3 November

“The U.S. Federal Reserve on Wednesday raised interest rates by 75 basis points (0.75 percentage point) to a range of 3.75% to 4% in a move that was widely anticipated by market participants. At a press conference following the announcement, Powell gave several hints that the Fed is considering slowing the pace of rate hikes in the near future.

At some point it will become appropriate to slow … and it may come as soon as the next meeting, or the one after that.

In determining the pace of future increases in the target range, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.

While slowing is a possibility, pausing isn’t at this point, Powell reiterated. He stressed that he doesn’t think that the Fed has overtightened and that it is “very premature” to discuss pausing.”

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Singapore has quietly been playing host to some of the most advanced explorations into cryptocurrency and decentralized finance (DeFi) ever done by big banks, institutions and regulators. In particular, Project Guardian, which sets out to test asset tokenization and DeFi for banks, launched in early summer by the Monetary Authority of Singapore (MAS), saw Singapore’s DBS Bank joined by JPMorgan and Japan’s SBI Digital.

The first phase of testing involved trades in tokenized Singapore government securities, Singapore dollars (SGD), Japanese government bonds and Japanese yen (JPY), which was done using Ethereum public blockchain overlay system Polygon, DeFi lending platform Aave and Uniswap, a decentralized exchange and automated market maker (AMM).

We wanted to show it was possible to tokenize government securities and cash within a DeFi liquidity pool. Then using an AMM, and solving for that with price oracles and market data streaming services from Bloomberg or Refinitiv, we wanted to create an institutional-grade DeFi venue which regulators would be comfortable with.

Banks and traditional financial institutions see opportunities and efficiencies to be gained by copying DeFi’s success in crypto, with the boldest moves involving public blockchains and promising to bring trillions in existing financial instruments to the party.”

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“Project Mariana, coordinated by the Innovation Hub of the Bank for International Settlements (BIS), is looking at whether protocols used in intermediary-free decentralized finance (DeFi) can replace traditional, more laborious processes for matching buyers and sellers of different fiat currencies.

DeFi and its applications have the potential to become systemically important parts of the financial ecosystem. Automated market makers can become the basis for a new generation of financial infrastructure.”

The upcoming “end-to-end toolkit” for NFTs will allow users to create and launch their own NFTs for sale through Instagram. Instagram will also pull NFT metadata from OpenSea so that collection names and descriptions can be viewed on Instagram.

While Meta won’t initially charge its own fees for NFT sales made through its applications, that is on the horizon. ‘Meta won’t charge fees to create or sell digital collectibles until 2024.

Today, Facebook and Instagram support Ethereum, Polygon, and Flow blockchains, allowing users to connect their wallets to their accounts to display NFTs.”

“Billionaire Sam Bankman-Fried’s cryptocurrency empire is officially broken into two main parts: FTX (his exchange) and Alameda Research (his trading firm).

Alameda’s balance sheet is full of FTX – specifically, the FTT token issued by the exchange that grants holders a discount on trading fees on its marketplace. While there is nothing per se untoward or wrong about that, it shows Bankman-Fried’s trading giant Alameda rests on a foundation largely made up of a coin that a sister company invented.

As of June 30, the company’s assets amounted to $14.6 billion. Its single biggest asset: $3.66 billion of “unlocked FTT.” The third-largest entry on the assets side of the accounting ledger? A $2.16 billion pile of “FTT collateral.” There are more FTX tokens among its $8 billion of liabilities, including $292 million of “locked FTT.” (The liabilities are dominated by $7.4 billion of loans.)

It’s fascinating to see that the majority of the net equity in the Alameda business is actually FTX’s own centrally controlled and printed-out-of-thin-air token.”

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