CFPB taps Hensarling aide; CFTC approves bitcoin futures

Receiving Wide Coverage ...
The future(s) is now: The Commodity Futures Trading Commission has given the green light to allow CME Group and Cboe Global Markets to start trading bitcoin futures. The announcement is "a potentially huge step in the evolution of the digital currency, making trading bitcoin easier for Wall Street banks and small investors alike," the Wall Street Journal commented. CME said its expects to launch its bitcoin futures on December 18, while Cboe said it would announce its launch date shortly. Wall Street Journal, American Banker

"Bitcoin's increased use as a tradable security actually makes it harder for it to take off as the payment system of the future it was designed to be," the Journal notes in a separate article. Because of bitcoin's skyrocketing price, few people are actually using it to buy things, which "could hamper its development as a regular currency. That raises the question of whether bitcoin and other cryptocurrencies will be widely used in payments and transactions soon, or if they will merely exist as trading vehicles for investors to make a quick profit or hold as a store of value."

Nevertheless, the paper says it's time for the world's central banks, including the U.S. Federal Reserve, to start thinking about minting their own cybercurrencies. "For years central bankers have seen digital currencies as a curiosity to keep an eye on," it says. "But now they are increasingly looking at whether they should create their own."

A group of current and former students at James Madison University in Virginia is offering investors digital tokens to finance their new startup, TaxToken, which offers an electronic tax-filing platform based on blockchain technology.

Wall Street Journal
Right-hand man: Mick Mulvaney, the acting director of the Consumer Financial Protection Bureau, named Brian Johnson as a senior adviser to him at the agency. Johnson is senior counsel at the House Financial Services Committee, which is headed by Rep. Jeb Hensarling, R-Texas, a leading critic of the consumer agency. Johnson "is expected to have a significant role in pushing the CFPB through the transition, with the authority to act on behalf of Mr. Mulvaney," the Journal said. Mulvaney is also head of the White House budget office.

Safety in numbers: American banks and credit unions have launched a "doomsday project" to prevent a run on the entire financial system in the event of a cyberattack against one institution. Called Sheltered Harbor, the project requires member firms to back up their data so other firms can serve the customers of a disabled bank. Members of the project includes banks and credit unions with about 400 million customer accounts.

"While some institutions can spend huge amounts on cybersecurity, they can still be vulnerable if there is an overall loss of confidence" in the financial system, the Journal explained. "If people suddenly can't access their accounts and money at one bank, customers at other banks could panic, thinking they might be vulnerable, too. This could prompt them to withdraw funds as a precaution and, in a worst-case scenario, spark a run on the wider banking system."

Hello, Richmond: Thomas Barkin, McKinsey & Co.'s chief risk officer and its former chief financial officer, is expected to be named president of the Federal Reserve Bank of Richmond on Monday. He would replace Jeffrey Lacker, who resigned as the bank's president in April.

Tech exec axed: Visa fired Jim McCarthy, an 18-year company veteran and "one of its most high-profile executives," last Friday, citing unspecified behavior "that violated company policy." McCarthy handled innovation and strategic partnerships for Visa with companies like PayPal and Apple and was "an important face of the company within the technology community."

In a separate event, PayPal said the personal records on some 1.6 million of its users was potentially compromised at TIO Networks, a company it acquired earlier this year. TIO Networks makes digital bill pay tools for utilities and other companies and operates a network of kiosks in retail stores where people can pay their bills.

Financial Times
Stocking up: Wall Street banks are restocking their inventories of stocks and bonds in anticipation of increased trading activity "under the lighter-touch regime of Donald Trump, who has promised to rip up Obama-era rules designed to rein in risk-taking," the FT reports. Since the beginning of the year, the Street's six big banks have increased their trading portfolios by more than $170 billion, to $1.71 trillion, the highest level in five years.

The increase shows "a willingness among the banks to increase their balance sheets, suggesting they are more comfortable with the regulatory climate emerging under Mr. Trump," the paper said.

Tech hiring: Citigroup hired eBay's chief data officer, Zoher Karu, to lead data and analytics for its retail operations in Asia, "a sign that banks are pushing back against a trend that is sapping their talent to feed a boom in financial services at competing tech companies," the FT reports Monday.

Quotable

"The structure of the CFPB is just fundamentally flawed. Authority that I have now as the acting director really should frighten people." — Mick Mulvaney, acting director of the Consumer Financial Protection Bureau.