Binance proposes recovery fund for crypto projects facing liquidity crisis
Binance announced that it is forming an industry recovery fund, to help projects who are otherwise strong, but in a liquidity crisis. CEO Changpeng “CZ” Zhao also welcomed other industry players with cash who wants to co-invest to join the fund. Tron, Huobi Global and Poloniex will reportedly support the initiative. [Read more at CoinDesk]
Can proof-of-reserves prevent future crypto exchange collapses?
A number of crypto exchanges are rushing to publish proof-of-reserves in a seeming attempt to reassure investors their funds are safe in the wake of the FTX meltdown. Proof-of-reserves (PoR) are independent audits by third parties that aim to provide transparency and evidence that a custodian holds the assets it claims to own on behalf of its clients. Auditors then aggregate balances into a Merkle tree, which entails all client balances. The CBDC Think Tank’s Jamiel Sheikh has provided a nice infographic that illustrates how PoR works (see below). And Nic Carter has set up a PoR dashboard to keep track of entities which have conducted a recent PoR attestations. [Click here for the dashboard]
Crypto trading and Bitcoin prices: evidence from a new database of retail adoption
The Bank for International Settlements published a paper that investigates the drivers of crypto adoption, based on a novel database (made available with the paper) on retail use of crypto exchange apps in 95 countries over 2015–22. It shows that a rising Bitcoin price is followed by the entry of new users. About 40% of these new users are men under 35, commonly identified as the most “risk-seeking” segment of the population. Overall, back of the envelope calculations suggest that around three-quarters of users have lost money on their Bitcoin investments as most entered when prices where high (see graph below). Blockchain data show that large hodlers (“whales”) were selling when smaller investors were entering, as early investors and insiders cashed out at their expense. [Read more at the BIS]
Russia’s Digital Ruble Integrated Into Banking App
VTB Bank has reportedly become the first Russian bank to add the digital ruble to its mobile application. The integration is currently being tested with accounts set up for legal entities. Select customers will be granted access in the coming months and will be able to join the trials. [Read more at Bitcoin.com]
Bank of England looking for CBDC solution architect
The Bank of England is recruiting for Solution Architects within the Technology team of its Central Bank Digital Currency (CBDC) Unit. The CBDC Unit is responsible for analyzing the opportunities and challenges presented by CBDC and developing the design of a CBDC. The Unit’s activities include macroeconomic analysis, work on functional design, exploration of technology options, and engaging private-sector and international counterparts. The responsibility of the job holder will be to explore the technology design and architecture options for a potential retail CBDC. [Apply here]
Kiffmeister’s Global Central Bank Digital Currency Monthly Monitor
Just a reminder that I produce a monthly digest of central bank digital currency (CBDC) developments exclusively for the official sector. So for any of you out there who work for a central bank, ministry of finance or international financial institution who would like to receive it by email on the first business day of every month, please DM me on LinkedIn or email me at chronicles@kiffmeister.com.
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