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US will be forced to curtail crypto if industry fails to act on illicit finance threats- official

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US will be forced to curtail crypto if industry fails to act on illicit finance threats- official

Bitcoin coins are seen at a stand during the Bitcoin Conference 2023, in Miami Beach, Florida, U.S., May 19, 2023. REUTERS/Marco Bello/File Photo Acquire Licensing Rights

Nov 29 (Reuters) – The U.S. government will cut off cryptocurrency companies from the broader U.S. economy if they fail to block and report illicit money flows, Deputy Treasury Secretary Wally Adeyemo warned the industry on Wednesday.

Speaking at an event hosted by the Blockchain Association, Adeyemo said that crypto companies need to do more to curtail the flow of illicit finance, and that the lack of action across the sector presents a risk to the U.S.

“Our actions over the last year send a clear message: we will not hesitate to bring to bear tools across government to protect our national security,” Adeyemo said in prepared remarks.

The Biden administration on Tuesday sent a letter to Congress, requesting new legislation that would grant Treasury the authority to police crypto marketplaces used by actors the U.S. government deems illicit, Adeyemo said.

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The move comes after the U.S. in October issued sanctions aimed at disrupting funding for Palestinian militant group Hamas following deadly attacks in Israel, singling out a Gaza-based cryptocurrency exchange among other targets.

Last week, Binance chief Changpeng Zhao pleaded guilty to breaking U.S. anti-money laundering laws as part of a $4.3 billion settlement, and stepped down as CEO of the world’s largest crypto exchange, conceding that he had “made mistakes.”

Prosecutors said Binance broke U.S. anti-money laundering and sanctions laws and failed to report more than 100,000 suspicious transactions with organizations the U.S. described as terrorist groups including Hamas, al Qaeda and the Islamic State of Iraq and Syria, authorities said. Binance said in response that it had worked hard to make the platform “safer and even more secure.”

Reporting by Hannah Lang in Washington; Editing by Michelle Price

Our Standards: The Thomson Reuters Trust Principles.

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Hannah Lang covers financial technology and cryptocurrency, including the businesses that drive the industry and policy developments that govern the sector. Hannah previously worked at American Banker where she covered bank regulation and the Federal Reserve. She graduated from the University of Maryland, College Park and lives in Washington, DC.

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Half of U.S. states now offer personal finance classes for high school students

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Half of U.S. states now offer personal finance classes for high school students

(Gray News) – Half of U.S. states now offer standalone personal finance courses for high school students.

In December, Pennsylvania passed an education policy bill to become the 25th state to guarantee a personal finance course for high schoolers.

Senator Chris Gebhard (R-48) sponsored the original bill.

“An alarming number of our high school students are currently entering adulthood and the workforce without an appropriate knowledge of basic financial concepts,” Gebhard said in a statement. “I want them to have the best foundation possible as they start their own lives.”

The bill was supported by policymakers on both sides of the aisle, and it also garnered support from parents, business groups, nonprofit organizations, and educators from across the state.

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Pennsylvania’s personal finance course requirement will begin with the 2026-2027 school year and will cover topics such as budgeting, saving, credit management, investing, and understanding loans and interest rates.

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'Last chance saloon': UK finance minister expected to pledge pre-election tax cuts

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'Last chance saloon': UK finance minister expected to pledge pre-election tax cuts

British Finance Minister Jeremy Hunt said earlier this month the U.K. would not enter a recession this year.

Hannah Mckay | Reuters

LONDON — Economists expect U.K. Finance Minister Jeremy Hunt to use a small fiscal windfall to deliver a modest package of tax cuts at his Spring Budget on Wednesday.

Heading into what will likely be the Conservative government’s last fiscal event before the country’s upcoming General Election, Hunt is under pressure to offer a sweetener to voters as his party trails the main opposition Labour Party by more than 20 points across all national polls.

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But he must also navigate the constraints of fragile public finances and a stagnant economy that recently entered a modest technical recession.

On the upside, inflation has fallen faster than anticipated and market expectations for interest rates are well below where they were going into Hunt’s Autumn Statement in November.

The Treasury pre-announced plans over the weekend to deliver up to £1.8 billion ($2.3 billion) worth of benefits by boosting public sector productivity, including releasing police time for more frontline work.

The Independent Office for Budget Responsibility estimates that returning to levels of pre-pandemic productivity could save the Treasury up to £20 billion per year.

Hunt will also announce £360 million in funding to boost research and development (R&D) and manufacturing projects across the life sciences, automotive and aerospace sectors, the Treasury said Monday.

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However, the big questions over tax cuts remain heading into Wednesday’s statement.

Increased fiscal headroom

“On balance, we think Chancellor Hunt’s fiscal headroom will have likely increased – but only marginally, and nowhere close to what he had in the Autumn Statement (owing largely to the fall in expected debt costs),” Deutsche Bank Senior Economist Sanjay Raja said in a research note Thursday.

The German lender estimates that the government’s fiscal headroom will have grown from around £13 billion to around £18.5 billion, and that tax cuts are “very likely” the first port of call. Raja suggested the finance minister will err on the side of caution in loosening fiscal policy, favoring supply side support over boosting demand.

“Supply side measures are more likely in our view, particularly with the Bank of England more amenable to loosening monetary policy,” Raja said.

“Therefore, tax cuts to national insurance contributions (NICs) and changes to child benefits are more likely to come in the Spring Budget (in contrast to earlier expectations of income tax cuts).”

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A substantial cut to National Insurance was the highlight of Hunt’s Autumn Statement, though economists were quick to point out that its benefit to payers would be more than erased by the effect of existing freezes on personal income tax thresholds — known as the “fiscal drag.”

The U.K. National Insurance is a tax on workers’ income and employers’ profits to pay for state social security benefits, including the state pension.

Raja also suggested an extension of the government’s existing freeze on fuel duty remains a possibility, and that some spending cuts will likely be used to partially offset a loosening of fiscal policy.

In total, Deutsche Bank expects Hunt to deliver net loosening of £15 billion over the coming fiscal year, dropping to around £12.5 billion in the medium-term.

“The outlook for the public finances remains precarious. Slight changes to the macroeconomic outlook could result in big shifts to the public finances. The Chancellor continues to walk a fine line between managing his fiscal rules now and rising austerity later,” Raja said.

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“To be sure, big questions on the public finances remain – including whether spending cuts, or limited rises in some areas, remain realistic to tackle the rising strain in public services, and the Government’s own ambitions around net-zero, defence, and overseas development spending.”

BNP Paribas economists expect a more modest package of tax cuts worth around £10 billion across the 2024/25 fiscal year, and projected that the government will start the year with a fiscal windfall of around £11 billion.

Economist shares three troubling takeaways from latest UK economic data

The French bank agreed that the reductions will be aimed at stimulating labor supply, with “little impact on inflation and thus the Bank of England.”

“Our base case is that the government will spend GBP10bn of the near-term fiscal windfall and use the additional medium-term fiscal space to cut personal taxes,” economists Matthew Swannell and Dani Stoilova said in a research note entitled “last-chance saloon.”

They also expect the Treasury to postpone the March 2024 rise in fuel duty for another 12 months, at a cost of £3.7 billion a year, and to introduce a permanent 1 pence reduction in the basic rate of income tax at a cost of between £6 billion and £7.35 billion per year.

“The overall effect of this policy package would be to leave medium-term fiscal headroom roughly back where it started at GBP12.7bn,” they added.

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“With the Conservative party trailing in the opinion polls and the Budget possibly the last opportunity to loosen fiscal policy before a general election, we expect Chancellor Hunt to once again, at least, spend any additional fiscal space available to him.”

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Board of Visitors’ Finance Committee evaluates potential additions to Major Capital Plan

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Board of Visitors’ Finance Committee evaluates potential additions to Major Capital Plan

The Board of Visitors’ Finance Committee met Friday to evaluate the financial feasibility of three additions to the Major Capital Plan, which outlines planned improvements to the University through construction, renovation and infrastructure projects. The newly approved projects include an upgrade to Hereford Residential College’s HVAC system, an expansion of the University Hospital’s South Tower and the construction of an Institute of Biotechnology. The Board additionally reviewed a series of proposals and updates relating to contract signatory authority, the University’s investment portfolio and future developments.

The three new projects within the Major Capital Plan, an annual set of assets evaluated to optimize the University’s financial stream, were determined to be viable additions to the MCP by the Board’s Buildings and Grounds Committee Thursday, leading to the Finance Committee’s discussion of the plan’s financial viability.

According to the Finance Committee agenda, the Committee considers potential additions to the MCP and evaluates if there is a viable financing plan that fits the estimated project costs and additional operating costs. 

The new Institute of Biotechnology, which will be added on to the Fontaine Research Park complex, has an estimated cost of $350 million, with $100 million of the costs paid for by “private philanthropy” and the other $250 million added to the University’s debt, which is serviced through the University’s operating funds, Commonwealth funds, administrative costs and potential donations. 

According to the discussion section of the Committee’s agenda, the institute aligns with health equality goals and provides a wide range of opportunities for research across fields ranging from neuroscience to cardiovascular disease.

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“The ultimate outcome is to ensure that no Virginian needs to leave the Commonwealth to obtain high-quality health care,” the section reads. “The Institute of Biotechnology building … will provide modern, flexible laboratory space to accommodate a wide range of disciplines.”

The University’s Medical Center would cover the $120 million expansion of the Hospital’s South Tower with both operational funds and cash. This expansion would create three floors of additional beds to meet increased demand for adult and infant intensive care units and oncology services, according to the Committee’s agenda.

Hereford Residential College’s new $11.4 million HVAC system is the only new proposed item on the MCP that would be entirely paid in cash. 

The agenda’s discussion emphasized the development’s importance to the 2030 Plan, a comprehensive vision for the University’s development outlined by President Jim Ryan. 

“Aligned with the 2030 Plan, this project will enhance the student experience by 

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improving the quality of residential living,” the discussion section reads. “In addition, the project will increase overall building efficiency and extend the useful life of these facilities.”

The Committee also approved several requests for proposals. Guidelines dictate that the committee must review any RFPs exceeding $5 million per year. During the session, RFPs for increasing the amount of custodial staff and acquiring new technologies including desktops, tablets and laptops were approved. Additionally, the Committee authorized the reduction of tuition at the College at Wise Center for Teaching Excellence with the intention to increase the program’s affordability and competitiveness.

The Committee also reviewed a series of current and potential affordable housing investments across the Charlottesville area. Committee members Jim Murray and Carlos Brown sit as Board representatives on an affordable housing advisory group that has identified three sites for future development of affordable housing. 

Finally, the Committee reviewed a series of both recently completed and currently ongoing efforts to evaluate the success of the University’s use of budgetary spending. These Operational Efficiency and Effectiveness Efforts relied upon several studies and consultations that used data surrounding accounting, financial reporting and cost efficiency in order to better understand how to guide the budget through potential new issues, proposals and requests. 

According to a presentation delivered by Jennifer Davis, the University’s executive vice president and chief operating officer, the effort to advance understanding of the University’s best financial interests will continue as part of the Board’s series of next steps spanning from March to June. These steps will also include the finalization of the 2025 fiscal year operating budget. 

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The Finance Committee is scheduled to reconvene when the Board meets again in June.

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