German Cabinet and Bundesbank Are in Close Communication on CBDC Issues

On Aug. 29, Germany’s federal parliament (Bundestag) published official feedback to a request from parliamentary group the Free Democratic Party, which asked the Cabinet to respond to six questions related to CBDCs in July 2019.

The Cabinet of Germany and Germany’s central bank Deutsche Bundesbank are working together closely on issues related to central bank digital currencies (CBDCs).

In the document, dated Aug. 16, the Cabinet answered all questions by the group, citing major reports and surveys in the space, including a January report by the Bank of International Settlements (BIS).

Awareness of global CBDC situation

Specifically, when asked about its knowledge or insights about CBDC, the Cabinet cited the BIS, claiming that 70% of global central banks are engaged in CBDC work, but only two have concrete plans to issue digital central bank money.

Status of existing projects: unclear

The Cabinet emphasized that Sweden is the only country in the European Union that is currently considering issuing CBDCs. However, a final decision about CBDC issuance has not been reached, the authority stated. In addition, there are some concrete CBDC plans in Uruguay but shakey pilots have led to uncertainty as to future implementation, the Cabinet wrote.

The authority outlined a similar situation with the Chinese Central Bank that launched a research program on the possible issue of CBDC back in 2014 but is still experiencing a lack of clarity regarding the issue. The Cabinet also cited Venezuela’s Petro (PTR) project, referencing a 2018 Reuters report claiming that there were still no transactions in the oil-backed national cryptocurrency.

In July 2019, the head of Bundesbank Jens Weidmann expressed support for Facebook’s much-discussed crypto project Libra, claiming that global regulators should not suppress the initiative in its infancy.

Galaxy Digital Gains Approval to Underwrite Public Securities Offerings

Michael Novogratz’s cryptocurrency investment bank Galaxy Digital has gained approval from the Financial Industry Regulatory Authority (FINRA) to underwrite registered public offerings of securities.

As reported by Bloomberg on Sept. 6, the company has its sights on facilitating security token offerings, or STOs.

FINRA is a non-governmental private organization that acts as a self-regulatory body for member firms and exchange markets.

The Goldman Sachs of cryptocurrencies

Novogratz is a former partner at Goldman Sachs who wants his firm Galaxy Digital to fulfil a similar role in the cryptocurrency space. He sees underwriting securities offerings as a good complement to the company’s existing services. Novogratz said:

“It’s a really young industry, and we are a pretty young business. We are sober and patient about how fast it will grow, and we are well capitalized. This feels like a perfect addition.”

If you build it they will come

Whilst Novogratz is aware that business could take some time to ramp up, there are already signs of demand for initial public offerings (IPO) within the cryptocurrency industry.

Exchanges like Coinbase have already raised billions of dollars in securities offerings, and mining giant Bitmain seems to finally have its beleaguered IPO back on track.

According to Bloomberg, as early movers in the cryptocurrency industry mature and start to generate real revenue and profits, it is likely that an increasing number of companies will want to go public.

FTX Launches Futures on Index of 8 China Cryptos Amid Xi Blockchain Pump

Derivatives exchange FTX has launched an index of eight popular China-based cryptocurrencies.

Announced in a tweet by the firm’s CEO Sam Bankman-Fried Tuesday, the Dragon Perpetual Futures Index (DRGN-PERP) tracks a basket of coins including BTM, IOST, NEO, NULS, ONT, QTUM, TRX, and VET, based on a weighted average of their respective prices.

FTX is also offering traders exposure to the coins in the form of perpetual futures contracts based on the index.

Traders will be able to leverage these contracts up to 101 times, Bankman-Fried told CoinDesk.

The exchange – which operates out of Antigua and Barbuda – has a history of providing less orthodox indices, having launched the amusingly titled Shitcoin Perpetual Futures Index in August. That offering covers a basket of 58 low-market cap cryptocurrencies.

The timing of the DRGN-PERP launch probably couldn’t have been better, coming days after Chinese President Xi Jinping urged his country to “seize the opportunity” afforded by blockchain technology and proposed adoption across a wide range of sectors.

Chinese blockchain and tech stocks saw a massive spike in interest after Xi’s comments, prompting authorities to urge investors to avoid speculative behavior.

“China recently voiced support for the blockchain industry, causing a bunch of cryptocurrencies developed there to skyrocket in price and driving intense user interest in Chinese cryptocurrency projects”, Bankman-Fried said.

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