Gold: A Historical and Central Bank Preference

Dalio stressed that gold serves as a long-term store of value. Unlike purely speculative assets, gold has historically played a strategic role in central banks’ reserves. Dalio pointed out that past efforts to address economic problems by printing money are no longer as effective, making gold’s limited supply and irreplaceable nature a critical factor in maintaining its value over time.

“You cannot print gold at will,” Dalio noted, emphasizing that central banks acquire gold deliberately to safeguard their positions amid global economic uncertainty. Gold’s stability, he argued, clearly separates it from traditional currency and underscores its role as a reliable reserve asset.

Why Bitcoin Differs from Gold

Dalio argued that comparing Bitcoin to gold is misleading. Gold’s uniqueness comes from being a singular, finite resource. In contrast, Bitcoin, as a digital asset, behaves more like technology stocks, with price dynamics heavily influenced by market sentiment and innovation cycles. Dalio also highlighted potential privacy concerns with Bitcoin, noting that its fully transparent nature differentiates it from gold in a meaningful way.

Additionally, Dalio mentioned that advances in quantum computing could pose a theoretical risk to Bitcoin. Central banks, he believes, are unlikely to adopt Bitcoin as a reserve asset in the same manner as gold, further distancing it from the “digital gold” narrative.

Global Shifts and Geopolitical Change

Dalio also reflected on the evolving global order. He observed that U.S.-led dominance is weakening and older powers are giving way to emerging players, signaling a period of geopolitical transformation. Investors, Dalio suggests, need to recognize these structural changes when considering the relative security of assets like gold versus the speculative nature of Bitcoin.

The takeaway is clear: while gold continues to serve as a historically proven safe haven, Bitcoin remains a volatile, technology-driven investment, better understood as part of the broader risk portfolio rather than a direct substitute for gold.

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A Historic “Master Account” Approval

Kraken confirmed that its Wyoming-chartered banking subsidiary, Kraken Financial, has been granted a Federal Reserve “master account.” This designation allows the firm to connect directly to the central bank’s payment rails, including the Fedwire interbank transfer network.

With this access, Kraken can settle U.S. dollar transactions through the same infrastructure used by thousands of banks and credit unions across the country. Previously, crypto companies typically relied on intermediary banking partners to process dollar payments. Direct connectivity significantly reduces that dependency and streamlines transaction flows.

What This Means for the Crypto Industry

The decision is widely viewed as a breakthrough for the digital asset sector, which has historically faced barriers when attempting to integrate with core banking systems. Access to a master account effectively places Kraken’s banking arm within the foundational payment framework of the U.S. financial system.

However, the approval does not grant Kraken Financial the full range of services available to traditional banks. Notably, it will not be permitted to earn interest on reserves held at the Federal Reserve. Even so, the ability to directly settle payments represents a structural shift in how crypto firms can operate within the regulated financial ecosystem.

A Watershed Moment for Digital Assets

Industry observers describe the development as a turning point in the evolution of crypto’s relationship with conventional finance. By gaining entry to the Federal Reserve’s payment network, Kraken has crossed a threshold that many digital asset companies have long sought but struggled to achieve.

The milestone also arrives at a time when Kraken is reportedly exploring a potential public listing, further underscoring its ambition to position itself as a fully integrated financial institution rather than solely a crypto exchange.

As regulatory frameworks continue to evolve, this move may set a precedent for other crypto firms seeking deeper access to U.S. financial infrastructure.

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Average Inflation Target on the Table

Powell stated that the idea of a “moderate overshoot of inflation following weakness” has become obsolete. He indicated that strategies such as average inflation targeting could be reconsidered. This evaluation is interpreted as a sign that the shifting global economic dynamics in the post-pandemic era may lead to permanent changes in monetary policy.

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Emphasizing that we may be entering a period of more frequent supply shocks, Powell noted that this situation brings with it the need for new flexibility in the policy framework.

Revisions in Fed Communication on the Agenda

The Fed Chair also stated that changes to the institution’s communication style and strategic messaging could be on the table. He emphasized that the definitions used in relation to employment shortfalls and price stability goals need to be reassessed.

These statements indicate that the Fed continues its effort to adapt its current policy framework to future conditions.

Silence on the Interest Rate Path

One of the most striking aspects of Powell’s speech was the lack of any comment on the short-term economic outlook or the interest rate trajectory. This is interpreted as a conscious decision by the Fed to maintain its data-driven approach and avoid giving a clear directional signal.

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Could the PBOC Be the Catalyst for a Crypto Market Resurgence?

Arthur Hayes suggests that if the People’s Bank of China (PBOC) devalues the yuan, it could spark a new Bitcoin bull market. Hayes believes this could mirror the capital flows into Bitcoin seen in 2013 and 2015.

In the past, when the yuan weakened against the USD, it resulted in increased interest in Bitcoin. As the yuan lost value, Chinese capital flowed into cryptocurrencies, pushing Bitcoin prices higher. Experts predict this trend could repeat itself in 2025.

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According to Bybit co-founder Ben Zhou, a devaluation of the yuan could drive more capital into BTC, which would be a bullish signal for the Bitcoin market.

Historical Events and Bitcoin’s Rise

In 2015, China devalued the yuan by almost 2%, leading to its biggest single-day drop in decades. This period saw a rise in Bitcoin interest, although the direct cause-and-effect relationship is still debated. Similarly, when the yuan fell below the symbolic 7:1 ratio against the USD in 2019, Bitcoin also saw significant price increases.

Wealthy Chinese Investors Turning to Crypto

Analysts suggest that wealthy Chinese individuals have previously turned to Bitcoin and other cryptocurrencies to bypass government capital controls and preserve wealth. Furthermore, currency devaluations are believed to erode trust in central banks and government financial management, prompting people to turn to decentralized alternatives like Bitcoin.

Meta Description: Arthur Hayes suggests that China’s response to tariffs and a potential yuan devaluation could fuel capital flight into Bitcoin, sparking a new bull market in 2025.

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The CBRT last raised its policy rate in March, by 50 basis points, to 50%. This was a surprise move, as markets had expected the bank to keep rates on hold. The rate hike was part of a tightening cycle that began in June of last year, following the country’s general elections.

Inflation in Turkey remains high, reaching 75.45% as of May, the highest level since the end of 2022. The CBRT expects inflation to start to decline in June and reach 38% by the end of the year. The bank’s inflation forecast for 2025 is 14%.

CBRT Governor Sahap Kavcioglu said last week that he expects headline inflation to decline every month for the rest of the year. He also said that the bank is closely monitoring inflation developments and expectations to ensure that they converge with the bank’s forecast path.

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New Zealand Central Bank Governor Adrian Orr Shares His Thoughts on Stablecoins

The remarks by Adrian Orr, Governor of the Reserve Bank of New Zealand, were prompted by concerns over the growing popularity of decentralized digital assets such as Bitcoin and stablecoins as an alternative to traditional currencies. Despite their widespread adoption among speculative investors, Orr noted that Bitcoin and stablecoins do not function effectively as a medium of exchange or store of value.

Expressing reservations about stablecoins, Orr highlighted their dependence on the financial health of issuers, warning that they are subject to the stability of underlying balance sheets. Describing stablecoins as “the ultimate misnomer and oxymoron”, Orr emphasized their speculative nature and distinguished them from legitimate currencies issued by central banks.

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Speaking at a campaign rally in New Hampshire, Trump said that CBDCs could give the federal government too much power over money.

“I’m making another promise tonight to protect Americans from the tyranny of government,” Trump said. “As your president, I will never allow the creation of a Central Bank Digital Currency. Such a currency would give the federal government, our federal government, absolute control over your money… They can take your money and you won’t even know it’s gone.”

Donald Trump’s digital currency comments

Donald Trump’s digital currency comments come as the Federal Reserve is exploring the possibility of issuing a CBDC. Federal Reserve Governor Michelle Bowman said in October that she has not yet seen a compelling argument for a U.S. CBDC and that other alternatives could address financial challenges.

The Fed has made it clear on its website that it has not made any decisions about issuing a CBDC and would only proceed with issuance with an authorizing law. Federal Reserve Chairman Jerome Powell said in March 2023 before the House Financial Services Committee that a CBDC is “something that we would certainly need congressional approval for.”

A CBDC tracker compiled by the Atlantic Council showed that 130 countries, representing 98% of global gross domestic product, are researching a CBDC.

According to the Atlantic Council, 64 countries are in advanced stages, with the European Central Bank announcing in October that it is in the “preparation phase” for a digital euro and China completing its first international crude oil trade with the digital yuan.

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According to the information obtained, the House of Representatives also approved the bill, and is expected to be approved by President Luiz Inácio Lula da Silva, who initiated the new income tax regulation.

According to the bill approved by the Senate, Brazilians who earn income over $1,200 (approximately 6,000 Brazilian reais) from abroad will be taxed from January 1, 2024. With this change, foreign and domestic cryptocurrencies are subject to the same tax rate. The tax on money earned before 2024 will be applied when the fund owner reaches the current money. Profits from the funds available until December 31st will be taxed at 8%.

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The bill is expected to cover “special funds”, i.e., investment funds with a single shareholder, and foreign companies operating in the Brazilian financial market. The government plans to generate 20.3 billion Brazilian reais (approximately $4 billion) in tax revenue in 2024 with this practice. However, Senator Rogério Marinho opposed this bill, saying, “Government introduces a new tax because it is a bad manager.”

The President of the Central Bank of Brazil, Roberto Campos Neto, stated in September that they intend to adopt stricter regulations on cryptocurrencies. Campos Neto said this decision was made due to the rapid rise in the popularity of cryptocurrencies and the possibility of tax evasion.

In June, the Brazilian Central Bank acquired regulatory authority over digital asset service providers.

The regulation of crypto-based securities in Brazil is carried out by the Securities and Exchange Commission, which serves a similar function to the United States Securities and Exchange Commission.

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According to Serpro’s president Alexandre Amorim, blockchain’s decentralized and immutable nature makes it the most appropriate technology for Brazil’s identity project. Amorim said, “Blockchain technology plays a critical role in protecting personal data and preventing fraud, providing Brazilian citizens with a safer digital experience. The utilized b-Registries blockchain platform significantly enhances the security and reliability of the National Identity Card project.”

The issuance of the National Identity Card (CIN) now has blockchain security. Learn what changes in the document and check all the details that make the new identity card of Brazilians safer than ever!https://t.co/G2MigNkG1J

— Serpro (@SERPRO) September 25, 2023

According to the government’s statement, the identity project will play a crucial role in areas such as combating organized crime, enabling public sectors to collaborate more effectively, easier access to services, and regulation of administrative records. For the last few years, Brazil has been trying to unify 30 provinces regarding identity. It is emphasized in the announcement that secure data exchange will be provided with the new steps.

Another important development in the country is the upcoming Central Bank Digital Currency (CBDC) project. The government rebranded the digital currency as “Drex” after introducing the project in more detail in August.

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