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FirstFT: BNY Mellon joins State Street in crypto trading push

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Two of the world’s largest custody banks have publicly backed a London-based cryptocurrency trading platform, in a move that points to growing demand from traditional asset managers for bitcoin and other digital tokens.

Bank of New York Mellon has joined the consortium of six banks behind the launch of Pure Digital, three months after State Street became the first to announce its support for the planned exchange.

The move suggests that normally staid and conservative custodians, which safeguard assets for some of the world’s largest asset managers, are fielding increasing interest from clients about trading digital currencies.

Investor interest in cryptocurrencies is growing despite recent falls in the price of bitcoin. The cryptocurrency exchange FTX yesterday raised one of the largest rounds of financing for a digital assets start-up.

Regulators are also increasing their focus on the sector after years of almost unrestrained growth. Janet Yellen, Treasury secretary, this week convened a working group to discuss regulation and said she expected to issue recommendations on stablecoins in the coming months.

Martin Wolf, in a column today, urges central banks to introduce digital currencies that work for all of society, not the privileged few.

“It is the job of central banks (with other regulators) to ensure that the revolution in digital payments works for society as a whole. There is now the possibility — necessity, in my view — of augmenting cash with central bank digital currencies.”

Five more stories in the news

1. Jeff Bezos completes space flight The Amazon founder-turned-private space entrepreneur reached the lower reaches of space early yesterday after a series of long delays. He thanked Amazon employees and customers “because you guys paid for all this”. Blue Origin’s successful mission was a moment to savour but Elon Musk’s SpaceX remains streets ahead.

“All polluting industry will move off Earth, and Earth will end up zoned residential” — Jeff Bezos

Jeff Bezos leaves the capsule of the New Shepard craft after its flight on Tuesday
Jeff Bezos leaves the capsule of the New Shepard craft after its flight yesterday © Blue Origin/AFP via Getty Images

2. Trump ally charged with illegally acting as UAE agent Tom Barrack, former chief executive of Colony Capital who was chair of Donald Trump’s inaugural 2016 election committee, has been arrested and charged with illegally acting as an agent of the United Arab Emirates.

3. UBS launches portfolio to invest in women-led hedge funds The Swiss bank’s asset management arm has launched a portfolio that invests solely in hedge funds led by women in an effort to improve diversity and spot talent in the male-dominated sector. Female representation in hedge funds, at 18.6 per cent, is the second-lowest across seven alternative asset classes.

4. Netflix sheds subscribers The streaming group lost 430,000 subscribers in the US and Canada in the second quarter and issued weaker than expected forecasts, rekindling investor doubts about how the market leader will fare after the economic reopening from the pandemic.

5. China flooding kills a dozen people Severe flooding has killed at least a dozen people in the central Chinese city of Zhengzhou. Torrential rain submerged streets and stranded passengers in subway cars, in what local weather authorities said was the worst flooding in the city since 1951.

  • Beijing must reduce emissions this decade if the planet is to avoid climate “chaos”, US climate envoy John Kerry told the Financial Times as he issued a stark assessment that the world was falling short on its environmental pledges.

Coronavirus digest

  • Wall Street clawed back losses yesterday from a global rout a day earlier.

  • The Delta variant accounts for more than 80 per cent of new cases in the US, health officials said.

  • Chicago has expanded the number of states on its travel advisory list and placed new restrictions on unvaccinated travellers from Florida, Louisiana and Nevada.

  • Blood sample tests in Italy have revived a debate over whether coronavirus was circulating in Europe as early as October 2019, before Chinese authorities confirmed the first case in Wuhan.

Follow our live coronavirus blog and sign up for our Coronavirus Business Update newsletter for more.

The day ahead

Earnings Johnson & Johnson, which is part of a proposed $26bn settlement to resolve claims that it helped fuel the opioid crisis, releases second-quarter results today.

  • Also reporting as earnings season ramps up: Coca-Cola, Verizon, Harley-Davidson and Baker Hughes report before the bell. Texas Instruments, CSX, Las Vegas Sands and Whirlpool report after the market closes.

Infrastructure bill Chuck Schumer, the Senate majority leader, plans to hold a controversial vote today to proceed with legislation on President Joe Biden’s bipartisan $1tn infrastructure bill. (CNBC)

Brexit The UK will put itself on a collision course with Brussels today by unveiling a set of demands that would overhaul post-Brexit trading arrangements between Great Britain and Northern Ireland.

What else we’re reading

Why Trump voters refuse to get vaccinated The pace of vaccinations in US states has become starkly correlated with politics, with Republican voters less likely than Democrats to get a jab. This poses a huge challenge for local health officials in red states, as Nikou Asgari’s reporting from Little Rock, Arkansas shows.

scatterplot correlation between Trump vote share in 2020 and hesitancy to get a vaccine, at the state level. states that Trump won had a higher % of adults say they were 'hesitant' or 'very hesitant' to get a vaccine

Europe’s expensive plan to reach top tier of chipmakers The EU is seeking to launch itself into the global premier league of semiconductor manufacturing, setting a goal of doubling its share of the global chip market by 2030. But will it end up squandering public money chasing geopolitical ambitions that may not be supported by industrial and market logic?

You can’t always get what you quant From picking the best stocks to listening in on earnings calls, artificial intelligence-powered systems are changing finance. But how big are the rewards? In the latest episode of the Tech Tonic podcast, the FT’s global finance correspondent Robin Wigglesworth explains how investors are using AI to get an edge on rivals.

How Israel used NSO spyware as diplomatic calling card The Israeli company assailed by rights activists for selling military-grade surveillance software to repressive regimes played a crucial role in its government’s attempts to woo countries such as the UAE, Bahrain and Saudi Arabia, revealing the tech unicorn’s close ties with the highest echelons of the Israeli state.

Corporate values must go beyond buzzwords Official statements of corporate values are often a maddening mix of hokum and gibberish. Integrity, innovation, respect, responsibility and sustainability topped the list of popular buzzwords over the past two years. Brooke Masters suspects their popularity lies in the fact that they are extremely hard to measure.

Motoring

Classic cars, trending trucks and a fleet of Silver Surfers. How To Spend It’s summer series on motoring is now available.

Recommended newsletters for you

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