BeCrypto🌿

Making the most out of web3's endless potential.

[BeCrypto🌿 @BeCrypto_Sol]

Gm everyone ☕

[ᐺᒪᗩᕲ @xyzvlad00]

The Hidden World of FX Swaps
A Behind-the-Scenes Look at Global Currency Flows

Trillions of dollars flow silently through the global financial system each day, largely unnoticed. These hidden currents take the form of FX swaps, short-term derivatives that exchange currencies today with a promise to reverse the trade in the future.

"A typical day sees almost $4 trillion in new FX swap contracts," notes a recent report from the Bank for International Settlements (BIS). While invisible on balance sheets, these instruments create huge payment obligations between the world's largest banks.

The BIS report sheds light on this murky corner of finance by combining two datasets. Bank balance sheet data from the BIS statistics show on-balance sheet currency positions. Special data from CLS, a large FX settlement system, provide a detailed breakdown of banks' off-balance sheet positions in FX swaps settled through CLS.

Together, these datasets reveal fascinating insights into how major banks use FX swaps to move dollars and other currencies around the world.

Follow the Money

First, the scale. Outstanding FX swaps and forwards amounted to a staggering $66 trillion in mid-2022, more than global GDP. The vast majority, around 90%, involved dollar payments.

A handful of big banks dominate, with US banks controlling around a third of the global market. Their pivotal role makes monitoring their FX swap positions essential for tracking dollar funding flows.

Banks use FX swaps in three main ways:

1. Hedging on-balance sheet currency exposures.
2. Arbitraging interest rate differences across currencies.
3. Market-making for clients.

In practice, banks treat the positions from these activities fungible, managing the overall net position.

Lucrative Dollar Lending

The BIS-CLS data show that major US and Eurozone banks have ramped up net dollar lending via FX swaps dramatically since 2013. Their combined net dollar lending surpassed $1 trillion by early 2021.

What drove this surge? With dollar premiums over funding costs in euros and yen having widened significantly, dollar lending via FX swaps became very profitable. Banks with ample dollar funding took advantage.

Japanese banks, meanwhile, have been consistent net borrowers of dollars in FX swaps. Japanese life insurers and other institutional investors make heavy use of dollar swaps to hedge the currency risk of their huge foreign asset holdings.

Accommodating Clients

Banks turn to the interbank FX swap market to offset imbalances in their derivative positions with clients. The data show banks adjusting interbank swaps as customer demand for currency hedges changes.

For example, as US banks' estimated net dollar lending to customers grew between 2016 to 2020, they funded this mainly by borrowing dollars from other banks in interbank swaps. Eurozone banks did similar.

These interbank swaps allow banks to accommodate clients' hedging needs without expanding balance sheets.

The Kingpins

US banks stand out as the key FX swap intermediaries between banks and non-banks globally. In particular, Eurozone and Japanese banks relying on dollar swaps tend to transact mainly with US banks rather than directly with each other.

In addition, US banks engage in maturity transformation that is unique. They borrow dollars short-term from banks to lend long-term to non-bank customers. This makes US banks net borrowers of dollars on the interbank market, even as they act as overall dollar providers.

In short, US banks are the pivot point directing global currents of dollars through the FX swap market. Their positioning and activities have major implications for dollar funding conditions globally.

Murky Risks

The BIS report concludes that detailed monitoring of banks' FX swap positions is essential for financial stability. The huge off-balance sheet payment obligations make the FX swap market prone to periodic seize-ups.

Recent history shows that when this corner of dollar funding markets freezes up, it takes extraordinary central bank interventions to unblock the plumbing. Given US banks' centrality, monitoring their FX swap books is vital to tracking dollar liquidity risks.

The opaque nature of FX swaps allows banks' dollar liabilities to balloon out of sight. The next crisis may very well start with the sudden revealing of some uncomfortable truths about the trillions swirling silently through this hidden dimension of finance.

This summary was made with the help of Claude, an AI assistant. Via this post I have learned more about the current financial system and I hope that in a way, it helps you as well.

You can find the full report here:
https://t.co/rEoBCJtjLq

[BeCrypto🌿 @BeCrypto_Sol]

@timelder88 @Quantic___ So much gratitude for you and this post.

[BeCrypto🌿 @BeCrypto_Sol]

Congrats Vlad! So much value delivered 🤝

[ᐺᒪᗩᕲ @xyzvlad00]

The Hidden World of FX Swaps
A Behind-the-Scenes Look at Global Currency Flows

Trillions of dollars flow silently through the global financial system each day, largely unnoticed. These hidden currents take the form of FX swaps, short-term derivatives that exchange currencies today with a promise to reverse the trade in the future.

"A typical day sees almost $4 trillion in new FX swap contracts," notes a recent report from the Bank for International Settlements (BIS). While invisible on balance sheets, these instruments create huge payment obligations between the world's largest banks.

The BIS report sheds light on this murky corner of finance by combining two datasets. Bank balance sheet data from the BIS statistics show on-balance sheet currency positions. Special data from CLS, a large FX settlement system, provide a detailed breakdown of banks' off-balance sheet positions in FX swaps settled through CLS.

Together, these datasets reveal fascinating insights into how major banks use FX swaps to move dollars and other currencies around the world.

Follow the Money

First, the scale. Outstanding FX swaps and forwards amounted to a staggering $66 trillion in mid-2022, more than global GDP. The vast majority, around 90%, involved dollar payments.

A handful of big banks dominate, with US banks controlling around a third of the global market. Their pivotal role makes monitoring their FX swap positions essential for tracking dollar funding flows.

Banks use FX swaps in three main ways:

1. Hedging on-balance sheet currency exposures.
2. Arbitraging interest rate differences across currencies.
3. Market-making for clients.

In practice, banks treat the positions from these activities fungible, managing the overall net position.

Lucrative Dollar Lending

The BIS-CLS data show that major US and Eurozone banks have ramped up net dollar lending via FX swaps dramatically since 2013. Their combined net dollar lending surpassed $1 trillion by early 2021.

What drove this surge? With dollar premiums over funding costs in euros and yen having widened significantly, dollar lending via FX swaps became very profitable. Banks with ample dollar funding took advantage.

Japanese banks, meanwhile, have been consistent net borrowers of dollars in FX swaps. Japanese life insurers and other institutional investors make heavy use of dollar swaps to hedge the currency risk of their huge foreign asset holdings.

Accommodating Clients

Banks turn to the interbank FX swap market to offset imbalances in their derivative positions with clients. The data show banks adjusting interbank swaps as customer demand for currency hedges changes.

For example, as US banks' estimated net dollar lending to customers grew between 2016 to 2020, they funded this mainly by borrowing dollars from other banks in interbank swaps. Eurozone banks did similar.

These interbank swaps allow banks to accommodate clients' hedging needs without expanding balance sheets.

The Kingpins

US banks stand out as the key FX swap intermediaries between banks and non-banks globally. In particular, Eurozone and Japanese banks relying on dollar swaps tend to transact mainly with US banks rather than directly with each other.

In addition, US banks engage in maturity transformation that is unique. They borrow dollars short-term from banks to lend long-term to non-bank customers. This makes US banks net borrowers of dollars on the interbank market, even as they act as overall dollar providers.

In short, US banks are the pivot point directing global currents of dollars through the FX swap market. Their positioning and activities have major implications for dollar funding conditions globally.

Murky Risks

The BIS report concludes that detailed monitoring of banks' FX swap positions is essential for financial stability. The huge off-balance sheet payment obligations make the FX swap market prone to periodic seize-ups.

Recent history shows that when this corner of dollar funding markets freezes up, it takes extraordinary central bank interventions to unblock the plumbing. Given US banks' centrality, monitoring their FX swap books is vital to tracking dollar liquidity risks.

The opaque nature of FX swaps allows banks' dollar liabilities to balloon out of sight. The next crisis may very well start with the sudden revealing of some uncomfortable truths about the trillions swirling silently through this hidden dimension of finance.

This summary was made with the help of Claude, an AI assistant. Via this post I have learned more about the current financial system and I hope that in a way, it helps you as well.

You can find the full report here:
https://t.co/rEoBCJtjLq

[BeCrypto🌿 @BeCrypto_Sol]

@Simulacrum_img So much work you put into this! Thank you for your efforts.

[Simulations @Simulacrum_img]

The Book is Here

🧵It's an educational overview of many of the blockchain concepts a person needs to know to navigate the nft and blockchain space.

Links below

[BeCrypto🌿 @BeCrypto_Sol]

Definitely worth checking out.

Full blown Blockchain and NFT course for 5$ 🤯

[Simulations @Simulacrum_img]

The Book is Here

🧵It's an educational overview of many of the blockchain concepts a person needs to know to navigate the nft and blockchain space.

Links below

[Trav 🇨🇦 @Trav_Sol]

The blockchain is leveling up in a real way with AI. We are early and the opportunity here is MASSIVE.

The Truth: no one knows about this because its so damn technical.

The Solution: We are going to break it down, make it easy to understand, and show you how to benefit.

[BeCrypto🌿 @BeCrypto_Sol]

There are a lot of newsletters out there.

A lot.

This one is different. From DeFi wisdom to personal growth hacks...

This will become a weekly read right away.

[Trav 🇨🇦 @Trav_Sol]

For a while I put big accounts on a pedestal.

I didn't think that I was worthy of their connection let alone be able to give them value.

Then I realized one important thing: we're all people out here trying to make it.

So I reached out. And it blew up my growth.

I've been able to make personal connections with legends like:
🔸Wolf Financial
🔸NFT God
🔸AlexIsBuilding

and from this, not only have I grown as a person:

🔸I've spoken with them on spaces.
🔸I've blown up my followers.
🔸I've gained incredible wisdom which has changed my life.

Here's the magic, you can do this too.

But there's a very specific way to do this, and Victor and I created a blueprint you can follow based on everything we've learned.

Sub to our newsletter and check out our most recent post to get your free copy and let me know how it works. (link in bio)

I won't make it unless we all make it💚

[BeCrypto🌿 @BeCrypto_Sol]

@trav_sol See you there.

[BeCrypto🌿 @BeCrypto_Sol]

@Quantic___ The alpha just hits on a whole other level!

[BeCrypto🌿 @BeCrypto_Sol]

All of you Web3 Legends need to see this.

[Quantic @0xQuantic]

Imagine coding your first smart contract in less than 5 minutes without any previous coding experience.

That's what you can achieve by following this tutorial I created to help you get started on your Solidity journey!

Remove 4 minutes and 30 seconds of dumb scrolling here and learn a six-figure skill that will change your life 🤝

[Trav 🇨🇦 @Trav_Sol]

Here are 5 unexpected ways that hosting spaces on X can make your life better:

🔸Grow your Network
🔸Level up your public speaking skills
🔸Instant Feedback Loop for your content
🔸Increased visibility
🔸Emotional well being from human connection

Who's your favorite host?

[BeCrypto🌿 @BeCrypto_Sol]

@trav_sol Love the delivery of the personal growth section. These points specifically really help connect some dots.

No constructive criticism yet, I will go back and check out the other ones and get back to you.

I'd love to learn more about DeFi and also how to actually face fears.

[Trav 🇨🇦 @Trav_Sol]

Want a FREE template with 12 powerful AI prompts for you to level up your content?

Keep reading and we will hook you up.

Powerful content can blow up your engagement, present life changing opportunities, and help you grow as a person.

Victor has a PhD in Physics and uses AI every day in all areas of his work. He's an AI Master.

He has created 12 powerful prompts that will help you:

🔸Discover the best topics for you to talk about.
🔸How to align your brand with your content.
🔸Learn what your audience actually wants to read.
🔸Inspiration for endless content ideas.

Here's how to get it:

1⃣ Subscribe and read our last Growth Bytes Newsletter (Link is in my bio).
2⃣ Post your feedback below.
🔸What do you like about it? What don't you like?
🔸What can we improve?
🔸What do you want to read more about?
3⃣ We will DM you a link to download a free copy of this template.

We want to make our Newsletter as valuable to you as possible. Your feedback will help make this happen.

Thank you for taking the time. Give this a retweet and look forward to connecting.

[BeCrypto🌿 @BeCrypto_Sol]

@maddeningsmart Bullish on open conversations about mental health. 🤝

[$Smarty @maddeningsmart]

Can Web3 Technology Truly
Enhance Your Mental Health and
Well-being?

Absolutely yes!

Let's dive in👇 🧵

[BeCrypto🌿 @BeCrypto_Sol]

Together we can accomplish anything.

Sub to a Newsletter that actually helps...

...and delivers knowledge that will help you find your freedom.

Link is in Trav's bio.

[Trav 🇨🇦 @Trav_Sol]

Too many of us are trapped in a cycle of:

🔸Doing work that we hate
🔸Killing ourselves for people who don't give a crap
🔸Destroying our health and relationships

This was me 3 years ago as a trauma nurse.

I worked 70+ hours a week, with zero time to process the horror that I took in.

After saving a gunshot victim, I would jump straight into restarting the heart of a father, and stabilizing brain bleeds of someones daughter.

A lot of the time we wouldn't be successful, and while I was there to console a family, I had zero time to console myself.

This broke me:

🔸My mental health was dead. PTSD, Burnout and Depression hit like a truck.
🔸My marriage was wrecked.
🔸I lost contact with friends, and barely made enough money to pay the bills.

I was forced from my job, that I once loved, but you know what?

It was the best thing that ever happened to me.

Not only have I learned to love myself, rebuild my marriage, and find new strength, but I've also made a powerful realization:

There is a better way forward.

Because of networking on social media, Web3 and all of the tools available to us, we CAN:

🔸learn skills that will provide more money than nursing ever would.
🔸connect with people who can offer us LIFE CHANGING opportunities.
🔸build in a way that has PURPOSE.

And while I'm not financially free yet, the way there is clear. What's more important:

🔸I can be my own boss.
🔸I don't have to sacrifice my family and friends.
🔸I can share it all with YOU, which is everything.

My reason for being here is clear, and I hope it is for you as well. If we put in the work, we can accomplish everything.

Thank you for reading this far. If you could give this a share, I would be grateful.

As thanks, I'm sharing everything I learn in my weekly newsletter Growth Bytes, so that we can all get the life we deserve. Link's up top.

Let's keep going.

[Trav 🇨🇦 @Trav_Sol]

The most impactful lesson I've learned this week.

Let your fears guide you.

Terrifying right?

Especially when your fears hijack your body and mind, and scream at you that your life is in danger.

Like mine do with raging PTSD.

Here's the thing though: that's all fear is, a feeling, just a chemical reaction inside your body.

Unless there's a tiger there, ready to eat you, many fears are just stories your subconscious tells you.

Actionable takeaway:

Next time you're afraid of:
🔸Having a tough conversation
🔸Speaking in public
🔸Reaching out to someone new

Stop.

Breath.

Sit with it and let yourself feel it. While you can't change your body's response, you CAN change your mindset.

The Alpha:
🔸Tell yourself you're safe
🔸Challenge yourself to be brave
🔸Know that by facing your fear, regardless of the outcome, you will grow confidence and find amazing opportunities.

This is how we grow.

What fear will you face today? Build this new habit now.

[BeCrypto🌿 @BeCrypto_Sol]

@Lysss302 @0xHannibal_ @0x_aslan @yaeunda @WildcatAlliance Congrats L! 🤝📈

[BeCrypto🌿 @BeCrypto_Sol]

Connect with this legend and you'll see 👇

[Lyss @Lysss302]

GM💛

Happy #NationalCoachesDay! 🏆

Special S/O to some of my fave coaches on X: @0xHannibal_ , @0x_aslan and @yaeunda 🫡

I appreciate everything you guys pour into me and look forward to all of us continuing to grow together🚀🌕

@WildcatAlliance #FridayFeeling #FridayVibes