Banks battle cryptosBy Arnaud Masset
It sounds like a sci-fi film or a gang war – and maybe it is a gang war. Banking’s business model is jeopardised by the blockchain technology. Banks need to buy time, to figure out how to compete, and a great way to buy time is to ban cryptocurrency exchange through regulations.
Last week the banks won two battles. One was convincing the US Securities and Exchange Commission (SEC) to rule that crypto-exchanges must comply with SEC rules. Two was blocking Finnish broker Prasos from working with four out of five partner banks to convert cryptos into euros, calling the initiative money laundering.
This triggered a sharp sell-off across the crypto-markets, which wiped out US$132 billion. Cryptos are now recovering after the correction. Bitcoin bounced back 14%, from $8,368 last Friday to around $9,550 on Monday morning. Still, momentum is fading as cryptos face other, similar hurdles such as the SEC’s. Crypto exchanges across are challenging governments, credit card issuers and local banks – so the latter keep throwing up roadblocks. Even though regulation of crypto-assets will bring positives such lower volatility in the long-term, the price plunge suggests that investors are yet to be convinced. Mainly, they see the move as a delay to the use of blockchain to make payments.
Trump’s tariff tantrum cries wolfBy Vincent-Frédéric Mivelaz
Will there be tariffs, on what products, from which countries and when? Markets are starting to discount US President Donald Trump’s threats – which seem to change continually and are starting to look like bluster. Asian markets rallied in the European morning Monday, boosted by strong US employment data: 313’000 jobs were created in February, well above the expectation of 205’000. Hong Kong’s Hang Seng and Shanghai’s Composite expanded 1.86% and 0.59% while Japan’s Nikkei 225 gained 1.65%.
After warning Europe’s, China’s and Japan’s aluminium and steel industries with 10% and 25% tariffs, Trump is hammering on the automobile industry, following discussions of European and US negotiators in Brussels. Trump says he intends to tax Mercedes-Benz, BMW and other German automotive companies if no reciprocal effort is made to remove tariff barriers for US products. America first, says Trump, even if his unilateral decisions bring him into opposition with the World Trade Organization’s fundamentals. China has confirmed its willingness to continue discussions with US negotiators, and that it will defend its interests at all costs.