The Nigerian Securities Regulator has proposed a rule requiring virtual asset service providers to be incorporated and maintain an office within Nigeria. The regulator has also suggested a fivefold increase in the registration fee, which must be submitted alongside license applications from prospective crypto exchanges. Proposed Regulations to Foreign Operators Targeting Nigerian Users According to […]
Bitcoin News
Franklin Templeton’s Executive Expects All Nations to Hold Bitcoin — ‘Every Country Is Going to Have to Hold Some Reserves’
An executive at trillion-dollar asset manager firm Franklin Templeton expects bitcoin to become “something that every treasury needs to hold.” She believes that “every country is going to have to hold some reserves,” emphasizing that the cryptocurrency is “working its way increasingly into the traditional banking ecosystem as just a foundational part of that system.”
Kaul: Bitcoin Could Be Used as Base Unit of International Trade
Franklin Templeton’s senior vice president and head of Digital Asset and Industry Advisory Services, Sandy Kaul, discussed the future outlook for bitcoin in an interview with Natalie Brunell, published Thursday. Before joining Franklin Templeton, Kaul held positions at Shearson Lehman Brothers, Citi, and Goldman Sachs Asset Management.
A global leader in investment management with a presence in over 150 countries and serving millions of clients, Franklin Templeton reported .37 trillion in assets under management at the end of September. The asset manager has also applied to launch a spot bitcoin exchange-traded fund (ETF) with the U.S. Securities and Exchange Commission (SEC).
Regarding the broader adoption of bitcoin and the potential for nation states to embrace it, the executive said: “I think you’re already starting to see that.” She explained that less developed nations combine “some of their buying power around bitcoin” and use it “as a way to compete more effectively with bigger companies and bigger countries and bigger economies.” Emphasizing, “I think you’ll see more of that,” Kaul stressed:
I think also that it’s going to become something that every treasury needs to hold because portions of their business will just be facilitated more easily through bitcoin payments than through foreign exchange conversions that need to happen to enable cross-border trade today.
While noting that a lot of people see promises in central bank digital currencies (CBDCs) as “there will be a lot of efficiencies that get created by them,” she argued: “But those are going to still require all of that translation, and exchange rate risk that you carry in moving from country to country whereas a bitcoin is a bitcoin in every country.”
Kaul opined: “So I do still think that the potential to see this used as the base unit of international trade exists. I think at a minimum you are gonna see it used for certain types of trade.” She asserted:
That means that every country is going to have to hold some reserves and so I just see it working its way increasingly into the traditional banking ecosystem as just a foundational part of that system.
She concluded: “I think the question then just becomes: ‘Over time do people start to gravitate more to something that works globally and isn’t tied to any government’s policies? And that I think we’ll have to see play out. But intuitively, it feels like it absolutely could.”
Do you agree with Franklin Templeton’s head of digital asset research? Let us know in the comments section below.
US Prosecutors Urge Court to Keep Binance’s Ex-CEO in the Country Amid Flight Risk Concerns
In the wake of the settlement between the U.S. Department of Justice and Binance, the world’s largest crypto exchange, federal authorities are insisting that the exchange’s former CEO, Changpeng Zhao (CZ), remain stateside until his sentencing in February 2024.
Justice Department Seeks to Restrict Ex-Binance CEO’s Travel Before Sentencing
A recent court filing reveals that U.S. prosecutors have petitioned Magistrate Judge Brian Tsuchida to ensure Changpeng Zhao’s (CZ) continued presence in the U.S. This request, lodged on Wednesday, aims to reassess the bond conditions set on November 21, 2023. The U.S. government articulates concerns about CZ being a “substantial risk of flight.”
The filed document explicitly states:
[The Government] requests that the court order that Zhao should not be permitted to return to the UAE before sentencing.
Currently residing in Dubai, United Arab Emirates (UAE), CZ lives with his three children and partner. The prosecutors argue that the prospect of an 18-month jail term might tempt CZ to remain in the UAE with his family. The lack of an extradition treaty between the UAE and the U.S. complicates matters, making it challenging to secure his return in case of non-compliance with court directives.
Despite an initial agreement on a 5 million bail bond, prosecutors are now questioning its sufficiency. Under the proposed arrangement, “three responsible persons” were to secure million in cash for the bail. While CZ faces potential imprisonment, there remains a possibility of avoiding it, akin to Bitmex’s former CEO Arthur Hayes.
Hayes, who breached the Bank Secrecy Act (BSA) by neglecting to establish an anti-money laundering (AML) protocol at Bitmex, faced a potential five-year prison term. However, as a first-time offender, he was granted two years of probation instead of prison time. Hayes concluded his legal troubles by paying a million fine for his offenses.
What do you think about the prosecutor’s concerns about CZ posing a flight risk? Share your thoughts and opinions about this subject in the comments section below.
Egypt Becomes First MENA Country to Issue Chinese Yuan-Denominated Bonds
Eygpt has reportedly become the first Middle East North Africa (MENA) region country to issue so-called “panda bonds” after it issued Chinese yuan denominated bonds worth 9 million. Issuing panda bonds marks another step in Egypt’s attempts to move away from costly dollar denominated loans.
Egypt’s Worsening Debt Affordability
Egypt, one of Africa’s heavily indebted countries, recently issued Chinese currency denominated bonds worth an estimated 9 million or 3.5 billion yuan. The three-year bonds, which were reportedly issued with an interest rate of 3.5%, are part of the North African country’s attempts at diversifying the country’s funding sources.
According to a Business Insider report, the rate of interest on these bonds is much lower than what Egypt would ordinarily pay were they denominated in dollars. Lowering the cost of servicing its debts remains a priority for Egypt, which recently had its credit rating status lowered to Caa1, some seven levels into junk status. Egypt’s worsening debt affordability was cited by rating agency Moody’s as one of the reasons why the country’s credit status was cut.
However, Mohamed Maait, Egypt’s finance minister, is quoted in the Business Insider report expressing his country’s desire to rein in on borrowing costs.
“We are working on diversifying our financing sources through different capital markets as well as securing guarantees from several institutions to reduce the cost of the debt during this challenging high interest-rate environment,” Maait reportedly said.
Egypt’s De-Dollarization Drive
The yuan bonds, also known as “panda bonds,” are debt instruments issued by non-Chinese entities. The bonds can only be sold in China, while issuers are not permitted to repatriate such funds. Poland and the Philippines are known to be the only countries to have issued such bonds.
By issuing the so-called panda bonds, Egypt has become the first country from the MENA region to do so. The move also makes good on Egypt’s pledge to de-dollarize its economy. Meanwhile, in addition to the panda bonds, Egypt is also reportedly planning to issue Japanese yen denominated bonds or “samurai” bonds.
What are your thoughts on this story? Let us know what you think in the comments section below.
‘Our Country Is Going to Hell’ — Trump Warns of US Losing Global Currency Dominance
The 45th president and previous White House occupant, Donald Trump cautions that America is in danger of losing its global influence. In an interview with Larry Kudlow, Trump stated while the U.S. retains significant power, its position is “waning” concerning its currency.
The Diminishing Dollar? Trump Points to a Shift in Global Currency Dynamics
Always candid, Trump engaged in a conversation with Fox Business’ Larry Kudlow to examine the nation’s international standing. As he seeks re-election in 2024, Trump may become the Republican challenger to incumbent Democrat Joe Biden. Asserting that America has suffered under Biden’s leadership, Trump accuses the current administration of lacking “common sense.”
“They don’t know what they’re doing and they’re destroying our country,” Trump declared about the Biden administration. He expressed confidence that if re-elected, his administration would promptly rectify matters. “[If] you look at our airports, you look at our terminals, you look at our filthy roads and broken roads and everything else, we’re like a Third World country,” Trump informed the broadcast host.
Subject to numerous ongoing investigations and indictments following his tenure, the former president emphasized his conviction that America will continue to decline and could lose its preeminent status. “Our country is going to hell and we’re not going to be the big boy,” Trump professed. “We have power, but it’s waning. In fact, it’s waning in terms of our currency.”
Trump further commented:
I’m not just talking about the value of our currency, I’m talking about our currency being used throughout the world.
Trump expounded upon nations opting against utilizing the U.S. dollar, contending that China aims to supplant it with the yuan – an idea previously deemed “unthinkable.” However, Trump asserts it is now under consideration. Ultimately, he believes inflated energy costs are responsible for these issues.
“Inflation was caused, in my opinion, by energy, because it’s so big,” Trump explained to Kudlow. “It’s like all encompassing, everything. You make donuts in the ovens and the trucks that deliver them, and no matter what you do, it’s so much about energy.” Trump’s exclusive Fox Business interview with Kudlow succeeded his recent warning that America would face recession if he isn’t re-elected. He also pledged to facilitate a swift peace treaty between Russia and Ukraine, among other promises.
What do you think about Donald Trump’s opinion of the United States and the dollar? Share your thoughts and opinions about this subject in the comments section below.
Bank Of Canada Study Shows Crypto Ownership In The Country Fell In The Last 2 Years
A recent study by the Bank of Canada (BoC) has shown a decline in the ownership of cryptocurrencies over the two years. The BoC has attributed this decline in crypto ownership to ecosystem collapses, regulatory hurdles, and price depreciation.
Bitcoin’s Decline Most Notable
According to the Bitcoin Omnibus Survey, Bitcoin’s ownership across the country dipped to 10% at the end of last year. This decline has been attributed to various factors, including the significant drop from its all-time high due to the current market conditions, especially since Bitcoin’s price crashed over 50% from its all-time high of ,044.77 last year.
The survey also cited FTX’s unexpected collapse as contributing to the decline, as it prompted enhanced scrutiny from regulators while also creating doubts in the hearts of crypto investors.
The decline in Bitcoin ownership wasn’t a result of investors moving their money to other crypto assets given that altcoins also suffered a similar fate to Bitcoin, as ownership in these digital assets also experienced a downward trend last year.
The report read:
Investors did not appear to shift out of Bitcoin and into other cryptoassets, as we observe decreased ownership of altcoins.
There are some positives for Bitcoin and the crypto ecosystem, as Bitcoin’s ownership is still higher than the 8% recorded between 2018 and 2020. Another silver lining is that many locals are aware of Bitcoin (meaning they could invest in it in the near future), as general awareness of the token has been at an impressive 90%.
However, despite being aware of the term Bitcoin, many Canadians still don’t understand how the cryptocurrency operates. According to the BoC’s research methodology, 61% of non-bitcoin owners showed low crypto literacy. Meanwhile, a meager 30% of Bitcoin owners exhibited high-level crypto literacy.
Financial Literacy Doesn’t Equate To Crypto Enthusiasm
Many would have predicted that persons with higher financial literacy would be more bullish on Bitcoin and other crypto assets. However, that isn’t the case in Canada, according to the survey. Interestingly, respondents with a high financial literacy were the ones who were quick to exit the crypto market. In contrast, those with a lower financial literacy remained bullish despite the market conditions and regulatory concerns.
While these figures may not be so encouraging, there is enough reason to believe that the growing adoption of cryptocurrencies worldwide will impact the future of crypto ownership in the country as more locals gain crypto literacy.
Furthermore, efforts from the authorities to provide regulatory clarity could also help as it will boost investors’ confidence in the country and consequently increase crypto ownership in the country.
Ukraine Government Reveals Crypto Firms Have Cost The Country $81 Million In Lost Taxes
According to data released by the Ukrainian government, cryptocurrency firms offering services in Ukraine have failed to contribute over million in taxes to the country’s budget in the past decade. This comes after the country passed a crypto bill into law in 2022 that amends its tax code to allow the country to generate taxes from cryptocurrency transactions.
A Huge Loss In Revenue For Ukraine
In a notice released on Wednesday, the Economic Security Bureau of Ukraine stated that unrelated cryptocurrency exchanges were responsible for the loss of approximately 3 billion hryvnia in taxes (roughly million) between 2013 to 2023.
The country’s foremost regulator noted that it had evaluated the trading actions of exchanges founded by residents of the country, which had billion in Bitcoin (BTC), Ether (ETH), and Tether (USDT) volume in rough estimates over the same period.
Speaking to local media following the announcement, Deputy Director of the Economic Security Bureau Andriy Pashchuk stated that there were different perspectives on “how these transactions should be taxed and (the bureau) will act in accordance with the provisions adopted by the deputies.” He opined that while these issues drag on, the country keeps losing “..tens of millions in taxes every month.”
Crypto Tax Losses Follow Passage Of Landmark Bill
The recent loss of revenue follows the recent passage of the legislation “On Virtual Assets” by the Ukrainian parliament in 2022. The law was enacted amid the growing adoption of cryptocurrencies as a valid means for conducting transactions.
The bill, which was signed into law in March 2022 by Ukrainian President Volodymyr Zelenskyy, sought to create a regulatory framework for cryptocurrency transactions in the country.
At the time of passing the bill, the government stated that it was looking to amend the country’s civil and tax codes to accommodate the new legal framework. However, as of August 2023, no such amendments have been executed.
Ukraine also brought some minor amendments to the legislation in September 2022 to ensure that the law was in sync with the European Union’s Markets in Crypto Asset (MiCA) regulation.
Since then, many crypto users in Ukraine have taken to Telegram to ask whether they would be mandated to provide “backpay” of taxes based on transactions over the last decade. Some noted the government’s failure to properly adopt the regulations despite the passage of the law in 2022. According to one Telegram user with the username Vini2010w, had the government adopted the law, “everything would have been settled a long time ago.”
Ukraine has been heavily reliant on cryptocurrency donations amid the ongoing war with Russia. About $225 million in cryptocurrency donations have been pledged in support of the country since 2022 following Russia’s invasion. The vast majority of the donations were made in Ethereum and Bitcoin, the two most popular cryptocurrencies and the largest by market cap.
Egypt Struggles With Skyrocketing Inflation and Depreciating Currency, While Bitcoin Nears Record High in the Country
According to the Egyptian Statistics Bureau, Egypt’s annual inflation rate hit 36.8% in June, a staggering 33.7% increase from May’s inflation rate, breaking records. Egypt, the world’s 14th most populous country, grapples with soaring prices for goods and services across the region. Additionally, the bitcoin exchange rate in Egypt is approaching the record high set in November 2021.
Egyptian Pound Plummets as Inflation Reaches Highest Level in Decades, Bitcoin Nears All-Time High
Recent inflation figures show Egypt is currently grappling with soaring inflation rates. The annual inflation rate surged to 36.8% in June. Citizens face rising food prices, a depreciating currency, higher fuel costs, and a growing fiscal deficit. Since June 2022, when the inflation rate was at 14.7%, the cost of goods and services in Egypt has more than doubled.
The Egyptian pound (EGP) has declined significantly against the U.S. dollar in the first half of 2023, according to the latest exchange rates. The EGP’s value has dropped 80.25% against the dollar since Dec. 26, 2003, with 42.09% of that decline occurring within the past five years. The currency has depreciated nearly 20% against the U.S. dollar since the start of 2023. Additionally, the inflation rate in Egypt has reached the highest level recorded since 1958.
In response to the inflation crisis, the Egyptian government has taken measures such as reducing state spending. Moreover, the Central Bank of Egypt increased the benchmark bank rate four times in 2022. Despite the significant rise in inflation in Egypt, the exchange rate of the Egyptian pound (EGP) against Bitcoin (BTC) indicates BTC is nearing a record high. The current exchange rate is nearing the all-time high set in November 2021, when BTC surpassed one million EGP per unit. As of July 10, 2023, the exchange rate is 936,506 EGP per Bitcoin.
Egypt’s ongoing currency crisis and rampant inflation have severely impacted its citizens. An Egyptian family told the Wall Street Journal in April they were “hardly surviving this crisis” and were running low on food. In order to mitigate the severe inflationary conditions, on January 16, 2023, the government announced a plan to sell discounted bread to low-income Egyptians most affected by the economic upheaval.
According to government statistics, nearly 30% of Egyptians live below the poverty line. Egyptian policymakers have also been seeking assistance from the International Monetary Fund (IMF) and the World Bank. Since 2016, Egypt has received multiple financial support packages from the IMF. The most recent of these, a billion loan, was approved by the IMF in December 2022.
What are your thoughts on Egypt’s inflation crisis and its impact on the lives of its citizens? Share your thoughts and opinions about this subject in the comments section below.
Malaysian Regulator Orders Crypto Exchange Huobi Global to Halt Operations in the Country
The Malaysian securities regulator announced on May 22 that the crypto exchange Huobi Global Limited and its CEO Leon Li have been reprimanded for operating in the Asian country illegally. The regulator also revealed that the crypto exchange has been told to stop soliciting investments via emails and social media platforms.
Crypto Exchange Told to Disable Its Website
The Securities Commission Malaysia (SC) said on May 22 that it had “issued a public reprimand against Huobi Global Limited, and [CEO] Leon Li for operating illegally in Malaysia.” In addition to the public censure, the Malaysian securities regulator also ordered the crypto exchange platform to stop operating in the country.
According to the regulator, Huobi must “disable its website and mobile application on several platforms such as Apple Store or Google Play.” Besides ordering the crypto exchange to stop inviting investors to its platform, the statement released by the regulator said the crypto exchange should also stop soliciting investments via emails or social media platforms.
In the statement, the Malaysian regulator said the decision to bar Huobi Global was made after it noted the crypto platform’s compliance failures.
“This decision comes after concerns about the platform’s compliance with local regulatory requirements and protecting investors’ interests. The SC views this breach seriously, as operating a DAX [digital asset exchange] without obtaining the SC’s registration as a Recognised Market Operator (RMO) is an offence under Section 7(1) of the Capital Markets and Services Act 2007,” the Securities Commission Malaysia said in the statement.
The Malaysian regulator also warned users of Huobi to “immediately cease trading through its platform, withdraw all their investments, and close their accounts.”
Meanwhile, the SC statement also advised Malaysian investors to deal with RMOs as these have “undergone strict regulatory scrutiny” and “are required to adhere” to guidelines that protect users. On the other hand, the securities regulator said those investing in unlicensed entities “may not be protected under Malaysian securities laws.”
What are your thoughts on this story? Let us know what you think in the comments section below.
South African Currency Plunges to New Low Versus the Dollar a Day After the US Accused Country of Secretly Supplying Ammunition to Russia
The South African currency’s exchange rate versus the U.S. dollar plunged to a new all-time low of ZAR19.51:US on May 12. The rand’s latest fall came a day after the U.S. ambassador to South Africa accused the country of secretly supplying weapons to Russia. Banking giant JP Morgan said it now projects South Africa’s gross domestic product to contract by 0.2%, down from the earlier positive projection of 0.3%.
South Africa Denies It Supplied Ammunition to Russia
The exchange rate of the South African currency versus the greenback fell to a new all-time low of 19.51 units of the rand for every dollar on May 12. The rand’s plunge came a day after the African country was accused of secretly supplying ammunition to Russia by a United States ambassador.
With this latest drop, the South African rand depreciated by more than 5% in just one week and more than 12% since the start of the year. Before hitting the new low, the South African rand’s previous all-time low was set on April 5, 2020.
Reuben Brigety, the U.S. ambassador to South Africa, revealed on May 11 that his country believes Russia, which invaded Ukraine in Feb. 2022, took possession of the weapons in late 2022. Addressing journalists after dropping the bombshell, Brigety said the matter was extremely serious and that the United States does “not consider this issue to be resolved.” The ambassador however said the U.S. is still keen on seeing South Africa practice its so-called “non-alignment policy.”
However, in response to the allegations, the U.S. official was summoned for a meeting on May 12 by the South African foreign affairs ministry. On the same day, Clayson Monyela, the spokesperson for the ministry, said in a tweet that his country has “no record of an approved arms sale by the state to Russia related to the period/incident in question.” Earlier, South African President Cyril Ramaphosa’s office suggested that an inquiry to “establish the facts and role players” was already underway when the U.S. ambassador went public with the allegations.
Dire Consequences for South Africa
Meanwhile, an earlier News 24 report said the South African rand had lost nearly 30 cents just moments after Brigety claimed that a Russian ship named “Lady R” was loaded with arms and ammunition when it docked at a naval base in Cape Town in December 2022. While South African officials have moved quickly to deny Brigety’s allegations, some economic commentators warned of dire consequences for the country if the U.S. decides to retaliate.
According to Nolan Wapenaar, the co-chief investment officer of Anchor Capital, the U.S. government will likely respond to the allegation by blocking South Africa’s access to American markets. Wapenaar explained:
[Brigety’s allegation] is likely to have dire consequences for SA, which could lose its African Growth and Opportunity Act (AGOA) preferential duty-free market access to the US.
Meanwhile, in its latest research note, the U.S. banking giant JP Morgan reportedly said it now expects South Africa’s gross domestic product (GDP) to contract by 0.2% in 2023. This is in contrast to the previous projection of a 0.3% growth rate. The banking also warned that its already pessimistic current account projection for the African country could worsen if an electricity situation is not resolved.
What are your thoughts on this story? Let us know what you think in the comments section below.