Stare back at the U.S. bully on secondary tariff
Amid the trade turmoil came the welcome gesture of the US state department designating Lashkar-e-Taiba's offshoot, The Resistance Front (TRF), as a foreign terrorist organisation and a specially designated global terrorist outfit. The TRF had claimed responsibility for the Pahalgam terror attack, which set off the four-day India-Pakistan clash. Such is the mixed messaging on the intent of the Trump administration on a deal with India.
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Business Standard
22 minutes ago
- Business Standard
Decoded: What are stablecoins, and why is the US regulating them?
On July 18, United States (US) President Donald Trump signed the GENIUS Act—Guiding and Establishing National Innovation for US Stablecoins—introducing America's first federal framework for dollar-pegged cryptocurrencies. The act mandates full reserve backing in liquid assets, monthly audits, and stronger consumer safeguards. While signing the act into law, Trump said that it creates "a clear and simple regulatory framework to establish and unleash the immense promise of dollar-backed stablecoins". He further stated that the act "could be perhaps the greatest revolution in financial technology since the birth of the internet itself". What are stablecoins? Stablecoins are digital assets, which means they have a value attached to them and can be used for transactions. They are designed to maintain a stable value relative to a specific reference asset, like a fiat currency such as the US dollar. Unlike cryptocurrencies, which experience significant price fluctuations due to speculation and limited supply mechanisms, stablecoins intend to provide price predictability. What backs stablecoins? Stablecoins can be broadly categorised based on their collateral mechanisms. Each category presents a different method for maintaining price stability: 1. Fiat-collateralised stablecoins: These stablecoins are backed by reserves of fiat currency held in bank accounts or other arrangements. The most common examples—such as Tether (USDT) and USD Coin (USDC)—are pegged to the US dollar. For every unit of stablecoin issued, an equivalent amount in fiat currency is supposedly held in reserve. These stablecoins rely heavily on trust in the issuer and the auditing of reserve holdings. Concerns have been raised in the past regarding the transparency and adequacy of these reserves, prompting countries to explore regulatory frameworks for the same, like the GENIUS Act. 2. Crypto-collateralised stablecoins: These are backed by other cryptocurrencies, which are typically over-collateralised to account for price volatility. For example, DAI, a widely known decentralised stablecoin, is backed by Ethereum and other crypto assets held in smart contracts on the blockchain. Blockchain is a distributed digital ledger that records transactions in a secure way, allowing assets to be tracked across a network. Smart contracts are digital contracts stored on a blockchain that are automatically executed when predetermined terms and conditions are met. For example, DAI is liquidated when the value of the cryptocurrency backing it falls below a certain threshold. These are still exposed to the inherent volatility of the underlying crypto assets and may face issues during market stress. 3. Algorithmic (non-collateralised) stablecoins: Algorithmic stablecoins use mathematical formulas and incentive mechanisms to manage the coin supply and maintain a peg without relying on actual collateral. They automatically expand or contract the supply of tokens based on demand. TerraUSD (UST), which collapsed in 2022, was one such example. 4. Commodity-collateralised stablecoins: Some stablecoins are backed by physical commodities such as gold or silver. These include coins like PAX Gold (PAXG), where each coin represents ownership of a specific amount of physical gold held in reserve. Uses of stablecoins Stablecoins serve several purposes across retail, institutional, and decentralised finance sectors: Payments: Due to lower transaction fees and faster settlement times, stablecoins are increasingly used for cross-border transfers, particularly in regions with limited access to banking infrastructure. Stablecoins are also integral to decentralised finance platforms, where they serve as collateral for loans, liquidity provision, and decentralised exchanges. Hedging against volatility: Investors often convert volatile crypto holdings into stablecoins to preserve value during market downturns. Risks associated with stablecoins Despite their intended stability, stablecoins are not without risks. As their market capitalisation has grown, regulators and policymakers have raised several concerns. One of the most prominent concerns is whether stablecoin issuers actually hold sufficient, liquid, and accessible reserves to honour redemptions. Here's where legislation like the GENIUS Act steps in. It requires 100 per cent reserve backing with liquid assets like US dollars or short-term Treasuries and requires issuers to make monthly, public disclosures of the composition of reserves. According to the White House press release, "In the event of insolvency of a stablecoin issuer, the GENIUS Act prioritises stablecoin holders' claims over all other creditors, ensuring a final backstop of consumer protection". Alternatives to stablecoins As stablecoins gain popularity, several alternatives are being explored to address their risks and limitations—particularly by regulators and central banks. Central Bank Digital Currencies (CBDCs) are the most prominent alternative. Unlike stablecoins, CBDCs are issued by central banks and carry sovereign backing. They aim to offer secure, programmable digital payments without the volatility of crypto. India also has a CBDC backed by the Reserve Bank of India, known as the digital rupee or e-rupee. Tokenised deposits: These are digital versions of regular bank deposits issued on blockchain platforms, allowing instant settlement and integration with smart contracts. E-money and digital wallet balances, while not blockchain-based, are widely used. These are backed by fiat reserves and regulated under existing financial rules. As countries continue to shape regulatory frameworks and central banks explore digital alternatives, the journey ahead for stablecoins will likely depend on their ability to operate securely and transparently within the financial system.
New Indian Express
22 minutes ago
- New Indian Express
Japan's Ishiba says he'll stay in office to tackle inflation and US tariffs despite election loss
Trump has added to the pressure, complaining about a lack of progress in trade negotiations and the lack of sales of U.S. autos and American-grown rice to Japan despite a shortfall in domestic stocks of the grain. A 25% tariff due to take effect Aug. 1 has been another blow for Ishiba. At a news conference Monday, Ishiba said his LDP and the Komeito have agreed to stick with their coalition while seeking further cooperation from opposition parties. Ishiba resisted calls for his resignation and did not say how much longer he planned to stay on. He is sticking around for the country and the people, not for self-interest, 'to put the pressing issues on a path to a solution," he said. Voters frustrated with price increases exceeding the pace of wage hikes, especially younger people who have long felt ignored by the ruling government's focus on senior voters, rapidly turned to emerging conservative and right-wing populist parties. Established liberal to centrist parties, including the main opposition Constitutional Democratic Party of Japan, gained little ground. The Democratic Party for the People quadrupled its seats by campaigning for higher take-home pay. The right-wing Sanseito, running on a 'Japanese First' platform that puts tougher regulations on foreigners and brakes on gender and sexual diversity, surged to number three in the opposition. The LDP has lost support due to the people's discontent over the party's measures for rising prices, foreign residents and other reasons and that he will 'quickly analyze the results and learn the lesson," Ishiba said. None of the opposition parties said they want to form a full-fledged alliance with the governing coalition but are open to cooperating on policy. CDPJ leader Yoshihiko Noda told broadcaster NHK that his priority is to form an alliance among the opposition. 'Public opinion clearly said 'no' to the Ishiba government,' Noda said. Sanseito leader Sohei Kamiya told NHK late Sunday he is open to cooperating with the ruling bloc on conservative policies. While he said his party did better than expected, he would wait to gain more seats in the other house in the next election and attempt to form a multi-party coalition like in Europe. The Sanseito party's stance encouraged the spread of xenophobic rhetoric in the campaign and on social media, while also attracting people who are strugging with economic woes and looking for targets to vent their discontent and anxiety, experts say. The language triggered protests from rights activists and alarmed foreign residents.
NDTV
29 minutes ago
- NDTV
Russia Strikes Kyiv Hours Before High-Level Talks On Support For Ukraine
Russia unleashed one of its largest aerial assaults on Ukraine in recent months, only hours before the UK and Germany are to chair a meeting to discuss US President Donald Trump's plans for NATO allies to provide Ukraine with weapons. The attack killed two people and wounded 15, including a 12-year-old, Ukrainian President Volodymyr Zelenskyy said. In Kyiv's Shevchenkivskyi district, a drone struck the entrance to a subway station where people had taken cover. Videos posted on social media showed the station platform engulfed by smoke, with dozens of people inside. Kyiv Mayor Vitalii Klitschko said the station had to be ventilated in what he called an 'enhanced mode.' The heaviest strikes hit Kyiv's Darnytskyi district, where a kindergarten, supermarket, and warehouse facilities caught fire. French Foreign Minister Jean-Noel Barrot arrived in Kyiv on Monday and visited some of the damage. The hourslong drone and missile assault on Kyiv overnight into Monday underscored the urgency of Ukraine's need for further Western military aid, especially in air defense, a week after Trump said deliveries would arrive in Ukraine within days. The virtual meeting will be led by British Defense Secretary John Healey and his German counterpart Boris Pistorius. Healey said US Defense Secretary Pete Hegseth and NATO leader Mark Rutte, as well as NATO's Supreme Allied Commander Europe, Gen. Alexus Grynkewich, will attend the meeting of the Ukraine Defense Contact Group. Moscow has intensified its long-range attacks on Ukrainian cities, and analysts say the barrages are likely to escalate as Russian drone production expands. In a shift of tone toward Russia, Trump last week gave Moscow a 50-day deadline to agree to a ceasefire or face tougher sanctions. At Monday's meeting, Healey was expected to urge Ukraine's Western partners to launch a coincidental '50-day drive' to get Kyiv the weapons it needs to fight Russia's bigger army and force Russian President Vladimir Putin to the negotiating table, the UK government said in a statement. Trump's arms plan, announced a week ago, involves European nations sending American weapons to Ukraine via NATO — either from existing stockpiles or buying and donating new ones. The US president indicated discussions were partly focused on advanced Patriot air defense systems and said a week ago that deliveries would begin 'within days.' But last week, various senior officials suggested no transfers had yet taken place. NATO's Grynkewich told The Associated Press on Thursday that 'preparations are underway' for weapons transfers to Ukraine, while US Ambassador to NATO Matthew Whitaker said he couldn't give a time frame. Germany has said it offered to finance two new Patriot systems for Ukraine and raised the possibility of supplying systems it already owns and having them replaced by the US. But delivery could take time, German Chancellor Friedrich Merz suggested, because 'they have to be transported, they have to be set up; that is not a question of hours, it is a question of days, perhaps weeks." Other Patriot systems could come thanks to Switzerland, whose defense ministry said Thursday it was informed by the US Defense Department that it will 'reprioritize the delivery" of five previously ordered systems to support Ukraine. While Ukraine waits for Patriots, a senior NATO official said the alliance is still coordinating the delivery of other military aid — such as ammunition and artillery rounds — which includes aid from the US that was briefly paused. The official spoke on condition of anonymity to discuss sensitive matters. Zelenskyy said Saturday that his officials have proposed a new round of peace talks this week. Russian state media on Sunday reported that no date has yet been set for the negotiations, but said that Istanbul would likely remain the host city. The Kremlin spokesman said Sunday that Russia is open to peace with Ukraine, but achieving its goals remains a priority. The overnight Russian barrage of Kyiv began shortly after midnight and continued until around 6 a.m. Residents of the capital were kept awake by machine-gun fire, buzzing drone engines, and multiple loud explosions. It was the first major attack on Kyiv since Trump's special envoy to Ukraine, Keith Kellogg, arrived in the city last Monday. Russia halted strikes on Kyiv during its visit. Russia's Ministry of Defense said its attack used drones and Kinzhal hypersonic missiles. It said that the barrage successfully targeted airfield infrastructure and Ukraine's military-industrial complex. Ukraine's air force said Russia launched 426 Shahed and decoy drones overnight Monday, as well as 24 missiles of various types. It said 200 drones were intercepted, with 203 more jammed or lost from radars. Four Ukrainian planes 'unintentionally penetrated' Romanian airspace for several minutes but did not pose a threat to national security or civilian lives, Romania's Ministry of National Defense said. It said the brief incursion occurred as Ukraine took measures to move military aircraft away from airfields in western Ukraine amid the Russian bombardment. Ukraine, meanwhile, continued to deploy its domestically produced long-range drones. Russia's Ministry of Defense said that its forces shot down 74 Ukrainian drones overnight, with almost a third of them destroyed close to the Russian capital. Twenty-three drones were shot down in the Moscow region, the ministry said, 15 of which were intercepted over the city itself.
