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Global banking regulators call for toughest rules for cryptocurrencies | Bitcoin

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Global regulators have said cryptocurrencies such as bitcoin should come with the toughest bank capital rules to avoid putting the wider financial system at risk should their value collapse suddenly.

The Basel Committee on Banking Supervision, which consists of regulators from the world’s leading financial centres, is proposing a “new conservative prudential treatment” for crypto-assets that would force banks to put aside enough capital to cover 100% of potential losses.

That would be the highest capital requirement of any asset, illustrating that cryptocurrencies and related investments are seen as far more risky and volatile than conventional stocks or bonds.

“Crypto-assets have given rise to a range of concerns including consumer protection, money laundering and terrorist financing, and their carbon footprint,” the Basel Committee said. While most regulated banks currently have limited exposure to cryptocurrencies, the committee warned that the “growth of crypto-assets and related services has the potential to raise financial stability concerns and increase risks faced by banks”.

The world’s most powerful banking standards setter warned on Thursday that certain crypto-assets had proved to be highly volatile, meaning they could “present risks for banks as exposures increase, including liquidity risk; credit risk; market risk; operational risk (including fraud and cyber risks); money laundering/terrorist financing risk; and legal and reputation risks”.

However, it said looser rules could apply to stablecoins – a new form of digital asset usually pegged to the value of a traditional currency – that may require only a level of capital rules applied to traditional assets such as bonds, loans, deposits, equities or commodities.

The committee’s proposals, which will now go out for consultation, are meant to help protect the global financial system in case cryptocurrency prices plummet.

The price of bitcoin rose more than 5% after the report was published, to $37,361. However, the cryptocurrency has tumbled by 40% since hitting all-time highs of more than $64,000 (£45,000) in mid-April.

If adopted, the committee’s capital requirements could put some banks off dealing in cryptocurrencies, which have surged in value over the past year, but have proven incredibly volatile, owing to the fact that they are not backed by any other underlying assets such as dollars or gold to help ground the price.

Lenders are increasingly split over whether to adopt or shun cryptocurrencies, which are growing in popularity among customers. Goldman Sachs and Standard Chartered have launched their own cryptocurrency trading desks to take advantage of their rapid growth, while HSBC has vowed to steer clear of the asset.

The UK lender NatWest has said it will refuse to serve business customers who accept payment in cryptocurrencies alongside those made by debit, credit cards and cash, even though it could mean turning away notable companies including the ethical cosmetics firm Lush and office-sharing firm WeWork.

While most authorities are starting to crack down on the use of crypto-assets, some are taking a more open-minded approach. El Salvador announced this week that it would become the first country to adopt bitcoin as legal tender, despite repeated warnings from central banks that investors should be ready to lose all their cash.

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The regulator in China caused bitcoin prices to plunge last month when it banned banks and payment firms from offering clients any services involving cryptocurrencies and warned of the risks linked to trading in crypto-assets.

Meanwhile, the governor of the Bank of England, Andrew Bailey, has told investors they should be prepared to lose all their money if they dabble in cryptocurrencies, since they are not covered by consumer protection schemes.

Regulators at the European Central Bank have likened bitcoin’s meteoric rise to other financial bubbles such as “tulip mania” and the South Sea Bubble, which whipped investors into a frenzy before the bubbles burst in the 17th and 18th centuries.

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Power Capital takes majority interest in Terra Solar’s portfolio

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Terra Solar, a NovaUCD start-up founded in 2016, is giving up its sites in Wexford and Cork to Power Capital to develop solar farms.

Dublin-based company Power Capital Renewable Energy (PCRE) has announced plans to acquire majority interest in Terra Solar’s 400MW portfolio.

This will bring the company’s total solar assets to 840MW and boost its presence in the Irish solar power space.

A start-up that sprung out of NovaUCD, the University College Dublin accelerator, Terra Solar was founded by David Fewer and André Fernon in 2016. State-owned ESB was one of Terra Solar’s early investors, putting up €2.5m for a stake in the company.

Paris-based VC firm Omnes Capital will back the development of the solar sites over the next few years, which require around €200m to build out. Irish and international lenders will also back the development.

Power Capital director Peter Duff said that his company’s aim of becoming Ireland’s leading independent power producer has come a step closer with the deal.

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“Both Terra Solar and PCRE share common values and ambitions to help Ireland meet its 2030 targets and we are excited that Terra Solar chose us as a partner to bring these sites through construction,” he said.

The solar farm sites, located in Wexford and Cork, are a culmination of more than four years of engagement with local landowners, communities and planners, said Fewer.

“We will be retaining an equity stake in the developments and will be working intensively with all stakeholders over the coming few years to ensure that these sites are successfully constructed while equally continuing to grow our remaining development pipeline of 600MW.”

Justin Brown, co-founder of Power Capital, said that the company is currently in talks with other industry bodies about “increasing our foothold in the sector and we expect to see renewable energy being the dominant generator of electricity across Ireland within the next decade”.

Construction on the solar farms is set to begin in 2022 and the project is expected to be completed in the next five years.

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2021 iPhone photography awards – in pictures | Technology

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The 14th annual iPhone photography awards offer glimpses of beauty, hope and the endurance of the human spirit. Out of thousands of submissions, photojournalist Istvan Kerekes of Hungary was named the grand prize winner for his image Transylvanian Shepherds. In it, two rugged shepherds traverse an equally rugged industrial landscape, bearing a pair of lambs in their arms.

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With Alphabet’s legendary commitment to products, we can’t wait to see what its robotics biz Intrinsic achieves • The Register

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Alphabet today launched its latest tech startup, Intrinsic, which aims to build commercial software that will power industrial robots.

Intrinsic will focus on developing software control tools for industrial robots used in manufacturing, we’re told. Its pitch is that the days of humans having to manually program and adjust a robot’s every move are over, and that mechanical bots should be more autonomous and smart, thanks to advances in artificial intelligence and leaps in training techniques.

This could make robots easier to direct – give them a task, and they’ll figure out the specifics – and more efficient – the AI can work out the best way to achieve its goal.

“Over the last few years, our team has been exploring how to give industrial robots the ability to sense, learn, and automatically make adjustments as they’re completing tasks, so they work in a wider range of settings and applications,” said CEO Wendy Tan White.

“Working in collaboration with teams across Alphabet, and with our partners in real-world manufacturing settings, we’ve been testing software that uses techniques like automated perception, deep learning, reinforcement learning, motion planning, simulation, and force control.”

Tan White – a British entrepreneur and investor who was made an MBE by the Queen in 2016 for her services to the tech industry – will leave her role as vice president of X, Alphabet’s moonshot R&D lab, to concentrate on Intrinsic.

She earlier co-founded and was CEO of website-building biz Moonfruit, and helped multiple early-stage companies get up and running as a general partner at Entrepreneur First, a tech accelerator. She is also a board trustee of the UK’s Alan Turing Institute, and member of Blighty’s Digital Economic Council.

“I loved the role I played in creating platforms that inspired the imagination and entrepreneurship of people all over the world, and I’ve recently stepped into a similar opportunity: I’m delighted to share that I’m now leading Intrinsic, a new Alphabet company,” she said.

The new outfit is another venture to emerge from Google-parent Alphabet’s X labs, along with Waymo, the self-driving car startup; and Verily, a biotech biz. ®

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