A research paper published at Harvard university highlighted how central banks can use Bitcoin to hedge against financial sanctions from fiat reserve issuers.
A working paper, titled “Hedging Sanctions Risk: Cryptocurrency in Central Bank Reserves” released by Matthew Ferranti, a PhD candidate at the university’s economics department explored the potential of Bitcoin as an alternative hedging asset for central banks to fight off potential sanctions.
Ferranti argued that there’s merit for central banks to hold a small amount of Bitcoin even in normal circumstances. However, when there’s a risk of sanctions, the researcher said that it makes sense to hold a larger portion of BTC along with their gold reserves.
In the paper, the researcher also pointed out that countries that were facing risks of sanctions from the United States have been increasing the share of their gold reserves much more than countries that had less sanction risk. If these central banks cannot acquire enough gold to hedge the risks of sanctions, the researcher argued that Bitcoin reserves are an optimal alternative.
Apart from this, the researcher believes that the risk of sanctions may eventually spur diversification in central bank reserves, strengthening the value of crypto and gold. Ferranti concluded that there are significant benefits in diversifying reserves and allocating portions to both Bitcoin and gold.
Digital strategists at the Bank of America (BofA) highlighted that the rise in the correlation between BTC and gold is an indicator of investors' confidence in Bitcoin during the current economic downturn. In addition, the BofA strategists believe that the rise of self-custody also indicates a potential decrease in sell pressure.
While self-custody has started to become highlighted amid the fall of the FTX exchange, some community members argued that it’s not without risks. From bugs within smart contracts to loved ones accessing crypto assets after death, community members pointed out potential issues that might arise when people of to self-custody their digital assets.
The Monetary Authority of Singapore (MAS), the country’s central bank, released a statement on Nov. 21 to address “some questions and misconceptions that have arisen in the wake of the FTX.com (FTX) debacle.”
The first point MAS wanted to make was that it could not protect local users from the fallout from FTX collapse “such as by ringfencing their assets or ensuring that FTX backed its assets with reserves” because “FTX is not licensed by MAS and operates offshore. MAS has consistently warned about the dangers of dealing with unregulated entities.”
Yet, it was Binance that ended up on the MAS Investor Alert List. That was because Binance, unlike FTX, was actively targeting users in Singapore with offerings denominated in Singapore dollars and payment options through local transmitters. MAS noted that it had received “several” complaints about Binance between January and August 2021.
MAS made Binance stop soliciting Singaporean users and take several measures to show its compliance, such as geo-blocking local IP addresses. It also referred Binance to the country’s Commercial Affairs Department to investigate whether the exchange had violated the Payment Services Act. Singaporean users were, nonetheless, able to access FTX services.
The purpose of the Investor Alert List, MAS explained, is “to warn the public of entities that may be wrongly perceived as being MAS-regulated, especially those which solicit Singapore customers for financial business without the requisite MAS licence.” That does not mean that the list should contain all of the “hundreds” of crypto exchanges worldwide, according to MAS. “It is not possible to list all of them and no regulator in the world has done so,” it said.
MAS went on to make extensive warnings about the volatility of crypto assets, and conceded:
“Even if a crypto exchange is licensed in Singapore, it would be currently only regulated to address money-laundering risks, not to protect investors. This is similar to the approach currently taken in most jurisdictions.”
MAS released a consultation paper on consumer protections for crypto users in October, however.
State-owned investment firm Temasek issued a statement on Nov. 19 saying that it had done eight months of due diligence on FTX in 2021 without finding uncovering any problems. Singaporean police have issued a warning about phishing sites trying to cash in on the confusion surrounding the FTX collapse.
The word “metaverse” is one of three in the running to be crowned the Oxford Word of the Year (WOTY) in a competition run by the Oxford University Press (OUP) — the publisher of the Oxford English Dictionary.
OUP officially announced the launch of the competition and its three finalist words for 2022 on Nov. 22, with this year marking the first time the public can participate in voting for the WOTY.
“Metaverse” will compete against the terms “#IStandWith” and “Goblin Mode.”
In OUP’s video pitch for the metaverse, it described it as “a hypothetical virtual reality environment in which users interact with one another’s avatars and their surroundings in an immersive way.”
“The term dates back to the 1990s, with the first recorded use in the Oxford English Dictionary in 1992 in the science fiction novel Snow Crash by Neil Stephenson,” the video stated.
Oxford noted that “metaverse” has quadrupled in usage in Oct. 2022 compared with that of Oct. 2021. The video stated that more lifestyle and work-related activities taking place in virtual reality environments may bring about “more debates over the ethics and feasibility of an entirely online future.”
As for the other two WOTY candidates, “#IStandWith” has become an increasingly used phrase for political activism, while “Goblin Mode” emerged as a post-COVID-19 lockdown concept in which one rejects “returning back to normal” and instead does what they want to do.
As for how the three phrases were chosen, OUP stated that they ran an analysis on a language data system in order to narrow down the candidates to three.
In order to officially vote for “etaverse” or the other two candidates, voters must cast their vote on Oxford Languages’ website.
Over 237,000 votes have been cast so far, with voting set to close Dec. 2.
Oxford did not state when the winning word would be announced.
In what could spell how the votes are panning out, at the time of writing, a Twitter poll by OUP shows 63% of 929 voters favored “Goblin Mode,” followed by “metaverse” at 22% then “#IStandWith” at 15%.
Whatever the results of the poll, the metaverse is predicted to be a significant industry in the near future, with a recent report by international consulting firm McKinsey estimating metaverse-related technologies to be worth $5 trillion by 2030.
Investment bank Citi upped that prediction, saying the total addressable market for the metaverse economy may fall within the range of $8-13 trillion over the same time frame.
The understanding of the metaverse has been most significantly influenced by the blockchain and cryptocurrency industry, along with Meta CEO Mark Zuckerberg’s rebranding of Facebook to Meta in Oct. 2021 and its recent developments on its Metaverse products through its Reality Labs business.
This Daily Dose was brought to you by Cointelegraph.