Highest ever October state borrowing costs, official figures show

Published

1 year ago

November 21, 2023

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Public sector borrowing reached the second highest level for any October since records began, according to official figures, casting doubt on the prime minister’s pledge to cut debt and the chancellor’s capacity to cut taxes.

Public sector net borrowing was £14.9bn last month, £4.4bn more than the same point last year and the second highest since monthly records began in 1993, the Office for National Statistic (ONS) said.

Only once before, in the pandemic year of 2020, was a higher amount borrowed in October.

High borrowing costs, thanks to high interest rates and bond yields having neared a 15-year high, are part of the reason.

The interest payable was the highest on record for any October since such figures began being collated by the ONS.

Interest payments were £1.1bn more expensive than October last year, reaching £7.5bn. It is an even greater amount than the Office of Budget Responsibility’s (OBR) forecast of £4.9bn.

One of Prime Minister Rishi Sunak’s five promises is to reduce government debt, which arises when the state spends more money than it takes in from taxes.

Across the seven months to October 2023 debt was up £21.9bn compared with the same seven months in 2022, totalling £98.3bn.

But the sum was £16.9bn less than the £115.2bn forecast by the OBR in March.

The ONS data is the last set before the mini-budget speech to be delivered by Chancellor Jeremy Hunt in the Commons on Wednesday.

He had signalled months ago that the prospects for a series of giveaways was not in his immediate plans, despite pressure from Tory MPs for sweeteners to bolster the party’s fortunes in the polls.

However, the tune from Downing Street has changed significantly over the past few days, with Mr Sunak saying on Monday it was time for the government to “begin the next phase” of its plan and “turn our attention to cutting tax”.

It is believed some personal taxes could be cut to help boost growth and help working families with the cost of living.

At the weekend Mr Hunt also pledged to “remove the barriers that stop businesses growing”.

The chancellor had told Sky News in October that OBR’s new economic forecasts, to be revealed alongside the autumn statement, would be considerably worse than at the time of the spring budget.

Efforts to cut benefit bills and get 1.1 million classed as economically inactive into employment were revealed on Thursday last week as part of the chancellor’s Back to Work Plan.

It was the first pre-announcement of the autumn statement.

The run-up to a major fiscal event is often littered with such things – and leaks.

Mr Hunt is facing a clamour of demands for aid – not least from charities which warn that millions of families need additional support to get them through another tough winter for household budgets.

Inflation figures last week may have shown that the pace of price increases has more than halved this year, meeting the government’s target, but bills for energy remain £1,000 above pre-pandemic levels and other essentials such as food are still rising in double-digits.

Key announcements are due on Wednesday over the government’s commitment to the pensions triple lock and whether working age benefits will rise in line with September’s inflation figure.

Business aid may come in the form of tax relief.

A coalition of hospitality businesses called on the chancellor last week to freeze business rates and extend reliefs.

They argued that a fresh tax burden would force up costs and spark a flood of closures.

In response to Tuesday’s figures, Mr Hunt said: “We met our pledge to halve inflation, but we must keep on supporting the Bank of England to drive inflation down to 2%. That means being responsible with the nation’s finances.

“At my autumn statement tomorrow, I will focus on how we boost business investment and get people back into work to deliver the growth our country needs.”

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Stablecoins are the best way to ensure US dollar dominance — Web3 CEO

Published

2 hours ago

April 6, 2025

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Stablecoins are the best way to ensure US dollar dominance — Web3 CEO

Stablecoins are the single best tool for the United States government to maintain the US dollar’s hegemony in global financial markets, according to LayerZero Labs CEO and founder Bryan Pellegrino.

In an interview with Cointelegraph, the CEO of LayerZero Labs, which created the LayerZero interoperability protocol recently chosen by Wyoming to be the distribution partner for the Wyoming stablecoin, said that the cross-border accessibility of dollar-pegged tokens makes them an obvious choice to drive US dollar demand. Pellegrino added:

“Stablecoins for the US dollar are the single best tool — the last Trojan Horse or vampire attack on every single other currency in the world — whether it is Argentina, whether it is Venezuela, whether it is all of the countries that have massive inflation.”

The CEO said he expects support for stablecoins on both the federal and state levels to grow because of the obvious boost stablecoins give to the US dollar in foreign exchange markets and the financial moat stablecoin-driven demand will create around the US dollar’s global reserve currency status.

Dollar, US Government, Stablecoin — *Stablecoin market overview. Source:* *RWA.XYZ*

US government looks to stablecoins to protect US dollar

Pellegrino cited Tether’s emerging role as one of the largest buyers of US Treasury bills in the world as evidence of the demand for US debt instruments from stablecoin issuers.

Tether recently became the seventh-largest holder of US Treasuries, beating out Canada, Germany, Norway, Hong Kong, and Saudi Arabia.

Speaking at the White House Crypto Summit on March 7, US Treasury Secretary Scott Bessent said the Trump administration would leverage stablecoins to extend US dollar hegemony and indicated this would be a top priority for officials in 2025.

According to a 2023 report from Chainalysis, over 50% of all the digital asset value transferred to countries in the Latin American region, including Argentina, Brazil, Columbia, Mexico, and Venezuela was denominated in stablecoins.

The low transaction fees, relative stability, and near-instant settlement times for dollar-pegged stablecoins make these real-world tokenized assets ideal for remittances and stores of value for residents in developing countries suffering from high inflation and capital controls.

Magazine: Bitcoin payments are being undermined by centralized stablecoins

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CFPB likely to step back from crypto regulation — Attorney

Published

4 hours ago

April 6, 2025

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CFPB likely to step back from crypto regulation — Attorney

The Consumer Financial Protection Bureau (CFPB) will likely see a reduced role in crypto regulations as other federal agencies like the Securities and Exchange Commission (SEC) and state-level regulators assume a bigger role in crypto policy, according to Ethan Ostroff, partner at the Troutman Pepper Locke law firm.

“I think with the current administration, my sense is, we are highly likely to see a significant pullback by the CFPB in the context of the activity by other regulators,” Ostroff told Cointelegraph in an interview.

State regulators also have the authority under the Consumer Financial Protection Act (CFPA) to assume some of the regulatory roles of the CFPB, the attorney said but also added that some regulatory functions will continue to fall within the purview of the CFPB as a matter of established law.

Ostroff cited the New York Department of Financial Services (NYDFS) and the California Department of Financial Protection and Innovation (DFPI) as regulators to keep an eye on as potential leaders of crypto regulations at the state level.

However, the attorney clarified that while the CFPB may see a diminished role during the Trump administration, the agency would not be outright dismantled during the current regime due to “statutorily mandated obligations and requirements” that require acts of Congress to change.

Trump administration targets CFPB in efficiency push

The Trump administration targeted the CFPB as part of a broader push by the Department of Government Efficiency (DOGE) to slash government spending and reduce the federal debt.

Russell Vought, the recently appointed head of the CFPB, announced major funding cuts to the agency and scaled back operations within days of assuming the helm at the CFPB in February 2025.

Bitcoin Regulation, US Government, United States, Donald Trump — *Source:* *Russell Vought*

Massachusetts Senator Elizabeth Warren criticized Elon Musk for dismantling the CFPB, which the US senator co-founded back in 2007.

Warren characterized Musk as a “bank robber” and claimed that the Trump administration dismantled the CFPB to undo consumer protection rules and have greater control over the financial system.

In a February 12 interview with Mother Jones, the senator stressed that the Executive Branch of government does not have the statutory authority to fully dismantle the CFPB, which can only be done through Congressional approval.

Magazine: SEC’s U-turn on crypto leaves key questions unanswered

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Nearly 400,000 FTX users risk losing $2.5 billion in repayments

Published

11 hours ago

April 6, 2025

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Nearly 400,000 FTX users risk losing .5 billion in repayments

Nearly 400,000 creditors of the bankrupt cryptocurrency exchange FTX risk missing out on $2.5 billion in repayments after failing to begin the mandatory Know Your Customer (KYC) verification process.

Roughly 392,000 FTX creditors have failed to complete or at least take the first steps of the mandatory Know Your Customer verification, according to an April 2 court filing in the US Bankruptcy Court for the District of Delaware.

FTX users originally had until March 3 to begin the verification process to collect their claims.

“If a holder of a claim listed on Schedule 1 attached thereto did not commence the KYC submission process with respect to such claim on or prior to March 3, 2025, at 4:00 pm (ET) (the “KYC Commencing Deadline”), 2 such claim shall be disallowed and expunged in its entirety,” the filing states.

Nearly 400,000 FTX users risk losing $2.5 billion in repayments — *FTX court filing. Source:* *Bloomberglaw.com*

The KYC deadline has been extended to June 1, 2025, giving users another chance to verify their identity and claim eligibility. Those who fail to meet the new deadline may have their claims permanently disqualified.

According to the court documents, claims under $50,000 could account for roughly $655 million in disallowed repayments, while claims over $50,000 could amount to $1.9 billion — bringing the total at-risk funds to more than $2.5 billion.

The next round of FTX creditor repayments is set for May 30, 2025, with over $11 billion expected to be repaid to creditors with claims of over $50,000.

Under FTX’s recovery plan, 98% of creditors are expected to receive at least 118% of their original claim value in cash.

How FTX users can complete KYC

Many FTX users have reported problems with the KYC process.

However, users who were unable to submit their KYC documentation can resubmit their application and restart the verification process, according to an April 5 X post from Sunil, FTX creditor and Customer Ad-Hoc Committee member.

Impacted users should email FTX support (support@ftx.com) to receive a ticket number, then log in to the support portal, create an account, and re-upload the necessary KYC documents.

FTX’s Bahamian subsidiary, FTX Digital Markets, processed the first round of repayments in February, distributing $1.2 billion to creditors.

The crypto industry is still recovering from the collapse of FTX and more than 130 subsidiaries launched a series of insolvencies that led to the industry’s longest-ever crypto winter, which saw Bitcoin’s (BTC) price bottom out at around $16,000.

While not a “market-moving catalyst” in itself, the beginning of the FTX repayments is a positive sign for the maturation of the crypto industry, which may see a “significant portion” reinvested into cryptocurrencies, Alvin Kan, chief operating officer at Bitget Wallet, told Cointelegraph.