Bank of England to announce possibility of a central bank digital currency

(qlmbusinessnews.com via bbc.co.uk – – Mon, 19th April 2021) London, Uk – –

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The Bank of England and the Treasury have announced they are setting up a taskforce to explore the possibility of a central bank digital currency.

The aim is to look at the risks and opportunities involved in creating a new kind of digital money.

Issued by the Bank for use by households and businesses, it would exist alongside cash and bank deposits, rather than replacing them.

No decision has been taken on whether to have such a currency in the UK.

However, the government and the Bank want to “engage widely with stakeholders” on the benefits and practicalities of doing so.

The taskforce will be jointly led by the Bank's deputy governor for financial stability, Sir Jon Cunliffe, and the Treasury's director general of financial services, Katharine Braddick.

The Bank has previously said it is interested in a central bank digital currency (CBDC) because “this is a period of significant change in money and payments”.

The use of cash in financial transactions has been steadily declining in recent years, while debit card payments have been on the rise. Use of credit cards and direct debits have also been increasing.

The Bank also sees having its own digital currency as a way of “avoiding the risks of new forms of private money creation”, including crypto-currencies such as Bitcoin.

“If a CBDC were to be introduced, it would be denominated in pounds sterling, just like banknotes, so £10 of CBDC would always be worth the same as a £10 note,” the Bank said.

“CBDC is sometimes thought of as equivalent to a digital banknote, although in some respects it may have as much in common with a bank deposit.

“Any CBDC would be introduced alongside – rather than replacing – cash and bank deposits.”

Most of the world's central banks are looking into the possibility of creating such a currency, but the only one already in existence is China's digital yuan, which is currently undergoing public testing.

Among the objectives of the UK taskforce is monitoring international developments, “to ensure the UK remains at the forefront of global innovation”.

The Bank also announced the creation of a CDBC engagement forum and a technology forum, as well as a CBDC unit within the Bank itself, overseen by Sir Jon.

No timetable was announced for the taskforce's operations.

Coinbase makes a landmark market debut with $99.6bn valuation

(qlmbusinessnews.com via news.sky.com– Thur, 15th April 2021) London, Uk – –

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The cryptocurrency exchange coinbase started trading on Wednesday at a valuation of nearly $100bn (£72bn), in a major boost to supporters of digital currencies such as bitcoin.

Coinbase shares opened at $381 (£276) on the Nasdaq, racing past the $250 reference price, and valuing the exchange at $99.6bn (£72bn).

The valuation means that Coinbase is worth more than traditional financial institutions such as HSBC, Barclays, and Standard Chartered.

It is the first time a major cryptocurrency business has been publicly listed, and is a landmark moment for a technology once considered trivial.

Coinbase earns money from transaction fees and has seen its profits soar as cryptocurrency trading has boomed since the start of the pandemic.Advertisement

Record levels of cash have poured in to digital currencies such as bitcoin and ethereum, plumping up Coinbase’s margins. Both have seen their prices climb meteorically in the past year, rising over 800% and 1,300% respectively.

Thanks to this, Coinbase booked an estimated $730m (£530m) to $800m (£580m) in net profits in the first three months of 2021, while it reported $1.8bn (£1.3bn) in revenue during the same period.

“The Coinbase IPO is potentially a watershed event for the crypto industry and will be something the Street will be laser focused on to gauge investor appetite,” said Wedbush analyst Daniel Ives in a note to investors.

The company is a “foundational piece of the crypto ecosystem,” he said.

Coinbase was founded in 2012 by Brian Armstrong, a software engineer at Airbnb, and Fred Ehrsam, a trader at Goldman Sachs.

The pair set out to simplify the process of buying and selling bitcoin, at a time when the currency was largely used by hobbyists fascinated by its technology, and criminals attracted to its anonymity.

By Ed Clowes

Bitcoin frenzy as economic turmoil drives Turkey’s lira to decline

(qlmbusinessnews.com via theguardian.com – – Tue, 13th Apr, 2021) London, Uk – –

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Investors turn to cryptocurrency after Erdoğan’s sacking of central bank governor caused further fall in lira

The neighbourhood teahouse is a focus of daily life across Turkey, an Ottoman tradition that has endured through the centuries. At the Red Lightning teahouse in Çorum, the enterprising owners have one foot in the past and one in the future: it’s the first one in the country where customers can pay in bitcoin.

“Everyone we know in Çorum is starting to invest in cryptocurrency. We think that in five years or so regular currency will be in decline, it will be replaced by digital ones. So we wanted to be in a good position now,” said co-owners Hüseyin Nalcı, 38, and Kerem Kutay Yıldırım, 28.

“The older customers think it’s a bit absurd. They made fun of us. But now the dürüm [wrap] shop next door is asking us to teach them.”

The Turkish lira slumped dramatically last month after President Recep Tayyip Erdoğan’s shock decision to fire the central bank governor, Naci Ağbal. The reserve is now on its fourth governor in less than two years, and the lira has lost half its value since a 2018 currency crisis.

Inflation reached a six-month high in March of 16.19%, well above a 5% target, and unemployment remains high, at 12.2%.

The latest economic turmoil has led to a surge in cryptocurrency trading in the country, with investors hoping to gain from bitcoin’s rally and shelter against inflation.

Data from the US researcher Chainalysis analysed by Reuters showed that trading volumes between the start of February and 24 March hit 218bn lira (£19bn) with a spike on the weekend Ağbal was sacked, up from just over 7bn lira in the same period a year earlier. Cryptocurrency worth 23bn lira was traded in the first few days after the shock announcement, the data showed, versus 1bn lira in the same timespan in 2020.

Turkish Google searches for cryptocurrency also hit a record high in the week before Ağbal was removed. The governor, who took over the post in November, was reportedly at loggerheads with Erdoğan’s over interest rate hikes: contrary to mainstream economic thinking, the president has repeatedly said that he believes high interest rates cause inflation.

Bitcoin’s climb to a new record of just under $62,000 (or more than £44,000) has seen interest in the digital currency soar worldwide: investors and companies have embraced the emerging asset despite warnings about its volatility.

“Turkish people like stable assets due to our history of high inflation,” Özgür Güneri, CEO of cryptocurrency exchange BtcTurk, told Reuters. “That is why generation after generation of Turks invested in gold, real estate and dollars.”

Turkish interest in cryptocurrencies has been growing steadily for several years, in large part because they are finite resources with a reputation for being immune to inflation.

So far, Ankara has not made any moves to regulate or tax the digital currency space, which adds to the appeal for Turkey’s youthful, tech-savvy population.

Erdoğan recently reiterated calls for Turks to invest gold and foreign currencies kept under the mattress in order to shore up domestic financial markets. The country’s recent economic troubles have had significant implications for his ruling Justice and Development party: its support has fallen away with the abrupt end of years of strong economic growth.

At Sirius Coin, a cryptocurrency cashpoint near the gold dealers of Istanbul’s Grand Bazaar, Mehmet, 35, said business was booming. The shop’s owners are getting ready to launch their own trading exchange by the end of the year.

“Everyone wants to get rich quick. Turks are no exception to that,” he said.

By Bethan McKernan 

IMF Silently Creates New Money Layer, Why You Need to Leave the Banks: Willem Middelkoop

Source: Stansberry Research

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The International Monetary Fund’s special drawing right (SDR) – the international reserve asset created in 1969 to prepare for a new dollar crisis – is undergoing a renaissance with important worldwide repercussions says Willem Middelkoop, author of the Big Reset. “The announcement of the largest-ever increase in SDR allocations, which will greatly improve the liquidity of many developing nations, signals alignment between the US and China in a key area of global monetary power,” he tells our Daniela Cambone.

Elon Musk: Tesla will accept Bitcoin from consumers wishing to purchase cars

(qlmbusinessnews.com via news.sky.com– Wed, 24th March 2021) London, Uk – –

Tesla's chief executive Elon Musk has said that the company will now be directly accepting Bitcoin from consumers wishing to purchase cars.

The pay by Bitcoin system is currently only available in the US, but the billionaire has said the feature will be expanded to other countries later this year.

It follows the car company last month announcing that it had invested $1.5bn (£1.09bn) in the notoriously volatile cryptocurrency, sending it to a record high.

A single Bitcoin is currently trading at just over £41,000 – up from the £5,600 it was worth on this date last year.

Bitcoin paid to Tesla will be retained as the cryptocurrency, Musk said, not converted to cash.

It is the latest vote of confidence in the cryptocurrency to come from the billionaire since he gave its price a boost by adding a “#bitcoin” tag to his Twitter profile page.

He removed the tag a few days later but has continued talking up Bitcoin, saying it was “on the verge” of being more widely accepted by investors.

Announcing the investment, Tesla said in its regulatory filing that its decision was part of a broad investment policy aimed at diversifying and maximising its returns on cash.

It said it had invested a total $1.5bn in the cryptocurrency and could “acquire and hold digital assets from time to time or long-term”.

The disclosure comes after Tesla recently reported that it had made an annual profit for the first time after years of losses.

At the time analysts said the move by the car company – which last year overtook bigger-selling conventional rivals to become the largest by value as its share price surged – could prove a gamechanger for Bitcoin.

Eric Turner, vice president of market intelligence at cryptocurrency research firm Messari, said: “I think we will see an acceleration of companies looking to allocate to Bitcoin now that Tesla has made the first move.

“One of the largest companies in the world now owns Bitcoin and by extension, every investor that owns Tesla (or even just at S&P 500 fund) has exposure to it as well.”

Bitcoin has set new record highs at the start of this year after a bumpy ride for investors over the past decade, with major financial institutions starting to offer support.

Central banks such as the Bank of England have remained sceptical but some suggest that as it becomes more accepted it could become more attractive as a store of value.

NFT digital art by Beeple’s nets $69m at Christie’s auction house

(qlmbusinessnews.com via bbc.co.uk – – Fri, 12th March 2021) London, Uk – –

The first digital-only art auction by Christie's auction house has netted $69m (£50m) for the artist Beeple.

The digital art was sold as an NFT – the latest tech craze which has boomed in popularity in recent weeks.

Beeple – real name Mike Winkelmann – creates a new piece of digital art every day, and was selling the first 5,000 days (13 years) of his work.

That success puts Beeple “among the top three most valuable living artists”, Christie's said.

The company said the sale was the first NFT-based work of art sold by a “major” auction house, and set a new world record for digital art.

The collection is a collage of the thousands of individual daily images which Beeple, an American graphic designer, started in early 2007 and has done every day since.

Many of the individual pieces are surreal or unsettling, and he uses a variety of digital modelling and artistic programmes for them.

The auction had attracted a great deal of attention, with bidding ramping up to $10m earlier this week. But on the final day of bidding, it skyrocketed to a final price of $69,346,250.

Christie's told the AFP news agency a record 22 million people watched the final moments of the auction's livestream.

That may in part be down to the current hype surrounding NFTs – or “non-fungible-tokens”. They are a unique identifier of ownership for non-physical objects such as digital art.

Beeple responded to the sale by tweeting a series of expletives.

Critics say the digital tokens have a huge environmental impact, since they are stored on a Blockchain, similar to crypto-currencies including Bitcoin and Ethereum. Others have suggested their current popularity is an investment bubble.

But the unique tokens allow value to be assigned to digital art, and they can be sold and traded in a similar way to physical art being used as an investment.

The current craze surrounding NFTs has seen the musician Grimes sell a collection of her artwork for more than $6m at the beginning of March. The founder of Twitter has also put his first tweet up for sale, with a bid of $2.5m so far.

And in one of the most controversial cases, one group burned a genuine Banksy original before putting its digital token up for sale, for $380,000 (£274,000).

Coinbase applies for SEC listing and reveals healthy revenue growth

(qlmbusinessnews.com via uk.reuters.com — Thu, 25th Feb 2021) London, UK —

(Reuters) – Coinbase Global Inc on Thursday disclosed its regulatory filing to go public, revealing surging revenue growth and healthy earnings and setting the stage for a landmark stock market listing for the U.S. cryptocurrency exchange.

The procedural step of making its filing with U.S. regulators public brings Coinbase a step closer to listing its shares on the Nasdaq stock exchange, which would represent a landmark victory for cryptocurrency advocates vying for mainstream endorsement.

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Coinbase said in December that it had confidentially applied with the U.S. Securities and Exchange Commission (SEC) to go public.

Reuters was first to report last July that Coinbase started plans for a stock-market listing and was exploring going public through a direct listing instead of a traditional initial public offering.

Many cryptocurrencies have struggled to win the trust of mainstream investors and the general public due to their speculative nature and potential for money laundering.

The landmark decision from the SEC could be a major boon or blow to the legitimacy of cryptocurrencies, and determine which ones are allowed to trade on the platform.

In its latest filing, Coinbase cautioned that it was yet to receive the relevant approvals from regulators that would allow it to trade certain securities.

“Although we have applied to operate an ATS (alternative trading system) in the United States that would allow us to trade crypto assets that are deemed “securities” under U.S. federal securities laws, we have not yet received regulatory approval to, and do not currently, operate an ATS for trading of crypto assets deemed to be securities,” Coinbase said in its filing.

The listing would come after the price of bitcoin, the world’s biggest cryptocurrency, ended 2020 up more than 300% and earlier this month hit a record high of $58,354 with a market capitalization above $1 trillion.

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Bitcoin has come off its recent highs this week as investors grew nervous at sky-high valuations.

For the year ended Dec. 31, Coinbase pulled in total revenue of $1.3 billion, compared with $533.7 million in the year-ago period. It also reported net income of $322.3 million, compared with a loss of $30.4 million during the same period last year, according to the filing.

Coinbase is eschewing a traditional initial public offering where a company raises money by selling new shares, opting instead to go public through a direct listing where no new stock is sold and existing shareholders can sell stock.

Founded in 2012, San Francisco-based Coinbase is among the most well-known cryptocurrency platforms globally and has more than 43 million users in more than 100 countries.

The New York Stock Exchange, BBVA and former Citigroup Inc chief executive Vikram Pandit are among those that have invested in Coinbase, which was valued at more than $8 billion in its latest private fundraising round in 2018.

Reporting by Joshua Franklin