Interbank Market News Scan: Canada sees no rush to issue a central bank digital coin …

Links you should follow ….

Foreign exchange. Luis Costa outlines commodity currencies that he is trading. This strategist outlines which currency commodities he’s trading (msn.com)

Foreign exchange. The Bank of Canada is thinking in more concrete terms about how its digital currency might look and work but it does not currently see a strong case for issuing one, a deputy governor said on Wednesday. Bank of Canada does not see currently see strong case for issuing digital currency | Nasdaq

Foreign exchange. After more than a year of slumber, investors are preparing for currency volatility to come roaring back to life. Currency FX Volatility Set for a Comeback on Looming Policy Shifts – Bloomberg

Foreign exchange. A dovish Federal Reserve and accelerating growth abroad are weighing on the dollar, a move that could be a boon for stocks and other assets. Analysis-Floundering dollar falls to bottom of global currency heap (msn.com)

Foreign exchange, cryptocurrency. ‘Bitcoin isn’t even a reliable hedge for risk-off events, let alone inflation shocks. It’s actually highly pro-cyclical…In difficult times, crypto assets don’t go up; they go down.’— Nouriel Roubini. Bitcoin isn’t a currency or financial asset, but ‘looks like a bubble’: Roubini (msn.com)

Foreign exchange rates of interest …

Changes in currency tails comprised of the euro, US dollar, and Canadian dollar and currencies out of the Eastern Caribbean, Dominican Republic, Haiti, and Jamaica remained relatively flat over the last 24 hours. Any tightening of rates on the part of major central banks is expected to have a significant impact on Caribbean currencies thus the purchasing power and cost of remittances sent back to the Caribbean.

Currency PairsRates as of 12:00 pm AST 27 May 2021Rates as of 10:45 am AST 26 May 2021
EUR/XCD3.30073.3055
USD/XCD2.70002.7000
CAD/XCD2.22492.2402
EUR/JMD182.7800181.2040
USD/JMD147.9460148.0130
CAD/JMD122.3780122.8050
USD/DOP56.479956.4454
USD/HTG88.663488.6591
Source: OANDA

Interbank Market News Scan : A thought on creating an Afro-American currency …

My morning takeaway …

I think a currency should reflect the reality of the relationship between two distinct political economies that reside under a single flag.  I am specifically concerned with two groups under the American flag: Afro-America and the Virgin Islands of the United States.  Neither group have been fully incorporated into the American political economy.  There is only a 47-year difference between their starting attempts at incorporation into the United States with Afro Americans, at least on the surface, holding a lead in political-economic corporation due primarily to their physical presence in the contiguous United States, their 43 million population, and thus greater access to political channels.

Both Virgin Islanders and the Afro-American community have disproportionately higher poverty rates, lower incomes, and higher unemployment rates than their white American counterparts.  Both communities suffer from a dearth of capital and lack productive capacity, for now, through which they could independently sustain themselves.  Their banking markets are, like the rest of the United States, subject to the Federal Reserve, and the lip service of the Fed’s community development initiatives and the Community Reinvestment Act of 1977.

A priori, neither community draws the attention of family offices, hedge funds, investment banks, or individual trading desks in search of margin that supports any trade, including foreign exchange.  This is due primarily to both communities not having sufficient pooled natural and human resources upon which a currency (value or “energy”) can be calculated and leveraged.

Then again, under a credit creation theory of banking, this may not matter where credit, money, margin, are created out of thin air … but more on that at some other time.

In the mean-time I thought it would be interesting to add two proxy foreign exchange rates reflecting the currency of the Virgin Island (USVI) and Afro-American (AfAM) communities.  It is my endeavor, amongst too many others, to develop them in the near future …

20 May 2021

Currency PairsRates as of 2:00 pm GMT 20 May 2021Rates as of 12:44 pm GMT 19 May 2021
GHS/EUR0.14180.1419
GMD/EUR0.01610.0159
NGN/EUR0.00200.0020
SLL/EUR0.00010.0001
KES/EUR0.00750.0076
RWF/EUR0.00080.0008
ZAR/EUR0.05830.0584
MZN/EUR0.01370.0137
XCD/EUR0.30330.3033
USVI/USD0.00010.0001
AfAM/USD0.10000.1000
Source: OANDA, Alton Drew

Links you should follow …

Banks.  Three of the biggest US banking groups want the US Department of Agriculture to reconsider the terms of billions of dollars in planned debt relief for minority farmers, claiming it will cut into banks’ profits — and warn they may have to cut those same farmers off from future loans.  Banks say USDA’s debt forgiveness for minority farmers will cost them money and could affect future loans. Black farmers call that a threat. (msn.com)

Banks. Australian stocks closed higher on Thursday, marking their steepest rise in nearly two weeks, due to gains in tech and banking stocks and upbeat employment data.  Australian shares see best day in nearly 2 weeks on jobless data, banks boost | Nasdaq

Banks. In an effort stemming from the murder of George Floyd and at the behest of a Connecticut state official, a who’s who of financial institutions on Tuesday promised to address the effects of racial disparities in financial services by investing billions of dollars to support Black and Latinx communities. A state treasurer convinced big banks to commit billions of dollars to tackle racial inequities. This is the result. (msn.com)

Banks. Mike Mayo, Wells Fargo Securities senior banking analyst, joins ‘Power Lunch’ to discuss the competition banks could be facing from fintech, the future of bank branches and more. Banks are headed toward record efficiency, says Wells Fargo’s Mike Mayo (msn.com) Banks, central banks, digital currency. Can crypto benefit central banks? 3 ways digital currencies backed by central banks could benefit the global economy, according to Fitch (msn.com)

Central banks. The Bahamas became a global leader in e-money last year when it launched one of the world’s first central bank digital ­currencies—the “sand dollar”—beating China’s “digital renminbi” to the market by six months. How the Tiny Bahamas Beat Global Giants in the E-Currency Race (msn.com)

Opinion: Black Americans and Bitcoin. Playing it Wrong from the Beginning and How to Play it Right Now

A few years ago, I saw a number of Black Americans on Facebook touting bitcoin as the path to wealth. What bothered me that in all the hype being expressed that there was nary a discussion on what currency actual meant. No discussion as to the economics. No discussion as to the political-economic philosophy that undergirds a currency. 2017 saw the bitcoin bubble burst and the chit chat by those same Black Americans faded away like the unrealized gains they promoted.

Bitcoin and other cryptocurrencies have been touted by some proponents as the way to introduce underbanked or unbanked minorities into the credit system. Some Black Americans may have bought into this although the leading Black advocate organizations i.e. National Urban League, NAACP, Color of Change, Multicultural Media, Telecom, and Internet Council, to name a few, have been relatively silent on the benefits of crypto as a banking and payment system. No surprise their since when it comes to technology, Blacks have consistently taken a consumer position versus a producer position. And given that these legacy organizations are lead by the older generation, leadership’s inability to wrap its head around the true underlying economic benefits of cryptocurrency is a direct result of leadership being out of step with technology overall and how technology lies at the core of America’s economic exceptionalism.

In addition to consumerism, Black Americans still emphasize allegiance to the American political economy instead of a more skeptic, independent view of it. Again, its current leadership emphasizes inclusion and diversity as benefits without discussing its costs: that not everyone will benefit from such an approach. A truly inclusive approach to the political economy would be one where Black Americans view themselves not as a community, but as a nation within an American confederation. The advantage of that approach, a national approach, would require that Black Americans re-evaluate the meaning of economic value and the technology or mechanisms for capturing, storing, expressing, and transporting that economic value, particularly in a digital age. Cryptocurrency can be a vehicle for capturing, storing, expressing, and transporting Black economic value.

The upfront work will be the hardest, that being to identify and “mine” that value and quantifying it into a digital asset like cryptocurrency. But by doing so, by tying it to a Black economic engine, Black Americans can provide a blueprint for moving cryptocurrency from merely a speculative commodity to a true currency that can be used in the mainstream to buy and sell any and all goods. Unless crypto can demonstrate its utility in trade, then Nouriel Roubini’s description of cryptocurrency as shit coins will take hold as truly appropriate by most observers. Creating that value means taking a “nationhood” approach. It means connecting all productive assets within Black America to its current banking assets, identifying the economic value within Black America, issuing coin based on that value, ane getting members of its community to buy off on that value.

There are legal and regulatory hurdles, but the biggest hurdle will be cultural and societal. Black Americans will have to take a more courageous approach to Black economic viability and sustainability. The current political-economic structure has failed them and it will be up to Blacks on their own to reimagine the production and distribution of economic value within their communities.