.
What is for certain is that central banks are worried about what the future holds for them.
Featured Image from Shutterstock
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Issuing Money Is for Governments, Not Private Firms Apple CEO
Apple CEO Tim Cook has spoken out about whether his company would launch a cryptocurrency, and the answer is a firm no.
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