• Bitcoin is pushing upwards as a daily high of USD 7,619 looks to be breached
  • The US SEC has given approval to the NYDIG Bitcoin Strategy Fund to offer shares to institutional investors
  • BIS general manager Agustin Carstens says that central banks could build more efficient and inclusive financial systems using CBDCs

Bitcoin markets have flung aside the bearish mood for the week, starting the weekend very strongly as Saturday trading pushes price up to from a daily low of USD 7,304. And this was almost 24 hours ago, before it pushed to a current high of USD 7,619, where the hourly trend appears to still be creeping upwards (CoinDesk).

Perhaps we could be seeing the early effects of some good news from the US Securities and Exchange Commission (SEC), which has just approved a Bitcoin futures called NYDIG Bitcoin Strategy Fund, giving it the right to offer its shares to institutional investors.

The New York Digital Investment Group LLC (NYDIG) essentially can offer the investment to recognized and accredited entities. This includes registered investment advisers as well as their clients. Better still, there is no minimum investment amount, so the entry barrier certainly seems to simply be that you have to be accredited to invest in Bitcoin.

The fund carries a description as “a non-diversified, closed-end management investment company that continuously offers its shares”, and states that investment in Bitcoin futures contract is simply to achieve capital appreciation. The proposed max offer price per share stands at USD 10, with an initial capital of USD 25 million.

This investment deal will see the fund only buying cash-settled Bitcoin futures traded on commodity exchanges registered with the US Commodity Futures Trading Commission (CFTC).

It is a series of bullish news for NYDIG, whose subsidiary NYDIG Execution had just last month gained the notoriously difficult to get BitLicense from the New York State Department of Financial Services (NYDFS). This treasured license entitles the holder to offer crypto custodial services and trade execution in the jurisdiction of New York state.

At the time being, NYDIG is allowed to offer custodial services for five digital assets: Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Ripple (XRP) and Litecoin (LTC).

Just this week, California-based financial company SoFi also got a BitLicense approved and can now support six cryptocurrencies: BTC, ETH, BCH, Ethereum Classic (ETC), LTC and Stellar (XLM).

NYDFS Superintendent Linda Lacewell seemed to suggest that the authority was no longer being as miserly with its issuance of the BitLicense, with innovation in New York’s cryptosphere now essential. She said:

“The Department’s approval of SoFi’s virtual currency and money transmitter licenses provides consumers with more choices in a continuously evolving global financial services marketplace.”

Meanwhile, in Agustin Carstens, the general manager at the Bank for International Settlements (BIS), appears to find himself falling in love with crypto, after previously being quite adamant against central bank digital currencies (CBDCs).

In a lecture at Princeton University entitled ‘The future of money and the payment system: what role for central banks?’, Carstens did a remarkable about-turn when he said that central banks could build more efficient and inclusive financial systems in an approach that utilized emerging technologies such as blockchain.

He credited Bitcoin as one of three developments that have made policy agenda centered around money and the payment system in recent years, grabbing the spotlight of observers and commentators. Carstens listed these developments:

“The first was the rise (and subsequent fall) of Bitcoin and its cryptocurrency cousins; the second was the entry of big tech firms into financial services, and third and most recently, came the intense debates concerning Libra and other stablecoins. We have followed these developments in various BIS

Carstens said that the introduction of retail CBDCs could bring about significant impact by opening up new avenues like round-the-clock payment availability, added layers of privacy, and peer-to-peer transfers. More importantly, CBDCs could be designed to be compatible with the provision of central bank settlement liquidity. He said:

“The monetary system is founded on trust in the currency. This is something that only the central
bank can provide. Like the legal system and other public goods, the trust underpinned by the central bank.”

As recently as March, Carstens had been against the idea of CBDCs, warning that such an innovation could trigger bank runs and destabilize the financial system.


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