Why regulators are so concerned about ‘stablecoins’: crypto wrap

Why regulators are so concerned about ‘stablecoins’: crypto wrap
The stablecoins with the biggest market caps include Tether, USD Coin and Binance USD. (Reuters)
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Updated 11 September 2021

Why regulators are so concerned about ‘stablecoins’: crypto wrap

Why regulators are so concerned about ‘stablecoins’: crypto wrap
  • US Treasury Department met with industry figures this week to discuss the risks and benefits of stabelcoins

LONDON: The US Treasury Department met with industry figures this week to discuss the risks and benefits of stabelcoins, cryptocurrencies that are pegged to traditional currencies, Reuters reported on Friday, citing three unnamed sources.

But why are they so interested in them in the first place? With a market cap of about $125 billion, they are a tiny slither of the approximately $103 trillion of assets under management, although the wider crypto market surpassed a record $2 trillion in April.

At this stage, they are just gathering information. However, Janet Yellen, US Treasury Secretary, said in July that the government must move quickly to establish a regulatory framework for stablecoins.

One of the imminent concerns regulators have about stablecoins is that they are actually used as money. While bitcoin et al have proven great investments, not many people buy things with them, making them potentially a smaller part of the fabric of the financial system than, say, Tether, USD Coin or Binance USD.

With those stablecoins and many others, you don’t have to worry about swapping them for goods for fear of missing out on a surge in the currency’s value.

Policymakers are concerned that the rise in privately-operated currencies could undermine their control of the financial and monetary systems, increase systemic risks, promote financial crime, and hurt investors.

Among the questions Treasury officials asked industry participants this week was how they could mitigate the risks of too many people trying to cash in their stablecoins at the same time. That could make it hard for the managers of the coins to maintain their peg to the dollar, or whatever currency they are linked to, and risk leaving investors nursing a loss.

Treasury officials also asked whether major stablecoins should be backed by traditional assets. Many crypto enthusiasts have been ruing the end of the gold standard for some time, so maybe this is their opportunity to bring it back.

The Treasury is expected to release a number of reports detailing its thinking in the coming months, but it is unlikely that the industry will get away with remain the unregulated domain it is today.

In the markets today, bitcoin was 0.5 percent lower at $45,557.27, while Ethereum also declined 0.5 percent, to $3,319.24.


Saudi National Bank posts 20 percent rise in quarterly profit

Saudi National Bank posts 20 percent rise in quarterly profit
Updated 10 sec ago

Saudi National Bank posts 20 percent rise in quarterly profit

Saudi National Bank posts 20 percent rise in quarterly profit
DUBAI: Saudi National Bank (SNB), the country’s biggest lender, on Sunday posted a nearly 20 percent rise in third-quarter profit from higher fees.
SNB reported a net profit of 3.8 billion riyals ($1.0 billion) for the quarter that ended on Sept. 30, up from 3.2 billion riyals in the same period a year earlier.
The result was better than the 3.6 billion riyals average analysts’ forecast on Refinitiv Eikon data.
The Saudi bank said total operating income increased by 38.4 percent mainly due to higher net special commission income, foreign exchange income and higher fees from banking services

Saudi insurer MEDGULF to increase capital by 50% to $279mn for more solvency

Saudi insurer MEDGULF to increase capital by 50% to $279mn for more solvency
Updated 43 min 51 sec ago

Saudi insurer MEDGULF to increase capital by 50% to $279mn for more solvency

Saudi insurer MEDGULF to increase capital by 50% to $279mn for more solvency
  • The company plans to increase its capital from SR700 million ($186.6 million) to SR1.050 billion ($279.9 million)

RIYADH: The Mediterranean and Gulf Insurance and Reinsurance Company (MEDGULF) plans to increase its capital by 50 percent to boost its solvency and leverage business expansion opportunities.

The company plans to increase its capital from SR700 million ($186.6 million) to SR1.050 billion ($279.9 million), by offering 35 million new ordinary shares through a rights issue at an offer price of SR12 , and a nominal value of SR10 per share, a statement revealed.

Up to 15.9 percent of the offering proceeds will be invested in information technology applications with focus on business development, sales generation and customer service, the company noted in the offering prospectus.

MEDGULF received approval on the capital increase from the Saudi Central Bank in June 2021 and from Saudi Capital Market Authority (CMA) in September 2021. The company will have its extraordinary general assembly meeting on November 3rd to discuss the offering plans further.

MEDGULF is a major player in the Saudi insurance industry with health insurance being the largest business division, representing 72 percent of gross premiums as on December 31, 2020, followed by motor insurance at 17 percent and general insurance at 11 percent.


Desperate for employees, US businesses struggle to hire

Desperate for employees, US businesses struggle to hire
Updated 24 October 2021

Desperate for employees, US businesses struggle to hire

Desperate for employees, US businesses struggle to hire
  • More than 10 million jobs were unfilled as of the end of August, according to government data

NEW YORK: To keep the taps at his recently opened beer tasting room flowing, Peter Chekijian had no choice but to ask his main employees to come in seven days per-week.
The staffing shortage has also kept Chekijian from realizing his goal of brewing beer on site, since he can’t find contractors to finish installing tanks he requires.
“That’s been a big issue of getting people to actually finish up the job,” said Chekijian, who co-founded the small Twin Fork Beer Company in New York state.
Even as millions of Americans who lost their jobs to the Covid-19 pandemic have returned to work, companies nationwide report they’re still struggling to hire employees in recent months.
More than 10 million jobs were unfilled as of the end of August, according to government data. The labor force participation rate, which measures the US economy’s active workforce, was 61.6 percent in September, compared to 63.3 percent before the pandemic.
The causes of the short staffing are myriad, from continued fears of contracting Covid-19, particularly among people who live with elderly family or children, to early retirements and objections over work-life balance and low wages.
And while the government throughout the pandemic offered generous unemployment benefits to keep people who lost their job financially sound, their expiration last month hasn’t yet caused hiring to increase.

The employee shortages come as restaurants and entertainment venues reopen amid as more Americans get vaccinated, and ahead of the uptick in business around the holiday season.
With “so many employers trying to hire so many people at the same time, it creates that imbalance,” said Aaron Sojourner, an economist at the University of Minnesota.
Employers who spoke to AFP told of mad scrambles to attract applicants by offering higher wages and other perks.
Chekijian has put out ads looking for employees and attended job fairs with offers of time off, benefits packages and salaries as generous as he can manage, but still can’t find the people he needs.
“It’s been shockingly slow,” he said. “It’s definitely affecting what we’re trying to do in terms of growing our business.”
The biggest American retailers are hiring staff ahead of the holiday season, with Amazon and Walmart both recruiting 150,000 people, Target and UPS taking on 100,000 and FedEx 90,000.
Logistics company GXO is looking to hire 9,000 employees for the busy season over the next two months, and its head of human resources Maryclaire Hammond said “finding people has been a huge issue.”
“There is a massive competition for talent at all levels, there is an absolute war,” she said in an interview.

GXO is particularly short on material handlers and forklift operators, and has paid for billboards and social media advertisements and organized job fairs to attract applications.
It has upped its pay by $3 to $5 per-hour in the past eight months and offered hiring incentives and a benefits package including health insurance, retirement contributions and college tuition assistance.
But Hammond said getting people to stay is even trickier.
“The current workforce is pretty fickle, happy to change,” she said. If a warehouse nearby pays even slightly more, employees will move there.
The company has tried to make workers feel comfortable, even going so far as to hand out burritos at some warehouses.
“Offering very good burritos in the mornings, it sounds silly, but things like that really motivate people,” Hammond said.
It has also tried to find ways around the worker shortages by increasing automation in its warehouses by 40 percent this year.
Staci Weinsheimer is looking for a full-time administrative job and feels that the market is finally turning in her favor.
“I’m getting a lot of interviews, I’m getting a lot of great feedback from the employers,” she said after meeting with hospitality companies at a job fair in Melville, New York.
Some job seekers still struggle to find work, or question whether companies will treat them well.
“Employers could be spending more money to attract new hires, and to improve working conditions. Those who do that find it easier to hire,” Sojourner, the University of Minnesota economist, said.
He added: “But a lot of employers are reluctant to really raise wages, because that does come out of their profits, and then the incumbent employees might also want a raise.”
 


World leaders, environmentalists welcome Saudi Green Initiative

World leaders, environmentalists welcome Saudi Green Initiative
Updated 24 October 2021

World leaders, environmentalists welcome Saudi Green Initiative

World leaders, environmentalists welcome Saudi Green Initiative

CAIRO: The Saudi Green Initiative launched by Crown Prince Mohammed bin Salman was widely welcomed by world leaders and leading environmentalists.
The SGI aims to eliminate 278 million tons of carbon dioxide emissions per year by 2030, up from a previous target of 130 million tons. The crown prince said the SGI initiative would involve investments of over SR700 billion ($190 billion) in that time period.

In a video message played at the forum on Saturday, Prince Charles said: “We have already seen great progress, which Saudi and Middle East green initiatives will accelerate.” 
“We now have a dangerously narrow window of opportunity to accelerate climate change action,” the prince of Wales added. 
Boris Johnson tweeted: “Saudi Arabia’s landmark pledge to reach net zero emissions by 2060 is a major step forward.”

Marco Lambertini, director general of WWF International stressed the need to agree on a global goal for nature as “we have for climate — we need to talk about net positive biodiversity.”
“Only 20 percent of the companies within the G20 countries have climate targets,” said Sanda Ojiambo, CEO and executive director of the UN. 
“We are all committed to lowering carbon emissions — each country with its own implementation program,” Tarek El-Molla, Egypt’s minister of petroleum and mineral resources said. 
US climate envoy John Kerry is due to attend a wider Middle East green summit in Riyadh on Monday.

“An initiative of the (Saudi) crown prince, the summit is the first of its kind in the Middle East region,” the Pakistan’s Prime Minister Office said in a statement said.
Imran Khan is visiting Saudi Arabia to attend the launch of “the Middle East Green Initiative Summit” in Riyadh.


SABIC announces carbon neutrality strategy at inaugural Saudi Green Initiative forum

SABIC announces carbon neutrality strategy at inaugural Saudi Green Initiative forum
Updated 23 October 2021

SABIC announces carbon neutrality strategy at inaugural Saudi Green Initiative forum

SABIC announces carbon neutrality strategy at inaugural Saudi Green Initiative forum
  • SABIC and 10 peer companies will work together to share early-stage risks and co-invest in developing and upscaling LCETs

RIYADH: SABIC unveiled its global strategy towards carbon neutrality at the inaugural Saudi Green Initiative in Riyadh on Saturday.

The event was attended by a high-level delegation from the company who joined international heads of state and global leaders of business, finance, and civil society to discuss Saudi Arabia’s vision for tackling environmental challenges.

SABIC chairman, Khalid Hashim Al-Dabbagh, said: “The SGI provides an ambitious framework aimed towards the shared goal of achieving a green future. SABIC is an active contributor to several strategic initiatives announced today, including those geared towards the production of hydrogen, reusing captured carbon, and recycling plastics.”
He added: “At SABIC, we recognize the power of collaboration to improve and protect the quality of life for the next generations. Sustainability is in our DNA and we’re pleased to contribute innovative technologies that will accelerate our journey towards carbon neutrality.”

SABIC’s Vice Chairman and CEO Yousef Al-Benyan joined an industry panel at the event to discuss the scaling up of new technologies and reasserted the company’s global commitment to reduce greenhouse gas emissions and pursue carbon neutrality. 

He said that “SABIC is uniquely contributing to the SGI goals and taking bold actions that support the Kingdom’s ambitions for the circular carbon economy. Our global carbon neutrality strategy reaffirms our commitment to the Paris Agreement goals and the continuous pursuit of solutions that can reduce greenhouse gas emissions.”

He added: “Many countries are competing for position as the world looks to broaden its energy mix and reduce carbon emissions. The foresight of Vision 2030, our abundant renewable resources and the innovative advances made by Saudi Arabian companies are making circularity a reality, placing the Kingdom in pole position to lead the new energy revolution.”

During the session, he outlined SABIC’s key circular innovations and collaborative efforts to transform energy intensive industry towards renewables, and being a founding member of the Low Carbon Emitting Technologies (LCET) initiative with the World Economic Forum. 

In this collaboration, SABIC and 10 peer companies will work together to share early-stage risks and co-invest in developing and upscaling LCETs.

SABIC is also partnering in the development of the world’s first large-scale chemical site to operate on 100 percent renewable power and, in a different project, developing solutions for electrically heated steam cracker furnaces which could reduce emissions by up to 90 percent.

Al-Benyan also highlighted some of the company’s accomplishments including the demonstration of the blue ammonia supply chain and the development of the world’s largest CO2 capture and purification plant. Based in Jubail and operational from 2015, the pioneering facility can process up to 500,000 megatons of CO2 per year into feedstock for industrial processes.

The company’s range of certified renewable polymers are providing an important bridge for the value chain to evolve from a linear to a circular economy and its landmark plastic chemical recycling processes contribute to CO2 reduction by preventing the incineration of plastic waste.