More bitcoin milestones; Citi’s tax plan hit

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Up, up and away: The price of bitcoin pushed past $12,000 on Wednesday and then a few hours later surged past $13,000 as well, just days after it climbed past $11,000.

“Coinbase has been at the center of the speculative frenzy driving up the value of Bitcoin and similar currencies,” the New York Times reports. “While there are many Bitcoin exchanges around the world, Coinbase has been the dominant place that ordinary Americans go to buy and sell virtual currency. No company had made it simpler to sign up, link a bank account or debit card, and begin buying Bitcoin.”

Not everyone is happy about the rise in bitcoin prices. The Futures Industry Association plans to send a letter to the Commodity Futures Trading Commission protesting the CFTC’s greenlighting futures contracts on bitcoin by CME Group and CBOE Global Markets.

The FIA believes the financial system “is ill-prepared for the launch of the contracts as the value of the volatile cryptocurrency has soared,” the Financial Times says. At the same time, “futures brokers are worried they will bear the brunt of the risk associated with bitcoin futures.”

Not surprisingly, the soaring price of bitcoin has attracted the criminal element. About $70 million worth of the digital currency was stolen from a cryptocurrency-mining service following a security breach.

But nobody seems to have a problem with blockchain, the technology behind bitcoin. The Australian Securities Exchange said it plans to use blockchain to manage the clearing and settlement of equities, making it “one of the world’s first global exchanges to commit to the technology,” the FT says.

Wall Street Journal
Big hit: Citigroup CFO John Gerspach said the bank is likely to take an immediate charge of about $20 billion if the Senate's version of the tax plan becomes law. The hit would result from the bank having to write down the value of deferred tax assets as well as repatriating profits earned in foreign countries.

“Over the long term, though, any immediate hit to profits at Citigroup and other banks with these tax assets are likely to be offset by higher net income due to a lower tax rate,” the paper notes. At the same time, Gerspach said the tax law changes would not affect Citi’s plan to return $60 billion to stockholders over the next three years.

Citigroup also said it hired a new head of investment banking for Saudi Arabia following a 13-year absence from the country. Majed Al Hassoun will be based in Riyadh, and the bank expects to add up to more 20 employees over time. “The return highlights the opportunities that the bank and its rivals expect as a result of Saudi Arabia’s plans to diversify its economy away from oil,” the paper comments.

Promises, promises: What’s happened to the Treasury Department’s vows to deregulate the financial services industry under Donald Trump, Peter J. Wallison, a senior fellow at the American Enterprise Institute, wants to know. Not only has the department’s zeal for deregulation faded, he writes in an op-ed piece, but it’s actually looking to increase the power of the Financial Stability Oversight Council, something even the Obama administration was loath to do.

“It is disturbing that the Treasury Department — in an administration that pledged to deregulate — would endorse this expansion of government regulatory power,” Wallison says.

Ka-ching!: Visa has come up with a signature sound that consumers will hear when they make a payment through a mobile device or at a cash register. The less-than-a-second sound signals “speed and convenience,” the payments company says. It’s also launching its own unique vibration and adding animation to its logo.

Financial Times
Investing in HSBC: Ping An, the big Chinese insurance company, is now the second-largest shareholder in HSBC. The company said it bought 10 million shares of the bank on Tuesday, pushing its stake over the 5% mark that requires it to disclose its holding. The added investment “comes just weeks after HSBC announced plans for John Flint, its head of retail banking and wealth management, to succeed Stuart Gulliver as chief executive early next year,” the paper notes.

“I’ve always been skeptical of directly competing with and replacing existing forms of payment. Today what Bitcoin is excellent at, and has mostly solved, is being your own bank.” — Steve Lee, a longtime Google employee who is investing in virtual currencies.

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