Friday, June 2, 2023

Employment data isn't all it's cracked up to be, bank stablecoins are about to become a big thing, not all enterprise metaverse ideas are dumb, and more

“The whole of life is just like watching a film. Only it's as though you always get in ten minutes after the big picture has started, and no-one will tell you the plot, so you have to work it out all yourself from the clues.” ― Terry Pratchett

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WHAT I’M WATCHING

Employment data isn’t all it’s cracked up to be. Markets may obsess over job statistics, but their role in determining the trajectory of inflation and interest rates is debatable. More on this below.

Bank stablecoins in a legal framework! A year ago, Japan became one of the first countries to pass a legal framework around stablecoins, essentially defining them as money and allowing their issuance by licensed banks, registered money transfer agents and trust companies. Yesterday, this law came into force and, on cue, MUFG – the largest financial group in Japan – announced plans to issue native bank-backed stablecoins on multiple public blockchains, including Ethereum, Avalanche, Cosmos and Polygon. The timing is unclear, but this is potentially huge, and could not only have a significant impact on the country’s crypto markets, it could also kickstart a wave of security token issuance. More to come on this, no doubt.

Virtual travel? Another interesting experiment in enterprise metaverse applications – Japan’s largest airline is developing a virtual tourism app in order to promote actual trips, produced by the director of Final Fantasy XV. It has also unveiled an NFT marketplace which will feature 3d models of aeroplanes, which will have some appeal to enthusiasts but which could also evolve into a loyalty program.

Peter Schiff. For those of you who don’t know who Peter Schiff is, he is a well-known economist and gold bug. He has long been a bitcoin sceptic, often engaging in public arguments with his son who is a bitcoin enthusiast. Over the past couple of weeks, he has started tweeting about Bitcoin ordinals, even launching a bitcoin-based art project, and is even going to be speaking at a blockchain conference. At first, I thought his account had been hacked, and then that he might just be making fun of the crypto community. But (she says tentatively) it seems to be real. This is not the “conversion” it may at first seem – he still doesn’t think BTC is worth anything. But it is an example of how the concept of crypto assets is vast and diverse and has something for everyone. It also serves as a reminder that we just never know what will resonate with individuals. If even Peter Schiff can get interested, other prominent sceptics are also likely to take another look.

MARKETS

Employment data is not that significant

Since traders around the world and across assets are eagerly awaiting today’s US employment data, due shortly after you receive this email, it’s worth asking why these figures attract so much attention.