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Software Firm From China Says They Are Working On CBDC Project

A software firm from China has also admitted that it is working with the nation’s central bank on the expanding digital currency pilot project making it the second private firm to make this claim over a week as we are reading more in today’s altcoin news. Another software firm from China admitted to be working […]

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A software firm from China has also admitted that it is working with the nation’s central bank on the expanding digital currency pilot project making it the second private firm to make this claim over a week as we are reading more in today’s altcoin news.

Another software firm from China admitted to be working on the central bank digital currency, to expand the pilot project. NetEase, the mobile payment software provider named Weifutong Technology revealed to be working with multiple unnamed state-owned banks on the central digital yuan pilots project by the People’s Bank of China which already encompass five major cities and could be expanded to multiple new areas shortly.

citizens of china, tether, crypto,

Wiefutong is a subsidiary of the Shanghai-based textiles company Huafeng Microfiber and develops back-end mobile pay solutions for multiple banks in the Middle Kingdom. Weifutong said that the digital currency business involves “actively participating in the digital yuan project with a few banks.” the firm also added that due to the terms of confidentiality agreements, it won’t disclose further details of the testing and promotional work for the time being.

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The same media outlet said that more details emerged regarding Shenzhen Techno Telecom and its involvement in the project after the Beijing-based company admitted to being working on the pilot earlier this week. NetEase reported that Shenzhen Techno Telecom works with a “large state-owned bank” claiming that its most-recently listed client base includes the central bank with three policy banks and six state-owned commercial banks along with a large number of provincial banks and other financial companies.

Other private companies are also working on the project include the food delivery platform Meituan Dianping and the operator Didi Chuxing. Many experts based in China claimed the likes of Alibaba and Tencent to be working behind the scenes with the People’s Bank of China.

china will test the digital yuan
China is apparently working towards digitizing the digital yuan.

The digital currency approach by China with its Chinese digital yuan is getting better and better accepted by the media, the latest crypto news show. According to a former head at the People’s Bank of China (PBoE), the national cryptocurrency approach is set to favor international payments and domestic retail systems. Zhou Xiaochuan who is the president of the Chinese Finance Association and former governor of the People’s Bank of China (PBoC) spoke about this, outlining two major types of implementations of central bank digital currencies (CBDCs) while speaking at the 2019 Caixin Hengqin Forum.

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Source: https://www.dcforecasts.com/altcoin-news/software-firm-from-china-says-they-are-working-on-cbdc-project/

Blockchain

US House Passes $1.9 Trillion COVID-19 Relief Package, $1,400 Direct Check Provisions Included

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This past weekend, the US House of Representatives passed President Biden’s $1.9 trillion stimulus bill, sending the piece of legislation to the Senate for a vote.

Some of the notable parts of the bill include increased funding for vaccine distribution and schools, direct funding to state and local governments, and $1,400 checks to Americans making less than $75,000 annually. While this aid is desperately needed by the American people, it brings up larger points about the direction the financial system is headed.

Sending out the Checks

Direct stimulus checks were one of the biggest campaign-promises from the Democrats during the Georgia Runoff Elections, and it seems that the US Government might be one step closer to delivering on that promise.

The bill, which includes a minimum wage increase to $15 per hour, passed in the House with a 219-212 vote down party lines. Despite support from 76% of voters, not a single Republican representative voted for the bill, along with two Democrats who broke with the party to vote no.

However, the current iteration of the bill is unlikely to be the version that President Biden will sign. Procedural roadblocks and a bit of Democrat inaction are preventing the minimum wage increase from passing the Senate, and more than likely, the minimum wage provisions will be removed. The bill will be sent back to the House to be voted on again, without the minimum wage increase, before landing on Biden’s desk. We are now over a month into the Biden presidency, and many Americans are wondering where those “Day One” payments are.

This newest relief bill, if passed, will be the third major stimulus bill passed by the United States government since the start of the COVID-19 pandemic. It comes after the December 2020 stimulus package, which extended the eviction moratorium, additional PPP loans, $600 direct payments to Americans, in addition to the previous $6.2 trillion CARES Act, which was passed in March of last year. However, the Federal Reserve pumping money into the economy does have repercussions, some felt rather quickly.

Money Printer Go Brrrr

The stimulus last year contained nearly $4 trillion getting pumped in to prop up various top financial institutions, sending waves throughout the international currency markets. The US Dollar started losing value shortly after the bill was signed into law and has been on the decline ever since. Since March of last year, the US Dollar has fallen 10.5% and 10.3% to the British Pound and Euro, respectively. While the new stimulus bill is considerably smaller, it is still likely it will affect Dollar in the coming months.

Worries regarding the devaluation of the dollar are nothing new, however. Cryptocurrency users have long pointed out the issues with the state being able to effectively print infinite money.

Bitcoin and other digital currencies have long touted the advantages of having a provably limited supply, where the minting of new coins is an algorithmic process that is defined in advance. And it seems like investors believe those types of systems may have some benefits.

As the major economies around the world continue to struggle, people may start looking towards cryptocurrencies as a safer place to hold their wealth rather than continuing to let it devalue.

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Source: https://cryptopotato.com/us-house-passes-1-9-trillion-covid-19-relief-package-1400-direct-check-provisions-included/

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Cboe Files With the US SEC Again to List VanEck’s Bitcoin ETF

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Yet another attempt for a US-approved Bitcoin ETF is on the horizon coming from the Chicago Board Options Exchange (Cboe). The organization’s filing with the SEC aims to build on a previous S-1 filing initiated by VanEck. 

  • CryptoPotato reported in late 2020 that the US investment giant with about $50 billion in AUM, VanEck, has filed for its latest S-1 form with the SEC to establish a Bitcoin ETF called The VanEck Bitcoin Trust.  
  • The company’s application indicated that the ETF’s shares would be traded on the Cboe BZX Exchange if approved. 
  • Although the Commission has not issued a formal response yet, Cboe has interfered with the application by filing a proposal of its own. 
  • It works as an addition to the previous attempt as the proposal “builds on VanEck’s earlier S-1 filing” and “represents the next steps in bringing what could be the first US Bitcoin ETF to market.” 
  • Furthermore, the filing reads that such a product would “present certain advantages for retail investors compared to buying spot bitcoin directly. The most notable advantage is the use of the Custodian to custody the Trust’s bitcoin assets.” However, the document didn’t reveal the name of the custodian.
  • The regulator has yet to approve a Bitcoin ETF in the US as it has rejected dozens of applications so far. VanEck alone has a couple of attempts in the past, but each ended with a withdrawal from the company. 
  • While the US has failed to approve a product tracking the performance of the primary cryptocurrency, the nation’s northern neighbor did so earlier this year. 
  • Canada’s Ontario Securities Commission (OSC) approved a filing by Purpose Investments in February, and the product accumulated more than $400 million in its first few weeks of existence.  
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Source: https://cryptopotato.com/cboe-files-with-the-us-sec-again-to-list-vanecks-bitcoin-etf/

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No, Goldman Sachs isn’t a bearish indicator for Bitcoin

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Peter Brandt, a popular veteran trader and CEO of proprietary trading firm Factor LLC, recently gave his thoughts on Goldman Sachs potentially restarting its cryptocurrency desk.

On Dec. 21, 2017, a similar Bloomberg piece stated that Goldman Sachs would set up a cryptocurrency trading desk, although the bank was “still trying to work out security issues.”

Although Brandt’s chart seems significant, one needs to understand that such speculation had been ongoing for a couple of months. Wall Street Journal already covered Goldman Sachs’ intention to do this on Oct. 2, 2017.

Even if we disregard the exact date, Goldman Sachs apparently ditched those plans to launch its Bitcoin (BTC) trading desk. But, more importantly, there aren’t many similarities between the 2017 bull run and the current market in terms of their structure.

Bitcoin market cap, volume late-2017, USD billion. Source: TradingView

Take notice of how BTC volume soared from a $2 billion average daily volume in November 2017 to $14.6 billion by year-end, a seven-fold increase. The incoming retail demand was so impressive that it caused Binance, Bitfinex, and Bittrex exchanges to reject new users temporarily.

Binance accounts were even sold by users directly to other users at the time when no new sign-ups were being accepted. In other words, there is currently no retail frenzy in Bitcoin similar to what happened in late 2017. In fact, the current bull cycle appears to be driven by institutions that are seemingly scooping up BTC on every dip

Bitcoin market cap, volume, USD billion. Source: TradingView

Meanwhile, the $66 billion daily average traded volume seen on Feb. 22, 2021, as Bitcoin’s market capitalization peaked at $1.09 trillion, has been relatively flat for the previous six weeks.

Therefore, an experienced technical analyst such as Brandt should have added the caveat that volume is the most relevant market participation indicator (which he frequently emphasizes in his other analysis). 

To settle this difference for good, one needs to understand the basics of futures markets. Derivatives exchanges charge either perpetual futures longs (buyers) or shorts (sellers) a fee every eight hours to keep a balanced risk exposure. This indicator, known as the funding rate, will turn positive when longs are the ones demanding more leverage.

Bitmex BTC perpetual futures weekly funding rate, late-2017. Source: TradingView

As the above chart indicates, buyers were willing to pay up to 40% per week to leverage their long positions. This is entirely unsustainable and a sign of extreme optimism. Any market downturn would have caused cascading liquidations, with the BTC price accelerating to the downside.

BitMEX BTC perpetual futures weekly funding rate. Source: TradingView

Such exorbitant rates no longer exist, albeit the current 4% weekly funding rate has been the highest since June 2019. Nevertheless, scales of magnitude lower than late-2017 outrageous retail-driven long leverage frenzy.

Lastly, one should factor in that December 2017 marked the launch of CME and CBOE futures contracts. As Cointelegraph astutely put back then: This unprecedented event could have a significant impact on the Bitcoin economy.” In retrospect, this seems to have been the peak euphoria signal the bears were waiting for. Thus, Goldman Sachs balking was likely the effect, not the cause. 

But while Brandt has become well-known in the cryptocurrency space for anticipating the 80%+ correction after the 2017 Bitcoin price top, his track record has been less impressive in recent times. 

So to sum up, there is zero evidence to support Peter Brandt’s theory besides a single event that happened once in the 11 years of Bitcoin trading. Not to mention that the 2017 Goldman Sachs cryptocurrency trading desk rumors had been going for a while.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Source: https://cointelegraph.com/news/no-goldman-sachs-isn-t-a-bearish-indicator-for-bitcoin

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