UK CPI Inflation Falls Short of Forecast, Yields Soar and Yield Curve Inverts
The UK's CPI inflation rate for April was lower than expected at 8.7%, missing the forecasted rate of 8.2%. This is a significant issue as core inflation is a major concern globally. The UK's Core CPI year over year increased to 6.8%, the highest it has been since 1992, while the month over month rate accelerated to 1.2%, surpassing the expected rate of 0.7%. As a result, yields have increased, causing a severe inversion across the yield curve. CryptoSlate's latest market report analyzes Tether's plan to purchase Bitcoin every month, which could potentially cause market volatility and put it in competition with MicroStrategy.
UK Core CPI Reaches Highest Since 1992
Bitcoin's value dropped below $27,000 during Asia's trading day, causing a decline in major cryptocurrencies as traders in broader equity markets reacted to poor U.K. inflation figures. The U.K.'s core Consumer Prices Index rate was higher than expected for the third month in a row, coming in at 6.8%, the highest since 1992. This may add pressure on the Bank of England to keep raising interest rates in the coming months.
Bank of England and U.K. Treasury Explore Plans for Digital Pound, Legal Framework and Data Protection Laws to be Addressed
The UK will need to create new laws or modify existing ones to accommodate a digital pound, according to two lawyers interviewed by CoinDesk. The Bank of England and the UK Treasury are seeking feedback on their plans for a digital pound, which officials say will likely be necessary in the future. If the UK decides to issue a central bank digital currency (CBDC), new legislation will be required to define the characteristics of a digital pound, and current data, privacy, and anti-money laundering rules will need to be amended to accommodate such a currency. Ownership issues and security will also need to be addressed in the legal framework for a digital pound. Additionally, Morris suggests that more consideration needs to be given to how people's concerns will be addressed, and specific amendments may be required regarding the government's use of data related to the digital pound. Only when such changes are made will people feel comfortable using it.
Kraken’s UK boss talks IPO, layoffs, and why the exchange is ‘pumped’ about Britain
Kraken's UK managing director, Blair Halliday, discussed the cryptocurrency exchange's plans for an IPO, layoffs, and the potential of the UK's crypto opportunities in an interview with DL News. While Halliday did not provide any specific details on Kraken's IPO plans, he expressed optimism about the crypto industry's potential in the UK and praised the government's efforts to introduce new crypto laws. He also criticized UK banks' restrictions on account holders transferring fiat to crypto companies, saying that they will push UK consumers into the arms of offshore trading platforms with insufficient investor protections. Despite facing setbacks such as layoffs and regulatory crackdowns, Kraken added 42 new tokens to the exchange, grew and paid out over $500 million in its staking service, sponsored festivals, and hired over 1,100 employees in 2021.
Coinbase expands zero-fee subscription product to UK, Germany and Ireland
Coinbase, a US-based crypto exchange, is expanding its Coinbase One subscription product to the UK, Germany, and Ireland. The product offers zero fees on trades in exchange for a $29.99 monthly payment, along with 24/7 customer support, boosted staking rewards, and introductory offers to crypto data services. Coinbase plans to launch the service in 31 additional European countries in the coming months. The subscription product offers a predictable income stream for Coinbase and helps build longer, deeper relationships with customers. Coinbase has been expanding internationally to reduce its reliance on the US market.
CryptoUK and Kraken UK Slam UK Lawmakers' Recommendation to Regulate Crypto as Gambling
CryptoUK and Kraken UK have criticized a recent report by British lawmakers that suggested regulating cryptocurrency in the same way as gambling. The Treasury Committee recommended that unbacked crypto be regulated as gambling due to concerns over consumer risks associated with the asset class, such as price volatility and lack of intrinsic value. CryptoUK argued that such an approach would not take into account the nuances of the sector and may lead to UK consumers looking for offshore crypto platforms. Kraken UK disagreed with the Treasury’s conclusion that cryptoassets have no intrinsic value and argued that regulating them as gambling products is misguided and unsuitable for UK consumers.
UK lawmakers recommend regulating cryptocurrencies as gambling due to fraud and consumer risks
A panel of UK lawmakers has recommended that cryptocurrencies like Bitcoin and Ethereum be regulated as gambling due to the potential for fraud and risks to consumers. The report from parliament's treasury committee also noted that these cryptoassets are not backed by any currency or asset, leading to volatility in prices and the potential for all invested money to be lost. Regulating retail trading and investment in unbacked cryptocurrencies as gambling could create a false sense of security for consumers. The Financial Conduct Authority has previously warned consumers about the risks of investing in cryptocurrencies.
UK High Court Rules to Set Aside Interim Proprietary Injunction Against Binance
A United Kingdom high court recently ruled to set aside an interim proprietary injunction against the cryptocurrency exchange Binance. The interim injunction, which required Binance to preserve a certain amount of cryptocurrency, was issued after a victim of cryptocurrency fraud claimed to have traced the stolen funds to the crypto exchange.
UK’s FCA Continues Crackdown on Unregistered Crypto ATMs
The UK's Financial Conduct Authority (FCA) has inspected crypto ATM sites in Exeter, Nottingham, and Sheffield alongside regional police, as part of its crackdown on unlawful crypto ATMs. The FCA regards these devices as a money laundering threat, and none are logged with the FCA as required by law. The regulator said that crypto ATMs operating without FCA registration are illegal. The FCA is reviewing the evidence gained from its inspection, but did not specify what further action, if any, might be taken. The raids follow enforcement action in Leeds and East London that were announced in March. According to CoinATMRadar, there are 17 crypto ATMs in the UK, but the FCA says that none of the 40 or so registered crypto companies are permitted to offer that service.
UK Reviews AI Development: It Can ‘Drive Substantial Economic Growth’
The UK's Competition and Markets Authority (CMA) has announced an examination of the impact of artificial intelligence (AI) on consumers and the economy. The regulator will look at the development and deployment of foundation models, such as OpenAI's ChatGPT, against key principles including safety, transparency, fairness, and accountability. The initial review will examine the competitive market for AI foundation models and their usage, with regulators monitoring how they can expand and present opportunities, along with risks to competition and consumers. The CMA's goal is to help AI technology develop in ways that ensure open, competitive markets and effective consumer protection. The review is intended to produce guiding principles for the protection of consumers while supporting healthy competition as such technologies develop, with the report of findings scheduled to be published in September 2023. This announcement follows the publication of a white paper on AI from the UK government in March 2023 and a recent funding of £100 million ($124.8 million) to support a task force aimed at accelerating the country's AI readiness.
