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Recent market volatility has severely impacted funded status and altered asset allocations at U.S. public pension plans. To help plans navigate this difficult time, we have produced a new research piece, Assessing the Impact of Recent Market Volatility on US Public Pensions. The publication builds off BlackRock's Public Pension Peer Risk Study, in which we collected data from approximately 70 U.S. public plans.

"I do not like the term (LDI) and never did, it has been hijacked by consultants and has morphed into what we are seeing now," said John Ralfe, who in 2001 led the 2.3 billion pound Boots Pension Fund's shift into bonds. "The fund didn't load up on debt... Pension schemes were doing disguised borrowing, it's absolutely toxic... There was much greater risk in the financial system than anyone - including me - would have thought."

This is a crisis no one wants to solve, at least not quickly. The Chicago Teachers scheme is aiming for 90% funding, but not until 2059-long after many retired members will have died. New Jersey's teachers' scheme is not scheduled to be fully funded until 2048. Such promises might as well be dated "the 12th of never". The bill for taxpayers seems certain to rise substantially. For the states with the biggest pension holes, political conflict is in store.

Amazon has partnered with Legal & General to create a blockchain system for managing corporate pension deals. The insurer will make use of the Amazon Managed Blockchain for its bulk annuity transactions.

"The collapse of Celsius continues to ripple throughout the world of finance. Canada's second-biggest pension and insurance fund the Caisse de Dépôt invested $150 million into Celsius nine months before its Chapter 11 bankruptcy. Now, the fund may be left empty-handed."

"In the wake of the margin crunch for UK pension funds, dealers have seen a surge in demand for committed collateral transformation facilities that allow the funds to swap less-liquid assets for eligible collateral to meet their calls."

Venezuelan President Nicholas Maduro announced that the Christmas bonus of the country's retirees and pensioners will be paid to them in the national cryptocurrency Petro.

Grayscale has 10 funds and currently manages $25 billion in crypto-assets, up from $2 billion a year ago. The Grayscale Bitcoin Trust has accumulated more than 3% of the total Bitcoin supply, and it is seeing participation broaden out of the hedge fund segment to other institutions, pensions and endowments. Grayscale's funds operate as trusts that hold growing hoards of crypto-assets that are not redeemable by investors. Holders can sell their shares in most of the trusts in the secondary market.

"We analyze the new UFR proposal in more detail in this article. Whilst the introduction of the new method would currently lead to lower funding ratios, it should also make it easier for pension funds to stabilize their UFR funding and interest rate hedging ratios over time."

Supervisory technology (SupTech) is the use of technology by supervisors to deliver innovative and efficient supervisory solutions that will support a more effective, flexible and responsive supervisory system. This note aims to define such a strategy and covers both prudential and conduct of business supervision, policy and interaction with entities, for insurance and occupational pensions sectors.

The European Insurance and Occupational Pensions Authority (EIOPA) published a discussion paper on blockchain and smart contracts in insurance which aims to provide a high-level overview of risks and benefits of blockchain and smart contracts in insurance from a supervisory perspective. It found that blockchain has the potential to reduce duplication of processes, increase process automation and efficiency, enhance customer experiences, and improve data quality. On the other hand, it may trigger new risks to insurers, supervisors, and consumers.

Nearly 70 crypto-focused hedge funds that mostly cater to pensions, family offices and wealthy individuals closed this year. The number of new fund launched is less than half the amount started in 2018.

"The deficit recovery periods of defined benefit schemes with valuations in 2020-21 was impacted by the pandemic-led crisis, with these schemes having a smaller reduction than expected, according to new analysis."

The Bank of Jamaica's push to deepen the mobile money market forms part of the central bank's CBDC drive to reduce cash usage. Governor Byles reportedly appealed to banks and other deposit-taking institutions to encourage their merchant customers to set up CBDC wallets. In particular, he wants to see cash-intensive industries to set up digital wallets to pay pensioners, enable toll road payments, and facilitate remittance flows. The test phase of the Jamaica CBDC, to assess the smoothness of transactions and get a read on the potential market receptivity to a digital currency, is under way and should wrap up by year end, with a public roll-out scheduled soon after.

The Biden administration published a statement urging Congress to "step up its efforts" with respect to regulating the cryptocurrency market. Other suggestions included strengthening transparency and disclosure requirements for crypto companies, strengthening penalties for violations of illicit-finance rules, and working more closely with international law enforcement partners. The officials also made suggestions about what Congress should not do in terms of crafting new crypto regulation, including "greenlight[ing] mainstream institutions, like pension funds, to dive headlong into cryptocurrency markets." https://www.whitehouse.gov/nec/briefing-room/2023/01/27/the-administrations-roadmap-to-mitigate-cryptocurrencies-risks

"Alameda and FTX seem to have printed FTT, pumped its price using customer assets - FTX was quite open that it was the FTT market maker, and there's no other real demand - and used the mark-to-market value of their illiquid made-up token as collateral for loans, or as evidence that pension funds should invest in crypto companies. This works great while number is going up!"

"Recently, the subject of seigniorage - the revenues deriving from the monetary monopoly - has attracted the attention of academics and policy-makers. The authors discuss the reasons for this interest before undertaking a survey of the implications of a large-scale introduction of electronic money products on the seigniorage revenues and financial independence of central banks in the group of G10 countries. In countries with decreased seigniorage revenues and a high percentage of e-money the financial independence of central banks are negatively affected as a result of their inability to compensate for increasing operational expenses. Measures such as the limitation of e-money issuance and the imposition of requirements on e-money help in curtailing operational costs related to salaries, pensions, publications and banknote circulation, among others."

The European Insurance and Occupation Pensions Authority (EIOPA) published a feedback statement on blockchain and smart contracts in insurance. The document provides a high-level summary of the responses received from stakeholders during a public consultation on the topic as well as EIOPA's reactions to them. Insurers see potential in blockchain and are exploring possible use cases across the insurance value chain to streamline business and better serve customers, but the technology's deployment is still at an early stage.

The OECD published a report that analyzes the connection between decentralized finance (DeFi) protocol liquidations and price volatility in decentralized exchanges (DEXs). The analysis employs transactional data of three of the largest DeFi lending protocols and suggests a positive relation between liquidations and post-liquidations price volatility across the main DEX pools. It also shows a positive correlation among borrowing rates and across different assets, which indicates that the liquidity in DeFi lending pools is connected, and that at extreme events, when investors pursue the same strategy at large numbers, liquidity of a particular asset may dry up in each of the pools across protocols. This implies that the liquidations mechanism might be limited in its ability to restore liquidity, as liquidators themselves rely on the liquidity available in the pools to repay underwater loans.

Bermuda's Longitude Exchange and Dedomainia, a technology company offering longevity swap solutions, are to collaborate on techniques and processes for monitoring, administering, and valuing index-based longevity risk hedging transactions.