Dogecoin surges as Tesla accepts payments; BOE warned on CBDC: crypto moves

LONDON: Cryptocurrency dogecoin jumped more than 20 percent on Friday as Tesla began accepting it as payment for merchandise in its online store.

Tesla CEO Elon Musk tweeted: “Tesla merch buyable with Dogecoin,” delivering on a pledge he made in December 2021.

The digital coin, originally created as a joke in 2013 but since considered a legitimate investment product, was 14 percent higher at $0.1972 as of 10:19 a.m. in London.

Musk helped dogecoin soar about 4,000 percent in 2021 with tweets such as “how much is that doggy in the window?” and claims that it is the “people’s crypto.”

e-pound warning

A central bank digital currency managed by the Bank of England and used by consumers could harm financial stability, raise the cost of credit and erode privacy, but a version for wholesale use in the financial sector demands greater appraisal, a committee of the UK’s House of Lords said on Thursday.

Britain’s central bank and finance ministry said in November they would hold a consultation in 2022 on whether to proceed with a CBDC that would be introduced after 2025 at the earliest.

Central banks globally have stepped up their plans for CBDCs to head off potential risks from private cryptocurrencies dominating digital payments. However, an electronic pound used for everyday payments could see people move cash from bank accounts to digital wallets, undermining banks and causing financial instability, said the committee.

It could also increase borrowing costs as banks lost one of their key sources of funding, the Economic Affairs Committee said. The central bank’s ability to monitor transactions could also harm privacy, it said.

Many of the benefits of a CBDC for consumers could be “achieved by alternative means with fewer risks,” committee chair Michael Forsyth told Reuters, suggesting regulation would be a better tool to ward off the threat of crypto issued by Big Tech firms.

However, a wholesale CBDC used to transfer large sums could make securities trading and settlement more efficient, the report said. Britain’s central bank and finance ministry should consult on its advantages over the expansion of the existing settlements system, it said.

Britain’s parliament should have the final say on any decision to launch an e-pound, the report said, calling for lawmakers to also vote on its governance.

Mind the NFT Gap

Clothing retailer Gap launched non-fungible tokens of its iconic hoodies on Thursday, helping send its shares about 5 percent higher.

The company’s push into virtual assets follows similar moves by brands such as Nike, which last month announced the acquisition of NFT maker RTFKT. Mattel Inc. has also launched NFT versions of its Barbie and Hot Wheels lines.

While NFTs of artworks have sold for millions of dollars in the past year, Gap said its NFTs will be priced from about $8.30 to $415 for a collectible that comes with a physical hoodie.

Gap is collaborating with Brandon Sines, the artist behind the Frank Ape cartoon, on the NFT collection that is being hosted on the Tezos blockchain.