The Bank of Zambia has proposed a new series of guidelines that seek to outlaw the use of foreign currency, including the U.S. dollar, for local transactions. If finally approved, the document would establish harsh penalties for infringement, including jail time for up to ten years and hefty fines. Zambia to Punish Illegal Use of […]
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Euro’s Reserve Currency Status Threatened as Its Share of Foreign Reserves Holdings Drops
A report from the European Central Bank indicated that the euro’s share of foreign exchange reserves declined by one percentage point to 20% in 2023. According to the report, the continued diversification of global reserve portfolios into nontraditional currencies threatens to further erode the euro’s share of foreign exchange reserves. Euro’s Decline Coincides with US […]
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Indian Authority Busts Cryptocurrency Fraud Ring Targeting Foreign National
India’s Enforcement Directorate (ED) has cracked down on a cryptocurrency fraud ring targeting a foreign national. The accused persuaded the victim to transfer 0,000 to a cryptocurrency account set up using unauthorized remote access. The ED seized digital evidence, froze fixed deposits, and confiscated jewelry connected to the case. The investigation is still ongoing. ED […]
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Nigerian Central Bank Prohibits Use of Foreign Exchange as Collateral for Local Currency Loans
The Central Bank of Nigeria has barred the use of foreign exchange as collateral for local currency loans. In its April 8 letter addressed to banks, the CBN warned of severe consequences for banks that fail to comply with the latest directive. Halting the Slide of the Naira Hamstrung by ongoing shortages of U.S. dollars, […]
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UN Report: Crypto Crime Provided North Korea up to Half of Its Foreign Currency Income
A report issued by a United Nations panel of experts has concluded that cyber crypto heists have provided 50% of the foreign currency income for North Korea since 2017. The report indicated that North Korean actors have been linked to 17 theft and hack events involving over 0 million in 2023 alone, and details several […]
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Nigeria Proposes Rule Requiring Foreign Crypto Exchanges to Incorporate in the Country
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 […]
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Nigeria’s Headline Inflation Increases as Central Bank Intensifies Foreign Exchange Controls
In the first month of 2024, Nigeria’s headline inflation rose from nearly one percent to 29.9%. However, on a year-on-year basis, the January 2024 headline inflation rate was 8.08 percentage points higher than the January 2023 rate. Many commentators identify foreign exchange shortages as the root cause of the naira’s poor performance against major currencies. […]
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EU Regulator Proposes Stricter Rules for Foreign Crypto Firms
The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator, has proposed stricter rules for crypto firms based outside the EU, limiting their ability to directly serve customers within the bloc to ensure fair competition.
ESMA Proposes Stricter Rules for Non-EU Crypto Firms
The European Securities and Markets Authority (ESMA), responsible for regulating and supervising EU financial markets, published consultation papers on two sets of proposed guidelines under the Markets in Crypto-Assets Regulation (MiCA) earlier this week.
The first set of guidance concerns the rules for the reverse solicitation exemption and the supervision practices national competent authorities (NCAs) may take to prevent its circumvention. To ensure a level playing field for companies within the EU, foreign crypto assets service providers (CASPs) will only be able to directly serve customers within the bloc under very limited conditions. “There is only one exemption, if the client at its own, exclusive initiative contacted the firm and requested the service, the third-country firm may provide it,” ESMA clarified, emphasizing:
Third-country firms may not solicit clients in the Union as they are not authorised to provide CASP services in the Union.
While EU financial laws recognize “reverse solicitation,” where customers reach out directly, recent policy changes tighten up these rules, pressuring foreign firms to establish an EU presence.
ESMA also proposed another set of guidelines to define when a crypto asset qualifies as a “financial instrument” under Markets in Financial Instruments Directive (MiFID) rules, bridging the gap between MiCA and MiFID II for EU-wide consistency.
Stakeholders have until April 29 to submit comments on ESMA’s two consultations. The authority will consider the feedback throughout Q2 and expects to release a final report in Q4. The regulator said:
ESMA, and national competent authorities, through their supervisory and enforcement powers, will take all necessary measures to actively protect European Union (EU)-based investors and MiCA-compliant crypto-asset service providers from undue incursions by non-EU and non-MiCA compliant entities.
What do you think about these proposed rules by ESMA? Let us know in the comments section below.
Russia Open to the Use of Crypto in Foreign Trade Says Central Bank Governor
The Russian Central Bank is discussing the possible use of central bank digital currencies as a payment method in foreign trade, according to Elvira Nabiullina, the bank’s governor. Nabiullina stated that while Russia is opposed to the use of crypto payments in domestic transactions, the country is open to the idea of using cryptocurrencies in foreign trade.
Russia Supports Use of Crypto in Foreign Trade
The Bank of Russia is discussing the possible use of central bank digital currencies (CBDC) and cryptocurrencies in cross-border payments with friendly countries, according to Elvira Nabiullina, the bank governor. Nabiullina, who is credited with successfully steering the sanctions-hit Russian economy, added that her country’s CBDC or digital ruble has been inserted with a feature that would enable any integration with other CBDCs.
Regarding the use of cryptocurrencies, Nabiulla expressed her opposition to their use in domestic transactions during an interview with RIA Novosti. However, the Russian Central Bank chief reiterated her country’s openness to their use in foreign trade.
“As for cryptocurrencies, our position is known; we are against their use in payments within the country. At the same time, we support their use in foreign trade, but a bill that provides such an opportunity is still being discussed in the State Duma,” Nabiulla reportedly said.
The Impact of U.S. Sanctions
As previously reported by Bitcoin.com News, Moscow officials have signaled their openness to the idea of “evil crypto” being used in foreign trade. For instance, in April 2023, the country’s deputy finance minister, Alexey Moiseev, revealed Russia was planning to set up a committee to issue permits to entities using crypto in foreign trade transactions.
However, the prospect of Russian entities using crypto to evade sanctions has alarmed some Western leaders and politicians. Many have since called on players in the crypto industry, including crypto exchanges, to deny service to sanctioned entities. In 2022, Hillary Clinton, a losing U.S. presidential hopeful, went as far as calling for the total blockade of all Russian crypto users.
Meanwhile, in the same interview, Nabiullina admitted that the latest U.S. sanctions package and the threat of secondary sanctions have created “certain complications of cross-border settlements with many countries.” She, however, said such complications should impress on Russia and its allies the need “to step up efforts to create alternative payment methods.”
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Report: Turkey Exits From Foreign Exchange Protected Deposit Program
On Jan. 1 Turkey ended its two-year-old foreign exchange (FX)—protected deposit program in what is seen as another step towards a return to orthodoxy. Treasury and Finance Minister, Mehmet Simsek also signaled the start of what he called a “permanent improvement in the current account.”
Turkey’s Policy U-Turn
Turkey’s Treasury and Finance Minister, Mehmet Simsek, recently disclosed that the country will end its foreign exchange (FX)-protected deposit program, also known as KKM, in 2024. This move is the latest in a series of policy u-turns that Turkey has made in the last couple of months.
Programımızın olumlu sonuçlarını yeni yılda da almaya devam edeceğiz.
2024 yılı;
•Yıllık enflasyonda düşüşün başladığı,
•Rezerv yeterliliğinin daha da arttığı,
•Kur korumalı sistemin sonlandığı,
•Cari açıkta kalıcı iyileşmenin başladığı,
•Bütçe disiplininin tesis…— Mehmet Simsek (@memetsimsek) December 31, 2023
Following his re-election in May 2023, President Recep Tayyip Erdoğan immediately signaled the country’s return to orthodoxy by appointing Simsek as the Finance Ministry head. The central bank later all but confirmed the major policy shift by sharply raising interest rates.
Before his re-election, President Erdoğan and his government resisted devaluing the lira or raising interest rates. Instead, the government pursued several policy measures including the KKM program whose objective was to bolster the lira and halt the apparent dollarization of bank deposits. Under the program, Turkish residents who maintained their savings in local currency were guaranteed returns that compensated for any exchange rate-related losses.
However, in his Dec. 31 post on X, Simsek, one of the former Wall Street bankers in Erdogan’s government, said:
“2024 will be a year [where] annual inflation starts to decline, reserve adequacy increases further, the foreign exchange protected system ends, a permanent improvement in the current account begins, and fiscal discipline is established.”
Simsek confirmed Turkey’s exit from the KKM program just a few months after he suggested that this process could be achieved without offering incentives. According to a state-run news agency, banks were expected to stop offering FX-protected lira deposit accounts for savings on Jan. 1.
What are your thoughts on this story? Let us know what you think in the comments section below.