JPMorgan Chase, Citi and Wells Fargo say they’ve lost $5.361 billion from customers who can no longer pay their debt.

In their Q2 2025 earnings reports, the three major banks disclosed billions of dollars in losses from “net charge-offs” — loans written off as uncollectible after all efforts to recover payments proved unsuccessful.

Among the trio, JPMorgan Chase reported the highest level of charge-offs at $2.4 billion, predominantly driven by bad credit card debt.

Meanwhile, Citi wiped $2.234 billion in bad loans off its books, including $1.889 billion tied to its retail credit card portfolio.

And Wells Fargo recorded $977 million in net charge-offs, fueled by $818 million in sour loans from its consumer banking and lending segment.

The figures come as fresh data from the Federal Reserve Bank of New York shows that US credit card balances reached $1.18 trillion by the end of March 2025.

Despite the losses, Citi reported a $225 million decline in net credit losses quarter-over-quarter, and Wells Fargo saw a $12 million decrease in net charge-offs over the same period. However, JPMorgan witnessed an increase of at $179 million in net charge-offs over the three-month period.

Additionally, the three banks reported strong earnings in Q2, with JPMorgan, Citi and Wells Fargo generating $15 billion, $4 billion and $5.5 billion in net income, respectively.

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A new report from the Bank for International Settlements (BIS) challenges the notion that stablecoins can serve as real money in a modern financial system.

According to the BIS Annual Economic Report 2025, stablecoins fail the fundamental tests of “singleness,” “elasticity” and “integrity”— three critical criteria that define effective monetary instruments.

The BIS describes stablecoins as “digital bearer instruments” that resemble financial assets more than true money. “Stablecoins perform poorly when assessed against the three tests for serving as the mainstay of the monetary system,” the report claims.

Unlike central bank-backed money, which is accepted “at par” and requires no background checks, private entities issue stablecoins and often trade at fluctuating rates. This undermines the core principle of monetary singleness, it claims.

Related: South Korea’s central bank wants gradual stablecoin rollout

Stablecoins fail elasticity and integrity tests

Elasticity, the second test, is crucial for absorbing shocks and meeting large-value payment demands, BIS said in its report.

It pointed out that “any additional supply of stablecoins thus requires full upfront payment by its holders,” likening it to a “strict cash-in-advance setup” that contrasts with the flexibility of modern banking systems, where central banks provide liquidity as needed.

The third and perhaps most damning failure lies in the area of integrity. The report claims stablecoins’ design, especially those transacted via unhosted wallets on public blockchains, makes them prone to financial crime.

“Stablecoins have significant shortcomings when it comes to promoting the integrity of the monetary system,” the BIS notes, emphasizing their vulnerability to money laundering, sanctions evasion and terrorist financing.

Related: Malaysia launches Digital Asset Hub to test stablecoin, programmable money

Stablecoins should have a limited role

While acknowledging the continued demand for stablecoins due to features like cross-border accessibility and lower transaction costs, the BIS argues that these instruments should only play a limited, well-regulated role.

“Society can re-learn the historical lessons about the limitations of unsound money,” the report cautions. “Bold action by central banks and other public authorities can push the financial system along the right path, in partnership with the financial sector.”

Circle, the company behind USDC (USDC), saw its stock drop more than 15% on Tuesday after the BIS report, hitting $222. CRCL shares reached an all-time high of $299 on Monday.

Despite its hard take on stablecoins, the BIS report praised tokenization as a “transformative innovation” for the next-generation monetary and financial system. It said tokenization builds on the current financial system rather than replacing it.

Meanwhile, some in the crypto community said it is “no surprise” that the BIS paper is generally negative on stablecoins, given that it is a “regulatory body owned by global central banks.”

“The BIS is hysterical in its opposition to crypto,” Jim Walker, chief economist at Aletheia Capital Limited, wrote. “The first criterion, backed by a central bank, should make it a laughing stock given the historical failures of those institutions around the world.”

Magazine: MapleStory apologizes for cheaters, Tokyo Beast blows up in Japan, FIFA Rivals: Web3 Gamer

]]> https://earlybirdsinvest.com/bis-says-stablecoins-fail-as-money-calls-for-strict-limits-on-their-role/feed/ 0 44022 https://earlybirdsinvest.com/critical-discrepancy-bitcoin-core-nodes-look-at-utxo-via-scantxoutset-but-not-motivated-from-listunspent-and-sparrow-wallet-fail-lnd-keys/ https://earlybirdsinvest.com/critical-discrepancy-bitcoin-core-nodes-look-at-utxo-via-scantxoutset-but-not-motivated-from-listunspent-and-sparrow-wallet-fail-lnd-keys/#respond Mon, 21 Apr 2025 07:15:47 +0000 https://earlybirdsinvest.com/critical-discrepancy-bitcoin-core-nodes-look-at-utxo-via-scantxoutset-but-not-motivated-from-listunspent-and-sparrow-wallet-fail-lnd-keys/

Hello LND Developers and Community,

Despite being fully synchronized after Bitcoin core node (v29.0.0, RPI5 fresh IBD, txindex = 1), we are facing a very unusual and important issue that on-chain funds related to past LND channel closures are inaccessible. However, both the ListUnSpent software and the external wallet software (Sparrow) are unable to view this UTXO, and importantly, the address holding the fund cannot be derived from my LND root key using standard methods.

System and history:

LND: v0.18.5-beta (upgraded from v0.5.2-beta). Only one wallet.db has been identified that is used throughout.

Bitcoin Core: V29.0.0 (RPI5), fully synced, IBD, TXINDEX = 1 report synced: true. Datadir/MNT/HDD/BITCOIN.

Channel History: Opened in March 2019 (LND V0.5.2, Funding TX: 7060 … 9D71), later closed the power by peers.

Sweep Transaction: April 1, 2024 (block 837257), TX 4C0407B1188E0BA39313B1D9C87C49F6C81D99AA2839026C8AF8C989CE102244 used the channel output and sent 0.01495 BTC to P2WPHH. BC1QT728QPLPUH6D98EVKL4A990ZDHWPWVUR6QG8QZ.

On-Chain Verification: Explorers confirm that this UTXO (4C04 …:0) is present and does not exist in BC1QT7 … G8QZ.

Core Issues and Conflicts:

After full IBD, make sure the txindex is synced on the Bitcoin Core node.

getrawtransaction 4c04... true Success: Node knows the history of funding transactions.

scantxoutset start '("addr(bc1qt7...)")' Returns UTXO successfully. This directly confirms that the node’s chainstate (UTXO set) database is correct and contains the previous output of BC1QT7 … G8QZ.

{
  "success": true, ...
  "unspents": ( { "txid": "4c04...", "vout": 0, ... "address": "bc1qt7...", "amount": 0.01495437 ... } ),
  "total_amount": 0.01495437
}

listunspent ... '("bc1qt7...")' (use -rpcwallet="" or any other loaded wallet) Returns (): Despite the UTXO present in the chain state, wallet-specific RPC calls cannot list it.

Sparrow Wallet (a fresh install connected to this node) shows a balance of 0. Import the confirmed LND root XPRV and configure BIP84 (M/84’/0’/0”, native Segwit P2WPKH), Sparrow completes the scan, but shows 0 balance and uses utxos.

Parallel Wallet Derived Failure:

Verified root XPRV (extracted from the correct Wallet.db via Chantools Showrootkey), using extensive checks using the offline tool (bip39-Standalone.html) (m/84’/0’/0’/0’/* and m/84’/0’/0’/0’/1/*). BC1QT728QPLPUH6D98EVKL4A990ZDHWPWVUR6QG8QZAfter checking millions of addresses.

Current Status and Emergency Questions:

I have an on-chain fund in bc1qt7…g8qz (per scantxoutset) the nodes fundamentally know, but they are not accessible via standard wallet RPC (listunspent) and external wallet (sparrow). To consolidate this is that you cannot derive this particular address from the LND root key using the standard BIP84 path.

Seek expert help:

Why can’t external wallets like Sparrow and external wallets like Sparrow not display UTXO when ScantxOutset on the same node confirm its presence in the UTXO set? Is this a known core bug, an issue with how Wallets queries addresses other than owners, or is it something else?

Given the derivation failure, is it possible for LND (especially after major version jump) to wipe out funds from the Aezeed root key to addresses that cannot be derived via the standard BIP84 path? Is a bug or a particular state likely to lead to using different derivation schemes, or can you use important keys that are unrelated to the main wallet in the sweep output?

Advanced methods or tools (LND debug commands, using specific Chantools, alternative wallet software known to handle edge cases) are:

a) Force Sparrow/LND to recognize UTXO based on node chain state confirmation?

b) Does it help clearly track the derived paths (even non-standard) used to generate bc1qt7…g8qz from wallet.db/xprv?

This situation seems very unusual. The insights and guidance are highly appreciated.

thank you.