Crypto News: The age of volatility

Participants at Bloomberg's Gateway Europe conference put a spotlight on a host of economic, regulatory and geopolitical trends that underline how much more volatile the world has become in recent years.

From the dangers of AI and social media to the climate crisis and US debt brinkmanship, what comes next is anyone's guess—and that had conference participants deeply concerned as the second and final day of the gathering came to an end.

The sudden emergence of layperson-accessible artificial intelligence—in the form of ChatGPT—has caught society unprepared and shown the need for more discussion about its role, according to Eva Maydell—a member of the European Parliament's industry, research and energy committee.

"If you want society to embrace and trust technology, you need to have that social contract," she said. DeepMind Chief Operating Officer Lila Ibrahim separately endorsed a request by more than 10,000 tech workers and business leaders for a temporary halt to AI evolution. Ibrahim characterized it as a call for "responsibility and safety."

Lila Ibrahim, chief operating officer of DeepMind Technologies Ltd., speaks at the Bloomberg New Economy Gateway Europe conference near Dublin this week Photographer: Paulo Nunes dos Santos/Bloomberg

Given the danger of leaks illustrated by the emergence on social media over the past few weeks of top secret US intelligence, Palo Alto Networks' Helmut Reisinger called for "a zero-trust approach" with regard to access to classified information.

And while many (if not most) policymakers and businesspeople alike agree on the need to address climate change, it's clear there are sharp differences over how to go about it.

The US and European Union are pursuing their own subsidy-rich strategies to bolster clean-energy supply chains. But the duo should really align to better compete with China, said Ann Mettler, vice president at Bill Gates-founded Breakthrough Energy.

"Europe and the US should be talking about sort of a trans-Atlantic clean marketplace where we would really look to align at an early stage in the development of some of these technologies," Mettler said.

Meantime, Rachel Muncrief, deputy director of the International Council on Clean Transportation, criticized the steel industry for not getting enough attention as a "massive polluter." Policymakers need to focus on the full supply chains of technologies such as electric cars when considering how to speed up decarbonization, she said.

Perhaps the most unsettling discussion at the conference revolved around the current partisan standoff in Washington over raising the US federal debt limit. With the US Treasury Department months or even just weeks away from potentially running out of cash, one senior finance official issued a dire warning Thursday.

Philipp Hildebrand, vice chairman of BlackRock Inc., left, speaks with Bloomberg Television anchor Francine Lacqua at the Bloomberg New Economy Gateway Europe conference Thursday. Photographer: Paulo Nunes dos Santos/Bloomberg

A US debt default would threaten "a basic anchor" of the global financial system and "must not happen," BlackRock Inc. Vice Chairman Philipp Hildebrand said.

"All we can do is to pray that everyone in the US understands how important the sanctity of the sovereign signature of the leading currency, of the leading bond market, of the leading economy in the world is," said Hildebrand. "This is not something you want to mess with." —Chris Anstey

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Europe's Role | The EU ought to assemble a unified stance with regard to US-China strategic competition, Ireland's prime minister said.
Replenishing Reserves | The US could begin to refill its Strategic Petroleum Reserve as soon at the third quarter of 2023, if the price is right, the US official responsible for energy diplomacy said.
UBS-Credit Suisse | Hildebrand, a former Swiss central bank chief, said the task for melding the nation's two banking giants will be down to "execution" and "culture."
Emigre Dynamism | Thousands of skilled, educated Russians have fled their homeland for Serbia, offering the Balkan nation an economic boost, Serbian Prime Minister Ana Brnabic said.
Tech Regulation | The EU's top privacy watchdog denied that her agency takes too long to issue rulings on Silicon Valley firms.
Climate Competition | As the EU assembles its answer to the new US clean-energy initiative, it's important that smaller EU members not be disadvantaged, Ireland's finance minister said.

Critical to determining how much room the US Treasury Department has under the current $31.4 trillion debt ceiling is how big a take it reels in from individual income tax returns for 2022, which were due April 18.

Those numbers are just starting to come in now. That day, the Treasury's cash balance jumped by just over $108 billion. That's well down from the more-than $260 billion that flowed in on the same day last year.

That's bad news when it comes to the time remaining before the US Congress needs to raise or suspend the debt ceiling to avoid the risk of a payments default. "Taxes will need to run about $60 billion higher than 2022 for government funding to run into July," said Bloomberg Intelligence US interest rate strategists Ira Jersey and Will Hoffman.