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Federal Reserve official outlines plans to ease burden of bank stress tests prompted by financial crisisNovember 9, 2018 | dailybusinessnews
Wall Street banks will have to wait a bit longer for regulators appointed by President Trump to make the Federal Reserve’s stress tests less stressful. Their reward for being patient could be many more concessions than the industry anticipated.
Randal Quarles, the Fed’s vice chairman for supervision,…
Trump’s complaint that the Federal Reserve was ‘going loco’ on interest rates is just plain crazy, analysts sayOctober 12, 2018 | dailybusinessnews
The stock market tumbled Thursday for a second-straight session — a combined loss of nearly 1,400 points by the Dow Jones industrial average — and President Trump has been quick to finger the culprit:
The Federal Reserve, headed by his handpicked chairman, Jerome H. Powell.
“We have interest rates…
President Trump on Thursday blamed the Federal Reserve for the recent stock market downturn but said he would not dismiss his hand-picked chairman, Jerome H. Powell.
“No, I’m not going to fire him.” Trump said in the Oval Office after a reporter asked him if Powell’s job was in jeopardy due to…
Economist Richard Clarida won Senate confirmation to be vice chairman of the Federal Reserve, reinforcing U.S. central bank leadership as it faces criticism from President Trump over plans to keep increasing interest rates.
Clarida, a Columbia University professor and global strategic advisor at…
The central bank of India has reportedly formed a special unit tasked to track emerging technologies such as those related to cryptocurrencies. Its members will be expected to research, draft rules, and, in the future, supervise the development of digital assets, blockchain and artificial intelligence applications.
RBI Team to Track Crypto Developments
In an obvious attempt to improve its own capacity in the field, the Reserve Bank of India (RBI) has gathered experts in a newly formed unit that will be responsible for tracking crypto, blockchain and artificial intelligence technologies, The Economic Times reported quoting two sources familiar with RBI’s plans.
According to the report, the new unit will be tasked to research the emerging tech but also prepare rules and supervise the sector at some point in the future. One of the individuals cited in the article commented:
As a regulator, the RBI also has to explore new emerging areas to check what can be adopted and what cannot. A central bank has to be on top to create regulations. This new unit is on an experimental basis and will evolve as time passes.
No formal announcement about the new team has been made yet and the RBI has not responded to media queries for more details. Nevertheless, the publication notes that the unit was formed about a month ago and the bank’s management has already appointed its leader.
The outlet also quotes another expert on the topic. According to Piyush Singh, managing director of financial services for Asia Pacific and Africa at Accenture, unless regulators are part of the ecosystem, they understand and have a clear indication of what is accepted and what is not, they can neither protect the regulated industry nor the consumers who use it. Singh believes the RBI is doing the right thing at a time when new technologies are changing business models.
Researching, Despite Warning and Banning
The news about the forming of the research unit comes after multiple warnings against engaging in crypto transactions issued by the Indian central bank. In December of last year the RBI highlighted a number of crypto-related risks of economic, financial and legal character. This year, the bank ordered all regulated financial institutions to quit providing services to businesses and individuals dealing in cryptocurrencies.
The ban went into effect in July, despite attempts by representatives of the crypto sector to challenge it in court. In two hearings of the filed petitions, the Supreme Court of India did not grant a stay against the ban and eventually scheduled the final hearing for September 11.
In the meantime, Indian officials have been working on a regulatory framework for the crypto industry. Early statements that the draft regulations would be ready in July were later followed by another estimate – the Indian government is now expected to issue detailed cryptocurrency guidelines by September, as news.Bitcoin.com reported. Consultations with stakeholders are underway.
Do you think the RBI will eventually change its attitude towards cryptocurrencies? Share your thoughts on the subject in the comments section below.
Images courtesy of Shutterstock.
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Before this week, it had been more than a quarter-century since a sitting U.S. president publicly pressured the independent Federal Reserve on interest rates.
On Friday, President Trump did it for the second day in a row.
In unprecedented back-to-back statements, Trump escalated his criticism of…
The U.S. economy is in a sweet spot where it’s growing but not overheating, the Federal Reserve said Friday in its latest official report to Congress.
Growth is solid, unemployment is low and price increases are modest, the Fed said. The only real notes of caution in the 63-page report were sharply…
This week the Federal Reserve Bank of St. Louis added cryptocurrency to their Federal Reserve Economic Data (FRED) database. It’s a seemingly small gesture, but one that signals to most observers crypto’s maturation, at least in the eyes of arguably the most important central banking institution in the world.
Federal Reserve Bank of St. Louis Adds Four Cryptos to its FRED Database
“FRED has added four series on the prices of different cryptocurrencies,” the St. Louis Federal Reserve posted without much fanfare this week, including “Bitcoin, Bitcoin Cash, Ethereum, and Litecoin. The price data are updated daily and span from as early as 2014 to the present. All data were obtained from Coinbase, a cryptocurrency exchange company, whose overall digital asset performance is depicted in the above graph (Coinbase Index).”
The St. Louis Fed is one of 12 regional banks within the system, collectively constituting the most powerful central bank on the globe. Known to be part of the 8th District, which includes midwestern Fed banks, it is also considered an economic research powerhouse.
It maintains its FRED database at its famed research division. The bank uses more than half of a million data points, derived from 81 sources. Exchange rates, GDP, interest rates, consumer indexes, banking, producer price indexes, among other sectors, comprise its focus. FRED-published statistics carry massive weight in the professional financial world.
That some government agency creates yet another index isn’t particularly newsworthy. However, that both proponents and opponents frequently set cryptocurrencies such as bitcoin cash (BCH) as distinctly operating in defiance of central banks, and how the Fed appeals to crypto bank Coinbase for its metric, means decentralized currencies have come of age.
Going forward, it would also appear as Coinbase adds more currencies perhaps FRED would be compelled to monitor them as well. Whatever the case, the St. Louis Fed has been consistently out ahead of most central banks and economists when it comes to crypto.
That’s a marked contrast to its brethren. Atlanta’s Fed bank openly chastised younger investors to steer clear of crypto. The San Francisco branch pegged bitcoin core’s (BTC) price considerably lower than its near $ 6,000 present figure, insisting one BTC is probably worth around the cost of mining, slightly under $ 2,000 per coin. Even the Minneapolis Fed, in trying to be charitable, urged ignoring the currency aspect altogether and instead look toward ‘blockchain technology.’
Again, the St. Louis Fed thinks differently. Just a few months ago it caused a stir within the ecosystem by publishing a meditation on BTC, putting forth the idea it can be considered alongside the dollar. Its Governor James Bullard, however, is much more cautious. Acknowledging crypto as being a real future of money, he explained, “Cryptocurrencies may unwittingly be pushing in the wrong direction in trying to solve an important social problem, which is how best to facilitate market-based exchange.”
Is the arrival of a FRED crypto index important? Let us know in the comments.
Images via the Pixabay, FRED.
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On May 13 2018, the Reserve Bank Of Zimbabwe (RBZ) issued guidelines in a circular that detailed cryptocurrency activities taking place within the country are now banned. The RBZ further stated that domestic digital currency operations had sixty days to become compliant. Local reports now reveal the Zimbabwe-based cryptocurrency exchange Golix plans to take the central bank to court for banning digital assets, as the firm emphasizes that the RBZ has no authority to ban cryptocurrencies across the country.
Reserve Bank Of Zimbabwe Faces Legal Backlash
Last week cryptocurrency enthusiasts and businesses in Zimbabwe got some bad news as the central bank decided to ban all digital currency activities. The RBZ warned about the ‘risks’ involved with cryptocurrencies and told financial institutions not to deal with digital asset businesses.
The ban would affect Localbitcoins trades within the region alongside the country’s three exchanges Golix, Bitfinance, and Styx24. News.Bitcoin.com spoke with Golix representative Tawanda Kembo last month when the exchange installed a Bitcoin ATM. Our newsdesk also received an email from the Golix exchange shortly after the ban.
“On Friday, the Reserve Bank of Zimbabwe issued a statement to all banks instructing them to stop providing bank accounts to cryptocurrency companies within the next sixty days,” the Golix exchange explains.
This means that unless the central bank changes its position prior to the expiry of the sixty-day window, you will not be able to send or receive fiat currencies for cryptocurrency trades.
Golix Files a Lawsuit Against the RBZ with the High Court
Shortly after the email, the regional publication Zimeye.net reported that Golix was now planning to “slap a lawsuit” against the RBZ for issuing a countrywide cryptocurrency ban. Golix says they are taking the central bank to the High Court and state that the RBZ governor has no experience with managing a local currency giving him no right to ban it. The exchange argues that the central bank has no authority to ban digital currencies and only parliament has the means to make such laws.
”I submit that the ban in effect outlaws and classifies as illegal Applicant’s operations,” a Golix official said to the Zimeye publication.
The respondents are in fact purporting to classify the trade in cryptocurrency as illegal. That will amount to law making, a function that belongs to the legislature and not the respondents. Respondents are thus clandestinely usurping Parliament’s law making powers.
Golix Has Yet to Receive Instructions From Their Bank — Continues Business as Usual
News.Bitcoin.com reached out to Golix for further information on this lawsuit but has yet to hear back from the exchange. According to other reports, even though the RBZ has issued a ban in its circular to banking institutions concerning virtual currencies, Golix is still organizing an initial coin offering (ICO). “Thus far we are yet to receive instructions from our bank as to what will happen, if at all anything. Once we do, we will update,” an official from the Golix exchange detailed.
What do you think about the Golix exchange slapping a lawsuit against the Reserve Bank of Zimbabwe? Let us know your thoughts on this subject in the comments below.
Images via Shutterstock, Pixabay, and Golix.
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St. Louis Federal Reserve President, James Bullard, was recently interviewed at this year’s Consensus conference in New York City. That a top US economic policy maker was in attendance is victory enough; however, he was asked his opinions on cryptocurrency going forward by CNBC Global Markets Reporter Seema Mody. He explained he found the phenomenon “interesting,” and how more cryptos being issued all time necessitates keeping an “eye” on them. Mr. Bullard also compared the use case for cryptocurrencies with that of the dollar, and whether the former posed a threat to the latter.
Federal Reserve President Attends Crypto Conference
Federal Reserve President, James Bullard, gave a presentation at this year’s giant Consensus conference in New York City. Reread that sentence. A sitting Fed policy maker thought it important enough to attend a crypto soiree. That’s news enough. But more importantly, President Bullard gave a presentation on the government’s current thinking about cryptocurrency.
In his talk, he acknowledged crypto is facilitating trade that might otherwise not occur. He couldn’t help himself by mentioning illegal activity (and we all know fiat currencies are never used in illegal activity), but he did describe decentralized money’s lean toward frictionless transactions (especially with regard to costs/fees) as being an advancement.
The Fed policy maker reserved the bulk of his comments, both in the presentation and during a post-game interview with CNBC, to talk about the problems in crypto as he sees them. One issue is simply the number of currencies being offered. The 12th St. Louis Fed President feels this over complicates matters, especially with regard to exchange rates and volatility.
Asked if cryptocurrencies pose a threat to the dollar, Mr. Bullard, 56, answered he didn’t think so. Global Markets Reporter Seema Mody, who is covering Consensus for CNBC this year, quickly followed up with a “but it could be?” The Fed President was noncommittal, choosing instead to shrug and give the pat answer about no one really knowing what the future holds. He emphasized how since its creation the US dollar has vanquished nearly all currency competition due to its being backed by the world’s strongest economy. It’s abundantly clear, Mr. Bullard suggested, people want the dollar and not crypto … at least at the moment.
Fed Coin on the Horizon?
Ms. Mody pressed Mr. Bullard about his presence at the conference, asking if this was a hint of things to come with regard to a future coin birthed by the Fed, a Fed Coin? Interestingly he didn’t dismiss the idea outwardly, and instead said they’d for sure look at the possibility, as the Fed does with many different types of financial innovations. He also assured there wasn’t any plan being hatched at the moment, no imminent Fed Coin coming. Mr. Bullard also wondered aloud what the gains would be by creating such a coin. He smiled subtly, assuring he’s keeping an “open mind.”
His comments seem to be less strident than statements issued by the St. Louis Fed on the very subject not even one month ago. “The St. Louis Federal Reserve has published an essay critically evaluating the notion of cryptocurrencies that are issued by central banks,” we detailed. “The article is highly dismissive in presenting what it describes as ‘the non-case for central bank cryptocurrencies,’ concluding that ‘a central bank will not issue cryptocurrencies in the sense of a truly decentralized and permissionless asset that allows users to remain anonymous.’”
A rather curious fact about the St. Louis Fed, one of twelve jurisdictions in the Federal Reserve system (the 8th district serves Indiana, Kentucky, Missouri, Illinois, Tennessee, Louisiana, Mississippi, Arkansas), is how it has recently become very chatty about crypto. As these pages reported back at the beginning of this year, “Aleksander Berentsen and Fabian Schär of the Federal Reserve Bank of St. Louis have recently published an article that emphasizes many of the benefits of cryptocurrencies. The article states that ‘cryptoassets are well suited to become an important asset class,’ in addition to offering praise regarding a number of the major applications associated with cryptocurrencies.”
Do you think a Fed president attending a crypto conference is meaningful? Let us know your thoughts in the comments below.
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