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Bitcoin And The Fall Of Davos Man

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Tom Luongo discusses his theory of Davos man and what Bitcoin means geopolitically at this time of great change.

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In this episode of Bitcoin Magazine’s “Fed Watch” podcast, Christian Keroles and I sat down with Tom Luongo of Gold Goats ‘N Guns to talk about Europe and central bank politics. We went into the weeds, talked about what’s happening behind closed doors as it were, in a discussion that you won’t find on any other show. Luongo’s theories revolve around his idea of the primarily European/Western elites which he sums up as “Davos man.” It was a wide-ranging discussion which I outline below.

You can find all of Luongo’s content on his website. I recommend going back to episodes 75 through 77 to get a summary of Davos man and his geopolitical framework. Luongo is a long-time bitcoin advocate, so of course, we discussed what bitcoin means geopolitically in this time of great change.

Who Or What Is Davos Man?

I read a post from Luongo that was syndicated to Zero Hedge several months ago. In that post he was calling the European elites “Davos man.” I was struck by this framing, because it perfectly summed up the elites of the declining world order in my general geopolitical framework. Luongo described them as, “all the people who think they run the world.”

Their calling cards are globalization, international institutions (like NATO, the EU and the UN), climate change, and a global tax regime. He summed it up as “communists,” and I’d add to that that they are global communists.

The goal of Davos is to reverse WWII, where European economies were destroyed and capital fled to the U.S. This time, they want to cause global chaos outside of Europe, and make the EU the center for capital flight in the coming decades.

Powell And Davos

Luongo framed the current struggle as a battle between Davos man and Wall Street. Federal Reserve Chairman Jerome Powell is not Janet Yellen; he is loyal to U.S. money interests in a way that contradicts Davos’ full court press against the world.

Luongo filled in our blanks on why Powell is different. For the last year, Keroles and I, on “Fed Watch” have been saying that Powell is a “straight shooter.” We sensed he was different than the typical central bank elite. Now I see that this central banking elite is part of the Davos world order.

Powell has stiff-armed central bank digital currencies (CBDCs) and provided monetary facilities that have maintained U.S. dollar dominance in the global financial system. Luongo went into why his renomination is so important, because it is like drawing a red line — the U.S. will not play Davos’ game anymore. Cinderella favorite Lael Brainard was passed up for chairman of the Fed because her appointment by the U.S. Senate was questionable, and because of her deep connections to the Chinese Communist Party through her husband have surfaced.

World Tour Of Geopolitics

In the second half of the show, our conversation went into the weeds on specific hotspots around the world. We were in agreement that Europe is in a lot of trouble. But where I am concerned about Russia’s natural geopolitical drive for strategic depth and its waning demographic time bomb, Luongo was not as worried because Russia does not want to be dragged into a war.

To give you an idea of the ground we covered quickly at the end of the podcast, we brought in Afghanistan and why that was such a pivotal event, MacKinder and Brzezinski’s heartland theory, and the U.S.’s return to non-interventionism.

ECB Paper Marks Success Factors for CBDCs, Digital Euro

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ECB Paper Marks Success Factors for CBDCs, Digital Euro

A paper published by the European Central Bank (ECB) discusses various conditions for successful implementation of central bank digital currencies (CBDCs) such as the eurozone’s own digital euro. The authors also point to different risks that such projects entail, like the danger of crowding out the private sector.

ECB: Digital Euro Should Be Widely Used for Payments, Not Investment


In order to create a successful CBDC, a monetary authority needs to establish the digital currency as a widespread means of payment and exchange that also has a sufficient store of value function, according to the paper released by the European Central Bank. At the same time, central banks need to ensure that currencies like the digital euro do not turn into a significant means of investment, crowd out private payment solutions, or undermine the banking sector’s intermediation role.

The document, which was published this week, is authored by three high-ranking ECB officials — Fabio Panetta, Ulrich Bindseil, and Ignacio Terol. They list key success factors for CBDCs and offer their expert opinions on how to avoid risks associated with the digital versions of fiat currencies that dozens of countries around the world, including major economies, are currently exploring or developing.

The paper identifies three conditions for the successful implementation of a CBDC. The first one is ‘merchant acceptance’ which has to be wide, meaning users should be able to pay digitally anywhere. Unlike paper cash, a digital currency is likely to come with fees for each transaction and require dedicated devices to process the payments. There are other differences as well, despite both forms of money having legal tender status. The ECB elaborates:

Cash is impractical in e-commerce, while making CBDC legal tender may require exceptions for merchants who do not have the device needed to accept non-cash payments.


The second success factor has been defined as ‘efficient distribution.’ The ECB officials quote a Eurosystem report, according to which a digital euro should be distributed by supervised intermediaries such as banks and regulated payment providers. To encourage the distribution of the central bank digital currency, incentives may be paid to supervised intermediaries. The document divides intermediary services into two categories: onboarding and funding services — which would include operations required to open, manage, and close a CBDC account — and payment services.

‘Demand from consumers’ is the third condition for success which refers to the ability to use the CBDC to “pay anywhere, pay safely, pay privately,” the paper emphasizes. Member of the Executive Board of the ECB Fabio Panetta and his colleagues believe that residents of the euro area can be motivated by the option to use the digital euro in peer-to-peer (P2P) payments beyond the reach of existing private solutions. Privacy can be another motivating factor, they say, pointing out that central banks could use privacy-enhancing techniques while still complying with anti-money laundering regulations. Despite protests against the digital euro particularly in that regard, the three experts insist:

As public and independent institutions, central banks have no interest in monetising users’ payment data. They would only process such data to the extent necessary for performing their functions and in full compliance with public interest objectives and legislation.

Paper Proposes Measures to Prevent CBDC Risks


The ECB paper discusses some of the risks associated with central bank digital currencies as well, such as excessive CBDC holdings. It suggests a number of measures to prevent a permanent or temporary excessive flow of funds into a central bank digital currency, including the introduction of limited convertibility that could terminate the potential outflow of bank deposits into a CBDC. Setting per capita limits with a ceiling on the amount of CBDC each individual would be allowed to hold could serve as another barrier.

The document devotes attention to concerns that the issuing of a CBDC could trigger a process of bank disintermediation and crowd out payments solutions currently provided by the private sector. To avoid this negative effect, finding an adequate functional scope is crucial. It should neither be too broad, crowding out private sector solutions, nor too narrow, limiting the use of the central bank digital currency. This could be а challenge for the financial sector, the ECB representatives warn.

The authors of the paper conclude that while CBDCs have clear merits and central banks need to follow trends in payments and technology in order to continue to fulfill their task to serve both citizens and businesses, they still have to address many questions regarding the design of a currency like the digital euro. Besides the functional scope, appropriate business model and controls are required to meet demands and ensure robust use of the CBDC, they stress.

Do you think the European Central Bank will issue a successful digital euro? Share your thoughts on the subject in the comments section below.

Invesco Launches ‘Physical’ Bitcoin ETP In Europe

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Shortly after withdrawing a futures-based offering in the U.S., the asset manager has entered Europe with a spot-based one.

  • Invesco has launched a bitcoin exchange-traded product in Europe.
  • The Invesco Physical Bitcoin fund is listed on the Deutsche Boerse under the ticker symbol BTIC.
  • The offering is “physically”-backed by bitcoin and tracks the CoinShares reference price index, minus fees.

Asset manager Invesco has launched a spot bitcoin exchange-traded product (ETP) in Europe, reported ETF Stream. The offering is “physically” backed by actual bitcoin and tracks the CoinShares Bitcoin Hourly Reference Rate index, seeking to deliver the performance of BTC minus fees.

“In the last two to three years, we have been trying to structure a product that looked, from an institutional point of view, as close as possible to a traditional ETF like our gold structure, and that has been the driver of BTIC’s timeline,” Gary Buxton, head of EMEA ETFs and indexed strategies at Invesco, told ETF Stream.

“We have been pushed over the last couple of years by institutional clients and had to look at how we can access this space well,” Buxton added. “Most of the discussions we have with clients are not really about bitcoin itself but more about the access to bitcoin and how you get comfortable with segregation, how you get comfortable with valuation. Really, one of the strengths of ETPs is as an access vehicle.”

The Invesco Physical Bitcoin ETP is listed on the Deutsche Boerse under the ticker symbol BTIC with a total expense ratio (TER) of 0.99%. The product is targeted at institutional investors seeking a more convenient investment vehicle for bitcoin price exposure.

“Custody of bitcoins held on behalf of BTIC will be performed by FCA-registered and UK-based Zodia Custody,” per the report. The custodian incubated by Standard Chartered subsidiary SC Ventures received regulatory approval at the end of this summer. Northern Trust will act as the administrator for BTIC, while CoinShares will serve as the product’s index sponsor and execution agent.

By holding actual bitcoin, BTIC has a better shot at performing similar to spot BTC than bitcoin-linked offerings such as derivatives-based products or trusts like GBTC, which is currently trading at a discount.

BTIC is technically an exchange-traded note (ETN), a reference name that differs from the more common exchange-traded fund (ETF). However, the differences are primarily in semantics, as VanEck director Gabor Gurbacs explained.

“In Europe, only baskets of securities can be called Exchange Traded Fund (ETF),” Gurbacs tweeted. “Most single-asset commodities are structured as an Exchange Traded Note (ETN). Some are physically backed and some are certificates/bank-backed. Exchange Traded Product (ETP) is the umbrella category.”

Eurosystem Approves New Oversight Framework Concerning Crypto Services

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Eurosystem Approves New Oversight Framework Concerning Crypto Services

The monetary authority of the euro area, the Eurosystem, has introduced a new framework for overseeing electronic payments, including services related to crypto assets. The new set of rules will complement upcoming EU regulations for cryptocurrencies and stablecoins.

ECB Aims for Secure and Efficient Digital Payments Through Improved Oversight

Following public consultations on the matter, the Governing Council of the European Central Bank (ECB) has approved a new oversight framework for electronic payments. The document has been published by the Eurosystem, which consists of the ECB and the national central banks of the EU member states that have adopted the common European currency, the euro.

According to an announcement by the ECB, the single framework replaces other regulations within the Eurosystem’s existing oversight regime for payment instruments and complements its oversight mechanisms for payment systems. The bank noted that the framework has been designed to “make the current and future payments ecosystem safer and more efficient” as part of efforts to promote smooth payments on the Old Continent.

The Eurosystem’s “oversight framework for electronic payment instruments, schemes and arrangements,” referred to as “Pisa,” will be employed to oversee entities enabling the use of payment cards, credit transfers, direct debits, e-money transfers, and electronic wallets. The framework will apply to services linked to crypto assets as well.

The latter category includes businesses facilitating the acceptance of cryptocurrencies by merchants through card payments as well as digital wallet providers allowing users to send, receive, or pay with crypto assets via their products. Fabio Panetta, member of the ECB Executive Board, revealed that the Pisa framework will also cover digital payment tokens such as stablecoins. He commented:

The retail payments ecosystem is evolving fast owing to innovation and technological change. This calls for a forward-looking approach in overseeing digital payment solutions.

The European Central Bank has urged for rapid advance in terms of global oversight in the field of digital payments. “Internationally coordinated action will also have to be stepped up to cope with the challenges posed by global digital payment solutions and stablecoins,” the bank’s high-ranking representative insisted.

Businesses Have to Comply With New Oversight Rules Within a Year

Companies currently overseen by the Eurosystem are expected to comply with the recently adopted requirements by Nov. 15, 2022. Other entities that are now becoming subject to oversight will have a grace period of one year after they are notified about their updated obligations. All traditional and crypto service providers will have to file self-assessments and maintain contact with the regulatory bodies.

The Eurosystem’s new oversight framework replaces a number of other documents issued previously by the ECB. The list includes the Harmonized oversight approach and standards for payment instruments (PI standards,) Electronic money system security objectives (Emsso), Oversight framework for card payment schemes, Oversight framework for credit transfer schemes, and the Oversight framework for direct debit schemes.

The Eurosystem intends to cooperate with other authorities on the implementation of Pisa. The framework has been adopted in advance of forthcoming regulations regarding the status of cryptocurrencies and related activities within the EU such as the Markets in Crypto-Assets (Mica) proposal. The move also comes as the ECB progresses towards issuing its own digital euro currency, after launching the project’s investigation phase earlier this year.

What’s your opinion about the adoption of the new oversight framework covering crypto services in the eurozone? Tell us in the comments section below.

Norway Mulls Backing Sweden’s Call for Euro Ban on Crypto Mining

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Norway Mulls Backing Sweden’s Call for Euro Ban on Crypto Mining

The government in Norway is considering ways to limit the environmental impact of cryptocurrency mining and may support Swedish proposals to that end, including a European ban on proof-of-work mining. The European Commission has revealed it is already working to promote a transition to “more sustainable” protocols.

Extensive Use of Renewable Energy for Mining Is Hard to Justify, Norway Minister Says

Authorities in Norway are mulling over potential policy measures to deal with the effects of crypto mining on the environment, the country’s minister responsible for local government and regional development has indicated. As part of the review, the Norwegian government intends to look into solutions recently put forward by Swedish regulators and work for common European rules. Speaking to Euronews Next, Minister Bjørn Arild Gram also stated:

Although crypto mining and its underlying technology might represent some possible benefits in the long run, it is difficult to justify the extensive use of renewable energy today.

Both countries, along with another Nordic nation, Iceland, have in the past few years become popular destinations for cryptocurrency miners. The region boasts abundant renewable energy resources and maintains relatively low electricity rates. According to Eurostat data for the first half of 2021, Norway offered the cheapest electricity for non-household consumers in the European Economic Area (EEA), with over 90% of its energy coming from hydroelectric power generation.

Bjørn Gram’s statement comes after the directors of Sweden’s financial services and environmental protection agencies called for imposing a ban on proof-of-work mining across the European Union, after a multifold increase of energy usage by bitcoin miners in the country this year. “Sweden needs the renewable energy targeted by crypto asset producers for the climate transition of our essential services, and increased use by miners threatens our ability to meet the Paris Agreement,” the officials warned.

“Overall, we want our renewable energy to be used in a way that creates value and that supports the transition to a climate neutral society,” Minister Gram elaborated. His comments are part of a heated discussion in Norway regarding the use of renewable energy to power digital coin minting after Oslo introduced tax breaks for data centers in 2016. The country’s new environment minister, Espen Barth Eide, has in the past expressed concerns over Norway becoming the “world’s Bitcoin mine” at the expense of its own power-intensive industries.

European Commission Urges Crypto Miners to Move Away From Proof-of-Work Concept

Regional Development Minister Bjørn Gram did not provide any specific details regarding the regulatory policies the Norwegian government is currently considering. But if Norway decides to follow in the footsteps of Sweden, it may result in a crackdown on crypto mining operations that require significant amounts of energy.

Meanwhile, the European Commission (EC), which would be responsible for enforcing crypto regulations in the EU, has admitted that it’s already encouraging the crypto mining industry to “migrate applications” from energy-intensive proof-of-work blockchains to less demanding protocols like proof-of-stake and hybrid consensus models, Euronews Next revealed. A spokesperson for the executive body told the publication that the EC is working to promote “more sustainable forms of blockchain technologies.”

The Commission, the representative added, has “ambitious emission reduction targets” and promotes the advancement of less energy-intensive blockchain technologies through funding for startups and direct development of a public sector blockchain network. Although the Paris Climate Agreement, referred to by Swedish regulators, does not ban crypto mining, Brussels is aware of developments in jurisdictions like China and will discuss the matter with EU member states, the official added.

Do you think Norway, Sweden, and the EU will impose restrictions on energy-intensive crypto mining? Share your expectations in the comments section below.