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Harsh Stablecoin Recommendations From G-20 Are a Step in the Right Direction, but Regulators Need More Education

Harsh Stablecoin Recommendations From G-20 Are a Step in the Right Direction, but Regulators Need More Education

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Most crypto analysts believe that proper regulation is needed when it comes to promoting the legitimacy of stablecoins.

According to a study released by the G-20’s Financial Stability Board on April 14, stablecoins pose a pertinent risk to the financial stability of the global economy and therefore need to be regulated in a manner that is not only meticulous but also future ready. 

Additionally, as per data released by the FSB, members of the G-20 have been advised to make use of their existing financial rules — especially those related to money laundering and terrorism funding — in regard to any stablecoin offerings that may be available within their respective borders.

The G-20 seems to be particularly hostile toward Facebook’s Libra project, as the cryptocurrency holds an enormous amount of potential for instant adoption. However, the board is not too concerned about other projects like Dai, saying they are too small to pose any sort of systemic risk to the local economy of any nation.

Continuing the dialogue

To get a more in-depth understanding of the matter, Cointelegraph reached out to Daniel Burstein, the general counsel and chief compliance officer of Paxos, which is the platform behind several stablecoins such as the United States dollar-backed Paxos Standard (PAX) and gold-linked Pax Gold (PAXG). 

In his view, the FSB, through its aforementioned report, has made an “important and thoughtful contribution” to the ongoing dialogue about the benefits of stablecoins as well as the importance of mitigating risks associated with stablecoins through strong controls and thoughtful regulation. “The FSB consulted Paxos in researching this report, and the report demonstrates that our input was well received.”

He further pointed out that by gaining the approval of the New York State Department of Financial Services, Paxos’s various stablecoin offerings are tackling a number of pressing issues related to this unique asset class, such as security of reserves, ease of redemption, governance, accountability, risk management, transparency, cybersecurity and financial crime compliance, recovery and resolution.

Similarly, Paolo Ardoino, the chief technology officer of Tether — the company behind the U.S. dollar-pegged stablecoin USDT — told Cointelegraph that despite all of the criticism put forth by the G-20 in relation to the asset class, his firm has welcomed the FSB's recognition of the role of stablecoins in the global economy and its consideration of financial technology innovation in the digital asset space.

Pundits weigh in on how stablecoins should ideally be regulated 

In their most basic sense, stablecoins are digital currencies that offer value to traders and exchanges, as well as the overall crypto ecosystem, by providing investors with an asset class that is stabilized by an underlying crypto or fiat currency such as the U.S. dollar. 

Investors can use stablecoins to buy and sell cryptocurrencies, reducing their risk during periods of high volatility. However, in terms of how this unique asset class should be governed, Josh Li, the chief business officer of Apifiny — the parent company of the Global Currency Organization, which is issuing a digital dollar token called USD Digital (USDD) — told Cointelegraph:

“If regulators devise clear guidelines on how stablecoins should be created, traded and managed, any potential concerns can be greatly alleviated. I believe that the advantages of well-regulated stablecoins outweigh any potential risks. Ideally, the government regulators around the world can align on a common framework.”

Also, Gregory Klumov, the CEO of Stasis, which issues the euro-back stablecoin Eurs, told Cointelegraph that many of the issues highlighted by the FSB are not really serious because transactions related to stablecoins are available on public ledgers. Not only that, he also pointed out that most stablecoin issuers are currently making use of analytical software tools that can easily help auditors determine whether a particular transaction has any issues with it, especially in relation to the origin of its funds, adding:

“I believe that the board has probably just started to climb it's learning curve and has not been aware that there are blockchain analytical tools for proof-of-work blockchain that provide a solution exactly against what they are concerned with.”

Lastly, expounding his views on the matter, Jake Yocom-Piatt, the project lead and co-founder of Decred (DCR) — an autonomous digital currency that makes use of a hybrid consensus system — told Cointelegraph that a lot of the FSB’s concerns about stablecoins are vastly overblown and it is very limited in its outlook:

“The FSB represents a collection of states that have very powerful corresponding central banks and the primary power of those central banks is the ability to issue credit as they lease. The FSB will continue to worry about potential competition in the context of fiat-like credit issuance because central banks are both unwilling and unable to adopt a more reasonable deterministic or finite credit issuance process.”

Can stablecoins really be used to exploit regulatory loopholes?

Over the past couple of years, stablecoins have grown immensely both in terms of their legitimacy and overall popularity. This is in part due to the fact that more and more people have found this unique offering to be helpful in saving time and money. Additionally, a number of stablecoins, such as Tether and Binance USD (BUSD), have witnessed a sizable increase in their respective market capitalizations. This points to the fact that stablecoins are either being repurposed or being utilized for supplanting bank-dependent money.

Related: How Zero Interest Rates in the US Will Impact Stablecoin Adoption

However, when it comes to stablecoins being used for nefarious purposes, Paul Mak, a former venture capital investor and founder of Gus — a stablecoin that has its value pegged to the U.S. dollar but is backed by physical gold — told Cointelegraph that most of the “loopholes” the FSB has harped on in its report are really just regulatory differentiators between various economies, adding:

“What crypto and distributed companies have figured out is that there is an opportunity for regulatory arbitrage. This is the way of the global economy, it happens across all markets in all forms, pricing, production, finance and regulation. But now all of a sudden governments have to work together because stable coins pose a threat. They don’t.”

Regardless, Mak does believe that the G-20’s recommendations are a step in the right direction, even though it may still take some time for regulators to truly understand the potential of this novel asset. Similarly, Dan Schatt, the former general manager of financial innovations for PayPal and the chairman of Universal Protocol — the organization behind the U.S. dollar-backed stablecoin Universal Dollar (UPUSD) — told Cointelegraph that just as cash can be used up to a certain amount without any ID checking, the same protocols could and should be used for stablecoins, which would largely solve concerns and issues around Know Your Customer processes. In regard to the matter, he further opined, “Certainly, verification of identity has become easier with technology and could help mitigate the threat of money laundering.”

On the subject of certain stablecoins showcasing deviations from their pegs and the financial implications such aberrations could have on the global economic engine, Schatt pointed out:

“We have witnessed deviations from ‘pegs’ with many countries that have had runaway inflation. Blockchain technology has evolved such that tokens can be dynamically burned and minted to reflect an underlying asset deposited or withdrawn and is a much cleaner way of instilling confidence that a stablecoin is fully substantiated.”

A similar opinion is shared by Shy Datika, the co-founder and president of INX, a trading platform for institutional investors. In his view, any unsupervised and unregulated financial instrument can be misused. However, as stablecoins are blockchain-based entities, they are much safer than any other capital asset: 

“Smart contracts allow for self-regulation and therefore have zero human intervention, and thus prevent any intentional malpractice. It all goes back to the same issue — the stablecoins are not the problem — lack of proper regulation is.”

The future looks good for stablecoins 

Despite the G-20 taking a cautious approach toward stablecoins, experts believe that if regulated they may actually increase the stability of many economies by decreasing global arbitrage spreads. Additionally, these digital assets are available 24/7 for trade and react in real-time settlement as opposed to legacy assets that have major settlement and trading lags, which enable miscreants to exploit many of the loopholes that the FSB has outlined in its report.

Also, USDT, one of the world’s most popular stablecoins that currently has a market capitalization of around $6.4 billion, often showcases trading volumes of over $20 billion per day. This is well over 15–20 times the daily trading volume of Singapore’s stock exchange. With that being said, tokens such as USDT that have a somewhat suspicious financial past may seem to pose a systemic risk, mainly because many people stand to potentially lose out on their hard earned wealth should investor confidence in such offerings erode.

In regard to Facebook’s Libra, a currency that will be supported by a basket of stablecoins pegged to dominant fiat currencies from all around the world that have obvious appeal for users in emerging markets, Nick Hill, the vice president of business development at Invictus Capital — a merchant banking and C-suite advisory firm — told Cointelegraph that the issue with Libra and other similar assets is that their rapid adoption could destabilize and undermine the financial systems of less developed countries. This would take away any ability for financial authorities to control their local money supplies and further transfer monetary power to established economies:

“This problem can be alleviated by properly regulating stablecoin issuers. Establish a framework for legal tender and establishing adoption policies for digital currency use can help alleviate the stress of local monetary authorities.”

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Sylvester researchers, collaborators call for greater investment in bereavement care

MIAMI, FLORIDA (March 15, 2024) – The public health toll from bereavement is well-documented in the medical literature, with bereaved persons at greater…

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March 15, 2024

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MIAMI, FLORIDA (March 15, 2024) – The public health toll from bereavement is well-documented in the medical literature, with bereaved persons at greater risk for many adverse outcomes, including mental health challenges, decreased quality of life, health care neglect, cancer, heart disease, suicide, and death. Now, in a paper published in The Lancet Public Health, researchers sound a clarion call for greater investment, at both the community and institutional level, in establishing support for grief-related suffering.

Credit: Photo courtesy of Memorial Sloan Kettering Comprehensive Cancer Center

MIAMI, FLORIDA (March 15, 2024) – The public health toll from bereavement is well-documented in the medical literature, with bereaved persons at greater risk for many adverse outcomes, including mental health challenges, decreased quality of life, health care neglect, cancer, heart disease, suicide, and death. Now, in a paper published in The Lancet Public Health, researchers sound a clarion call for greater investment, at both the community and institutional level, in establishing support for grief-related suffering.

The authors emphasized that increased mortality worldwide caused by the COVID-19 pandemic, suicide, drug overdose, homicide, armed conflict, and terrorism have accelerated the urgency for national- and global-level frameworks to strengthen the provision of sustainable and accessible bereavement care. Unfortunately, current national and global investment in bereavement support services is woefully inadequate to address this growing public health crisis, said researchers with Sylvester Comprehensive Cancer Center at the University of Miami Miller School of Medicine and collaborating organizations.  

They proposed a model for transitional care that involves firmly establishing bereavement support services within healthcare organizations to ensure continuity of family-centered care while bolstering community-based support through development of “compassionate communities” and a grief-informed workforce. The model highlights the responsibility of the health system to build bridges to the community that can help grievers feel held as they transition.   

The Center for the Advancement of Bereavement Care at Sylvester is advocating for precisely this model of transitional care. Wendy G. Lichtenthal, PhD, FT, FAPOS, who is Founding Director of the new Center and associate professor of public health sciences at the Miller School, noted, “We need a paradigm shift in how healthcare professionals, institutions, and systems view bereavement care. Sylvester is leading the way by investing in the establishment of this Center, which is the first to focus on bringing the transitional bereavement care model to life.”

What further distinguishes the Center is its roots in bereavement science, advancing care approaches that are both grounded in research and community-engaged.  

The authors focused on palliative care, which strives to provide a holistic approach to minimize suffering for seriously ill patients and their families, as one area where improvements are critically needed. They referenced groundbreaking reports of the Lancet Commissions on the value of global access to palliative care and pain relief that highlighted the “undeniable need for improved bereavement care delivery infrastructure.” One of those reports acknowledged that bereavement has been overlooked and called for reprioritizing social determinants of death, dying, and grief.

“Palliative care should culminate with bereavement care, both in theory and in practice,” explained Lichtenthal, who is the article’s corresponding author. “Yet, bereavement care often is under-resourced and beset with access inequities.”

Transitional bereavement care model

So, how do health systems and communities prioritize bereavement services to ensure that no bereaved individual goes without needed support? The transitional bereavement care model offers a roadmap.

“We must reposition bereavement care from an afterthought to a public health priority. Transitional bereavement care is necessary to bridge the gap in offerings between healthcare organizations and community-based bereavement services,” Lichtenthal said. “Our model calls for health systems to shore up the quality and availability of their offerings, but also recognizes that resources for bereavement care within a given healthcare institution are finite, emphasizing the need to help build communities’ capacity to support grievers.”

Key to the model, she added, is the bolstering of community-based support through development of “compassionate communities” and “upskilling” of professional services to assist those with more substantial bereavement-support needs.

The model contains these pillars:

  • Preventive bereavement care –healthcare teams engage in bereavement-conscious practices, and compassionate communities are mindful of the emotional and practical needs of dying patients’ families.
  • Ownership of bereavement care – institutions provide bereavement education for staff, risk screenings for families, outreach and counseling or grief support. Communities establish bereavement centers and “champions” to provide bereavement care at workplaces, schools, places of worship or care facilities.
  • Resource allocation for bereavement care – dedicated personnel offer universal outreach, and bereaved stakeholders provide input to identify community barriers and needed resources.
  • Upskilling of support providers – Bereavement education is integrated into training programs for health professionals, and institutions offer dedicated grief specialists. Communities have trained, accessible bereavement specialists who provide support and are educated in how to best support bereaved individuals, increasing their grief literacy.
  • Evidence-based care – bereavement care is evidence-based and features effective grief assessments, interventions, and training programs. Compassionate communities remain mindful of bereavement care needs.

Lichtenthal said the new Center will strive to materialize these pillars and aims to serve as a global model for other health organizations. She hopes the paper’s recommendations “will cultivate a bereavement-conscious and grief-informed workforce as well as grief-literate, compassionate communities and health systems that prioritize bereavement as a vital part of ethical healthcare.”

“This paper is calling for healthcare institutions to respond to their duty to care for the family beyond patients’ deaths. By investing in the creation of the Center for the Advancement of Bereavement Care, Sylvester is answering this call,” Lichtenthal said.

Follow @SylvesterCancer on X for the latest news on Sylvester’s research and care.

# # #

Article Title: Investing in bereavement care as a public health priority

DOI: 10.1016/S2468-2667(24)00030-6

Authors: The complete list of authors is included in the paper.

Funding: The authors received funding from the National Cancer Institute (P30 CA240139 Nimer) and P30 CA008748 Vickers).

Disclosures: The authors declared no competing interests.

# # #

Journal

The Lancet Public Health

DOI

10.1016/S2468-2667(24)00030-6

Article Title

Investing in bereavement care as a public health priority

Article Publication Date

13-Mar-2024

COI Statement

The authors declared no competing interests.

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International

Copper Soars, Iron Ore Tumbles As Goldman Says “Copper’s Time Is Now”

Copper Soars, Iron Ore Tumbles As Goldman Says "Copper’s Time Is Now"

After languishing for the past two years in a tight range despite recurring…

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March 15, 2024

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Copper Soars, Iron Ore Tumbles As Goldman Says "Copper's Time Is Now"

After languishing for the past two years in a tight range despite recurring speculation about declining global supply, copper has finally broken out, surging to the highest price in the past year, just shy of $9,000 a ton as supply cuts hit the market; At the same time the price of the world's "other" most important mined commodity has diverged, as iron ore has tumbled amid growing demand headwinds out of China's comatose housing sector where not even ghost cities are being built any more.

Copper surged almost 5% this week, ending a months-long spell of inertia, as investors focused on risks to supply at various global mines and smelters. As Bloomberg adds, traders also warmed to the idea that the worst of a global downturn is in the past, particularly for metals like copper that are increasingly used in electric vehicles and renewables.

Yet the commodity crash of recent years is hardly over, as signs of the headwinds in traditional industrial sectors are still all too obvious in the iron ore market, where futures fell below $100 a ton for the first time in seven months on Friday as investors bet that China’s years-long property crisis will run through 2024, keeping a lid on demand.

Indeed, while the mood surrounding copper has turned almost euphoric, sentiment on iron ore has soured since the conclusion of the latest National People’s Congress in Beijing, where the CCP set a 5% goal for economic growth, but offered few new measures that would boost infrastructure or other construction-intensive sectors.

As a result, the main steelmaking ingredient has shed more than 30% since early January as hopes of a meaningful revival in construction activity faded. Loss-making steel mills are buying less ore, and stockpiles are piling up at Chinese ports. The latest drop will embolden those who believe that the effects of President Xi Jinping’s property crackdown still have significant room to run, and that last year’s rally in iron ore may have been a false dawn.

Meanwhile, as Bloomberg notes, on Friday there were fresh signs that weakness in China’s industrial economy is hitting the copper market too, with stockpiles tracked by the Shanghai Futures Exchange surging to the highest level since the early days of the pandemic. The hope is that headwinds in traditional industrial areas will be offset by an ongoing surge in usage in electric vehicles and renewables.

And while industrial conditions in Europe and the US also look soft, there’s growing optimism about copper usage in India, where rising investment has helped fuel blowout growth rates of more than 8% — making it the fastest-growing major economy.

In any case, with the demand side of the equation still questionable, the main catalyst behind copper’s powerful rally is an unexpected tightening in global mine supplies, driven mainly by last year’s closure of a giant mine in Panama (discussed here), but there are also growing worries about output in Zambia, which is facing an El Niño-induced power crisis.

On Wednesday, copper prices jumped on huge volumes after smelters in China held a crisis meeting on how to cope with a sharp drop in processing fees following disruptions to supplies of mined ore. The group stopped short of coordinated production cuts, but pledged to re-arrange maintenance work, reduce runs and delay the startup of new projects. In the coming weeks investors will be watching Shanghai exchange inventories closely to gauge both the strength of demand and the extent of any capacity curtailments.

“The increase in SHFE stockpiles has been bigger than we’d anticipated, but we expect to see them coming down over the next few weeks,” Colin Hamilton, managing director for commodities research at BMO Capital Markets, said by phone. “If the pace of the inventory builds doesn’t start to slow, investors will start to question whether smelters are actually cutting and whether the impact of weak construction activity is starting to weigh more heavily on the market.”

* * *

Few have been as happy with the recent surge in copper prices as Goldman's commodity team, where copper has long been a preferred trade (even if it may have cost the former team head Jeff Currie his job due to his unbridled enthusiasm for copper in the past two years which saw many hedge fund clients suffer major losses).

As Goldman's Nicholas Snowdon writes in a note titled "Copper's time is now" (available to pro subscribers in the usual place)...

... there has been a "turn in the industrial cycle." Specifically according to the Goldman analyst, after a prolonged downturn, "incremental evidence now points to a bottoming out in the industrial cycle, with the global manufacturing PMI in expansion for the first time since September 2022." As a result, Goldman now expects copper to rise to $10,000/t by year-end and then $12,000/t by end of Q1-25.’

Here are the details:

Previous inflexions in global manufacturing cycles have been associated with subsequent sustained industrial metals upside, with copper and aluminium rising on average 25% and 9% over the next 12 months. Whilst seasonal surpluses have so far limited a tightening alignment at a micro level, we expect deficit inflexions to play out from quarter end, particularly for metals with severe supply binds. Supplemented by the influence of anticipated Fed easing ahead in a non-recessionary growth setting, another historically positive performance factor for metals, this should support further upside ahead with copper the headline act in this regard.

Goldman then turns to what it calls China's "green policy put":

Much of the recent focus on the “Two Sessions” event centred on the lack of significant broad stimulus, and in particular the limited property support. In our view it would be wrong – just as in 2022 and 2023 – to assume that this will result in weak onshore metals demand. Beijing’s emphasis on rapid growth in the metals intensive green economy, as an offset to property declines, continues to act as a policy put for green metals demand. After last year’s strong trends, evidence year-to-date is again supportive with aluminium and copper apparent demand rising 17% and 12% y/y respectively. Moreover, the potential for a ‘cash for clunkers’ initiative could provide meaningful right tail risk to that healthy demand base case. Yet there are also clear metal losers in this divergent policy setting, with ongoing pressure on property related steel demand generating recent sharp iron ore downside.

Meanwhile, Snowdon believes that the driver behind Goldman's long-running bullish view on copper - a global supply shock - continues:

Copper’s supply shock progresses. The metal with most significant upside potential is copper, in our view. The supply shock which began with aggressive concentrate destocking and then sharp mine supply downgrades last year, has now advanced to an increasing bind on metal production, as reflected in this week's China smelter supply rationing signal. With continued positive momentum in China's copper demand, a healthy refined import trend should generate a substantial ex-China refined deficit this year. With LME stocks having halved from Q4 peak, China’s imminent seasonal demand inflection should accelerate a path into extreme tightness by H2. Structural supply underinvestment, best reflected in peak mine supply we expect next year, implies that demand destruction will need to be the persistent solver on scarcity, an effect requiring substantially higher pricing than current, in our view. In this context, we maintain our view that the copper price will surge into next year (GSe 2025 $15,000/t average), expecting copper to rise to $10,000/t by year-end and then $12,000/t by end of Q1-25’

Another reason why Goldman is doubling down on its bullish copper outlook: gold.

The sharp rally in gold price since the beginning of March has ended the period of consolidation that had been present since late December. Whilst the initial catalyst for the break higher came from a (gold) supportive turn in US data and real rates, the move has been significantly amplified by short term systematic buying, which suggests less sticky upside. In this context, we expect gold to consolidate for now, with our economists near term view on rates and the dollar suggesting limited near-term catalysts for further upside momentum. Yet, a substantive retracement lower will also likely be limited by resilience in physical buying channels. Nonetheless, in the midterm we continue to hold a constructive view on gold underpinned by persistent strength in EM demand as well as eventual Fed easing, which should crucially reactivate the largely for now dormant ETF buying channel. In this context, we increase our average gold price forecast for 2024 from $2,090/toz to $2,180/toz, targeting a move to $2,300/toz by year-end.

Much more in the full Goldman note available to pro subs.

Tyler Durden Fri, 03/15/2024 - 14:25

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Government

Moderna turns the spotlight on long Covid with new initiatives

Moderna’s latest Covid effort addresses the often-overlooked chronic condition of long Covid — and encourages vaccination to reduce risks. A digital…

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March 15, 2024

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Moderna’s latest Covid effort addresses the often-overlooked chronic condition of long Covid — and encourages vaccination to reduce risks. A digital campaign debuted Friday along with a co-sponsored event in Detroit offering free CT scans, which will also be used in ongoing long Covid research.

In a new video, a young woman describes her three-year battle with long Covid, which includes losing her job, coping with multiple debilitating symptoms and dealing with the negative effects on her family. She ends by saying, “The only way to prevent long Covid is to not get Covid” along with an on-screen message about where to find Covid-19 vaccines through the vaccines.gov website.

Kate Cronin

“Last season we saw people would get a flu shot, but they didn’t always get a Covid shot,” said Moderna’s Chief Brand Officer Kate Cronin. “People should get their flu shot, but they should also get their Covid shot. There’s no risk of long flu, but there is the risk of long-term effects of Covid.”

It’s Moderna’s “first effort to really sound the alarm,” she said, and the debut coincides with the second annual Long Covid Awareness Day.

An estimated 17.6 million Americans are living with long Covid, according to the latest CDC data. About four million of them are out of work because of the condition, resulting in an estimated $170 billion in lost wages.

While HHS anted up $45 million in grants last year to expand long Covid support initiatives along with public health campaigns, the condition is still often ignored and underfunded.

“It’s not just about the initial infection of Covid, but also if you get it multiple times, your risks goes up significantly,” Cronin said. “It’s important that people understand that.”

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