After hackers stole digital currency assets from South Korean currency exchange Coinrail recently, the question must be asked, can bitcoin and other crypto-currencies be safe? The problems don't seem to lie in the blockchain technology, but instead in the exchanges that provide servicing to crypto-currency users. This isn't the first time an exchange has been hacked, or even the second or third time. So users must take into account the idea that the place housing their crypto-currencies may not be altogether safe. Can you imagine a rash of bank robberies in your town, but without any FDIC … [Read more...]

Writing in The Wall Street Journal, Andy Kessler explains the mistake Isaac Newton made with his investments in the South Sea Co. After investing well and earning 100%, Newton initially sold his shares profitably. But when the South Sea Co.'s shares began to take off into bubble territory, Newton was afraid of missing out and invested once again, ultimately losing what would be millions in today's dollars. Kessler writes of today's bitcoin investors: Why relive this painful history? Because half of bitcoin’s price increase over the past year came from market manipulation via another … [Read more...]

Can an initial coin offering selling "tokens" that will fund media ventures be used to revolutionize, and even save the news business? The Civil Media company is testing that model. Benjamin Mullin reports for The Wall Street Journal: The company is trying to sell a maximum of $34 million in “tokens,” digital currency that its owners can use in a new online marketplace for media ventures being created by the company. The tokens — which will be valued between $0.94 and $0.27 each — will eventually give their bearers the ability to pay freelancers, support news organizations and help resolve … [Read more...]

Long known for its commitment to banking privacy, Switzerland makes sense as a place where anonymous crypto-currencies would thrive. Ralph Atkins and Philip Stafford report in the FT on plans in Switzerland for a new market infrastructure which will enhance traders' ability to swap crypto-currencies. They write: Switzerland’s stock exchange is seeking a global lead in the trading of digital assets, announcing plans for new market infrastructure which will boost the country’s credentials as a “crypto nation”. The platform being built by the Six exchange is designed to be used for … [Read more...]

How quickly things can change. Back in April I wrote to you of Sweden's all out dash toward creating the world's first cashless society. Digital currency was the wave of the future, and the Swedes were happy to lead. Now, though, the movement toward a cashless society in Sweden is being challenged. Swedish politicians are attempting to rein in the policies of the Riksbank, Sweden's central bank, that encourage cashlessness. Bloomberg reports: A key committee of Swedish lawmakers wants to force the country’s biggest banks to handle cash in an effort to halt the nation’s march toward … [Read more...]

Writing in his eponymous magazine, Steve Forbes explains to readers why cryptocurrencies cannot be "real" money, at least not the way they're set up today. Forbes writes: THE ASTONISHING FACT about the explosion in cryptocurrencies is that their creators have overlooked a fundamental fact: Money isn't viable if it fluctuates in value, particularly with the wild swings characteristic of this sector. Most buyers are looking to make a quick buck, treating Bitcoin et al. like penny stocks of yore. They forget that the very instability of government-produced money is one of the two critical … [Read more...]

The populist backlash across the euro-area is gathering momentum. Italy is headed for elections that may give populist parties more power and there is a no-confidence vote planned in Spain. The FT reports that the Bank of Italy has warned the Italian government that it may be losing the trust of markets. The governor of the Bank of Italy has warned that the country was “a few short steps away” from losing the “asset of trust”, a rare intervention by the central bank into a political crisis that underlined the risk Rome faces as it stumbles to new elections. Ignazio Visco said any new … [Read more...]

In an editorial appearing in his eponymous magazine, Steve Forbes writes that the Federal Reserve's new chairman, Jerome Powell will continue the same bad policies that have done so much harm to the American economy. Forbes lists a number of these misguided approaches, but the first is the belief in what he calls "funny money." He writes: THE FEDERAL RESERVE'S new chairman, Jerome Powell, recently presided over his first meeting of the Federal Open Market Committee, which sets central bank policy, most particularly the level of interest rates. Powell looks to continue the same destructive … [Read more...]

The FT reports that last week emerging market currencies had their worst week since 2016 and they are down again this morning. The Turkish lira faced the heaviest fall on Monday, sliding 0.85 per cent on the buck, with a dollar buying 4.2624 lira. South Africa’s rand was the second biggest faller, down 0.44 per cent on the greenback, while the Philippine peso, Russian rouble and Indian rupee were each off roughly 0.4 per cent. Trading in the Argentine peso, which tumbled 6.2 per cent last week and sparked a series of three rate rises from the central bank, opens at roughly 2pm London … [Read more...]

“Mr. Shlyapnikov has launched a cryptocurrency, the kolion, named after his hamlet some 80 miles southeast of Moscow, buoyed by an initial investment of a half-million dollars from investors in Russia and abroad,” writes Thomas Grove in the WSJ. It is an example of a crypto doing what it’s supposed to do: offer a trading network where money and trust are scarce. Grove continues: “Banks don’t want to lend to small farmers,” said Mr. Shlyapnikov. “So we created our own currency.” He said he wasn’t personally profiting, and appeared to live frugally. The tactic is popular in a part of … [Read more...]