WEBVTT - Fed Looks at Possible U.S. Digital-Coin 0:00:01.800 --> 0:00:04.440 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:04.480 --> 0:00:07.280 Bloomberg Quick Takes Tim Stanovk. We're here every day bringing 0:00:07.320 --> 0:00:09.840 you the latest news from the world to business and finance, 0:00:09.840 --> 0:00:13.640 plus technology, politics, economics, all partnising the power of Business 0:00:13.680 --> 0:00:17.160 Week reporters and editors, not to mention our journalists and 0:00:17.160 --> 0:00:19.640 analyst in more than one and twenty countries. You can 0:00:19.640 --> 0:00:23.239 download Bloomberg Business Weekend iTunes, SoundCloud, or Bloomberg dot com. 0:00:23.400 --> 0:00:25.200 You can also listen to our radio show at two 0:00:25.200 --> 0:00:27.880 pm Eastern Time on Bloomberg Radio or watch us on 0:00:27.920 --> 0:00:32.640 YouTube search Bloomberg Global News. So Tim totally bummed me 0:00:32.680 --> 0:00:36.560 out by talking about the latest variant. Thank you so much. Yeah, 0:00:36.560 --> 0:00:39.320 I'm sorry, Bush. Gotta brush up on your Greek alphabet, 0:00:39.400 --> 0:00:42.920 so you know, start practicing funny not funny whatever the 0:00:42.920 --> 0:00:45.440 next letter is. Lot's going on, so let's get to it. 0:00:45.640 --> 0:00:48.400 Um And just for those of you keeping track, as 0:00:48.440 --> 0:00:50.839 we are always at bloom byg Global Cases, when it 0:00:50.920 --> 0:00:53.640 comes to COVID top three hundred sixty six point nine 0:00:53.640 --> 0:00:57.200 million deaths past five point six million, and the vaccine 0:00:57.200 --> 0:01:00.560 more than ten billion shots and ministered Tim around the world, Well, 0:01:00.600 --> 0:01:02.800 let's go to Dr Ian lust Bader, clinical professor of 0:01:02.800 --> 0:01:04.920 Medicine at n y U Lane and the Medical Center. 0:01:04.959 --> 0:01:07.720 He joins us on the phone from New York City, 0:01:07.720 --> 0:01:10.840 as he does on most Fridays. Dr Let's bet I 0:01:10.840 --> 0:01:12.360 want to start with what Caroline I were talking about 0:01:12.400 --> 0:01:15.040 just a couple of minutes ago. This omicron sub variant 0:01:15.480 --> 0:01:18.839 be A dot two, appearing to be even more contagious 0:01:18.880 --> 0:01:23.080 than the original fast spreading strain. That's according to UK 0:01:23.360 --> 0:01:26.479 health authorities. We do know though, that vaccine booster shots 0:01:26.480 --> 0:01:31.200 remain an effective shield. How are you reading into this? Well, 0:01:31.319 --> 0:01:35.360 we talked about the possibility of more mutations and this 0:01:35.520 --> 0:01:38.960 O macron variant definitely Happy Friday. By the way, guys, 0:01:39.000 --> 0:01:43.840 thank you is a is yay we got here, we 0:01:43.920 --> 0:01:47.000 got here, we made It is definitely a split off 0:01:47.040 --> 0:01:51.880 of the original O macron or maybe sort of coevolved 0:01:51.920 --> 0:01:56.240 with it. The genetics are are slightly different than uh 0:01:56.320 --> 0:01:59.280 some of the other mutations that we've seen. The good 0:01:59.320 --> 0:02:02.640 news is it appears that people who have had O 0:02:02.760 --> 0:02:06.800 macron will be resistant to the b A two variant. 0:02:07.320 --> 0:02:10.400 Uh So that's good news. It also it does seem 0:02:10.440 --> 0:02:13.720 to be maybe slightly more contagious, and we can talk 0:02:13.760 --> 0:02:17.400 about what that means, but certainly not more lethal. So 0:02:17.480 --> 0:02:22.160 overall this does appear as viruses overall tend to mutate, 0:02:22.880 --> 0:02:25.000 tend to be a little more infectious, tend to be 0:02:25.040 --> 0:02:30.480 a little less lethal because viruses are more successful if 0:02:30.520 --> 0:02:33.120 they don't kill their host. So I don't think this 0:02:33.320 --> 0:02:39.160 is a meaningfully worrisome development in a way, not completely surprising. 0:02:39.440 --> 0:02:44.680 We're seeing some uh indications in California, Texas, Washington of 0:02:44.720 --> 0:02:48.320 the B two strain, more common in Europe, in Denmark 0:02:48.400 --> 0:02:51.600 and certainly in the United Kingdom. UH. And it may 0:02:51.680 --> 0:02:55.000 replace just as O macron replaced delta. The B A 0:02:55.080 --> 0:02:59.040 two strain may replace h O macron. But at this 0:02:59.120 --> 0:03:02.120 point it is not killing more people. And basically the 0:03:02.200 --> 0:03:07.040 same approach that we're using, whether it's a vaccines, you know, 0:03:07.160 --> 0:03:11.480 masks are very reasonable. We have a medication ever sheld 0:03:11.840 --> 0:03:15.640 for I mean to compromise patients, which is becoming somewhat 0:03:15.639 --> 0:03:19.680 more available. It's two shots their monoclonal antibodies. So for 0:03:20.520 --> 0:03:23.639 people who are really at risk, they should talk their 0:03:24.160 --> 0:03:28.200 to their doctor about this because that is available for prevention, 0:03:28.919 --> 0:03:31.000 not just treatment. How are you doing? You still sound 0:03:31.200 --> 0:03:35.640 still just a cold or I'm I'd say I'm n 0:03:36.760 --> 0:03:40.680 bettery voice still not a hundred percent. Uh, it's interesting. 0:03:40.720 --> 0:03:44.000 We were not really seeing sort of long COVID symptoms 0:03:44.040 --> 0:03:47.880 from omicron. But but who knows, you know, with UH 0:03:48.160 --> 0:03:51.520 will have to track these things further out. I'm feeling fine. 0:03:51.520 --> 0:03:53.560 What about you? How are you doing? I'm fine. I 0:03:53.640 --> 0:03:57.480 never had any symptoms. Um, I had a million negative tests, 0:03:57.520 --> 0:04:00.560 including my PCR test which I took on the same 0:04:00.600 --> 0:04:02.839 day that I took a rapid that that rapid came 0:04:02.840 --> 0:04:05.960 back positive. Maybe you had Who knows? Tim? And Dr 0:04:06.000 --> 0:04:08.280 Lester thinks I know. I don't think I had it, 0:04:08.560 --> 0:04:11.000 but I don't know, and I'm continue to get tests. 0:04:11.440 --> 0:04:14.320 You know, now, i'd just be careful, so um, hey, 0:04:14.360 --> 0:04:17.080 I wouldn't. I wouldn't worry at this point. I'm not right. 0:04:17.120 --> 0:04:19.960 I gotta just live life. We all do, but just carefully. Hey, 0:04:20.040 --> 0:04:21.680 do you think it's a given ian that we're going 0:04:21.720 --> 0:04:25.000 to get a fourth vaccine dose booster at some point? 0:04:26.120 --> 0:04:29.159 There aren't fering it into Israel And certainly for people 0:04:29.200 --> 0:04:34.560 who are really at risk, the elderly having significant problems, 0:04:34.880 --> 0:04:38.240 I mean, no compromised, it probably is not going to 0:04:38.320 --> 0:04:43.320 be harmful. It's very unclear. Four doses of alpha for 0:04:43.520 --> 0:04:47.240 really O macron or b A two very unclear how 0:04:47.279 --> 0:04:50.640 protective it will be and how long that protection will last. 0:04:51.040 --> 0:04:54.359 So if you're at risk for ninety days, think about 0:04:54.400 --> 0:04:58.200 things like eversheld, which is astras eneca, think about early 0:04:58.320 --> 0:05:01.279 packs LVID. We do have that of available for people 0:05:01.320 --> 0:05:04.320 who are at risk who do who test positive and 0:05:04.360 --> 0:05:08.800 have mild to moderate symptoms. So there are various options available. 0:05:09.560 --> 0:05:13.400 The fourth vaccine um I think is less well proven, 0:05:13.520 --> 0:05:18.320 certainly than paxlovid, which lowers hospitalization and severe illness, you know, 0:05:19.880 --> 0:05:24.360 so that is certainly very reassuring. Hey, I'm wondering dr 0:05:24.440 --> 0:05:27.640 less better about masks because we did learn that in 0:05:27.720 --> 0:05:30.680 San Francisco. They have removed it into our mask mandate 0:05:30.720 --> 0:05:33.240 for offices and gems that still people have to prove 0:05:33.279 --> 0:05:35.480 that they're up to date on vaccinations and boosters. That 0:05:35.560 --> 0:05:38.799 starts February one. Uh, what do you think that's gonna 0:05:38.880 --> 0:05:41.280 the spell for New York City, New York State, and 0:05:41.920 --> 0:05:46.760 other areas of the country. So again, depending on the 0:05:46.839 --> 0:05:49.560 kind of mask, how you wear it. Uh, there are 0:05:49.560 --> 0:05:52.240 so many variables that it's very hard to really get 0:05:52.360 --> 0:05:55.800 hard data, you know on this. I think certainly for 0:05:56.160 --> 0:05:58.720 kids in school, we we do think maybe that's had 0:05:58.760 --> 0:06:03.719 a negative impact on socialization and other areas. I think 0:06:03.760 --> 0:06:07.080 if you're overall healthy and there's no mask mandate, if 0:06:07.120 --> 0:06:10.400 you're insecure, certainly where it. If you're someone at risk, 0:06:10.480 --> 0:06:13.720 if you're immuno compromised, if you're elderly, I would take 0:06:13.800 --> 0:06:17.279 every measure possible to reduce risk, which would include wearing 0:06:17.279 --> 0:06:21.159 a mask, even though we know they're not all right. Well, 0:06:21.160 --> 0:06:23.680 take care. Always nice to check in with you and 0:06:23.760 --> 0:06:26.279 stay well. Dr Ia las Beta, Clinical Professor of Medicine 0:06:26.320 --> 0:06:29.600 at n y U Lango Medical Center. This is Bloomberg 0:06:29.640 --> 0:06:33.280 Business Week with Carol Masser and Bloomberg Quick Takes Tim 0:06:33.360 --> 0:06:36.720 Stinovic on Bloomberg Radio. So among the most read on 0:06:36.760 --> 0:06:40.280 the Bloomberg Today. It is a Bloomberg exclusive exclusive. It's 0:06:40.279 --> 0:06:43.040 about how Wall Street had a briefing from the Body 0:06:43.040 --> 0:06:46.440 Administration on possible sanctions against Russia. Tim Yeah. The story 0:06:46.480 --> 0:06:49.159 written by Jenny Stain, Catherine Dougherty, and Hannah Levitt. Hannah 0:06:49.279 --> 0:06:52.240 joins us now. She's Finance reporter at Bloomberg News. She's 0:06:52.279 --> 0:06:54.600 on the phone from New York City, Hannah, you and 0:06:54.680 --> 0:06:57.320 our colleagues right that city Bank of America JP Morgan. 0:06:57.320 --> 0:06:59.560 They're among the firms that are involved in discussions the 0:06:59.680 --> 0:07:02.960 US and allies are hoping to prevent a Russian invasion 0:07:03.040 --> 0:07:06.360 of Ukraine. What did you learn and and and really 0:07:06.400 --> 0:07:09.160 take us into it. Hey, you guys, thank you for 0:07:09.200 --> 0:07:13.360 having me today. Happy Friday. Um. So what we're what 0:07:13.400 --> 0:07:15.560 we heard and what we reported is that, um, the 0:07:15.600 --> 0:07:19.520 Biden administration held discussions were really consulting uh, these big 0:07:19.560 --> 0:07:22.280 banks to make sure that you know, any any sanctions 0:07:22.320 --> 0:07:25.760 wouldn't um disrupt the global financial system. And so what 0:07:25.760 --> 0:07:28.280 we're looking at here is Russia is really integrated into 0:07:28.360 --> 0:07:31.400 the global financial system. UM. So it's less you know, 0:07:31.440 --> 0:07:33.400 how will study group be impacted or how will there 0:07:33.480 --> 0:07:35.200 be more going to be impacted or something like that, 0:07:35.520 --> 0:07:38.800 and really more so, uh making sure that the government 0:07:38.880 --> 0:07:42.679 understands the full range of consequences for you know, any 0:07:42.680 --> 0:07:45.440 actions or set of actions that they may take. Well. 0:07:45.480 --> 0:07:47.520 And it's interesting too because I think you think about 0:07:47.520 --> 0:07:51.280 the global banks and I do wonder about the relationship 0:07:51.320 --> 0:07:54.880 they have with maybe some of the different markets. Uh, 0:07:54.920 --> 0:07:58.240 what is kind of the ties between Russia and the 0:07:58.320 --> 0:08:02.720 US Banking Committee industry. Yeah, that's a great question. I mean, 0:08:02.760 --> 0:08:05.520 so like, of the three biggest US banks, City Group 0:08:05.560 --> 0:08:07.880 is the only one that even breaks out it's exposure 0:08:08.120 --> 0:08:11.640 um to Russia. And you know, those those assets are 0:08:11.640 --> 0:08:14.400 really just I think it was point three percent of 0:08:14.920 --> 0:08:17.080 its total assets. So it's not you know, you're not 0:08:17.120 --> 0:08:19.480 talking some kind of like outsized exposure on behalf of 0:08:19.520 --> 0:08:22.520 the US banks here, um. But that's not really the issue. 0:08:22.520 --> 0:08:26.000 It's more, you know, the the interconnectiveness of of the 0:08:26.040 --> 0:08:28.000 financial system as a whole, and when you're looking at 0:08:28.040 --> 0:08:30.520 things like you know, the Swift payment system, which is 0:08:30.560 --> 0:08:33.560 considered the nuclear option here, but if you cut off 0:08:33.920 --> 0:08:36.400 Russia from something like that, it's how does that impact, 0:08:36.520 --> 0:08:38.319 you know, the way business gets done in the way 0:08:38.360 --> 0:08:41.160 that thinks facilitate that globally. That's a really good point, 0:08:41.240 --> 0:08:43.320 especially when we you know, you think about how all 0:08:43.360 --> 0:08:45.640 the conversations we've had about the global supply chain, and 0:08:45.679 --> 0:08:49.280 there's a global financial supply chain in terms of how 0:08:49.320 --> 0:08:52.240 things work around the world. The other thing I think 0:08:52.280 --> 0:08:55.280 about is I wonder how the banks are thinking about 0:08:55.640 --> 0:08:59.400 Europe's relationship with Russia, whether it's an economic impact of 0:08:59.559 --> 0:09:02.640 things to to break down. You know that is Europe 0:09:02.640 --> 0:09:06.880 obviously more directly impacted in the United States in that form. Yeah, 0:09:06.880 --> 0:09:08.840 well definitely. And you know all of these big banks 0:09:08.880 --> 0:09:11.600 have global exposure, and when you're looking at I mean 0:09:11.800 --> 0:09:15.000 I think I was just reading that. I think when uh, 0:09:15.000 --> 0:09:18.199 when Western nations threatened Russia's access to swift back in, 0:09:19.120 --> 0:09:22.280 one of their finance ministers said it could produce Russia's 0:09:22.280 --> 0:09:24.920 GDP by like five percent in a year. So you know, 0:09:24.920 --> 0:09:27.440 when when you think about these consequences, um, you know, 0:09:27.520 --> 0:09:30.000 not just in Russia, but then still over effects to 0:09:30.160 --> 0:09:32.839 you know, those countries that are closer geographically like you 0:09:32.960 --> 0:09:36.400 just mentioned. Um, then you're looking at that question of 0:09:36.520 --> 0:09:38.959 you know, global growth and how that impacts the banks. 0:09:38.960 --> 0:09:41.320 And also you know when you think about your talking 0:09:41.360 --> 0:09:43.520 about volatility of the markets, which this week has been 0:09:43.840 --> 0:09:45.920 you know, crazy as it is, but then you think about, 0:09:46.440 --> 0:09:48.440 you know, if if there's all this uncertainty around that, 0:09:48.480 --> 0:09:51.839 will people be on the sidelines and all of those occasions. Well, 0:09:51.920 --> 0:09:53.840 and there's the traditional big banks, right, and then there's 0:09:53.880 --> 0:09:55.880 also like a master card. I know you guys cite 0:09:56.440 --> 0:09:58.960 the CEO in your story. I mean they talk about 0:09:58.960 --> 0:10:02.160 it being a substantial and strategically important market for them. 0:10:02.240 --> 0:10:04.439 Mm hmm, yeah. I mean that that really goes back 0:10:04.480 --> 0:10:06.520 to the whole the payments thing, in the payment system 0:10:06.520 --> 0:10:10.040 of the whole. So what do what do banks and 0:10:10.080 --> 0:10:12.840 financial institutions do now now that they've been briefed? How 0:10:12.840 --> 0:10:14.800 do they how do they prepare for such a situation. 0:10:15.760 --> 0:10:17.760 I mean, you know that it's it's a back and forth. 0:10:17.840 --> 0:10:20.440 It's not um. You know, I think that the the 0:10:20.480 --> 0:10:23.480 administration my senses, wants to learn from the banks as 0:10:23.520 --> 0:10:25.280 well and the people whose job it is at the 0:10:25.320 --> 0:10:29.160 banks to understand the potential outcomes. So you know, there's 0:10:29.200 --> 0:10:31.040 there's some back and forth there. But you know, at 0:10:31.040 --> 0:10:32.480 the end of the day, banks have had to deal 0:10:32.520 --> 0:10:35.120 with sanctions before UM and that's really the point of 0:10:35.160 --> 0:10:38.040 these conversations is for them too, you know, be able 0:10:38.080 --> 0:10:41.079 to determine they had forward as well as the administration. 0:10:41.160 --> 0:10:43.280 And real quickly just got about twenty five seconds. Who's 0:10:43.320 --> 0:10:46.520 more worried the bide administration about spillover or banks more 0:10:46.559 --> 0:10:50.240 worried about spillover. That's a good question, you know, I 0:10:50.280 --> 0:10:55.680 do that that's a great question to be continued. Hey, 0:10:55.720 --> 0:10:58.199 great reporting and it's a Bloomberg exclusive and it is 0:10:58.240 --> 0:11:01.240 among the most read on the Bloomberg and what's been 0:11:01.280 --> 0:11:03.720 a crazy cra cray week kind of love it. Thanks 0:11:03.720 --> 0:11:06.000 so much, Finance Report ut Bloomberg News on the phone 0:11:06.160 --> 0:11:08.720 in New York City. You know what I love about 0:11:08.720 --> 0:11:10.760 what she said to is just it's a reminder when 0:11:10.760 --> 0:11:14.600 we have spoken so much about the connect connectivity between 0:11:14.640 --> 0:11:18.360 supply chains, but the financial supply chain is so connected. Yeah, 0:11:18.360 --> 0:11:20.160 and it's not something that you can really visualize, but 0:11:20.240 --> 0:11:21.880 it absolutely is. I mean, think about the fact that 0:11:21.920 --> 0:11:23.880 all these companies and their earnings are talking about cross 0:11:23.880 --> 0:11:25.959 border transactions and we take it for granted, right that 0:11:26.000 --> 0:11:28.880 this stuff just works so seamlessly, and that's not always 0:11:28.920 --> 0:11:32.560 the case. You're listening to Bloomberg Business Week with Carol 0:11:32.640 --> 0:11:37.079 Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. 0:11:37.400 --> 0:11:39.840 In the new issue Bloomberg Business Week gets out and 0:11:39.840 --> 0:11:42.439 in it you'll find a story about one crypto company, 0:11:42.559 --> 0:11:45.040 it's founder and why regulators are keeping an eye on it. 0:11:45.280 --> 0:11:49.280 The story by Zeke Fox, financial investigations reporter at Bloomberg News. 0:11:49.520 --> 0:11:52.040 He joins us now to talk about his story. It's 0:11:52.080 --> 0:11:54.679 about Celsius also joining us as Joel Webber, editor at 0:11:54.679 --> 0:11:56.800 Bloomberg Business Week. He joins us on the access line 0:11:57.080 --> 0:12:00.680 from Brooklyn. Celsius is eighteen percent yields on crypto. They're 0:12:00.720 --> 0:12:05.400 tempting and they're drawing scrutiny, Joelso, is is Celsius a bank? 0:12:06.080 --> 0:12:09.239 It takes your crypto? It's not regulated as a bank. 0:12:09.640 --> 0:12:17.040 What is Celsius sounds great? And yields um definitely catch attention. 0:12:17.160 --> 0:12:20.320 And for for a long time it's been people who 0:12:20.360 --> 0:12:23.960 are willing to lend crypto to Celsius and get those 0:12:24.400 --> 0:12:29.040 returns um and increasingly it's making uh some regulators take 0:12:29.120 --> 0:12:32.240 notice too. Uh, Zeke, how do you get a team 0:12:32.240 --> 0:12:39.240 percent yields? So the pitch is really compelling. It's the 0:12:39.240 --> 0:12:43.720 celsius Is founder Alex Muschinsky. He says, Listen, it's not 0:12:43.760 --> 0:12:46.480 hard to get a team percent yields. It's actually the 0:12:46.559 --> 0:12:50.120 big banks are robbing you. They take your deposits, they 0:12:50.160 --> 0:12:53.280 go out and invest them. They make lots of money 0:12:53.400 --> 0:12:57.000 and they but they don't give you the profits. Meanwhile, 0:12:57.440 --> 0:13:01.040 if you send your crypto to celsie Is, it'll go 0:13:01.080 --> 0:13:05.080 out and invest it and it'll pay you five percent 0:13:05.200 --> 0:13:11.559 eight percent even depending on which crypto you send them. 0:13:11.640 --> 0:13:14.240 Well okay, so so what do they then do with 0:13:14.280 --> 0:13:19.640 your crypto? Yeah, I mean that is the question. Celsius 0:13:19.720 --> 0:13:23.600 says that they have these profitable ways of using the crypto, 0:13:24.040 --> 0:13:27.680 the main one being that they can take the coins 0:13:27.720 --> 0:13:31.880 that you sent to Celsius and lend them to big 0:13:31.920 --> 0:13:35.360 traders like hedge funds, who will use them to make 0:13:35.440 --> 0:13:40.560 really profitable bets. And these traders they have trouble borrowing 0:13:40.559 --> 0:13:42.640 money elsewhere, so they're willing to pay a lot to 0:13:42.720 --> 0:13:47.640 celsie it and Celsius can keep like a little sliver 0:13:47.760 --> 0:13:50.320 for itself and pay out the rest to the depositors. 0:13:51.280 --> 0:13:53.120 So it sounds like so it sounds like a win 0:13:53.200 --> 0:13:58.880 win pretty much. I mean, the when I heard the 0:13:58.920 --> 0:14:01.520 pitch the it, I mean, that was my question, Like 0:14:01.559 --> 0:14:04.800 what's the catch? Because in general, if someone is paying 0:14:04.800 --> 0:14:07.840 you a high interest rate, it's because you know they're 0:14:07.880 --> 0:14:10.559 taking some sort of risk with your with your money. 0:14:10.720 --> 0:14:14.280 And that's what I set out to investigate, because while 0:14:14.320 --> 0:14:17.640 Celsius says it's really transparent, it doesn't give out any 0:14:17.679 --> 0:14:21.360 sort of financial statement that shows exactly what it's doing 0:14:21.400 --> 0:14:24.520 with all the money that it's collecting, and it's not 0:14:24.600 --> 0:14:28.120 regulated like a bank. Even though the basic proposition is 0:14:28.120 --> 0:14:31.720 pretty similar to a bank, it's not really regulated at all. 0:14:32.480 --> 0:14:37.479 Um But in recent months a bunch of state securities 0:14:37.520 --> 0:14:42.000 regulators have started looking into Celsius, and so has the 0:14:42.160 --> 0:14:47.680 Securities and Exchange Commission, which is saying that maybe by 0:14:47.880 --> 0:14:50.800 doing what it does, it's breaking the law and offering 0:14:50.840 --> 0:14:56.120 people what are essentially investment products that the SEC should 0:14:56.160 --> 0:15:02.000 be overseeing. So if if that were to happen, if 0:15:02.040 --> 0:15:04.600 the SEC then does have to oversee these products, does 0:15:04.640 --> 0:15:08.320 that somehow ruin Celsius's business model or could they change 0:15:08.320 --> 0:15:12.520 their business models so they adhere to regulatory Uh well, 0:15:12.560 --> 0:15:16.400 I guess it here to regulations. You know, it's a 0:15:16.400 --> 0:15:18.680 good question. I mean, they've been growing so fast. They 0:15:18.760 --> 0:15:23.160 got up to billion in assets last year, more than quadrupled. 0:15:24.800 --> 0:15:27.840 I don't see why it couldn't go on with regulation. 0:15:28.200 --> 0:15:31.080 But the regulators would want to know exactly what they're 0:15:31.120 --> 0:15:34.080 doing with all the money, and they might have to 0:15:34.240 --> 0:15:38.280 disclose it to users. Um So, I spoke with a 0:15:38.280 --> 0:15:43.440 lot of former employees of Celsius, and what I found 0:15:43.480 --> 0:15:47.800 was that the company is definitely taking some risks with 0:15:48.000 --> 0:15:51.520 this with this money. So if there was more transparency, 0:15:52.160 --> 0:15:57.960 it's unclear how the users would react. So so as 0:15:57.960 --> 0:16:00.680 he talked to us more about Mashinsky because he's got 0:16:00.760 --> 0:16:04.960 u sort of an online you know, you mentioned those assets. 0:16:05.600 --> 0:16:08.480 How many people are watching him and tuning into his 0:16:08.560 --> 0:16:13.960 programming where he where he's you know, basically pitches his services. Yeah, 0:16:13.960 --> 0:16:15.920 I mean he's the founder and he's like the number 0:16:15.920 --> 0:16:18.840 one pitchman for the company. He's at every cryptoconference, he 0:16:18.960 --> 0:16:22.600 live streams every week. And I mean, just one example 0:16:22.600 --> 0:16:25.920 of something he said is the beauty of Celsius. Of 0:16:25.960 --> 0:16:28.600 what Celsius managed to do is that we deliver yield. 0:16:28.920 --> 0:16:30.560 We pay it to the people who would never be 0:16:30.600 --> 0:16:33.000 able to do it themselves. We take it from the rich, 0:16:33.040 --> 0:16:35.040 and we beat the index. That's like going to the 0:16:35.080 --> 0:16:38.480 Olympics and getting fifteen medals in fifteen different fields. After 0:16:38.520 --> 0:16:41.280 he said it, he dabbed and brushed off his shoulders. Um, 0:16:42.120 --> 0:16:46.760 and he's, uh, he talks like this. It sounds like 0:16:46.800 --> 0:16:50.240 he he makes Celsius sound like kind of like a 0:16:50.320 --> 0:16:54.400 multi level marketing type business opportunity more than like a 0:16:54.440 --> 0:16:58.600 bank account. But he has all these fans like Celsius users. 0:16:59.000 --> 0:17:01.200 He calls them selsie ms. He says, there's more than 0:17:01.240 --> 0:17:04.800 a million of them. These users will right in and 0:17:04.840 --> 0:17:07.040 be like I put my life savings in Celsius, like 0:17:07.040 --> 0:17:11.280 I quit my job. I'm making so much money off Celsia. UM. 0:17:11.440 --> 0:17:13.879 And it seems like Maschinsky really feeds off this energy. 0:17:14.359 --> 0:17:17.879 And he's, uh, he's fifty six, which is old by 0:17:18.440 --> 0:17:23.200 crypto standards, and he's he likes to say that he 0:17:23.320 --> 0:17:28.280 calls Celsius money over i P, as if it was like, uh, 0:17:28.400 --> 0:17:31.760 the revolutionary technology voiceover i P that, like you said, 0:17:32.200 --> 0:17:34.640 phone calls over the Internet. And he likes to say 0:17:34.640 --> 0:17:38.280 that he invented voiceover i P, which would make him 0:17:38.320 --> 0:17:43.960 like a really important inventor in the history of the internet. Um. However, 0:17:44.880 --> 0:17:46.639 I looked into this. I talked with a bunch of 0:17:46.640 --> 0:17:50.280 people who worked on voiceover i P and they say 0:17:50.720 --> 0:17:53.800 Maschinsky did not invent it. That he he did have 0:17:53.840 --> 0:17:56.920 an early voiceover i P company, but he didn't invent 0:17:56.960 --> 0:18:01.720 the technology. Um as. And it makes you wonder write 0:18:01.760 --> 0:18:03.840 with someone else to kind of put that out there. Hey, 0:18:03.880 --> 0:18:08.560 you did talk to, um those that were formally employed 0:18:08.640 --> 0:18:11.119 at that company. I mean, I guess it's a great 0:18:11.119 --> 0:18:13.400 profile and a deep dive into maybe a company people 0:18:13.400 --> 0:18:17.119 don't know about. What was your takeaway after your reporting 0:18:17.200 --> 0:18:23.040 and writing about this? To me, I think that, as 0:18:24.080 --> 0:18:28.160 a do professor told my co writer Joel Light, there's 0:18:28.200 --> 0:18:30.920 no free lunch. If if Celsius is paying you a 0:18:31.000 --> 0:18:33.440 lot of money, they have to be taking some risk 0:18:33.520 --> 0:18:38.160 with it to earn those returns. And maybe you trust 0:18:38.160 --> 0:18:42.680 Celsius to take your crypto and invest it, but maybe 0:18:42.720 --> 0:18:45.720 you want some more information about exactly what they're doing 0:18:45.760 --> 0:18:48.919 with with the money before you decide whether they're to 0:18:48.960 --> 0:18:51.119 invest with them. I mean, I found that they had 0:18:51.200 --> 0:18:54.119 given at least hundreds of millions of dollars to a 0:18:54.200 --> 0:18:57.680 guy to invest in Defy, So they were like taking 0:18:57.720 --> 0:19:01.440 the user's deposits and sticking them on these de five platforms. 0:19:02.000 --> 0:19:06.520 And the top money manager for DeFi left in a 0:19:06.600 --> 0:19:10.480 dispute that wasn't disclosed, and they lost a bunch of 0:19:10.520 --> 0:19:15.199 money in a hack. Right, So it seems like you know, 0:19:15.400 --> 0:19:20.159 you're definitely there's some risk involved. Just let the depositor 0:19:20.320 --> 0:19:23.560 or I guess not depositor be aware as wide open. Hey, 0:19:23.600 --> 0:19:25.840 we gotta run Seek, Thank you so much. Seek Fox. 0:19:25.920 --> 0:19:29.000 He's financial investigations reporter at Bloomberg News. Check out his story. 0:19:29.119 --> 0:19:31.639 It's in the finance section of the new issue of 0:19:31.640 --> 0:19:35.159 Bloomberg Business Week magazine, on newsstands, on the Bloomberg and 0:19:35.240 --> 0:19:38.200 online at Bloomberg dot com slash business Week. Joe Weber, 0:19:38.240 --> 0:19:40.720 have a great weekend, editor of Bloomberg Business Week. Catch Joeb, 0:19:40.720 --> 0:19:43.440 Me and Tim. We're on the weekend show up Bloomberg 0:19:43.440 --> 0:19:45.480 Business Week and catch out on Bloomberg Radio at eight 0:19:45.520 --> 0:19:51.480 am come Saturday. This is Bloomberg Radio. This is Bloomberg 0:19:51.520 --> 0:19:55.200 Business Week with Carol Masser and Bloomberg Quick Takes Tim 0:19:55.240 --> 0:19:59.200 Stinovic on Bloomberg Radio. We just talked about Goldman saying 0:19:59.200 --> 0:20:01.600 that investors should be skeptical of the narrative that rising 0:20:01.640 --> 0:20:04.679 adoption of cryptocurrencies must translate into higher prices to we 0:20:04.680 --> 0:20:06.840 have that going on, and it's kind of good to 0:20:06.920 --> 0:20:10.080 keep that in mind when we heard what was it 0:20:10.080 --> 0:20:12.119 about a week ago the Fed taking a key step 0:20:12.160 --> 0:20:16.040 in weighing the creation of its own digital currency UH, 0:20:16.040 --> 0:20:17.920 a move that the FETE said could help ensure the 0:20:18.000 --> 0:20:20.520 U S dollars dominance as the central Bank rapples really 0:20:20.560 --> 0:20:24.399 with the fast growing fast growing private crypto markets and 0:20:24.400 --> 0:20:26.639 coins issued by other nations. Right, there's this whole thing 0:20:26.680 --> 0:20:29.359 going on globally. Yeah, let's talk about it with Dorothy G. 0:20:29.520 --> 0:20:32.200 O b. She's of council at Jones Day. She joins 0:20:32.280 --> 0:20:33.840 us on the phone from New York City. Dorothy, how 0:20:33.880 --> 0:20:36.960 are you hi, Carol? Tim, thanks very much for having 0:20:36.960 --> 0:20:38.760 me on. Great to have you, Yeah, really great to 0:20:38.760 --> 0:20:40.840 have you here. Let's talk about the FED considering a 0:20:40.920 --> 0:20:44.080 central bank digital currency. UM, what are some I want 0:20:44.080 --> 0:20:46.040 to start with the pros here, because this is something 0:20:46.040 --> 0:20:47.880 that you look at closely. You have a good understanding 0:20:47.880 --> 0:20:51.440 of this. Why would the central bank want to do this? Yeah, Tim, 0:20:51.440 --> 0:20:54.159 it's a great question. And UM, so as you as 0:20:54.200 --> 0:20:56.440 you mentioned, the FED has come out with this report, 0:20:56.960 --> 0:20:59.920 uh last week, and it's going to be examining specific 0:21:00.080 --> 0:21:03.040 use cases and UM, you know, both the benefits and 0:21:03.080 --> 0:21:07.399 the challenges of issuing a central bank digital currency. I 0:21:07.440 --> 0:21:10.199 think that, um, the pros or the potential pros of 0:21:10.600 --> 0:21:15.040 CBDC central bank digital currency really depend on, uh, the 0:21:15.080 --> 0:21:18.520 particular use case, UM, the way in which the CBDC 0:21:18.600 --> 0:21:22.879 could be used in a given set of circumstances. So, UM, 0:21:22.960 --> 0:21:26.919 some potential benefits could be uh the the greater efficiency 0:21:27.000 --> 0:21:31.960 and in payment systems, more efficiencies and cross border payments, UM, 0:21:32.359 --> 0:21:36.160 better tools to fight financial crime UM, and and also 0:21:36.240 --> 0:21:41.280 the potential again for greater financial inclusion. Those are some 0:21:41.359 --> 0:21:44.480 of the benefits or the potential pros of a CBDC. 0:21:45.040 --> 0:21:47.240 I think, UM, you know what the FED is doing 0:21:47.280 --> 0:21:51.080 now is um examining these potential use cases and trying 0:21:51.119 --> 0:21:54.560 to think through whether a CBDC is the right tool 0:21:55.000 --> 0:21:57.960 um to realize some of those uh some of those issues. 0:21:58.040 --> 0:22:01.359 So what would a cbd C do you to the 0:22:01.400 --> 0:22:06.360 average Joe and Jane on main street? Well, UM, again 0:22:06.480 --> 0:22:08.879 you know there there are a couple of different models 0:22:08.920 --> 0:22:12.320 of a CBDC. So one is could be institutional only 0:22:12.440 --> 0:22:15.600 and so that would be for use um between you know, 0:22:15.680 --> 0:22:20.320 payments between financial institutions. So um, not much impact to 0:22:20.359 --> 0:22:24.119 the average consumer on the street there UM any efficiencies 0:22:24.160 --> 0:22:27.360 there would be realized really between the institutions. Now, if 0:22:27.359 --> 0:22:31.160 there were a retail CBDC or one um uh in 0:22:31.200 --> 0:22:35.160 which the public could participate, UM, you know that could 0:22:35.200 --> 0:22:38.840 that could again have the potential for greater financial inclusions. 0:22:38.840 --> 0:22:43.919 So for example, UM, people might be less uh likely 0:22:44.280 --> 0:22:47.280