Amidst public interest, the Bank of England and HM Treasury have addressed key concerns regarding the digital pound, reassuring the public of stringent legislative measures for privacy and control, alongside the maintenance of traditional cash.

HM Treasury and Bank of England Respond to Public’s Digital Currency Concerns, No Final Decision yet on Digital Pound

The Bank of England and HM Treasury have unveiled their response to the public consultation on the potential introduction of a digital pound, following engagement from the public and industry experts. Over 50,000 responses were received, indicating the public’s interest in the future of digital currency in the United Kingdom.

Key concerns raised by the respondents centered around privacy and control of funds, along with the continued availability of traditional cash. The authorities have assured that robust legislative measures will be implemented to safeguard user privacy and control before the roll-out of any digital pound. This includes primary legislation to ensure that neither the Bank of England nor the government will have access to users’ personal data.

The digital pound is envisaged as a supplement to existing forms of money, not a replacement. Economic Secretary to the Treasury, Bim Afolami said, “We will always ensure people’s privacy is paramount in any design, and any rollout would be alongside, not instead of, traditional cash.“

Sarah Breeden, Deputy Governor for Financial Stability, underscored the importance of trust in all forms of money and pointed out that, “[i]t is essential that we build that trust and have the support of the public and businesses who would be using it if introduced.”

No final decision has been made to pursue the digital pound, also known as a central bank digital currency (CBDC). The ongoing work involves exploring the feasibility and potential design choices of a digital pound in the UK economy. This phase will focus on how the digital currency can provide greater choice, convenience, and innovation for everyday payments.

The digital pound aims to coexist with cash in a digital era, offering an alternative for everyday transactions. It would be issued by the Bank of England and designed to be convenient, widely available, and easily exchangeable with other forms of money. The proposed digital currency would be accessible through digital wallets and intended primarily for transactions rather than savings, without paying interest. Initial restrictions on how much an individual or business could hold are also part of the plan.

Before the launch of a digital pound, detailed legislative processes and further public consultations are planned. The proposed design of the digital pound has been generally well-received, but concerns about access to cash and control over personal data led to the commitment to introduce primary legislation for user protection. The future legislation will also prevent the government from programming the digital pound.

The Bank of England currently proposes a holding limit of 10,000-20,000 British pounds, though this may be subject to future reviews. The digital pound is expected to be accessible in several countries, barring those under sanctions. Experiments and further public consultations are planned to test the digital pound in real-world scenarios.

Would you be open to using the digital pound if it were available? Share your thoughts and opinions about this subject in the comments section below.

A survey of European Central Bank (ECB) staff has revealed widespread dissatisfaction with President Christine Lagarde’s leadership. More than half of the respondents rated Lagarde’s performance as “very poor” or “poor.” Some expressed concerns that the former International Monetary Fund (IMF) chief “does not necessarily act according to the values she proclaims.”

Lagarde Spends ‘Too Much Time on Topics Unrelated to Monetary Policy’

The International and European Public Services Organisation (IPSO), a union founded by European Central Bank (ECB) staff, conducted a survey among ECB staff asking them to assess the performance of Christine Lagarde as a president of the ECB. The survey was conducted between Dec. 12 and Dec. 22, 2023. Lagarde was France’s finance minister between 2007 and 2011. She then served as the managing director of the International Monetary Fund (IMF) between 2011 and 2019.

According to the survey results, released earlier this week, 50.6% of 1,159 respondents rated Lagarde’s performance in the first half of her eight-year term as “very poor” or “poor.” The IPSO also revealed that many respondents expressed dissatisfaction with Lagarde spending “too much time on topics unrelated to monetary policy,” citing her frequent engagement in political discussions.

Moreover, 53.5% disagreed that she was the “right president for the ECB at the current juncture.” Some respondents expressed concern about Lagarde’s potential political aspirations, suggesting she may be using the ECB as a platform for future political endeavors. Only 38% of respondents backed the monetary policy decisions taken under Lagarde. One staff member was quoted as saying:

The ECB has been focusing on topics beyond its mandate in a period where inflation was at the highest level in the EU history.

An ECB spokesperson said the survey was flawed, stating: “The President and the Board are fully focused on their mandate and have implemented policies to respond to unprecedented events in recent years such as the pandemic and wars.”

In its summary of comments for the survey, the IPSO noted:

Christine Lagarde is generally reported as being an autocratic leader who does not necessarily act according to the values she proclaims.

Do you think Christine Lagarde is a good ECB leader? Let us know in the comments section below.

The cryptocurrency lending platform Nexo has submitted a $3 billion arbitration claim against the Republic of Bulgaria, following a raid on its office in 2023 and a subsequent probe by the Bulgarian Prosecutor General’s Office. Nexo alleges that these actions harmed its business prospects.

‘Politically Motivated’ Allegations

The Switzerland-based crypto lending platform Nexo AG has filed a $3 billion arbitration claim against the Bulgarian government for damages and lost opportunities after the latter dropped its money laundering and Russian sanctions violations allegations. Nexo said the “politically motivated” allegations against it by the Prosecutor General’s Office in January 2023 harmed its brand and reputation.

In a statement released on Jan. 24, the digital asset platform revealed that the U.S. law firm Pillsbury Winthrop Shaw Pittman submitted the claim to the Secretariat of the World Bank’s International Centre for Settlement of Investment Disputes (ICSID). As reported by Bitcoin.com News, the Bulgarian Prosecutor General’s Office dropped charges against the crypto lender after an investigation found no evidence of criminal activity.

However, Nexo insists that the raid on its offices in January 2023 and the subsequent investigations derailed many of its planned activities, including a capital-raising initiative. The actions of the Bulgarian Prosecutor General’s Office also led to the collapse of a lucrative sponsorship deal with an unnamed major European football club.

Reputational and Financial Damages

Explaining why the crypto lender has chosen to take on Bulgaria, Antoni Trenchev, a co-founder at Nexo, said:

“Our growth path has been slowed down and opportunities lost or significantly delayed. I personally promised 10 months ago that we would explore all legal means available to secure financial compensation for Nexo. Now that the Bulgarian Prosecutor’s Office itself has finally exonerated us, the time is right for us to file our claim and receive reparations for the enormous reputational and financial damage suffered.”

Trenchev said the claim will also serve as a warning and deterrent to power-abusing individuals or regulators elsewhere. The co-founder added that Nexo’s expected vindication at ICSID will be a positive outcome for “all good actors” in the blockchain space.

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The head of enforcement at South Africa’s financial industry watchdog said on Jan. 24 that he expects the organization to decide the fate of 50 crypto firms’ license applicants in the coming weeks. The watchdog stated that from the more than 100 entities that applied for a license, 20 have since withdrawn from their respective applications.

The Cost of Obtaining a License

An official with the Financial Sector Conduct Authority (FSCA), South Africa’s financial industry watchdog, announced on Jan.24 that the organization expects to determine the fate of some 50 crypto firms’ license applications in the coming weeks. Gerhard van Deventer, the head of enforcement at the FSCA, revealed that out of the 90-plus applicants, 20 have since withdrawn.

As reported by Bitcoin.com News in late 2023, the South African watchdog had received a total of 93 applicants just days before the Nov. 30 deadline. This figure, which ultimately rose to 105, consisted of both current holders of FSP licenses and fresh applicants. At the time, Diketso Mashigo, the FSCA’s compliance head, confirmed that some applicants had decided against pursuing the license. Some eventually opted to operate outside the South African market.

Deventer, who made the remarks during a podcast, said he agrees with the assertion that some of the applicants may have chosen to withdraw because they have may been spooked by the cost of obtaining the financial service provider (FSP) license.

Applicants Fail to Meet Key Requirement

The FSCA’s head of enforcement however suggested that some of the withdrawing applicants only did so after they became aware of the burden of getting the license. Deventer suggested that many of those applicants had no realistic chance of meeting one key requirement.

“Applicants got stuck on the requirement of having an appropriate key individual because such an individual will need to have a very specific and relevant experience, qualifications and skills. And there is not a lot of that around if you take into account that crypto has not been around for a long time,” the FSCA’s Head of enforcement said.

Some of the applicants who found themselves in this situation said they would only reapply when a suitable individual is found, Deventer added.

Meanwhile, when asked about the changes to regulations proposed by the FSCA, Deventer said tackling scammers who purposely choose to operate outside its regulatory ambit is what motivated it to make the amendments. According to Deventer, once the new regulations kick in it will now be impossible for such entities to avoid regulation of their activities.

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Former Bitmex CEO Arthur Hayes has predicted that bitcoin will find a support level between $30,000 and $35,000. He contends that the ongoing bitcoin selloff is not due to outflows from Grayscale’s bitcoin trust (GBTC). “That argument is bogus,” he claimed, adding that bitcoin’s price movement is “anticipating the Bank Term Funding Program (BTFP) will not be renewed.”

Ex-Bitmex Chief’s Bitcoin Price Prediction

Arthur Hayes, co-founder and former CEO of crypto exchange Bitmex, has shared his bitcoin price prediction, explaining that he believes the cryptocurrency will form support between $30,000 and $35,000. In a blog post published Tuesday, Hayes detailed:

I think bitcoin will find a local bottom between $30,000 and $35,000.

Referring to his statement earlier this month that he expects a 30% correction for bitcoin, Hayes elaborated in Wednesday’s blog post that “A 30% correction from the ETF approval high of $48,000 is $33,600.” He also previously noted, “The washout could be even more severe if the slate of U.S.-listed spot bitcoin ETFs has already commenced trading.”

The U.S. Securities and Exchange Commission (SEC) approved 11 spot bitcoin exchange-traded funds (ETFs) on Jan. 10. Most of them started trading the next day. The price of bitcoin pushed above $47K in anticipation of the approval but dropped below $40K on Monday and $39K on Tuesday.

Discussing why the price of bitcoin plummeted following the ETF launches, the former Bitmex executive said: “The first argument for bitcoin’s recent dump is the outflows from the Grayscale Bitcoin Trust (GBTC). That argument is bogus because when you net the outflows from GBTC against the inflows into the newly listed spot bitcoin ETFs, the result is, as of January 22nd, a net inflow of $820 million.”

The former Bitmex boss continued:

The second argument, which is my position, is that bitcoin is anticipating the Bank Term Funding Program (BTFP) will not be renewed. This event will not be positive as the Fed still has yet to cut rates to a level that pushes the 10-year Treasury into the 2% to 3% range.

On Wednesday, the Federal Reserve Board announced that the Bank Term Funding Program will cease making new loans as scheduled on March 11. The Fed announced the creation of the Bank Term Funding Program on March 12 last year following the collapse of Silicon Valley Bank (SVB) and Signature Bank.

Hayes previously explained that he expects bitcoin will dip before the Bank Term Funding Program renewal decision on March 12. “As the SPX [S&P 500] and NDX [Nasdaq-100] dump due to a mini financial crisis in March, bitcoin will rise as it will front-run the eventual conversion of rate cuts and money printing talk on behalf of the Fed into the action of pressing that Brrrr button,” the former Bitmex executive noted.

What do you think about former Bitmex CEO Arthur Hayes’ bitcoin price prediction? Let us know in the comments section below.

Polymer Labs, the inter-blockchain communication (IBC)-based networking layer two (L2), recently disclosed that it had raised $23 million via a Series A funding round. Polymer said only Ethereum and all chains under the IBC control will initially be compatible with its interoperability solution.

‘Connecting Billions of Dollars in Value Across Rollups’

Polymer Labs, one of the first modular Inter-Blockchain Communication (IBC)-based networking layer two (L2), recently announced that it had closed a $23 million Series A funding round. The funding round was co-led by Blockchain Capital, Maven 11, and Distributed Global, with the participation of Coinbase Ventures, Placeholder, Digital Currency Group, North Island Ventures, and Figment Capital.

According to a statement, Polymer Labs will use the funds raised to further develop the L2, which serves as an Ethereum Interoperability Hub. The L2, which is yet to be launched, seeks to connect billions of dollars in value across rollups. Polymer said it is hopeful that this solution will not only bring scalability benefits but will also prove to be reliable and less susceptible to hacking attacks.

“Polymer’s mission is to establish the next generation of the internet by ensuring that the interoperability layer connecting all blockchains is neutral, open, modular, and permissionless across ecosystems,” Peter Kim, a Polymer co-founder said.

Meanwhile, Yuan Han Li, an investor with Blockchain Capital, has said that his organization now supports Polymer’s goal of bringing interoperability standards to Web3. However, the statement said only Ethereum and all chains under the IBC control will initially be compatible with Polymer’s solution.

Commenting on the partnership between his organization and Polymer, he said: “We are really excited that Polymer is bringing the generalized IBC primitive into the Ethereum rollup landscape by building a versatile transport hub, and thrilled that we at Eigenlayer have the pleasure of partnering with the passionate team at Polymer.”

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Following an examination launched in November 2022, FINRA claims widespread potential violations in the way member firms communicate about crypto assets.

FINRA Report Alleges Misinformation in Crypto Asset Marketing

In a report released on Jan. 23, the Financial Industry Regulatory Authority (FINRA) has found that approximately 70% of public communications related to crypto assets by its member firms contain potential violations. This revelation comes from a targeted examination initiated by FINRA in November 2022, following the high-profile collapse of cryptocurrency exchange FTX.

FINRA, a non-governmental organization authorized by Congress to protect American investors, reviewed over 500 retail communications concerning crypto assets. These communications ranged from traditional advertising to more modern forms, including mobile app promotions and digital media content.

The regulator sees these misleading or false statements in communications as a concerning trend. The reviewed materials often failed to differentiate clearly between crypto assets offered by member firms and third parties. Additionally, many communications falsely represented crypto assets as secure or equivalent to traditional financial instruments like cash.

Ira Gluck, Senior Director at FINRA, said on an appearance on FINRA’s “Unscripted” podcast just after the report was released, “With the growth in this market and increased interest in crypto assets, the potential harm caused by problematic communications has also increased … [I]n order to have enough information to evaluate a crypto asset investment or service, communications need to clearly describe its risks and features.”

The review also identified issues with how crypto assets were compared to other investment options, such as stocks or gold, often without a sound basis for comparison. Furthermore, several communications misleadingly suggested that crypto assets were protected under federal securities laws or by organizations like the Securities Investor Protection Corporation (SIPC).

In response to these findings, FINRA has posed a series of questions to its member firms, urging them to reevaluate their communication strategies concerning crypto assets. These questions focus on ensuring that firms provide balanced presentations of risks associated with crypto assets and clearly distinguish between different types of products and services offered.

Have you found crypto asset communications to be misleading or outright false? Share your thoughts and opinions about this subject in the comments section below.