Snippings

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In its report published today the Public Accounts Committee warns that Government “significantly increased” taxpayer exposure to fraud and error by its twin decisions to drop basic fraud and error checks in paying out Covid19 loans, and to support people and businesses that it had no prior relationship with.

The Department for Business (BEIS) estimates the Bounce Back Loan Scheme could cost the taxpayer £27 billion in fraud or credit  losses, with the 100% taxpayer guarantee leaving the Department “reliant on banks that it admits lack incentives given it is not their money on the line”.
Local authorities are responsible for delivering several government support schemes, but their budgets and services are already under pressure and they have variable capacity to handle fraud. Concurrently, the Committee has recently heard worrying evidence of increasing issues in the timeliness and quality of local authority audits.
Universal Credit fraud and error rose by £3.8 billion to an all-time high of £5.5 billion between April 2020 and March 2021.

From Taxpayers set to lose tens of £billions in Government’s Covid-19 support schemes – Committees – UK Parliament.

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The Salvadoran Finance Minister Alejandro Zelaya sought technical assistance from the World Bank to help it to use bitcoin as a parallel means of exchange alongside the U.S. dollar, but the Bank refused “given environmental and transparency drawbacks”.

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DAOs already govern most of the multi-billion dollar decentralized finance (“DeFi”) protocols, like Uniswap, Aave, and Curve. Many such DAOs, however, started as private foundations. Like companies “going public” after a period of maturation, many DeFi protocols opt to be initially managed by a private foundation before ceding management to the rest of the world through a permissionless DAO. DAOs are permissionless because anyone with an internet connection can buy a project’s governance token, which they use to vote on governance proposals or claim any profits the DAO generates.

From Wyoming built a home for DAOs, but they won’t come – by Joshua Durham – ⚔️ LexDAOism ⚖️:

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I was flattered to be invited to join the (sadly virtual this year) Paris Fintech Forum, which is one of the events that is a fixture in my conference calendar. At this year’s online Forum, Mr François Villeroy de Galhau, the Governor of the Bank of France, raised a few eyebrows by saying that when people talk about cryptocurrencies the term “is a contradiction“. He went on to say that you can either have a currency “with all its functions and a public guarantee” or private crypto-assets. But, he asserted plainly, there is “no such thing as a cryptocurrency”.

He is wrong, of course, but in terms of setting business strategies for the medium term, it is helpful to understand why he is wrong. It is not, and let’s be very clear about this, because Bitcoin isn’t a currency. Bitcoin can never be a currency, because Bitcoin isn’t money. It is best thought of as a new kind of digital asset that can, in certain circumstances, exhibit money-like properties.

Brett Scott, who is a very clear thinker on these issues, recently wrote a piece

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Just like a kid swapping a ball for toys does not undermine the Federal Reserve (which issues dollars that both are priced in), swapping a dollar-priced Bitcoin collectible for dollar-priced goods does not fundamentally alter the structure of the monetary system.

From Why you can swap Bitcoin for many things, but not buy anything with it – by Brett Scott – Altered States of Monetary Consciousness:

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In other words, people exchanging (dollar denominated) Bitcoin for (dollar denominated) good and services are not spending money, they are trading assets.

So why am I entitled so say on Bastille Day that the Governor of the Banque de France is wrong? Well, it’s because of his implicit assumption that currency must come with a public guarantee. Scholars of money know that not only is 

SAE./No.185/June 2021

Studies in Applied Economics

BUKELE’S BITCOIN BLUNDER

Steve H. Hanke, Nicholas Hanlon, and Mihir Chakravarthi

 

Johns Hopkins Institute for Applied Economics,
Global Health, and the Study of Business Enterprise

 

 

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El Salvador’s President Nayib Bukele blessed El Salvador’s Bitcoin Law, asserting that making
bitcoin legal tender would reduce remittance costs. But at present, Bukele’s assertion is incorrect.
As things currently stand, the cost of using bitcoin to send remittances to El Salvador is not, in
fact, cheaper than traditional money transfer services. Indeed, at present, traditional transfer
methods are the cheapest way to make remittance payments.

The remittance fees for each of the money-wire transfer services are contained in Table 3.
According to the World Bank, the average realized fee is, in fact, 2.85%. El Salvadorans want
greenbacks, not bitcoin. So, if sent remittances in bitcoin, El Salvadorans (at present) have to
convert their bitcoin to dollars at a bitcoin ATM. Therefore, the minimum cost of receiving
remittances via bitcoin is 5% plus network fees plus the costs of travel, safety, and security. This
is clearly at least double the average fee realized when using traditional methods.

From .

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Speaking at a European Banking Federation seminar, Pablo Urbiola, from BBVA’s digital regulation team, urged a “cautious and pragmatic approach”.

He told his audience: “Although it is hard to argue that a digital euro is needed at the moment, there are good reasons for the ECB to explore the possible issuance of a digital currency, and to be ready to make such a move should the need arise in the future.”

From BBVA exec questions digital euro.

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A less understood phenomenon is the ‘data privacy paradox’, which refers to a general disconnect between consumers’ self-stated privacy preferences and their actual privacy-seeking behaviour

From The data privacy paradox and digital demand | VOX, CEPR Policy Portal.

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Trained on billions of lines of public code, GitHub Copilot puts the knowledge you need at your fingertips, saving you time and helping you stay focused.

From GitHub Copilot · Your AI pair programmer.

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Parachute Pants and Central Bank Money
Vice Chair for Supervision Randal K. Quarles

At the 113th Annual Utah Bankers Association Convention, Sun Valley, Idaho

I am far from convinced that a CBDC is the best, or even an effective, method to increase financial inclusion

From Speech by Vice Chair for Supervision Quarles on central bank digital currency – Federal Reserve Board.

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