The US is considering enforcing bank-like regulations on cryptocurrency companies issuing so-called stablecoins that are less subject to valuation swings, a report has said.
President Joe Biden's administration will also urge such firms to register as banks, The Wall Street Journal reported on Friday.
A stablecoin is a type of digital currency whose value is tied to an outside asset, such as gold or a government-issued fiat currency like the US dollar, to stabilise the price.
Other cryptocurrencies such as Bitcoin and Ether have a tendency to fluctuate wildly.
Citing people familiar with the matter, the Journal said a Treasury-led group also plans to recommend that senior regulators form a panel to look for risks to the financial system. According to the newspaper, the group would be called the Financial Stability Oversight Council.
Last month, it was reported that the US is considering launching a formal review into whether Tether and other stablecoins threaten financial stability.
Over the past few years, stablecoins have thrived - with tokens in circulation now worth more than $120 billion, according to CoinMarketCap.com.
They are used for transactions similar to traditional financial products — like bank savings accounts — but do not offer the same level of customer protection.
As the role of stablecoins grows, regulations should meet the risks they pose and the economic functions they perform, the International Monetary Fund said in a report released on Friday.
The banking sector could also come under pressure if cryptocurrencies, including stablecoins, become an alternative to domestic bank deposits or even loans, the report cautioned.
“Stablecoin trading volumes outpace those of all other crypto assets … primarily because they are highly usable for settlement of spot and derivatives trades on exchanges,” the IMF said, adding that their market capitalisation has quadrupled this year to more than $120bn.
Tether is the largest stablecoin, but its market share has declined sharply in the past few months as major centralised crypto exchanges such as Coinbase and Binance have introduced their own versions.
'Worse than a prison sentence'
Marie Byrne, a counsellor who volunteers at the UAE government's mental health crisis helpline, said the ordeal the crew had been through would take time to overcome.
“It was worse than a prison sentence, where at least someone can deal with a set amount of time incarcerated," she said.
“They were living in perpetual mystery as to how their futures would pan out, and what that would be.
“Because of coronavirus, the world is very different now to the one they left, that will also have an impact.
“It will not fully register until they are on dry land. Some have not seen their young children grow up while others will have to rebuild relationships.
“It will be a challenge mentally, and to find other work to support their families as they have been out of circulation for so long. Hopefully they will get the care they need when they get home.”
RESULT
Manchester City 1 Sheffield United 0
Man City: Jesus (9')
Will the pound fall to parity with the dollar?
The idea of pound parity now seems less far-fetched as the risk grows that Britain may split away from the European Union without a deal.
Rupert Harrison, a fund manager at BlackRock, sees the risk of it falling to trade level with the dollar on a no-deal Brexit. The view echoes Morgan Stanley’s recent forecast that the currency can plunge toward $1 (Dh3.67) on such an outcome. That isn’t the majority view yet – a Bloomberg survey this month estimated the pound will slide to $1.10 should the UK exit the bloc without an agreement.
New Prime Minister Boris Johnson has repeatedly said that Britain will leave the EU on the October 31 deadline with or without an agreement, fuelling concern the nation is headed for a disorderly departure and fanning pessimism toward the pound. Sterling has fallen more than 7 per cent in the past three months, the worst performance among major developed-market currencies.
“The pound is at a much lower level now but I still think a no-deal exit would lead to significant volatility and we could be testing parity on a really bad outcome,” said Mr Harrison, who manages more than $10 billion in assets at BlackRock. “We will see this game of chicken continue through August and that’s likely negative for sterling,” he said about the deadlocked Brexit talks.
The pound fell 0.8 per cent to $1.2033 on Friday, its weakest closing level since the 1980s, after a report on the second quarter showed the UK economy shrank for the first time in six years. The data means it is likely the Bank of England will cut interest rates, according to Mizuho Bank.
The BOE said in November that the currency could fall even below $1 in an analysis on possible worst-case Brexit scenarios. Options-based calculations showed around a 6.4 per cent chance of pound-dollar parity in the next one year, markedly higher than 0.2 per cent in early March when prospects of a no-deal outcome were seemingly off the table.
Bloomberg
Business Insights
- As per the document, there are six filing options, including choosing to report on a realisation basis and transitional rules for pre-tax period gains or losses.
- SMEs with revenue below Dh3 million per annum can opt for transitional relief until 2026, treating them as having no taxable income.
- Larger entities have specific provisions for asset and liability movements, business restructuring, and handling foreign permanent establishments.
ORDER OF PLAY ON SHOW COURTS
Centre Court - 4pm (UAE)
Gael Monfils (15) v Kyle Edmund
Karolina Pliskova (3) v Magdalena Rybarikova
Dusan Lajovic v Roger Federer (3)
Court 1 - 4pm
Adam Pavlasek v Novak Djokovic (2)
Dominic Thiem (8) v Gilles Simon
Angelique Kerber (1) v Kirsten Flipkens
Court 2 - 2.30pm
Grigor Dimitrov (13) v Marcos Baghdatis
Agnieszka Radwanska (9) v Christina McHale
Milos Raonic (6) v Mikhail Youzhny
Tsvetana Pironkova v Caroline Wozniacki (5)
