Category: Institutions

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Banking Crypto News Institutions United Kingdom

UK is Launching a Taskforce to Study a Potential Digital Pound

UK is Launching a Taskforce to Study a Potential Digital Pound

The government of the United Kingdom (UK) is launching a taskforce to explore the concept of central bank digital currency (CBDC). Following a report on Monday, the UK now adds to the list of major countries studying a potential digital currency.

We’re launching a new taskforce between the Treasury and the Bank of England to coordinate exploratory work on a potential central bank digital currency (CBDC).

Rishi Sunak, British Finance Minister

UK Becomes Another Country Researching CBDC

The Bank of England (BoE) and the country’s Treasury will spearhead the new initiative, according to Sunak. They will drive the taskforce towards researching the benefits of launching a national digital currency. However, the UK has no immediate need to launch a digital currency, which the finance minister touted as “Britcoin”.

The Government and the Bank of England have not yet made a decision on whether to introduce a CBDC in the UK and will engage widely with stakeholders on the benefits, risks and practicalities of doing so.

Bank of England

The CBDC Taskforce also said consumers and businesses in the UK would use the digital currency alongside physical cash. This means the digital currency won’t replace the Pound Sterling and bank deposits outright.

Interest in CBDC is Rising Globally

Many central banks in the world are beginning to research the possibility of launching the digital version of their national currency in the form of CBDC. This follows the growing interest in digital currencies for payment, seemingly propelled by the outbreak of the coronavirus pandemic.

Crypto News Australia recently reported that the Reserve Bank of Australia (RBA) intended to launch a wholesale CBDC. The RBA said it didn’t see any strong case for issuing a retail CBDC.

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Australia Coinbase Institutions

Westpac Bank Set To Make $300 Million from Coinbase Public Listing

As reported by the SMH, Australian Westpac bank’s venture capital fund Reinventure is set to make an estimated $300 million AUD profit from a Coinbase investment they made back in 2015.

Pictured above Reinventure’s Simon Cant, Danny Gilligan and Rohen Sood – source

The Sydney based company Reinventure, was seeded by Westpac with an additional $50 million in late 2014, with the purpose of investing in start-ups. In a statement with Financial Review earlier this year, Reinventure Group co-founder Danny Gilligan mentioned rumours that the fund had increased by nine times.

“We can’t comment on the secondary trading as it’s under NDA [non-disclosure agreement],” Mr Gilligan said. “But if those rumoured prices are true, then Fund 1 is currently nine times the original fund.”

Danny Gilligan – Reinventure Group co-founder

If the rumours are true this would made the fund worth $450 million today, one of the best-performing funds in the history of Australian venture capital?

The 10 start-ups backed by the Reinventure fund included:

  • SocietyOne – Peer-to-peer lending platform
  • Coinbase – Cryptocurrency exchange
  • Nabo – Social media platform (sold)
  • Zetaris – Big data (sold)
  • Hey You – Australian dining out app
  • Auror – Crime software
  • Data Republic – Data safety
  • Flare – HR cloud platform
  • Valiant – Business loans

Coinbase Goes Public

On April 15th, Coinbase (COIN) was listed on the New York Stock Market (Nasdaq). The exchange is one of the largest cryptocurrency exchanges in the world with an estimated 56 million users worldwide.

The exchange recently reported massive quarterly profits for Q1 2021 with a net income of $800 million USD, which led to a suggested massive $100 billion evaluation.

“With Coinbase, the appeal was it was like selling picks and shovels at a gold rush, rather than taking a view on bitcoin. And Coinbase seemed to have a very robust business for providing the tools for people who wanted to use bitcoin. That seemed like a fairly sensible and relatively low-risk bet”

Former Westpac CEO Brian Hartzer

DeFi is the “cutting edge” of Finance

Decentralised Finance (DeFi) is hot right now, with a growing number of start-ups entering the space. We have seen DeFi traders making millions, Mark Cuban calling DeFi the start of personal banking and a lot of DeFi funds get hacked since it the new internet technology emerged in mid 2020.

“DeFi is re-engineering the fundamentals of finance from the ground up,” Mr Cant said. “It still has a way to go before it starts to be used in a scaled way for real financial applications, but in the meantime, problems around scaling are being worked through and we are particularly bullish on the potential for decentralised finance infrastructure, data and the continued thematic of finance at the edge”.

Simon Cant – Reinventure Group co-founder

Fintech seems popular with VC’s right now as we saw earlier this year Australian DeFi company Synthetix raise $12 million, and just recently Australian Mark Carnegie setting up a DeFi crypto fund.

Will we see more Australian investors seed capital into the DeFi technology start-ups this year?

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Bitcoin Crypto News Institutions

MicroStrategy to Pay its Board of Directors in Bitcoin

Michael Saylor
Michael Saylor https://twitter.com/michael_saylor/status/1376173512226959363

The NASDAQ-listed business intelligence company, MicroStrategy, has revealed in a recent filing with the United States Securities and Exchange Commission (SEC) that some of its Board of Directors will receive their compensations in Bitcoin (BTC).

MicroStrategy to Pay in BTC for Board Services

In the Form 8-K document filed with the SEC, the company disclosed that its non-employee directors would receive Bitcoin as a form of compensation for Board service. Henceforth, all the payable Board fees for the non-employee directors will be converted from US dollar to the cryptocurrency and transferred to their designed wallet address, according to the modified compensation arrangements.

The development comes amid the Board’s commitment to Bitcoin. This is not surprising because MicroStrategy has shown a keen interest and support for Bitcoin over the past months.

The business intelligence company suddenly turned Bitcoin into its main reserve assets following the outbreak of coronavirus. At the time, the company’s CEO Michael Saylor noted that the cryptocurrency was a better inflation hedge and a store of value. This seems been the main reason behind the massive BTC amount purchased by the company so far.

MicroStrategy: the Largest Corporate Bitcoin Investor?

About a month ago, MicroStrategy reportedly bought 262 Bitcoins at nearly $58,000 USD. In total, MicroStrategy held about 91,579 BTC in its balance sheet as of 5 April 2021. Following the market value of BTC, these coins are worth over $5.7 billion USD, making the company on of the largest Bitcoin corporate investors.

Like MicroStrategy, many other publicly-traded companies have invested in cryptocurrencies, including Tesla, Square and others. Many industry players believe there is still more room for Bitcoin to grow, as several public companies are yet to include BTC in their balance sheet.

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Bitcoin Crypto News Institutions

Bitcoin Before and After Headlines by Major Companies

Bitcoin Before and After Headlines by Major Companies

The leading cryptocurrency, Bitcoin (BTC), faced several criticisms and condemning statements, especially from major financial companies, during its early stage. Fast forward to the present: the story has changed.

Many companies now support Bitcoin, to the extent that some have announced their intentions to debut Bitcoin and cryptocurrency investment services for their clients. This follows the massive rise in price, demand, and popularity in digital currencies over recent years.

A collection of old headlines about Bitcoin [multiple sources]

More Financial Companies Now Believe in BTC

Morgan Stanley, JPMorgan, Goldman Sachs, Visa, PayPal and others, all had an opposing view about the leading cryptocurrency.

Back in December 2017, James Faucette, an analyst from Morgan Stanley (a leading US investment bank), said in a document that “the value of Bitcoin could actually be…zero” because it’s not a real currency, besides other reasons. However, the bank is currently counted as one of the companies pushing crypto adoption. Recently, Morgan Stanley introduced Bitcoin funds to its wealthy clients.

Jamie Dimon, the CEO at JPMorgan Chase, argued in September 2017 that the leading cryptocurrency “is a fraud” and “eventually it will be closed”. Recently, JPMorgan looked closer at cryptos, considering different USD prices Bitcoin might reach.

Goldman Sachs had outlined five reasons why Bitcoin was neither an asset nor suitable for investment in May 2020. Almost a year later, the company informed it has plans for crypto offering, following the boom in Bitcoin and cryptocurrencies.

The former CEO of PayPal also argued in 2018 that BTC will fall because “there’s just no value there”. He added that the cryptocurrency was useless as a payment mechanism and ridiculous as a store of value. Last year however, the company launched crypto services that allow its customers to buy and sell cryptocurrencies. 

Visa CEO Alfred Kelly said in 2018 that they wouldn’t process BTC transactions because it isn’t a payment system. Visa now accepts USDC as a settlement currency. Recently, they also announced plans to enable Bitcoin purchases.

Bitcoin Isn’t Dead

It’s interesting to see the opposing perspective of these companies changed about Bitcoin. It indicates that Bitcoin and other cryptocurrencies are going mainstream and gradually becoming a widely accepted payment and asset class. The value of Bitcoin has more than doubled since those comments were made. At the time of writing, Bitcoin was trading at $63,097 USD on CoinMarketCap.

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Bitcoin Crypto News Institutions

Grayscale Total AUM increases to $49.2 Billion in just four days

Grayscale
Grayscale

Grayscale has increased its total AUM (Assets Under Management) to $49.2 billion USD, getting closer to the $50 billion USD mark as Bitcoin spiked above $62,000 USD today.

Its most popular investment product, the Grayscale Bitcoin Trust (GBTC) now holds $40,534 million USD, while the Grayscale Ethereum Trust (ETHE) holds over $7 million USD.

AUM Growing Every Day

Grayscale total AUM has been growing at a fast rate as Bitcoin and altcoins surged in the past weeks.

The addition of five new tokens also boosted Grayscale’s total AUM. As reported, the firm added five cryptocurrencies to its suite of investment trusts, including Chainlink (LINK) Filecoin, Livepeer, Basic Attention Token (BAT) and MANA (Decentraland).

On April 9, Grayscale’s total AUM grew by $1 billion USD worth of Bitcoin in almost 24 hours, according to the report. Some weeks before the total AUM grew over $3 billion USD in just four days.

On Saturday, Bitcoin broke above $80,000 AUD after several weeks of strong consolidation, a new all-time high for the father-of-all cryptos.

Grayscale’s Intention for a BTC ETF

Grayscale also plans to turn its GBTC into a proper Bitcoin Exchange-traded fund, after hinting at various ETF-related job positions on its career page.

Unlike other elite institutions like Goldman Sachs and VanEck, Grayscale will not file an S-1 form with the Securities and Exchange Commission. The company said that it will develop its BTC ETF as the regulatory weather on the United States becomes clearer.

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Banking Crypto News Forex Institutions Trading

Big Banks Are Setting Up To Trade Bitcoin, Forex and Other Digital Assets

State Street, the second oldest bank in the USA, is going to interchange its Forex infrastructure to create a bank-grade platform for digital assets – set to go live in the middle of the year.

State Street Corporation, the parent company of State Street Global Advisors (SSGA) is the world’s fourth-largest investment management corporation, with approximately $3.5 trillion assets under management (AUM), and $38.8 trillion under custody and administration. It’s also the second-largest custodian bank in the world.

According to a press release from Pressat, Pure Digital has made an agreement with State Street to use Currenex, a cutting-edge trading technology, as the backbone for their “new and unique wholesale digital currency trading platform”.

We are excited to partner with Currenex, an industry leader in FX, on this initiative; as we work to transpose FX infrastructure to the crypto space via a bank-led consortium.


Lauren Kiley, CEO of Pure Digital

A Platform Specifically For Banks

The Pure Digital trading platform will be the first of its kind, offering a wholesale inter-bank market for Tier 1 investment banks to trade bitcoin and other digital assets. Pure Digital is in discussions with several other Tier 1 investment banks to use the platform.

The platform will be an over-the-counter (OTC) offering with bilateral credit lines and full transparency so that the banks can see exactly who they’re dealing with. When asked whether they would be using the platform for their own crypto trading, Kiley replied:

That is the intention – State Street is one of the many banks that will be using this platform and we are looking at midway through 2021, although no date is set.

Lauren Kiley, CEO of Pure Digital

Big Banks Are Starting to Offer Crypto Services

Now that other big banks like BNY Mellon, Goldman Sachs, and Morgan Stanley have dipped their toes in crypto. The eyes have been on State Street now, as one of the biggest U.S. custody providers and trading operations, to see if it would move into crypto as well.

It (cryptocurrency) needs large balance financial institutions involved in the manufacturing process of price. The primary market doesn’t really exist. There’s a lot of disparate exchanges out there with different rules of engagement and systems. And this manifests itself in very fragmented market data.

Campbell Adams, founder of Pure Digital

The boost that these big institutions give to the cryptocurrency industry through investing in it and making it available for others to invest in is a major help to the ecosystem.  On the other hand, banks need to cater to the needs of their customers, and if they fail to do so they may become irrelevant.

Currently no Australian banks offer crypto services, but will we see this happen in 2021?

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Crypto News Cryptocurrency Law Institutions Regulation

Coinbase, Square, Paradigm and Fidelity Form “CCI” to Encourage Responsible Crypto Policies

Coinbase, Square, Paradigm, Fidelity Forms "CCI" to Encourage Responsible Crypto Policy

Some leading financial companies are collaborating to encourage a clear regulatory path for the burgeoning digital currency industry.

Known as the Crypto Council for Innovation (CCI), this group currently includes four prominent industry players: Coinbase, Square, Fidelity, and Paradigm. It aims at informing and helping global regulators understand cryptocurrencies while also encouraging responsible crypto-related public policies.

CCI to Unlock The Transformational Promise of Crypto

The companies behind CCI believe that digital currencies are at their critical stage. In recent years, more people have got to learn and invest in cryptocurrencies, including institutions and corporations. As a result, the crypto market has grown significantly, with the market capitalization recently touching $2 trillion. However, the regulatory uncertainties across different countries mean the industry doesn’t hold a clear or settled future. 

Crypto is at a mainstream inflection point. It’s in its very early stages and, much like the internet (once was), it’s very fragile while it’s in that stage.

Fred Ehrsam, co-founder of Paradigm [Wall Street Journal]

Thus, the Crypto Council for Innovation wants to educate the institutions, regulators, and policymakers on the benefits of digital currencies. Part of the approach includes providing analysis and insight about cryptocurrency. The CCI will also focus on correcting some “misperceptions that inevitably accompany a transformative new technology.”

By educating leaders about crypto, we can help empower them to participate in the crypto ecosystem for the benefit of their citizens, communities, and families.

Gus Coldebella, Chief Policy Officer at Paradigm

More Mainstream Crypto Adoption?

The development today could greatly change the shape of the crypto industry from a regulatory aspect. Having clearer regulations for cryptocurrencies would possibly result in encouraging more mainstream crypto adoption.

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Bitcoin Crypto News Institutions

Grayscale Confirms its Intentions to Turn GBTC into a Bitcoin ETF

Grayscale’s CEO, Barry Silbert, has confirmed the investment firm is “100% committed” to turn GBTC (Grayscale Bitcoin Trust) into a Bitcoin Exchanged-traded Fund.

As per their post, the investment giant outlined the possibility of a BTC ETF in the United States. Other investment firms like Goldman Sachs have filed with the Securities and Exchange Commission (SEC) to launch the long-awaited crypto-fund, but Grayscale remains wary about submitting a file to the SEC.

The firm does not consider that the current regulation weather in the US is suitable for such a fund.

Today, we remain committed to converting GBTC into an ETF although the timing will be driven by the regulatory environment. When GBTC converts to an ETF, shareholders of publicly-traded GBTC shares will not need to take action and the management fee will be reduced accordingly.

Grayscale

GBTC is a SEC-reporting Bitcoin fund launched in 2013. Each Grayscale product has four stages, in which the last one aims to convert the product into an ETF.

Source: Medium

The Crypto Market Tops $2 Trillion

Grayscale’s announcement came at the same time the global crypto market hit $2 trillion, according to CoinGecko. The institutional adoption of cryptocurrencies has increased the demand dramatically, and the crypto community seems to be now waiting for SEC to finally approve a Bitcoin ETF. If approved, a Bitcoin ETF coupled with the public listing of Coinbase could give the crypto market a tremendous boost.

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Banking Crypto News Institutions Stablecoins

Japan’s Central Bank Starts Experimenting With Digital Yen

On Monday the Bank of Japan (BOJ) started a year long study with its central bank digital currency (CBDC), following the advances made by China, U.S., and European countries.

This follows the BOJ’s announcement in early October 2020 where a project overview was given. The first of three phases is to be carried out now until March 2022. This phase is a proof-of-concept phase where participants will “build a systematic experimental environment and verify the basic functions of issuance, distribution, and refund, which form the core of CBDC as a payment method.”

In proof-of-concept phase 2 the study will look at “adding peripheral functions of CBDC to the experimental environment constructed in Phase 1 and verify its feasibility.” And if it is deemed necessary after proof of concept, they will consider conducting a pilot experiment in which private businesses and consumers can participate.

Shinichi Uchida, executive director of the bank, said in a statement last month that some people questioned whether people could use cash and bank accounts instead, and others wondered if potential cases for a CBDC “could be addressed by alternative solutions that did not require such extensive and large-scale efforts.”

Central Bank of Japan [Wikimedia]

CBDCs are similar to stablecoins, except that they are state-run. This means that transaction data are not on a public blockchain and that the central bank maintains authority over the ledgers that hold this data. The implementation of a system like this will allow participants to transact, store, and track the currency as an official unit of account since it’s registered with the central bank, thereby also increasing security against fraud and other related crimes.

Japan Doesn’t Want To Be Left Behind

The BOJ is mainly looking at digital currencies in a case it were to become mainstream or yield major benefits for them. BOJ Governor Haruhiko Kuroda has said it is important to “prepare thoroughly to respond to changes in circumstances,” and that it is not an appropriate policy response for central banks to start considering digital currencies only when the need to issue one arises.

Smaller banks like those in the Bahamas and Cambodia have already launched their CBDC, like the “Sand Dollar“. Japan’s economic rival has also made some major strides in the digital currency arena. According to a Chinese media source six state-owned banks have begun to promote digital yuan and accepting applications to open digital wallets. As well as U.S. Federal Reserve Chairman Jeremy Powell stating that a potential digital dollar is a high-priority project but has remained cautious about issuing one.

While there is no change in the BOJ’s stance it currently has no plan to issue CBDC, we believe initiating experiments at this stage is a necessary step

Shinichi Uchida, BOJ Executive Director

If, after a year, the bank finds that the proof-of-concept phase was fruitful, it will progress to the next phase: a pilot program. As countries start to adopt their own version of digital assets it opens more doors for individuals to interact with this technology and become familiar with how it works.

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Crypto News Institutions

Morgan Stanley Files To Offer BTC Exposure To Multiple Institutional Funds

Investment giant Morgan Stanely has filed with the Securities and Exchange Commission (SEC) to allow Bitcoin exposure into multiple funds.

The bank filed the request on Thursday. According to the document, all institutional funds may gay exposure to Bitcoin indirectly through investments in Grayscale Bitcoin Trust (GBTC) or cash-settled futures.

Certain Funds may engage in futures contracts based on bitcoin. The only bitcoin futures in which a Fund may invest are cash settled bitcoin futures traded on futures exchanges registered with the CFTC.

Morgan Stanley SEC file

Investors Demanding Bitcoin

A few weeks ago, Morgan Stanley offered three Bitcoin funds to its wealthiest investors. Giving the inherent volatility of BTC, the bank will allow its clients to invest only 2.5% of their capital.

The bank has outlined that Bitcoin is a risky investment, and it will allow clients with a high tolerance for risk. Although this didn’t discourage investors from demanding more exposure to BTC as it rallies again to $60k.

Rumours were circulating that the investment giant was behind Bithumb, South Korea’s largest crypto-exchange. As reported, the bank could be negotiating with Bithumb Holdings to acquire 10% of shares — and even placing a $2 billion bid for the exchange.

At the time of writing, Bitcoin is trading at $59,000, down 0.50% in 24 hours, with technicals pointing at a strong buying sentiment.

BTC/USD chart. Source: TradingView