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| March 23, 2018

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Risk Archives -

More Americans at risk for heart attack and stroke, says a new study

March 20, 2018 |

Most U.S. adults have poor cardiovascular health, and more people are at risk for heart attacks and strokes today than was true a generation ago, a U.S. study suggests.
FOX News

World’s Central Bank: Crypto Could Risk Bank Runs

March 13, 2018 |

World’s Central Bank: Crypto Could Risk Bank Runs

How many central banks are actually considering their own version of cryptocurrency is unclear, Russia and Venezuela being the most infamous examples. To perhaps ward off serious consideration from more established economies, the Bank for International Settlements (BIS), the world’s central bank to central bankers, is suggesting state-backed crypto might destabilize commercial banks’ customer deposits, negatively impacting the “efficiency of financial intermediation.”

Also read: Québec Premier: We’re Not Really Interested in Bitcoin Mining

Central Banks Warned About State-Backed Crypto

Chairs of two BIS working groups, Klaus Löber (European Central Bank) and Aerdt Houben (Netherlands Bank), submitted Central Bank Digital Currencies, a 34-page document meant to be a “high-level overview of [central bank digital currency (CBDC)] implications for payments, monetary policy and financial stability. The analysis of the committees reflects initial thinking in this rapidly evolving area and is a starting point for further discussion and research. It also highlights that the issuance of a CBDC requires careful consideration,” it outlines in the Foreword.

The word, “careful,” in one form or another, is sprinkled half a dozen times throughout, as in “Any steps towards the possible launch of a CBDC should be subject to careful and thorough consideration. Further research on the possible effects on interest rates, the structure of intermediation, financial stability and financial supervision is warranted. The effects on movements in exchange rates and other asset prices remain largely unknown and also deserve further exploration.”

World’s Central Bank: Crypto Could Risk Commercial Bank Deposit Runs, Instability

The BIS has been particularly vocal of late on the subject of crypto, as when last month its General Manager stressed “while perhaps intended as an alternative payment system with no government involvement, it has become a combination of a bubble, a Ponzi scheme and an environmental disaster.” The 87 year old, Basel, Switzerland-based central bank is the world’s lender of last resort to the lenders of last resort.

The report is revealing in the sense it appears cryptocurrency is an increasingly important topic of conversation, and that at least some central banks are considering competing alternatives as perhaps an answer. Where last month’s BIS comments dismissed crypto, the present report doesn’t outright condemn a state-backed coin. The paper “finds that wholesale CBDCs might be useful for payments but more work is needed to assess the full potential. Although a CBDC would not alter the basic mechanics of monetary policy implementation, its transmission could be affected.”

Wholesale Is Preferable for Central Banks

World’s Central Bank: Crypto Could Risk Commercial Bank Deposit Runs, Instability
Klaus Löber

“Many forms of CBDC are possible,” the report emphasizes, “with different implications for payment systems, monetary policy transmission as well as the structure and stability of the financial system. Two main CBDC variants are analysed in this report: a wholesale and a general purpose one. The wholesale variant would limit access to a predefined group of users, while the general purpose one would be widely accessible.” 

By contrast, “A general purpose CBDC could have wide-ranging implications for banks and the financial system. Commercial banks’ reliance on customer deposits may become less stable, as deposits could more easily take flight to the central bank in times of stress. Besides consequences for financial stability, effects on the efficiency of financial intermediation need to be carefully considered,” the authors detailed.

World’s Central Bank: Crypto Could Risk Commercial Bank Deposit Runs, Instability
Aerdt Houben

To buttress the wholesale point, the report continues to argue, “Wholesale CBDCs, combined with the use of distributed ledger technology, may enhance settlement efficiency for transactions involving securities and derivatives. Currently proposed implementations for wholesale payments – designed to comply with existing central bank system requirements relating to capacity, efficiency and robustness – look broadly similar to, and not clearly superior to, existing infrastructures. While future proofs of concept may rely on different system designs, more experimentation and experience would be required before central banks can usefully and safely implement new technologies supporting a wholesale CBDC variant.” 

Again, this is all very revealing. Too much “general purpose” crypto, even state backed, would destabilize economies, but that doesn’t mean more obviously efficient aspects of the technology shouldn’t be employed as a settlement layer behind the scenes, central bank to central bank. Of course, the BIS loves blockchain technology, and so far the only developed economy seriously flirting with some kind of central bank cryptocurrency is Sweden’s Riksbank (its study for the “e-krona” won’t be ready until next year).

What do you think about central bank-backed crypto? Let us know in the comments!

Images via Pixabay, BIS. 

At we do not censor any comment content based on politics or personal opinions. So, please be patient. Your comment will be published.

The post World’s Central Bank: Crypto Could Risk Bank Runs appeared first on Bitcoin News.

Bitcoin News

Dutch Bank That Once Called Bitcoin ‘High Risk’ Considers Building Crypto-Wallet

March 2, 2018 |

Dutch Bank That Once Called Bitcoin 'High Risk' Considers Building Crypto-Wallet

A Dutch multinational financial provider, Rabobank has announced the possible introduction of a ‘cryptocurrency wallet’ tethered to the company’s banking services. The news follows the bank’s recent ‘high risk’ profiling of account holders that participated in bitcoin trading. 

Also Read: Israeli Supreme Court Forbids Bank From Denying Service to Bitcoin Exchange

Rabobank Investigates the Idea of Introducing a Cryptocurrency Wallet to Its Online Banking Environment

Dutch Bank That Once Called Bitcoin 'High Risk' Considers Building Crypto-WalletThis week the Dutch institution, Rabobank, the second-largest bank in the Netherlands in terms of total assets revealed it may introduce a cryptocurrency wallet called “Rabobit.” The wallet idea is one of 22 concepts introduced in Rabobank’s internal Moonshot acceleration program. At the moment the idea is to host a cryptocurrency wallet that’s tethered to the company’s online banking environment. Rabobank says right now company employees are researching the benefits and risks tied to implementing a digital currency wallet.

“The idea of Rabobit is a cryptocurrency wallet within the online banking environment,” explains the Dutch bank.  

The employees who are currently investigating this initiative approach clients for this, both in person (street research) and via the website.

A Messy Banking Past

Rabobank also has a history of paying fines for unethical banking practices. In 2013 the bank paid a $ 1 billion fine for “unscrupulous trading practices” that were associated with the LIBOR scandal. The bank’s California unit just got into trouble this year when regulators investigated alleged money laundering associated with Mexican drug sales and organized crime. Rabobank agreed to pay $ 369 million to settle the money laundering allegations.

The Dutch institution’s webpage says if the wallet is launched it will be hosted by a trusted party and within the secure online banking environment. Further, customers can get insight to an investor’s overall liquidity by utilizing both banking and cryptocurrency accounts all in one place.

Dutch Bank That Once Called Bitcoin 'High Risk' Considers Building Crypto-Wallet

Rabobank Recently Declared Customers Who Trade Bitcoins ‘High Risk’

Even though Rabobank has launched the cryptocurrency wallet website the company says the idea hasn’t been fully established yet and the company is researching to see if demand exists.

“Rabobit has not yet been realised, there is still no official decision to introduce this. As soon as more info follows, we will communicate this,” a Rabobank representative on Twitter explains yesterday.

Just recently Rabobank warned that customers who trade bitcoins using their accounts were dealing with certain risks. Further, account holders who trade cryptocurrencies would be classified as “high risk” customers.

“Bitcoins are considered to be risky products. Customers who trade in high-risk products can have a higher risk profile. It is conceivable that companies that deal with cryptocurrencies are seen as too risky and can therefore not be accepted as a customer,” Rabobank stated on February 2.

Ownership and value transfer are completely anonymous and evade supervision by third parties, such as a government. Which means that cryptocurrency does not meet the highest standards of compliance set by Rabobank.

Even though the bank representatives state there is no official decision to introduce the wallet just yet, it seems the company is changing its mind about cryptocurrencies, and may be friendlier toward the technology in the near future.

What do you think about Rabobank back peddling on recent statements about bitcoin risks and then announcing the possibility of creating a cryptocurrency wallet? Let us know in the comments below.

Images via Rabobank building, logo, and the Rabobit website. 

At there’s a bunch of free helpful services. For instance, have you seen our Tools page? You can even lookup the exchange rate for a transaction in the past. Or calculate the value of your current holdings. Or create a paper wallet. And much more.

The post Dutch Bank That Once Called Bitcoin ‘High Risk’ Considers Building Crypto-Wallet appeared first on Bitcoin News.

Bitcoin News

CEOs Take Sides on Gun Control at Their Own Risk

February 28, 2018 |

As more business leaders take a stand on fraught political issues, some find they pay a price by angering consumers on the other side. US Business

Bitcoin finds a bottom as risk aversion grips global markets

February 10, 2018 |

What’s supposed to be the most volatile asset in the universe is proving to be a bastion of stability compared with wild swings and carnage in global equities this week.

Bitcoin clawed its way back from the four-month low of $ 5,922 it touched Tuesday, rebounding almost 45% to $ 8,500. The Standard…

L.A. Times – Business

Automation creates greater risk for women’s jobs, Davos report finds

January 28, 2018 |

Women are more likely than men to be knocked out of their jobs in the U.S. by automation over the next eight years, and they’ll find half as many opportunities to land new positions unless there’s a new effort to retrain them.

Those conclusions, from a study released last week at the World Economic…

L.A. Times – Business

Dr. Marc Siegel: Smartphones really are dangerous for our kids (they put them at risk for suicide and more)

January 13, 2018 |

Alarming new reports that should concern every parent link heavy smartphone use by children to an increased rate of social isolation, depression, suicidal thoughts and even suicide.
FOX News

The Biggest Risk to the Eurozone’s Booming Economy: Inflation

January 4, 2018 |

For the first time in a decade, economic forecasters appear to be unambiguously optimistic about the prospects for the eurozone economy. What did forecasters miss in 2017 and what might they be missing this time? What’s News Europe

Tax bill runs risk of overheating an already revved-up economy, analysts warn

December 20, 2017 |

For President Trump and Republican lawmakers, economic prospects may never look better than today.

The economy is poised for what most analysts expect to be the best performance in years — a rare moment of synchronized global growth that has been lifting U.S. manufacturing and demand at home.


L.A. Times – Business