Is The Bubble About To Burst? Student-Loan Delinquency Rates Rise For First Time In Years

Since the financial crisis, most market observers and economists have cheerfully ignored the aggregate student-debt load in the US, which recently swelled to an economy-threatening $1.4 trillion. Even as student-debt, which can't be discharged in bankruptcy, grew to represent 10% of the total US debt burden, defenders of the status quo pointed to declining default rates as evidence that the government-backed student loan industry wasn’t in danger of imploding.

But that may soon change.

As Bloomberg reports, the student-loan default rate in the US ticked higher during the second quarter for the first time since 2013. While it’s only one quarter of data, it should send a chill down the spine of government and private lenders, who have every reason to worry that this could be more than a temporary blip.

To wit, the share of Americans at least 31 days late on loans from the U.S. Department of Education ticked up to 18.8% as of June 30, up from 18.6% during the same period a year ago, according to new federal data. Meanwhile, about 3.3 million Americans have gone more than a month without making a required payment on their Education Department loans—up about 320,000 borrowers.

The rise interrupts a period of 12 straight quarters of declines in delinquency rates, according to numbers dating to 2013. It also comes at a time when US economic growth is nominally expanding (the BEA announced earlier today that the US economy expanded by 3.1% during the second quarter, an improvement over its previous estimate).

Read the entire article

The “Trump Tax Plan” - Details & Analysis

Business tax changes:

• A 20% corporate tax rate. This is the first time Trump has publicly backed down from one of his earliest campaign promises: a 15% corporate tax rate. The budget math required for a 15% rate was too difficult, so the somewhat higher rate is the opening bid. The current statutory federal rate is 35%.
• A 25% rate for pass-through businesses. Instead of getting taxed at an individual rate for business profits, people who own their own business would pay at the pass-through rate. The plan also says it will consider rules to prevent “personal income” from being taxed at this rate. Mnuchin previously suggested there may be limitations on what types of businesses get this rate — it could apply only to goods producers and not service-oriented companies to prevent people from creating limited-liability corporations to store their assets and receive a lower rate.
• Elimination of some business deductions, industry-specific incentives, and more. There are few details, but the plan includes language regarding the “streamlining” of business tax breaks.
• A one-time repatriation tax. All overseas assets from US-owned companies would be considered repatriated and taxed at a one-time lower rate — this is designed to bring corporate profits back from overseas. Illiquid assets like real estate would be taxed at a lower rate than cash or cash equivalents, and the payments would be spread out over time. While there is no precise number in the plan, officials have indicated the rate could end up somewhere around 10%.

Read the entire article

California Mulls Combustion-Engine Car Ban: "You Could Stop All Sales By 2030"

California, the state which single-handedly turned Elon Musk into the billionaire that he is today by forcing taxpayers to subsidize his unprofitable electric vehicle scam via "Zero Emission Vehicle" credits, is now considering a full ban of combustion-engine cars by as early as 2030. The potential ban was discussed by Mary Nichols of the California Air Resources Board, the same folks who decided to regulate cow farts last year, who told Bloomberg that Governor Jerry Brown has expressed interest in a ban.

Governor Jerry Brown has expressed an interest in barring the sale of vehicles powered by internal-combustion engines, Mary Nichols, chairman of the California Air Resources Board, said in an interview Friday at Bloomberg headquarters in New York. Brown, one of the most outspoken elected official in the U.S. about the need for policies to combat climate change, would be replicating similar moves by China, France and the U.K.

“I’ve gotten messages from the governor asking, ‘Why haven’t we done something already?’” Nichols said, referring to China’s planned phase-out of fossil-fuel vehicle sales. “The governor has certainly indicated an interest in why China can do this and not California.”

California has set a goal to cut carbon dioxide emissions by 80 percent from 1990 levels by 2050. Rising emissions from on-road transportation has undercut the state’s efforts to reduce pollution, a San Francisco-based non-profit said last month.

“To reach the ambitious levels of reduction in greenhouse gas emissions, we have to pretty much replace all combustion with some form of renewable energy by 2040 or 2050," Nichols said. “We’re looking at that as a method of moving this discussion forward.”

Read the entire article

As Cash Use Plummets, Swedish Government Begins Testing Cryptocurrencies

Riksbank estimates that cash transactions made up only 15 percent of all retail transactions last year. That number is down from 40 percent in 2010, thanks in large part to massively popular mobile payment services. That leaves the bank wondering if a technology similar to that of Bitcoin’s could be implemented in Sweden.

Riksbank isn’t the only central bank taking a serious look at blockchain, the technology that makes Bitcoin and other cryptocurrencies run.

These systems, also called distributed ledgers, rely on networks of computers, rather than a central authority like a bank, to verify and record transactions on a shared, virtually incorruptible database.

Government bankers across the world believe this has the potential to replace cash and make other payment systems more efficient.

Read the entire article

China's ICO Crackdown Boosts Hong Kong's Hopes Of Becoming Blockchain Hub

China’s decision to shutter digital-currency exchanges based on the mainland, a strategy meant to extinguish the rampant fraud and abuse associated with initial coin offerings, or ICOs, is brightening Hong Kong's hopes of asserting itself as a hub for blockchain technology.

As Bloomberg reports, while China has at least nominally embraced blockchain technology - even building a prototype digital yuan – Hong Kong’s city government has gone a step further by encouraging blockchain startups to set up shop in the city. One firm run by Johnson Leung, who has found success in finance and shipping, and now runs a blockchain startup, is focusing on applications for container ship operators.

The city’s embrace of blockchain is its latest attempt to nurture a domestic technology industry that could compliment the city’s dominance in banking and shipping. But as Bloomberg notes, betting on blockchain, a technology that has generated a ludicrous amount of hype, much of it undeserved, could be a risky proposition. Despite Hong Kong’s status as a financial hub, the city, one of the most expensive in the world for average working families, has zero “unicorns” – a term for startups valued at over $1 billion.

Skeptics say it’s a risky bet on an unproven technology - one with more than its fair share of hype and, in some cases, fraud. But a growing number of Hong Kong entrepreneurs and policy makers are convinced the online ledger system that underlies cryptocurrencies like bitcoin will eventually reshape everything from financial services to supply chains. They say the city’s laissez faire approach toward regulation, along with its expertise in finance and logistics, make it a natural hub for blockchain startups.

“I don’t see why Hong Kong can’t be a leader of blockchain technology,” said Leung, who co-founded 300cubits.tech after more than a decade in the financial industry that included stints as a research analyst at JPMorgan Chase & Co. and Jefferies Group LLC. “It’s so new that it’s not like any country has a huge advantage compared to us.”

Read the entire article

"You're Going To See A Rush For Gold" - Katusa Warns De-Dollarization Is Accelerating

Global strategist Marin Katusa is the New York Times best selling author of The Colder War, which details the geo-political power shift that threatens the global dominance of the United States. He’s also a well known resource hedge fund manager who legendary investor Doug Casey has called one of the best market analysts he’s ever worked with.

His prior forecasts noted that countries around the world would soon stop trading commodities like oil in the U.S. dollar, something we’re already seeing with China, Russia, Iran, and Venezuela, all of which are preparing non-dollar, gold-backed mechanisms of exchange.

This trend, according to Katusa in a must see interview with Future Money Trends, will only continue to weaken the U.S. dollar going forward and the result will be a massive capital flight to gold in coming years:

I think we’ll have a near term bounce on the U.S. dollar… then it’s going to be very weak… and then it’s going to go much, much lower… With China and Russia working together to de-dollarize the U.S. dollar starting with oil, which is the biggest market… and then all the other commodities.

You’re going to start seeing a massive unwind of these U.S. dollars in the emerging markets.

Read the entire article

S&P Downgrades China To A+ From AA- Due To Soaring Debt Growth

Four months after Moody's downgraded China to A1 from Aa3, unwittingly launching a startling surge in the Yuan as Beijing set forth to "prove" just how stable China truly is, moments ago S&P followed suit when the rating agency also downgraded China from AA- to A+ for the first time since 1999 citing risks from soaring debt growth, less than a month before the most congress for Chiina's communist leadership in the past five years is set to take place. In addition to cutting the sovereign rating by one notch, S&P analysts also lowered their rating on three foreign banks that primarily operate in China, saying HSBC China, Hang Seng China and DBS Bank China Ltd. are unlikely to avoid default should the nation default on its sovereign debt. Following the downgrade, S&P revised its outlook to stable from negative.

“China’s prolonged period of strong credit growth has increased its economic and financial risks,” S&P said. “Since 2009, claims by depository institutions on the resident nongovernment sector have increased rapidly. The increases have often been above the rate of income growth.  Although this credit growth had contributed to strong real GDP growth and higher asset prices, we believe it has also diminished financial stability to  some extent."

According to commentators, the second downgrade of China this year represents ebbing international confidence China can strike a balance between maintaining economic growth and cleaning up its financial sector, Bloomberg reported. The move may also be uncomfortable for Communist Party officials, who are just weeks away from their twice-a-decade leadership reshuffle.

The cut will “have a relatively big impact on Chinese enterprises since corporate ratings can’t be higher than the sovereign rating,” said Xia Le, an economist at Banco Bilbao Vizcaya Argentaria SA in Hong Kong. “It will affect corporate financing.”

Read the entire article

Do You Trust What JP Morgan CEO Says About Bitcoin?

JP Morgan CEO Jamie Dimon commented that he thinks Bitcoin is a fraud, and that “it will eventually be closed.”

CNBC continues its amazing economic news coverage with his interview.

Yes, the CEO of a major financial institution thinks Bitcoin will be “closed.”

Look, however unlikely, it is possible that the Bitcoin price goes to $0. It is not, however, anywhere within the realm of possibilities that the crypto-currency will be “closed” as Dimon put it.

This is because there is nothing to close. It is not a business. It is not owned by anyone except a vast and disunited network of Bitcoin miners and those who own Bitcoins.

So again, miners could conceivably shut off their computers. People who hold Bitcoin could conceivably sell off at such a rate that the price crumbles. But no one can “close” the cryptocurrency.

If you listen to his complete remarks, what he seems to mean is that governments will crack down on Bitcoin when it becomes too popular.

Read the entire article

Top Financial Expert Warns Stocks Need To Drop ‘Between 30 And 40 Percent’ As Bankruptcy Looms For Toys R Us

Will there be a major stock market crash before the end of 2017?  To many of us, it seems like we have been waiting for this ridiculous stock market bubble to burst for a very long time.  The experts have been warning us over and over again that stocks cannot keep going up like this indefinitely, and yet this market has seemed absolutely determined to defy the laws of economics.  But most people don’t remember that we went through a similar thing before the financial crisis of 2008 as well.  I recently spoke to an investor that shorted the market three years ahead of that crash.  In the end his long-term analysis was right on the money, but his timing was just a bit off, and the same thing will be true with many of the experts this time around.

On Monday, I was quite stunned to learn what Brad McMillan had just said about the market.  He is considered to be one of the brightest minds in the financial world, and he told CNBC that stocks would need to fall “somewhere between 30 and 40 percent just to get to fair value”…

Brad McMillan — who counsels independent financial advisors representing $114 billion in assets under management — told CNBC on Monday that the stock market is way overvalued.

“The market probably would have to drop somewhere between 30 and 40 percent to get to fair value, based on historical standards,” said McMillan, chief investment officer at Massachusetts-based Commonwealth Financial Network.

McMillan’s analysis is very similar to mine.  For a long time I have been warning that valuations would need to decline by at least 40 or 50 percent just to get back to the long-term averages.

Read the entire article

One-Tenth Of Global GDP Is Now Held In Offshore Tax Havens

Accurately measuring the scope of global wealth inequality is a notoriously difficult undertaking – a fact that was brought to light last year when the International Consortium of Investigative Journalists published the Panama Papers, exposing clients of Panamanian law firm Mossack Fonseca. As the papers revealed, Mossack Fonseca, which is only the world’s fourth-largest provider of offshore financial services, boasted a client roster stacked with some of the world’s wealthiest and most politically connected individuals. The former prime minister of Iceland (who was forced from office because of the revelations), associates of Russian President Vladimir Putin, and the father of former UK Prime Minister David Cameron.

In a first-of-its kind study from the National Bureau of Economic Research, a team of economists has broken down rates of offshore wealth holdings as a percentage of GDP to identify countries with the largest, and smallest, percentages of wealth held offshore. The study’s conclusion suggests a reality that many readers probably suspected: the true scope of wealth inequality is far larger than the official statistics would suggest.

The study found that as much as one-tenth of the world’s GDP is held in tax havens, though that percentage can vary widely from country to country.

Here's Bloomberg:

“One-tenth of the world’s GDP is held in offshore tax havens, but that share jumps to as much of 15 percent for Europe and as much as 60 percent for Gulf and some Latin American countries, new research shows.

When it comes to total offshore wealth as a share of GDP, the United Arab Emirates, Venezuela, Saudi Arabia, Russia and Argentina lead the pack, while Germany, the U.K. and France all have above-average holdings. The U.S. is slightly below average.”

Read the entire article

Comparing Bitcoin, Ether, & Other Cryptos

Unless you’ve been hiding under a rock, you’re probably aware that we’re in the middle of a cryptocurrency explosion. In one year, the value of all currencies increased a staggering 1,466% – and newer coins like Ethereum have even joined Bitcoin in gaining some mainstream acceptance.

And while people like Jamie Dimon of J.P. Morgan and famed value investor Howard Marks have been extremely critical of cryptocurrencies as of late, many other investors are continuing to ride the wave. As Visual Capitalist's Jeff Desjardins has noted in the past, the possible effects of the blockchain cannot be understated, and it could even change the backbone of how financial markets work.

However, even with the excitement and action that comes with the space, a major problem still exists for the layman: it’s really challenging to decipher the differences between cryptocurrencies like Bitcoin, Ethereum, Ethereum Classic, Litecoin, Ripple, and Dash.

For this reason, we worked with social trading network eToro to come up with an infographic that breaks down the major differences between these coins all in one place.

Read the entire article

De-Dollarization Spikes - Venezuela Stops Accepting Dollars For Oil Payments

Apparently confirming what President Maduro had warned following the recent US sanctions, The Wall Street Journal reports that Venezuela has officially stopped accepting US Dollars as payment for its crude oil exports.

As we previously noted, Venezuelan President Nicolas Maduro said last Thursday that Venezuela will be looking to “free” itself from the U.S. dollar next week. According to Reuters,

“Venezuela is going to implement a new system of international payments and will create a basket of currencies to free us from the dollar,” Maduro said in a multi-hour address to a new legislative “superbody.” He reportedly did not provide details of this new proposal.

Maduro hinted further that the South American country would look to using the yuan instead, among other currencies.

“If they pursue us with the dollar, we’ll use the Russian ruble, the yuan, yen, the Indian rupee, the euro,” Maduro also said.

Read the entire article

Former BIS Chief Economist Warns "More Dangers Now Than In 2007"

India’s debt problems go back a long way, and there are significant governance issues, including at state-owned banks.

China’s debt situation isn’t a lot different to India’s, but the acceleration of loans and credit growth in China is very fast

It’s not just the debt level in China that is worrisome, but the speed that it’s accumulating; maybe some of these loans won’t be repaid or serviced.

We don’t have a liquidity problem that central banks can solve - if we have too much debt, we have a debt resolution or insolvency problem and only governments can address problems like that.

World needs more fiscal expansion, structural reforms, and also have to look closely at debt write-off some of it and maybe recapitalize financial institutions.

We have got the mix of income that goes to capital versus labor wrong in many countries, and we need to look at that.

Central bank tightening is inevitable, but have to be careful.

Read the entire article

Debt Nightmare: Does Anyone Actually Care That Our Exploding National Debt Is Destroying Our Future?

When will America finally wake up?  The borrower is the servant of the lender, and we now have a colossal 20 trillion dollar chain around our collective ankles.  We have willingly enslaved ourselves, our children and our grandchildren, and yet our addiction is so insatiable that we continue to add more than 100 million dollars to our debt load every single hour of every single day.  The national debt is sitting at a grand total of $20,162,176,797,904.13 at this moment, but now that the debt ceiling has been lifted that number is expected to shoot up very rapidly toward 21 trillion dollars by the end of the year.  The national debt had been held down by accounting tricks to keep it under the debt limit for many months, but every time this has happened before we have seen the national debt absolutely explode back to projected levels once the debt ceiling was raised.

But very few of our “leaders” in Washington seem to care that we are in the process of committing national suicide.  There is no possible way that we will be able to continue to be the most powerful economy on the planet if we continue down this road.  During Obama’s eight years in the White House, we added more than 9 trillion dollars to the national debt. That certainly improved things in the short-term, because if we could go back and take 9 trillion dollars out of the economy over the past 8 years we would be in an absolutely nightmarish economic depression right now.

But even with all of this borrowing and spending, our economy has still only grown at an average rate of just 1.33 percent a year over the last 10 years.

And by going into so much debt, we are literally destroying the future for our children and our grandchildren.

What we are doing to them is beyond criminal, and people should be going to prison over this.  But instead we just keep rewarding these Congress critters by sending the same cast of characters back to Washington over and over again.

Are we insane?

Read the entire article

A Matter Of "Trust": A Look Inside China's Crackdown Of Its $3 Trillion Shadow Banking Industry

Finally, even if China manages to crackdown on Shadow Banking there is another problem: as a recent report by Natixis put it perfectly, "when one [credit] door closes [in China], another one opens up." This simply means that as Beijing slams the door shut on Trust and other key shadow debt components, these will be offset by an increased usage in others such as WMPs, NBFIs, Repos, Negotiatable Certificates of Deposit, and money markets. Below are the highlights from the report:

As deleverage becomes a higher level objective (but sometimes conflicting) to the Chinese leadership, banks now face more restrictions from regulators. In any event, this is not the first time they find themselves in the regulatory whirlpool. From the usage of repo agreements to wealth management products (WMPs), and most recently negotiable certificate of deposits (NCDs), banks have been very creative in playing the cat and mouse game in front of evolving regulations.

Flourishing financial innovation has helped China’s leverage process to continue unabated. The deleveraging process has hardly begun. In contrast, liquidity seems to be increasingly scarce, which keeps on lifting the cost of funding. In fact, overnight SHIBOR is at record high since the difficult events in 2015, very close to 3% (Chart 1). One of the key reasons for the liquidity shortage is related to tighter regulatory control from the People's Bank of China (PBoC), in particular stricter Macro Prudential Assessment (MPA). This has hampered the use of WMPs to fund banks’ asset growth. They have already shrunk by 1.6 RMB trillion to 28.4 RMB trillion in May 2017 (Chart 2)

Read the entire article

Toronto Home Price Bubble Bursts Into Bear Market

With surprise rate hike, Bank of Canada turns against housing market...

Home sales in the Greater Toronto Area, the largest housing market in Canada, plunged 34.8% in August compared to a year ago, to 6,357 homes, with sales of detached homes and semi-detached homes getting eviscerated:

Sales by type:

Detached houses -41.6%

Semi-detached houses -37.3%

Townhouses -27.5%:

Condos -28.0%.

Even as total sales plunged, the number of active listings of homes for sale soared 65% year-over-year to 16,419, with 11,523 new listings added in August, according to the Toronto Real Estate Board (TREB).

“The relationship between sales [plunging] and listings in the marketplace today [soaring] suggests a balanced market,” the report explained, adding hopefully:

“If current conditions are sustained over the coming months, we would expect to see year-over-year price growth normalize slightly above the rate of inflation. However, if some buyers move from the sidelines back into the marketplace, as TREB consumer research suggests may happen, an acceleration in price growth could result if listings remain at current levels.”

Read the entire article

NYC Commercial Real Estate Sales Plunge Over 50% As Owners Lever Up In The Absence Of Buyers

So what do you do when the bubbly market for your exorbitantly priced New York City commercial real estate collapses by over 50% in two years?  Well, you lever up, of course. 

As Bloomberg notes this morning, the 'smart money' at U.S. banking institutions are tripping over themselves to throw money at commercial real estate projects all while 'dumb money' buyers have completely dried up.

A growing chasm between what buyers are willing to pay and what sellers think their properties are worth has put the brakes on deals. In New York City, the largest U.S. market for offices, apartments and other commercial buildings, transactions in the first half of the year tumbled about 50 percent from the same period in 2016, to $15.4 billion, the slowest start since 2012, according to research firm Real Capital Analytics Inc.

At the same time, the market for debt on commercial properties is booming. Investors of all stripes -- from banks and insurance companies to hedge funds and private equity firms -- are plowing into real estate loans as an alternative to lower-yielding bonds. That’s giving building owners another option to cash in if their plans to sell don’t work out.

“Sellers have a number in mind, and the market is not there right now,” said Aaron Appel, a managing director at brokerage Jones Lang LaSalle Inc. who arranges commercial real estate debt. “Owners are pulling out capital” by refinancing loans instead of finding buyers, he said.

Read the entire article

US Bitcoin Exchange Coinbase Hits 10 Million Users

After two (and soon three) "generational" market crashes, Joe Sixpack may have lost interest in the stock market (or at least in single names, the transfer of bagholder rights from institutions to retail investors via ETFs is doing just fine), but when it comes to chasing torrid, upward price momentum, US retail investors are doing their best frenzied Chinese housewife impression now that they have discovered the next big bubble thing, and it's called bitcoin. And nowhere is America's sudden infatuation with cryptocurrencies such as bitcoin, ethereum, litecoin and all other "coins" which can make (or break) a hedge fund's annual return in days if not hours, more obvious than on Coinbase, the US bitcoin exchange, which has just hit a remarkable 10 million registered users, all of whom are there for just one thing: to trade, but mostly buy, crypto currencies.

The San Francisco startup has seen tremendous growth in 2017, adding thousands of users per day and handling increasing levels of trading volume. Last month, CEO Brian Armstrong announced that the company had raised $100 million during its latest funding round, giving the company a valuation of $1 billion, making it first “bitcoin unicorn” according to Cryptocoinsnews. A few weeks later, following the latest burst higher in bitcoin, Coinbase has surpassed 10 million registered users. In the last three weeks of August, the bitcoin exchange added an astonishing 800,000 users as the bitcoin price briefly rose above $5,000. According to data from the Coinbase website, the exchange and wallet service has also recently surpassed $20 billion in total volume.

While many bitcoin veterans have panned Coinbase for its simplistic approach to trading (no limit orders, no shorting, etc) and exorbitant fees, some actually enjoy the minimialist, if expensive, experience: one user on reddit, btcltc77, referred to the exchanges as the “McDonald’s of Bitcoin banking.”

Coinbase is still the most mainstream way of buying Bitcoin. It’s the McDonald’s of Bitcoin banking.

That, and the implied safety net from its increasingly bigger venture backing, appears to be working and has made Coinbase the go-to site for millions of armchair cryptocurrency investors.

Read the entire article

These cheap retail stocks can hold their own against Amazon

When it comes to consumer stocks, it's the best of times and the worst of times.  

On the plus side, consumer sentiment is strong. The Conference Board's measure of consumer confidence hit a 16-year high a few months back, and there's little sign of a slowdown. July retail figures released a few weeks ago were the best they've been all year.

Yet retail and consumer stocks have been toxic despite these broader metrics. The SPDR S&P Retail ETF XRT, +1.35%  , for example, is down more than 15% in the past two years vs. a 25% gain for the S&P 500 SPX, +0.20%  ; this year so far the fund is down 10% vs. a 10% gain for the S&P 500

Are consumer stocks and traditional retailers dead forever? Or are they poised for a comeback as the all-important holiday shopping season kicks off?

Unfortunately, there are no easy answers. Certain segments of specialty retail have remained resilient, while others look to be down for the count. But take a closer look at the fundamentals of these three specific companies after their recent earnings reports. Each of them a good chance of mounting a late-2017 comeback, particularly if consumer sentiment stays strong:

Read the entire article

Visualizing The Unparalleled Explosion In Cryptocurrencies

After the massive Bitcoin price surge in November 2013, the popularity of launching new cryptocurrencies took off along with it.

In fact, as Visual Capitalist's Jeff Desjardins notes, if you go back at historical snapshots around that time, you’ll see that there were literally hundreds of new coins available to mine and buy. Here’s one from November 2014 – a time when there were only 32 coins that were worth more than $1 million in market cap, and 354 coins that were worth less than $50,000, usually trading for tiny fractions of a cent.

It seems like everyone and their dog were launching cryptocurrencies back then, even if they were a longshot to materialize into anything.

Then vs. Now

Fast forward to today, and things haven’t changed much – many people and companies are still launching new cryptocurrencies through a mechanism known as an ICO (Initial Coin Offering).

The only difference?

Today, there is real money at play, and in 12 months the number of cryptocurrencies worth >$1 million has soared by 468%. Meanwhile, the total value of all currencies together has skyrocketed by 1,466%.

Read the entire article

Six Banks Join UBS's "Utility Coin" Blockchain Project

Here’s a piece of news that the remaining human members of Wall Street’s FX sales and trading desks probably don’t want to hear.

According to the Financial Times, six of the world’s largest banks have decided to join a blockchain project called “utility coin” that will allow banks to settle trades in securities denominated in different currencies without a money transfer. What’s worse, the banks expect to begin live-testing the project late next year.

“Barclays, Credit Suisse, Canadian Imperial Bank of Commerce, HSBC, MUFG and State Street have teamed up to work on the “utility settlement coin” which was created by Switzerland’s UBS to make financial markets more efficient.

The move comes as the project shifts into a new phase of development, in which its members aim to deepen discussions with central banks and to work on tightening up its data privacy and cyber security protections.”

The project’s managers say they’ve already involved representatives from various central banks…

Read the entire article