The tax authorities of Australia and Indonesia have signed a memorandum of understanding to share information on cryptocurrency. Under this agreement, both entities will exchange data on crypto assets and share knowledge to ensure adherence to tax obligations. Agreement Underscores Two Countries’ Willingness to Adopt The Australian Taxation Office (ATO) and its Indonesian counterpart have […]
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EU Provisional Agreement: Crypto Asset Service Providers Added to Obliged Entities List
As per the provisional agreement struck between the European Union Council and Parliament, crypto asset service providers will be obliged to verify facts and information on users whose transactions exceed ,090. According to the Belgian Finance Minister, the new requirements will “ensure that fraudsters, organised crime and terrorists will have no space left for legitimising their proceeds through the financial system.”
New Measures Mitigate Risks Associated with Self-Hosted Wallets
According to a provisional agreement between the European Union (EU) Council and Parliament, crypto asset service providers (CASPs) will now feature in the list of obliged entities that are required to “conduct due diligence on their customers.” This means CASPs need to verify facts and information on users whose transactions exceed ,090 or €1000.
In its Jan. 18 statement, the Council of the EU claimed that the due diligence, which also includes reporting suspicious activity, “adds measures to mitigate risks in relation to transactions with self-hosted wallets.” The statement also explains why the council and parliament agreed to add CASPs to a list which already includes banks, casinos, real estate agencies, and asset management services.
Commenting on the proposed changes to existing regulations, the Belgian Finance Minister Vincent Van Peteghem, said:
“This agreement is part and parcel of the EU’s new anti-money laundering system. It will improve the way national systems against money laundering and terrorist financing are organised and work together. This will ensure that fraudsters, organised crime and terrorists will have no space left for legitimising their proceeds through the financial system.”
Under the provisional agreement, traders for items such as luxury cars, airplanes, yachts, and cultural goods also become obliged entities. In addition, professional football clubs also become obliged entities. However, according to the statement, EU members can still remove the football sector if they perceive it to be a low risk.
New Cash Payment Limit
Meanwhile, the statement also revealed that members will be required to impose a cash payment limit of nearly ,000. By restricting the value of cash payments, the EU aims to “make it harder for criminals to launder dirty money.” The statement also revealed new cash payment thresholds for occasional crypto users.
“In addition, according to the provisional agreement, obliged entities will need to identify and verify the identity of a person who carries out an occasional transaction in cash between €3,000 and €10,000,” the Council of the EU said.
The council’s statement also outlined the responsibilities of member states’ respective financial intelligence units (FIU). It said each unit would be given “immediate and direct access to financial, administrative, and law enforcement information.” This information can include crypto transfers, national motor vehicles, and customs data.
Following the agreement between the Council and Parliament, the text of the provisional agreement is now set to be presented to member states’ representatives and the EU for approval.
What are your thoughts on the European Union’s latest anti-money laundering rules? Let us know what you think in the comments section below.
Argentina Registers First Bitcoin Settled Lease Agreement
Argentina has registered one of its first lease agreements denominated in bitcoin after the application of the emergency executive order issued by President Javier Milei, which opened the door for this kind of settlement. The agreement stipulates that the tenant must pay the 0 USDT worth of bitcoin to the property’s landlord each month.
Argentina Starts Implementing Bitcoin-Settled Lease Agreements
Argentina has reached a milestone in crypto adoption, registering one of the first contracts involving bitcoin payments. According to La Capital, a local Argentine news outlet, the first Bitcoin-settled lease agreement was recently signed in Rosario City.
The agreement stipulates that the tenant will pay the equivalent of 0 USDT in Bitcoin to the landlord each month, having selected Fiwind, a national cryptocurrency exchange, as the provider of the referential bitcoin price to execute these payments. The contract also determines that the tenant will execute these payments during the first five days of each month to an address provided by the landlord.
While there were records of real estate sales settled in bitcoin before, this is the first lease agreement of this kind, local sources state.
Diana Mondino, the Minister of Foreign Affairs of Argentina, had clarified that as a result of the application of the first mega executive order issued by President Javier Milei, which eliminated the lease and rents law, these contracts could be settled in bitcoin, in other cryptos, and also in other assets.
The executive order that enables these agreements will be reviewed by the courts of the country, which have already suspended the effects of some segments awaiting the final decision on the legality of this document. Also, the emergency executive order can be suspended if both chambers of Congress reject it.
Nonetheless, the executive order allows tenants and landlords to legally sign this kind of bitcoin-denominated lease contract that evades having to transact in Argentine pesos, the embattled and devalued national fiat currency.
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European Union Finalizes Digital ID Wallet Agreement, Hints at Digital Euro Integration
The European Parliament and the Council of the European Union (EU) have finalized the agreement that will allow the implementation of a continent-wide digital ID wallet program. The agreement, which needs to be ratified at the parliamentary level, would greenlight the issuance of the EU digital ID wallet in accordance with the “Europe’s Digital Decade” framework, which targets the digitization of Europe.
European Union Agrees on a Digital ID Wallet Plan
The European Union (EU) has finalized the agreement that will allow the implementation of a digital ID wallet project in all of the EU. The agreement, which builds on top of the digital ID political pact reached in June, aims to extend access to government-based and private services using a simple mobile document app.
The news was announced first by Thierry Breton, commissioner for the internal market of the EU, who celebrated the development by stating:
We did it! With the European Digital Identity wallet, all European citizens will be able to have a secured e-identity for their lifetime.
Breton also reinforced that the wallet will have the “highest level of both security and privacy,” letting Europeans control which apps have access to their data. Private businesses and companies like Amazon and Facebook will have to implement public identification checks using these digital ID services based on European standards.
What Comes Next
The digital ID wallet might integrate with the Digital Euro in the future, as Breton hinted as a possible connection between these two services. Robert Roos, a member of the European Parliament who was present when the agreement was reached, explained how Breton suggested the future link.
Roos declared that after the agreement, Breton stated that now that the EU had an identity wallet, they had to put something in it, referring to the digital euro, the European central bank digital currency (CBDC) that recently entered its “preparation” phase.
These developments are inscribed in a framework the EU calls “Europe’s Digital Decade,” which seeks to digitize most government services and private businesses and educate a “digitally skilled population and highly skilled digital professionals.”
Nonetheless, the agreement still needs to be ratified by the European Parliament and all of its members. If approved, “Member States will have to provide EU Digital Identity Wallets to their citizens 24 months after adoption of Implementing Acts setting out the technical specifications for the EU Digital Identity Wallet and the technical specifications for certification.”
What do you think about implementing a digital ID wallet in the European Union? Tell us in the comments section below.
Latam Insights — Argentina Reaches IMF Agreement, Bitfarms to Open New Mining Operations in Paraguay
Welcome to Latam Insights, a compendium of Latin America’s most relevant crypto and economic news during the last week. In this issue, Argentina reached a new agreement with the International Monetary Fund (IMF), Bitfarms will open two bitcoin mining farms in Paraguay, and Venezuela is now accepting MIR card payments.
Argentina Reaches New Disbursement Agreement With the IMF
Argentina has reached a new agreement with the International Monetary Fund (IMF) to accelerate the delivery of resources during this year. According to Economy Minister Sergio Massa, this new deal includes the disbursement of funds to Argentina in August and November, allowing the embattled nation to replenish its reserves at least for this year. While Massa declined to mention specific numbers, he stated these payments were able to fulfill the country’s expectations.
Also, Massa declared this agreement reinforces the ability of the Central Bank of Argentina to intervene and balance its internal exchange system. The bank had been reducing foreign currency sales to importers as its reserves touched historic lows.
Massa explained:
From now on, you have a Central Bank that does not have a dilemma to make payments and you have less pressure on financial dollars that influence price remarking.
Bitfarms to Launch Two Bitcoin Mining Farms in Paraguay
Bitfarms, a Nasdaq-listed Bitcoin mining company, announced that it had secured two power purchasing agreements in Paraguay to build two new Bitcoin mining operations in the country. The company acquired up to 50 MW of power in Villarrica and 100 MW in Iguazu. The power contracted has a hydroelectrical origin to ensure the new sites will operate using renewables.
Geoff Morphy, CEO of Bitfarms, declared:
Paraguay has access to an abundance of surplus renewable power, and these acquisitions secure valuable, yet limited, sustainable energy contracts while broadening our foothold in a resource-rich country.
Villarrica’s site construction is slated to start in Q3 2023, while a construction timeline for Iguazu hasn’t been determined yet.
Venezuela Starts Processing MIR Card Payments
Russian Ambassador to Caracas Sergey Melik-Bagdasarov informed that Venezuela was already processing payments from Russian MIR cards. The pioneer spot for this adoption move is located on the eastern island of Margarita, a tourist location.
Melik-Bagdasarov stated:
The start of [Mir card] payments has already begun on Margarita Island, which is ready to host and is accommodating Russian tourists.
The ambassador stated that while Mir payments were also being tested in Caracas, the Venezuelan capital, there were still technical issues to be addressed. The Venezuelan government announced it was working on this integration in June.
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Egyptian and Nigerian Central Banks Sign Agreement to Deepen Cross-Border Regulation
The central banks of Egypt and Nigeria have signed a fintech agreement to deepen the two institutions’ “cross-border regulatory collaboration” and information sharing. The London Institute of Banking & Finance, which also signed an MOU, will offer training programs, workshops, and courses to leaders in the Egyptian fintech sector.
MOU Agreement to Help Boost Innovation
On July 17, the Egyptian and Nigerian central banks announced the signing of a financial technology collaboration agreement. The signing of the memorandum of understanding (MOU) is expected to help “deepen cross-border regulatory collaboration” and information sharing between the two institutions.
Furthermore, the pact will help “boost innovation and grow regional technology investments.” The MOUs were signed on the sidelines of the Seamless North Africa 2023 meeting held in Cairo.
Central Bank of Nigeria signs FinTech collaboration agreements with the Central Bank of Egypt #FinancialInclusion #FinTech #SeamlessNorthAfrica2023. pic.twitter.com/pswcIA7aMy
— Central Bank of Nigeria (@cenbank) July 18, 2023
In her remarks following the signing of what has been described as a fintech bridge, Aishah Ahmad, the deputy governor of the Central Bank of Nigeria (CBN), said the collaboration would foster financial inclusion.
“We look forward to cultivating an innovative space for fintech startups and entrepreneurs in Egypt and Nigeria to accelerate financial inclusion, deepen our payment systems and drive economic growth across the African Continent,” Ahmad, who is in charge of Financial System Stability, said.
According to a Xinhua report, the London Institute of Banking & Finance, which also signed an MOU with the Egyptian central bank, will offer training programs, workshops, and courses to leaders in the Egyptian fintech sector. Meanwhile, at the same event, the governor of the Egyptian central bank Hassan Abdallah announced the release of the Fintech Outlook report which highlights the positive indicators of Egypt’s fintech sector.
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India and UAE Break Away From US Dollar: Landmark Agreement Enables Trade Settlements in Rupees and Dirhams
In a compelling turn of events this Saturday, India and the United Arab Emirates (UAE) inked a landmark agreement facilitating trade transactions to be settled in their native currencies, rupees and dirhams, instead of relying on the U.S. dollar. India’s prime minister Narendra Modi visited the UAE, where the countries announced the linking of the UAE’s Instant Payments Platform (IPP) and India’s Unified Payments Interface (UPI).
India, UAE Ink Deal for Trade in Native Currencies
India and the UAE signed a memorandum of understanding Saturday to promote trade settlements in rupees and dirhams. Indian Foreign Secretary Vinay Mohan Kwatra said that although short, prime minister Narendra Modi’s visit to Abu Dhabi was a “landmark in the partnership between India and the UAE.” In addition to facilitating trade in both currencies, the countries will link India’s UPI and the UAE’s IPP systems.
“This is a very important aspect of India-UAE cooperation. It paves the way for enhanced economic collaboration and will make international financial interactions simpler,” prime minister Narendra Modi said.
Furthermore, both countries announced a plan for the Indian Institute of Technology to establish a campus in Abu Dhabi, partnering with IIT-Delhi. This endeavor aims to strengthen technological innovation ties between India and the UAE. “The manner in which ties between our countries have expanded, you have made a big contribution to that. Every person in India views you as a true friend,” Modi conveyed to the UAE’s president and Abu Dhabi’s ruler, Sheikh Mohamed bin Zayed Al Nahyan.
Before the recent agreement between India and the UAE to settle trade payments in rupees and dirhams, Indian refiners were required to buy U.S. dollars to purchase oil. For approximately 48 years, many international buyers were obligated to pay for Saudi Arabian crude in U.S. dollars. That has been shifting recently. In January, just six months prior, Saudi Arabia’s finance minister Mohammed Al-Jadaan announced the kingdom’s openness to trading in currencies other than the U.S. dollar.
Although the recent agreement between Modi and Al Nahyan simplifies transactions, several Indian refiners had already begun to veer away from the U.S. dollar, opting for the UAE’s dirham when buying Russian crude oil. Among those adopting the dirham were companies such as Reliance Industries, Bharat Petroleum, and Nayara Energy. Initially, there were some stumbling blocks, as reports suggest the State Bank of India (SBI) encountered difficulties with these settlements. However, since February, SBI has successfully been clearing dirham payments.
What do you think about the trade deal between India and the UAE? Share your thoughts and opinions about this subject in the comments section below.
Nasdaq Resubmits Blackrock Spot Bitcoin ETF Application, Inks Agreement With Coinbase for Surveillance-Sharing
After the four firms that filed for spot bitcoin exchange-traded funds (ETFs) resubmitted their applications with the U.S. Securities and Exchange Commission (SEC), the asset manager Blackrock followed suit with an amended application. Similar to Cboe’s refiling of registrations from Fidelity, Vaneck, Invesco, and Wisdomtree, Nasdaq amended the Blackrock spot bitcoin ETF filing, by incorporating Coinbase as a surveillance-sharing agreement (SSA) partner.
Nasdaq Amends Blackrock Spot Bitcoin ETF Application Alongside Industry Competitors
Last week, a report from The Wall Street Journal revealed that individuals with knowledge of the situation said the Securities and Exchange Commission (SEC) expressed dissatisfaction with the numerous spot bitcoin ETF filings submitted in the past two weeks.
The leading U.S. options exchange, Cboe, informed the WSJ that it intended to revise its filings. Subsequently, Cboe updated the spot bitcoin ETF filings for Wisdomtree, Vaneck, Invesco, and Fidelity.
At that time, it remained undisclosed whether Blackrock had updated its registration for its spot bitcoin ETF. However, on June 29, 2023, records indicate that Nasdaq revised the Blackrock spot bitcoin 19b-4 filing. Like the other ETF resubmissions, Blackrock and Nasdaq designated Coinbase as the fund’s surveillance-sharing agreement (SSA) partner.
In essence, an SSA partner is an organization that has consented to share surveillance information with another entity. Regarding an exchange-traded fund, an SSA cooperates with the manager to exchange surveillance information aimed at enhancing security and ensuring public safety.
One of the primary concerns regarding a spot bitcoin ETF, as stated in the SEC’s numerous denials of spot bitcoin ETFs over the years, is market manipulation and insufficient investor protection.
Nevertheless, Blackrock, being the world’s largest asset manager, carries significant credibility, leading some to speculate that the financial powerhouse’s credentials could facilitate the approval of Blackrock’s spot Bitcoin ETF.
“The Spot BTC SSA is expected to be a bilateral surveillance-sharing agreement between Nasdaq and Coinbase that is intended to supplement the exchange’s market surveillance program,” according to details in Blackrock’s filing.
In the ETF filing submitted for approval to the U.S. securities regulator, Coinbase is also designated as Blackrock’s custodian. Blackrock’s filing elaborates that there is an agreement and term sheet between Coinbase and Nasdaq, which took effect on June 16, 2023.
Some market observers suggest that this could give Blackrock an advantage, as opposed to stating that the funds are simply “expecting to enter into an SSA,” as explained by Nate Geraci, co-founder of the ETF Institute.
What are your thoughts on the resubmission of spot Bitcoin ETF applications by major players like Blackrock? Do you believe this renewed effort will pave the way for regulatory approval? Share your thoughts and opinions about this subject in the comments section below.
Russian Official Expects Agreement on BRICS Currency This Year
The chairman of the State Duma Committee on the Financial Market says that an agreement on the BRICS currency can be reached in 2023 as BRICS nations ramp up their de-dollarization efforts to shift away from U.S. dollar reliance. “By linking its economy and currency to politics, the U.S. is practically undermining the foundations of its dominance,” said the Russian official.
Agreement on BRICS Currency Could Be Reached in 2023, Says Russian Official
Anatoly Aksakov, Chairman of the State Duma Committee on the Financial Market, discussed BRICS currency and the de-dollarization trend on Wednesday at the press center of Parliamentary Newspaper, the publication of the Federal Assembly of the Russian Federation.
Aksakov expects the share of the U.S. dollar in international trade to decline, noting that Americans continuing to destroy the value of the dollar with their own hands shows the whole world that the USD is being used for political purposes. He said:
By linking its economy and currency to politics, the U.S. is practically undermining the foundations of its dominance. I am sure that the share of the dollar in world trade will steadily decline.
The Russian official added that now there is a search for some kind of collective currencies, emphasizing that a discussion on this topic is already on the agenda of the BRICS countries (Brazil, Russia, India, China, and South Africa).
Aksakov further stated that while the negotiations are at an early stage, an agreement can be reached in 2023.
The BRICS nations have been ramping up their de-dollarization efforts and are currently working to create a common currency that will reduce their reliance on the U.S. dollar. State Duma Deputy Chairman Alexander Babakov said last month that BRICS currency is expected to be discussed at the next leaders’ summit in August.
The economic bloc is also pushing to expand its global influence. A Russian official said this week that Russia is actively discussing BRICS expansion with member countries. So far, 19 nations have either applied to join the group or have expressed interest to join. However, multiple people have warned that a BRICS currency will erode the U.S. dollar’s dominance.
Do you think the BRICS currency will undermine the U.S. dollar’s dominance? Let us know in the comments section below.
Report: Nigeria-China Currency Swap Agreement Fails to Ease Pressure on the Naira
Nigerian economic experts have said the country’s five-year-old currency swap agreement with China has not eased the pressure against the Nigerian currency. According to one expert, implementation of the swap arrangement is being held back by the size of the trade imbalance between Nigeria and China
Easing Pressure on the Naira
According to experts on the Nigerian economy, the country’s five-year-old currency swap agreement with China has failed to ease the pressure on the naira. Signed between the Central Bank of Nigeria (CBN) and the People’s Bank of China (PBOC), the agreement was also intended to reduce pressure on Nigeria’s external reserves and to ensure foreign exchange stability.
However, since the signing of the swap arrangement in 2018, the Nigerian currency has depreciated versus the dollar from N305: in 2018 to over N460: in the first week of April 2023. Against the yuan, the Nigerian currency slid from the 2018 exchange rate of N48:CNY1 to N66.70:CNY1 on April 6, 2023. On the foreign exchange parallel market, a key source of the greenback for many Nigerian businesses and individuals, the naira/dollar exchange rate reportedly stood at over N730:.
Reports of the currency swap arrangement’s failures came at a time when several countries have or are seeking to establish similar arrangements with China.
Explaining why the currency swap arrangement with China is seemingly failing to halt the naira’s decline, Taiwo Oyedele, the head of tax and corporate advisory services at PWC Nigeria, pointed to the trade imbalance between the two nations.
“The implementation has so far been a challenge due essentially to the trade imbalance between Nigeria and China. While we import so much from China, we do not export nearly as much, which in fact has been on the decline in addition to the relative instability in the value of the naira,” Oyedele reportedly said.
According to Oyedele, Nigeria can still remedy this situation by substituting or promoting locally produced alternatives to imports.
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