The fintech industry has been changing rapidly. Digital assets, distributed ledger technology and central bank digital currencies are gaining momentum. Multi-trillion-dollar United States Federal Reserve System money creation has increased demand for digital assets, particularly Bitcoin (BTC). Banks, brokers, commercial lenders, investment advisors, private investment funds, family offices, mutual funds, fintech entrepreneurs, lawmakers and private citizens should take note of several developments in this space. Old wine, new bottles The use of ledgers to track events and transactions is of ancient origin. DLT and blockchain technology combine venerable record-keeping techniques with new technologies — like storing old wine in new …

In the past year, three major financial oversight bodies have voiced concerns about threats to financial stability purported to be posed by stablecoins. While acknowledging the potential for enhanced payments efficiency, reports from the Bank for International Settlements, the United States Federal Reserve and, most recently, from the Financial Stability Board all emphasize numerous risks under the banner of “financial stability.” The concern is with global stablecoins, which the FSB defines as having “potential reach and adoption across multiple jurisdictions and the potential to achieve substantial volume.” The FSB report included a glossary of definitions for key terms, although none …

Economist, financial commentator and gold advocate Peter Schiff once again bashed Bitcoin in a tweet, essentially calling it fiat currency — the name for regional currencies, such as the U.S. dollar. "The Fed gets Bitcoin right," Schiff said in a June 20 tweet, adding: "It categorizes it with fiat, in contrast to gold that has real value. It sees nothing new in Bitcoin, just in the way it's exchanged. As confidence in both traditional and crypto fiat is lost, savers will return to gold." The U.S. Fed classified Bitcoin fiat In a June 18 post, Liberty Street Economics, a blog …

Decred (DCR) co-founder Jake Yocom-Piatt believes that the emergence of CBDCs will facilitate the growth of crony capitalism. He speculates that if successful, central banks will be able to play favorites without the need for intermediaries. At least nominally accountable In a Cointelegraph interview, Yacom-Piatt opined that the way the banking system is currently set up, if the Federal Reserve wants to provide a loan to a company or an industry, it cannot do it directly. Instead, it must first make a loan to a commercial bank, who then will lend out these funds. This creates at least some level …

Jerome Powell, the chairman of the Federal Reserve, reported on the state of the economy at a Senatorial hearing held on June 16. During the initial report on the state of the economy and the actions taken by the Fed in response to the Coronavirus crisis, the chairman listed all of the extraordinary measures adopted by the bank since March. Part of that included an unprecedented expansion of the Fed’s balance sheet, which purchased securities on the market with newly created money as part of the practice of Quantitative Easing. But the chairman was entirely optimistic about the prospects of …

Experts in the financial market and the crypto industry foresee a major stock market correction unfolding in the short term. Given the high correlation of Bitcoin (BTC) with stocks observed in the past three months, there is a strong possibility that Bitcoin could follow suit. The United States stock market has seen extreme volatility after the Dow Jones Industrial Average dropped by around 7% on June 11, led by double-digit drops of airline stocks. A confluence of three factors is seemingly triggering sizable volatility in the stock market: uncertainty around the COVID-19 pandemic, institutions moving to cash and bonds over …

The European Central Bank (ECB) may be fearing default as rumors circulate that it plans to plant at least half a trillion euros of “bad” debt in a “bad bank.” As Reuters reported on June 10 citing two people familiar with the matter, the ECB now wants to quarantine its financial junk. ECB praises “useful” asset management firms The reason, the sources say, is that rising unemployment may fuel the risk of mass defaulting on debt obligations. Even excluding the coronavirus unemployment surge, the Eurozone already has $500 billion of debt which is unlikely to be repaid at all. This …

The COVID-19 pandemic forced the world to hit the brakes on economic activity, and in response, the United States Federal Reserve has introduced trillions of U.S. dollars to pay for the stimulus packages it’s giving away. Naturally, many people have jumped to inflation as the forgone conclusion. Proponents of Bitcoin (BTC) are excited about the prospect of inflation because the cryptocurrency has been billed as a check against central bank expansion, and such a period of inflation would demonstrate Bitcoin’s value in this regard. But inflation is not a foregone conclusion. Central bank expansion can spare millions of unemployed people …

In a May 28 letter to Senator Tom Cotton (R-AR), Jerome Powell, Chairman of the U.S. Federal Reserve, described an interest reference rate based on the Ethereum blockchain, called Ameribor, as effective for some, but not all. Ameribor is a tool from American Financial Exchange (AFX) that uses the Ethereum blockchain to track interbank lending by minting ERC-721 tokens for each repayment. The Fed Chair responds on overall interest reference rates After a Banking, Housing and Urban Affairs Committee hearing in February, U.S. Senator Cotton sent questions over to Chairman Powell. The senator referenced Powell's mention of a move away …

On May 28, the Digital Dollar Project released its white paper, a 30-page document detailing the potential applications of a CBDC. The white paper continues the nascent think tank’s work to push forward development of a digital dollar. The project and the tenets of the new white paper The paper details certain core tenets of what it considers a digital dollar and what it will push forward. The Digital Dollar Project was founded by former leaders of the Commodity Futures Trading Commission and professional services company Accenture. One of those founders is Daniel Gorfine, the head of the CFTC’s fintech …

Earlier this week, Tether (USDT) was making headlines for flippening XRP and taking the number three spot for largest cryptocurrency by market cap. Confidence in the leading stablecoin seems to have returned, despite Tether and Bitfinex still being embroiled in two ongoing court proceedings — one of which relates to an $850 million cash loan made by Tether to Bitfinex, secured against Bitfinex stock. Investors didn’t like the fact that their Tether was no longer backed one-to-one with dollars. But with United States banks now allowed to issue loans with zero reserve, were the shares actually a better option? Tether …

Did you notice the song that Christian Bale’s character was jamming out to in his office when his partner came in to pull the money in The Big Short? Well, it happens to be my favorite metal band of all time: Metallica. And that song is called “Master of Puppets.” It’s almost ironic that as I was writing this article on the real truth behind what’s currently happening with the collapse of our financial and economic markets and calling it “Master of Puppets” — well, this movie scene popped in my mind. Yes, The Big Short is about the big …