Finance

U.S. prosecutors on Tuesday recommended an above-guidance, 36-month sentence for former Binance CEO Changpeng Zhao.
Zhao should serve a higher sentence than suggested under advisory guidelines to “reflect the gravity of his crimes,” prosecutors said.
Zhao stepped down as Binance’s CEO in November last year after reaching a plea deal with the U.S. Department of Justice.

Changpeng Zhao, founder and CEO of Binance, attends the Viva Technology conference dedicated to innovation and startups at Porte de Versailles exhibition center in Paris on June 16, 2022.
Benoit Tessier | Reuters

U.S. prosecutors are seeking an above-guidance sentence of 36 months for the former CEO of cryptocurrency exchange Binance on charges of enabling money laundering, according to a sentencing memorandum out late Tuesday.
The memorandum, which was filed with the court for the western district of Washington, states that Zhao should serve a higher sentence that suggested under advisory guidelines to “reflect the gravity of his crimes.”

Under advisory guidelines, Zhao’s sentencing would come in at a range of 12 to 18 months in prison.
“A custodial sentence of 36 months—twice the high end of the Guidelines range—would reflect the seriousness of the offense, promote respect for law, afford adequate deterrence, and be sufficient but not greater than necessary to achieve the goals of sentencing,” U.S. prosecutors said.
Zhao is accused of wilfully failing to implement an effective anti-money laundering program as required by the Bank Secrecy Act, and of effectively allowing Binance to process transactions involving proceeds of unlawful activity, including transactions between Americans and individuals in sanctions jurisdictions.
Binance has separately been sued by the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission over the alleged mishandling of customer assets and the operation of an illegal, unregistered exchange in the U.S.

The U.S., which separately accuses Binance and Zhao of violating the U.S. Bank Secrecy Act and sanctions on Iran, ordered Binance to pay $4.3 billion in fines and forfeiture. Zhao agreed to pay a $50 million fine.

Zhao stepped down as Binance’s CEO in November last year after reaching this plea and was replaced by the former Abu Dhabi markets regulator’s chief, Richard Teng.
Zhao was not immediately available for comment when contacted via social media platform X. Binance has yet to return a request for comment when contacted by CNBC.

‘Unprecedented scale’ of financial crime

Prosecutors say that Zhao violated U.S. law on an “unprecedented scale,” and that he had a “deliberate disregard” for Binance’s legal responsibilities.
In the memorandum of Tuesday, prosecutors said that, under Zhao’s control, Binance operated on a “Wild West” model.

“Zhao bet that he would not get caught, and that if he did, the consequences would not be as serious as the crime,” the memorandum stated.
“But Zhao was caught, and now the Court will decide what price Zhao should pay for his crimes.”
Zhao’s official sentencing is expected to take place on April 30. More

China’s state-directed economy may be creating the conditions for a new wave of bond defaults that could come as soon as next year, according to an S&P Global Ratings report released Tuesday.
“The real thing to watch for policymakers is whether the current directives are creating distorted incentives in the economy,” Charles Chang, greater China country lead at S&P Global Ratings, said in a phone interview Wednesday.
Bond defaults dropped in most sectors last year except for tech services, consumer and retail, S&P found.

Residential buildings under construction at the Phoenix Palace project, developed by Country Garden Holdings Co., in Heyuan, Guangdong province, China in September 2023.
Bloomberg | Bloomberg | Getty Images

BEIJING — China’s state-directed economy may be creating the conditions for a new wave of bond defaults that could come as soon as next year, according to an S&P Global Ratings report released Tuesday.
It would be the third round of corporate defaults in about a decade, the ratings agency pointed out.

It comes against a backdrop of extremely few defaults in China amid concerns about overall growth in the world’s second-largest economy.
“The real thing to watch for policymakers is whether the current directives are creating distorted incentives in the economy,” Charles Chang, greater China country lead at S&P Global Ratings, said in a phone interview Wednesday.
China’s corporate bond default rate fell to 0.2% in 2023, the lowest in at least 8 years and far below the global rate of about 2.6%, S&P data showed.
“To a certain extent this is not a good sign, because we see this divergence as something that’s not the result of the functioning of markets,” Chang said. “We’ve seen directives or guidance from the government in the past year to discourage defaults in the bond market.”
“The question is: When the guidance to avoid the defaults in the bond market [ends], what happens to the bond market?” he said, noting that’s something to watch out for next year.

Chinese authorities have in recent years emphasized the need to prevent financial risks.
But heavy-handed approaches to tackling problems, especially in the real estate sector, can have unintended consequences.
The property market slumped after Beijing’s crackdown on developers’ high reliance on debt in the last three years. The once-massive sector has dragged down the economy, while the property sector shows few signs of turning around.
Real estate led the latest wave of defaults between 2020 and 2024, according to S&P. Prior to that, their analysis showed that industrials and commodity firms led defaults in 2015 to 2019.
“The bigger issue for the government is whether the real estate market can stabilize and property prices can stabilize,” Chang said. “That can potentially ease off some of the negative wealth effects that we’ve been seeing since the middle of last year.”
Much of household wealth in China is in real estate, rather than other financial assets such as stocks.

Economic growth concerns

Bond defaults dropped in most sectors last year except for tech services, consumer and retail, S&P found.
“That flags potential vulnerabilities to the slowing growth we’re seeing right now,” Chang said.
China’s economy grew by 5.2% last year, and Beijing has set a target of around 5% in GDP growth for 2024. Analysts’ forecasts are generally near or below that pace, with expectations for further slowdown in the coming years from the double-digit growth of past decades.
Large levels of public, private and hidden debt in China have long raised concerns about the potential for systemic financial risks.
China’s debt problems, however, are not as pressing as the need for Beijing to address real estate issues in a broader “comprehensive strategy,” Vitor Gaspar, director of the fiscal affairs department at the International Monetary Fund, said at a press briefing last week.
He said other aspects of the strategy are China’s emphasis on innovation and productivity growth, as well as the need to strengthen social safety nets so that households will be more willing to spend.
It remains to be seen whether other sectors can offset the property sector’s drag on the economy, and bolster growth overall.
UBS on Tuesday upgraded MSCI China stocks to overweight due to better corporate earnings performance which are not affected by property market trends.
“The largest stocks in the China index have been generally fine on earnings/fundamentals. So China underperformance is purely due to valuation collapse,” Sunil Tirumalai, chief GEM equity strategist at UBS, said in a note. “What makes us more positive now on earnings are the early signs of pick up in consumption.”
The bank also upgraded its outlook on Hong Kong stocks.
On why UBS’s changed its view on China valuations, Tirumalai pointed to a “growing trend of China companies giving positive surprise on dividends/buybacks.”
“This higher visibility of shareholder returns can be useful if global markets get more worried on geopolitics, and in higher-for-longer scenarios. We would keep an eye on the next leg of market reforms,” he added. More

Chinese smartphone company Xiaomi’s new car is selling better than expected, putting it closer to break-even despite undercutting Tesla’s Model 3 on price.
When Xiaomi launched its SU7 electric sedan, CEO Lei Jun said the company would be selling each car at a loss.
But on Tuesday, he estimated gross profit margin of around 5% to 10% for Xiaomi’s auto business.
Xiaomi has invested heavily in its electric car venture as Lei has long-term ambitions to become one of the top five automakers in the world.

The Xiaomi SU7 on display at the Mobile World Congress 2024.
Arjun Kharpal | CNBC

BEIJING — Chinese smartphone company Xiaomi’s new electric vehicle is selling better than expected, putting it closer to break-even despite undercutting Tesla’s Model 3 on price.
Xiaomi has received more than 70,000 orders for its electric SU7 sedan as of April 20, close to the company’s original full-year target for deliveries this year, CEO Lei Jun told investors Tuesday.

The company now aims to deliver 100,000 of its new EV this year, he said.
Xiaomi released the SU7 in late March with a price about $4,000 less than Tesla’s Model 3, and has started deliveries. The Chinese smartphone company is set to livestream a car update at 9:20 a.m. on Thursday, as the Beijing auto show kicks off.
“Breakeven would be realized if annual sales reach 300[k]-400k,” Citi analysts said in a report, citing the investor day. They raised their autos segment gross profit margin forecast to 6% this year, versus a 10% loss previously expected.

The Citi analysts raised their earnings per share forecast by 25% this year, and now expect Xiaomi to ship 100,000 cars this year, 200,000 next year and 280,000 in 2026.
For context, Tesla China sold more than 600,000 cars last year, according to the China Passenger Car Association. Li Auto, which technically sells mostly hybrids, sold 376,000 cars last year, while Nio sold just over 160,000 cars last year, the data showed.

Li Auto had a gross margin of 23.5% in the fourth quarter last year, while Nio’s gross margin was 7.5%, both up from the year-ago period.
Tesla’s gross margin has successively declined over the past five quarters to 17.4% in the first three months of this year. Gross margin figures don’t account for operating expenses.
When Xiaomi launched the SU7 last month, Lei said the company would be selling each car at a loss.
But on Tuesday, he estimated gross profit margin of around 5% to 10% for Xiaomi’s auto business, and noted that sales are greater than expected, while expressing thanks to suppliers on reducing costs.
“We are currently in discussions with supply chain partners on how to increase production capacity and further support on costs,” he said, according to a CNBC translation of a Chinese-language investor day transcript provided by the company.

Sticking to China for now

Xiaomi has invested heavily in its electric car venture as Lei has long-term ambitions to become one of the top five automakers in the world.
But for the next three years, the company plans to fully focus on the domestic market, he told investors Tuesday.
Lei pointed out that Xiaomi already does business in more than 100 countries.
“We have a foundation of global influence and Xiaomi fans,” Lei said. “When we are ready to enter the global market, it should come naturally.”
Xiaomi also has plans for its next electric car, an SUV, set to be released in the second half of 2025, Chinese business news site 36kr reported Wednesday, citing sources.
Lei declined to share details when asked about SUV plans on Tuesday.
“I think one of the reasons for the success of SU7’s launch was its confidentiality,” he added. More

The dollar is looking increasingly formidable. As American growth has stayed strong and investors have scaled back bets that the Federal Reserve will cut interest rates, money has flooded into the country’s markets—and the greenback has shot up. It has risen by 4% this year, measured against a trade-weighted basket of currencies, and the fundamentals point to further appreciation. With a presidential election looming, and both Democrats and Republicans determined to promote American manufacturing, the world is on the verge of a difficult new period of strong-dollar geopolitics.This situation is made still more difficult by the fact that the currency’s strength reflects weakness elsewhere. By the end of 2023, America’s economy was 8% larger than at the end of 2019. Those of Britain, France, Germany and Japan each grew by less than 2% during the same period. The yen is at a 34-year low against the dollar. The euro has dropped to $1.07 from $1.10 at the start of the year (see chart 1). Some traders are now betting that the pair will reach parity by the beginning of next year.Chart: The EconomistShould Donald Trump win in November, the scene is therefore set for a fight. A strong dollar tends to raise the price of American exports and lower the price of imports, which would widen the country’s persistent trade deficit—a bugbear of Mr Trump’s for many decades. Robert Lighthizer, the architect of tariffs against China during Mr Trump’s time in the White House, wants to weaken the dollar, according to Politico, a news website. President Joe Biden has made no public pronouncements on the currency, but a strong dollar complicates his manufacturing agenda.Elsewhere, a mighty greenback is good for exporters that have costs denominated in other currencies. But high American interest rates and a strong dollar generate imported inflation, which is now exacerbated by relatively high oil prices. In addition, companies that have borrowed in dollars face steeper repayments. On April 18th Kristalina Georgieva, head of the IMF, warned about the impact of these developments on global financial stability.Many countries have ample foreign-exchange reserves that they could sell to bolster their currencies: Japan has $1.3trn, India $643bn and South Korea $419bn. Yet any relief would be temporary. Although sales slowed the strengthening of the dollar in 2022, when the Fed began raising interest rates, they did not stop it. Central banks and finance ministries are loth to waste their holdings on fruitless fights.Another option is international co-ordination to halt the greenback’s climb. The start of this was on display on April 16th, when the finance ministers of America, Japan and South Korea expressed concern about the slump of the yen and won. This may be the precursor to more intervention—in the form of joint sales of foreign-exchange reserves—to prevent the two Asian currencies from weakening further.But as much as these countries may want to be on the same page, economics is unavoidably pulling them apart. After all, yen and won weakness is driven by the gap in interest rates between America and other countries. South Korea’s two-year government bonds offer a return of around 3.5%, and Japan’s just 0.3%, while American Treasuries maturing at the same time offer 5% (see chart 2). If interest rates stay markedly higher in America, investors seeking returns face a straightforward choice—and their decisions will buttress the dollar.Chart: The EconomistThen there are countries with which America is less likely to co-operate. According to Goldman Sachs, a bank, China saw $39bn or so in foreign-exchange outflows in March as investors fled the country’s languishing economy—the fourth most of any month since 2016. The yuan has weakened steadily against the dollar since the beginning of the year, and more rapidly from mid-March, since when the dollar has risen from 7.18 yuan to 7.25. Bank of America expects it to reach 7.45 by September, when America’s election campaign will be in full flow. That would put the yuan at its weakest since 2007, providing a boost to China’s government’s latest export drive. Cheap Chinese electric vehicles may be about to become even cheaper, infuriating American politicians.Even protectionists in America may be willing to overlook allies’ weak currencies, at least for a time. They are less likely to for China. This raises the risk of further tariffs and sanctions, and maybe even the return of China to America’s list of currency manipulators. So long as America’s economy outperforms, the dollar is likely to remain strong. And so long as American politicians see that as a cause for concern, trade tensions will rise. ■ More

The Philippines’ Securities and Exchange Commission sent letters to Google and Apple requesting the removal of Binance apps from their respective app stores.
The agency accused Binance of offering unregistered securities to Filipinos and operating as an unregistered broker.
The regulator said that blocking Binance from app stores would help “prevent the further proliferation of its illegal activities in the country.”

Zhao Changpeng, founder and chief executive officer of Binance, attends the Viva Technology conference dedicated to innovation and startups at Porte de Versailles exhibition center in Paris, France June 16, 2022. 
Benoit Tessier | Reuters

The Philippines’ Securities and Exchange Commission (SEC) has ordered Google and Apple to remove cryptocurrency exchange Binance from their app stores.
In a press release out on Tuesday, the regulator said it had sent letters to Google and Apple requesting the removal of applications controlled by Binance from the Google Play Store and Apple App Store, respectively.

SEC Chairperson Emilio Aquino said that the Philippine public’s continued access to Binance sites and apps “poses a threat to the security of the funds of investing Filipinos.”
The agency accused Binance of offering unregistered securities to Filipinos and operating as an unregistered broker, adding that this violates the country’s securities laws.
Binance, Google, and Apple were not immediately available for comment when contacted by CNBC.
Aquino said that blocking Binance from the Google and Apple app stores would help “prevent the further proliferation of its illegal activities in the country, and to protect the investing public from its detrimental effects on our economy.”

The Philippines’ National Telecommunications Commission has previously moved to block access to websites used by Binance in the country.

The SEC says it earlier warned the Philippines public against using Binance and began studying the possibility of blocking Binance’s services in the Philippines as early as November last year.
The SEC said that Binance has been actively promoting its services on social media to attract funds from Filipinos, despite not being licensed by the regulator.
The watchdog said it is urging Filipinos with investments in Binance to immediately close their positions, or to transfer their crypto holdings to their own crypto wallets or exchanges registered in the Philippines.
The action adds to a litany of woes for Binance, which recently replaced its CEO with Richard Teng, the former chief of UAE regulator Abu Dhabi Global Markets, in November 2023, after a U.S. government settlement ordering the company to pay a $4.3 billion fine for alleged money laundering violations.
Former Binance CEO Changpeng Zhao was charged with violating the Bank Secrecy Act and agreed to step down. Zhao’s sentencing is expected to take place on April 30.
Binance has separately been sued by the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission over alleged mishandling of customer assets and the operation of an illegal, unregistered exchange in the U.S. More

Walmart’s majority-owned fintech startup One has begun offering buy now, pay later loans for big-ticket items at some of the retailer’s more than 4,600 U.S. stores, CNBC has learned.
The move puts One in direct competition with Affirm, the BNPL leader and exclusive provider of installment loans for Walmart customers since 2019.
One’s expanding role at Walmart raises the possibility that the company could force Affirm, Capital One and other third parties out of some of the most coveted partnerships in American retail.

Customers shop in a Walmart Supercenter on February 20, 2024 in Hallandale Beach, Florida.
Joe Raedle | Getty Images News | Getty Images

Walmart’s majority-owned fintech startup One has begun offering buy now, pay later loans for big-ticket items at some of the retailer’s more than 4,600 U.S. stores, CNBC has learned.
The move puts One in direct competition with Affirm, the BNPL leader and exclusive provider of installment loans for Walmart customers since 2019. It’s a relationship that the Bentonville, Arkansas, retailer expanded recently, introducing Affirm as a payment option at Walmart self-checkout kiosks.

It also likely signals that a battle is brewing in the store aisles and ecommerce portals of America’s largest retailer. At stake is the role of a wide spectrum of players, from fintech firms to card companies and established banks.
One’s push into lending is the clearest sign yet of its ambition to become a financial superapp, a mobile one-stop shop for saving, spending and borrowing money.
Since it burst onto the scene in 2021, luring Goldman Sachs veteran Omer Ismail as CEO, the fintech startup has intrigued and threatened a financial landscape dominated by banks — and poached talent from more established lenders and payments firms.
But the company, based out of a cramped Manhattan WeWork space, has operated mostly in stealth mode while developing its early products, including a debit account released in 2022.
Now, One is going head-to-head with some of Walmart’s existing partners like Affirm who helped the retail giant generate $648 billion in revenue last year.

Walmart’s Fintech startup One is now offering BNPL loans in Secaucus, New Jersey.
Hugh Son | CNBC

On a recent visit by CNBC to a New Jersey Walmart location, ads for both One and Affirm vied for attention among the Apple products and Android smartphones in the store’s electronics section.
Offerings from both One and Affirm were available at checkout, and loans from either provider were available for purchases starting at around $100 and costing as much as several thousand dollars at an annual interest rate of between 10% to 36%, according to their respective websites.
Electronics, jewelry, power tools and automotive accessories are eligible for the loans, while groceries, alcohol and weapons are not.
Buy now, pay later has gained popularity with consumers for everyday items as well as larger purchases. From January through March of this year, BNPL drove $19.2 billion in online spending, according to Adobe Analytics. That’s a 12% year-over-year increase.
Walmart and One declined to comment for this article.

Who stays, who goes?

One’s expanding role at Walmart raises the possibility that the company could force Affirm, Capital One and other third parties out of some of the most coveted partnerships in American retail, according to industry experts.
“I have to imagine the goal is to have all this stuff, whether it’s a credit card, buy now, pay later loans or remittances, to have it all unified in an app under a single brand, delivered online and through Walmart’s physical footprint,” said Jason Mikula, a consultant formerly employed at Goldman’s consumer division.
Affirm declined to comment about its Walmart partnership.
For Walmart, One is part of its broader effort to develop new revenue sources beyond its retail stores in areas including finance and health care, following rival Amazon’s playbook with cloud computing and streaming, among other segments. Walmart’s newer businesses have higher margins than retail and are a part of its plan to grow profits faster than sales.
In February, Walmart said it was buying TV maker Vizio for $2.3 billion to boost its advertising business, another growth area for the retailer.

‘Bank of Walmart’

When it comes to finance, One is just Walmart’s latest attempt to break into the banking business. Starting in the 1990s, Walmart made repeated efforts to enter the industry through direct ownership of a banking arm, each time getting blocked by lawmakers and industry groups concerned that a “Bank of Walmart” would crush small lenders and squeeze big ones.
To sidestep those concerns, Walmart adopted a more arms-length approach this time around. For One, the retailer created a joint venture with investment firm firm Ribbit Capital — known for backing fintech firms including Robinhood, Credit Karma and Affirm — and staffed the business with executives from across finance.
Walmart has not disclosed the size of its investment in One.
The startup has said that it makes decisions independent of Walmart, though its board includes Walmart U.S. CEO, John Furner, and its finance chief, John David Rainey.
One doesn’t have a banking license, but partners with Coastal Community Bank for the debit card and installment loans.
After its failed early attempts in banking, Walmart pursued a partnership strategy, teaming up with a constellation of providers, including Capital One, Synchrony, MoneyGram, Green Dot, and more recently, Affirm. Leaning on partners, the retailer opened thousands of physical MoneyCenter locations within its stores to offer check cashing, sending and receiving payments, and tax services.

From paper to pixels

But Walmart and One executives have made no secret of their ambition to become a major player in financial services by leapfrogging existing players with a clean-slate effort.
One’s no-fee approach is especially relevant to low- and middle-income Americans who are “underserved financially,” Rainey, a former PayPal executive, noted during a December conference.
“We see a lot of that customer demographic, so I think it gives us the ability to participate in this space in maybe a way that others don’t,” Rainey said. “We can digitize a lot of the services that we do physically today. One is the platform for that.”
One could generate roughly $1.6 billion in annual revenue from debit cards and lending in the near term, and more than $4 billion if it expands into investing and other areas, according to Morgan Stanley.
Walmart can use its scale to grow One in other ways. It is the largest private employer in the U.S. with about 1.6 million employees, and it already offers its workers early access to wages if they sign up for a corporate version of One.

Walmart’s next card

There are signs that One is making a deeper push into lending beyond installment loans.
Walmart recently prevailed in a legal dispute with Capital One, allowing the retailer to end its credit-card partnership years ahead of schedule. Walmart sued Capital One last year, alleging that its exclusive partnership with the card issuer was void after it failed to live up to contractual obligations around customer service, assertions that Capital One denied.
The lawsuit led to speculation that Walmart intends to have One take over management of the retailer’s co-branded and store cards. In fact, in legal filings Capital One itself alleged that Walmart’s rationale was less about servicing complaints and more about moving transactions to a company it owns.
“Upon information and belief, Walmart intends to offer its branded credit cards through One in the future,” Capital One said last year in response to Walmart’s suit. “With One, Walmart is positioning itself to compete directly with Capital One to provide credit and payment products to Walmart customers.”

A Capital One Walmart credit card sign is seen at a store in Mountain View, California, United States on Tuesday, November 19, 2019.
Yichuan Cao | Nurphoto | Getty Images

Capital One said last month that it could appeal the decision. The company declined to comment further.
Meanwhile, Walmart said last year when its lawsuit became public that it would soon announce a new credit card option with “meaningful benefits and rewards.”
One has obtained lending licenses that allow it to operate in nearly every U.S. state, according to filings and its website. The company’s app tells users that credit building and credit score monitoring services are coming soon.

Catching Cash App, Chime

And while One’s expansion threatens to supersede Walmart’s existing financial partners, Walmart’s efforts could also be seen as defensive.
Fintech players including Block’s Cash App, PayPal and Chime dominate account growth among people who switch bank accounts and have made inroads with Walmart’s core demographic. The three services made up 60% of digital player signups last year, according to data and consultancy firm Curinos.
But One has the advantage of being majority owned by a company whose customers make more than 200 million visits a week.
It can offer them enticements including 3% cashback on Walmart purchases and a savings account that pays 5% interest annually, far higher than most banks, according to customer emails from One.
Those terms keep customers spending and saving within the Walmart ecosystem and helps the retailer better understand them, Morgan Stanley analysts said in a 2022 research note.
“One has access to Walmart’s sizable and sticky customer base, the largest in retail,” the analysts wrote. “This captive and underserved customer base gives One a leg up vs. other fintechs.”

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The Department of Energy approved the first state application for federal funding via the Home Energy Rebates program.
The Inflation Reduction Act allocates $8.8 billion in total funding for consumers who make their homes more energy efficient.
Consumers can access up to $14,000 or more per household, and perhaps more in some states depending on the design of the program. Many will likely be able to start accessing rebates within months.

Ryanjlane | E+ | Getty Images

Rebates tied to home energy efficiency and created by the Inflation Reduction Act may start flowing to many consumers within months.  
The federal government is issuing $8.8 billion for Home Energy Rebates programs through states, territories and tribes, which must apply for the funding. The U.S. Department of Energy approved the first application for New York on April 18, awarding it an initial $158 million.

The DOE is hopeful New York will open its program to consumers by early summer, according to Karen Zelmar, the agency’s Home Energy Rebates program manager. The state has the fourth-largest total funding allocation, behind California, Texas and Florida.   
The federal rebates — worth up to $14,000 or more per household, depending on a state’s program design — are basically discounts for homeowners and landlords who make certain efficiency upgrades to their property.
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The rebates aim to partially or fully offset costs for efficiency projects like installing electric heat pumps, insulation, electrical panels and Energy Star-rated appliances.
Their value and eligibility vary according to factors like household income, with more money flowing to low- and middle-income earners.

The DOE also expects the programs to save households $1 billion a year in energy costs due to higher efficiency, Zelmar said.

Eleven other states have also applied for funding: Arizona, California, Colorado, Georgia, Hawaii, Indiana, Minnesota, New Hampshire, New Mexico, Oregon and Washington. Many other states are also far along in their application process, Zelmar said.  
“We certainly hope to see all the programs launched … by this time next year, and hopefully much sooner than that for many of the states,” she said.
States must notify the Energy Department they intend to participate by Aug. 16, 2024. Applications are due by Jan. 31, 2025.

These are key details about the rebates

The Inflation Reduction Act earmarked $369 billion in spending for policies to fight climate change, marking the biggest piece of climate legislation in U.S. history. President Biden signed the measure into law in August 2022.
The IRA divided $8.8 billion in total rebate funding between two programs: the Home Efficiency Rebates program and the Home Electrification and Appliance Rebates program.
New York’s application was approved for the the latter program. So far, just four states — Georgia, Oregon, Indiana and New Mexico — have applied for both.
“I hope that at this time next year we have 50 states with rebate programs,” said Kara Saul Rinaldi, CEO and founder of AnnDyl Policy Group, a consulting firm focused on climate and energy policy.
While their goals are the same — largely, to reduce household energy use and greenhouse gas emissions — the two programs’ approach to household energy savings differs, Saul Rinaldi said.
The Home Electrification and Appliance Rebates program
The Home Electrification and Appliance Rebates program pays consumers a maximum amount of money for buying specific technologies and services, Saul Rinaldi said.
Here are some examples from the Energy Department:

ENERGY STAR electric heat pump water heater — worth up to $1,750
ENERGY STAR electric heat pump for space heating and cooling — up to $8,000
ENERGY STAR electric heat pump clothes dryer — up to $840
ENERGY STAR electric stove, cooktop, range, or oven — up to $840
Electric load service center — up to $4,000
Electric wiring — up to $2,500
Insulation, air sealing and ventilation — up to $1,600

This program pays up to $14,000 to consumers. It’s only available to low- and moderate-income households, defined as being below 150% of an area’s median income. (These geographical income thresholds are outlined by the U.S. Department of Housing and Urban Development.)
Low-income earners — those whose income is 80% or less of the area median — qualify for 100% of project costs. Others are limited to half of project costs. (Both are subject to the $14,000 cap.)
Renters can also take advantage of the program, as long as they communicate to their landlord about the purchase of an appliance, Zelmar said.
Home Efficiency Rebates program
In contrast, the Home Efficiency Rebates program is technology neutral, Saul Rinaldi said.
The value of the rebates are tied to how much overall energy a household saves via efficiency upgrades. The deeper the energy cuts, the larger the rebates, Saul Rinaldi said.
For example, the program is worth up to $8,000 for households who cut energy use by at least 35%. It’s worth a maximum $4,000 for those who reduce energy by at least 20%.
The program is available to all households, regardless of income. Low-income earners can qualify for the most money, as with the other rebate program.
With Energy Department approval, states can opt to increase the maximum rebate to more than $8,000 for low earners. In this way, the Home Efficiency Rebates’ value can technically exceed that of the Home Electrification and Appliance Rebates one, Zelmar said.

How consumers can access the rebates

Consumers can’t double dip, however. For example, a consumer who gets a rebate for buying an electric heat pump generally can’t also apply the energy savings from that heat pump to the calculation for a whole household rebate, experts said.
However, consumers may be able to use the rebates in conjunction with existing programs available through states and local utilities, experts said. Consumers who want to make upgrades before these rebate programs are in place may be able to take advantage of other Inflation Reduction Act funding like tax breaks tied to home efficiency.
Rebates are also meant to be delivered at the point of sale. That may be at a retailer via an upfront discount on purchase price, or from a contractor who gives consumers a rebated amount off the project cost at the point of sale, Zelmar said.
These details will vary by state, experts said. States must develop and publish an approved contractor list as part of their program design.

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There are about 28,420 centimillionaires globally, largely concentrated in New York City, the Bay Area, Los Angeles, London and Beijing, according to WRISE Wealth Management Singapore.
“They don’t invest in get rich, quick things, illiquid things today,” said Salvatore Buscemi, CEO of Dandrew Partners.

Yana Iskayeva | Moment | Getty Images

The uber wealthy live a world apart and their investing strategies also look vastly different from the average investor’s portfolio.
“While there is no official threshold, centimillionaires or individuals with a total net worth of over $100 million, is a good benchmark as entry into the 0.001% club,” said Kevin Teng, CEO of WRISE Wealth Management Singapore, a wealth enterprise for ultra-high net worth individuals.

Globally, the population of centimillionaires stands at around 28,420 individuals, and are largely concentrated in New York City, the Bay Area, Los Angeles, London and Beijing, according to data from WRISE.

They bestow knighthood on you in the United States when you buy an NFL team.

Salvatore Buscemi
CEO of Dandrew Partners

“These cities boast robust financial infrastructure, vibrant entrepreneurial ecosystems, and lucrative real estate markets, making them attractive destinations for the ultra-wealthy,” Teng told CNBC. 
And this demographic that “epitomizes extreme wealth” is selective when it comes to investments, Teng said.
“They don’t invest in get rich, quick things, illiquid things today. For example, that means they don’t really do publicly traded equities,” said Salvatore Buscemi, CEO of Dandrew Partners, a private family investment office.
“They actually don’t even invest in crypto, believe it or not,” Buscemi told CNBC via Zoom. “What they’re looking for is to preserve their legacy and their wealth.”

1. Real estate

As a result, centimillionaire portfolios often feature “very strong, stable pieces of real estate,” Buscemi said. These wealthy individuals gravitate toward “trophy asset” Class A properties, or investment-grade assets that typically were built within the last 15 years.

Monaco Harbor on the French Riviera.
Silvain Sonnet | Getty Images

Michael Sonnenfeldt, founder and chairman of Tiger 21 — a network of ultra-high net worth entrepreneurs and investors — told CNBC that real estate investments typically represent 27% of these individuals’ portfolios.

2. Family offices as investment vehicles

Individuals of such wealth generally have their money managed by single family offices, which handle everything including their inheritance, household bills, credit cards, immediate family expenses, etc., said Andrew Amoils, an analyst at global wealth intelligence firm New World Wealth.
“These family offices often have foundation arms for charities and venture capital arms that invest in high growth startups,” said Amoils.
The number of family offices in the world has tripled since 2019, topping 4,500 worldwide last year with an estimated $6 trillion in assets under management combined. 

3. Alternative investments?

Ultra high net worth individuals also explore potentially buying stakes in professional sports teams, said Dandrew’s Buscemi.
“That’s a very, very insulated group to get into and requires a lot more than just money,” he said.
The exclusivity is a major appeal as these wealthy individuals want to mingle with people of similar status, Buscemi explained. Owning a stake in a sports team is a way for these individuals to legitimize their status, he said.

Owner Jerry Jones of the Dallas Cowboys welcomes fans to training camp at River Ridge Complex on July 24, 2021 in Oxnard, California.
Jayne Kamin-Oncea | Getty Images Sport | Getty Images

“They bestow knighthood on you in the United States when you buy an NFL team,” he said, like how American businessman and billionaire Jerry Jones bought the Dallas Cowboys in 1989.
WRISE’s Teng also noted that 0.001% individuals pay more attention to fixed income, private credit and alternative investments. He said private credit is gaining traction as investors seek sources of yield outside of conventional markets. 
“This trend reflects a growing appetite for non-traditional assets that offer unique risk-return profiles,” said Teng, noting that alternative investments include venture capital, private equity and real assets. More