The reality of why central banks create money out of thin air was put into sharp focus this week as the Bank of England admitted the UK almost went bankrupt due to the Covid-induced economic stop and stock market crash. 11 years ago Bitcoin was created due to this exact policy of unsustainable debt, asset bubbles and unfettered money printing. It is happening again. And it is this which will spur cryptocurrencies ever higher. In fact, Binance is debuting its cryptoexchange in the UK this summer, aimed squarely at institutional investors faced with near-zero Treasury bond yields. The fallout from Black Thursday continues in DeFi as MakerDAO loses the #1 spot to Compound, Wirecard ex-CEO Markus Braun has been arrested and ING claims it has solved the FATF Travel Rule.
britain nearly went bankrupt in march, says bank of england [22 june 2020]
Quantitative easing — the extraordinary measure of creating money out of thin air to buy government bonds — saved Britain from bankruptcy at the height of the Covid-19 crisis, the Bank of England’s new governor has revealed. Andrew Bailey, who took over from Mark Carney in the midst of the steepest fall in equities and the worst economic crisis in a generation, said without the £200bn rescue package the UK government “would have struggled to fund itself.” This was the precise reason Bitcoin was created and yet a decade on, central banks still have not learned their lesson. Read more here.
binance targets institutional investors with summer 2020 UK launch [17 june 2020]
The world’s largest and best-known cryptoexchange will debut its trading service in Britain this summer, and will be regulated by the Financial Conduct Authority, its UK director Teana Baker-Taylor told Reuters. The UK is a key financial global hub and crucial to Binance’s expansion into Europe. Investors will be able to buy 65 cryptocurrencies with pounds and Euros, Binance said. Its key focus with the UK move is to attract the large institutional investor market who face near-zero yields from government bonds. Institutional client volumes jumped 113% in Q1 2020 while futures surged 217% over the same period, it reported. Read more here.
makerDAO loses #1 DeFi spot to compound [20 june 2020]
Another sign of the times: Compound has overtaken MakerDAO to become the largest DeFi protocol on the blockchain. $500m is now locked in Compound, $12m more than its closest rival. It’s the legacy of 12 March 2020 — Black Thursday — the largest one-day drop in Ethereum since 2013 — which liquidated MakerDAO’s collateralised debt positions and led to 3,000 users filing a $28m lawsuit against the stablecoin issuer. Read more here.
ex-wirecard CEO markus braun arrested as €1.9bn fraud suspected [23 june 2020]
Card payment infrastructure giant Wirecard underwrites a host of crypto-to-fiat cards, including Crypto.com. CEO Markus Braun has now been arrested and the company, which has a German banking licence, is under investigation for a “missing” €1.9bn in cash, which the new management say “likely doesn’t exist”. At one point all the leading UK challenger banks relied on Wirecard’s infrastructure. Revolut dropped its services in 2018 and it now seems with good reason. At its 2018 peak Wirecard was worth €24bn, but share prices have dropped 80% in the last two days. Read more here.
ING claims it has solved crypto FATF travel rule with new protocol [23 june 2020]
Dutch multinational bank ING claims to have solved one of the biggest problems in crypto: the FATF travel rule. When the global anti-money laundering organisation said it would impose transaction reporting on cryptocurrencies, it turned the world of digital assets upside down overnight. Now ING says it has developed an FATF-friendly protocol called TRP to trace crypto transfers. The move has been backed by Standard Chartered Bank, Bitgo, and Fidelity Digital Assets. Read more here.