A panel of senior financial regulators in the United States has warned the public about the purported risks of stablecoins and cryptocurrencies.
A report issued on Dec. 4 by the Financial Stability Oversight Council (FSOC) highlighted potential problems resulting from stablecoins gaining wider recognition.
The FSOC was set up in 2008 to combat risks to the financial sector after the financial crisis. The panel is headed by United States Secretary of the Treasury Steven Mnuchin. Its voting members include Jay Clayton, the chairman of the Securities and Exchange Commission (SEC), as well as Heath Tarbert, who recently took over as chairman of the Commodity Futures Trading Commission (CFTC).
FSOC: stablecoins “could affect wider economy”
In its annual report for 2019, the regulators stated, “If a stablecoin became widely adopted as a means of payment or store of value, disruptions to the stablecoin system could affect the wider economy. Financial regulators should review existing and planned digital asset arrangements and their risks, as appropriate.”
The FSOC additionally mentioned Bitcoin (BTC) and other cryptocurrencies as part of its coverage. It appeared unable to draw concrete conclusions about the phenomenon, acknowledging that trading data was “sparse and may be unreliable.”
The panel also expressed doubts over so-called distributed ledger technology (DLT) — a byword for digital currency projects notionally related to blockchain.
“The ultimate success of the technology, including applications in the financial sector, is not yet certain,” the report stated. The FSOC continued:
“Some early efforts have not resulted in the anticipated efficiency gains and other promised benefits, and as a result, have been scaled back, refocused, or abandoned.”
Cryptocurrency suspicions continue
As Cointelegraph reported, Mnuchin has been vocal as a critic of Bitcoin, alluding that the seminal cryptocurrency is likely a passing fad. In a July interview he said:
“I won’t be talking about Bitcoin in 10 years, I can assure you that […] I would bet even in 5 or 6 years I’m no longer talking about Bitcoin as Treasury Secretary. I’ll have other priorities […] I can assure you I will personally not be loaded up on Bitcoin.”
U.S. lawmakers continue to focus on the perceived risks stemming from the cryptocurrency sector, including associated schemes such as Facebook’s unlaunched Libra digital currency.
The central bank of France plans to pilot a central bank digital currency (CBDC) for financial institutions in 2020. François Villeroy de Galhau, the governor of the Bank of France, announced that the bank will start testing the digital euro project by the end of the first quarter 2020, French financial publication Les Echos reports Dec. 4.
The Bank of France confirmed the news on Twitter, noting that the announcement was made at a conference co-hosted by two major French financial regulators, the French Prudential Supervision and Resolution Authority and the Autorité des marchés financiers.
Digital euro pilot won’t involve retail customers
According to the report, the digital euro pilot will only target private financial sector players and won’t involve retail payments made by individuals. Villeroy reportedly noted that a digital currency for retail customers would “be subject to special vigilance.”
As reported by Les Echos, the initiative intends to strengthen the efficiency of the French financial system, while ensuring trust in the currency.
Preventing Libra’s impact
Moreover, the project aims to assert France’s sovereignty over private digital currency initiatives like Facebook’s stablecoinLibra, Villeroy reportedly said.
Villeroy’s stance falls in line with previous statements by French finance minister Bruno Le Maire, who argued that regulators cannot allow the launch of Libra on European soil due to monetary sovereignty concerns.
According to some reports, France led the anti-Libra effort alongside Germany, Italy, Spain and the Netherlands.
Villeroy calls on France to become the first country in the world to issue a CBDC
According to a tweet by the Bank of France, its governor emphasized that France should become the first country in the world to issue a CBDC and provide an exemplary model to other jurisdictions. He stated:
“I see the interest in rapidly advancing the issuance of at least one central bank digital currency in order to be the leading issuer globally and get the benefits associated with providing an exemplary central bank digital currency.”
France has emerged as a major adopter of blockchain tech and Bitcoin
Meanwhile, France has appeared to be at the forefront of adopting crypto and blockchain technology as its government has initiated and encouraged a number of industry-related projects.
In late November 2019, the first deputy governor of the Bank of France called for a blockchain-based settlements and payments systems in Europe. As reported by Cointelegraph on Nov. 20, the French Armies and Gendarmerie’s Information and Public Relations Center was validating judicial expenses incurred during investigations on the Tezos (XTZ) blockchain at the time.
Alongside developments in blockchain, France has also emerged as a major adopter of biggest cryptocurrency, Bitcoin (BTC). In mid-October, French crypto startup Keplerk relaunched its service to accept Bitcoin payments in over 5,200 tobacco shops in France. Previously, Cointelegraph reported that at least 30 French retailers plan to launch Bitcoin payments support at over 25,000 sales points by early 2020.
Gemini, the top global cryptocurrency exchange per CryptoCompare’s latest Exchange Benchmark, hired a former senior executive from United Kingdom-based Starling Bank.
Julian Sawyer, a former CEO and co-founder at Starling, will now lead Gemini Europe — the European affiliate of Gemini Trust Company — as the managing director of the U.K. and Europe, the firm announced Dec. 4.
Over 20 years in high-growth financial services organizations
According to an announcement by Gemini president Cameron Winklevoss, Sawyer joins the major United States-based crypto exchange with a total of 20 years experience at growing financial services organizations. Prior to Starling, Sawyer founded Bluerock Consulting, a financial management consultancy, which he sold in 2012.
Sawyer also worked as a management consultant at Big Four audit firm EY and Irish professional services company Accenture, the announcement says.
At his new position at Gemini, Sawyer will be responsible for building the crypto exchange’s common strategy in the region. Alongside managing product development and operations, the new European exec will manage hiring in the U.K. and Europe, and will report directly to Cameron.
Europe and the United Kingdom’s concept of “thoughtful regulation”
In the announcement, Tyler Winklevoss stated that Europe is the “birthplace of modern financial markets,” while the U.K. has been a major hub of global financial innovation for hundreds of years. Cameron also noted Europe and the U.K.’s “thoughtful regulation” in a blog post:
“The concept of thoughtful regulation itself was first developed out of the lessons learned in these markets over centuries. Our ethos — to ask permission, not forgiveness — was a first in the crypto industry and both honors and continues to build on Europe and the UK’s tradition of thoughtful regulation.”
Gemini first eyed support for the U.K. last year, when it reportedly began hiring advisors to oversee its potential expansion into the country. Support for Australia followed in August 2019. According to its website, Gemini also operates in Hong Kong, Singapore, South Korea, and Canada.
Cryptocurrency exchange Gemini burnt about one-fifth of its Gemini Dollar (GUSD) stablecoin total supply on Dec. 3.
Whale Alert — a Twitter account dedicated to tracking large cryptocurrency transactions — reported on Dec. 3 that 1,035,020 GUSD were burnt in a single operation. This number of tokens is equivalent to around 20% of what was the total GUSD circulating supply before the burn. The remaining GUSD supply is a little more than 4.1 million GUSD.
The Gemini dollar has seen an overall poor performance since its launch in late September last year. The token received approval from the New York Department of Financial Services and the United States dollars that back it are “held at a bank located in the United States and eligible for FDIC ‘pass-through’ deposit insurance, subject to applicable limitations.”
But clearing regulatory hurdles is seemingly not enough to assure the success of a stablecoin. CoinMarketCap historical data shows that GUSD reported $3.3 million in trading volume on Dec.3, down from a peak of over $249.4 million reported on Feb. 20, 2019. The data suggests that initial enthusiasm around the asset has cooled down.
The burn of a notable portion of the token’s total supply has not gone unnoticed by the community, with Frank Chaparro, news director of industry news outlet The Block, commenting on Twitter, “GUSD is one of the biggest crypto failures of 2019.”
Stablecoins are causing concern among financial regulators worldwide. As Cointelegraph reported earlier today, Bank of Japan Governor Haruhiko Kuroda recently said that no global stablecoin should begin its operations until legal, regulatory and oversight challenges and risks are addressed.
Circle, the parent company of cryptocurrency exchange Poloniex, says it could charge United States users fees and even confiscate users’ entire balances if they do not remove their funds.
In a blog post on Dec. 3, Circle warned that U.S. traders have no option but to stop using Poloniex, a policy adopted in preparation for the platform forming its own separate entity.
Funds must be taken from accounts by Dec. 16. If a user fails to do so, fees may apply, which in theory can total the entire account balance. The blog post stated:
“There are two fees Poloniex US customers who do not withdraw their assets may be subject to: a monthly service fee while a user continues to have assets stored on the platform, and a one-time dormancy fee when an account becomes dormant per the terms of the applicable regulations. Unclaimed assets may be sent to state governments, consistent with applicable regulations.”
Circle added that users would lose access to their Poloniex accounts, and that it would convert unclaimed tokens into its native stablecoin, USD Coin (USDC). “Poloniex US customers will NEVER be charged more than their total account balance,” the blog post concluded.
Focus on competitiveness
As Cointelegraph reported, Poloniex confirmed it would spin out from Circle in October, to trade under the new name of Polo Digital Assets. The move, executives explained at the time, aims to increase Poloniex’s competitiveness on the international market. Circle originally acquired the exchange for $400 million in early 2018.
Last week, Poloniex relaunched a decentralized exchange (DEX), Poloni DEX, having acquired it as TRX Market, the largest DEX on blockchain network Tron.
The majority of the Ripple (XRP) holders were waiting for the yearly Swell conference to bring some excitement to XRP price. However, the price didn’t move at all and now Ripple is searching for annual lows on its USD pair.
The question is, was it reasonable for investors to expect a vast rally before the Swell conference or should they have not expected any upward movement at all? Let’s look at the charts to see what XRP price might do in the future.
Ripple remains in a year-long downtrend
There are some exciting things to be seen from the USD chart. The trend is quite clear and readers will notice that XRP price has continued to fall since the peak in January 2018.
XRP USD 2-day chart. Source: TradingView
A downtrend is marked by lower highs and lower lows. Quite importantly, the price didn’t make any higher high since the peak in January 2018 and is still stuck in its downtrend.
A positive is that there is a remarkably healthy support level of around $0.30. It took nearly a year until the floor broke downwards and this breakdown occurred in August 2019.
Since then, the XRP did make a few retests of this level and confirmed this level as resistance, which marked the continuation of the downward movements towards the next support area around $0.19 to $0.20.
Swell didn’t go so well
Another interesting phenomenon is the excitement of XRP investors around the time that the Swell conference is meant to begin.
XRP USD 2-day chart. Source: TradingView
Quite remarkably, the 2-day chart provides clear data regarding the impact of the past three Swell conferences on XRP price. Each time there is a surge before the actual event occurs and the price drops the moment the event starts or finishes. Is this due to unsatisfied investors selling their tokens or are they simply playing the surge provided by the event?
What can be concluded from this chart is that it’s a classic example of the buy the rumor, sell the news concept. In this concept, there’s a surge before actual events (buy the rumor), caused by hype. However, when the actual event occurs, the price drops as the hype is going away (sell the news).
This phenomenon is seen on many levels and can also be found on the last Bitcoin (BTC) halving or the previous Litecoin (LTC) halvings.
LTC USD 2-day chart. Source: TradingView
As shown by the LTC 2-day chart, and also with the halving in 2015, we can see a price run-up before the actual halving took place. This is simply another example of the ‘buy the rumor, sell the news’ concept, one of the unique phenomena which occurs in trading and investing.
Ripple has nearly bottomed on the BTC pair
XRP BTC 2-day chart. Source: TradingView
The XRP/BTC 2-day chart shows XRP price hovering on a vital support area (the green box). This area provided support and resistance levels for more than four years and is a level to watch closely.
Furthermore, the price broke out of a massive falling wedge construction and marked bullish divergences alongside it, which is often seen as a sign of a trend reversal.
XRP BTC daily chart. Source: TradingView
Currently, the daily chart is providing data that XRP price is in a crucial support area. This area is a previous order block and horizontal support zone that should be kept as support if the XRP wants to maintain bullish perspectives.
Alongside that, a potential falling wedge construction is found which is similar to the one seen on the left side of the chart. If the price can maintain this support and break to the upside, then a breakout towards 3700-3750 satoshis and possibly 4800-5000 satoshis is likely.
The case of XRP price seeing a continuation to the upside is growing more likely according to the higher timeframes.
XRP USD 4-day chart. Source: TradingView
The higher time frame charts (4-day in this example) are showing similar signals to prior bottom formations. The last time a bullish divergence occurred on the 4-day chart, the price surged 5,500% and 180%.
A bullish divergence is not a guarantee of any price movements, but they are seen as one of the significant indicators for a potential trend reversal.
Ripple needs to break $0.30 to flip bullish
XRP USD daily chart. Source: TradingView
The crucial factor for Ripple is the need to break out of the falling wedge construction. Any bullish reversal will hinge on this happening. Furthermore, if the breakout occurs, XRP price needs to push above $0.30.
The reasoning behind that is quite simple; the $0.30 level used to be a support for a year. Through breaking that level, a potential higher high can be defined, and a new upwards trend can start.
At the time of publishing, XRP price is still making lower highs and lower lows, so an upwards breakout is needed to speak of bullishness.
Holding XRP through the past two years didn’t bring a high return on investment as the price is down 93.45% since its all-time high. Does this mean that buying XRP would be a bad investment at this point?
Not necessarily and many investors will remember a quote made famous by an 18th British nobleman named Baron Rothschild. Rothschild said, “Buy when there’s blood in the streets, even if the blood is your own.”
In that regard, if the price starts to make an uptrend, a crucial factor is a breakout of $0.30 to start an uptrend and to provide a better investment opportunity. If $0.20 to $0.21 can’t provide support, the next support level is at $0.15.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Binance — the second-largest crypto exchange by daily trade volume — has announced support for Tezos (XTZ) staking, according to an announcement published on Dec. 3.
Starting on Dec. 4, Binance’s users will be able to trade with XTZ, with XTZ rewards to be calculated daily based on live snapshots and distributed monthly. The distribution is set to end before Jan. 20, and after that on the 20th day of each following month.
Binance said that users must hold at least 1 XTZ in order to qualify for staking rewards. Tezos is currently trading at $1.30.
Binance’s CEO Changpeng Zhao had hinted at the possibility of staking in September, when the exchange initially listed the coin with three trading pairs against Bitcoin (BTC), Tether (USDT) and Binance Coin (BNB).
Other major exchanges have added Tezos staking rewards to their available offerings. Coinbase added the feature in early November before transitioning its custody arm, Coinbase Custody, to an internationally based staking service on Nov. 21.
Staking, in general, refers to the practice of holding a cryptocurrency in a wallet to support a blockchain network’s operations. In addition to allowing holders to vote on blockchain operations, staking also generates periodic rewards for the holder staking their funds.
Binance’s recent additions
Tezos staking rewards come on the heels of the listing of four Russian ruble trading pairs on Dec. 2. The first trading pairs featuring the ruble include Binance Coin (BNB), Bitcoin (BTC), Ether (ETH) and XRP.
In November, Binance launched support for the Turkish lira through its local digital wallet partner Papara and also became the first exchange to add the Fiat Gateway developed by stablecoin operator Paxos.
Apart from that, Binance partnered with crypto travel startup TravelByBit to launch a rewards card that facilitates cryptocurrency payments on major travel website. The card will function like a traditional prepaid card with access to additional discounts and rewards that users will be able to load with Bitcoin, Binance USD (BUSD), Binance Coin and Ontology (ONT).
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