Bond Yields Around the World Soar

SPEAKER_1 (0:00)

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Pierre Bienaimé (0:34)

Fighting heats up between the US and Iran. That's pushing up the price of oil and sending bond yields soaring around the world.

Jack Pitcher (0:42)

There's a global index of government bonds that today touched the highest yield level since 2008

Pierre Bienaimé (0:48)

And banks once lobbied against stable coins. Now many of them are teaming up to launch their own. It's Tuesday, September 1st. I'm Pierre Bienaimé for the Wall Street Journal, sitting in for Alex Osola. This is the PM Edition of What's News, the top headlines and business stories that moved the world today.

Let's begin with one of Big Tech's big rivalries. OpenAI is hitting back at Apple, the company that has accused OpenAI of stealing trade secrets. In a legal filing late last night, OpenAI called Apple's lawsuit baseless. The Chad GPT maker says Apple is trying to hurt OpenAI's ability to recruit new employees. OpenAI wants to develop AI-driven devices that compete with the iPhone, and OpenAI says Apple is trying to block that. Apple's suit was filed in July. It accuses two OpenAI employees, who once worked for Apple, of taking Apple's confidential information.

OpenAI says Apple's suit largely boils down to it having poor offboarding procedures. Apple didn't respond to requests for further comment.

And in finance, major US banks are joining other firms around the world to launch a business they once disregarded. That business is stablecoins. These are digital tokens pegged to the US dollar or other currencies, and they're used for transactions across borders. Bank of America, Citigroup, and Goldman Sachs are among the firms teaming up to launch a stablecoin in the first half of next year. Gina Hebe covers banks and finance for The Wall Street Journal, and she joins me now.

Gina, could you tell us more about stablecoins, like what they really are and who uses them and for what?

Gina Hebe (2:26)

Right now, they're mainly used to trade in and out of cryptocurrencies. The thinking is that they could grow in popularity and be used to make cross-border transactions faster, more efficient, cheaper. But right now, they're mainly used in the crypto world.

Pierre Bienaimé (2:42)

In this case, it's a currency that will belong to a group of companies, most of them banks.

Gina Hebe (2:46)

Exactly, yes. So we have all those big American banks outside of the US. We have Scotiabank. In Europe, we have Sontander, Deutsche Bank.

Pierre Bienaimé (2:56)

And you've been covering this for a while, this evolution from banks rejecting stable coins, even lobbying against them to now getting in on it themselves. What happened there?

Gina Hebe (3:06)

So banks came out with this tokenized deposit solution. They are essentially just a digital asset representation of traditional funds.

The thinking was that that could be enough to combat some of the rising competition in the crypto world as other firms have gotten into stable coin, not just crypto firms, but you know, like BlackRock, DoorDash have gotten in on this market. Banks have kind of said maybe we need to be a little bit more defensive here.

Pierre Bienaimé (3:36)

And President Trump's family is also one of the groups launching their own stable coin.

Gina Hebe (3:41)

That is right, yes.

Pierre Bienaimé (3:42)

Are there any risks here for banks in launching something like this?

Gina Hebe (3:45)

You know, it's largely a defensive strategy without knowing that stable coins will take off.

And in that case, it's like you've invested money in this and it doesn't really go anywhere. And then whatever plays out with digital asset regulation remains uncertain.

Pierre Bienaimé (4:01)

Gina Hebe covers banks and finance for the Wall Street Journal. Gina, thanks so much.

Gina Hebe (4:04)

Thank you for having me.

Pierre Bienaimé (4:10)

Germany has accused Russia of sending explosive drones to its Leipzig airport last month and it's pledging to retaliate against Moscow. It's a rare public attribution of blame in the widening campaign of sabotage across NATO territory, like drone incursions, cyber attacks and arson.

In a press conference today, German Interior Minister Alexander Dobrindt said that Germany is a, quote, daily target of hybrid warfare.

Jack Pitcher (4:36)

That's Deutschland, das Ziel.

Pierre Bienaimé (4:44)

Germany said it would close the last Russian consulate in the country, summon the Russian ambassador, and tighten restrictions on Russians entering Germany. The Kremlin didn't respond to repeated requests for comment.