Archiv für den Monat: Februar 2023

Bitcoin Soars as Central Bank Balance Sheets Expand

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• The article discusses how Bitcoin is following the increasing liquidity and balance sheets of global central banks, particularly those of Japan and China.
• The article also focuses on the Fed’s net liquidity indicator, which measures the difference in the Fed’s balance sheet and Treasury General Account plus Reverse Repo.
• All three metrics – Bitcoin, balance sheets, and liquidity – have seen increases from their respective bottoms in October 2022.

Overview

This article examines how Bitcoin is being impacted by global central banks‘ increasing liquidity and balance sheets, with a particular focus on Japan and China. It also looks at the Fed’s net liquidity indicator as a measure of this relationship.

Central Bank Balance Sheets

The orange line in the chart above shows that major central bank balance sheets have increased to 756 trillion since October 2022, when it was roughly 706 trillion. This increase has been driven by Japan and China continuing to expand their balance sheets despite high inflation.

Fed Net Liquidity Indicator

The red line in the chart shows the Federal Reserve’s net liquidity indicator, which measures the difference between its balance sheet and Treasury General Account plus Reverse Repo divided by units. All three metrics – Bitcoin, balance sheets, and liquidity – have seen increases from their respective bottoms in October 2022.

Bitcoin Impacted

As these global central bank balances continue to expand, they are offsetting quantitative tightening taking place elsewhere such as Europe, UK and US; this is having an impact on Bitcoin (the blue line) which has increased by around 50% year-to-date.

Conclusion

This article highlights how Bitcoin is being impacted by global central banks‘ increasing liquidity and balance sheets; with particular reference to Japan’s and China’s expansionary policies even amid high inflation levels. It also looks at the Fed’s net liquidity indicator as a measure of this relationship between Bitcoin prices and central bank balance sheets/liquidity levels across key countries worldwide.

FTX Warns Creditors Against Justin Sun’s FUD Token

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• FTX is warning creditors against patronizing unauthorized debt tokens, such as the Justin Sun-backed FTX User Debt (FUD) token.
• FUD was listed on Huobi Global with support from Justin Sun, who called it a “top quality FTX debt asset”.
• Following its listing, FUD surged to a high of $115, leading the Debt DAO to consider burning about 18 million FUD tokens.

FTX Cautions Creditors Against Unauthorized Tokens

Bankrupt crypto exchange FTX has warned its creditors against patronizing unauthorized debt tokens, including the Justin Sun-backed FTX User Debt Token (FUD). The tweet came after Huobi Global had listed the token with Sun’s backing and it soared to a high of $115 shortly after.

Justin Sun Backed Listing of FUD

At launch, about 20 million FUD was minted, with plans underway to mint additional tokens as soon as FTX confirmed the debt amount. However, Justin Sun had earlier backed the listing of FUD on Huobi Global claiming that it is a „top quality FTX debt asset“.

FTX Disassociates From Project

Following this news, FTX tweeted on Feb. 17 to disassociate itself from the project and warned creditors against dealing with such unauthorized schemes. The crypto community had also expressed pessimism about the token as the DebtDAO has no website and its Twitter account was last active on Feb. 8th .

Trading Activity Slowed for FUD

Over the last 24 hours trading activities have slowed for FUD as its price fell below $16 and its trading volume sits at $231,300 according to Coinmarketcap data. This might be due to lack of confidence in light of recent events or simply because people are waiting for more information before investing in these tokens again.

Conclusion

In conclusion, it appears that there is still much uncertainty surrounding these unauthorised tokens so it would be wise for investors to exercise caution when considering investing in them until more information comes out regarding their legitimacy and safety measures taken by exchanges like Huobi Global when listing them on their platform.

Paxos Refutes Bank Charter Rejection Rumors: All You Need to Know

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• Paxos denied rumors that the Office of the Comptroller of the Currency (OCC) had rejected its application for a national bank charter.
• The OCC granted preliminary approval to Paxos in April 2021 and the opening was four months overdue.
• Separate rumors emerged suggesting that Paxos faces a probe from the New York Department of Financial Services (NYDFS).

Paxos Refutes Bank Charter Rejection Rumors

Stablecoin issuer Paxos stated that it has not been denied a national bank charter from the Office of the Comptroller of the Currency (OCC). On Feb. 7, rumors circulated regarding OCC’s rejection, which stemmed from its preliminary approval given to Paxos 18 months ago.

OCC Preliminary Approval

The OCC gave preliminary approval to Paxos in April 2021 and it has now been 22 months since then, making it four months overdue. Paxos completely refuted all claims in its Feb. 8 tweet and said that neither is their application withdrawn nor they have received any rejection from OCC. If approved, this would enable them to operate as federally-regulated digital asset bank alongside competitors such as Anchorage and Protego without requiring state licenses for individual states.

Rumors Of NYDFS Investigation Emerge

On Feb. 9, separate rumors suggested that there might be an investigation conducted by New York Department of Financial Services (NYDFS) on Paxos however none have been confirmed yet by either party. As an issuer of stablecoins Binance USD (BUSD) and the Pax Dollar (USDP), they also run a crypto brokerage along with providing PayPal’s crypto trading capabilities as well.

Conclusion

Paxo’s denial statement against being rejected by OCC has cleared all doubts regarding their application status while investigations being conducted by NYDFS is still uncertain until both parties confirm it officially or reveal otherwise at some later point in time.

Takeaway

The timely denial statement issued by Paxo can be taken as a positive indicator towards their efforts to obtain a national bank charter from OCC although further updates will be required before any official confirmation can be made on this matter both from OCC as well as NYDFS sides if needed at all.