Finance

Circle CEO Jeremy Allaire said that 2024 is likely the year that the U.S. passes concrete laws for the stablecoin industry.
Stablecoins, which allow traders to move in and out of crypto, are a $135.3 billion market but they are for the most part unregulated.
The U.S. is yet to pass federal crypto regulation, even as jurisdictions around the world are approving new crypto-focused laws.
But Allaire hopes that things will change this year, stating that there is a “very good chance” U.S. lawmakers approve a stablecoin bill.

A picture taken in London shows gold-plated souvenir cryptocurrency tether, bitcoin and ethereum coins arranged beside a screen displaying a trading chart, May 8, 2022.
Justin Tallis | Afp | Getty Images

The CEO of Circle, the company behind popular stablecoin USD Coin, sees a strong chance that laws for stablecoin issuers like itself will come through in 2024.
Stablecoins, which allow traders to move in and out of crypto, are a $135.3 billion market — but they are for the most part unregulated. The U.S. is yet to pass federal crypto regulation, even as jurisdictions around the world are approving new crypto-focused laws.

But Jeremy Allaire, Circle’s boss and co-founder, hopes that things will change this year, stating that there is a “very good chance” U.S. lawmakers approve a stablecoin bill.
Speaking with CNBC at the World Economic Forum in Davos, Switzerland, Allaire said regulatory developments around the crypto industry were picking up around the world, and that the U.S. was more than likely to approve laws for stablecoins than before.
“I think what you’re seeing is a desire from the administration, a desire from the Treasury, from the [Federal Reserve], by both chambers of Congress, and certainly on a bipartisan basis,” Allaire told CNBC Monday.

“Digital dollars are happening around the world, other governments are regulating dollar-digital currencies before the United States. And so I think there is a very strong desire to act and assert U.S. leadership and get the right consumer protections involved,” Allaire added.  
Allaire was asked about the Clarity for Payment Stablecoins Act, which seeks to bring stablecoins within the same regulatory frameworks that govern traditional financial services companies.

The act was passed by the House Financial Services Committee in 2023, moving it to the floor of the House of Representatives for consideration. It has yet to be approved lawmakers in the House.
Circle recently filed its confidential S-1 registration with the U.S. Securities and Exchange Commission, showcasing the company’s intention to list publicly. The firm did not give away any information on the timing of its IPO, which came the same week that the SEC approved the first U.S. spot bitcoin ETFs.
Allaire, asked about whether the timing of Circle’s listing was in response to the SEC’s ETF approval, said he couldn’t comment on the development due to regulatory restrictions.
Crypto had a buoyant year in 2023 with markets seeing a major recovery, and industry insiders are hoping for an even more fortunate 2024 for the industry.
“Stablecoins in particular remain the killer app for blockchain technology,” Allaire told CNBC. “We’re starting to see widening usage all around the world.”
“It’s been a really powerful time for that and we think 2024, with things like the spot ETF and world regulatory clarity, is going to open this up even wider.”
Dante Disparte, Circle’s chief strategy officer and global head of public policy, echoed Allaire’s view that 2024 would be the year that the U.S. sees rules for stablecoins coming in.
“I remain optimistic that payments stablecoin policy is a possibility early in the new year. And that is increasingly a bipartisan reality, in no small measure,” Disparte told CNBC’s MacKenzie Sigalos on the sidelines of Davos.

Disparte suggested that concerns around illicit usage of some cryptocurrencies could spur U.S. lawmakers on to bring stablecoin laws into place, as stablecoins provide more of a legitimate use case for everyday purchases and trade compred to their more volatile neighbors in crypto, which have been associated heavily with criminal activity.
“You’ve seen in the conflict in the Middle East, for example, the use of certain digital assets in the space as a vehicle for funding terrorism,” Disparte said.
“Domestically in the United States, you can see the use of certain assets in the space as a vehicle for funding fentanyl trafficking, and worse, all of those types of illicit actions that are bad for the U.S. dollar are bad for the U.S. economy, bad for the sector, bad for banking and payments, and bad for people,” Disparte said.
“Unless that is addressed, that would be against the interest of the country [and] the economy. So I remain optimistic that this will be a year where policymakers actually get around to doing something affirmatively on stablecoins, as opposed to through enforcement,” Circle’s policy chief added.
—CNBC’s MacKenzie Sigalos contributed to this article. More

The Securities and Exchange Commission’s approval of 11 spot bitcoin ETFs this week could be a turning point for cryptocurrency investing.
Ark Invest CEO and Chief Investment Officer Cathie Wood is behind one of the new ETFs. Her firm partnered with 21Shares to launch the ARK 21Shares Bitcoin ETF.

“We really believe this is an important moment for us to help with the democratization of bitcoin access, giving more people access,” Wood told “ETF Edge” on Monday.
The first-ever batch of spot ETFs began trading Thursday. Investor interest in bitcoin leading up to the historic ETF approvals has been on the upswing. As of Friday, the cryptocurrency is up more than 125% in the past 12 months.
As financial firms begin to get more exposure through the new instruments, Wood said, the impact on bitcoin prices will be noticeable. 
“If institutions with trillions of dollars under management just put 0.2[%] or 0.5% in, that could really move the needle,” Wood said.
Ophelia Snyder’s firm 21.co is heavily involved in the cryptocurrency space. According to its website, the firm “bridges traditional finance and decentralized finance for easy crypto access.”

“It’s also very much part of a new wave of disruptive technology,” the firm’s president and co-founder told “ETF Edge.”
Snyder contended that bitcoin goes beyond being just a new asset class.

“It’s also very much part of a new wave of disruptive technology.”

Ophelia Snyder
21.CO President and Co-Founder

“There’s still quite a ways to go in terms of how this actually will interact both with the world at large and sort of our economic systems, as well as, quite frankly, how it will end up interacting with your portfolio,” she said. 
Snyder also said the impact that wider bitcoin access could have on the broader market “can’t be underestimated.”
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Deflation is when prices fall outright for goods and services.
Prices declined in 2023 in categories such as physical goods, groceries and energy, according to the December consumer price index.
Supply and demand have normalized and a stronger U.S. dollar makes it cheaper to import goods.

Extreme-photographer | E+ | Getty Images

As inflation continues to throttle back across the broad U.S. economy, some consumer categories have sunk into outright deflation.
In other words: Americans are seeing prices decline for certain items.

Those pullbacks have largely been among physical goods rather than services, economists said.

Demand for goods soared early in the Covid-19 pandemic, as consumers were confined to their homes. The health crisis also snarled global supply chains for those goods. These dynamics drove up prices. Now, they’re falling back to earth.
“You have seen some [price] give-back in some categories that were most affected by the shift in consumer demand, as well as being affected most severely by some of the supply-chain issues we saw over the course of the pandemic,” according to Sarah House, senior economist at Wells Fargo Economics.

A shift away from spending on goods

For example, average prices have declined in these categories, among others, since December 2022: toys (by 4.5%), college textbooks (4.9%), televisions (10.3%), men’s suits, sport coats, and outerwear (6%), sporting goods (2.5%), furniture and bedding (4.3%), and computer software and accessories (9.9%), according to the consumer price index.
“We bought a lot of goods because we couldn’t go out, travel, go to ballgames” early in the pandemic, said Mark Zandi, chief economist at Moody’s Analytics. “There has been a shift from goods to things we couldn’t do when we were shut in.”

Prices for used cars and trucks have also fallen, by 1.3%, according to CPI data.
Used and new vehicle prices were among the first to surge when the U.S. economy reopened broadly early in 2021, amid a shortage of semiconductor chips essential for manufacturing.
However, price levels on used cars remain more than 30% higher than they were pre-pandemic, meaning there’s likely still ample room for a reversal, said Andrew Hunter, deputy chief U.S. economist at Capital Economics.

There are other deflationary dynamics

Broadly, a historically strong U.S. dollar relative to other global currencies has also helped rein in goods prices, Zandi said. This makes it cheaper for U.S. companies to import goods from overseas, since the dollar can buy more.
The Nominal Broad U.S. Dollar Index is higher than at any pre-pandemic point dating to at least 2006, according to U.S. Federal Reserve data as of early January. The index gauges the dollar’s appreciation relative to currencies of the U.S.′ main trading partners such as the euro, Canadian dollar, British pound, Mexican peso and Japanese yen.
More from Personal Finance:Here’s the inflation breakdown for December 2023Deflation vs. disinflation: One is ‘the more ideal outcome’Why workers’ raises are smaller in 2024
Falling energy prices have also put downward pressure on goods prices, due to lower transportation and energy-intensive manufacturing costs, economists said.
However, attacks by Houthi militias on merchant ships in the Red Sea — a major trade route — are causing freight costs to spike, potentially leading some goods deflation to reverse, Zandi said.

Lower energy prices also put downward pressure on food transportation to store shelves.
Egg and lettuce prices, for example, have also declined significantly after having soared in 2022. Among the reasons for those initial shocks: a historic outbreak of avian influenza in the U.S., which is extremely lethal among birds such as egg-laying hens, and an insect-borne virus that raged through the Salinas Valley growing region in California, which accounts for about half of U.S. lettuce production.

How measurement quirks affect price data

Elsewhere, some deflationary dynamics are happening only on paper.
For example, the U.S. Bureau of Labor Statistics, which compiles the CPI report, controls for quality improvements over time. Electronics such as televisions, cellphones and computers continually get better. Consumers get more for roughly the same amount of money, which shows up as a price decline in the CPI data. 
Health insurance, which falls in the “services” side of the U.S. economy, is similar.

The Bureau of Labor Statistics doesn’t assess health insurance inflation based on consumer premiums. It does so indirectly by measuring insurers’ profits. This is because insurance quality varies greatly from person to person. One person’s premiums may buy high-value insurance benefits, while another’s buys meager coverage.
Those differences in quality make it difficult to gauge changes in health insurance prices with accuracy.
The 27.1% decline in health insurance prices last year reflects smaller insurer profits in 2021 relative to 2020.
These sorts of quality adjustments mean consumers don’t necessarily see prices drop at the store — only on paper. More

Citigroup said it was cutting 10% of its workforce in a bid to help boost the embattled bank’s results and stock price.
In November, CNBC reported that managers and consultants involved in CEO Jane Fraser’s restructuring discussed job cuts of 10%.
The company has since executed several waves of layoffs, with another round of cuts set for Jan. 22, according to a source.

Citigroup CEO Jane Fraser at the World Economic Forum in Davos, Switzerland, on Jan. 17, 2023.
Adam Galica | CNBC

Citigroup said it was cutting 10% of its workforce in a bid to help boost the embattled bank’s results and stock price.
About 20,000 employees will be let go over the “medium term,” New York-based Citigroup said Friday in a slideshow tied to fourth-quarter earnings. While it wasn’t immediately clear how long that is, the bank has previously used that term to denote a three- to five-year period.

Citigroup had roughly 200,000 workers at the end of 2023, excluding Mexican operations that are in the process of being spun out, according to the presentation.
Citigroup CEO Jane Fraser announced a sweeping overhaul of the third-largest U.S. bank by assets in September. The company has been left behind by peers since the 2008 financial crisis as Fraser’s predecessors couldn’t get a handle on expenses and is the lowest valued among the six biggest U.S. banks.
In November, CNBC reported that managers and consultants involved in the effort — known internally by the code name “Project Bora Bora” — discussed job cuts of 10% in several major businesses.

Next round of cuts

The company has since executed several waves of layoffs, beginning with the top layers of the bank, with another round of cuts set for Jan. 22, according to a person familiar with the matter. A Citigroup spokeswoman declined to comment.
American banks have been trimming jobs all throughout the past year, led by Wells Fargo and Goldman Sachs, to lower costs amid stagnant revenue. Citigroup had been a notable outlier, maintaining staffing levels at around 240,000 for all of 2023, including its Mexico operations.

Citigroup said Friday it booked a $780 million charge in the fourth quarter tied to Fraser’s restructuring project, and that it may post another $1 billion in severance and other expenses in 2024. The moves could help trim up to $2.5 billion in costs over time, the bank said.

Permanent vacation

In a footnote to its presentation, Citigroup said the 20,000 job cuts could be “slightly lower” if it chooses to use internal resources rather than outsource functions.
Given the outlook for thousands of more job cuts over the next few years, some Citigroup employees are using vacation time or mental health leave to search for their next position, said the person familiar with the matter, who declined to be identified speaking about personnel matters.
“People are looking aggressively,” the person said. “I know senior VPs who are on vacation now, but they’re never coming back.”

Don’t miss these stories from CNBC PRO: More

Hedge fund billionaire Bill Ackman said Friday that he’s starting an activist organization to fight antisemitism and reform higher education.
The Pershing Square Capital CEO was one of the loudest critics of Harvard, his alma mater, as well as the University of Pennsylvania and the Massachusetts Institute of Technology, after Hamas’ Oct. 7 attack on Israel, charging their presidents with not taking a strong stance against antisemitism on campus.

Hedge fund billionaire Bill Ackman, who recently fought a high-profile battle against Harvard University, said Friday that he’s starting an activist organization to fight antisemitism and reform higher education.
“It’s going to be a ‘think-and-do tank.’ It’s going to be an activist,” Ackman said in an interview with CNBC’s Andrew Ross Sorkin on “Squawk Box.” “I’m standing up an organization very shortly to focus on precisely what’s going on. … We’re going to study these issues. And we’re going to come up with solutions to problems and we’re going to implement.”

The Pershing Square Capital CEO was one of the loudest critics of Harvard, his alma mater, as well as the University of Pennsylvania and the Massachusetts Institute of Technology, after Hamas’ Oct. 7 attack on Israel, charging their presidents with not taking a strong stance against antisemitism on campus.
Harvard president Claudine Gay later resigned following sharp criticism of her testimony before Congress in early December where she and other academic leaders were grilled over tolerance of antisemitism on campus. In addition, Gay faced accusations of plagiarism in her own published work.
Ackman’s fight took a turn when online publication Business Insider posted a story that included similar accusations of plagiarism against his wife, Neri Oxman, who is an architect, designer and a former professor at MIT.
“It started with antisemitism on campus, and then I got concerned about governance at Harvard. … Then I have broader concerns about higher education generally,” Ackman said. “I think these are very important issues. And these are issues that will require resources to be focused on.”
Ackman, whose Pershing Square oversees nearly $15 billion in assets under management, said he’s going to hire a CEO and put together a board of directors for the new organization.

“This kind of activism now requires… a serious team,” Ackman said. “We’re going to go after these issues in a very aggressive way.”Don’t miss these stories from CNBC PRO: More

Jane Fraser, CEO of Citigroup, attends a hearing on Annual Oversight of Wall Street Firms before the Senate Committee on Banking, Housing, and Urban Affairs in Washington, D.C., the United States, on Dec. 6, 2023. 
Tom Williams | Cq-roll Call, Inc. | Getty Images

Citigroup reported fourth-quarter earnings before the opening bell Friday.
Here’s what the company reported compared with what Wall Street analysts surveyed by LSEG, formerly known as Refinitiv, were expecting:

Earnings: adjusted 84 cents a share, may not compare with expected 81 cents
Revenue: $17.44 billion, vs. expected $18.74 billion

Citigroup CEO Jane Fraser announced plans for a sweeping corporate reorganization in September after previous efforts failed to boost the bank’s results and share price.
The bank has said it will disclose how much the overhaul will impact headcount and reduce expenses with fourth-quarter results. Wednesday evening, the company said it booked bigger charges in the quarter than previously disclosed.
Citigroup has already said it would exit municipal bond and distressed debt trading operations as part of the streamlining exercise.
The third biggest U.S. bank by assets had 240,000 employees as of September, second only to the far more profitable JPMorgan Chase.
JPMorgan and Bank of America posted results earlier Friday, while Goldman Sachs and Morgan Stanley report Tuesday.
This story is developing. Please check back for updates. More

Wells Fargo shares fell Friday even after fourth-quarter profit rose from a year ago, as the bank warned that net interest income for 2024 could come in significantly lower year over year.
Here’s what the bank reported versus what Wall Street was expecting based on a survey of analysts by LSEG, formerly known as Refinitiv:

·       Revenue: $20.48 billion vs. $20.30 billion expected
Wells Fargo’s stock fell 1% before the bell.
Total revenue came in at $20.48 billion for the period. That’s a 2% increase from the fourth quarter of 2022 when Wells Fargo posted $20.3 billion in revenue. The bank also posted net income of $3.45 billion, or 86 cents per share, up slightly from $3.16 billion, or 75 cents a share a year ago.
Earnings were lowered by a $1.9 billion charge from a FDIC special assessment and a $969 million charge from severance expenses. Wells Fargo also recorded a $621 million, or 17 cents per share, tax benefit.
“As we look forward, our business performance remains sensitive to interest rates and the health of the U.S. economy, but we are confident that the actions we are taking will drive stronger returns over the cycle,” said Chief Executive Officer Charlie Scharf in a release. “We are closely monitoring credit and while we see modest deterioration, it remains consistent with our expectations.”

Wells Fargo said net interest income fell 5% from a year ago to $12.78 billion, and warned that the figure could come in 7% to 9% lower for the year from $52.4 billion in 2023. The decline in net interest income was due to lower deposit and loan balances, but offset slightly by higher interest rates, the bank said.
Provisions for credit losses rose 34% to $1.28 billion from $957 million a year ago, as allowances for credit losses rose for credit card and commercial real estate loans. Wells Fargo said that was partially offset by lower allowances for auto loans.
Wells Fargo shares are virtually flat this year after rallying more than 19% in 2023. During the period the 10-year Treasury yield topped the 5% threshold in October, before finishing the year below 3.9%.
This story is developing. Please check back for updates. More

The bank said quarterly earnings slipped 15% to $9.31 billion, or $3.04 per share, from a year earlier.
Excluding the fee tied to the regional banking crisis and $743 million in investment losses, earnings would have been $3.97 per share, according to JPMorgan.

Jamie Dimon, Chairman of the Board and Chief Executive Officer of JPMorgan Chase & Co., gestures as he speaks during an interview with Reuters in Miami, Florida, U.S., February 8, 2023. 
Marco Bello | Reuters

JPMorgan Chase said Friday that fourth quarter profit declined after paying a $2.9 billion fee tied to the government seizures of failed regional banks last year.
Here’s what the company reported vs. what analysts surveyed by LSEG, formerly known as Refinitiv, expected:

Earnings per share: $3.04, may not compare with expected $3.32
Revenue: $39.94 billion, vs. expected $39.78 billion

The bank said quarterly earnings slipped 15% to $9.31 billion, or $3.04 per share, from a year earlier. Excluding the fee tied to the regional banking crisis and $743 million in investment losses, earnings would have been $3.97 per share, according to JPMorgan.
Revenue climbed 12% to $39.94 billion, edging out analysts’ expectations.
JPMorgan CEO Jamie Dimon said full-year results hit a record because the largest U.S. bank by assets performed better than expected on net interest income and credit quality. The bank said it generated nearly $50 billion of profit in 2023, $4.1 billion of which came from First Republic.
Just as it did in the 2008 financial crisis, JPMorgan emerged larger and more profitable from last year’s regional banking chaos after acquiring First Republic, a midsized lender to wealthy coastal families. The Federal Deposit Insurance Corporation hit large U.S. banks with a special assessment to replenish losses from a fund that helped uninsured depositors of seized regional banks.
Despite his bank’s performance, Dimon struck a cautious note on the American economy.

“The U.S. economy continues to be resilient, with consumers still spending, and markets currently expect a soft landing,” Dimon said in the release.
But deficit spending and supply chain adjustments “may lead inflation to be stickier and rates to be higher than markets expect,” he said. Risks to markets and economies include central banks’ steps to rein in support programs and wars in Ukraine and the Middle East, he added.
“These significant and somewhat unprecedented forces cause us to remain cautious,” he said.
While the biggest U.S. bank by assets has navigated the rate environment capably since the Federal Reserve began raising rates in early 2022, smaller peers have seen their profits squeezed.
The industry has been forced to pay up for deposits as customers shift cash into higher-yielding instruments, squeezing margins. At the same time, rising yields mean the bonds owned by banks fell in value, creating unrealized losses that pressure capital levels.
Concern is also mounting over rising losses from commercial loans, especially office building debt, and higher defaults on credit cards.
Beyond guidance on net interest income and loan losses for this year, analysts will want to hear what Dimon has to say about banks’ efforts to tone down coming increases in capital requirements.
Beaten-down shares of banks recovered in November on expectations that the Fed had successfully managed inflation and could cut rates this year.
Shares of JPMorgan jumped 27% last year, the best showing among big bank peers and outperforming the 5% decline of the KBW Bank Index.
This story is developing. Please check back for updates. More