Digital Currency Wealth Growth and Banking Regulation

Georgia’s new national digital currency is not a CBDC

The country of Georgia will introduce a novel solution for a national digital currency by working with Tether. “Tether, the world's biggest stablecoin issuer, plans to launch a crypto token representing the Georgian lari with the support of Georgia's government, the company said on Monday, in the latest sign of the country's pro-crypto approach,” Reuters reports. “Tether's new token is unusual in being launched by a private company in partnership with a government, although Tether did not detail the nature of the partnership, or whether what it called the ‘official’ stablecoin amounted to a central bank digital currency.” But as it’s not issued by the central bank, it’s perhaps best described as a government-supported lari stablecoin. “Georgia, a South Caucasus country of 3.7 million, is among the world’s top miners of cryptocurrency. Tether said the launch is a result of the National Bank of Georgia's stablecoin rules making the country attractive to digital asset businesses. El Salvador-based Tether says it has nearly $190 billion of its dollar-pegged token in circulation. Its token pegged to the Mexican peso has less than $20 million worth in circulation and Tether announced it would wind down a token pegged to the offshore Chinese yuan due to low demand.”

Global regulations on capital requirements are diverging

Global regulations put in place after the financial crisis are fracturing, though the cracks have been showing for some time. Basel III has been postponed a number of times as US banks led the opposition to higher capital buffers. Now diverging regulations in the US, UK and Europe are allowing US banks and UK to expand their assets while constraining expansion at European banks. The FT reports that reforms are freeing up capacity for eight of the biggest US lenders, namely JPMorgan Chase, Bank of America, Citigroup, Goldman Sachs, Wells Fargo, Morgan Stanley, BNY and State Street, to grow their balance sheets by 15 per cent or $2.5tn, or 15 per cent. HSBC, Standard Chartered and Barclays have grown their assets by $200 billion in the last six months. “Global regulators are taking different paths in bank capital reform,” said Fernando de la Mora, co-head of financial services at Alvarez & Marsal. “The US is going fast and furious. The UK is following, maybe at a slower pace than anticipated, but we will see more. Almost all the money the US banks made in profits, they distributed to their shareholders,” de la Mora added. “But they were still able to deploy more capital to their businesses by expanding their balance sheets, by doing more lending and increasing capital markets activities.”

City states are vying for wealth management leadership

Singapore’s banking authorities have told banks to speed up the onboarding process for wealthy clients as the city-state vies for highly mobile wealthy people and families and the fees that are highly valued by its banks. Bloomberg reports that Singapore wants to be seen as an island of stability in what sometimes feels like an increasingly chaotic geopolitical environment. “More efficient account opening will improve the competitiveness of the wealth management industry while maintaining high standards,” Chia said. “Amidst more regular shocks and persistent uncertainty, Singapore’s financial centre and the safety, stability, trust and dynamism that it stands for offers significant value.” Singapore’s pitch to become a leader in wealth management was roiled by a money-laundering scandal in recent years, and has led to an 18-month backlog for the opening of family offices. Among the MAS suggestions are to focus on the source of customer wealth only in higher-risk areas rather than all assets, and to focus on due diligence for customers that pose the most risk.

And why is this? For the first time, Hong Kong has overtaken Switzerland as the biggest cross-border wealth hub, assisted by an in-flow of funds from China. The new BCG report says that wealth managers in Hong Kong booked $2.9tn of international assets in 2025, with almost two-thirds of that coming from China. “But the rise of the Asian city as a cross-border hub also reflects broader shifts in global wealth flows, with clients seeking to spread their assets across multiple jurisdictions to hedge against geopolitical tensions, sanctions risks and political instability,” the FT reports. “This is a completely new phenomenon. I haven’t seen anything like it,” said Michael Pellman Rowland at Baseline Wealth Management, a Swiss-based independent manager with global clients. As we wrote earlier this week, the surge in Hong Kong’s attractiveness has caused alarm to Singapore’s regulators, who ordered its banks to make the onboarding process easier for wealthy clients.

Banking, movies, fraud and funding

When banks appear in movies, it’s usually because they’re the backdrop to a fraud story, or they’re being robbed. On occasion, the story is stranger. Keen followers of banking scandals will have noted that Jho Low is back in the news, after the fugitive Malaysian financier applied to the US Department of Justice for a pardon ‘after completion of sentence’, claiming he is innocent. Low, who is believed to be living in China, is the alleged mastermind of one of the world’s biggest frauds, taking $4.5 billion from Malaysia’s sovereign wealth fund. But for a time, Low lived a high-profile life that included contributing some of the finance for the film Wolf of Wall Street, which was based on the life of financial fraudster Jordan Belfort. It’s not clear what amount of the $100 funding of the film was provided by Low, but it appears to be more than $60 million. Low agreed in a 2019 civil forfeiture settlement to surrender over $700 million in assets to US authorities, but the criminal liability remained. Incidentally, Wolf of Wall Street went on to gross $400 million on a $100 million budget.

In Brazil, there’s a new crossover of banking, politics and films as the presidential campaign of Flávio Bolsonaro has been caught up in the Banco Master affair. Flávio Bolsanaro is son of former president Jair Bolsonaro, who is currently serving a 27-year jail sentence for plotting a coup following his defeat in the last election. Banco Master was liquidated by Brazil’s central bank in November last year, and its owner Daniel Vorcaro was arrested. He has reportedly agreed to cooperate with the prosecution. Recently it has emerged that Flávio Bolsonaro requested money from Vorcaro to help fund the English-language political thriller Dark Horse, starring US actor Jim Caviezel, which comes out this summer. “The ex-president’s oldest son insisted he did nothing wrong in his dealings with Daniel Vorcaro, the owner of Banco Master, a midsized lender that imploded in November after allegations of a $2.3bn fraud,” writes the FT. “Bolsonaro has said he met Vorcaro before any public accusations or suspicions were raised against the entrepreneur and that he offered no favours in exchange.” The film tells the story of a political outsider who rises to power against the odds in a Latin American country.