Hard power is the world’s real currency once again – talking tough on defence won’t be enough

Published

2 months ago

March 2, 2025

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Remarkable – and relatively speaking a blessing – that the wake-up call for Britain to take defence seriously again did not come in the form of a military attack on UK soil, but instead was triggered by the verbal assault of Ukraine’s wartime leader by a sitting US president.

The lack of any physical destruction on British streets, though, should fool no one in government or wider society that the framework of security that has protected the country and its allies since the end of the Second World War is not at best cracked and at worst shattered.

Instead, check out one of the latest posts by Elon Musk, Donald Trump’s “disrupter-in-chief”.

He used his social media site X to say “I agree” with a call for the United States to leave NATO – a transatlantic alliance, and the bedrock of European security, that the new administration had until now continued to back at least in public.

It is yet another example of escalating hostility from the new Trump White House – which has sided with Russia against Ukraine, lashed out at its European partners over their values, and even suggested absorbing Canada as the 51st American state.

The alarming mood-change by a nation that is meant to be a friend surely demands an equally dramatic shift in approach by NATO’s 30 European allies and their Canadian partner.

Rather than stating the obvious – that American support can no longer be taken for granted – they should instead be actively adapting to a world in which it fundamentally no longer exists.

Make no mistake, this would be a daunting and humbling prospect – perhaps too awful even to contemplate, in particular for the UK, which has tied itself militarily so closely to the US for pretty much everything from intelligence sharing and technology to nuclear weapons.

Britain is not alone. All European militaries, as well as Canada, to a greater or lesser extent rely heavily on their more powerful American partners.

Breaking that dependency would require a rapid expansion in military capabilities and capacity across the continent, as well as a huge effort to build up the defence industrial base required to produce weapons at scale and exploit emerging technologies.

Sir Keir Starmer – who is hosting a Ukraine summit of allies on Sunday – has rightly adopted the UK’s natural position of leadership in Europe in the wake of Donald Trump’s extraordinary hostility towards Volodymyr Zelenskyy. He gave the embattled Ukrainian president a warm embrace on Saturday when the two met at Downing Street.

Britain is one of Europe’s two nuclear-armed states, a powerful voice within NATO, and a permanent member of the United Nations Security Council.

But talking tough on defence and the need to support Ukraine as the US steps back is no longer enough in a world where hard power is the only real currency once again.

A pledge by the prime minister to increase defence spending to 2.5% of national income by 2027 and to 3% in the next parliament is of course a step in the right direction.

Yet unless it is accompanied by much greater speed and urgency coupled with a genuinely generational shift in the entire country’s approach to national security then it will go down in history as the headline-grabbing but otherwise empty gesture of a government that has forgotten what it means to be ready to fight wars.

Anneliese Dodds, who quit as international development secretary on Thursday over the prime minister’s plan to fund his increase in defence spending with a raid on the overseas aid budget, summed up the challenge well in her resignation letter.

She wrote that she supported the plan to lift the defence budget but said even 3% “may only be the start, and it will be impossible to raise the substantial resources needed just through tactical cuts to public spending”.

She added: “These are unprecedented times, when strategic decisions for the sake of our country’s security cannot be ducked.”

Ms Dodds is right.

It is no longer good enough to treat defence, deterrence and wider national resilience as a niche subject that is delivered by an increasingly small, professional military.

Rather, it should once again be at the heart of the thinking of all government departments – from the Treasury and business to health and education – led by the prime minister, his national security adviser and the cabinet secretary.

This is not something new. It was normal during the Cold War years when, after two world wars, the whole country was acutely aware of the need to maintain costly but credible armed forces and a population that was ready to play its part in a crisis.

Politics

Canada ‘got it wrong’ labeling stablecoins securities — NDAX exec

Published

3 hours ago

May 14, 2025

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<div>Canada 'got it wrong' labeling stablecoins securities — NDAX exec</div>

Tanim Rasul, chief operating officer at Canadian crypto exchange NDAX, said Canada “got it wrong” categorizing stablecoins as securities in 2022, and the country needs to realize that every other regulatory regime is looking at stablecoins as payment instruments.

Rasul made the remarks during a panel on May 13 at the Blockchain Futurist Conference in Toronto, pointing to Europe’s crypto regulatory framework as a model for Canada to consider:

“I’m sure the regulators are wondering if this was the right choice to approach stablecoins as a security. […] I would just say, look at MiCA, look at the way they’re approaching stablecoins. It’s a payment instrument. It should be regulated as such.”

The Canadian Securities Administrators (CSA) classified stablecoins as “securities and/or derivatives” in December 2022, following “recent events in the crypto market,” such as the dramatic collapse of crypto exchange FTX just a month before.

Canada, Cryptocurrency Exchange, Stablecoin — *Canadian Web3 Regulation panel at Blockchain Futurist Conference. Source: Cointelegraph*

The agency elaborated on stablecoin rules in February and October of 2023, placing such tokens under the umbrella of “value-referenced crypto assets.”

Canada’s stance on digital assets led many top crypto companies, including Binance, Bybit, OKX, and Paxos, to scale back operations in the local market. Crypto exchange Gemini also announced exit plans in September 2024.

The regulatory setback, however, hasn’t stopped Canada’s digital asset market from flourishing. According to Grand View Research, the local crypto industry posted revenue of $224 million in 2024, higher than in previous years. It is expected to grow at a compound annual growth rate of 18.6% until 2030, when it is forecast to reach $617.5 million in annual revenue.

Stablecoins have emerged as key crypto use case

Stablecoins, cryptocurrencies pegged to a fiat currency, have emerged as a key use case for digital assets. According to DefiLlama, the current market capitalization for all stablecoins is at $242.8 billion as of May 14, up 51.9% in the past 12 months.

Nation-states and economic blocs are increasingly working on stablecoin regulations to tackle the rising usage across the world. While the most used stablecoins are pegged to the US dollar, there is demand for stablecoins pegged to other fiat currencies.

Magazine: Legal Panel: Crypto wanted to overthrow banks, now it’s becoming them in stablecoin fight

Politics

CFTC commissioner will step down to become Blockchain Association CEO

Published

5 hours ago

May 14, 2025

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CFTC commissioner will step down to become Blockchain Association CEO

Summer Mersinger, one of four commissioners currently serving at the US financial regulatory body Commodity Futures Trading Commission (CFTC), will become the next CEO of the digital asset advocacy group the Blockchain Association (BA).

In a May 14 notice, the Blockchain Association said its current CEO, Kristin Smith, would step down for Mersinger on May 16, allowing an interim head of the group to work until the CFTC commissioner assumes the role on June 2. Though her term at the CFTC was expected to last until April 2028, the BA said Mersinger is set to leave the agency on May 30.

The departure of Mersinger, who has served in one of the CFTC’s Republican seats since 2022, opens the way for US President Donald Trump to nominate another member to the financial regulator. Rules require that no more than three commissioners belong to the same political party.

Like the Securities and Exchange Commission, the CFTC is one of the significant US financial regulators whose policies impact digital assets. Lawmakers in Congress are currently working to pass a market structure bill to clarify the roles each agency could take in overseeing and regulating crypto.

New leadership at the Blockchain Association had been expected since Smith announced her departure on April 1 to become the next president of the Solana Policy Institute. A spokesperson for the Blockchain Association had not responded to Cointelegraph’s request for comment at the time of publication.

Some of the biggest crypto firms in the US, including Coinbase, Ripple Labs and Chainlink Labs, are members of the Association. The organization “support[s] a future-forward, pro-innovation national policy and regulatory framework for the crypto economy,” according to its website.

Changing the leadership at a major US financial regulator

A nominee of former US President Joe Biden, Mersinger has called for standardized crypto-related policies and said the CFTC was the “ideal regulator for the cryptocurrency spot market.” Some expected she would lead the regulator following the election of Trump and the departure of then-CFTC Chair Rostin Behnam, but Commissioner Caroline Pham took on the role in an acting capacity in January.

Trump chose former commissioner Brian Quintenz to chair the CFTC in February, but his nomination has not moved through the Senate for a vote in roughly three months. Commissioner Christy Goldsmith Romero reportedly said she plans to leave the agency once Quintenz is confirmed, potentially giving Trump the chance to nominate three new commissioners to fill the five-seat panel.

Any CFTC commissioner picked by the president needs a majority vote in the Senate to be confirmed for a five-year term or to fill in for a resigning member.

Magazine: Crypto wanted to overthrow banks, now it’s becoming them in stablecoin fight

Politics

Bitcoin more of a ‘diversifier’ than safe-haven asset: Report

Published

8 hours ago

May 14, 2025

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Bitcoin more of a ‘diversifier’ than safe-haven asset: Report

Bitcoin’s fluctuating correlation with US equities is raising questions about its role as a global safe-haven asset during periods of financial stress.

Bitcoin (BTC) exhibited a strong negative correlation with the US stock market when analyzing the short-term, seven-day trailing correlation, according to new research from blockchain data provider RedStone Oracles, shared exclusively with Cointelegraph.

However, RedStone said that the 30-day indicator signals a “variable correlation” between Bitcoin price and the S&P 500 index, with the correlation coefficient ranging from -0.2 to 0.4.

This fluctuating correlation suggests that Bitcoin “doesn’t consistently function as a true hedge for equities” due to its lack of a strong negative correlation below -0.3, which is needed for “reliable counter movement during market stress,” the report said.

The research suggests that while Bitcoin may not be a dependable hedge against stock market declines, it offers value as a portfolio diversifier.

This fluctuating dynamic signals that Bitcoin often moves independently from other assets, potentially offering additional returns while other assets are struggling. Still, Bitcoin has yet to mirror the safe-haven dynamics of gold and government bonds, RedStone suggests.

Bitcoin needs to “mature” before decoupling from stock market

While Bitcoin is poised to grow into a safe-haven asset in the future, the world’s first cryptocurrency still needs to “mature” as a global asset, according to Marcin Kazmierczak, co-founder and chief operating officer at RedStone.

“Bitcoin still needs to mature before decoupling from stock markets,” Kazmierczak told Cointelegraph, adding:

“Increased institutional adoption will absolutely help — we’re already seeing this effect with corporate treasury investments reducing Bitcoin’s 30-day volatility and with BlackRock repetitively praising BTC as an asset in a portfolio.”

Meanwhile, Bitcoin will see growing recognition as a portfolio diversifier, with an annualized return of over 230% for the past five years, which “significantly outperformed” both stocks and traditional safe-haven assets, Kazmierczak said, adding that “even a small 1–5% Bitcoin allocation can meaningfully enhance a portfolio’s risk-adjusted returns.”

Meanwhile, Bitcoin’s declining volatility supports BTC’s growing maturity as a global financial asset. Bitcoin’s weekly volatility hit a 563-day low on April 30, a development that may signal more stable price action.

Bitcoin’s price volatility fell below the realized volatility of the S&P 500 and the Nasdaq 100, signaling that investors are increasingly treating Bitcoin as a long-term investment vehicle, Cointelegraph reported on May 13.