A New ‘Bretton Woods’ Moment?

A New ‘Bretton Woods’ Moment?

The IMF has said it’s time to re-evaluate the global economic order, but what does that really mean? In a recent speech, the International Monetary Fund argued that the time to fundamentally re-evaluate the global economic order is here. Goldbugs see the potential to return to the gold standard, bitcoiners anticipate ever-growing stimulus and macro observers are betting on massive disruptions in the wake of central bank digital currencies.

Blockchain Bites: Filecoin Strike, Bitcoin Fees Fall, Coinbase Censorship

Blockchain Bites: Filecoin Strike, Bitcoin Fees Fall, Coinbase Censorship

Top shelfToken protestFive of the largest Filecoin miners, which secure that data storage network, have gone on strike, bringing attention to the project’s “unfair” economic model. According to a report by 8btc.com, miners are required to stake a significant amount of FIL tokens to start mining operations. But there’s a critical lack of FIL tokens off the bat. Purchasing tokens on exchanges at what could be inflated prices is seen as unattractive. “All the miners have been off since the mainnet went live. This is not some sort of protest but we have to shut them down because we really don’t have the tokens as collateral to mine,” ST Cloud CEO Chuhang Lai said in the report. In response to miner’s concerns, Filecoin has decided to release 25% token rewards in advance once a miner builds a block on the blockchain.Transaction countBitcoin’s (BTC) miners are seeing depressed earnings as on-chain transaction activity and price action cools. “Boring price action and low volatility tends to reduce the count of transactions to and from the exchanges,” Willy Woo, on-chain analyst and author of The Bitcoin Forecast newsletter, told CoinDesk over Telegram. Yesterday, there were only 231,437 transactions processed on the Bitcoin blockchain, the lowest since May 24 and down 40% from a peak on July 1, according to data provided by blockchain analytics firm Glassnode. With the network processing far fewer transactions currently, the percentage of miners’ revenue derived from fees also dropped to a three-month low of 3.49% over the weekend.Schiff riffNoted Bitcoin skeptic Peter Schiff’s Euro Pacific Bank has become the focus of a major global tax evasion investigation. Initiated by the U.K., the U.S., Australia, Canada and the Netherlands, this investigation, dubbed Operation Atlantis, is seeking to determine if hundreds of “high risk” account holders were involved in tax evasion and money laundering through the bank. The investigation began in January and has its roots in the “Panama Papers,” which shed light on how some of the world’s wealthiest people and firms have been hiding money and evading tax in off-shore accounts.Crypto insuranceBitstamp, one of the world’s largest cryptocurrency exchanges, has introduced an insurance policy that covers the theft and other losses of user funds held on its platform. The Europe-based exchange said the…

Bitcoin News Roundup for Oct. 19, 2020

Bitcoin News Roundup for Oct. 19, 2020

With BTC transaction activity slowing and Filecoin miners striking, CoinDesk’s Markets Daily is back for your latest crypto news roundup!Bitcoin’s transaction activity has cooled amid the recent lull in price action – and that’s hurting miners’ earnings. Some of the largest Filecoin miners stopped mining on Saturday, complaining the project’s mining incentive scheme has made it impossible for the miners to start operations.   The OKEx drama shows just how immature crypto markets are compared to traditional ones, but it also highlights their overall resilience.A recent giveaway of China’s in-testing central bank digital currency has reportedly left recipients wondering why they should change from existing solutions like Alipay.

Fiat-to-Crypto Gateway BTC Direct Raises Almost $13M in Series A Funding

Fiat-to-Crypto Gateway BTC Direct Raises Almost $13M in Series A Funding

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Major Meeting of Central Banks Produces Same Old ‘Evaluating’ CBDCs Refrain

Major Meeting of Central Banks Produces Same Old ‘Evaluating’ CBDCs Refrain

Central bankers continued to evaluate the merits, or lack thereof, of a digital currency (CBDC), explaining that digital innovation has its benefits but policy considerations abound, during a panel discussion hosted by the International Monetary Fund on Monday. The panel, featuring Federal Reserve Chairman Jerome Powell; Bank Negara Malaysia Governor Nor Shamsiah; Bank for International Settlements General Manager Agustin Carstens; and Saudi Arabian Monetary Authority Governor Ahmed Abdulkarim Alkholifey, appeared to conclude that while CBDCs may be useful for some countries, it’s too soon for them to be issued.Nothing particularly new was said during the hour-long segment, in which Powell reiterated the U.S. is evaluating a digital dollar.“I actually do think this is one of those issues where it’s more important for the United States to get it right, than it is to be first,” he said. “Given the dollar’s important role globally, it’s essential that we remain on the frontier of research and policy development. The dollar is the world’s principal reserve currency and there continues to be large global demand for Federal Reserve notes.”The Federal Reserve Bank of Boston is collaborating with MIT’s Digital Currency Initiative to research CBDCs, he noted. “These types of experiments advance our understanding of the risks and benefits of CBDCs, measuring trade-offs between different designs and system arrangements and assessing security risks on the policy side,” Powell said. “We’re also actively engaging with a wide variety of stakeholders from government, academia and the private sector to gather different perspectives and expertise about potential CBDC issues, the range of design options and other considerations.”Powell said much the same a year ago, when he told U.S. lawmakers that while central bank researchers were evaluating a potential digital dollar, it was unclear what specific benefits the U.S. would enjoy.Shamsiah said she believes the private sector “has an important role to play” in the development of a CBDC, while Alkholifey said Saudi Arabia might consider a CBDC for its economic policy toolkit.The IMF published a report on CBDCs and their policy considerations in the lead-up to the event, which said digital currencies can be a useful tool for central banks but they need to evaluate the potential effects on their country’s monetary policy goals.

IMF Says CBDCs Have Potential, but Don’t Solve Every Issue

IMF Says CBDCs Have Potential, but Don’t Solve Every Issue

Central bank digital currencies (CBDCs) may benefit countries looking to exert greater control over their monetary policy but aren’t a solution for every crisis, said a report from the International Monetary Fund (IMF) published Monday. While most of the report assessed the different pros and cons as well as the policy considerations of a central bank issuing its own digital currency, its main conclusion appeared to be that a CBDC should be viewed as another tool in currency issuance or monetary policy, rather than a panacea for every world economy.“Overall, the paper finds that CBDCs do not qualitatively change the economic forces that lead to the international use of currencies, as they are only digital forms of existing fiat currencies but quantitatively, they could reinforce the incentives behind currency substitution and currency internationalization,” the report said.The report created a few hypothetical scenarios for the issuance of a CBDC, which envision it as a niche tool solely for cross-border payments; a tool for currency substitution; a primary unit of account/payments tool in several countries; or a widely adopted set of CBDCs which are used for both international and domestic transactions.A CBDC is not a one-size-fits-all solution for lackluster economies, and it won’t save nations with high inflation or similar domestic issues.“If the local currency suffers from instability and provides a poor unit of account, issuing CBDC is unlikely to change that. More broadly, the case for CBDC issuance is likely to depend on country circumstances,” the report warned.The report comes ahead of an IMF-hosted panel on cross-border payments, which will see Federal Reserve Chair Jerome Powell, Bank for International Settlements General Manager Agustín Carstens, Bank Negara Malaysia Governor Nor Shamsiah and Saudi Arabian Monetary Authority Governor Ahmed Abdulkarim Alkholifey discuss their views with moderator Kristalina Georgieva, the IMF’s managing director.International relationsOne of the chief benefits of a central bank digital currency is that it’s (perhaps obviously) a digital payments system, the report said. Before CBDCs can be issued or adopted, countries should take a look at the international treaties governing currency agreements, the report suggested. “Authorities will also need to assess whether restrictions on payments in CBDCs are consistent with countries’ obligations under international and bilateral treaties, including the IMF’s Articles of Agreement,” the report said. Other considerations include the…

Ex-Coinbase, BitFlyer Lawyer Joins Anderson Kill

Ex-Coinbase, BitFlyer Lawyer Joins Anderson Kill

Former Coinbase counsel Hailey Lennon is joining law firm Anderson Kill. Lennon has joined Anderson Kill’s Los Angeles office as a shareholder in the Technology, Media and Distributed Systems Group. She joins a team of 10 other lawyers who practice in the crypto and blockchain space, including Stephen Palley, Preston Byrne and Bob Cornish.  “Hailey’s hiring is indicative of our hiring philosophy in the space, which is to bring on lawyers who have deep substantive experience and are best in class lawyers,” Palley said in an email.  “We expect to see more growth in disputes work, M&A transactions, and in BSA/OFAC regulatory work, where Hailey has significant experience.”In her role at Coinbase, Lennon worked with the U.S. Securities and Exchange Commision (SEC), Commodity Futures Trading Commission (CFTC), Office of Foreign Assets Control (OFAC) and the New York Department of Financial Services (NYDFS). Prior to Coinbase, she helped Tokyo-based crypto exchange bitFlyer gain 33 money transmitter licenses in the U.S., and was part of the team that helped bitFlyer secure a BitLicense from New York.Lennon also worked as an assistant vice president of regulatory compliance at Silvergate Bank, who conducted compliance and legal reviews for any prospective cryptocurrency customers looking for an account at the La Jolla, Calif.-based bank.