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Facebook’s Libra Suffers as Paypal Pulls Out

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  • Facebook’s Libra Suffers as Paypal Pulls Out

Paypal Inc has officially pulled out of Facebook’s cryptocurrency project, Libra, amid rising regulatory scrutiny and opposition.

Paypal was one of the companies that invested at least $10 million in the project when it was unveiled earlier this year, however, none of them anticipated the level of opposition and scrutiny that trailed the announcement.

Regulators across the world are worried about trusting Facebook with financial details of their citizens following its failure to protect users’ data in the past and its reluctant to even report the stolen data.

The 29 companies that initially signed up for the project are now sceptical, and with Paypal out, others may start pulling out to limit regulatory scrutiny and negative impact on their overall branding.

A move that could hurt the entire project as Facebook would lose more bargaining power and its ability to convince regulators that the project is a collective effort and not a move to monopolise global financial service.

In a statement released by Paypal, the company decided to focus on advancing its existing mission and business priorities.

“PayPal has made the decision to forgo further participation in the Libra Association at this time and to continue to focus on advancing our existing mission and business priorities as we strive to democratize access to financial services for underserved populations,” PayPal said in an emailed statement to TechCrunch. “We remain supportive of Libra’s aspirations and look forward to continued dialogue on ways to work together in the future. Facebook has been a longstanding and valued strategic partner to PayPal, and we will continue to partner with and support Facebook in various capacities.”

Earlier this week, WSJ reported that Mastercard, Visa and other companies may also pull out ahead of the scheduled meeting to elect the first board of directors for the project this month in Geneva.

Facebook, however, responded to the Paypal announcement: “It requires a certain boldness and fortitude to take on an endeavor as ambitious as Libra – a generational opportunity to get things right and improve financial inclusion,” said a spokesperson. “The journey will be long and challenging. The type of change that will reconfigure the financial system to be tilted towards people, not the institutions serving them, will be hard. Commitment to that mission is more important to us than anything else. We’re better off knowing about this lack of commitment now, rather than later.”

The only CEO who has spoken regarding the project, Al Kelly, Visa, said: “It’s important to understand the facts here and not any of us get out ahead of ourselves,” Kelly said in the company’s most recent earnings call. “So we have signed a nonbinding letter of intent to join Libra. We’re one of – I think it’s 27 companies that have expressed that interest. So no one has yet officially joined. We’re in discussions and our ultimate decision to join will be determined by a number of factors, including obviously the ability of the association to satisfy all the requisite regulatory requirements… It’s really, really early days and there’s just a tremendous amount to be finalized. But obviously, given that we’ve expressed interest, we actually believe we could be additive and helpful in the association.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Bitcoin

Bitcoin Needs Greater Regulatory Scrutiny – and Here’s Why: deVere CEO

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Bitcoin Needs Greater Regulatory Scrutiny – and Here’s Why: deVere CEO

Greater regulatory scrutiny of cryptocurrencies such as Bitcoin must become a priority as they continue to play an increasingly normalised role for investors, says the CEO of one of the world’s largest independent financial advisory and fintech organisations.

deVere Group’s chief executive and founder Nigel Green – a long time advocate of cryptocurrencies – is speaking out after both the UK’s Financial Conduct Authority (FCA) and the president of the European Central Bank (ECB) called for more robust regulations for cryptocurrencies this week.

The calls follow the price of Bitcoin jumping more than 300% last year and gained a further 40% earlier this month to reach an all-time high.

Mr Green says: “The calls by financial watchdogs and central banks for greater regulatory scrutiny must be championed as digital currencies, including Bitcoin, are set to play an ever greater role in the international financial system.

“What’s needed is a strong regulatory framework to be established and approved at an international level.  The forthcoming UK-hosted G20 summit might prove to be the ideal opportunity.

“Such regulation will help protect investors, tackle cryptocurrency criminality, and reduce the potential possibility of disrupting global financial stability, as well as offering a potential long-term economic boost to those countries which introduce it.”

He continues: “There is sustained and growing interest in the likes of Bitcoin from both retail and institutional investors. They are now increasingly handling the assets as they would any other asset in the portfolio –for example, sometimes profit-taking, sometimes reinvesting, using the volatility to their advantage, and using these alternatives to help with all-important diversification.

“These mainstream, normalised investor strategies demonstrate that cryptocurrencies must come into the regulatory tent and be held the same standards as the rest of the financial system.”

Previously, the deVere boss has said that one of the best ways to address the regulatory issues is via the exchanges.

“Nearly all foreign exchange transactions go through banks or currency houses and this is what needs to happen with cryptocurrencies. When flows run through regulated exchanges, it will be much easier to tackle potential wrongdoing, such as money laundering, and make sure tax is paid,” he has noted.

“For this to happen, banks will need to open accounts for exchanges, which is why they must be regulated.”

Mr Green concludes: “Cryptocurrencies in some form or another are here to stay – and the market is only set to grow.

“There can be no doubt that regulation of the crypto ecosystem is required and, I believe, it should be a priority.

“The work being done by many international financial watchdogs, lawmakers and central banks, such as the FCA and the ECB, in this area is something I fully support.”

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Bitcoin, Other Cryptocurrencies Free Fall as President-Elect Joe Biden Promises Trillions of Additional Stimulus

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Bitcoin

Bitcoin, Other Cryptocurrencies Free Fall as President-Elect Joe Biden Promises Trillions of Additional Stimulus

Investors appear to be locking in profits and jumping off unregulated crypto-asset Bitcoin and other cryptocurrencies following the official declaration of Joe Biden as the President-Elect of the United States.

Bitcoin plunged by over $8,000 to $33.781 per coin, down from over $41.457 per coin it traded a few days ago.

Ethereum followed with a 15.17 percent decline to $1,067.30 per coin.

Stellar and Ripple lost 11.71 percent and 15.36 percent, respectively.

The decline in cryptocurrency value was as a result of the recent stimulus announcement by President-elect, Joe Biden, and the fact that Democrats now control both the lower and upper houses. It means little to zero policy hindrance when President Biden is officially sworn in on January 20, 2021.

Businesses and investors are now more optimistic about other sectors of the economy and expect the new stimulus package to boost stocks and other traditional assets that are better regulated than the crypto space.

It means institutional investors that are jumping on bitcoin and other cryptocurrencies have started holding back to assess new opportunities opening up with the incoming president.

Also, the American Dollar sustained its bullish trend against haven currencies and other currencies as investors up purchase of American assets as evidenced in the surge in yield.

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Cryptocurrency

Coinbase Acquired Routefire to Deepen Operations

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Coinbase Acquired Routefire to Deepen Operations

The leading U.S cryptocurrency exchange company, Coinbase, has acquired Routefire, a trade execution startup, in an effort to expand and improve its exchange business.

In a blog post by Jason Victor, the Chief Executive Officer, Routefire, the company can executive $1mm+ orders with 50 basis points or more in price improvement.

The blog read in part, “After an incredible journey that began in early 2018, it is with pride and a deep sense of gratitude that today we are announcing we will be discontinuing Routefire’s services and our team will be joining Coinbase to continue developing best-in-class execution services for digital assets.

“We’ve had an incredible few years serving this community. When we entered the space, crypto market infrastructure was in its infancy, and traders were sorely in need of a solution that allowed them to execute quickly and efficiently across venues without suffering the market impact common to large block orders.

“Our mission was to enhance trading infrastructure in crypto markets, and we developed one of the most performant tools in the space, routinely filling $1mm+ orders with 50 bps or more in price improvement. Most of all, we enjoyed listening to and partnering with our customers to build the Routefire platform.”

A spokesman for Coinbase confirmed the transaction but refused to comment on the details.

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