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G7 Finance Ministers and Bankers Adopt Guidelines for Central Bank Digital Currencies

G7 Finance Ministers and Bankers Adopt Guidelines for Central Bank Digital CurrenciesAny digital currency issued by a central bank must support financial and monetary stability, finance leaders from G7 member states have insisted. State-issued coins should also ensure privacy, transparency, and data protection, the officials stated. The forum adopted 13 public policy principles for retail digital currencies and stressed that “CBDCs are not ‘cryptoassets.’” CBDCs Must […]

New York Attorney General Orders Two Unregistered Crypto Lending Platforms To Shut Down, Demands Answers From Three More

BREAKING: Coinbase plans to raise $1.5B via debt offering

Coinbase announced a $1.5 billion bond sale shortly after the SEC threatened to sue the firm over its lending program.

Coinbase, the largest cryptocurrency exchange in the United States, is planning to raise $1.5 billion via a debt offering, the company officially announced Sept. 13.

The Nasdaq-listed crypto exchange is looking to use the capital raised to further grow the company’s balance sheet for general corporate purposes as well as potential investments and acquisitions of other companies, products or technology, Coinbase said.

The news comes amid Coinbase facing increased attention from securities regulators, with the U.S. Securities and Exchange Commission (SEC) threatening to sue the exchange over its upcoming crypto lending program last week. Coinbase CEO Brian Armstrong pointed out that there are a number of other crypto firms on the market that currently provide similar lending services to their customers.

This article is developing and will be updated.

New York Attorney General Orders Two Unregistered Crypto Lending Platforms To Shut Down, Demands Answers From Three More

Russia Not Ready for Bitcoin as Legal Tender, Putin’s Spokesman Peskov Says

Russia Not Ready for Bitcoin as Legal Tender, Putin’s Spokesman Peskov SaysRussia has no reason to recognize bitcoin, President Putin’s press secretary has noted after El Salvador became the first country to adopt the digital coin as legal tender. In a statement to the press, Dmitry Peskov revealed he is convinced that such a move would not bring any benefits to the Russian Federation. Kremlin Not […]

New York Attorney General Orders Two Unregistered Crypto Lending Platforms To Shut Down, Demands Answers From Three More

Bank of America Sees Long Road Ahead for Coinbase to Become the ‘Amazon of Crypto Assets’

Bank of America Sees Long Road Ahead for Coinbase to Become the ‘Amazon of Crypto Assets’Bank of America has initiated coverage of Coinbase Global. The bank has identified several factors that could boost Coinbase’s revenue. Regarding the crypto exchange’s plan to become “the Amazon of crypto assets,” Bank of America says it is “still in very early stages of development.” Bank of America Awaits Concrete Signs of Progress Against Coinbase’s […]

New York Attorney General Orders Two Unregistered Crypto Lending Platforms To Shut Down, Demands Answers From Three More

Coinbase beats earnings estimates as analysts say regulation will ‘stifle’ innovation

COIN exceeded earnings estimates but analysts caution that blanket crypto-sector regulation will “stifle innovation” and possibly cast a shadow on Coinbase's growth.

Coinbase Global (NASDAQ: COIN) rebounded during the early trading hours on Aug.11 after it beat Wall Street forecasts for sales and revenues in the second quarter.

The cost to purchase one COIN share surged 4.7% to $282.34 at the New York opening bell. Later, bids for the COIN rose to as high as $294 before pulling back to its current price at $279.72.

Coinbase stock daily chart. Source: TradingView

Strong Q2 earnings for Coinbase 

Coinbase Global reported better-than-expected earnings in the second quarter of 2021and posted net revenue of $2.3 billion. That came to be 27% higher from the previous quarter and 1,042% up on a year-over-year basis.

Meanwhile, Coinbase's net income rose from $32 million to $1.6 billion in the same period, surpassing earnings of older and more traditional exchange operators, including the CME Group of Chicago, which earned $510 million and made $1.2 billion in revenue in Q3, and the Intercontinental Exchange, which reported a $1.3 billion in earnings.

The positive Coinbase results appeared as various entities continue to accumulate Bitcoin and the firm reported that its monthly transaction metric climbed to 8.1 million in Q2 from $6.1 million in Q1. Meanwhile, its trading volume rose to $462 billion from $335 billion in the same period.

In excerpts from the earnings call transcript, Coinbase CEO Brian Armstrong is heard discussing plans to expand Coinbase operations in the future.

Armstrong said:

"We're also focusing on international expansion, another form of decentralization, and just listing more and more assets. We want to be the Amazon of assets, list every asset out there in crypto that's legal."

In a letter to shareholders, Coinbase shared plans to explore decentralized finance (DeFi), adding that mainstream customers and institutions would soon be using the technology that cuts out traditional intermediaries from financial services, such as lending and borrowing.

Analysts still express caution

On the flip side, Coinbase warned that declining volatility in the cryptocurrency market that could impact its earnings in the year ahead.

The firm stated that its monthly transacting users (MTU)—retail traders that trade on exchanges at least once a month—surged 44% to 8.8 million at the end of Q2. Nevertheless, the net MTU declined in July and August, prompting Coinbase to lower its annual users estimate from 9 million to 8 million.

Declining trading volumes is another metric concerning analysts and the figure turned out to be weaker in July, mostly due to Bitcoin price slumping below $30,000.

According to Wedbush Securities analyst Moshe Katri, COIN's primary concerns are "mostly related to the regulatory environment."

Katri is likely referring to the US Senate approving a roughly $1 trillion infrastructure bill, a part of which requires digital asset brokers to report capital gains to the Internal Revenue Service. The bill aims to raise $28 billion in a decade by taxing the cryptocurrency sector but it failed to define who it considers "brokers."

Anne Fauvre, COO of data security firm Oasis Labs, said that the bill is too vague, fearing that it might end up covering even entities that are neither brokers nor hold any personal information of their customers. 

Fauvre told Cointelegraph, "Regulation should be seen as a way to create guardrails around industries" and "this bill would stifle the next 20 years of innovation in the US as we know it."

Adding to these regulati concerns, Coinbase CFO Alesia Haas told CNBC that U.S. regulators and lawmakers need to know that every cryptocurrency is not a security. Armstrong said that Coinbase is investing in a crypto advocacy group called the "Crypto Council for Innovation" to ensure "sensible regulation" in the US. 

COIN's technical outlook is positive

Katri iterated a 'Buy' rating for the Coinbase stock and suggested a rise to $300 in the next 12 months, which is a 3.03% upside estimate.

Analyst rating consensus for the Coinbase stock. Source: TipRanks

According to TipRanks, the average analyst consensus for COIN was also a 'Buy' with a $369.25 price target per share by next year.

New York Attorney General Orders Two Unregistered Crypto Lending Platforms To Shut Down, Demands Answers From Three More

Coinbase removes ‘backed by US dollars’ claim for USDC stablecoin

The Coinbase website now states that USD Coin is “backed by fully reserved assets,” contrary to the now-removed claim of “backed by U.S. dollars in a bank account.”

USD Coin (USDC), Circle’s dollar-pegged stablecoin, seemingly lost one of its biggest competitive advantages over its rival, Tether (USDT). 

Major crypto exchange Coinbase made an important change on the USD Coin page on its website following an audit which revealed that not all of USDC’s reserves were held in cash. This rain contrary to the previous statement that “each USDC is backed by one U.S. dollar held in a bank account.”

Coinbase visitors are now greeted with a statement that says USDC is “backed by fully reserved assets” when they enter the USD Coin webpage. This new claim states:

“Each USDC is backed by one dollar or asset with equivalent fair value, which is held in accounts with US regulated financial institutions.”
Coinbase changed the promotional material for USDC. Source: Bloomberg

USD Coin stands is the eighth-largest cryptocurrency with a total market cap of over $28 billion. USDC is also the second-largest stablecoin after Tether, which has almost $63 billion in total assets, according to its latest Consolidated Reserves Report.

Since its inception, USDC soared as a stablecoin fully backed by U.S. dollars. On the other hand, Tether found itself in hot water with regulators on more than one occasion due to undisclosed commercial paper accounting for almost half of USDT’s total reserves.

However, an audit by multi-national tax advisory firm Grant Horton showed that 61% of USDC’s reserves were held in cash and cash equivalents while 9% of the reserves were held in commercial paper. The audit report defines cash as deposits at banks and Government Obligation Money Market Funds, while cash equivalents are defined as securities with an original maturity less than or equal to 90 days.

The report revealed the USDC reserves include Yankee CDs and US.. Treasuries and certainly are not “fully backed by U.S. dollar held in a bank account.” According to Bloomberg, the wording for the USD Coin on the website was changed the day the mainstream media contacted Coinbase about the report and related marketing material.

Coinbase spokesman Andrew Schmitt reiterated to reporters that each USDC is backed by one dollar or asset with equivalent fair value:

“Users can always redeem 1 USD Coin for US$1.00. We have added additional detail to our website for customers to understand more about USDC reserves.”

Related: Tether promises an audit in ‘months’ as Paxos claims USDT is not a real stablecoin

Circle, the company that oversees USDC in partnership with Coinbase under The Centre consortium, recently announced its plans to become a full-reserve national digital currency bank in the United States. Circle CEO Jeremy Allaire said the company is willing to operate under regulators' supervision and risk management requirements.

As part of the announcement, he said that USDC will grow to “hundreds of billions of dollars in circulation,” continuing to support high-trust economic activity and become a popular tool in financial services and internet commerce applications.

Coinbase did not immediately respond to Cointelegraph's request for comment.

New York Attorney General Orders Two Unregistered Crypto Lending Platforms To Shut Down, Demands Answers From Three More

Man Sentenced to 8 Years in Prison for Stealing Nearly $7 Million of Crypto in Israel

Man Sentenced to 8 Years in Prison for Stealing Nearly  Million of Crypto in IsraelAfek Zard, a resident of Israel, has been sentenced to eight years in prison for embezzling a large sum of cryptocurrency that belonged to a friend of his. The man, who refused to cooperate with the investigation, will have to pay a hefty fine as well. Israeli Resident Sentenced for Cryptocurrency Theft The 27-year-old Zard […]

New York Attorney General Orders Two Unregistered Crypto Lending Platforms To Shut Down, Demands Answers From Three More

Palestinians Ponder Digital Currency as Move for Monetary Independence

Palestinians Ponder Digital Currency as Move for Monetary IndependenceThe Palestine Monetary Authority is exploring the possibility of issuing its own digital currency. For Palestinians, the minting of a national coin would represent a step, at least a symbolic one, towards achieving monetary independence from the State of Israel. Digital Currency to Help Palestinians Cope With Israeli Restrictions Palestinians are currently conducting two studies […]

New York Attorney General Orders Two Unregistered Crypto Lending Platforms To Shut Down, Demands Answers From Three More

Basketball Players in Canada to Be Paid in Bitcoin

Basketball Players in Canada to Be Paid in BitcoinCEBL, the Canadian men’s basketball league, will offer its professional basketball players the option to receive a portion of their salary in cryptocurrency. The new payment option has been enabled through a partnership with the Canadian cryptocurrency exchange Bitbuy. Bitbuy to Convert Canadian Dollar Salaries Into Bitcoin The Canadian Elite Basketball League (CEBL) announced the […]

New York Attorney General Orders Two Unregistered Crypto Lending Platforms To Shut Down, Demands Answers From Three More