If you can’t beat them…
Six of the world’s biggest banks have teamed up with UBS to pilot a project to create a new kind of digital cash that is designed to exploit the blockchain technology that already facilitates bitcoin transactions.
Barclays, Credit Suisse, and HSBC are among the major organisations to announce their collaboration with UBS over the ‘utility settlement coin’ (USC), a virtual currency that was originally the brainchild of London start-up Clearmatics. Further discussions with central banks, as well as a review of data privacy and cyber security measures are scheduled but it’s hoped that the USC will speed up settlements and could bring central banks one step closer to the introduction of a formal digital currency.
Head of strategic investment and fintech innovation at UBS, Hyder Jaffrey, said in a statement that discussions would continue over the next 12 months, with the aim of a limited ‘go live’ towards the end of 2018.
Libor to be phased out
In the wake of news that a US court has overturned two former Rabobank traders’ convictions over a conspiracy to fix yen and dollar Libor rates, comes an announcement from the head of the Financial Conduct Authority, Andrew Bailey, that it has become ‘not only unsustainable, but also undesirable’ for Libor to continue in its current form.
The decision was taken because banks no longer want to participate in setting the rate, which, at its peak, was used to price more than $350tn of financial products around the world. Plans are currently being made to move to alternative benchmarks by the end of 2021.
Are we on the cusp of a Bitcoin bubble?
What goes up must come down – or must it? Bitcoin’s recent stratospheric rise has helped push the value of crypto-currencies through the $50 billion-mark, triggering concerns over the creation of an unstable asset bubble in what is a largely unregulated market.
The rapid growth in alternative digital currencies — so-called ‘alt-coins’ — as well as in Bitcoin itself is without precedent; the value of Bitcoin alone has risen by more than 50% in a month and is currently worth more than gold. It’s an astonishing trajectory for a virtual, non-fiat currency.
Is the presidential honeymoon over?
It was one of Donald Trump’s most prominent pre-election pledges, so when the much-vaunted repeal of Obamacare failed to secure the support it needed in Congress, Wall Street signalled its disapproval via a massive share dump, bringing the stock market’s seemingly unstoppable rise to a screeching halt.
If the stellar performance of the S&P over the past few months demonstrated a level of confidence in the ability of the new president to deliver on his promises, this abrupt volte-face is a reflection of a more sombre mood. Tumbling US shares prefaced similar dips in Tokyo, Frankfurt, Paris and London as global markets wobbled over the prospect of the Trump administration’s ability to deliver on a raft of growth-boosting measures.
Small businesses are the lifeblood of any economy, creating wealth and employment opportunities – and supporting economic growth at grass-roots level. This type of entrepreneurship has always been valued in the United States, where the founders of startups can aspire to become leaders of Fortune 500 companies if they hit on a successful niche.
But are small business owners being unfairly hampered by the raft of regulations introduced following the financial crisis of 2008? It’s an issue that’s hitting the headlines at the moment as President Trump reaffirms his pre-election promises to de-regulate the financial services industry.
What do Donald Trump and Johnny Depp have in common? Superficially speaking, not much. But recent events around the thorny issue of whether or not financial advisers should be required to put their clients’ interests before their own has placed POTUS and Hollywood star on opposite sides of one of the hottest discussions of the year so far.