A new report issued today by the White House Council of Economic Advisers (CEA) argues that banning interest or yield on stablecoins would do little to help banks, especially community banks, and could instead deprive consumers of better returns. The report comes amid a debate between banks and crypto firms: banks warn that yield-bearing stablecoins could pull deposits away from them, while crypto companies say restricting yields would stifle innovation. According to the CEA’s analysis, delightfully titled “Effects of Stablecoin Yield Prohibition on Bank Lending,” even eliminating stablecoin yield would have only a minimal impact on bank lending—raising it by about $2.1 billion, or just 0.02%. Most of that benefit…
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Morgan Stanley launches ETP to track bitcoin performance
A blue chip bank’s tardy endorsement of crypto
Modern Consensus is coining a new phrase: ETF Slop.™ And Morgan Stanley is the latest to add its thumb to the scale. This morning, the giant bank announced the launch of Morgan Stanley Bitcoin Trust, an exchange-traded product that seeks to track bitcoin performance. It’s doing so through its subsidiary Morgan Stanley Investment Management, the first U.S. bank-affiliated asset manager that offers cryptocurrency what they’re calling ETP for exchange-traded product. While there’s hardly a shortage of instruments to track bitcoin, this kind of endorsement from the bluest of blue chip banks only adds to the sense that bitcoin has matured into an asset for grown-ups. “ETPs remain a powerful way…
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G’Day, Coinbase!
Goliath exchange gets Aussie permission; closer to “everything exchange” by expanding offerings and geography
Coinbase must be cranking AC/DC, the Little River Band and Rick Springfield in the halls of its SF headquarters. Securing an Australian Financial Services License (AFSL) is a significant step toward expanding its global footprint, positioning itself ahead of new regulatory requirements that will soon apply to digital asset platforms in the land down under. The move effectively transitions Coinbase from a long-standing market participant into a fully regulated financial services provider within Australia. “The AFSL – granted ahead of incoming legislation that will require digital asset exchanges to hold one – provides us with the regulatory foundation to bring the Everything Exchange to Australia,” the company said in a…
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Sandwich Attacks: Are You on the Menu?
Explanation of “front running” risks in crypto and how to avoid them
Traditional “front running” is trading of stocks or other financial assets using privileged information about an upcoming transaction that is anticipated to significantly impact its price. For example, brokers could front run trades by using insider knowledge regarding their firm’s imminent issuance of a buy or sell recommendation to clients, a move expected to influence the asset’s price. Trading on this kind of non-public information is illegal in most jurisdictions, not only because it’s unfair to other market participants but also because it degrades the integrity of financial markets and erodes investor trust. In the often “Wild West” of crypto markets, given that all too often lawmakers haven’t caught up…
