A chorus of disapproval rang out from the halls of the United States Congress on Sept. 14 as a House of Representatives subcommittee held a hearing on the “digital dollar dilemma.” Five expert witnesses were scheduled to testify at the hearing, and all of them argued against creating a U.S. central bank digital currency (CBDC), otherwise known as a digital dollar.
Partisan divisions were on full display as the hearing opened, with subcommittee chair French Hill saying, “There is no support for a CBDC in Congress except from those on the fringes.” Rep. Tom Emmer called CBDCs “a tool the Communists have.”
Subcommittee ranking member Stephen Lynch warned of “false narratives and fear mongering, much of it coming from the cryptocurrency industry itself,” and announced the creation of a congressional Digital Dollar Caucus.
The five witnesses slated to speak at the hearing — held by the Financial Services Subcommittee on Digital Assets, Financial Technology and Inclusion — were Digital Asset CEO Yuval Rooz, senior vice president of the Bank Policy Institute Paige Paridon, the University of Pennsylvania’s Christina Parajon Skinner, Norbert Michel from the Cato Institute and Columbia University lecturer Raúl Carrillo.
The hearing was explicitly dedicated to private sector alternatives to CBDCs, but only Rooz was directly affiliated with a business.
Digital Asset is the creator of the Daml smart contract language and the Canton blockchain, which is backed by companies such as Microsoft, Goldman Sachs and Deloitte. In his prepared testimony, Rooz took on position on CBDC, but urged that any form of digital dollar should respect privacy rights guaranteed under the Fourth Amendment and leverage existing technologies in the private sector.
#TODAY @ 2 PM – Subcmte RM @RepStephenLynch leads Democrats as the Subcmte on Digital Assets, Financial Technology and Inclusion holds a hearing entitled “Digital Dollar Dilemma: The Implications of a Central Bank Digital Currency and Private Sector Alternative”
— U.S. House Committee on Financial Services (@FSCDems) September 14, 2023
Paridon spoke about claims made by digital dollar supporters with counterarguments. She concentrated on issues that could arise within the banking system. Based on the list of potential risks, she concluded, “A CBDC could undermine the commercial banking system in the United States and severely constrict the availability of credit to the economy.”
Skinner set CBDC largely in a historical context, beginning with the apparent intentions of the founding fathers. She concluded:
“Introducing CBDC is likely to have certain costs to individual economic liberty by providing the State with more tools — and hence greater temptation — to establish command-and-control style public policy.”
The Cato Institute has a well-established record as an opponent of CBDCs. Michel addressed technical and political issues and saw no good coming from a U.S. CBDC.
Carrillo stated his support for a digital dollar technology in general and opposition specifically to a CBDC. A major objection put forward by Carrillo was the concentration of responsibilities in the Federal Reserve, since the Treasury Department has many roles in monetary creation and implementation of financial technology as well.
In his analysis, Carrillo stated, “There is a profoundly mistaken assumption that we do not already live in a financial surveillance state.” He continued:
“Although counterintuitive to some CBDC critics, substantively reigning in government financial surveillance means limiting public-private partnerships, as direct relationships between the government and members of the public are more likely to engender constitutional protections, including protection under the Fourth Amendment.”
Blockchain technology is not a decisive factor in ensuring privacy, Carrillo argued:
“Aspirationally, blockchain hides sensitive data about users, but in practice, blockchain systems necessarily interface with the surveilled infrastructure of the rest of the internet.”
Carrillo endorsed the Electronic Currency and Secure Hardware Act. It was re-introduced on Sept. 14 by Lynch and was not being examined by the subcommittee.
Carrillo concluded that “DFC [digital fiat currency] discourse in the United States is comparatively impoverished and unimaginative. […] Policymakers should support an array of Digital Dollar pilot programs and develop a steady rhythm of innovation, aiming to build a safe and secure financial system for all.”
The Fed’s well-known mantra of no CBDC without congressional authorization is well known. H.R. 3402, one of the bills under discussion at the hearing, would explicitly require congressional authorization prior to the introduction of a CBDC. H.R. 3712, also under consideration, would largely ban CBDC research. Emmer referred to research by the Boston Fed as “sketchy” during the opening of the hearing. Emmer’s recently re-introduced CBDC Anti-Surveillance State Act was also on the hearing agenda.
The president’s March 2022 executive order on digital assets mandated CBDC research. The Digital Dollar Project, a think tank co-founded by former U.S. Commodity Futures Trading Commission head Christopher Giancarlo, has also contributed significantly to CBDC research.
Almost 400,000 patients spend 24 hours or more in A&E, figures show
Twenty-four hours in A&E is now “no longer a documentary”, leading medics have warned, as figures show almost 400,000 patients spent a day or more in an emergency department in England last year.
The Royal College of Emergency Medicine (RCEM) said the very long waits are a “matter of national shame”.
Figures uncovered by the college and shared with the PA news agency show 399,908 people waited 24 hours or more in an emergency department in England in 2022-23.
The college warned there could be a similar situation this year, with Dr Adrian Boyle, its president, cautioning that patients are coming to avoidable harm as a result of long waits.
“We know that long stays in emergency departments are harmful,” Dr Boyle said.
“There is good scientific data that shows that once people spend more than about six hours, and they need to be admitted into hospital, actually their mortality starts to get worse.
“I think it should be a matter of national shame that we have these very long waits for admitted patients.”
He said people caught up in the long waits are “often elderly and vulnerable”.
Political parties urged to end overcrowding
The RCEM has made a number of calls to political parties in its general manifesto, including:
• To end overcrowding in emergency departments, including by ensuring there are enough hospital beds to prevent people being stuck in emergency departments when they need a bed on a ward.
• More funding for social care to prevent a system where people who no longer need hospital care can be discharged when ready.
• More emergency medicine staff to deliver “safe and sustainable care” and for more work to retain current staff.
• More data to be published on hospital performance.
• A call to “resource the NHS to ensure the emergency system can provide equitable care to all”.
Record number attend A&E
A record number of patients attended A&E in England in 2022-33, 25.3 million, up 4% from the previous year, according to figures released last week.
The data also shows 71% of people spent four hours or less in A&E in 2022-23.
The NHS recovery plan sets a target of March 2024 for 76% of patients attending A&E to be admitted, transferred or discharged within four hours, with further improvements expected the following year.
An NHS England spokesperson said: “This data relates to last year and winter, when services were facing record demand, industrial action and a twindemic of COVID and flu, but since we published our urgent and emergency care recovery plan in January we have seen significant improvements.
“Thanks to the hard work of NHS staff Category 2 ambulance response times are now an hour faster than in December, A&E four-hour performance is up from 69% to 73%, and the proportion of patients waiting 12 hours in A&E is down a sixth.
“We know there is more to do, which is why we set out our winter plans earlier than ever before this year, expanding care ‘traffic control’ centres, delivering additional ambulance hours and extra beds to boost capacity and reduce long waits for patients, and other initiatives like same day emergency care units and virtual wards which can mean patients are able to get the care they need without an unnecessary trip to an emergency department – this is better for them, and means A&E staff can continue to prioritise those with the most urgent clinical need.”
Hong Kong to list ‘suspicious’ crypto platforms in wake of JPEX scandal
One of Hong Kong’s principal financial regulators, the Securities and Futures Commission (SFC) has vowed to step up efforts to combat unregulated cryptocurrency trading platforms in its jurisdiction.
According to a Sept. 25 announcement, the SFC said it will publish a list of all licensed, deemed licensed, closing down and application-pending virtual asset trading platforms (VATPs) to better help members of the public identify potentially unregulated VATPs doing business in Hong Kong.
The SFC said it will also keep a dedicated list of “suspicious VATPs” which will be featured in an easily accessible and prominent part of the regulators’ website.
The new rules come immediately in the wake of the ongoing JPEX crypto exchange scandal, an affair which local media outlets are describing as one of the worst cases of financial fraud to ever hit the region. JPEX stands accused of promoting its services to Hong Kong residents despite not having applied for a license in the country.
Speaking at a Sept. 25 press briefing on the new rules and the JPEX scandal, Kit Wilson, the SFC’s director of enforcement explained that due to “evasive” behavior from stakeholders and unsatisfactory responses to requests for information, JPEX was placed on their alert list in July 2022.
Wilson shared that the SFC then launched a complex investigation involving multiple parties across a range of jurisdictions, which escalated in April 2023 after the organization received its first official investor complaint.
“In June 2023, an AMLO (Anti-Money Laundering Ordinance) came into full effect. At that time enforcement commenced a more formal fraud investigation. As a result of that investigation we issued a formal warning on Sept. 13 and referred the matter to the police.”
The financial fallout from JPEX is estimated to reached around $178 million at the time of publication, with local police havi received more than 2,200 complaints from affected users of the exchange.
A total of 11 people including crypto influencers, YouTubers, and employees of the allegedly fraudulent crypto exchange have been taken into custody for questioning.
In a statement, the SFC said the resulting fallout from JPEX “highlights the risks of dealing with unregulated VATPs and the need for proper regulation to maintain market confidence.”
The regulators added that it would be working with local police to establish a dedicated channel for citizens to share information on suspicious activity and potential legal breaches by VATPs, as well as better investigating the JPEX incident to help “bring the wrong-doers to justice.”
Deposit risk: What do crypto exchanges really do with your money?
JPEX scandal masterminds still at large as 11 suspects taken into custody: Report
The masterminds behind Hong Kong’s JPEX alleged crypto exchange scandal — referred to by some as the largest financial fraud to ever hit the city — have eluded authorities despite 11 people already being taken in for questioning in relation to the case.
According to a Sept. 23 report from the South China Morning Post, police have now received more than 2,265 complaints from victims of the exchange, with the total monetary value of the fallout estimated to be in the vicinity of $178 million (1.4 billion Hong Kong dollars).
The complaints appear to be related to difficulties withdrawing cryptocurrency from the platform. On Sept. 15, the JPEX exchange raised its withdrawal fees to 999 USDT.
— 梭教授说 (@hellosuoha) September 14, 2023
So far, the list of people reportedly taken into custody for questioning includes crypto influencer Joseph Lam Chok, who has made numerous attempts to publicly distance himself from the exchange.
Police have also arrested three employees of the JPEX Technical Support Company, along with two YouTubers, Chan Wing-yee and Chu Ka-fai — who have a combined following of more than 200,000 — in relation to the scandal.
Others sought or taken in for questioning include the company’s sole director Kwok Ho-lun, a restaurant director, and three celebrities who had reportedly promoted JPEX in some form in the pa.
Hong Kong’s authorities however said the ringleaders of the operation are still on the run. Police added that the investigation was continuing and further arrests were likely in the near future.
Local police have also reportedly enlisted the help of Interpol and other international enforcement agencies after it identified suspicious crypto transfers being made from the JPEX exchange. Police has also requested that local telecommunications providers block access to the exchange’s website.
During the Token2049 conference in Singapore on Sept. 13, the JPEX team allegedly abandoned its corporate booth after Hong Kong police arrested six employees on charges of fraud for operating an unlicensed crypto exchange.
The Platinum sponsor, JPEX, abandoned their booth at #Token2049 on the second day.
On a side note, their logo looks quite similar to FTX. Is that a sign? pic.twitter.com/KZw9o5vNgF
— J O Y (@joyxspacelatte) September 14, 2023
The JPEX scandal first appeared on the radar on Sept. 13 when Hong Kong’s financial regulator notified the public that it had received over 1,000 complaints about the unregistered crypto exchange platform, with claims of losses amounting to over $128 million (HK$1 billion).
The exchange later shuttered a number of its yield-bearing products, and ratcheted up its withdrawal fees to 999 USDT, while blaming its third-party market-makers for “maliciously” freezing liquidity.
At the time, it claimed that it had attempted to register with the relevant authorities and cited “unfair” treatment from the SFC.
In a Sept. 20 statement, the SFC revealed that JPEX had been operating without a license for virtual asset trading.
According to the official website, JPEX purports to be headquartered in Dubai and claims to be licensed for crypto trading activities in the United States, Canada and Australia. Founded in 2020, JPEX claimed to oversee some $2 billion in assets and said its goal was to be included in the world’s top five crypto exchanges.
Deposit risk: What do crypto exchanges really do with your money?
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