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Kevin O’Leary Expects US Crypto Regulations to Come Out After Midterm Elections

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Kevin O'Leary Expects US Crypto Regulations to Come Out After Midterm Elections

Shark Tank star Kevin O’Leary, aka Mr. Wonderful, says U.S. crypto regulations will not come out until after the midterm elections. He explained that President Joe Biden “is not interested in discussing crypto” when his approval ratings have sunk to record lows. O’Leary also cited other factors, including double-digit inflation and high food and gas prices.

Kevin O’Leary on Crypto Regulation, Biden’s Policy


Shark Tank star Kevin O’Leary talked about bitcoin and cryptocurrency regulation in an interview with Stansberry Research, published Friday.

He was asked how far away the U.S. Securities and Exchange Commission (SEC) is from approving a spot bitcoin exchange-traded fund (ETF).

“It’s a long way away,” O’Leary replied. “That’s not what’s going to happen first. I think what’s going to happen first is we are going to see policy on stablecoins.” He cited two bills that have been proposed for the regulation of stablecoins. One was introduced by Senator Bill Hagerty and the other by Senator Pat Toomey.

Noting that a bill on stablecoins will be easy to pass after the midterm elections, he emphasized:

Nothing’s gonna happen until after the midterms. Biden is not interested in discussing crypto when his poll ratings are, you know whatever it is, sub-31%. That’s not a place where he wants to go, so you’re gonna have to wait until after the midterms.


Mr. Wonderful noted that when Biden issued the encouraging executive order on crypto, his ratings were higher. A new poll shows that President Joe Biden’s approval rating dipped to the lowest point of his presidency in May; only 39% of U.S. adults approve of his performance as president.

The U.S. midterm elections are scheduled for Nov. 8. If the Republican Party gains control of either or both chambers, it will have the power to thwart the president’s plans.

O’Leary explained that crypto is not one of the “issues that when you are declining in the polls, you become a champion of. That doesn’t help you.”

Noting that “The market is correcting … People are getting gas at the pump, going to the driving season, at unheard-of prices the last 20 years. The price of protein’s up 20% to 40%,” the Shark Tank star said:

Biden’s facing close to double-digit inflation … He’s not sitting around worrying about crypto.


In addition, O’Leary described that there are a lot of different proposals coming out of the SEC around climate change, crypto, and bitcoin mining. “So it’s a very volatile situation right now,” he said.

Mr. Wonderful was also asked if he thinks this crypto winter will be a long one and where the market will head now.

“The forecasts for bitcoin have never been accurate. No one’s been able to forecast its volatility,” he opined. “And you know, the speculation that it was going to be a hedge against inflation was just flat out wrong.” He continued:

I’d argue that the volatility of bitcoin is going to remain very akin to what Amazon was for the first 15 years — 30% to 50% corrections every 12 months.


He explained the reason was that “There was no institutional support in the early days of Amazon.” The Shark Tank star asserted: “That’s the same right now for bitcoin … People talk about institutions owning it. That’s just not true. They don’t own any of it and they won’t until the SEC rules on it.”

What do you think about the comments by Kevin O’Leary? Let us know in the comments section below.

G7 Finance Leaders Call for Swift and Comprehensive Crypto Regulation

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G7 Finance Leaders Call for Swift and Comprehensive Crypto Regulation

The G7 finance ministers and central bank governors have called for a swift and comprehensive regulation of crypto assets. The G7 decision followed the recent crypto market turmoil, including the collapse of cryptocurrencies LUNA and UST.

G7 Countries Calling for Swift, Comprehensive Regulation of Crypto Assets


The finance ministers and central bank governors from the Group of Seven (G7) industrialized nations convened in Bonn and Königswinter, Germany, on May 18–20.

Among the topics they discussed was the regulation of crypto assets following the recent market turmoil and the collapse of cryptocurrency terra (LUNA) and algorithmic stablecoin terrausd (UST).

“The G7 supports work by the Financial Stability Board (FSB) to monitor and address financial stability risks arising from all forms of crypto-assets, and welcomes increasing global cooperation to address regulatory issues associated with the use of crypto-assets, including in cross-border payments,” according to the communique summarizing the finance leaders’ key decisions, published Friday.

The G7 finance chiefs added:

In light of the recent turmoil in the crypto-asset market, the G7 urges the FSB … to advance the swift development and implementation of consistent and comprehensive regulation of crypto-asset issuers and service providers.


The FSB will work “in close coordination with international standard-setters” on crypto regulation “with a view to holding crypto-assets, including stablecoins, to the same standards as the rest of the financial system,” the communique further details.

“In particular, the G7 calls for rapid implementation of the Financial Action Task Force (FATF) ‘travel rule’ and stronger disclosure and regulatory reporting, for instance, as regards reserve assets backing stablecoins,” the finance leaders continued, adding:

We reaffirm that no global stablecoin project should begin operation until it adequately addresses relevant legal, regulatory and oversight requirements through appropriate design and by adhering to applicable standards.


“The G7 remains committed to high regulatory standards for global stablecoins, following the principle of same activity, same risk, same regulation,” the communique concludes.

Following the collapse of LUNA and UST, a number of countries have independently called for an urgent regulation of crypto assets, particularly stablecoins.

In the U.S., Treasury Secretary Janet Yellen told Congress last week that it is important and urgent to regulate stablecoins. She mentioned the fall of terrausd by name. The U.K. government also reaffirmed its commitment to regulate stablecoins this week.

What do you think about the G7 financial chiefs calling for a swift and comprehensive regulation of crypto assets? Let us know in the comments section below.

An Overview Of The Stablecoin Market

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The U.S. dollar accounts for nearly 100% of stablecoin value and a window of opportunity for policymakers has emerged with the collapse of UST.

In this excerpt from Bitcoin Magazine Pro, we will take a more in-depth look at the redemption mechanism of USDT, and cover why the concerns about the stablecoin and the apparent risks it presents to the bitcoin/cryptocurrency ecosystem.

Before digging in, it should be said that the advent of bitcoin on a long enough timeframe obfuscates the need for a “stablecoin,” which is really just a blockchain-based IOU held by a counterparty. A digital bearer asset that is completely stable on the protocol level and from an issuance and absolute supply perspective that can be held with no counterparty risk is the innovation. With that being said, the natural demand for dollars in the “crypto-economy” does make sense given the dollar’s incumbent status as the world reserve currency.

With today’s release and focus on stablecoins, as well as the recent collapse of UST, an interesting window of opportunity for policymakers has emerged to provide guidance and clarity to stablecoin issuers, which would result in a rising demand for monetizing U.S. Treasury debt. After all, in the cryptocurrency ecosystem, USD stablecoins account for nearly 100% of stablecoin value. Given the dollar’s role as the world reserve currency today, this makes intuitive sense.

The U.S. dollar accounts for nearly 100% of stablecoin value.

The main takeaway from the rapid growth of stablecoins over the past two years is that despite the emergence of a digital monetary bearer asset with a fixed supply (bitcoin), there still is demand for a bearer instrument form of dollars, even if accompanied by trade-offs. All in all, a vibrant market for stablecoins ultimately will lead to smoother rails to bitcoin itself for those without access to the walled garden Western financial system, without offering the assurances of bitcoin’s monetary policy or decentralization.

The is an excerpt from a recent edition of Bitcoin Magazine Pro, Bitcoin Magazine’s premium markets newsletter. To be among the first to receive these insights and other on-chain bitcoin market analysis straight to your inbox, subscribe now.

Circle Says USDC Reserve Backed Entirely in Cash and Short-Dated US Treasuries

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On May 13, Circle’s chief financial officer Jeremy Fox-Geen published a blog post called “How to Be Stable,” following the aftermath of Terra’s stablecoin implosion. Circle’s CFO explained that since usd coin’s inception, the stablecoin aims to be “the most transparent and trusted dollar digital currency.”

Terra’s Stablecoin De-Pegging Incident Has Cast a Spotlight on the Entire Stablecoin Economy

For a few years now, stablecoin assets have been a popular hedging vehicle among many participants within the cryptocurrency community. In more recent times, stablecoins are being loaned out in great numbers in order to gather interest and high yield returns. In the early days, stablecoins were centralized projects and these days there are a few decentralized and algorithmic stablecoin tokens among the giants.

Tether (USDT) and usd coin (USDC) are the two largest stablecoin projects in terms of market valuation. Both of them are centralized, which means the company guarantees the stablecoins are redeemable for the $1 parity by holding reserves that cover the funds in circulation. Even before Terra’s stablecoin de-pegging event, more confidence has been placed in the top two stablecoins because they are centralized.

 

Three days ago, Bitcoin.com News reported on the stablecoin shuffle after the recent editorial our newsdesk published, showing that for the first time in history, three stablecoins entered the crypto top ten. That is still the case today, except that terrausd (UST) has been knocked out of the top-ten largest crypto market caps and the stablecoin BUSD has replaced the token’s position. After the terrausd (UST) implosion, Circle Financial’s CEO Jeremy Allaire has been speaking to the press about what makes USDC different, and he believes there needs to be “more regulatory framework around stablecoins.”

Circle CEO Says Company Is Ramping Up Trust and Transparency Efforts, Firm Says ‘USDC Is Always Redeemable 1:1 for US Dollars’

On Friday, Allaire tweeted that Circle was “ramping up our efforts” when it comes to USDC “trust and transparency.” Allaire also shared a blog post written by the firm’s CFO Jeremy Fox-Geen, who gives a summary of what Allaire means about transparency. Fox-Geen’s blog post explains “USDC has always been backed by the equivalent value of U.S. dollar-denominated assets.” The CFO further notes that the funds are held by America’s leading financial institutions such as Bank of New York Mellon and Blackrock. The Circle executive’s report adds:

The USDC reserve is held entirely in cash and short-dated U.S. government obligations, consisting of U.S. Treasuries with maturities of 3 months or less.

Circle’s CFO detailed that the company has been publishing monthly attestations from the leading accounting firm Grant Thornton International. “The USDC reserve is worth at least as much as the number of USDC in circulation, providing reputable third-party assurance of this fact to the USDC ecosystem,” Fox-Geen summarized in the blog post. “USDC is always redeemable 1:1 for U.S. dollars,” the Circle executive adds. The blog post concludes that there are thousands of projects and entities that support and facilitate the exchange of USDC in 190 countries.

While Terra’s Algorithmic Stablecoin Shuddered, a Few Decentralized Fiat-Pegged Tokens Still Exist, Many Crypto Supporters Believe They Are Needed

Meanwhile, there are a few decentralized and algorithmic stablecoin assets that exist today like LUSD, DAI, FEI, MIM, USDV, and USDD. For instance, the Ethereum-based Makerdao project leverages an over-collateralization method to back the stablecoin DAI. Tron recently introduced an algorithmic stablecoin token called USDD, and a blockchain project called Vader has a native algorithmic stablecoin called USDV. Another stablecoin asset, dubbed magic internet money (MIM), is built on top of Avalanche (AVAX) and is issued by the decentralized lending platform Abracadabra.

Decentralized and algorithmic stablecoin proponents believe they are needed among the centralized heavyweights like USDT and USDC. Supporters of such assets think that centralized stablecoins are subject to the same failure, and others believe decentralized and algorithmic stablecoins trump centralized models because they cannot be frozen by the issuer. Despite these benefits, centralized stablecoins have ruled the roost and crypto users, at least for now, have more confidence in them.

What do you think about centralized stablecoins and Circle’s recent blog post about transparency and the token’s reserve backing? Let us know what you think about this subject in the comments section below.

UK Affirms Commitment to Regulate Stablecoins Following Terra Meltdown

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UK Affirms Commitment to Regulate Stablecoins Following Terra Collapse

The British Treasury Department has affirmed its commitment to regulate stablecoins after the collapse of terrausd (UST) and terra (LUNA). “This will create the conditions for issuers and service providers to operate and grow in the U.K., whilst ensuring financial stability and high regulatory standards,” said an HM Treasury spokesperson.

Regulation of Stablecoins in the UK

HM Treasury, the U.K. Treasury Department, is moving forward with plans to regulate payment stablecoins despite a crypto market meltdown last week, The Telegraph reported Saturday.

The affirmation followed the collapse of Terra which saw algorithmic stablecoin terrausd (UST) lose its peg to the U.S. dollar and terra (LUNA) fall to near zero.

A HM Treasury spokesman said:

Legislation to regulate stablecoins, where used as a means of payment, will be part of the Financial Services and Markets Bill which was announced in the Queen’s Speech.

“This will create the conditions for issuers and service providers to operate and grow in the UK, whilst ensuring financial stability and high regulatory standards so that these new technologies can be used reliably and safely,” the spokesperson added.

Prince Charles delivered the Queen’s Speech last week, outlining the British government’s legislative agenda for the next parliamentary year. Two of the bills put forward specifically mention crypto assets.

The U.K. government unveiled a detailed plan in April to make the country a global crypto hub and “a hospitable place for crypto.” The plan includes establishing a dynamic regulatory framework for crypto, regulating stablecoins, and working with the Royal Mint to create a non-fungible token (NFT) to be issued by summer.

Rishi Sunak, the British chancellor of the exchequer, has said the plan will “ensure the UK financial services industry is always at the forefront of technology and innovation.”

However, the Treasury does not plan to include algorithmic stablecoins in the legislation, saying they do not guarantee stability. Terrausd (UST) is an example of an algorithmic stablecoin.

The HM Treasury spokesperson further detailed:

The government has been clear that certain stablecoins are not suitable for payment purposes as they share characteristics with unbacked crypto assets.

“We will continue to monitor the wider crypto asset market and stand ready to take further regulatory action if required,” the spokesperson included.

U.S. lawmakers also called for the urgent regulation of stablecoins last week following the fall of Terra. However, Treasury Secretary Janet Yellen believes that stablecoins are currently not a real threat to U.S. financial stability.

What do you think about the U.K. government’s commitment to regulate stablecoins? Let us know in the comments section below.