Coinz.com

By Kantaro Komiya

TOKYO (Reuters) – Japan will revise its foreign exchange law to prevent Russia from evading Western financial sanctions following Moscow’s invasion of Ukraine through cryptocurrency assets, top government officials said on Monday.

The government will submit a revision of the Foreign Exchange and Foreign Trade Act to the current parliament session to strengthen protections against potential sanction-busting by Russia through digital assets, Chief Cabinet Secretary Hirokazu Matsuno said in a press conference.

Prime Minister Fumio Kishida also called for the law to be amended in a Monday parliament session, where he stressed the need for coordinated moves with Western allies after attending last week’s Group of Seven summit in Belgium.

A finance ministry official told Reuters discussions were under way about the proposed amendment, saying he could not provide further details.

The revision “presumably enables the government to apply the law to crypto-asset exchanges like banks and oblige them to scrutinise whether their clients are Russian sanction targets,” said Saisuke Sakai, senior economist at Mizuho Research and Technologies.

Following the invasion of Ukraine, the Japanese government has slapped asset-freeze sanctions on more than 100 Russian officials, oligarchs, banks and other institutions. Japan has also banned high-tech exports and revoked the most-favoured nation trade status for Russia, which calls its actions in Ukraine a “special military operation”.

Earlier this month, Japan’s financial regulatory body demanded about 30 crypto exchanges in the country not to conduct asset transactions with sanction targets.

A legislative revision is a stronger step to implement such regulations. According to economist Sakai, Kishida’s government probably developed the legal revision plan given Western authorities’ stricter rules on the subject, as well as high Japanese public support for sanctioning Russia.

(Reporting by Kantaro Komiya; Editing by Kenneth Maxwell)

(Reuters) – Bitcoin surged 4.41% to $46,499.29 at 22:07 GMT on Sunday, adding $1,963.64 to its previous close.

Bitcoin, the world’s biggest and best-known cryptocurrency, is up 41.1% from the year’s low of $32,950.72 on Jan. 24.

Ether, the coin linked to the ethereum blockchain network, surged 3.92% to $3,270.67 on Sunday, adding $123.45 to its previous close.

(Reporting by Akriti Sharma in Bengaluru; Editing by Cynthia Osterman)

(Reuters) – U.S. Federal Reserve Governor Christopher Waller said on Friday he is not convinced of the need for a central bank digital currency, particularly for retail customers who already have access to fast payment systems.

“Why do we really need it?” Waller said in a virtual event on central banking and digital currencies. “I haven’t been convinced of that yet. It’s not saying that I can’t be, but I haven’t seen that on a retail CBDC.” He did not make any comments about monetary policy or the outlook for the economy.

(Reporting by Ann Saphir)

By Elizabeth Howcroft and Tom Wilson

LONDON (Reuters) – Ukraine started auctioning off a collection of non-fungible tokens (NFTs) on Friday in an expansion of a cryptocurrency fundraising push that Kyiv says has already collected more than $65 million for its war effort.

The ‘Meta History: Museum of War’ collection is a series of digital images – including silhouettes of warplanes, screengrabs of news reports and a cartoon-style image of an explosion – each one marking a different day in the conflict.

Ukraine’s Ministry of Digital Transformation started appealing for donations in digital tokens such as bitcoin and ether three days after Russia launched its invasion, which Moscow calls a “special military operation”.

The new NFT series was meant “to spread truthful information among the digital community in the world and to collect donations for the support of Ukraine,” according to a message on the collection’s website.

Non-fungible tokens (NFTs) are a type of crypto asset that exploded in popularity last year. They use the technology behind bitcoin to record who owns a digital file from a image to video or piece of text.

Ukraine has so far bought supplies for its military with its crypto donations including bulletproof vests, helmets, lunches and medicines, Ukraine’s deputy minister of digital transformation, Alex Bornyakov, said on Twitter this month.

NFTs are usually bought with cryptocurrencies such as ether. Ukraine’s NFTs will initially cost 0.15 ether, or just over $475. The funds will go directly to Kyiv’s digital crypto wallets, according to the website.

The explosive rise in NFT sales left many observers baffled as to why so much money is spent on items that don’t physically exist.

Still, they have become a popular fundraising tool in recent months, with groups of people pooling their crypto funds to buy NFTs to raise awareness of a particular cause.

(Reporting by Elizabeth Howcroft and Tom Wilson; Editing by Andrew Heavens)

By Chuck Mikolajczak

NEW YORK (Reuters) – The dollar rose for the fourth time in the past five sessions, as economic data on the labor market helped firm expectations the U.S. Federal Reserve will be more aggressive in taking steps to curb inflation.

Weekly initial jobless claims fell to a seasonally adjusted 187,000 last week, the lowest level since September 1969 and below the 212,000 forecast.

While new durable goods orders unexpectedly fell in February as shipments slowed, demand for goods remained strong. In addition a measure of business activity for March climbed to an eight-month high.

The data and recent comments from Federal Reserve officials have strengthened views the central bank will hike rates by more than 25 basis points at its next policy meeting in May. Expectations for a hike of 50 basis points at that meeting are 70.5%, according to CME’s FedWatch Tool https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html?redirect=/trading/interest-rates/fed-funds.html, up from 32.9% a week ago.

“The dollar continues to be like a steamroller here, pretty much running over anyone that takes a short position against it,” said Karl Schamotta, chief market strategist at Cambridge Global Payments in Toronto.

“The data we are seeing certainly supports the case for multiple 50-basis-point hikes this year, and that is pushing up the front end of the curve and leading the dollar to outperformance against virtually every major as well as the commodity-linked currencies, which is something of a surprise.”

Federal Reserve Chair Jerome Powell recently raised the possibility of raising interest rates by more than 25 basis points at upcoming meetings, a more aggressive stance echoed by other policymakers as they attempt to cool rising inflation, which has supported the greenback of late.

On Thursday, Chicago Fed President Charles Evans said he would be comfortable raising rates at every Fed meeting through next March by 25 basis points each time but is “open-minded” about a possible 50-basis-point hike.

Fed Governor Christopher Waller said the state of the U.S. housing market should help shape monetary policy and there seems to be no cooling in sight for higher home costs, although Minneapolis Federal Reserve Bank President Neel Kashkari on Thursday said he has penciled in seven quarter-point interest rate hikes this year and warned against overdoing it.

Morgan Stanley’s chief U.S. economist Ellen Zentner on Thursday said the firm now sees 50-basis point hikes at both the Fed’s May and June meetings, with 25-basis-point hikes at each meeting after through the rest of the year.

The dollar index rose 0.163%, with the euro down 0.06% to $1.0997.

Euro zone business growth was stronger than expected this month, a survey showed on Thursday, although prices rose at a record pace, likely adding to pressure on the European Central Bank to raise rates.

The Japanese yen fell against the U.S. dollar for the fifth session in a row, hitting its lowest since December 2015 at 122.40 with the Bank of Japan expected keep its soft monetary policy in place, in contrast to most other central banks around the globe.

The Japanese yen last weakened 0.92% versus the greenback to 122.27 per dollar, while Britain’s pound was last trading at $1.318, down 0.17% on the day.

The war in Ukraine has served to push up prices of oil and other commodities, adding pressure to already rising inflation.

Western leaders meeting in Brussels on Thursday agreed to strengthen their forces in Eastern Europe, increase military aid to Ukraine and tighten their sanctions on Russia.

Against the Swiss franc, the greenback rose 0.04%, after the Swiss National Bank held its policy rate at -0.75%, going against the grain of other central banks which have started hiking rates to combat inflation.

Norway’s central bank raised its benchmark interest rate on Thursday as expected, and said it now planned to hike at a faster pace than previously intended.

Against the Norwegian crown, the greenback rose 0.03%.

In cryptocurrencies, Bitcoin last rose 3.85% to $44,006.48.

(Reporting by Chuck Mikolajczak; editing by Jonathan Oatis)

By Hannah Lang

WASHINGTON (Reuters) – Prominent U.S. lawmaker Maxine Waters has asked more than 30 financial services trade groups for information on what steps their members have taken to end business relationships in Russia as pressure escalates on companies to cut ties with Moscow.

In a letter sent on Thursday to leading industry groups including the American Bankers Association, Bank Policy Institute, Securities Industry and Financial Markets Association and the U.S. Chamber of Commerce, Waters requested data on which companies remain engaged in business activities in Russia following its invasion of Ukraine and their reason for doing so.

She also asked the groups to detail their members’ processes for complying with Western sanctions. She asked the groups to get the information to the committee within 20 days.

U.S. Representative Waters, the California Democrat who chairs the House Financial Services Committee, did not indicate what the committee might do with this information.

Financial companies have taken varying approaches in response to Russia’s invasion and Waters’ scrutiny is likely to increase pressure on those institutions which have yet to exit.

“Even though multiple companies have voluntarily divested from Russia, the Committee currently lacks a clear picture of the extent of these divestments,” she wrote.

“When the full might of the U.S. economy is applied against countries that commit atrocities, we can bring about real and lasting change.”

U.S. payments firms Visa Inc, Mastercard Inc and PayPal Holdings Inc suspended their operations in Russia earlier this month, a move welcomed by the White House.

Several of Wall Street’s biggest banks, including Citigroup Inc, JPMorgan Chase & Co, and Goldman Sachs Group Inc, have committed to winding down business in Russia, although they are also planning on maintaining a limited presence and are holding on to Russian banking licenses, Reuters reported.

Most cryptocurrency exchanges, meanwhile, have resisted calls to cut off Russian users, raising concerns that digital assets could be used to evade Western sanctions.

(Reporting by Hannah Lang in Washington; Editing by Matthew Lewis)

By Huw Jones and David Milliken

LONDON (Reuters) – The Bank of England on Thursday began sketching out Britain’s first regulatory framework for cryptoassets, saying that although the sector remained small, its rapid growth could pose risks to financial stability in future if left unregulated.

Cryptoassets have come under the regulatory spotlight amid concerns they could be used to circumvent financial sanctions imposed on Russia since its invasion of Ukraine.

“While cryptoassets are unlikely to provide a feasible way to circumvent sanctions at scale currently, the possibility of such behaviour underscores the importance of ensuring innovation in cryptoassets is accompanied by effective public policy frameworks to… maintain broader trust and integrity in the financial system,” the BoE’s Financial Policy Committee (FPC) said in a statement https://www.bankofengland.co.uk/financial-stability-in-focus/2022/march-2022 on Thursday.

Cryptoassets, such as bitcoin and ether, are largely unregulated as they fall outside the regulatory ‘perimeter’ and a change of law would be needed to bring them under the full scope of UK securities rules, a step Britain’s finance ministry is looking at.

“This would likely require the expansion of the role of existing macro and microprudential, conduct, and market integrity regulators, and close co-ordination amongst them,” the FPC said.

The FPC said direct risks to financial stability from crypto were currently limited, but if the recent pace of growth is maintained, there would be risks in future.

The sector globally grew tenfold between early 2020 and November 2021, and now stands at $1.7 trillion or 0.4% of global financial assets, with over 17,000 different cryptoasset tokens in circulation.

Regulation for the sector should be based on “equivalence”, meaning that crypto-related financial services that perform a similar function to existing financial services should be subject to the same laws, the FPC said.

Until cryptoassets are brought fully under the regulatory net, the BoE is focusing on ensuring that risks from crypto are controlled in the banking sector. The Financial Conduct Authority on Thursday told firms they must fully explain to consumers the risks from unregulated crypto.

Regulators across the world are also trying to grapple with cryptoassets and their offshoots.

STABLECOIN CONDITIONS

BoE Deputy Governor Sam Woods wrote https://www.bankofengland.co.uk/prudential-regulation/letter/2022/march/existing-or-planned-exposure-to-cryptoassests to lenders on Thursday, noting increasing interest from banks and investment firms in the sector.

Risks from crypto should be “considered fully” by the boards of banks and they would likely need to adapt their existing risk management strategies and systems, Woods told them.

“We would also expect firms to discuss the proposed prudential treatment of cryptoasset exposures with their supervisors,” Woods said in reference to the amount of capital needed to cover any losses.

The BoE launched a survey of banks’ existing exposures and future crypto plans, setting a June 3 deadline for responses.

Stablecoins, which are backed by assets or cash, that became systemically important would need to be backed by high-quality, liquid assets and loss-absorbing capital similar to that held by banks, the FPC said.

Using deposits with commercial banks to provide backing for stablecoins would pose significant financial stability risks if pursued at scale, the FPC said.

The BoE and the Financial Conduct Authority will carry out further work on rules for stablecoins and consult on a regulatory “model” for systemic stablecoins in 2023, the FPC said. (Graphic: Bank of England Graphic on Stablecoins, https://fingfx.thomsonreuters.com/gfx/mkt/znpneqzdwvl/Bank%20of%20England%20Graphic%20on%20Stablecoins.PNG)

(Reporting by Huw Jones and David Milliken; Editing by Toby Chopra)

By Tom Wilson

LONDON (Reuters) – Decentralised finance – or DeFi – is throwing up new risks for investors as it evolves to mirror traditional markets, a global body for securities regulators said on Thursday, adding to a chorus of warnings about the fast-growing crypto offshoot.

So-called DeFi platforms allow users to lend, borrow and save in digital assets, bypassing the traditional gatekeepers of finance such as banks and exchanges.

Backers say they open up financial services for swathes of consumers and businesses that otherwise struggle to access loans or other products. The DeFi sites became popular during the COVID-19 pandemic, as rock-bottom interest rates pushed investors to search for yield.

Most DeFi services replicate more traditional financial services and activities, but with weaker regulation and increased risks for investors, IOSCO, made up of securities regulators from the United States, Europe and Asia, said in a report.

IOSCO highlighted risks surrounding DeFi, including lack of disclosure of products and systems, patchy reliability of the DeFi sites and potential problems in operating at scale.

DeFi sites claim to be “decentralised” with no single entity exerting control, but IOSCO said professional investors or venture capitalists often have a strong say on governance or retain ultimate control.

In addition, centralised trading platforms that offer DeFi services, such as trading, lending and borrowing, may also have potential conflicts of interest, IOSCO said, without giving further details.

The value of crypto on DeFi platforms hit a record of more than $111 billion in November, mirroring record highs for bitcoin, and now stands at around $80 billion, based on data site DeFi Pulse.

Regulation of DeFi, like cryptocurrencies in general, remains patchy, even though the sector is attracting more mainstream investors. DeFi has also been used for scams and other crimes.

The Financial Stability Board, a risk monitoring watchdog for the G20 economies, said last month DeFi could present risks to financial stability without regulation and oversight.

(Reporting by Tom Wilson. Editing by Jane Merriman)

NEW YORK (Reuters) – BlackRock Inc’s chief executive, Larry Fink, said on Thursday that the Russia-Ukraine war could end up accelerating digital currencies as a tool to settle international transactions, as the conflict upends the globalization drive of the last three decades.

In a letter to the shareholders of the world’s largest asset manager, Fink said the war will push countries to reassess currency dependencies, and that BlackRock was studying digital currencies and stablecoins due to increased client interest.

“A global digital payment system, thoughtfully designed, can enhance the settlement of international transactions while reducing the risk of money laundering and corruption”, he said.

That appeared to strike a different tone from May of last year, when Fink raised some concerns around volatility and said it was too early to determine whether cryptocurrencies were just a speculative trading tool.

In the letter on Thursday, the chairman and CEO of the $10 trillion asset manager said the Russia-Ukraine crisis had put an end to the globalization forces at work over the past 30 years.

Access to global capital markets was a “privilege, not a right,” he said, adding BlackRock had suspended the purchase of any Russian securities in its active index portfolios following Moscow’s invasion of Ukraine.

“Over the past few weeks, I’ve spoken to countless stakeholders, including our clients and employees, who are all looking to understand what could be done to prevent capital from being deployed to Russia. We believe this is the definition of our fiduciary duty,” Fink said.

BlackRock Inc’s total client exposure to Russia had declined to less than $1 billion earlier this month from $18 billion before Moscow’s invasion of Ukraine led to Western sanctions and the closure of the Russian stock market, according to figures supplied by the asset manager this month.

Russia calls its actions in Ukraine a “special operation.”

The conflict’s impact on global supply chains – already hammered over the past two years because of the coronavirus crisis – is expected to contribute to inflationary pressures that are pushing global central banks to tighten monetary policies and reverse COVID-19-driven accommodative measures.

“While companies’ and consumers’ balance sheets are strong today, giving them more of a cushion to weather these difficulties, a large-scale reorientation of supply chains will inherently be inflationary,” said Fink.

He said central banks were dealing with a dilemma they had not faced in decades, having to choose between living with high inflation or slowing economic activity to contain price pressures.

Energy prices have jumped as sanctions on Moscow prompted companies and countries to reassess supply chains and to try to reduce dependence on Russian commodities.

“Energy security has joined the energy transition as a top global priority,” Fink said.

(Reporting by Davide Barbuscia in New York; Editing by Matthew Lewis)

(Reuters) – Australia and New Zealand Banking Group said on Thursday it carried out an Australian dollar stablecoin payment, in a landmark transaction to become the first Australian lender to mint a digital asset linked to the country’s currency.

A stablecoin is a kind of digital asset that is devised to keep its value stable in relation to another asset, and are frequently used as a portal to other cryptocurrencies or to generate income in decentralised financial systems.

ANZ said it has delivered the Australian dollar stablecoin, which it calls A$DC, to a private wealth management firm for digital assets – Victor Smorgon Group – through digital asset investment platform Zerocap.

The company’s move to mint digital assets linked to the Australian dollar comes after the Reserve Bank of Australia (RBA) said last year the growth of digital wallets could allow the exchange of tokens or digital forms of money that could be backed by the RBA, even as the central bank remains sceptical of the digital currency.

ANZ, the country’s number three lender, said it has minted 30 million of A$DC using a smart contract and the coins were transferred between the parties and later redeemed back into Fiat currency.

(Reporting by Riya Sharma; Editing by Sherry Jacob-Phillips)

By Chuck Mikolajczak

NEW YORK (Reuters) – The dollar climbed on Wednesday while the euro weakened as oil prices shot higher again with U.S. President Joe Biden poised to announce, alongside European leaders, new sanctions against Russia during his trip to Europe.

Biden is due to arrive in Brussels later on Wednesday on his first foreign trip since the war in Ukraine began, and will meet NATO and European leaders in an emergency summit at the Western military alliance’s headquarters. Sources said the U.S. package would include measures targeting Russian members of parliament.

Prices for commodities such as oil and wheat have climbed as tensions in Ukraine have escalated, putting additional upward pressure on already high inflation due to supply chain bottlenecks. Rising inflation has led many central banks, including the U.S. Federal Reserve, to take measures to rein in prices, such as by raising interest rates.

“The capital flow is going to be I don’t want to be in Europe, it is closer to Ukraine literally in the geographical sense, but also it is the fallout from the sanctions, there is a lot of money rotating back out of Europe and back towards the States,” said Huw Roberts, head of analytics at Quant Insight.

“If we get another round of sanctions, then people therefore say the blowback on the West is going to fall on Europe disproportionately.”

The dollar index rose 0.097%, with the euro down 0.17% to $1.1008.

Crude prices were up more than 5% on Wednesday, supported by disruption to Russian and Kazakh crude exports.

The Russian rouble strengthened 8.65% versus the greenback at 89.50 per dollar after hitting a one-month high of 87.50 after Russian President Vladimir Putin said Russia will seek payment in roubles for gas sales from “unfriendly” countries.

Federal Reserve Chair Jerome Powell raised the possibility of raising interest rates by more than 25 basis points at upcoming meetings, a more aggressive stance echoed by other policymakers, which has supported the greenback and helped boost the yield on the benchmark 10-year U.S. Treasury note to more than 2.4%.

On Wednesday, San Francisco Fed President Mary Daly and Cleveland Fed President Loretta Mester became the latest Fed policymakers to indicate a bigger hike was in the offing at the central bank’s May meeting.

Jefferies on Wednesday updated its Fed forecast in light of Powell’s comments and now sees a 50-basis-point rate hike at both the May and June meetings, followed by 25-basis-point hikes at the remaining meetings of 2022.

The Japanese yen weakened 0.30% to 121.12 per dollar, while the British pound was last trading at $1.3207, down 0.42% on the day after earlier hitting a three-week high of $1.3298.

Inflation in Britain shot up faster than expected last month to hit a new 30-year high at a 6.2% year-over-year rise. British finance minister Rishi Sunak cut taxes for workers and reduced a duty on fuel on the heels of the inflation data as he sought to soften a severe cost-of-living squeeze against the backdrop of fast-rising prices and slowing economic growth.

The yen has been weak against the dollar recently, with the currency slipping to a new six-year low of 121.40 per dollar as the path of their respective central banks has diverged. Bank of Japan Governor Haruhiko Kuroda said on Tuesday the central bank must maintain ultra-loose monetary policy as recent cost-push inflation could hurt the economy.

In cryptocurrency markets, Bitcoin last fell 0.98% to $42,179.99.

Ethereum last fell 1.32% to $2,962.69.

(Reporting by Chuck Mikolajczak; Editing by Bernadette Baum and Jonathan Oatis)

BANGKOK (Reuters) – Thailand has issued rules to ban digital assets from being used to pay for goods and services from April 1, the market regulator said on Wednesday.

The move was in line with earlier discussions between the Securities and Exchange Commission (SEC) and the Bank of Thailand (BOT) on a need to regulate such activity by digital asset business operators as it could impact the country’s financial stability and overall economy, the SEC said in a statement.

Digital asset business operators that provide such services must comply with the new rules within 30 days from the effective date, it said.

The BOT has said repeatedly that it does not support cryptocurrencies as payments. It will hold a briefing on regulatory guidelines for banks’ digital asset business later on Wednesday.

In January, the regulator in Indonesia also warned financial firms not to offer and facilitate crypto sales, amid a boom in its usage.

(Reporting by Orathai Sriring; Editing by Kanupriya Kapoor)

By Nelson Renteria

SAN SALVADOR (Reuters) – El Salvador postponed an unprecedented issue of a bitcoin-backed bond planned for last week, as the government decided to wait for favorable conditions in the financial market, Finance Minister Alejandro Zelaya said on Tuesday.

The Central American government had scheduled the launch of the $1 billion bond between 15-20 March, but the war between Russia and Ukraine and volatility of the cryptocurrency prompted authorities to change the date.

The launch could be postponed until September as bitcoin has swooned since hitting a record high above $67,500 in early November. It lost almost half its value by Jan. 22, and traded at $42,609 on Tuesday, according to Refinitiv Eikon data.

Now is not the time to issue the bond, according to Zelaya who said that the ideal date to go on the market is the first half of the year, during an interview with a local television channel.

“In May or June the market variants are a little different. At the latest in September. After September, if you go out to the international market, it is difficult (to raise capital),” he added

El Salvador became the first country in the world to adopt bitcoin as legal tender last year, generating criticism from the International Monetary Fund (IMF), which worries the measure could hurt the country’s finances.

(Reporting by Nelson Renteria; Writing by Valentine Hilaire; Editing by Drazen Jorgic and David Gregorio)

By Chuck Mikolajczak

NEW YORK (Reuters) – The dollar edged lower on Tuesday as a boost from comments by U.S. Federal Reserve Chair Jerome Powell that boosted the greenback on the previous day faded and a rise in equities markets help boost risk-on sentiment.

The greenback saw its biggest one-day percentage gain since March 10 on Monday, as Powell opened the door for raising interest rates by more than 25 basis points at upcoming policy meetings in order to combat inflation.

On Tuesday, St. Louis Fed President James Bullard repeated his call for the Fed to move aggressively on Bloomberg TV. San Francisco Fed President Mary Daly said she believes the main risk to the economy is a worsening of already high inflation as oil prices climb due to the conflict in Ukraine and a disruption in supply chains from China’s COVID-19 countermeasures.

Traders are pricing in a 61.6% chance of a 50-basis-point hike at the Fed’s May meeting, according to CME’s FedWatch Tool, up from slightly more than 50% a week ago.

In the wake of Powell’s comments, Goldman Sachs now anticipates the central bank will raise interest rates by 50 basis points at both its May and June meetings.

Investors were in a risk-on mood, as U.S. stocks rose and dented some of the safe-haven appeal of the greenback, with equities getting a lift, in part, from bank shares on Fed rate hike expectations.

“For the dollar, it is well supported by the Fed’s increasingly hawkish rate stance but it is off its peaks, risk-appetite has something to do with that, with stocks higher that is kind of tempering the dollar’s gains,” said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.

“At least for now, it seems the market is giving the Fed the benefit of the doubt that it can foster a soft landing and that is what is underpinning risk appetite and capping gains in the dollar.”

The dollar index fell 0.06%.

The yen continued its recent weakness as the Bank of Japan renewed its stance on keeping its ultra-loose monetary policy intact.

The yen hit a fresh six-year low of 121.03 and last weakened 1.05% versus the greenback at 120.72 per dollar.

The yen also suffered against other currencies, with the euro hitting a five-month high of 133.33 and was last up 1.2% to $133.17. The Japanese currency slumped to a more than 6-1/2-year low against the Swiss franc at 128.91, with the franc last up 1.48% to $128.89.

The euro was up 0.13% to $1.1028. The single currency has weakened over the past month as the conflict in Ukraine has escalated, leading to an increase in energy prices. On Monday, European Central Bank President Christine Lagarde said the Fed and ECB will move out of sync, as the war in Ukraine has very different impacts on their respective economies.

But ECB policymaker Francois Villeroy de Galhau said on Tuesday the central bank needs to look beyond short-term swings in energy prices and focus on underlying inflation trends.

Sterling was last trading at $1.326, up 0.72% on the day.

In cryptocurrencies, Bitcoin last rose 3.67% to $42,662.37.

Ethereum last rose 3.59% to $3,014.26.

(Reporting by Chuck Mikolajczak; Editing by Marguerita Choy and Jonathan Oatis)

(Reuters) – A form of digital currency that is designed to have a stable price and is generally linked to a mainstream currency or something such as gold could prove beneficial if properly regulated, New York Federal Reserve Bank President John Williams said on Tuesday.

“I see there is a potential for stablecoins to serve a very useful purpose both in cross border payments…I also see this technology could be used for wholesale payments in general as well,” Williams said while appearing at a digital panel discussion on digital currencies organized by the Bank for International Settlements.

He added they would have to be properly regulated to ensure consumer and investor protection. Asked about other types of cryptocurrencies, Williams said they “have some fundamental flaws.”

(Reporting by Lindsay Dunsmuir; Editing by)

LONDON (Reuters) – Britain’s advertising watchdog on Tuesday stepped up scrutiny of cryptocurrency ads, ordering more than 50 companies in the industry to tell consumers that digital assets are unregulated and volatile.

Cryptocurrencies have soared in popularity during the COVID-19 pandemic, with retail and institutional investors alike flocking to the asset class. But bitcoin and other tokens are mostly unregulated in Britain.

Adverts for digital assets, from crypto to non-fungible tokens, have become commonplace in Britain on public transport and at sports events.

The Advertising Standards Authority (ASA) said adverts must not state or imply that deciding to invest in cryptocurrencies is “trivial, simple, easy or suitable for anyone.” They must also not create a “fear of missing out” or that investments are “low risk”, the watchdog said.

The ASA said its rules apply to adverts for crypto tokens like bitcoin, exchanges that traders use to buy and sell tokens, and other related promotions aimed at British consumers.

“We’re concerned that people might be enticed by ads into investing money they can’t afford to lose, without understanding the risks,” Advertising Standards Authority Chief Executive Guy Parker said in a statement.

The watchdog will monitor advertising and take enforcement action on adverts that fall foul of its rules after May 2, it said.

Its move comes as Britain’s financial watchdog plans to curb the marketing of cryptoassets amid an advertising boom and celebrity endorsements.

Other European regulators have moved to tighten curbs on crypto advertising. Such campaigns in Spain, for instance, will require authorisation from the stock market supervisor, the Spanish government said in January.

(Reporting by Tom Wilson. Editing by Jane Merriman)

By Lisa Pauline Mattackal and Bansari Mayur Kamdar

(Reuters) – Bitcoin just isn’t anonymous enough for a growing cohort of crypto users who are seeking greater seclusion.

A volatile class of crypto known as privacy coins, created with the primary aim of masking the identity of users and details of transactions, has quietly been gaining ground this month as maturing bitcoin inches towards mainstream finance.

Monero and Zcash, among the most popular, have respectively gained 7.6% and 46% since March 1, according to CoinMarketCap data, even as bitcoin has lost about 5%.

The pair has gained 4.7% and 16% in the past week. An index tracking privacy coins more broadly, compiled by research firm Macro Hive, has risen 4%.

This could be a blip in the wild ride of privacy coins, which conceal more information about transaction amounts and parties through differences in their underlying blockchains.

In the past five years, Monero’s market cap – the total value of all the coin out there – has pinballed from $100 million to $6.8 billion to $3.4 billion now, according to CoinMarketCap data.

Yet the interest in crypto privacy coincides with bitcoin’s diminishing function as an anonymous currency. It also comes against the backdrop of war in Europe, a tightening sanctions dragnet and strong noises from policymakers in the United States, EU and Japan about regulating the crypto market.

Aidan Arasasingham and Gerard DiPippo, of the Washington-based Center for Strategic and International Studies, note that bitcoin is not truly anonymous, but rather pseudonymous, where coins can be held in wallets opened under alternative or false names.

“If a wallet can be linked to an entity or person, the actor can be identified,” they wrote in a report in the context of the possibility of crypto being used in Russia and Ukraine to move funds. “Their transactions and wallets can be traced.”

Volatility aside, though, there are several obstacles that keep privacy coins from being a top-tier altcoin, or alternative to bitcoin, which has a market cap of around $776 billion.

Some major crypto exchanges do not list privacy coins due to their potential for illicit activity, for example. Daily trading volumes for Monero have mostly been under $250 million this month while altcoin Ripple sees more than $1.5 billion changing hands each day.

“Privacy coins will probably grow. The challenge is that you have to do a lot of things do make them anonymous that make for a horrible user experience and adds big transaction costs,” said Dave Siemer, CEO at asset management firm Wave Financial in Los Angeles who owns some Monero coins.

TRACING THE LAST SATOSHI

Privacy coins have evolved in recent years as the ability of authorities to track blockchain activity for bitcoin and other major cryptocurrencies has become more advanced.

“Coins can, with some effort, be traced back to the very last “satoshi”, bitcoin’s smallest unit,” Teunis Brosens, head economist of digital finance and regulation at ING, said in a note.

“Recent reports of ransomware money being recaptured, and arrests made for crypto exchange hacks made years ago, attest to this progress.”

Large regulators have the crypto market in the sights, with efforts intensified by concerns that Russian oligarchs and other sanctioned people could use bitcoin to clandestinely move money.

U.S. senators have introduced a bill that could give the president power to sanction foreign cryptocurrency firms. The European Union has also voted in favor of comprehensive digital asset legislation. Japan’s Financial Services Agency has said it will punish anyone making unauthorized payments to those targeted by the sanctions.

SO HOW’S BITCOIN MOVING?

Bitcoin’s movements have been contained in part by the Ukraine conflict and the Federal Reserve’s hawkishness.

The crypto kingpin has been stuck between $35,000 and $45,000 since mid-January, unable to reach the $50,000 level it held at the end of 2021. A bitcoin long-to-short positions ratio on Binance is at 1.5, the same level it was at on Feb. 24 when Russia invaded.

Meanwhile data from Glassnode shows a jump in the proportion of bitcoin supply being absorbed by entities with a low statistical history of spending it.

Marcus Sotiriou, analyst at UK-based digital asset broker GlobalBlock, sees this as “suggesting a bullish market structure for the medium-long term”.

“Bitcoin is consolidating under $41,000, as the percentage of long-term holders in the market continues to increase,” Sotiriou said.

(Reporting by Lisa Pauline Mattackal and Bansari Mayur Kamdar in Bengaluru; Editing by Vidya Ranganathan and Pravin Char)

By Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) – Cryptocurrency investment products and funds showed net outflows for a second straight week, a report from digital asset manager CoinShares showed on Monday, on persistent concerns about regulation and the possible fallout from the Russia-Ukraine conflict.

The sector posted net outflows of $47 million in the week ended March 18, after experiencing outflows of $110 million the previous week. Previous to the last two weeks, digital asset investment products saw seven straight weeks of inflows.

The outflows came amid ongoing efforts to regulate crypto. President Joe Biden signed an executive order a few weeks ago requiring the government to assess the risks and benefits of creating a central bank digital dollar, as well as other crypto issues.

Bitcoin saw the largest outflow of $33 million in the latest week, the report showed, following $70 million outflows previously. Year-to-date flows remained positive, however, at $63 million.

On Monday, bitcoin was down 0.5% at $41,047. Since its intra-day low on Feb. 24 when Russia invaded Ukraine, bitcoin has gained about 18%.

“Even though bitcoin has retraced a bit after tagging $42,000 over the weekend, it still managed to close the week well above $40,000,” said Mikkel Morch, executive director at digital asset hedge fund ARK36.

“Such a retrace seems healthy after a notable move up over the past week and shouldn’t be viewed as a negative reaction to any particular piece of geopolitical or macro news. As long as bitcoin stays above $40,000, there is a good chance of continuation.”

Ethereum-based products had outflows of $17 million last week, lower than the previous week, which saw outflows of $50 million. Ethereum continues to suffer from negative investor sentiment, analysts said, with year-to-date outflows of $151 million, or 1.2% of total assets under management.

In contrast, other altcoins saw inflows last week, such as Ripple, Polkadot, and Solana.

Blockchain-linked equity investment products also posted net inflows of $17 million last week, up from $4 million the previous week.

Assets under management at Grayscale and CoinShares, the world’s two largest digital asset managers, fell from their highs to $37.25 billion and roughly $3.7 billion, respectively.

(Reporting by Gertrude Chavez-Dreyfuss; Editing by Andrea Ricci)

By Chuck Mikolajczak

NEW YORK (Reuters) – The dollar strengthened against a basket of major currencies on Monday, in the wake of comments from U.S. Federal Reserve Chair Jerome Powell that opened the door for the central bank to take a more aggressive monetary policy path.

The greenback had been fluctuating between slight gains and losses earlier in the day, and weakened slightly after comments from Atlanta Federal Reserve Bank President Raphael Bostic. The policymaker said he sees six rate hikes this year and two for 2023, a more dovish stance than most of his colleagues as he has concerns about the effects of the conflict between Russia and Ukraine on the U.S. economy.

But the dollar gained ground after Powell said the central bank must move “expeditiously” to bring too-high inflation under control, and will, if needed, use bigger-than-usual interest rate hikes to do so.

“He keeps saying the same thing over and over, that we’ve got to get inflation down and whatever it takes that’s what we’re going to do. The market unfortunately is hanging on to old norms, that they’ll just do a quarter (of a percentage point) every time,” said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute in St. Louis.

“The Fed is kind of rewriting that playbook – we may have to go every meeting, we may have to do something more than 25 basis points, and we might have to do rate hikes and quantitative tightening at the same time.”

Markets have been volatile over the past month as the situation in Ukraine has escalated, increasing the prices of commodities such as oil and putting upward pressure on already high inflation.

The Fed raised its key interest rate by 25 basis points last week for the first time since 2018 as it attempts to combat rising prices while trying to avoid a policy error which could send the U.S. economy into recession. Investors are now focused on the potential speed and size of future rate hikes.

The dollar index rose 0.123%, with the euro down 0.24% to $1.1022.

Ukraine defied a Russian demand that its forces lay down arms in the besieged port city of Mariupol before dawn on Monday.

While many central banks around the globe have been hiking rates, with the Fed the latest to do so, the Bank of Japan on Friday maintained its massive stimulus program and held rates steady, while warning of increased risks from the Ukraine crisis to a delicate economic recovery.

That disparity has served to weaken the yen, with the Japanese currency trading near six-year lows versus the dollar despite its safe-haven status.

European Central Bank President Christine Lagarde said on Monday that the Fed and ECB will also move out of sync, as the war in Ukraine has very different impacts on their respective economies.

The Japanese yen weakened 0.17% versus the greenback at 119.38 per dollar, after touching 119.46 yen, its lowest level since February 2016.

Sterling was last trading at $1.3168, down 0.06% on the day.

In cryptocurrencies, Bitcoin last fell 1.84% to $40,973.32 while Ethereum last fell 1.33% to $2,908.60.

(Additional reporting by Sinéad Carew; Editing by Jonathan Oatis and Andrea Ricci)