Bank Financial News

spot price of bitcoin began trading in the U.S. on Thursday in a landmark moment for the cryptocurrency industry that has been seeking regulatory approval for the financial product for over a decade. The green light by the U.S. Securities and Exchange Commission finally came late on Wednesday following months-long talks with top asset managers such as BlackRock, Ark Investments/21Shares, Fidelity, Invesco and VanEck. The regulator approved 11 such ETFs, paving the way for popularizing investments in the world's biggest crypotcurrency without the risk of holding the digital token directly. «The approval has the potential to simplify and secure Bitcoin investments for a broader investor base, which may reshape the dynamics of cryptocurrency investments,» said Rajeev Bamra, senior vice-president of digital finance at Moody's Investors Service.

The Brazilian neobanking unicorn Nubank is stepping up its crypto adoption drive, adding trading capabilities for five more altcoins to its banking app.

Heartland Tri-State Bank, a community bank in Elkhart, Kansas, has been forced to shut down after its CEO, Shan Hanes, lost millions of dollars in a cryptocurrency scam. 

Forecasters anticipate this week’s consumer price index report to show inflation rose last month, signalling a reversal in progress after a year of steady declines.

The leading Spanish private bank A&G has launched a crypto investment fund offering, in a sign adoption is continuing to rise in the European nation.

Bank for International Settlements (BIS) said Tuesday that decentralised cryptocurrencies are a «flawed system» and instead supported the development of a centralised alternative. The BIS, regarded as the central bank of central banks, backed «tokenisation» or the conversion of money and other assets into digital tokens that can be traded on programmable platforms, saying it offers the promise of a «major leap» in the financial system. Central banks and regulators have mostly been sceptical if not downright hostile to cryptocurrencies, which were developed using digital blockchains, a technology that allowed for decentralised management of trading assets. Proponents of the technology lauded its decentralised structure and often anonymous transactions that took control out of the hands of government institutions like central banks.

As part of the investigation phase of its digital euro project, the European Central Bank (ECB), which serves as the European Union’s central bank, has released two reports on the institution’s market research and prototyping exercise. 

The Chinese arm of the French banking titan BNP Paribas announced it will launch a digital yuan wallet management platform, in another boost for China’s central bank digital currency (CBDC).

US banks, already hesitant to work with crypto customers, are now even warier of providing services to the industry after a string of regional-lender collapses and amid heightened scrutiny by regulators. The closure of crypto-friendly Silvergate Capital Corp. and seizure of Signature Bank has left crypto firms struggling to find new banks for depository and payment services. While there's no blanket ban on serving crypto clients, financial firms are imposing lengthy application procedures, turning away smaller companies and some retail platforms, and in some cases shutting the door on crypto businesses altogether, according to industry participants, investors and bank executives. Cross River Bank, for example, received requests from more than 100 new clients not all of whom were crypto companies seeking a safe harbor for their deposits within days of SVB Financial Group's Silicon Valley Bank and Signature collapsing, according to a person with direct knowledge of the bank's business. The closely held company turned down almost all those requests, the person said. The bank is «only considering companies with existing relationships with Cross River that are blue-chip customers and integral to the fintech ecosystem,» said Eden Hoffman, a spokesperson for the Fort Lee, New Jersey-based lender. Among the few crypto companies that have won over the bank is stablecoin issuer Circle Internet Financial., which expanded a partnership with Cross River, announced after Silicon Valley Bank failed.

A recent college graduate and a single mom are dabbling hopefully in bitcoin after attending a crypto workshop sponsored by rapper Jay-Z at the public housing complex where the hip-hop star grew up. But a former executive at a cryptocurrency exchange feels disillusioned by the false promise of crypto helping her family in Ethiopia's war-torn Tigray region. All were drawn by the idea of crypto as a pathway to wealth-building outside of traditional financial systems with a long history of racial discrimination and indifference to the needs of low-income communities. But crypto's meltdown over the past year has dealt a blow to that narrative, fueling a debate between those who continue to believe in its future and skeptics who say misleading advertising and celebrity-fueled hype have drawn vulnerable people to a risky and unproven asset class.

Silvergate Capital Corp. and Signature Bank — have set off a fresh set of stresses. SVB’s failure triggered a knock-on effect in the crucial market for stablecoins after digital-asset giant Circle Internet Financial Corp., one of the biggest issuers of the widely used tokens known for their perceived safety, revealed it had $3.3 billion of reserves with the bank. The news caused Circle’s token, USD Coin, to slip below its intended 1-for-1 peg with the dollar, sending a shock through the market. On Sunday, regulators in New York closed Signature Bank. As of March 8, the bank still held $16.5 billion in crypto-related deposits. “All depositors of this institution will be made whole,” the regulators said. Against this backdrop, it is still the shutdown of crypto-friendly bank Silvergate — and the shuttering of its electronic payments platform, the Silvergate Exchange Network — that is most weighing on the market.

The fallout from the failure of Silicon Valley Bank reached further into crypto, unhinging a key cog in the market that’s meant to be among the safest digital assets in the space. The second-largest stablecoin fell from its intended $1 peg, trading as low as 81.5 cents as investors reacted to the exposure of issuer Circle Internet Financial Ltd. to the collapsed bank. USD Coin, or USDC, is an asset-backed stablecoin and a widely used plank of crypto markets. The token is intended to hold a constant $1 value, fully backed by reserves of cash and short-dated Treasuries. But late Friday, Circle disclosed that $3.3 billion of its roughly $40 billion stockpile of reserves is held with Silicon Valley Bank, which has just become one of the largest US bank failures in recent history. Regulators seized the bank on Friday and investors are awaiting more clarity on the return of deposits. In that vacuum, USDC fell below $1, and was trading at about 91 cents as of 8:45 a.m. in New York. Smaller stablecoins like DAI, which is sometimes viewed as a proxy for USDC, and Pax Dollar also fell from their pegs. DAI is the fourth-largest stablecoin by circulation and one of the most widely used tokens in decentralized finance.

Brazilian neobank Nubank, known for its crypto-friendly stance, has made headlines by hiring David Marcus, the former crypto chief at Meta (formerly Facebook), while simultaneously seeing a key member of its management team step down. The move comes hot on the heels of the bank's release of its own crypto asset.

money laundering laws will apply to trade in cryptocurrencies, the federal government said in a notification dated March 7. The exchange between virtual digital assets and fiat currencies, the exchange between one or more forms of virtual digital assets and the transfer of digital assets will be covered under money laundering laws, the notification said. The safekeeping or administration of virtual digital assets and the participation in financial services related to the offer and sale of virtual digital assets will also be covered, the notification added. India is yet to finalise legislation and regulations surrounding cryptocurrencies even as the country's central bank has cautioned against their use multiple times.

This time, the counterparty is Silvergate Capital Corp., the bank behind a widely used payments network that facilitates the real-time transfer of money between crypto firms. Silvergate suffered from a run on deposits already last year, triggered by the bankruptcy of its key client FTX. On Wednesday, the bank said it sold more debt holdings at a loss and was reviewing whether it can remain viable. It also indicated it was being investigated by the US Justice Department. That warning prompted swift reactions by crypto exchanges, stablecoin issuers and trading desks. Coinbase Global Inc., Galaxy Digital and Paxos Trust Co. announced that they will no longer accept or initiate payments through Silvergate, as did Gemini Trust Co., Crypto.com and Cboe Clear Digital LLC.

Binance's custody unit Ceffu said on Thursday it is planning to apply for a permit to offer payment services in Singapore, as the crypto exchange makes another attempt to function in the crypto-friendly city-state. «Once the relevant amendments to the Payment Services Act go live and the application for a custody license opens, Ceffu will make its official application with the MAS (Monetary Authority of Singapore),» the unit's Vice President Athena Yu said in a statement to Reuters. The unit, launched in 2021, was recently rebranded to Ceffu from Binance Custody. Late last year U.S. crypto exchange Coinbase, Crypto.com and DBS Vickers — brokerage run by Singapore's largest bank DBS — received similar approval from the central bank to offer payment services in the country.

High electricity costs, a plunge in digital assets prices and persistent network competition in the fourth quarter slashed mining profit margins and made it difficult for miners to stay afloat. Core Scientific Inc., the largest public Bitcoin mining company by computing power, went bankrupt and multiple major miners warned of liquidity crunches. While struggling miners have garnered some relief from Bitcoin’s 40% rebound this year, they are still under financial pressure. The rise in Bitcoin has made it easier for miners to raise capital from the equity market after debt-financing opportunities dried up and interest payments outpaced cash flows in the quarter. Miners such as Marathon Digital Holdings Inc. and Riot Platforms Inc. have been among the best performing US stocks this year, gaining more than 75% each after tumbling in value in 2022. “Public market investors are not typically those that look at hash price and mining machines,” said Ethan Vera, chief operations officer at crypto-mining services firm Luxor Technologies, referencing industry terms used to calculate miners’ revenue. “Their investing is based on the price of Bitcoin.”

Bjorn Ulvaeus, one-quarter of Swedish pop group ABBA, became a standard-bearer for a world without cash after his son got burgled. Ditching coins and banknotes would hurt criminals and tax-dodgers while helping businesses and government budgets, he reckoned. “Sweden would be the ideal country to make cashless,” he told Bloomberg in 2014. “I think that should be the future.”

debt for distressed economies, the chief of the International Monetary Fund said on Saturday on the sidelines of a G20 meeting, adding that banning private cryptocurrencies should be an option. India's G20 presidency comes at a time when its South Asian neighbours Sri Lanka, Bangladesh and Pakistan are seeking urgent IMF funds due to an economic slowdown caused by the COVID-19 pandemic and the Russia-Ukraine war. China, the world's largest bilateral creditor, urged G20 nations on Friday to conduct a fair, objective and in-depth analysis of the causes of global debt issues as clamour grows for lenders to take a large haircut, or accept losses, on loans. «On debt restructuring, while there are still some disagreements, we now have the global sovereign debt roundtable with consideration of all public and private creditors,» IMF Managing Director Kristalina Georgieva told reporters after the roundtable she co-chaired with Indian Finance Minister Nirmala Sitharaman.

Moonstone Bank, a digital bank focused on serving high-net-worth individuals, has revealed that it is exiting the crypto space and will be refocusing on the "community bank" role.