Canceled by Corona: A Developing List of Finance Practices Halted due to Pandemic
An evolving list of finance policies and practices suspended due to Coronavirus and their meaning for cryptocurrencies.
By this point, everyone knows that Coronavirus, also known as COVID-19, has wreaked havoc on the world economy.
The ongoing pandemic
On March 13, crypto markets saw an unprecedented collapse alongside the worst day in the traditional markets since 1987. Beyond the markets tanking, the risk of spreading the highly contagious virus has led many countries to tell citizens to stay home — with obvious implications for broader workforce productivity and resulting in the cancellation of many events in the crypto space.
Beyond telling businesses to stay closed and people to socially isolate, governments around the world are taking unprecedented steps in economic policies in response to the virus.
Cointelegraph presents an ongoing list of government suspensions of crypto-relevant policies and practices. We will be updating this story as further events warrant.
March 19: New York suspends mortgage payments for 90 days
In a press conference, New York Governor Andrew Cuomo announced that the state will temporary waive mortgage payments for borrowers facing financial hardship without hurting their credit scores. Cuomo explained the 90-day waiver:
“If you are not working, if you’re working only part-time, we’re going to have the banks and financial institutions waive mortgage payments for 90 days. That will be a real-life economic benefit. It will also be a stress reliever for many families.”
March 18: U.S. IRS puts off deadline to pay taxes
As Cointelegraph reported, the United States tax authority announced on March 18 that it was delaying the typical due date for taxpayers to file from April 15 to July 15.
The IRS’s addition of a question about cryptocurrency to this year’s tax forms has necessitated greater reporting from crypto holders. However, the issue of taxation remains fraught with uncertainty. In December, a group of Congresspeople wrote a letter to the IRS concerned about the agency’s lack of clarity on hard forks and airdrops. The delay will give crypto-holding taxpayers more time to get their accounts in order.
March 17: Spain shuts down short-selling
As Cointelegraph reported on March 17, the Spanish securities regulator shut down short-selling to tamp stock losses as a result of Coronavirus panic.
In the words of the National Securities Market Commission, the effort was designed to combat “the risk of disorderly trading taking place in the following weeks.”
March 17: U.S. Senator calls for halt on work that doesn’t fight COVID-19
Senator Sherrod Brown (D-OH) — the ranking member of the Senate Banking Committee — called on the Department of Housing and Urban Development and a roster of financial regulators including Chairman Jay Clayton of the Securities and Exchange Commission (SEC) to put a halt on all rulemaking not in response to the Coronavirus. In the letters, Brown wrote:
“We urge you to implement an immediate moratorium on rulemakings not related to the virus response or other imminent health and safety concerns.”
The actual impact of Brown’s request remains to be seen. Given the SEC’s ongoing struggle to determine which digital assets to treat as securities, a freeze in the commission’s operations likely has the most bearing on crypto. The office of Chairman Clayton declined to comment on how the commission planned to respond to Brown’s calls.
The office of Sherrod Brown did not respond to Cointelegraph’s request for more information as of press time.
March 15: U.S. Federal Reserve pauses cash-holding requirements for banks
In an announcement on Sunday night, the U.S. monetary authority announced a series of emergency measures to curb economic damage.
Cointelegraph previously reported on the Fed’s emergency reduction to 0% interest rates. These emergency measures also included a reduction in reserve requirements for banks. Since 1992, the Fed has required that banks hold 10% of the value of their transaction accounts on-hand in reserves. Beginning March 26, that number will drop to 0%, meaning that account holders may have trouble with in-person cash withdrawals.
Bloomberg has noted the increased demand for cold hard cash among some bank account holders worried about the Coronavirus.
At least one Bank of America client has already spotted a reduction in available cash withdrawals. Tatiana Koffman, managing director at Mantis VC, told Cointelegraph that on March 16 a branch in Los Angeles that typically allows cash withdrawals of up to $20,000 without issue told her they had imposed a limit of $3,000. Koffman says the bank’s justification was: "They have to impose a limit because too many people were showing up asking for cash."
As far as Cointelegraph could determine, by March 17, the same branch had resolved this limit, though a representative at the bank did make a point to encourage non-cash withdrawal options. National representatives for Bank of America did not respond to Cointelegraph’s requests for comment as of press time.