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Cryptocurrency Risks for the Financial Sector are Getting Closer: Bank Of England

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The Bank of England is no more optimistic about the crypto industry than it was last month – but has a less volatile CBDC in the works.

Jon Cunliffe – Deputy Governor at the Bank of England – recently asserted that the risks cryptocurrencies pose to the financial sector are drawing closer. He urged regulators to take action before such an economic threat can manifest in traditional markets.

Crypto Threatening The Financial Industry?

The governor aired his thoughts in conversation with BBC’s Today Programme on Monday. He feared that the volatility of cryptocurrency markets could start to spill over into traditional financial markets. He claimed that this risk is “getting closer” and encouraged regulators to “think very hard” about the possibility.

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“My judgment is they’re not, at the moment, a financial stability risk, but they are growing very fast, and they’re becoming integrated more into what I might call the traditional financial system,” he said.

This isn’t the first time Cunliffe has presented this case. Last month, he argued that crypto markets are now large enough to send shocks throughout the rest of the financial system in the event of a collapse. Indeed, the industry has grown larger than ever, having recently touched a $3 trillion market cap.

The United Kingdom’s Financial Conduct Authority is yet to introduce sufficient consumer protections around cryptocurrencies. That includes regulation covering crypto ads, such as the Floki Inu banners that started appearing on London public transport last month. However, there are apparent actions undertaken in this regard as local authorities recently banned such ads.

That said, the governor is less concerned about private company-issued cryptocurrencies, such as Meta (formerly Facebook)’s Diem. Given that they haven’t reached mass adoption, regulatory action in that area is not urgent.

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Jon Cunliffe
Jon Cunliffe. Source: The Times

Prospects Of A CBDC For Britons

Instead of opting for cryptocurrencies, the Bank of England has been consulting an array of experts on the development of a CBDC – nicknamed “Britcoin.” However, such a product wouldn’t be launched until at least 2025, according to policymakers. The bank will hold a consultation on the project in 2022, followed by a technical explanation of its architecture.

Cunliffe said the CBDC would be fully regulated and tethered to the sterling to decrease volatility, which he called “the safest form of money.”

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Former Wall Street Banker Partners With Ethereum Competitor for New $1,500,000,000 Crypto Fund

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A former Citigroup executive is shaking up the crypto investment space with a $1.5 billion venture, partnering with a leading layer 1 altcoin project.

Hivemind Capital Partners is an investment firm founded by Matt Zhang, a 14-year Citigroup Inc veteran. In a press release, Zhang announces Hivemind’s mission to provide solutions to early blockchain entrepreneurs through the creation of a new “tailor-made crypto investment platform.”

“We believe blockchain technology is a paradigm shift, and we are still in the early innings. Our mission is to provide start-to-finish capital and infrastructure solutions to visionary entrepreneurs and category-defining crypto projects.

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The traditional asset management model is not designed to do this, which is why we are building a tailor-made crypto investment platform from the ground up that also offers the infrastructure institutional investors need for risk management, compliance and security.”

Hivemind is partnering with payments and decentralized finance (DeFi)-focused blockchain Algorand (ALGO) as a “strategic partner to provide technology capability and network ecosystem infrastructure.”

“We believe that Algorand is the preeminent blockchain protocol that allows institutional and corporate users to connect with the decentralized economy. With the explosive growth of the digital asset space, people tend to forget how early the crypto economy still is. We want to team up with partners who have the patience to build an enduring business.”

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However, Zhang notes that Hivemind is exploring partnerships with other layer 1 blockchains as the project progresses.

“We are also in active discussions to form partnerships with a number of other leading layer-1 networks. The goal is to build a multi-chain world to let our investors see the best opportunities across the entire crypto ecosystem.”

ALGO, trading at $1.82 at time of writing, is up nearly 12% on the day. The payments blockchain has interest from other large investors lately, including an endorsement from American financier Anthony Scaramucci last month.

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Jack Dorsey Steps Down as Twitter CEO

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Jack Dorsey has reportedly decided to step down as the chief executive officer of Twitter.

The price of Twitter shares shot up by double digits as news broke that the CEO of the social media giant – Jack Dorsey – has decided to quit.

  • CNBC reported, and later was confirmed by Jack Dorsey himself on twitter, the breaking news about Jack Dorsey’s decision to step down as the chief executive officer of Twitter.
  • The news comes as somewhat of a surprise at the moment, given the support Dorsey had. Last year, reports emerged that Paul Singer – billionaire investor and founder of Elliot Management Corp, wanted to replace Dorsey.
  • Shortly after, though, it became clear that he will remain at his position, which was regarded as positive news for Bitcoin supporters since Dorsey is among the most well-known proponents of the primary cryptocurrency.
  • In the past, he has repeatedly outlined BTC’s merits and even suggested during the 2021 Bitcoin Conference that he would quit being the CEO of Twitter and Square if BTC needed him, which raises the question of whether he has done precisely that.
  • Nevertheless, there will be many questions inside the community about what will happen to the relationship between Twitter and Bitcoin. The social media giant has been highly supportive of the cryptocurrency, including allowing BTC tips.
  • Separately, the news about Dorsey’s stepping down as Twitter CEO propelled a price surge for the company’s shares, which opened 10% higher than the last close.

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MicroStrategy Buys $414 Million Worth of Bitcoin

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MicroStrategy has announced another massive Bitcoin purchase

Business intelligence firm MicroStrategy has wowed the cryptocurrency community with yet another massive Bitcoin purchase. 

The company announced Monday that it had bought an additional 7,008 Bitcoins at an average price of approximately $59,187 per coin since the beginning of October.

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MicroStrategy’s Bitcoin riches have now swelled to 121,044 coins, whose average purchase price is $29,534.

The company currently holds roughly 0.64% of Bitcoin’s total circulating supply.

Bitcoin did not budge on the announcement as it continues to flatline just above the $57,000 level.

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As reported by U.Today, the flagship cryptocurrency has managed to partially recover from the violent sell-off that took place on Monday.

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