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Deltec, the Bahamas-based bank that holds the reserves for stablecoin giant Tether, holds a “large position in bitcoin” according to its chief investment officer.

CIO Hugo Rogers disclosed the investment during a year-in-review video published on January 14. Specifically, the comments about the bitcoin position were in the context of a question about Deltec’s “high level calls and best picks” for the year.

After discussing Deltec’s bond holdings, Rogers said:

“We’ve maintained a very significant position in the beneficiaries of maximum monetization, so that does include gold, it includes other commodities as well. It also includes a large position in bitcoin, which has received a lot of attention recently. We bought bitcoin for our clients at about $9,300 so that worked very well through 2020 and we expect it to work well in 2021 as the liquidity crisis continues to run hot.”

The timing of the purchase isn’t clear at this time. Market data from Coinbase shows that bitcoin’s price last traded at that level in mid-July.

The Block reported in October 2018 that Tether had begun holding its reserves with Deltec, having previously worked with Puerto Rico-based Noble Bank. A letter published by Tether in November 2018 attesting to its relationship with Deltec was later confirmed by the bank.

Tether’s banking problems began in mid-2017, when Wells Fargo — through which Tether had been processing U.S. dollar transactions — moved to block such activities, triggering a lawsuit that was soon withdrawn.

Tether is the subject of an ongoing inquiry by the New York State Attorney into iFinex, the parent company of both Tether and crypto exchange Bitfinex. The investigation broke into public view in April 2019. Last July, the AG’s office prevailed in an appeal related to document production for its investigation. On December 9, the AG’s office told a New York Supreme Court judge that iFinex has been cooperating with the document production, with a requested deadline extension to January 15.

Tether has long been the subject of public controversy and accusations of fraud, driven by the contention that USDT isn’t fully back by reserves and is used to manipulate cryptocurrency prices. 

In the period since the commencement of the NYAG’s lawsuit, Tether’s footprint has continued to grow, both in terms of the number of blockchains supporting USDT as well as the total amount of the stablecoin in circulation.

According to data collected by The Block, there is more than 25 billion USDT in circulation today.

Hat tip @Lenne0826/Twitter

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Federal Reserve chairman Jerome Powell described the central bank’s work on stablecoins as a “very high priority” during a webinar on Thursday. 

“Clearly there’s a need for, and we’ve been very focused as you know, on better regulatory answers for potential global stablecoins, in particular,” Powell said during a segment that focused in part on central bank digital currencies (CBDCs) as well. 

His comments indicate that the Fed’s stablecoin strategy is still in flux and that it sees the need to both chart out potential risks and how to mitigate them.

Powell noted during the webinar:

“So that’s been a high-level focus and that will continue to be a high-level focus because they could become systemically important overnight and we don’t begin to have, you know, our arms around the potential risks and how to manage those risks and the public will expect we do and has every right to expect that. So that’s something we’ve been working on with our colleagues around the world and that will go on as well. It’s a very high priority.”

On the topic of CBDCs, Powell remarked that “[w]e’re going to look at it very, very carefully,” reiterating that any potential creation by the Fed would constitute a years-long process. “We’re determined to do this right rather than quickly, and it will take some time — measured in years rather than months.” 

Powell mentioned that the CBDC talks will involve a “great deal” of outreach to elected representatives, financial sector participants, and citizens to understand use cases, needs and benefits. 

Powell’s comments come nearly a month after the White House released a report recommending to limit multi-currency stablecoins. Federal Reserve governor Lael Brainard also mentioned previously that such stablecoins raise “fundamental questions about legal and regulatory safeguards, financial stability, and the appropriate role of private money.” 

The video of Powell’s comments is embedded below (relevant footage begins around 57:00):

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The Financial Crimes Enforcement Network (FinCEN) has reopened the comment period for its proposed rule that would create new KYC requirements for crypto transactions in the U.S.

Commenters will have an additional 15 days to submit written comments on the reporting requirements related to a $10,000 transaction limit proposed in the rule. Another 45 days will be given to comment on the proposal that banks report counterparty information related to transactions with self-hosted wallets.

The proposed “Requirements for Certain Transactions Involving Convertible Virtual Currency of Digital Assets,” would subject all wallets to know-your-customer requirements and reporting requirements for transactions greater than $3,000.

FinCEN released the notice of proposed rulemaking in late December, leaving only 15 days over the course of a holiday period to submit comments. Industry stakeholders still managed to lodge 7,500 comments in that time, according to FinCEN. Many, including Coinbase and members of Congress, expressed their dissatisfaction with the shortened comment period, which was 45 days less than the standard 60 days. 

At that time, there was also confusion over when the initial deadline would take effect.

Many industry players believed the deadline to be Jan.4, or 15 days from the announcement of the proposed rule, as it stated in the text of the proposed rule. However, at some point during the comment period, the date was changed to Jan. 7 in the comment portal, though the text of the notice still stated a Jan. 4 deadline. Jan. 7 marked 15 days from the day the notice was published in the Federal Register.

FinCEN did not publicize the date change and did not respond to multiple requests for comment on why the date change occurred with no notice. It did not touch on the reason for the initial shortened comment period in its reopening notice, but did note that many of the comments received in the initial period cited the shortened length.

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.