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Facebook is scaling back its cryptocurrency plan; Revlon lenders to keep the money

By on May 13, 2021 0

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Digital activities

Facebook’s digital currency project “is move to the United States after abandoning an attempt to obtain the imprimatur from regulators in Switzerland, ”the Wall Street Journal reported. “The project, originally known as Libra and renamed Diem last year, is being redesigned in an attempt to address concerns from U.S. officials that it could be used for money laundering and other illicit purposes. These measures represent the latest effort to address regulatory concerns about the potential misuse of cryptocurrencies. “

“Diem plans to register with the Treasury Department’s Financial Crimes Enforcement Network, its anti-money laundering unit. He also announced a partnership with Silvergate Capital, a bank in La Jolla, Calif., Which will issue dollar-denominated stablecoins.

The changes are “a big downgrade of its initial global vision, ”reports the Financial Times. “Initially, Diem sought to create a synthetic coin backed by a basket of currencies, before gradually narrowing his vision to focus on launching a single coin backed one-for-one by the dollar.”

“Our plans integrate the project fully within the US regulatory perimeter and no longer require a license from Finma,” said Stuart Levey, CEO of Diem. “We are committed to building a secure payment system for consumers and businesses that makes payments faster and cheaper, and leverages blockchain technology to bring the benefits of the financial system to more people in the world. world.”

“If crypto assets have reached the general public – or at least prime-time television – it’s reasonable to ask if they need to be better regulated, ”says the FT. “Ironically, for a decentralized ecosystem that emerged as a snub to traditional finance, regulation would confirm its maturity.”

“What is clear is that international coordination is necessary. Investors are based all over the world and cryptocurrency exchanges are periodic. Better monitoring of how the crypto ecosystem impacts our real environment is also needed. Bitcoin mining can consume large amounts of energy, much of which is the cheapest of the fossil fuels. There should be no compromise between the so-called democratization of finance and the climate emergency. “

“The stablecoin market, a crucial link between crypto and traditional currencies, is facing calls for stricter monitoring, with regulations on both sides of the Atlantic lagging behind the rapid growth of digital assets, ”says the FT.

Tesla CEO Elon Musk said on Wednesday, “The company has suspended taking Bitcoin payments for its vehicles, ”the Journal reported. “We are concerned about the increasing use of fossil fuels for the mining and transactions of bitcoin, particularly coal,” he said, adding that he would resume using bitcoin for transactions “as soon as mining will shift to more sustainable energy. “

In addition, “Vitalik Buterin, co-creator of the Ethereum cryptographic network, donated over a billion dollars Wednesday to a relief fund to fight the spread of Covid-19 in India. At least it was $ 1 billion when he made the donation – in a cryptocurrency few had heard of and which plummeted in value right after news of the donation broke, ”the Journal said.

“The currency, the Shiba Inu coin, has been around for less than a year and is one of a host of alternative cryptocurrencies that have exploded in popularity and price in recent months. Its value changes enormously from hour to hour. Unlike cash, or even bitcoin, it’s hard to use Shiba Inu coins to buy things. “

In the niche

German financial regulator BaFin “told N26 Bank, an active digital start-up operating in Europe and the United States, of implement appropriate controls to prevent money laundering, by taking the unusual step of appointing a special controller to oversee the process, ”the Journal reported. BaFin said that “it made the decision after finding that gaps in money laundering prevention persisted two years after ordering the bank to make improvements.

“We recognize that more needs to be done in this area,” the bank said.

“BaFin’s the decision to appoint a special supervisor is rare, the only other opportunity being with Deutsche Bank in 2018, ”said the FT. “The regulator’s intervention comes two years after ordering the Berlin-based bank to step up its anti-money laundering practices after raising a number of concerns. N26, which was valued at $ 3.5 billion in a funding round last year, has been one of the fastest growing challenger banks in Europe since its inception in 2013. The bank has more of seven million customers in 25 countries. “

the Wall Street newspaper

Not frozen

“A federal judge ruled on Wednesday that lenders at Revlon Inc., which received around $ 500 million from Citigroup last year due to a back office error, were allowed to use the money as they did. ‘heard, unfreezing the funds. Judge Jesse Furman refused Citi’s request to continue to freeze funds while the bank tries to persuade an appeals court that it deserves to be reimbursed. The judge froze funds in August while he was reviewing the case.

“Citi wanted the freeze to continue, saying it was concerned that even if it won on appeal, it might have difficulty getting the money back once the asset managers distribute it to their clients. A spokesperson for Citi said the bank disagreed with the ruling and planned to file a petition with the Second Circuit Court of Appeals to try to ensure the preservation of the funds.

No FICO, no problem

Some of the largest US banks, including JPMorgan Chase, Wells Fargo and US Bancorp, “plan to start up share data on clients’ deposit accounts as part of a government-backed initiative to provide loans to people who have not always had the opportunity to borrow. Banks “will take into account information from applicants’ checking or savings accounts with other financial institutions to increase their chances of being approved for credit cards, according to people familiar with the matter. The pilot program is expected to be launched this year. “

The replacements “New contenders emerge in the race to get rid of the London interbank offered rate by the end of the year, with some analysts now claiming multiple benchmarks would likely replace Libor instead of just one.

To quote

“Cryptocurrency is a good idea on many levels and we believe it has a bright future, but it cannot come at a high cost to the environment. We are concerned about the rapid increase in the use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of all fuels. ” – Tesla CEO Elon Musk announced that the company has stopped accepting bitcoin for car purchases.