Tesla Bets Big on Bitcoin, Plans to Accept Cryptocurrency
Tesla invested $1.5 billion in Bitcoin and signaled its intent to begin accepting the cryptocurrency as a form of payment, sending prices to a new record after the vote of confidence from the electric-car market leader. “In January 2021, we updated our investment policy to provide us with more flexibility to further diversify and maximize returns on our cash that is not required to maintain adequate operating liquidity. As part of the policy, which was duly approved by the Audit Committee of our Board of Directors, we may invest a portion of such cash in certain alternative reserve assets including digital assets, gold bullion, gold exchange-traded funds and other assets as specified in the future. Thereafter, we invested an aggregate $1.5 billion in bitcoin under this policy and may acquire and hold digital assets from time to time or long-term. Moreover, we expect to begin accepting bitcoin as a form of payment for our products in the near future, subject to applicable laws and initially on a limited basis, which we may or may not liquidate upon receipt.”
Hardware wallet for digital yuan debuts in Xiong’an New Area
The Xiong’an branch of the Agricultural Bank of China in Hebei has reportedly produced the first hardware wallet designed for the digital yuan. The product was developed by the Party Working Committee of the Xiongan New Area and the People’s Bank of China branch in Shijiazhuang. The new hardware wallet supports dual offline payments without an internet connection. The digital yuan wallet also features payments without the use of mobile phones.
With Beijing onboard, China has so far issued $17 million in digital yuan tests
With Beijing being the next city joining the digital yuan test, China has now issued a total of 110 million (worth $17 million) of its central bank digital currency. Beijing will reportedly be distributing 10 million digital yuan to 50,000 local residents via a lottery. Similar to previous tests, lottery-winners will be able to spend the free digital yuan in offline and online merchants that support the DC/EP payment method.
Bank of Korea: CBDCs Are Fiat Currency Not Virtual Assets
The Bank of Korea has published the results of research it conducted last year on the legal issues surrounding central bank digital currency (CBDC). It concludes that the Bank of Korea Act would need to be amended to accommodate the issuance of a digital currency, because the act only accounts for notes and coins at present. However, CBDC would meet the requirements of currency legislation and could be freely exchanged with cash as the two share the same legal status. Therefore it would be reasonable to treat a CBDC in the same way as cash deposits held by financial institutions.
Ethereum Futures Are Now Trading on CME
The Chicago Mercantile Exchange (CME) launched its ethereum futures contract, with the February one being the most active and registering an opening price of $1,669.75 when the spot price stood at around $1,600.
* The views expressed herein are those of the author and should not be attributed to the International Monetary Fund, its Executive Board or its management.