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Cybercurrency craze: Interactive Brokers, the biggest broker for bitcoin futures, says it will soon allow customers to short bitcoin, or bet that its price will fall. The decision by the company, which previously allowed only bets that it would go up, “could change the dynamics of the nascent market” and “influence the balance of trading,” the Financial Times said.

“We realize that we have to open the ability to short it,” said Thomas Peterffy, Interactive’s chairman.

Bitcoin is now the biggest bubble in world history, surpassing the infamous tulip craze in Holland in the early 1600s. That’s according to Convoy Investments, a firm run by two former Bridgewater Associates analysts. Bitcoin’s price “has now gone up over 17 times this year, 64 times over the last three years and superseded that of the Dutch Tulip’s climb over the same time frame,” the firm said.

Some people are even mortgaging their homes to buy bitcoin, according to reports.

Hype aside, John Gapper, the Financial Times’ chief business commentator, warns banks they “face growing rivalry from a shadow payment system that ranges from cryptocurrencies to electronic platforms including Alipay and mobile wallets.”

“There are legitimate roles for cryptocurrencies — even speculation in bitcoin futures on exchanges,” he writes. “But the fact they are settled through a blockchain ledger, the underlying technology, rather than by banks under the direct oversight of regulators, is part of their appeal. This leaves a core deposit and payment system, which is tightly regulated and moving to cashless methods, alongside a growing periphery.”

New York Times business columnist Kevin Roose says he bought some bitcoin in 2013 and sold it for about $140, taking a small loss, “thoroughly unimpressed with the experience and pessimistic about the virtual money’s prospects.” Now, with the price of the cryptocurrency soaring above $15,000, he wants to know why he and so many other people were so “spectacularly wrong” about it. He thinks he made at least five bad assumptions.

Wall Street Journal
Inside team: The Trump administration has turned to a group of current and former aides to Sen. Richard Shelby, R-Ala., a long-time member of the Senate Banking Committee, to help ease the regulatory burden on Wall Street banks. Members of the so-called “Shelby mafia” “have landed or are under consideration for a number of roles — including prominent openings at the Securities and Exchange Commission and Federal Deposit Insurance Corp. — where they are positioned to help undo or ease postcrisis rules, even if Congress is unable to muster the votes to formally overturn them.”

Sen. Richard Shelby, R-Ala.

Read the fine print: Banks are lobbying against a few provisions in the tax bill that they believe will make some of their activities, including repurchase agreements and lending out stock that they hold on behalf of customers, more expensive.

Financial Times
Tell all: Banks in the United Kingdom will soon have to publish data on how many complaints and security breaches they experience. The rules are being put in place by the Financial Conduct Authority “to make it easier for customers to compare services by forcing banks to publish, for the first time, information ranging from how long it takes to reissue debit cards or open a current account to where and when customers can receive help.”

Washington Post
More work to do: Overall diversity in the financial services industry increased from 2007 through 2015, according to a report by the Government Accountability Office. But it still found room for improvement.

The number of African Americans, Latinos, Asians in lower-, mid- and senior-level management positions in increased from 17% to 21% during the period, the report said, although the percentage of black managers fell. The percentage of women in lower- and mid-level management positions, at 48%, was nearly equal to men, but only 29% of senior-level positions were held by women.

Quotable
“We’ve seen mortgages being taken out to buy bitcoin. People do credit cards, equity lines.” — Joseph Borg of the North American Securities Administrators Association.

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