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Runs on Stablecoins
Stablecoins are digital assets whose value is pegged to that of fiat currencies, usually the U.S. dollar, with a typical exchange rate of one dollar per unit. Their market capitalization has grown exponentially over the last couple of years, from $5 billion in 2019 to around $180 billion in 2022. Notwithstanding their name, however, stablecoins can be very unstable: between May 1 and May 16, 2022, there was a run on stablecoins, with their circulation decreasing by 15.58 billion and their market capitalization dropping by $25.63 billion (see charts below.) In this post, we describe the different types of stablecoins ... (full story)
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Good morning. I’m pleased to be here with Senior Deputy Governor Carolyn Rogers to discuss today’s policy announcement and the Bank of Canada’s Monetary Policy Report (MPR). Today, we raised our policy interest rate by 25 basis points to 5%. We are also continuing our policy of quantitative tightening. This decision reflects two broad considerations. First, monetary policy is working, but underlying inflationary pressures are proving more stubborn. We have made considerable progress in the fight against inflation. Consumer price index (CPI) inflation has fallen from a peak of 8.1% last summer to 3.4% in May. But even as headline inflation has come down largely as we forecast, underlying inflationary pressures are proving more persistent than we expected. Higher interest rates are needed to slow the growth of demand in the economy and relieve price pressures. Second, we are trying to balance the risks of under- and over-tightening monetary policy. If we don’t do enough now, we will likely have to do even more later. If we do too much, we risk making economic conditions unnecessarily painful for everybody. post at 11:00am: *BoC’s Macklem: BoC is Prepared to Hike Again if Needed *BoC’s Macklem: BoC Discussed Holding Rates and Awaiting More Data *BoC’s Macklem: BoC to Assess Rates on Decision-By-Decision Basis *BoC’s Macklem: BoC Decided Cost of Delay Exceeded Benefit of Waiting post at 11:17am: *BoC’s Macklem: ‘We Think We’re Close’ to End of Tightening Cycle post at 11:18am: *Macklem Reiterates It’s Too Early to Be Talking About Rate Cuts
Release of the Monetary Policy Report — Press conference by Governor Tiff Macklem and Carolyn Rogers, Senior Deputy Governor
Crypto crime fell overall in the first six months of 2023, but the volume of payments to ransomware attackers surged and is on track for its second-biggest annual total on record, ...
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We have had a big surprise in the June consumer price inflation report with both headline and core (ex food and energy) rates rising 0.2% month-on-month rather than the 0.3% ...
In October, the Governing Council of the European Central Bank will decide whether to develop a digital euro. Evelien Witlox, Programme Manager of the digital euro project and ...
The Senate’s bipartisan duo, Cynthia Lummis and Kirsten Gillibrand, unveiled their latest effort to regulate the US crypto industry, placing greater emphasis on consumer protection following a string of high-profile company failures last year. Lummis, a Republican from Wyoming, and Gillibrand, a Democrat from New York, first introduced their bill last June. At the time, the popular crypto stablecoin, TerraUSD, had already collapsed but the vast majority of the eventual 2022 turmoil, culminating with the implosion of trading giant FTX, was still to come. Now, the senators are revamping their prior effort by including measures they say will help prevent another FTX, whose founder Sam Bankman-Fried has since been criminally charged and faces accusations that he mishandled billions of dollars of customer funds. The bill would require firms to segregate client assets and impose third-party custody requirements, according to a document detailing the updates to the legislative proposal. It would also create new advertising standards for marketing crypto and require exchanges to show proof that they have enough assets to cover customer balances. The effort is ambitious, creating a framework to give the Commodity Futures Trading Commission more authority to oversee certain tokens and addressing everything from sanctions compliance and taxes to stablecoin regulation. The bipartisan nature of the bill gives it a promising start, but any crypto legislation would have to overcome significant hurdles to get enacted this year. The 2024 campaign season is right around the corner, meaning there’s less time to debate complex issues and garner the level of support needed to move this type of overhaul across the finish line. The Securities and Exchange Commission has also pushed hard against efforts to rewrite rules to accommodate the digital-asset industry. post at 11:24am: The crypto asset industry is here to stay. Today, @SenGillibrand and I are reintroducing landmark legislation to create a federal regulatory framework that allows crypto businesses and investors to prosper here in America while protecting consumers from bad actors. https://t.co/z2pr0evWt2
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- Posted: Jul 12, 2023 11:10am
- Submitted by:Category: Fundamental AnalysisComments: 0 / Views: 187