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Stablecoins could “threaten financial security” if widely adopted, the ECB head said in a magazine interview.

Crypto exchange Coinbase is preparing for the much-anticipated launch of Eth2, also known as Ethereum 2.0, by outlining how it plans to support staking and trading of what will eventually be two distinct tokens.

Coinbase will offer conversion services — from “ETH1” to “ETH2” — as well as rewards for those who opt to stake their tokens. Eth2 is a proof-of-stake based blockchain network, compared to the existing Ethereum network, which is a proof-of-work network.

The firm went on to explain in its blog post: “While staked ETH2 tokens remain locked on the beacon chain, Coinbase will also enable trading between ETH2, ETH, and all other supported currencies providing liquidity for our customers.”

Coinbase did not disclose a date at which it will offer these services, stating in the blog post that it would go live “in eligible jurisdictions starting in early 2021.”

“We’re excited for this major milestone for ETH2, and the potential that a final rollout of ETH2 holds for the entire cryptocurrency community,” the blog post concluded.

As reported earlier today, more than $500 million in ETH has been deposited thus far in the Eth2 staking contract. That amount more than exceeds the minimum amount needed for the beacon chain — the inaugural element of Eth2 to go live this week — to achieve genesis on December 1.

© 2020 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.

Why a price surge is not only attracting a new cadre of institutional investors, but also producing the beginnings of a new set of FUD.

Russia’s largest state-owned bank, Sberbank, is reportedly set to launch a platform allowing users to purchase digital financial assets.

Herman Gref, CEO of Sberbank, said that the bank wants to promote accessibility to the new class of assets through its own blockchain platform, according to the Russian news site RBC. The move appears to be tied to Russia’s recent approval of legislation that cleared the way for the development of digital securities, as previously reported. 

That same piece of legislation, signed into law by Russian president Vladimir Putin, notably included provisions aimed at prohibiting the use of cryptocurrencies as a means of payment starting next year. The law will go into effect in January.

Sberbank previously highlighted plans to launch a so-called Sbercoin, which will be pegged to the ruble and primarily used for digital financial asset settlements. Sberbank plans to begin experimenting with Sbercoin in 2021, according to RBC.

 

© 2020 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 accused, Gutemberg Dos Santos, has been charged in an indictment and was extradited from Panama on Nov. 25.

Mining hardware manufacturer Canaan Creative reported a Q3 net loss of $12.7 million, or 54 cents per share, more than quadruple the size of Q2’s $2.38 million loss, or 10 cents per share.

Bitcoin bucked sluggish activity across broader markets, hitting all-time highs on several cryptocurrency exchanges during Monday morning’s trade session.

The digital currency traded as high as $19,873.23 a coin on Coinbase, while hitting all-time highs on Binance, Bitstamp, and Kraken. At last check, bitcoin was trading up about 5.8% on the day at $19,047.

Meanwhile, the Dow Jones Industrial Average was down more than 1.4%. The price of gold was trading lower — adding to the losses bullion faced throughout November. Gold was trading down 0.47% at the time of writing at $1,782.

The divergence between gold and bitcoin  is striking, considering many investors have characterized the latter as a digital alternative to gold, which traditionally outperforms during periods of anxiety. Breakthroughs made by pharmaceutical firms on a Covid-19 vaccine appear to have sent gold’s price into a tailspin. 

“While there’s plenty of people that want to draw similarities between the two instruments, I think this divergence highlights how different they still are,” said Craig Erlam, an analyst at OANDA, in an email to The Block. 

“Bitcoin has done well since March and that may be linked to some belief that more stimulus is bullish but in the face of expectations being pared back and an improved economic outlook, it’s pushing record highs and I think it will probably go well beyond them,” he added. 

Vaccine news has also weighed on the US dollar. Despite enjoying a nice boost during Monday’s session, it is still trading down nearly 5% since the beginning of the year. 

© 2020 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.

PLUS: Anonymous developers have forked a seemingly dead project to launch DeFi’s latest stablecoin.

Stablecoins “pose serious risks” according to Christine Lagarde, the head of the European Central Bank.

Her comments — which touched on the intersection of payments and technology — from November 30 come as the European Union moves closer toward approving the eventual creation of a wholly digital euro. Lagarde previously indicated that a yes-or-no decision would come in January, even as other institutions around the globe pursue central bank digital currency initiatives.

As she has before, Lagarde spoke about the digital euro as a complement to physical cash. The ECB leader also stressed how the the digital euro, if implemented, would help shore up “monetary sovereignty” in the region.

“It could be important in a range of future scenarios, from a decline in the use of cash to pre-empting the uptake of foreign digital currencies in the euro area,” she said, according to the prepared remarks. “Issuing a digital euro might become necessary to ensure both continued access to central bank money and monetary sovereignty.”

Adopting a loftier perspective, Lagarde went on to say: “A digital euro would also be an emblem of the ongoing process of European integration and ultimately help to unify Europe’s digital economies.”

On the topic of crypto-assets, Lagarde had this to say:

“The main risk lies in relying purely on technology and the flawed concept of there being no identifiable issuer or claim. This also means that users cannot rely on crypto-assets maintaining a stable value: they are highly volatile, illiquid and speculative, and so do not fulfil all the functions of money.”

Her comments were specifically pointed when she spoke about stablecoins.

“Although stablecoins could drive additional innovation in payments and be well integrated into social media, trade and other platforms, they pose serious risks,” she remarked, going on to say:

“If widely adopted, they could threaten financial stability and monetary sovereignty. For instance, if the issuer cannot guarantee a fixed value or if they are perceived as being incapable of absorbing losses, a run could occur. Additionally, using stablecoins as a store of value could trigger a large shift of bank deposits to stablecoins, which may have an impact on banks’ operations and the transmission of monetary policy.”

Lagarde also critiqued stablecoins issued by “global technology firms” — a not-so-subtle reference, perhaps, to Facebook’s Libra — and how they “could also present risks to competitiveness and technological autonomy in Europe, as they would attempt to leverage their competitive advantage and control of large platforms.”

© 2020 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 research arm of the New York-based asset manager now recommends bitcoin as part of an investment portfolio.