Banks Are Showing Interest to Join the Libra Association
Will Facebook Allow Banks and Financial Institutions to be Part of the Libra Association?
Libra Association Would Have 100 Members Before Libra Launches Perez
Cryptocurrency News Today Facebook seems to be having a lot of issues with its digital currency project. The digital currency, which is expected to be launched by now, is still struggling to get regulatory approval. Many are waiting in anticipation for the launch of Facebooks Libra Coin. The crypto project of Facebook already has the backing of many top players in several industries. However, Facebook is yet to get the green light that it is looking for. Nevertheless, more bullish news around the project is popping up. Recently, more banks have been showing interest to join the Libra Association.
Recently, the acting managing director and Chief Operating Officer of the Libra Association Bertrand Perez said that many firms, including banks, are showing more interest to join the Libra Association a stablecoin project led by Facebook
In an interview with CNBC that was published yesterday, Perez said that banks and financial institutions have shown interest in joining the Libra project. However, the Libra Association executive did not mention the name of any bank or company. Nevertheless, he said:
We have reputable companies that are also very active in the financial and banking space.
At the moment, no bank or financial institution is part of the Libra Association. The Libra Foundation currently has 21 founding members. Initially, there were 28 founding members of the Libra Association, including Facebook. However, that number dropped over the past couple of weeks. Some weeks ago, seven high-profile firms pulled out of the project. The seven firms that pulled out of the project are eBay, PayPal, MasterCard, Visa, Stripe, Booking Holdings, and online marketplace MercadoLibre.
Despite these top firms dropping out, Perez is very much confident that the Libra Association would have 100 members by the time the project launches. However, he admitted that the launch of the project could be delayed due to the intense regulatory scrutiny. In a statement, he said:
We are aware that we need to answer a lot of questions coming from the regulators and to make them comfortable with the platform and that requires time. He added that launching a few quarters later or before makes no real change.
Facebook is currently having issues with regulators and the firm is yet to get the green light to launch the crypto project. No one knows when the project will eventually launch, but many believe it would launch definitely.
Bank of Canada contemplating CBDC launch to tackle cryptocurrencies
According to a recent report, Indian Minister of Finance and Corporate Affairs, Nirmala Sitharaman said that many countries had advised against rushing into cryptocurrency while addressing questions on Facebooks Libra during the annual meeting of the International Monetary Fund and the World Bank. Sitharaman stated:
On our side, the Reserve Bank Governor spoke about it during our turn to intervene. I got the sense that many countries were cautioning on rushing into this. Some of them [countries] of course even suggested that they shouldnt be using, all of us shouldnt be using the name stable currency because thats the expression they used. Many cautioned to the extent saying even the name should not be stable currency, it should relate to virtual currency or something of the kind
Indian authorities have made it clear that private cryptocurrency, such as Facebooks Libra, is not something they are comfortable with. The social networking giants upcoming global coin has met with resistance and apprehension from many countries. This, however, was the first time that the Indian Finance Minister expressed concern about it.
Indian regulators have constantly echoed concerns over the cryptocurrency space and a positive discussion, which is the need of the hour, seems to be positioned to take place in the rather distant future. The postponement of the Supreme Court hearings on cryptocurrency has only delayed clarity on the status of cryptocurrency in India.
Sitharaman echoed a similar sentiment to the recently released report presented by a G7 working group and acknowledged the strengths of the space, and also said that the risks associated with it cannot be undermined and hence should take steps cautiously. The finance minister stated:
In fact, this morning some of the presentations were also highlighting the strengths of such virtual currency. But equally everyone without fail spoke about the challenges together with talking about it as a if necessary step forward. So everyone was stepping cautiously on it
The digital asset markets forward march has resulted in a lot of users affirming their belief that the industry is here to stay for good. This excitement was reflected in Anthony Pomplianos latest tweet, in which he said:
Binance has made $1 billion in cumulative profit in less than 3 years since inception??Damn @cz_binance slow down and leave some of the profits for everyone else!!
The figures were based on recent analysis, which putBinancefront and center when it came to gross profits and successful trades. Changpeng Zhao, the Chief Executive Officer of Binance, took no time in replying to Pomp, tweeting that the company will be reinvesting a majority of the profits. crypto_revolutionary, popular Twitteratti, replied to CZ. Asking:
Please feel free to reinvest some in me, then Ill have a bit more to trade with on Binance, helping to secure the future of your business. No thanks needed.
The user community was confident that the profits would only increase in the future as there were many people left to join the crypto world along with the added influx of capital. Binance has been enjoying a great 2019, with profits adding totally to a whopping $1 billion. While at the same time, the price of BNB has not reflected the increase in profits CZ even commented on the phenomenonsaying:
We believe BNB has grown beyond the point of depending on reducing supply (such as the BNB burn) to increase value. A far bigger portion of BNB value comes from its utility. We prioritize increasing the utility of BNB over short-term profits for Binance, he said, later adding that even with all the above progress and results, the BNB price declined from its [all time high] near the beginning of the quarter.
The CEO added that the fall in prices could be associated with the FUD in the crypto community. At the same time, Zhao was confident that BNB had outshone the significant players, surpassing user expectations at the same time. He concluded:
Markets often confuse people, even me sometimes. We still have very much strive to be the financial infrastructure provider for tomorrow, and work hard to bring the freedom of money to the masses.
The third quarter of 2019 saw a decline in Digital Assets Market capitalization. The total market capitalization fell down from its peak in July 2019 ($300bn) to nearly $200bn at the end of September. Bitcoin (BTC), Ethereum (ETH), Ripple (XRP) which represent more than 80% of the total market capitalization displayed a significant decline in their prices owing to the fall in the total market cap. A recently releasedreportby ExoAlpha highlights the plight of the top 3 coins and how they shaped the market in the third quarter.
The third quarter saw Bitcoin price declining by 23%. Ether also suffered a sharp 38% decline. Interestingly, the volatility of the top 3 most liquid Digital Assets was lower than over the previous quarter: 75% for BTC, 69% for XRP and 83% for ETH. Even the digital assets derivatives market witnessed a key event this quarter, with the launch of theBakkt platformon the 23rd of September 2019, the first regulated, Bitcoin futures contract physically delivered exchange, backed by the Intercontinental Exchange (ICE) exchange.
Bitcoins volatility was marked at 74.5% in the 3rd quarter and it reduced by 13% from the Q2. Furthermore, the volatility decreased from a high in July of 99% to a low in September at53.6%. Over the quarter the volatility of Bitcoin has been 4 times higher than the volatility ofthe S&P 500 or Gold.
Ethereum displayed 82.8% volatility in the third quarter. The volatility stood at 89.7% at the end of the second quarter. During the third quarter, its volatility decreased from a high in July of 98% to a low in September at 79.4%. Over the quarter, the volatility of Ethereum has been more than 4 times higher than the volatility of the S&P 500 or Gold. Also, over the last 5 years, the volatility ofEthereum topped above 200%, in 2016 and 2017.
The volatility of XRP in Q3 was marked at 68.7%, lower than Q2 (96.4%). During the quarter, its volatility ranged between 54.9% and 76.5% with a low of 54.9% in August. Over the quarter the volatility of XRP has been more than 3 times higher than the volatility of the S&P 500 or Gold.
It was also observed that while Bitcoin has not shown a correlation to traditional assets such as the S&P 500 index or Gold, its beta to these traditional assets has ranged between -2 and +3 at times.
Even, Ethereums beta to these traditional assets has ranged between -2 and +4 at times.
The volatility of the Passive Index in Q3 was fount to be at 57.7%, lower than at the end of Q2(65.3%). During the quarter, its volatility decreased from a high of 90% in July to a low inSeptember at 30%.