Seeds of Wisdom RV and Economic Updates Friday Morning 10-4-24

04/10/2024

Good Morning ,

CFTC REPORTEDLY MULLING ACCEPTING DIGITAL ASSETS AS TRADING COLLATERAL

The proposal faces multiple steps before approval, but its passage could ultimately be a boon for the digital assets market.

The use of digital assets as trading collateral could be approved by the United States Commodity Futures Trading Commission (CFTC) by the end of the year.

According to a report from Bloomberg, a subcommittee of the Commodity Futures Trading Commission’s Global Markets Advisory Committee recently voted affirmatively to recommend a proposal allowing digital ledger technology-based collateral in commodities and derivatives trading.

In effect, were the proposal to be accepted by the CFTC, traders could settle transactions using digital assets as collateral with the same speed and ease as similar digital ledger and blockchain based transactions.

Brokers would be able to accept blockchain-based tokenized assets, such as BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL), via market-embedded systems.

Tokens as collateral
The use of blockchain-based assets as collateral in trading is already fairly common throughout the participating marketplace. However, those participants are limited to large firms such as BlackRock and JP Morgan. The CFTC’s general approval could serve as a catalyst for mainstream adoption.

However, it’s unclear at this time what exactly the Global Markets Advisory Committee has recommended or what’s even in the aforementioned proposal. According to Bloomberg, the main committee still has to approve the subcommittee’s recommendation before the proposal can be formally submitted to the CFTC for approval.

There’s no guarantee that the CFTC will approve the proposal or that it will pass without potential restrictions concerning which institutes and blockchains can participate.

As Cointelegraph recently reported, spot Bitcoin exchange-traded funds (ETFs) demonstrated banner performance throughout the month of September.

BlackRock’s Bitcoin ETF in particular outperformed its peers. It saw the highest daily inflow of any fund during the month on Sept. 25, during a five-day inflow streak across all spot Bitcoin ETFs in the United States.

This demonstrates the growing popularity and prospective value of digital assets in the traditional finance markets. It could also serve as a bullish indicator for digital asset adoption overall and play some role in the CFTC’s decision-making process.

@ Newshounds News™

Source: CoinTelegraph

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IMF PRESSURES EL SALVADOR TO OVERHAUL BITCOIN REGULATIONS

According to the International Monetary Fund (IMF), El Salvador has an annual GDP growth rate of 3% and roughly $144 million in outstanding loans.

During an Oct. 3 press conference, the International Monetary Fund (IMF) renewed calls pressuring El Salvador to scale back its Bitcoin policies and overhaul its regulatory framework surrounding the digital asset.

Julie Kozack, director of the IMF’s communications department, did not specify the exact details behind the proposed regulatory shift but instead provided this statement:

“What we have recommended is a narrowing of the scope of the Bitcoin Law, strengthening the regulatory framework and oversight of the Bitcoin ecosystem, and limiting public sector exposure to Bitcoin.”

Since El Salvador legalized Bitcoin as a form of legal tender in 2021, the IMF has pressured the Central American country to step away from Bitcoin and embrace traditional financial infrastructure.

In August 2024, the IMF voiced the same demands but admitted that many of the purported risks of Bitcoin adoption “have not yet materialized.”

IMF attitude to Bitcoin and crypto
The IMF has expressed concerns regarding Bitcoin. As some fiat currencies experience devaluation, certain individuals and a few nation-states have begun exploring alternatives, including Bitcoin, which is often viewed as offering a different monetary framework compared to traditional fiat systems.

In 2023, the IMF provided technical consulting to help Andorra record and monitor Bitcoin transactions. Later, in March 2024, it suggested Pakistan institute a capital gains tax on crypto to qualify for a $3 billion loan.

More recently, IMF executives floated the idea of taxing energy used for crypto mining to reduce carbon emissions. This added tax could drive up energy costs for miners by 85%, a potentially devastating blow for an industry already struggling with post-halving economics and increased mining difficulty.

IMF pushes central bank digital currencies
While the IMF continues to oppose Bitcoin and non-state-controlled cryptocurrencies, it is simultaneously pushing for central bank digital currencies (CBDC) globally.

This past September, the IMF released its ”REDI” framework for CBDC development. REDI stands for regulation, education, design, and incentives — geared toward helping central banks make CBDC adoption more palatable to prospective populations.

@ Newshounds News™

Source: CoinTelegraph

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The BRICS economic bloc will add around 10 new members during its upcoming summit.

The world continues to change in big ways.

I will be covering this event live in real-time.

@ Newshounds News™

Source: Gold Telegraph X

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️BREAKING NEWS: El Salvador doubles down on Bitcoin, defies IMF concerns

Crypto community members have advised the Central American country’s to reject the IMF recommendations.

El Salvador has doubled down on its Bitcoin moves despite ongoing pressure from the International Monetary Fund (IMF) regarding the country’s use of the digital asset.

On Oct. 4, Juan Carlos Reyes, President of the National Commission on Digital Assets (CNAD), announced that the Central American country’s lawmakers had passed “important amendments to the CNAD law.”

Bitcoin moves
According to him, these changes grant the CNAD authority to regulate Bitcoin companies in the country.

Further, the CNAD will now be the primary regulatory body overseeing the nation’s Bitcoin industry. It will also implement a risk-based regulatory framework to position El Salvador as a global digital asset adoption and regulation leader.

Reyes added:

“Our team [will] combine regulatory knowledge with practical Bitcoin experience, ensuring a balanced and effective approach.”

Reyes also mentioned that more information on the proposed regulatory framework will be shared in the coming weeks.

In a parallel development, the National Bitcoin Office (ONBTC) of the Office of the President of El Salvador stated that the country was building new capital markets on the bellwether digital asset.

According to ONBTC:

“Only on bitcoin can an individual ever self-custody their wealth and property. Capital will never form upon chains designed for velocity rather than sovereignty.”

These moves came after the IMF once again expressed concerns about El Salvador’s Bitcoin initiatives.

Julie Kozack, Director of the IMF Communications Department, stated that the country’s stance on Bitcoin remains an ongoing topic of discussion. She said:

“What [IMF] has recommended is a narrowing of the scope of the bitcoin law, strengthening the regulatory framework and oversight of the bitcoin ecosystem, and limiting the public sector exposure to bitcoin.”

Interestingly, this recommendation follows the IMF’s earlier acknowledgment that some risks associated with El Salvador’s Bitcoin involvement have not yet materialized.

Despite the IMF’s caution, many in the crypto community have advised the country to ignore this advice. Mathew Sigel, head of digital assets at VanEck, accused the IMF of holding El Salvador “hostage” over its pro-Bitcoin stance despite the nation’s economic and societal progress.

Instead, Sigel encouraged President Nayib Bukele to “stand firm” as his “vision is driving a remarkable transformation.”