🌐 G20 Won’t Regulate 🗞️ News Roundup — Cryptos for the Rest of Us

The selloff continues with the market hitting new lows during the week. It feels like capitulation may be close as gains since December last year are wiped out. We continue to run analysis on sentiment and are almost ready to release a report on the Japanese market, which constitutes ~60% of global BTC volumes.

🌐 G20 Won’t Regulate

What’s the Story?

The Financial Stability Board (FSB) which coordinates global financial regulation between the Group of 20 (G20) nations stated that cryptocurrencies do not currently pose a systemic risk to the global financial markets.

The FSB’s initial assessment is that crypto-assets do not pose risks to global financial stability at this time

FSB Chair Mark Carney said in a letter to G20 central bankers and finance ministers who will meet in Buenos Aires on Monday and Tuesday.

Why Isn’t it a Risk?

The main takeaway is that the total of crypto assets even at their peak was less than 1% of the global financial system. In short, because it’s such a small portion of the global market any failure would be very well contained.

Why Should I Care?

The FSB is a powerful force when it comes to creating new regulatory frameworks. It has been one of the primary forces coordinating the G20 regulatory response to the global financial crisis of 2008.

Carney, who is also the head of the Bank of England, resisted calls within the G20 to start regulation around cryptocurrencies.

The decision seems in line with his view that the FSB will be more focused on reviewing rules, rather than pushing out new standards.

As its work to fix the fault lines that caused the financial crisis draws to a close, the FSB is increasingly pivoting away from design of new policy initiatives towards dynamic implementation and rigorous evaluation of the effects of the agreed G20 reforms

In particular, this shows that while cryptocurrencies may have been in a bubble earlier this year, they are far from being a mainstream part of the financial markets — for now. In short, the FSB have bigger fish to fry.

The immediate response from the market was a rally which saw Ethereum jump $60 (~10%) after the news broke. Whether this will signal a reversal of fortunes for the crypto markets is yet to be seen.

📊 Chart of the Week

Google Trends for the term ‘Bitcoin’ over time

Clearly tracking the dramatic rise and fall in prices since the end of last year. As interest has waned in the space so too have volumes. A much-needed correction or a death knell for the market? Either way, it’s clear that we’re in a new paradigm as the USD20,000 mark for Bitcoin get farther and farther away.

🗞️ News Roundup

Coinbase gets e-money license in the UK — faster processing


Coinbase has won an e-money license from the FCA, the UK regulator. This gives them the ability to handle client funds separately and is in-between a regular company that keeps client funds together with company funds, and a bank which has government guaranteed deposits. Critically, this gives Coinbase access to the whole European market (until Brexit at least), and will significantly speed up GBP fiat/crypto transactions.

Hackers are targeting DADI ICO investors with phishing emails


Investors in the ICO ‘DADI’ have been targeted by phishing emails with an address claiming to be from the company. There is controversy surrounding the phishing scheme as some Redditors are claiming that the hackers are phishing using sensitive individual data that was given to DADI as part of the token sale — implying that DADI has had a data breach of KYC materials.

Cryptocurrencies: Last Week Tonight with John Oliver (HBO) — YouTube


John Oliver and the Last Week Tonight team created a very measured segment covering the cryptocurrency space. In particular, they criticise the ‘perpetual’ EOS token sale and correctly highlights the chequered past of one of its co-founders, Brock Pierce, who has since left the team following the segments criticism. The gist is that there are a lot of scams out there and it’s a dangerous place to be playing in.

First Lightning Network release on Bitcoin mainnet


Lightning Network, the off-chain solution to fast Bitcoin transactions, has released their first version on the main Bitcoin network. Its impact is more for the developers as of now but paves the way for full LN adoptions. The biggest introduction might be Atomic Multipath Payments — which allows large Lightning transactions to be divided into a series of smaller transactions as they’re sent over the Lightning Network, but in such a way that they’re automatically joined back together.

What do you find most valuable about this series? What would you like me to focus more on in coming issues?