• The International Monetary Fund (IMF) has warned against giving cryptocurrencies the status of legal tender or official currency as it could lead to adverse effects on a nation’s monetary sovereignty and stability.
• The agency proposed nine elements in order to create effective policies for crypto assets, including minimizing its use for official payments and avoiding guaranteeing crypto to fiat conversions.
• The IMF also suggested that governments build stronger institutions and create transparent, coherent and consistent policies in order to reduce the substitution of fiat into cryptocurrencies.
IMF Warns Against Giving Crypto Official Currency Status
The International Monetary Fund (IMF) has warned against granting cryptocurrencies the status of legal tender or official currency as it can cause significant problems with regards to monetary, sovereign and financial stability. To combat this, the agency has proposed nine elements which should be taken into account when creating effective policies for crypto assets.
Minimizing Use For Official Payments
One element suggested by the IMF is that governments should minimize its use for official payments in order to safeguard against volatility issues. It also suggested avoiding guaranteeing crypto-fiat conversions so as not to expose traditional financial institutions too much risk from these volatile assets.
Building Stronger Institutions And Policies
The IMF believes that building stronger domestic institutions and creating solid policies are key to reducing people’s inclination to convert their fiat into cryptocurrencies instead of other foreign currencies. The agency recommends creating a transparent, coherent and consistent Monetary Policy Framework (MPF) in order to ensure credibility and trust in the traditional system.
Adverse Effects On Monetary Sovereignty
According to the UN financial agency, granting crypto official currency or legal tender status can lead to negative impacts on a nation’s monetary sovereignty and stability due to its potential exposure of traditional financial systems to these volatile assets. Therefore, it is important for governments take proper precautions when considering such moves as they could have far reaching implications on their economy if not done correctly.
To sum up, the IMF’s position on giving cryptocurrencies legal tender status or official currency is clear: doing so can cause serious problems with regards to monetary sovereignty and stability that must be addressed before any such move is made. Governments should therefore take great care when crafting their cryptocurrency policy frameworks if they want avoid any potential pitfalls associated with such an action
- Binance.US sent $404 million to a firm managed by Binance CEO Changpeng Zhao.
- This transfer implies that Zhao has a possibly inappropriate financial connection to Binance.US.
- The SEC is investigating Binance.US and its partners for possible conflict of interest.
Details of the Transfer
In late 2020 and early 2021, Binance.US, under the name BAM Trading, sent millions of dollars from an account at Silvergate Bank to trading firm Merit Peak Ltd., which is managed by Binance CEO Changpeng Zhao. This could suggest that Zhao has a financial connection to Binance.US, raising questions about potential conflicts of interest between the two entities. It is unknown why these funds were transferred or if they belonged to exchange customers.
Catherine Coley’s Departure
Around the same time as the transfers took place, Catherine Coley—formerly the CEO of Binance US—suddenly left her role and went dark on social media. Reuters reports that Coley noticed these unusual transactions and questioned other staff members before leaving her position with the company.
The connections between Binance US and Merit Peak have been observed since February 2022, when it was reported that the U.S Securities & Exchange Commission (SEC) were investigating various partners associated with the exchange. The SEC had already issued subpoenas in 2020 regarding this matter and are continuing their investigation into possible conflicts of interest surrounding this case.
Binance US declined to comment on the transfers but told Reuters that they had accessed “outdated information” about them; furthermore, they stated that Merit Peak isn’t using their trading services anymore — though it is unclear when this ceased being true .
• Paxos denies rumors of OCC bank charter rejection.
• The OCC granted preliminary approval for the charter in April 2021, which is now over due.
• Separate rumors state that Paxos faces a probe from the New York Department of Financial Services (NYDFS).
Paxos Denies Bank Charter Rejection Rumors
Stablecoin issuer Paxos has denied rumors that it has been denied a national bank charter from the Office of the Comptroller of the Currency (OCC). According to Paxos, the OCC has not rejected its application for the charter, nor has it asked them to withdraw their application.
Preliminary Approval From OCC
In April 2021, the OCC granted preliminary approval to Paxos and gave it 18 months to open its chartered bank. It has now been 22 months since that date, making it four months overdue. If approved, Paxos would operate as a federally regulated digital asset bank alongside competitors Anchorage and Protego across all U.S. states without needing individual licenses.
Rumors Of NYDFS Investigation
Separate rumors emerged on Feb 9th suggesting that Paxos faces an investigation from the New York Department of Financial Services (NYDFS). No reasons have been disclosed and neither party has publicly confirmed any probes yet.
Responsible For Binance USD & PAX Dollar
Paxos is responsible for two popular stablecoins: Binance USD (BUSD) and PAX Dollar (USDP). In addition to this, they are also responsible for operating a crypto brokerage as well as powering PayPal’s crypto trading capabilities.
Continuing To Work Constructively With The OCC
Despite all these rumors, Paxos reassured its customers that they are continuing to work constructively with the OCC in order to obtain their national bank charter if possible.