Purchases from foreign cryptocurrency exchanges, considered imports, have broken records in Brazil, putting some weight into the nation’s trade balance. During the last 12 months, cryptocurrency purchases reached .84 billion, after reaching .3 billion last year. Likewise, crypto imports reached .69 billion in Q1 2024, rising by 118% compared to the numbers registered in Q1 […]
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Yuan Usage Soars in Argentina: Over 500 Companies Request to Pay for Imports in Chinese Currency, Report
Over 500 companies in Argentina have reportedly requested to pay for imports using Chinese yuan as the U.S. dollar shortage worsens. “The central bank doesn’t have dollars so it needs the emergency aid China is offering,” a trade economist in Buenos Aires explained.
Chinese Yuan Usage Hits Record High in Argentina
The Argentine customs agency has revealed that over 500 companies in Argentina, spanning various industries such as electronics, auto parts, textiles, oil, and mining, have requested to use Chinese yuan for import payments, Bloomberg reported Friday.
As the scarcity of U.S. dollars persists in Argentina, the use of the Chinese yuan has reached an all-time high in the country. According to officials from the country’s central bank, import payments authorized in the Chinese currency have amounted to .9 billion. Marcelo Elizondo, a trade economist in Buenos Aires, explained:
The central bank doesn’t have dollars so it needs the emergency aid China is offering … For Argentina, its currency ties to China represents an emergency, but for China it’s a point of leverage to take advantage of a geopolitical opportunity.
Whirlpool Corp. is among the companies seeking to utilize China’s currency for import payments. The American appliance giant invested million in its new factory outside Buenos Aires last year. Juan Carlos Puente, president of Whirlpool Latin America, was quoted as saying: “We’ve had to stop the factory at some points and that’s not good for business, productivity nor quality … We’re working to see how we can leverage this new avenue of flows to be able to continue importing materials.”
According to Argentina’s customs agency, between May and August, Argentine companies, including Mirgor and Newsan, made import payments totaling 0 million in Chinese yuan.
China recently granted Argentina access to over half of an billion currency swap line, aimed at bolstering trade between the two countries. This bilateral swap agreement, which has been in place since 2009, serves as a contingency measure to enhance foreign reserves during periods of liquidity crises.
Maria Castiglioni, director of consulting firm C&T Asesores in Buenos Aires, emphasized that Argentina is left with limited options due to the scarcity of the USD, stating:
The only option it has left is to access the yuan from the China swap line.
Recent data from Mercado Abierto Electrónico, one of Argentina’s prominent exchanges, shows that the daily proportion of Chinese yuan transactions in the country’s foreign currency market has reached a new daily record of 28%. This represents a significant increase compared to the previous month when the share of yuan transactions stood at a maximum of 5%.
What do you think about companies in Argentina wanting to pay for imports using Chinese yuan? Let us know in the comments section below.
Argentina Settled Almost 20% of Its Imports in April and May Using the Chinese Yuan
The government of Argentina has noted that 19% of all imports authorized in the national system were settled using the Chinese yuan in April and May. .72 billion in Chinese yuan were approved to complete these payments, taking advantage of the Chinese swap line to preserve the dollar reserves of the country, according to Commerce Secretary Matias Tombolini.
Argentina Advances in Substituting Dollar-Settled Imports Using Chinese Yuan
Argentina is showing advancements in substituting means other than the U.S. dollar to settle import payments. According to data presented by the Commerce Secretariat, imports denominated in Chinese yuan rose to almost 20% in April and May, with operations equivalent to .72 billion authorized. This development has been qualified as an advancement by Commerce Secretary Matias Tombolini, who believes this improves the economic outcome for Argentina.
Tombolini stated:
The alternative of imports in yuan strengthens our reserves and improves the outlook for net reserves, giving us greater freedom and ability to operate to intervene against those who speculate on the economic situation.
Argentina, facing significant levels of currency devaluation and inflation, had to take advantage of a billion Chinese swap line established in a bilateral meeting between Argentine President Alberto Fernandez and Chinese President Xi Jinping in 2022. The extension of the swap line to almost billion — with billion available for free management — in June, allowed Argentina to take advantage of these resources, introducing the yuan as a significant currency in the internal import adjudication system.
Use of Dollars Still Predominant
While the usage of the Chinese yuan has advanced, the dollar is still the predominant currency for settling international transactions, accounting for 62% of all the imports made during the April – May period. The Argentine government is interested in growing the yuan-settled negotiations due to the low level of its dollar-denominated foreign reserves, which stumbled to their lowest number since 2016 in May.
The Central Bank Of Argentina identified this situation as positive, explaining that the Chinese swap line allowed for a “growth in commercial operations carried out in local currencies.”
However, Economy Minister Sergio Massa has a trip scheduled to the U.S. to seek the advancement of a set of disbursements from the International Monetary Fund (IMF) to boost the central bank reserves and maintain a healthy cash flow. Argentina is also seeking to be admitted as a member of the New Development Bank, also called the BRICS bank, to get additional funding.
What do you think about the state of the de-dollarization process in Argentina? Tell us in the comments section below.
Iran Sets Up Platform to Facilitate Crypto Payments for Imports
Authorities in Iran are taking steps to make crypto payments easier for companies importing goods in the sanctioned country. A dedicated platform has been established to allow local businesses to transfer cryptocurrency for the purpose of cross-border settlements.
Iran to Use Cryptocurrencies for Imports, Trade Organization Chief Vows
Iranian companies will be able pay for imports with cryptocurrencies, the country’s Trade Promotion Organization (TPO) has assured, according to local media.
Alireza Peymanpak, head of the government body, said that the Central Bank of Iran (CBI) has issued a permission for using cryptos in settlements for imported goods.
“The final decision will be taken by the Economy Ministry,” Peymanpak added, quoted by the official Economy and Bank of Iran News Network (Ibena) on Sunday.
Peymanpak’s statements come several months after he announced that Iran had placed its first official import order in cryptocurrency. In August 2022, the government official revealed the deal was for million worth of goods.
“By the end of September, the use of cryptocurrencies and smart contracts will be widespread in foreign trade with target countries,” he tweeted at the time.
Peymanpak now revealed that a specialized platform has been created to connect local companies that want to pay foreign suppliers with digital coins. He elaborated:
Businesses can use the platform to transfer cryptocurrency to settle import bills.
A platform like this was necessary to facilitate money transfers using cryptocurrency. It is linked to Iran’s Comprehensive Trade System and the CBI’s Currency Allocation Platform, the executive detailed.
TPO, the organization Peymanpak leads, is affiliated with Iran’s Ministry of Commerce and is responsible for promoting the non-oil exports of the Islamic Republic.
Crypto may be subject to certain restrictions in trading with countries such as Iraq, Afghanistan and Pakistan, the Financial Tribune noted in a report. However, the digital currencies can help Iran in export destinations where they are used such as China, India and Russia, the English-language daily noted.
Like Iran, Russia has been the target of Western penalties, mostly over its involvement in the conflict in neighboring Ukraine, with multiple rounds of stiffening sanctions imposed since it launched a full-scale invasion last year.
Policymakers in Moscow have been discussing the limited legalization of cryptocurrencies in order to allow Russian companies to use them in international settlements with partners abroad, in order to circumvent mounting restrictions on traditional financial transactions.
Do you think Iranian companies will be actively using cryptocurrencies to pay for imports? Tell us in the comments section below.
Argentina to Settle Chinese Imports in Yuan to Safeguard Dwindling Dollar Reserves
The economy minister of Argentina, Sergio Massa, announced that starting this month, payments for imports coming from China will be settled using the Chinese yuan. The agreement, which will allow the country to safeguard its dwindling dollar reserves, involves the disbursement of more than billion in April.
Argentina to Settle Bilateral Transactions With China in Chinese Yuan
Argentina, one of the big three economies in Latin America, will use the Chinese yuan to pay for certain imports. According to statements from Argentine Economy Minister Sergio Massa, the country will begin settling payments for Chinese imports using the Chinese yuan, in the context of saving the scarce dollars that the country still has left.
The agreement is perceived by analysts as a positive pact for the nations, as China deepens the penetration and usage of the Chinese yuan in Latam, and Argentina manages to leverage billion of the “swap” reserve that was approved between Argentine President Alfredo Fernandez and Chinese President Xi Jinping, solidified in a bilateral meeting which took place at the 17th G20 summit back in 2022.
China is currently Argentina’s international partner, and this move will ostensibly allow the country to lessen the weight of imports on the weakened state of Argentine reserves. Just for April, there are already .07 billion in imports that will be settled with the Chinese yuan, and .8 billion are already set to be paid in the same way in May.
Argentine Crisis and Reactions
The Chinese concession given to Argentina by Chinese President Xi Jinping allows the central bank to focus its attention on the devaluation and inflation spiral Argentina is currently experiencing by injecting resources to stabilize its fiat exchange rate, which reached record lows last week against the U.S. dollar.
Massa also stated that using the Chinese yuan will serve to disarm a corruption scheme that justified using Uruguay as a bridge for the payment of Chinese imported goods in dollars. In this regard, he stated:
This swap in the guarantee of continuing to produce with intermediate goods from China, avoiding the triangulation detected — which was somehow used to pay more for what Argentina imported, than what (the intermediary) bought cheaper.
The measure generated mostly positive reactions from the main Small and Medium Enterprise (SME) associations according to Argentine news agency Telam. Leo Bilanski, president of ENAC, one of these organizations, said operating using the Chinese yuan presented several advantages. He explained:
Being able to operate in the national currency of both countries makes trade transparent and boosts, for SMEs, foreign trade operations within a framework of dollar restrictions and financial speculation with the illegal dollar.
What do you think about the shift to the Chinese yuan that Argentina is executing to settle bilateral transactions with China? Tell us in the comment section below.
Russia Negotiating Free Trade Deal With India to Facilitate Imports in the Face of Sanctions
Russia is in the process of negotiating a free trade deal with India in order to substitute part of the products and investments that were banned by sanctions enacted after the Ukrainian conflict erupted. Russia is now the largest oil supplier of India, with the country taking advantage of the discounted Russian crude.
Russia and India Negotiate New Trade Agreement
Russia and India are negotiating a new Free Trade Agreement (FTA) to increase the trading integration between the two countries, which has thrived after the establishment of Western sanctions on Russia. According to Reuters, India’s Foreign Minister Subrahmanyam Jaishankar stated that the deal was in a stage of “advanced agreement,” and that this might secure bilateral investments between the two countries.
Russia, which is now India’s biggest energy supplier, would be seeking to substitute throttled import products with those from India. On this, Russia’s Trade and Industry Minister Denis Manturov stated:
We need to find a niche in the products which India can replace. In civilian projects, we need as wide cooperation as it was before the sanctions.
In November, there were reports stating that Russia was seeking to acquire parts for cars, aircraft, and trains from India and other countries, to substitute for sanctioned, affected imports.
India-Russia Relationship Thrives
The cooperation between the two countries has not been affected by the Russia-Ukraine conflict, because India has not condemned Putin’s actions, maintaining public neutrality on the issue. This has allowed the country to take advantage of the discounted crude, sold at a discount due to the recent adoption of the Dubai benchmark, shunning the Europe-centric Brent benchmark.
On the other hand, India is trying to bring equilibrium to the trade balance. In December, the government of India sent a list of products that would be competitive in Russian markets, to gain permission to export them to the country.
The completion of an FTA between the two countries would simplify the introduction of foreign products in both markets, depending on the final determination of such an agreement. Russia is also finalizing another bilateral trade agreement with Iran, a country that has also been facing a wide package of U.S.-based sanctions, to increase their integration and trade levels without being limited by foreign determinations.
The dangers of overusing the U.S. dollar as a weapon for establishing sanctions was recently acknowledged by U.S. Treasury Secretary Janet Yellen, who stated that countries facing these sanctions would be determined to find alternatives.
What do you think about the new trade agreement that Russia and India are currently negotiating? Tell us in the comment section below.
Trump’s Trade Tariffs on Chinese Imports to Hit Mining Manufacturers Hard
President Trump’s trade tariffs will likely cause a major dint in the profitability of Chinese companies producing cryptocurrency mining hardware.
Of the three mining giants based in China, Beijing’s infamous Bitmain is expected to be the worst hit since they rely most heavily on overseas sales.
As Trump’s Trade War Heats Up, US to Charge Chinese Mining Manufacturers 27.6% Tax
Three of the planet’s largest producers of mining hardware are expected to be negatively impacted by the trade tariffs introduced by President Trump in late August.
Bitmain, Canaan, and Ebang International will be forced to pay a whopping 27.6 percent on all units sold in the U.S. This is because the U.S. Trade Representative categorised mining hardware as “electrical machinery apparatus” in June.
Ben Gagnon, the co-founder of Bitcoin mining equipment development firm LuTech, told the South China Morning Post about how the tariffs would likely impact the largely Chinese led industry:
“All manufacturers of mining rigs based in China will likely be affected by the tariff code change and, in turn, captured by the U.S. trade tariff.”
Of the industry’s three largest companies, Beijing-based Bitmain is expected to be worst hit by the trade tariffs. This is because the firm’s overseas sales made up a massive 51 percent of its total revenue in the years 2016 and 2017. These figures come courtesy of Bitmain’s own initial public offering prospectus.
Meanwhile, Canaan and Ebang International do not rely as heavily on exports with their own overseas sales contributing just 8.5 percent and 3.8 percent respectively during last year.
However, the precise percentage of sales destined for the U.S. from any of the three companies is unclear.
One of Sanford C. Bernstein’s senior analysts, Mark Li, states that the U.S. trade tariffs against China will make the units created by Bitmain, Ebang International, and Canaan much less attractive for cryptocurrency miners operating in the U.S. This would allow products from other countries to erode the influence China currently exerts on the mining industry.
For Bitmain, the Chinese trade tariff is not the only factor threatening to dethrone them as the planet’s largest cryptocurrency mining hardware manufacturer.
Their dominance in the race to create the most technologically advanced chips is quickly dwindling with offerings from the likes of GMO and Canaan being more efficient and faster than Bitmain’s flagship model.
Additionally, the Chinese cryptocurrency mining giant is also thought to be holding huge reserves of Bitcoin Cash on their books. The figure is thought to be so large that there is no practical way for the company to offload them without crashing the market.
Li summarised that Bitmain’s situation is looking increasingly bleak. So much so that the company probably have bigger issues to worry about than Trump’s harsh trade tariffs:
“The U.S. tariff is probably not something on the top of the management’s minds now.”
Featured image from Shutterstock.
The post Trump’s Trade Tariffs on Chinese Imports to Hit Mining Manufacturers Hard appeared first on NewsBTC.
Chinese Startup to Use Blockchain to Track Wine Imports
The Chinese wine industry is worth .8 billion. In attempts to improve trust, Shanghai-based startup VeChain is using blockchain technology to track imports to the city — the mainland’s second-largest market for imported wine — from vine to table.
VeChain: Using Blockchain to Build Trust in Wine Industry
To start, VeChain is teaming up with French producer Pierre Ferraud & Fils, whose 2017 Beaujolais Nouveau red wine is set to be verified on the blockchain platform.
How does it work? Shoppers in Shanghai scan a QR code, which provides them with details about the winery, the grape type, the date the bottle left the stock house, the date the wine landed in Shanghai, the date the wine hit shelves, as well as an 18-digit Chinese customs declaration number.
In attempts to further inform consumers, VeChain also plans to embed near field communications (NFC) chips near the wine stoppers in some more-premium wines. Once the chip is broken, users can no longer read or write data onto its blockchain, helping prevent refilling or mixing.
“The beauty of blockchain is that shoppers can see information about the whole life cycle of a bottle of wine from various sides, including vineyards, logistics and retailers,” said Fu Yu, a partner at VeChain who spoke with the South China Morning Post.
So far, 10,000 blockchain-enabled bottles have been shipped to retailer Shanghai Waigaoqiao Direct Imported Goods (DIG). This number is set to increase tenfold in 2019.
China’s Obsession with French Wine
The origin of a wine is the most important piece of information for Chinese consumers, according to studies by market research company Mintel Group. And France is their unrivaled favorite country of origin for all wines — red, sparking, white, or rose — according to a Mintel survey conducted last year.
Generally speaking, many major wineries already utilize ‘old school’ technology to prevent counterfeiting, using techniques like the laser etching of trademarks on bottles and bar codes that can identify the provenance of every bottle. But this method is limited as it does not follow wine along its entire production journey, and often lacks key information like a customs declaration number.
What VeChain and its partners are trying to do is carry out a verification of the entire supply chain. Brian Zhang, an independent wine consultant, said using new technologies at the very beginning of the production chain was a must, or the wine is ‘only as good as the weakest link in the chain.’
Warren Wang, an advisory partner at EY for Greater China, said blockchain was rising as a disruptive force to build a trust system as a traceable, tamper-resistant, and decentralized technology. He added that the foreign trade and luxury sectors, including premium wines, are among industries that can benefit most from it.
“In China, trustworthiness remains a weak spot and blockchain is well positioned to tackle the concern,” Wang said. “It’s still unfolding. In three to five years, we might see a killer application from the real economy.”
Featured image from Shutterstock.
The post Chinese Startup to Use Blockchain to Track Wine Imports appeared first on NewsBTC.
South Korea to Toughen Inspections of Crypto Mining Chip Imports
Cryptocurrency miners in South Korea may soon find it more difficult to get foreign-made mining chips imported to the country.
CoinDesk
JD.com to Track Beef Imports Using Blockchain Platform
Chinese e-commerce giant JD.com said it will roll out a blockchain system to track beef imports from a new meat supplier in Australia.
CoinDesk