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Pound Crashes After BOE Hikes By Most Since 1995, Starts Gilt Sales Yet Warns Of Crushing Stagflationary Recession

In what may be the most dovish double-rate hike in history, moments ago the Bank of England raised rates by the expected 50bps to 1.75% and announced it was starting gilt sales, yet at the same time the bank forecast a "long recession" driven by soaring recession (perhaps soaring stagflation would have been more appropriate).

The rate hike was supported by 8 of the 9 voters (Tenreryro voted for 25bps) who copied the RBA phrase that policy not on a "pre-set path" and also kept up a pledge to act forcefully again in the future if needed, potentially putting similar hikes on the table for coming meetings. While the UK central bank was the first major central bank to hike rates after the pandemic, and has moved at every meeting since December, it had thus far stuck to smaller, more usual moves. That left it risk of falling behind the curve, with some 70 other central banks having moved by a half-point or more this year. The Federal Reserve has raised interest rates by 75 basis points at its last two meetings, while even the European Central Bank kicked off its cycle in July with a half-point rise.

The hike comes as officials predicted a UK recession will begin in the fourth quarter, and last all the way through next year. That’s the longest slump since the financial crisis. Officials expect the economy to shrink by around 2.1% in total. Inflationary pressures have “intensified significantly,” the BOE said. “The latest rise in gas prices has led to another significant deterioration in the outlook for activity in the United Kingdom.”

The BOE also boosted its forecast for the peak of inflation from 13.1% to 13.3% in October amid a surge in gas prices, and warned that price gains will remain elevated throughout 2023 as stagflation. That will sharpen a cost of living crisis that will see real disposable incomes fall more than at any time in around 60 years.

Alongside the decision, the BOE also laid out its plans for reducing the mammoth government bond holdings it amassed during the crisis. Active sales, the first carried out by a major central bank, are likely to start after a confirmatory vote in September and will be in the region of around £10 billion a quarter. Including redemptions, the BOE sees its stock of gilts declining around £80 billion in the first year of the program. Officials said there would be a “high bar” to altering the plan. Sales of the far smaller holding of corporate bonds will begin in the week starting Sept. 19, the BOE said. Taken together the moves represent a significant step up in the BOE’s battle against inflation.

The BOE also said it plans to sell gilts from its holdings evenly across “buckets” of short, medium and long-maturity gilts, and will not schedule a gilt sales operation on the same day as an operation by the UK’s Debt Management Office.

The BOE will also launch a new Short-Term Repo facility, designed to keep short-term market rates close to the BOE’s key interest rate as it reduces the size of its balance sheet.

Here are the details from the BOE announcement:

RATES:

Eight members of the Committee judged that a 0.5 percentage point increase in Bank Rate to 1.75% was warranted at this meeting. For these members a more forceful policy action was justified.

Market rates imply more BoE tightening than May; show Bank Rate at 2.4% in 04 2022. 2.9% in Q4 2023. 2.4% in Q4 2024 (May: 1.9% in Q4 2022 2.6% in Q4 2023. 2 2% in 04 2024)
GILT SALES:

Committee is provisionally minded to commence gilt sales shortly after its September meeting subject to economic and market conditions being judged appropriate and to a confirmatory vote at that meeting.

The Committee judged that over the first twelve months of a sales programme starling in September a reduction in the stock of purchased gilts held in the APF of around GBP 80 billion was likely to be appropriate.

Given the profile of maturing gilts over this period this would imply a sales programme of around GBP 10 billion per quarter
OUTLOOK:

United Kingdom was now projected to enter recession from the fourth quarter of this year and last five quarters

The Committee would be particularly alert to indications of more persistent inflationary pressures and would if necessary act forcefully in response
FORECASTS:

BoE estimates GDP fell 0.2% QIQ in q2 2022 (June forecast: -0.3% Q/Q) sees +0.4% Q/Q in q3 2022

BoE estimates GDP in 2022 +3.5% (May forecast: +3.75%), 2023 -1.5% (May: -0.25%), 2024 -0.25% (May: +0.25%). based on market rates

BoE monetary policy report estimates unemployment rate 3.67 in Q4 2022 (May forecast: 3.61%): Q4 2023 4.68% (May: 4.26%); Q4 2024 5.68% (May: 5.05%)

BoE estimates real post-tax household disposable income in 2022 -1.5% Y/Y (May: -1.75%). 2023 -2.25% (May: +1%), 2024 +0.75% (May: +2.5%)

BoE estimates wage growth +5.25% Y/Y in 04 2022 (May forecast +5.75%). 04 2023 +5.25% (May: +4.75%). Q4 2024 +2.75% (May: +2.75%)

The forecasts, based on average energy bills increasing by 75% to around £3,500 in October, also highlight the scale of the challenge awaiting the victor of the race to replace Boris Johnson as UK prime minister.

The BOE forecasts, based on a market path for interest rates that peaks at 3% next year, show the economy contracting about 1.25% in 2023 and a further 0.25% the following year. Unemployment, meanwhile, will climb to 6.3% by 2025. Inflation will peak above 13% later this year, and still be at 9.5% in the third quarter of 2023. After that it will fall rapidly toward the 2% target as the recession saps demand.

As Bloomberg notes, even after billions of pounds of government support for struggling households, families are set to be around 5% worse off by the end of 2023 with incomes falling both this year and next. So set against the gloomy outlook, the half-point hike, unprecedented since the BOE gained independence in 1997, is a sign officials are calling time on the era of cheap money and scrambling to keep pace with a wave of global tightening from its international peers.

The BOE decision feeds into what BBG described as an increasingly acrimonious debate about who is responsible for growing cost-of-living crisis. The BOE has been blamed in some quarters for acting too slowly in face of the growing inflation threat, and Liz Truss, who is favored to win the race Johnson as prime minister, has vowed to sharpen the BOE’s mandate if she takes power. The contest for the leadership has also made the task of forecasting the economy harder. The final two candidates are offering widely differing views on tax cuts and borrowing levels, with front runner Liz Truss advocating the more radical path. By convention, the BOE bases its forecasts on announced government policy, so the predictions don’t take into account anything brought up during the campaign.

With inflation soaring, the vote split on rates was more forceful than expected, with most economists expecting the nine-member Monetary Policy Committee to vote 7-2 for a 50 basis-point hike. Only Silvana Tenreyro backed a smaller move, saying rates may already have reached a level consistent with returning inflation to target and flagging worries about squeezed household incomes.

Minutes of the meeting showed officials kept in a pledge to move “forcefully” on rates if needed in future - language which paved the way for the half-point hike this month. Policy makers also added guidance that “policy was not on a preset path.”

Summarizing the uber-dovish-mega-hike, Vanda Research FX strategist Viraj Patel said that "this is what EM central banks do hike rates into a recession. Stagflation trade in the UK back on. And that's not good news for $GBP that cares about growth more than defensive rate hikes"

In kneejerk response, cable, which had risen into the decision, immediately tumbled as it realized the rate hikes will be limited in the face of the coming recession, and plunged more than 100 pips below 1.21 to a session low of 1.2086 so far as markets digested the grim projections from the BoE, especially the 5 quarter recession.

At the same time, Gilts spiked and sent yields sliding to session lows of 1.84% as the coming "long recession" means massive curve inversion.

Following the announcement, market pricing has a 25bps in Sept entirely priced in with a 30% chance of a 50bps rate hike. Further out, end-2022 pricing is relatively unchanged from pre-release levels with 100bps of further upside implied before the barrage of rate cuts and new QE begins.

https://www.zerohedge.com/markets/pound-crashes-after-boe-hikes-most-1995-starts-gilt-sales-yet-warns-crushing-stagflationary

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Brad Garlinghouse In Washington 🚀

It’s time for a fair and open level playing field.

Under Gary Gensler it was quite the opposite.

  • Brad Garlinghouse
    July 9, 2025
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More Of The Same...l

🚨 JUST IN: Patriot Tom Fitton, who has been fighting DOJ and FBI to release documents for years, has practically thrown in the towel.

👉 "The justice department and the FBI are irredeemably compromised and corrupted.
The leadership needs to understand that and act accordingly." ~Tom Fitton

00:01:30
👉 Coinbase just launched an AI agent for Crypto Trading

Custom AI assistants that print money in your sleep? 🔜

The future of Crypto x AI is about to go crazy.

👉 Here’s what you need to know:

💠 'Based Agent' enables creation of custom AI agents
💠 Users set up personalized agents in < 3 minutes
💠 Equipped w/ crypto wallet and on-chain functions
💠 Capable of completing trades, swaps, and staking
💠 Integrates with Coinbase’s SDK, OpenAI, & Replit

👉 What this means for the future of Crypto:

1. Open Access: Democratized access to advanced trading
2. Automated Txns: Complex trades + streamlined on-chain activity
3. AI Dominance: Est ~80% of crypto 👉txns done by AI agents by 2025

🚨 I personally wouldn't bet against Brian Armstrong and Jesse Pollak.

👉 Coinbase just launched an AI agent for Crypto Trading

🎁 As of July 8th there have been 84 VERI SmartMetal NFT Activations (1.3%). With shipments ramping up, we witness the corresponding jump in activations.

Need help getting started? Check out our knowledge base to get the info you need: https://veridao.freshdesk.com/support/solutions/articles/51000487052-what-are-the-nft-activation-steps

👉Interested in which NFTs have been activated? Check them out here:
https://basescan.org/token/0x4516a5d613c30a36d157d3b579813734cbb929a4

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🚨BREAKING: The US House Committee on Financial Services says that next week the House will deliver on President Trump's call to make the US the "crypto capital of the world!

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Brinc Launches Web3 Accelerator with Octopus, XDC & IDA

Brinc Launches Web3 Accelerator with Octopus, XDC & IDA to Transform Hong Kong’s Loyalty and Payment Systems.

Read more: https://www.brinc.io/blog/brinc-launches-octopus-backed-web3-accelerator-program-to-revolutionize-hong-kongs-retail-loyalty-and-payment-ecosystem-with-xdc-and-ida-as-key-web3-infrastructure-partners/

🔗 Startups can apply from July 10

📅 Launching Sept 8

Learn more about the Web3 Accelerator program and apply now: https://www.brinc.io/stablecoin-accelerator/

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Musk Turns On Starlink to Save Iranians from Regime’s Internet Crackdown

Elon Musk, the world’s richest man and a visionary behind SpaceX, has flipped the switch on Starlink, delivering internet to Iranians amid a brutal regime crackdown.

This move comes on the heels of Israeli strikes targeting Iran’s nuclear facilities, as the Islamic Republic cuts off online access.

The former Department of Government Efficiency chief activated Starlink satellite internet service for Iranians on Saturday following the Islamic Republic's decision to impose nationwide internet restrictions.

As the Jerusalem Post reports, that the Islamic Republic’s Communications Ministry announced the move, stating, "In view of the special conditions of the country, temporary restrictions have been imposed on the country’s internet."

This action followed a series of Israeli attacks on Iranian targets.

Starlink, a SpaceX-developed satellite constellation, provides high-speed internet to regions with limited connectivity, such as remote areas or conflict zones.

Elizabeth MacDonald, a Fox News contributor, highlighted its impact, noting, "Elon Musk turning on Starlink for Iran in 2022 was a game changer. Starlink connects directly to SpaceX satellites, bypassing Iran’s ground infrastructure. That means even during government-imposed shutdowns or censorship, users can still get online, and reportedly more than 100,000 inside Iran are doing that."

During the 2022 "Woman, Life, Freedom" protests, Starlink enabled Iranians to communicate and share footage globally despite network blackouts," she added.

MacDonald also mentioned ongoing tests of "direct-to-cell" capabilities, which could allow smartphone connections without a dish, potentially expanding access and supporting free expression and protest coordination.

Musk confirmed the activation, noting on Saturday, "The beams are on."

This follows the regime’s internet shutdowns, which were triggered by Israeli military actions.

Adding to the tension, Israeli Prime Minister Benjamin Netanyahu addressed the Iranian people on Friday, urging resistance against the regime.

"Israel's fight is not against the Iranian people. Our fight is against the murderous Islamic regime that oppresses and impoverishes you,” he said.

Meanwhile, Reza Pahlavi, the exiled son of Iran’s last monarch, called on military and security forces to abandon the regime, accusing Supreme Leader Ayatollah Ali Khamenei in a Persian-language social media post of forcing Iranians into an unwanted war.

Starlink has been a beacon in other crises. Beyond Iran, Musk has leveraged Starlink to assist people during natural disasters and conflicts.

In the wake of hurricanes and earthquakes, Starlink has provided critical internet access to affected communities, enabling emergency communications and coordination.

Similarly, during the Ukraine-Russia conflict, Musk activated Starlink to support Ukrainian forces and civilians, ensuring they could maintain contact and access vital information under dire circumstances.

The genius entrepreneur, is throwing a lifeline to the oppressed in Iran, and the libs can’t stand it.

Conservative talk show host Mark Levin praised Musk’s action, reposting a message stating that Starlink would "reconnect the Iranian people with the internet and put the final nail in the coffin of the Iranian regime."

"God bless you, Elon. The Starlink beams are on in Iran!" Levin wrote.

Musk, who recently stepped down from leading the DOGE in the Trump administration, has apologized to President Trump for past criticisms, including his stance on the One Big Beautiful Bill.

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Your generosity keeps this mission alive, for all! Namasté 🙏 Crypto Michael ⚡  The Dinarian

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GENIUS Act lets State banks conduct some business nationwide. Regulators object

The Senate passed the GENIUS Act for stablecoins last week, but significant work remains before it becomes law. The House has a different bill, the STABLE Act, with notable differences that must be reconciled. State banking regulators have raised strong objections to a provision in the GENIUS Act that would allow state banks to operate nationwide without authorization from host states or a federal regulator.

The controversial clause permits a state bank with a regulated stablecoin subsidiary to provide money transmitter and custodial services in any other state. While host states can impose consumer protection laws, they cannot require the usual authorization and oversight typically needed for out-of-state banking operations.

The Conference of State Bank Supervisors welcomed some changes in the GENIUS Act but remains adamantly opposed to this particular provision. In a statement, CSBS said:

“Critical changes must be made during House consideration of the legislation to prevent unintended consequences and further mitigate financial stability risks. CSBS remains concerned with the dramatic and unsupported expansion of the authority of uninsured banks to conduct money transmission or custody activities nationwide without the approval or oversight of host state supervisors (Sec. 16(d)).”

The National Conference of State Legislatures expressed similar concerns in early June, stating:

“We urge you to oppose Section 16(d) and support state authority to regulate financial services in a manner that reflects local conditions, priorities and risk tolerances. Preserving the dual banking system and respecting state autonomy is essential to the safety, soundness and diversity of our nation’s financial sector.”

Evolution of nationwide authorization

Section 16 addresses several issues beyond stablecoins, including preventing a recurrence of the SEC’s SAB 121, which forced crypto assets held in custody onto balance sheets. However, the nationwide authorization subsection was added after the legislation cleared the Senate Banking Committee, with two significant modifications since then.

Originally, the provision applied only to special bank charters like Wyoming’s Special Purpose Depository Institutions or Connecticut’s Innovation Banks. Examples include crypto-focused Custodia Bank and crypto exchange Kraken in Wyoming, plus traditional finance player Fnality US in Connecticut. Recently the scope was expanded to cover most state chartered banks with stablecoin subsidiaries, possibly due to concerns about competitive advantages.

Simultaneously, the clause was substantially tightened. The initial version allowed state chartered banks to provide money transmission and custody services nationwide for any type of asset, which would include cryptocurrencies. Now these activities can only be conducted by the stablecoin subsidiary, and while Section 16(d) doesn’t explicitly limit services to stablecoins, the GENIUS Act currently restricts issuers to stablecoin related activities.

However, the House STABLE Act takes a more permissive approach, allowing regulators to decide which non-stablecoin activities are permitted. If the House version prevails in reconciliation, it could result in a significant expansion of allowed nationwide banking activities beyond stablecoins.

Is it that bad?

As originally drafted, the clause seemed overly permissive.

The amended clause makes sense for stablecoin issuers. They want to have a single regulator and be able to provide the stablecoin services throughout the United States. But it also leans into the perception outside of crypto that this is just another form of regulatory arbitrage.

The controversy over Section 16(d) reflects concerns about creating a regulatory gap that allows banks to operate interstate without the oversight typically required from either federal or state authorities. As the two Congressional chambers work toward reconciliation, lawmakers must decide whether stablecoin legislation should include provisions that effectively reduce traditional banking oversight requirements.

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If you find value in my content, consider showing your support via:

💳 PayPal: 
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Dubai regulator VARA classifies RWA issuance as licensed activity
Virtual Asset Regulatory Authority (VARA) leads global regulatory framework - makes RWA issuance licensed activity in Dubai.

Real-world assets (RWAs) issuance is now licensed activity in Dubai.

~ Actual law.
~ Not a legal gray zone.
~ Not a whitepaper fantasy.

RWA issuance and listing on secondary markets is defined under binding crypto regulation.

It’s execution by Dubai.

Irina Heaver explained:

“RWA issuance is no longer theoretical. It’s now a regulatory reality.”

VARA defined:

- RWAs are classified as Asset-Referenced Virtual Assets (ARVAs)

- Secondary market trading is permitted under VARA license

- Issuers need capital, audits, and legal disclosures

- Regulated broker-dealers and exchanges can now onboard and trade them

This closes the gap that killed STOs in 2018.

No more tokenization without venues.
No more assets without liquidity.

UAE is doing what Switzerland, Singapore, and Europe still haven’t:

Creating enforceable frameworks for RWA tokenization that actually work.

Matthew White, CEO of VARA, said it perfectly:

“Tokenization will redefine global finance in 2025.”

He’s not exaggerating.

$500B+ market predicted next year.

And the UAE just gave it legal rails.

~Real estate.
~Private credit.
~Shariah-compliant products.

Everything is in play.

This is how you turn hype into infrastructure.

What Dubai is doing now is 3 years ahead of everyone else.

Founders, investors, ecosystem builders:

You want to build real-world assets onchain.

Don’t waste another year waiting for clarity.

Come to Dubai.

It’s already here.

 

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If you find value in my content, consider showing your support via:

💳 PayPal: 
1) Simply scan the QR code below 📲
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🔗 Crypto – Support via Coinbase Wallet to: [email protected]

Or Buy me a coffee: https://buymeacoffee.com/thedinarian

Your generosity keeps this mission alive, for all! Namasté 🙏 Crypto Michael ⚡  The Dinarian

 

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