In a 5G world, can an individual be their own bank?

A thought ….

That Covid-19 has sped up the exposure of workers to the possibility of automation replacing them is a saying that is becoming almost cliché. Television commercials remind us that we are “all in this together” and that we should wear masks and safely social distance. Meanwhile, telecommunications companies are promoting 5G technology that when fully deployed will help alleviate the downsides of working from home with a technology that moves data faster and can help connect all your devices and appliances so that you can better manage the data flowing through your home. But what if, in addition to connecting your mobile phone to your refrigerator which may allow you to determine whether to buy more milk, that 5G also helps to turn you into a micro bank by taking a real-time audit of the assets in your possession and using them as a basis for issuing your own coin?

The thought came to me today while conversing with two friends about the probability of Facebook becoming its own “nation.” Facebook, the world’s largest social media platform, is backing a group that plans to issue a cryptocurrency next month called Diem. Diem will hopefully help people send money around the world almost instantaneously. Unlike other cryptocurrencies, Diem will be a “stable coin” meaning it will be backed by reliable fiat currencies like the U.S. dollar or the euro.

But what if we could take the Facebook macro-model and make it micro to you? For example, with 5G-driven internet of things and block chain technology, why couldn’t a real time audit of a person’s possessions be taken and instead of the individual issuing digital fiat currency or even stable coin, the individual could issue their own personal currency. Tom Steyer, for example, could digitally tally up his cash, land, securities, and other holdings and issue a digital certificate that could be used in the digital marketplace. A man of his wealth could take a position in a number of different currencies but should he choose to engage exclusively in the digital world on his own dime, he could do so without any rules or regulations that come along with currency issued by a nation-state, a social media platform, or a corporation.

The advantages to such a scheme compound when more people with the material means decide to go digital and trade either the social media platform’s coin or, if affluent enough, their own coin. This would be true personal banking.

U.S. Treasury declares Switzerland, Vietnam as currency manipulators …

Press Release

December 16, 2020

WASHINGTON – The U.S. Department of the Treasury today delivered to Congress the semiannual Report on Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States. In this Report, Treasury reviewed and assessed the policies of 20 major U.S. trading partners during the four quarters ending June 2020.

The Report concluded that both Vietnam and Switzerland met all three criteria under the Trade Facilitation and Trade Enforcement Act of 2015 (the 2015 Act) during the period under review. Treasury consequently conducted enhanced analysis of Vietnam and Switzerland in the Report and will also commence enhanced bilateral engagement with each country in accordance with the 2015 Act. This engagement will include urging the development of a plan with specific policy actions to address the underlying causes of currency undervaluation and external imbalances.

Treasury also determined that, under the Omnibus Trade and Competitiveness Act of 1988 (the 1988 Act), both Vietnam and Switzerland are currency manipulators. For each country, Treasury assessed, based on a range of evidence and circumstances, that at least part of its exchange rate management over the four quarters through June 2020, and particularly foreign exchange intervention, was for purposes of preventing effective balance of payments adjustments and, in the case of Vietnam, for gaining unfair competitive advantage in international trade as well. Consistent with the 1988 Act, Treasury will press for the adoption of policies that will permit effective balance of payments adjustments and eliminate the unfair advantages in trade that result from their actions.

No other major U.S. trading partner met the relevant 1988 or 2015 legislative criteria for currency manipulation or enhanced analysis during the relevant period. Treasury urged China to improve transparency with respect to the management of its exchange rate, in particular regarding official foreign exchange intervention, and increase public understanding of the relationship between the PBOC and the foreign exchange activities of the state-owned banks, including the use of foreign exchange derivatives and activities in the offshore RMB market.

“The Treasury Department has taken a strong step today to safeguard economic growth and opportunity for American workers and businesses,” said U.S. Treasury Secretary Steven T. Mnuchin. “Treasury will follow up on its findings with respect to Vietnam and Switzerland to work toward eliminating practices that create unfair advantages for foreign competitors.”

Treasury found that ten economies warrant placement on Treasury’s “Monitoring List” of major trading partners that merit close attention to their currency practices: China, Japan, Korea, Germany, Italy, Singapore, Malaysia, Taiwan, Thailand, and India, the last three being added in this Report.

Today’s Report is submitted to Congress pursuant to the Omnibus Trade and Competitiveness Act of 1988, 22 U.S.C. § 5305, and Section 701 of the Trade Facilitation and Trade Enforcement Act of 2015, 19 U.S.C. § 4421. Treasury continues to work actively to dismantle unfair barriers to trade and achieve freer and more reciprocal trade with major U.S. trading partners. This includes combatting unfair currency practices that facilitate competitive advantage, such as unwarranted intervention in currency markets.

Source: U.S. Department of the Treasury

Federal Reserve releases select exchange rates as of 11 December 2020

Atlanta 14 December 2020, 9:43 PM EST

The Board of Governors of the Federal Reserve System today released the foreign exchange rates for the following foreign exchange pairs. Compare with exchange rates quoted by foreign exchange broker OANDA as of 9:59 PM EST:

Federal Reserve OANDA

EUR/USD = 1.2112 EUR/USD = 1.21443

GBP/USD = 1.3197 GBP/USD = 1.33503

USD/CAD = 1.2767 USD/CAD = 1.27508

USD/JPY = 103.880 USD/JPY = 103.93

Countries importing American product see continued decline in exchange rates.

The top six trading partners with the United States in terms of total exports to those countries saw their costs for the dollar fall over the past 30 days. The USD/CAD trading pair was priced at 1.3145 CAD on 14 November By 14 December , that rate has fallen by 2.9% to 1.2766 CAD.

The USD/MEX, priced at 20.6473 MXN on 14 November 14, is now down two percent to 20.1201 MXN. Meanwhile, the USD/CHN is now priced at 6.53252, down 1.2% from its 14 November price of 6.6106 CHN.

The USD/JPY is equal today to 104 JPY. On 14 November, this price was .8% higher at 104.82 JPY. And as the world waits for Great Britain and the European Union to settle their divorce, the exchange rate of the USD/GBP pair today at 0.75532 reflects a decline of .60% from the 0.7599 exchange rate back on 14 November.

And speaking of Europe, the USD/EUR pair has an exchange rate today of 0.82533, down 2.5% from the 14 November level of 0.8461.

Source: OANDA

As of 10:37 am AST 11 December 2020, Foreign exchange rates between U.S., select countries in Africa, Asia, and Europe

How to read the chart:

EUR/USD: You want to buy euros (EUR) with US dollars (USD). Where the market determined exchange rate is one EUR for 1.21088 USD, you divide your dollars in hand by the exchange rate to determine the number of euros you will receive.

USD/CAD=1.27702

USD/GBP=0.75077

GBP/USD=1.33175

USD/CNH=6.53412

USD/EUR=0.82575

EUR/USD= 1.21088 

USD/DKK=6.14584

USD/NGN= 379.869  

USD/JPY=104.36

USD/INR=73.6224

USD/GHS=5.84964   

Source: OANDA

Major political/legal event impacting foreign exchange

Treasury Secretary Mnuchin addresses congressional oversight commission on CARES Act

Yesterday, U.S. Treasury Department Secretary Steven Mnuchin made the following address:

“Senator Toomey, Representative Hill, Representative Shalala, and Commissioner Ramamurti, I am pleased to join you today to discuss the Department of the Treasury’s work to execute the National Security Loan Program established in the CARES Act. Treasury has worked diligently to implement every piece of the CARES Act, including the National Security Loan Program, efficiently and transparently. 

NATIONAL SECURITY LOAN PROGRAM

The CARES Act provides funding for up to $17 billion in loans to businesses critical to maintaining national security related to losses incurred as a result of coronavirus. The CARES Act authorized Treasury to make loans and loan guarantees for “businesses critical to maintaining national security.” The statute, however, does not define that term. Therefore, after consulting with the Department of Defense and the Office of Director of National Intelligence, Treasury issued guidance on April 10, 2020, providing that a company can fall within this definition if it meets at least one of three criteria: 


If a company met at least one of the three necessary criteria, Treasury conducted detailed financial and legal reviews of each application pursuant to consistent credit standards that were applied to all applicants. 
To date, Treasury has approved 11 loans totaling nearly $736 million. Information on the companies and dollar amounts are publicly available on our website, Treasury.gov.
Many of the companies we initially expected to take part in the program were able to raise funds in the capital markets, leaving most of the available loan funds unused. Going forward, I urge Congress to re-allocate these funds to provide relief for aviation industry workers, who continue to struggle through no fault of their own. 

CONCLUSION

I would like to thank the members of the Commission for working with us to provide vital economic relief to American workers, families, and businesses. I hope that the extensive amount of information Treasury has provided to the Commission has been helpful to you, and I am pleased to answer any questions you may have.”

As of 11:30 am AST 10 December 2020, Foreign exchange rates between U.S., select countries in East Africa, West Africa, the Caribbean, and Asia, and BitCoin

As of  11:30 am AST, 10 December 2020:

How to read the chart:

CAD/USD: If you come to the United States with one Canadian dollar (CAD)and wish to sell it for a US dollar (USD), the market price is .78103 USD.

USD/CAD: If you take a US dollar (USD) to Canada and wish to sell it for a Canadian dollar (CAD), the market price is 1.28018 CAD

CAD/USD=0.78103   USD/CAD=1.28018

CNH/USD= 0.15339   USD/CNH=6.51820

EUR/USD= 1.21037   USD/EUR=0.82610

DKK/USD =0.16260   USD/DKK=6.14831

NGN/USD= 0.00260   USD/NGN=379.384

JPY/USD=0.00960   USD/JPY=104.19

INR/USD=0.01356      USD/INR=73.5975

JMD/USD=0.00683    USD/JMD=143.446

GYD/USD=0.00469       USD/GYD= 205.184

GHS/USD=0.17031     USD/GHS= 5.84142

XCD/USD=0.37037        USD/XCD= 2.70

KES/USD = 0.00889     USD/KES= 110.408

BBD/USD = 0.50000     USD/BBD = 2.0000

TTD/USD = .14459         USD/TTD= 6.66797

BTC/USD= 18252.40     USD/BTC= 0.00005

Source: OANDA

Major political/legal event impacting foreign exchange

BIS releases Basel III monitoring results on banks

Today, the Bank of International Settlements Basel III committee released results of its survey determining compliance with bank capital requirements developed in 2010 under the Basel III framework.  The framework was developed in response to the financial crisis of 2008.  The objective of Basel III was to modify bank capital requirements thus leading to less variability in a bank’s risk weighted assets.

The survey announced today found that banks were continuing to make progress toward meeting the Basel III requirements and that bank liquidity ratios pre-Covid have been improving.  

Source: Bank of International Settlements

Global Foreign Exchange Committee provides update on global FX code …

Press release 

GFXC meets via videoconference to discuss progress on the FX Global Code review, FX benchmarks, and announces new Co-Vice Chair

10 December 2020

The Global Foreign Exchange Committee (GFXC) met to discuss the progress being made in its review of the FX Global Code. The Committee is on track to finalise the review in mid-2021.

Ahead of its latest meeting, GFXC members received papers prepared by the working groups for each of the focus areas of the review: buy-side outreach, disclosures, anonymous trading, algorithmic trading, settlement risk, and execution principles. “The review of the Code is progressing well. One major theme across all areas of the review is the importance of clear and accessible disclosures. There is widespread support for standardised disclosures cover sheets. They have the potential to move the FX market forward in a material way, promoting greater transparency and supporting Market Participants in making informed choices.” said GFXC Chair Guy Debelle.

The GFXC discussed the feedback on these papers from the local foreign exchange committees (FXCs). The papers and the proposed changes to the Code will be revised on the back of that feedback and then recirculated to the FXCs for another round of detailed feedback in March.  A public ‘Request for Feedback’ on some of the proposals coming out of the review will be launched in April. The final proposals will be submitted for approval by the GFXC at their June 2021 meeting.

The GFXC announced that Richard de Roos, Group Head of Foreign Exchange for Standard Bank Group, has been selected as Co-Vice Chair for a two-year team.

“The GFXC is committed to its outreach and adoption of the Code to accommodate all stakeholders and jurisdictions in the foreign exchange markets. I am honoured by this appointment and excited by the opportunity it provides to emerging markets across the globe as we continue to ensure we are aligned with best practice while providing an important voice to the GFXC on our particular markets” Mr de Roos said.

Mr de Roos will succeed outgoing Co-Vice Chair, Akira Hoshino (Head of FX at Citi, Tokyo). “Akira has brought his wealth of experience from his long and illustrious career in the market to make a significant contribution as Co-Vice-Chair of the GFXC. He is a great sounding board for the work the GFXC is doing to support the effective functioning of the market.” said Dr Debelle.

The GFXC also welcomed the Indonesian Foreign Exchange Market Committee and Israel as associate members.

The GFXC continued its discussions on the WM/Reuters 4pm fix, with Refinitiv Benchmark Services Limited presenting data on trading patterns around the fix as well as updating members on its current focus areas for administering these benchmarks.

Summaries prepared by the GFXC members on broader trading conditions in foreign exchange markets are also being published today. The minutes of the meeting will be published in January.

For additional details on the GFXC and the FX Global Code, visit the GFXC website: www.globalfxc.org.

Press inquiries:

Cecile Lefort
Reserve Bank of Australia
media@globalfxc.org

Foreign exchange rates. Dollar continues its fall …

Foreign exchange rates of interest as of 9 December 2020, 5:30 pm AST:

How to read the chart:

CAD/USD: If you come to the United States with one Canadian dollar (CAD)and wish to sell it for a US dollar (USD), the market price is .78113 USD.

USD/CAD: If you take a US dollar (USD) to Canada and wish to sell it for a Canadian dollar (CAD), the market price is 1.28002 CAD

INR/USD = 0.01356 USD/INR=73.6386

CAD/USD= 0.78113 USD/CAD= 1.28002

JMD/USD= 0.00682 USD/JMD = 143.631

EUR/USD= 1.21122 USD/EUR = 0.82552

NGN/USD= 0.00260 USD/NGN = 379.723

CNH/USD= 0.15338 USD/CNH = 6.51859

JPY/USD = 0.00961 USD/JPY = 104.09

Source: OANDA

To show your support, please visit our advertisers or make a donation at Paypal.

Nigeria price of the US dollar falls versus other currencies.

According to data from OANDA, a foreign exchange brokerage, for the period 1 December to 5 December 2020, the Nigeria price of the US dollar fell 0.060% from 378.373 NGN to 378.145 NGN. The Nigeria price for the euro, British pound, and the yuan saw increases, however. The Nigeria price of the euro increased from 453.889 NGN to 458.285 NGN (0.969%) while the Nigeria price of the British pound increased from 506.130 NGN to 507.890 NGN (0.348%)

During the same period, the Nigeria price of the China’s yuan increased from 57.6594 NGN to 58.0075 NGN (0.604%).

As of 3 December 2020, the Bank of Nigeria reported that its interbank mid-range foreign exchange rate for the U.S dollar was 379.50 NGN while the interbank exchange rate for the euro came in at 460.375 NGN and the price for the British pound was 509.9342 NGN. Meanwhile the interbank foreign exchange rate for the Chinese yuan came in at 57.9137 NGN.

Nigeria’s interbank interest rate as of 2 December 2020 is .50.

To support my blog, please visit the advertiser’s appearing on this page. You may also make a donation at PayPal.

The foreign exchange environment for Trinidad and Tobago …

As of 12:37 pm AST, here are foreign exchange rates for countries trading commodities with Trinidad and Tobago.

How to read the chart:

USD/TTD: If you come to Trinidad and Tobago with one United States dollar (USD) and wish to sell it for a Trinidad and Tobago dollar (TTD), the market price is 6.65560 TTD.

USD/CAD: If you take a Trinidad and Tobago dollar (TTD) to the United States and wish to sell it for a United States dollar(USD), the market price is 0.14482 USD.

Trinidad and Tobago exports 34.8% of its commodities to the United States and 9% to Argentina. Almost 24% of its imports are from the U.S. followed by Russia (15.3%), Columbia (11.1%), and Gabon (10.5%).

USD/TTD=6.65560 TTD/USD=0.14482

ARS/TTD=0.08165 TTD/ARS=11.8034

RUS/TTD=0.0889 TTD/RUS=10.8354

COL/TTD=0.00190 TTD/COL=505.772

XAF/TTD=0.01231 TTD/XAF=78.2939

CNH/TTD=1.01748 TTD/CNH=0.94712