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This day in cryptocurrency, the Governor of the Bank of England raises concerns regarding stablecoins, numerous savers encounter possible losses after a $2.7 million deficit was identified at Ziglu, and a UK crypto fintech that has entered special administration, while interest from retail investors in Bitcoin is diminishing even as the asset achieves new all-time highs.
Bank of England governor raises concerns about stablecoins
Bank of England (BOE) governor Andrew Bailey provided a caution on Sunday regarding banks issuing stablecoins and stated that the BOE ought to consider adopting tokenized deposits instead.
Bailey indicated that stablecoins pose a risk to the foundation of the financial system and may lead to governments losing oversight of their fiat currencies.
The BOE official furthermore pointed out that the UK central bank should refrain from collaborating with the European Union to advocate for a central bank digital currency (CBDC) or to issue a “digital pound.”
Bailey’s apprehensions have been echoed by other EU representatives, who contend that US dollar stablecoins could disrupt the financial system or inflict additional harm on the euro within the global currency markets.
Bankrupt crypto company Ziglu encounters $2.7M shortfall amid special administration
Countless savers face the dire possibility of losing their investments after administrators revealed a 2 million pounds ($2.7 million) deficit at Ziglu, a UK cryptocurrency fintech that collapsed earlier this year.
The firm, which halted withdrawals in May, was placed into special administration last week amidst escalating worries about its financial oversight, as reported by The Telegraph on Sunday.
Ziglu drew in approximately 20,000 clients with promises of high-interest returns, particularly through its “Boost” feature, which provided yields of up to 6%. Launched in 2021 during a period of low interest rates, Boost gained traction due to its greater returns.
Nonetheless, the product was not safeguarded or earmarked, permitting the firm to utilize customer funds for routine operations and lending practices. Following the intervention by the Financial Conduct Authority (FCA) in May, withdrawals were frozen, leaving savers unable to access their funds for weeks.
Bitcoin retail interest ‘virtually non-existent’ as BTC reaches highs
Bitcoin has achieved consecutive unprecedented highs this week, however, retail investors appear hesitant to reinvest in the market, according to a crypto analyst.
Regardless, the demand for spot Bitcoin exchange-traded funds (ETFs) is skyrocketing, with Thursday and Friday notching daily inflows exceeding $1 billion, marking the first time such a phenomenon has occurred on two consecutive days.
Bitwise head of research André Dragosch remarked in a post on X on Friday, “Bitcoin is at new all-time highs, yet retail is virtually non-existent,” highlighting the minimal Google search interest in “Bitcoin” despite the asset achieving consecutive all-time highs this week.
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