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Managing cryptocurrencies is the riskiest business, according to the world’s most powerful banking standard-setter.
As action to regulate the market accelerates, the Basel Committee on Banking Supervision released a report on Thursday calling for cryptocurrencies to come with the strictest bank capital rules of all assets.
“The growth of crypto assets and related services has the potential to raise financial stability issues and increase the risks facing banks,” he warned, citing market and credit risk, the fraud, hacking, money laundering and the risk of terrorist financing.
He proposed a risk weight of 1,250 percent, in line with the highest standards for banks’ exposures to riskier assets. This would mean that banks would actually have to hold capital equal to the exposure they are facing, so a $ 100 bitcoin exposure would result in a minimum capital requirement of $ 100. The standards would also apply to assets created for decentralized finance (DeFi) and non-fungible tokens (NFT), but the central bank’s potential digital currencies were outside the scope of its consultation, the committee said.
Some bankers told us they felt the Basel proposals went too far. “We’ve all seen what happens when you drive the activity of a fairly well regulated system into the Wild West. . . Do regulators want adults to do business, or would they want teens to do business? Said an executive involved in cryptography.
The industry is under pressure from its customers to get involved. The head of State Street’s new digital division told the FT that the U.S. custodian bank was looking to track clients who had increased their crypto exposure by 300% in the past two to three months.
Lex claims custodian banks occupy one of the toughest corners of Wall Street as back-office service providers, making their entry into the wild cryptocurrency world look out of place. While custodial fees collected for crypto may not be significant, the value of digital asset management may come from applying blockchain technology to streamline future financial transactions.
The Internet of (five) things
1. SoftBank Helps Klarna Reach $ 46 Billion Valuation
Klarna increased its valuation by 50% to $ 45.6 billion in just three months as the buy-it-now-payout company raised new capital from Japan’s SoftBank. The new valuation, against $ 31 billion in March and $ 11 billion last September, consolidates the Swedish group’s status as the most valuable private fintech company in Europe.
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2. Altice builds a big stake in BT
Altice, the telecoms investor controlled by billionaire Patrick Drahi, bought a 12.1% stake in BT worth £ 2 billion, making it the UK company’s largest shareholder. Helen Thomas comments that the arrival of a greedy and greedy billionaire on the ledger would upset many CEOs. But BT boss Philip Jansen, who also counts German incumbent Deutsche Telekom as a 12 percent shareholder, should draw attention.
3. Amazon facing antitrust investigation in UK
The UK’s competition watchdog is planning a formal investigation into Amazon, mirroring an ongoing EU investigation, according to three people familiar with the situation. The Competition and Markets Authority may wonder whether the company favors traders who also use its logistics and delivery services. Meanwhile, Josh Chaffin introduced Prologis, whose nearly 1 billion square feet of warehouses in 19 countries are essential ecommerce nodes and house tenants like Amazon and Walmart.
4. JBS paid a ransom of $ 11 million
The world’s largest meat processor JBS said he paid the equivalent of $ 11 million in ransom “to prevent any potential risk to our customers” from the hacking of its computer systems last week. Check out our Big Read on the incident, as Hannah Murphy explains how the FBI’s Operation Trojan Shield exposed a criminal world.
5. Down and out in Chinese technology
A new generation of workers is demanding an end to the harsh conditions of Chinese tech giants. The forced filing is just a recent flashpoint that has attracted close scrutiny as allegations of overwork, abuse and injury became the subject of heated national debate, Yuan Yang writes for the FT magazine.
Forwarded from Sifted – European start-up week
german fintech Wajve raised new financing from Swedish company EQT Ventures this week, hoping to become the go-to banking app for teens. The amount raised was only 5 million euros, but this venture capitalist trend looking for the next hot fintech for the Generation Z Market.
Others include Quirk, a new financial advisor app for young people, as well as Kard, Go Henry and Mitto. XPO, an app set to launch this summer, is targeting content creators – many of whom are under 22 – with a quick invoice financing solution.
Elsewhere in European start-ups this week, SoftBank launched its Emerge accelerator with the aim of increasing the diversity of founders that the company finances; Europe’s largest digital wealth manager Scalable Capital announced that it has raised $ 180 million Series E financing round, making it the sixth German fintech unicorn; and lithium-ion battery manufacturer Northvolt raised $ 2.75 billion in equity.
Technical tools – OnePlus Nord CE 5G
Oneplus North CE 5G (Core Edition) is an update to its mid-range phone, and at a lower price – £ 299 in the UK, less than half the cost of its flagship OnePlus 9. It includes a 64MP triple camera system. , a 16MP selfie snapper, 6.43-inch 90Hz screen and a 4,500mAh battery, nearly 10% larger than the original North. The Verge also notesa new processor and the addition of a headphone jack. The phone can be pre-ordered now and will be available within the next 10 days.