News Updates September 26 & 27, 2022
1. The Fed has 'not decided to proceed' with a digital dollar, says Powell.
Jerome Powell, chair of the Federal Reserve, shut down expectations for a U.S. central bank digital currency (CBDC) to be issued in the near future.
The central bank leader said that the U.S. has “not decided to proceed” with the issuance of a CBDC for the time being.
"We do not see ourselves making that decision for some time," he said Tuesday, speaking remotely on a panel about the role of central banks in digital markets during a conference in Paris.
Instead, the U.S. central bank will be working in collaboration with Congress and the executive branch to evaluate the policy and the technological issues.
Powell went on to outline a multi-year period during which the Fed would focus on "building public confidence in our analysis and ultimate conclusions, which we certainly haven’t reached yet.”
Powell did elaborate that, if adopted, a U.S. CBDC would have several key characteristics: intermediated, privacy-protected, identity-verified, and interoperable.
"We would be looking to balance privacy protection with identity verification, which has to be done in today’s traditional banking system as well," Powell said referring to the discussion paper issued in January this year, where the Federal Reserve took the first step towards a CBDC.
Earlier this month, Federal Reserve Vice Chair Lael Brainard said that the central bank was seeking answers to questions that would determine the need for a CBDC.
At a New York conference hosted by the Bank Policy Institute, Brainard emphasized that the Fed’s investigation will determine the future financial system infrastructure, but said that a digital dollar is not "particularly relevant today."
2. Binance to Help US Government Distribute 100k ETH to Centra Tech Fraud Victims.
Leading crypto service provider Binance is supporting the United States in its effort to reimburse victims of the 2017-2018 Centra Tech Fraud.
Binance is quite excited that the victims get to receive compensation after almost five years. So far, the U.S has recovered 100,000 Ethereum (ETH) which will be utilized in funding the 170,000 victims affected by the scam.
Speaking on the Centra Tech Fraud, CEO of the exchange Changpeng Zhao said,
“We don’t tolerate crime in any way, and we’re proud to work with the U.S. Department of Justice (DOJ) to reach the victims of the Centra Tech fraud. We are thrilled that tens of thousands of users may be getting their money back.”
According to him, “Protecting users has always been our top focus, and we’ve greatly advanced our capabilities to do so since Centra Tech’s fraud occurred five years ago. We continue collaborating proactively with regulators, law enforcement, and other stakeholders to create a safe and well-regulated crypto ecosystem that brings the benefits of modern finance to everyone. The DOJ’s success, in this case, is an extremely important step forward for our quickly-maturing industry.”
3. YouTube Channel of South Korean Government Hacked in an Elon Musk-Crypto Scam.
Last Updated Sep 26, 2022 @ 14:26
South Korean YouTube channels with millions of subscribers have reportedly drawn the attention of cryptocurrency scammers.
Hackers have reportedly attacked several big-name South Korean YouTube channels in the past few months. After gaining access, most wrongdoers used the platform to upload cryptocurrency-related videos.
Among the victims was the official YouTube channel of the South Korean government. Earlier this month, a group of cybercriminals compromised it so they could promote a crypto scam featuring Elon Musk’s image.
South Korean Users Should Stay Alerted
A recent coverage revealed that hackers had attacked the YouTube channels of the South Korean government, the National Museum of Modern and Contemporary Art, and the Korea Tourism Organization.
In the government’s case, criminals changed the account’s name to “SpaceX Invest” to convince consumers that it was related to the American spacecraft manufacturer, spearheaded by Elon Musk.
To add to the confusion, the scammers posted videos of interviews where the world’s richest talked about bitcoin and other digital currencies. However, the government was quick to react and identified the fraud a few hours later.
4. Bitcoin price loses $20K as trader warns US dollar 'not quite topped out'
Bitcoin fails to avoid returning back under $20,000 after local highs prove too much to sustain.
Bitcoin (BTC) crossed under $20,000 after the Sept. 27 Wall Street open as United States equities inched higher.
Data from Cointelegraph Markets Pro and TradingView confirmed the $20,000 mark barely remaining as tentative support on the day.
BTC/USD had managed local highs of $20,344 on Bitstamp overnight, while retracing U.S. dollar strength gave modest relief to risk assets across the board.
The S&P 500 and Nasdaq Composite Index had been up 0.4% and 0.65%, respectively, after two hours’ trading, but subsequently reversed.
At the same time, the U.S. dollar index (DXY) was down 0.15% on the day, back below the 114 mark but still near its highest since mid-2002.
“U.S. open coming up. Green numbers, while Yields & $DXY are correcting,” Michaël van de Poppe, founder and CEO of trading firm Eight, commented.
“Time for Q4 to be good for crypto.”
Popular trader Crypto Tony nonetheless cautioned on assuming that DXY had put in a major top.
“Bad news for the Bitcoin pump, the Dollar has not quite topped out yet, so we are looking for more pumps on the dollar and setbacks on $BTC,” he decided.
“Keep an eye on both of these if you plan on leveraging BTC.”
Binance BTC/USDT volume hits all-time high
With days to go before the monthly close, further BTC price volatility was expected, while traders demanded that October — traditionally a better month than September for crypto return — deliver the goods in 2022.
5. French Central Bank CBDC Projects Aim to Manage DeFi Liquidity, Settle Tokenized Assets
The Bank of France is looking at a wholesale central bank digital currency that would be used by banks and financial markets.
The Banque de France Tuesday announced new projects to achieve the benefits of central bank digital currencies (CBDCs) used at a wholesale level by banks and financial markets.
“A wholesale CBDC could significantly contribute to improving cross-border and cross-currency payments,” Villeroy de Galhau, a governor at the Bank of France, the country's central bank, said in an appearance at the bank's digital currency conference. CBDCs at the wholesale level attract less attention than their headline-grabbing retail equivalent, he added.
One venture will look to improve CBDCs' liquidity management in decentralized finance (DeFi) – such as via automated market makers – which would play a role equivalent to that of investment banks that seek to sustain trading in a particular security, de Galhau.
French Central Bank CBDC Projects Aim to Manage DeFi Liquidity, Settle Tokenized Assets
The Bank of France is looking at a wholesale central bank digital currency that would be used by banks and financial markets.
The former stock exchange in Paris (Edward Berthelot/Getty Images)
The Banque de France Tuesday announced new projects to achieve the benefits of central bank digital currencies (CBDCs) used at a wholesale level by banks and financial markets.
“A wholesale CBDC could significantly contribute to improving cross-border and cross-currency payments,” Villeroy de Galhau, a governor at the Bank of France, the country's central bank, said in an appearance at the bank's digital currency conference. CBDCs at the wholesale level attract less attention than their headline-grabbing retail equivalent, he added.
One venture will look to improve CBDCs' liquidity management in decentralized finance (DeFi) – such as via automated market makers – which would play a role equivalent to that of investment banks that seek to sustain trading in a particular security, de Galhau said.
Another project will focus on issuing and distributing tokenized bonds on a blockchain, he said, building on previous findings about CBDCs being used to settle Web3 securities, such as the French central bank’s Project Jura.
Further details will be detailed in the coming weeks, he promised.
The European Central Bank is considering whether to issue a digital euro as soon as 2026, de Galhau said. The ECB is one of many central banks exploring the possibility of a CBDC for everyday use and for financial markets.
6. Digital Bank Revolut Wins FCA Registration to Offer Crypto Services in UK
The trading platform had been operating in the country under a program that gives firms a reprieve while their applications are pending.
Crypto trading app Revolut has won registration from the United Kingdom's Financial Conduct Authority to offer crypto services in the U.K. following a lengthy wait.
The digital banking service, which is valued at $33 billion, was added to the U.K. financial watchdog's crypto-asset firm register on Monday. The firm has about 20 million customers worldwide and offers exposure to about 80 crypto assets,
Revolut had previously offered crypto buying, selling and trading in the U.K under the FCA's temporary registration regime, or TRR, which was set up to allow firms to continue to operate while their applications were being reviewed.
When the deadline for approval passed at the end of March, the FCA allowed a select number of firms to remain on the TRR where it was "strictly necessary." As of early April, Revolut was one of five firms on TRR, along with CEX.I0, Copper Technologies, GlobalBlock and Moneybrain. None of the other four firms has subsequently been approved.
“We confirm that Revolut has been removed from the temporary register and has received full registration as a crypto-asset firm," an FCA spokesperson told CoinDesk via email.
“Revolut has agreed to a number of directions designed to ensure it has the systems and controls to meet the requirements of the money-laundering regulations," the FCA official said.
7. IMF calls on global financial watchdog to lead crypto regulation push.
IMF calls on global financial watchdog to lead crypto regulation.
The Financial Stability Board (FSB) has gained the IMF’s approval as a global leader for coordinating and setting crypto regulation standards.
An FSB report for G20 officials is anticipated in October on the regulation and supervision of stablecoins and other cryptoassets.
Two new reports by the International Monetary Fund (IMF) on regulating stablecoins and unbacked cryptoassets have called on the Financial Stability Board (FSB) to set and lead global efforts on crypto regulation.
The reports, published on Monday, state that the watchdog is "well placed to take the lead in coordinating and establishing global standards to support national regulation of crypto assets,” as well as guiding the national implementation of regulation of crypto assets while considering sector-specific standards.
Some of the measures in the reports include the development of common global categories to inform cross-sectoral standards and guide data collection. They also tout a risk-based approach with additional requirements for “entities and activities that generate more risk” as well as recommending the backing of stablecoins with safe and liquid assets.
The FSB will report to G20 finance ministers and central bank officials in October on “high-level recommendations” regarding crypto and particularly stablecoins, according to a statement issued by the FSB from this summer.
