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.
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.