Yesterday I reported that Bitfinex and Tether reached a $18.5 million settlement with the New York Attorney General (NYAG) over allegations that they hid the loss of commingled client and corporate funds and misrepresented the truth about the reserves backing Tether’s USDT stablecoin. However, the lawsuit did not cover the rumored role of Tether in a huge BTC pumping scheme. I discuss some of these broader issues in a new blog post here.
On February 13, 2021, Bitt, in partnership with the Eastern Caribbean Central Bank (ECCB), executed the first successful retail central bank digital currency (CBDC) consumer-to-merchant transaction using DCash, the ECCB digital currency. The transaction was completed at Geo F. Huggins’ Foodland, in the island of Grenada. The ECCB has begun to issue DCash to participating financial institutions to enable customer purchases at selected merchants, as part of the closed segment of the DCash pilot. This live exercise is the final step before the public launch in four of the ECCU’s eight sovereign member countries (Antigua and Barbuda, Grenada, Saint Kitts and Nevis and Saint Lucia).
Ant-backed MYbank and Tencent-backed WeBank will reportedly join the Peoples’s Bank of China (PBOC) digital yuan pilot. The e-wallets from the two firms will have exactly the same functions as those from the six state-owned lenders in the trial.
The U.S. Securities and Exchange Commission (SEC) filed an amended complaint towards Ripple, accusing the firm of purposely misleading investors in relation to its XRP crypto-asset. The original complaint accuses Ripple Labs and its lead executives of being in violation of securities laws with $1.3 billion generated from XRP sales. It now alleges that they purposely manipulated XRP’s price by increasing and decreasing XRP sales depending on market conditions.
Square purchased $170 million Bitcoin, raising its holdings to about 5% of the company’s cash and equivalents. Square reported that crypto-assets continue to be a growing part of its business through the use of its Cash App for Bitcoin transactions. The financial payments company’s involvement with Bitcoin is a reflection of CEO Jack Dorsey’s belief in crypto-assets and the open internet.
According to crypto market data aggregator, Glassnode, Bitcoin whales offloaded massive amounts of BTC during February. The whales (who hold between 1,000 and 10,000 BTC) and humpback (more than 10,000 BTC) buying spree peaked in January as they snapped up 80,000 BTC, but so far in February they appear to have taken heavy profits, offloading 140,000 BTC.
Since its first cohort in 2016, the U.K. Financial Conduct Authority (FCA) Regulatory Sandbox has supported 14 digital ID models. Also, there have been 15 applications for Direct Support to the FCA Innovation Hub and 6 of these are now receiving that support. Many other digital ID providers have engaged with the FCA through various channels such as the Anti-Money Laundering TechSprints. The FCA, in collaboration with The City of London, has also recently completed a pilot Digital Sandbox, which provides data access and a digital testing environment to help innovative businesses develop proof of concept. Two digital ID propositions participated in the pilot.
* 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.