Weekly Update: The FED is in the RED
The FED is in the RED
FED data show that it is posting its first operating loss in years. The reason? With interest rates increasing, the interest earned from its SOMA (System Open Market Account) portfolio are not sufficient to offset the interest it pays on bank reserves. Worse, if it sells the assets, it might incur realized losses. However, the FED is not like other banks as it cannot go bankrupt hence negative operating loss should not have any impact on monetary policy. It just looks bad (Bloomberg).
The Crypto Mac
Last week, McDonald's in Lugano (a city in Switzerland) began to accept Bitcoin as a payment method. On March 3, 2022, the city launched "Plan B" with Tether, creating two funds (over CHF 100m) to encourage crypto adoption in the region (Cointelegraph).
Reaching the cloud
Google announced on Tuesday that it will start accepting crypto payment for cloud services early next year via an integration with Coinbase. Shares of the crypto exchange rose 6% following the news (CoinDesk).
Catch me if you can
The OECD has published its finalized framework for crypto tax reporting. The document aims to standardize information sharing between the 38 members as well as to provide some templates for domestic taxation of digital assets (The Block).
No pay, No gain
The Portuguese government has proposed a new cryptocurrency tax policy that would take effect as part of its 2023 national budget. It plans to impose a 28% tax on cryptocurrency gains made within one year as well as a 4% tax on any free crypto transfers. The government wants to establish a clear framework for crypto taxation and treat these assets similar to other industries (Decrypt).
BNB chain has completed a hard fork to restore infrastructure and attempt to limit the damage following a major hack on its cross-chain bridge. The hacker managed to transfer out more than $100m, while around $430m remains in the hacker's wallet on the BNB chain. The team plans to hold a governance vote to decide on burning the tokens held in the hacker's wallet, which is almost certain to pass given the centralized nature of the BNB chain (The Block).
I can see clearly now
The FASB (Financial Accounting Standards Board) said on Wednesday that company should use fair-value accounting in order to measure crypto assets. moving a step closer to a standard. There are currently no specific accounting rules for crypto assets and businesses classify them as "indefinite-lived intangible assets" which is similar to intellectual property. In other words, they need to review the value of the assets at least once per year, and can only record a gain when they sell the asset. With fair-value accounting, they will be able to recognize losses and gains immediately and treat digital assets as financial assets (The Wall Street Journal).
The great migration
Citigroup said in a report published last week that DEX has grown faster than CEX over the past 2 years and that the gap is likely to widen due to the cumbersome KYC requirements from CEX (CoinDesk).
Polychain Capital led the round
DEX UniswapLabs raised $165m in Series B funding round that was led by Polychain Capital. The firm will use the capital to invest more in its web app, developer tools, NFT launch and move to support mobile users (CoinDesk).
What's to come
20th National Congress of the Chinese Communist Party (16-Oct); ZEW Economic Sentiment Index (18-Oct); GDP Data for China (18-Oct); Inflation Data in UK, EU, Canada (19-Oct), Japan (21-Oct); Employment Data in Australia (20-Oct) (DailyFX).