By Reuters | Updated: 9 September 2021
Salvadoran President Nayib Bukele stepped in on Wednesday to manage the fraught roll-out of a payments app that underpins the nation’s adoption of Bitcoin as legal tender, and called on users to report any problems on his Twitter feed.
Adopting language similar to IT departments in offices around the world, Bukele asked users to close and restart the app if a “currently under maintenance” error screen appeared.
The historic adoption of Bitcoin as legal tender by the Central American country has been beset by problems that have contributed to a rout in the value of the digital currency globally. Bitcoin price in India stood at Rs. 36.4 lakhs as of 10am IST on September 9.
Bitcoin continued to lose ground on Wednesday, closing at $46,000 (roughly Rs. 33.93 lakhs), down by 1.7 percent.
“Any financial innovation on this scale is going to come with teething problems. However, if we’ve learnt anything from watching the markets in the past year, it’s that Bitcoin maximalists will seek to push the digital currency back up just as quickly as it has fallen,” said Michael Kamerman, chief executive of Scandinavian-owned fintech company Skilling.
Some market watchers see a bullish future, with a new cryptocurrency research team at Standard Chartered predicting Bitcoin will hit $100,000 (roughly Rs. 73.7 lakhs) by early next year and could be worth as much as $175,000 (roughly Rs. 1.3 crores) longer-term.
Bukele has sent a stream of Twitter messages over the past 36 hours instructing users on how to download the government-backed Chivo app which promises commission-free transactions and which his administration hopes will be adopted by the unbanked.
Overnight the president said the app, a digital wallet, was being disconnected for the second time to “improve user experience and the problems it had during the day.”
“We hope that tomorrow will be much better,” he wrote in a tweet.
Several users replied in his comments section to report ongoing installation problems.
Douglas Rodriguez, head of El Salvador’s central bank, said during an event in the Honduran capital Tegucigalpa that the “eyes of the world” were on his country and that the Bitcoin adoption was a process that needed time to “mature.”
Addressing concerns the digital currency could encourage illicit activity, Rodriguez said the rules set out by the bank for using Bitcoin were designed to meet money laundering standards andSalvadoran President Nayib Bukele stepped in on Wednesday to manage the fraught roll-out of a payments app that underpins the nation’s adoption of Bitcoin as legal tender, and called on users to report any problems on his Twitter feed.
El Salvador’s Bitcoin law states the market will establish the exchange rate between the cryptocurrency and the US dollar, the nation’s other legal tender. It says all prices may be expressed in Bitcoin and tax contributions can be paid in digital currency, while currency transactions in Bitcoin are not subject to capital gains taxes.
Notwithstanding technical hiccups, the app’s rollout created some waves in El Salvador, in part due to a government handout of $30 (roughly Rs. 2,210) in Bitcoin to every local user who signs up, and despite polls that show many people are wary of Bitcoin’s volatility.
On the El Salvador edition of Apple’s App Store, Chivo was the No. 1 downloaded financial app on Wednesday.
Bukele earlier said only a few phone models would initially have access to the app on Alphabet’s Google Play to avoid a rush that could collapse the system.
On Wednesday afternoon, he wrote on Twitter that Google Play was available for Alcatel smartphones and that more models would be added, though it was important “not to saturate the servers” with too many registrations at the same time.
“We are still fine-tuning small details,” he said.
Reuters could not immediately determine how many times the app had been downloaded.
JP Morgan Chase said in a note on Wednesday that some technical snags are to be expected.
“These technical issues should not be a surprise given the country had only three months to prepare for this grand experiment,” the bank said. “In sharp contrast, China has been preparing/testing its digital yuan for years and has yet to officially launch it.”
Global retailers operating in El Salvador were accepting Bitcoin at some stores, including McDonald’s and Starbucks, along with several local outlets.
Bukele, 40, who is doing well in opinion polls but has been accused of eroding democracy, has heavily used social media to govern and engage with Salvadorans.
© Thomson Reuters 2021
Bitcoin Edges Off All-Time High but Momentum for More Gains This Year Seen Intact
By Reuters | Updated: 21 October 2021
Bitcoin fell slightly in Asian hours on Thursday, a day after marking an all-time high on optimism around the launch of the first US Bitcoin futures ETF.
The world’s largest cryptocurrency was last down 1.3 percent at $65,184 (roughly Rs. 48.8 lakhs) after hitting a record $67,016 (roughly Rs. 50 lakhs) on Wednesday, but still above a previous peak of $64,895 (roughly Rs. 48.6 lakhs) seen in April.
“We think its going to go higher and we can get to 80 or 90,000 by the end of this year easy, but that won’t be without volatility,” said Matt Dibb, COO of Singapore-based Stack Funds.
In the past few days, he said, traders were starting to pay high rates to borrow to buy Bitcoin futures, “and that’s a sign that we could be a bit overextended, and there could be a pullback to come.” Bitcoin price in India stood at 49.9 lakhs as of 9:30am IST on October 21.
He added he anticipated traders would rotate out of Bitcoin and into major ‘Altcoins’ – other cryptocurrencies.
Ether, the world’s second largest cryptocurrency, rose 1 percent to $4,203 (roughly Rs. 3.1 lakhs) and there were also sharper gains in smaller tokens. Ether price in India stood at Rs. 3.2 lakhs as of 10am IST on October 21.
Market players say the latest wave of buying has been supported by the launch of the first US Bitcoin futures-based exchange-traded fund (ETF) with investors betting this will open a path to greater investment from both retail and institutional investors.
Existing Bitcoin exchange-traded funds and products have seen sharp inflows since September.
Average weekly flows to bitcoin funds totalled $121.1 million (roughly Rs. 910 crores) in October, up from $31.2 million (roughly Rs. 230 crores) a month earlier, data from London-based CryptoCompare shows.
The three months prior to September had seen outflows following steep losses for bitcoin in May and June.
© Thomson Reuters 2021
Facebook Cannot Be Trusted to Manage Cryptocurrency, US Lawmakers Say
By Reuters | Updated: 20 October 2021
A group of US lawmakers said Facebook cannot be trusted to manage cryptocurrency and urged the social media platform to discontinue immediately a small pilot of its cryptocurrency wallet named Novi, which was launched on Tuesday.
US Democratic senators Brian Schatz, Sherrod Brown, Richard Blumenthal, Elizabeth Warren, and Tina Smith voiced their opposition to Facebook’s two-year-old effort to launch a cryptocurrency and digital wallet.
“Facebook is once again pursuing digital currency plans on an aggressive timeline and has already launched a pilot for a payments infrastructure network, even though these plans are incompatible with the actual financial regulatory landscape,” the senators wrote in a letter to Facebook Chief Executive Mark Zuckerberg.
“Facebook cannot be trusted to manage a payment system or digital currency when its existing ability to manage risks and keep consumers safe has proven wholly insufficient,” the senators wrote.
The letter by the senators indicates that even Facebook’s small pilot of its cryptocurrency wallet will face scrutiny from lawmakers and regulators, who have previously raised antitrust and other concerns.
A Novi spokesperson said: “We look forward to responding to the committee’s letter.”
Facebook unveiled a cryptocurrency project in June 2019, as part of an effort to expand into e-commerce and global payments.
But the project immediately ran into fierce opposition from policymakers globally, who worried it could erode their control over the money system, enable crime, and harm users’ privacy.
In December, the project was rebranded in a renewed effort to gain regulatory approval, with its scope scaled back further to a single dollar-backed digital coin.
© Thomson Reuters 2021
Bitcoin ETF Debuts on New York Stock Exchange, Bitcoin Nears Record
By Agence France-Presse | Updated: 20 October 2021
Bitcoin took another step closer to mainstream investing Tuesday with the launch of a new security on Wall Street tied to futures of the cryptocurrency.
To mark the occasion, ProShares, leader in exchange-traded funds, a type of investment linked to an index, rang the opening bell of the New York Stock Exchange on Tuesday.
The Bitcoin Strategy ETF, trading under the “BITO” ticker, rose 4.9 percent to $41.94 (roughly Rs. 3.150) in its first session, an eagerly-anticipated event in the world of cryptocurrency-money that boosted Bitcoin futures. Bitcoin price in India stood at Rs. 50.19 lakhs as of 10am IST on October 20.
fThe arrival of the fund helped propel Bitcoin back near its all-time high. Near 2030 GMT, the digital currency stood a $64,313 (roughly Rs. 48.3 lakhs), less than $600 (roughly Rs. 45,000) short of its April record.
Unlike mutual funds, which are traded only once a day, ETFs can be transacted throughout the trading session, making them more like individual stocks and increasingly popular with everyday investors.
Rather than a direct investment in the digital currency, BITO will invest “primarily in Bitcoin futures,” ProShares said.
The Securities and Exchange Commission has repeatedly rejected ETFs linked directly to Bitcoin, maintaining that they were subject to market manipulation.
SEC Chair Gary Gensler said futures connected to Bitcoin also could be volatile, but noted that the ProShares ETF is linked to a futures contract that has been regulated by the Commodities Futures Trading Commission since 2017.
“I think what you have here is a product, it’s been overseen for four years,” Gensler said on CNBC, adding that the SEC has jurisdiction over the ETF under longstanding US law.
“So we have some ability to bring it inside of investor protection (but) it’s still a highly speculative asset class,” he said. “Underneath this, it still has that same aspect of volatility and speculation.”
Other funds are planning ETFs linked to Bitcoin including Valkyrie Investments.
Crypto Exchange Binance Has Ireland in Plans for ‘Decentralised’ Regional Headquarters
By Reuters | Updated: 8 October 2021
Major cryptocurrency exchange Binance sees Ireland as part of its plans to establish a number of headquarters across the world, its CEO told Reuters on Thursday.
Regulators across the world have in recent months scrutinised Binance, the world’s largest exchange by trading volumes. Some have banned the platform from certain activities, while others have warned consumers that it was unlicensed to operate.
In response, CEO Changpeng Zhao said in July he wanted to improve relations with regulators, and would break with its “decentralised” structure and establish regional headquarters.
Last month, Binance registered three firms in Ireland, corporate registry documents show.
“Historically, we claim that we don’t have headquarters. We are actually just in the process of establishing a few headquarters in different parts of the world,” Changpeng Zhao said in an interview.
Asked if Ireland featured in Binance’s plans to establish headquarters in a particular country, Zhao replied: “Yes it does.” He declined to give further details of the plans for the country.
“When we first started we wanted to embrace the decentralised principles, no headquarters, work all around the world, no borders,” he said. “It’s very clear now to run a centralised exchange, you need a centralised, legal entity structure behind it.”
Trading volumes at Binance soared between July and September, suggesting a recent crackdown by regulators across the globe has had little impact on the platform’s business.
Binance’s corporate structure is opaque. Its holdings company is registered in the Cayman Islands, according to British court documents and Malaysia’s securities watchdog.
© Thomson Reuters 2021
NFT Sales Surge to $10.7 Billion in Q3 2021 as Crypto Asset Frenzy Hits New Highs
By Reuters | Updated: 5 October 2021
NFT sales volume surged to $10.7 billion (roughly Rs. 79,820 crores) in the third quarter of 2021, up more than eightfold from the previous quarter, according to data from market tracker DappRadar, as the frenzy for crypto assets reached new highs.
NFTs use blockchain to record the ownership of digital items such as images, videos, collectibles, and even land in virtual worlds.
Surging sales and hefty prices on NFTs – items which do not physically exist – have baffled many but the explosive growth shows no sign of abating.
The third-quarter figure was up from $1.3 billion (roughly Rs. 9.680 crores) in Q2 and $1.2 billion (roughly Rs. 8,935 crores) in Q1, DappRadar said.
On the biggest NFT marketplace, OpenSea, sales volumes hit $3.4 billion (roughly Rs. 25,320 crores) in August. Activity remained strong even in September when global stock markets faltered.
Cryptocurrency price gains during the COVID-19 pandemic are often cited as a driver behind the NFT market’s growth – because people use cryptocurrencies to buy NFTs – but enthusiasts say that the crypto assets have value independently of market conditions.
To be sure, estimates for the size of the NFT market vary depending on what is included. Transactions which take place “off-chain”, such as NFT art sales at auction houses, are often not captured by the data.
DappRadar’s numbers, which include multiple blockchains and “off-chain” transactions, put total 2021 sales volume at $13.2 billion ((roughly Rs. 98,285 crores). Another market tracker, CryptoSlam, which excludes “off-chain” sales, says the figure is $9.6 billion (roughly Rs. 71,480 crores).
Meanwhile, NonFungible.com, which tracks NFTs on the Ethereum blockchain only, puts the 2021 total volume at $7 billion (roughly Rs. 52,110 crores). Ether price in India stood at Rs. 2.6 lakhs as of 1:30pm IST on October 5.
The most expensive known NFT sale was a digital collage sold at Christie’s for $69.3 million (roughly Rs. 515 crores) in March. Since then, no known NFT has come close to this price, but auction houses still hold NFT sales, often fetching millions.
However, despite growing sales and celebrities and other investors jumping on the trend, the number of NFT buyers remains relatively small: there were just 265,927 active wallets trading NFTs on the ethereum blockchain in Q3, NonFungible.com said.
More than half of NFTs sold in Q3 were $101 (roughly Rs. 7,510) -$1,000 (roughly Rs. 74,440 crores), while those in the $1,001 (roughly Rs. 74,510) -$10,000 (roughly Rs. 7.4 lakhs) bracket accounted for 20 percent of sales, and 17 percent fetched less than $100 (roughly Rs. 7,440), NonFungible.com said.
One NFT brand to see particularly high growth in Q3 was Art Blocks, a US-based project which sells NFTs of algorithmically-generated digital artworks.
On Saturday, an Art Blocks NFT sold for 2,100 Ether (roughly Rs. 51 crores at the time). Average Art Blocks prices have risen to roughly $15,100 per NFT in September, up from $3,300 in July, according to CryptoSlam.
Gaming-related NFTs also surged, with the blockchain-based game Axie Infinity leading the “play-to-earn” sector with $776 million (roughly Rs. 5,780 crores) in Q3 revenues, DappRadar said.
© Thomson Reuters 2021
Cryptocurrency Adoption in Emerging Markets Can Threaten Financial Stability, Says IMF
By Reuters | Updated: 2 October 2021
The advent of digital currencies in emerging markets could spark “cryptoization” of local economies, potentially undermining exchange and capital controls and upsetting financial stability, the International Monetary Fund said on Friday.
Bitcoin and its kin have in the last year soared in price and popularity, with emerging and developing market economies such as Vietnam, India and Pakistan seeing rapid growth in some measures of adoption, according to US blockchain researcher Chainalysis.
Cryptocurrencies offer, in theory, a cheaper and quicker way of sending money across borders. Backers say digital tokens such as stablecoins could also help protect savings from high inflation or fluctuations in local currencies.
In September, El Salvador became the first country in the world to adopt bitcoin as legal tender, with backers tipping the experiment to lower costs for billions of dollars of remittances sent to the Central American nation.
The IMF said that unsound macroeconomic policies and inefficient payment systems are among the drivers of cryptocurrency adoption in emerging economies, along with the lure of quick gains that has also excited investors across the world.
But the IMF said the exact level of adoption of crypto in emerging economies was hard to gauge accurately.
Factors such as low credibility of central banks and weak domestic banking systems that can fuel “dollarization” can also contribute to growing crypto use, the Fund added.
Dollarization is where a foreign currency – typically the U.S. currency – is used in addition to, or instead of, a domestic currency. High inflation or the instability of a domestic currency are among the drivers of the process.
Wide adoption of stablecoins – digital tokens designed to hold a steady value and seen as useful for savings and commerce – could also pose significant challenges by reinforcing existing dollarization forces, the IMF said.
“Dollarization can impede central banks’ effective implementation of monetary policy and lead to financial stability risks through currency mismatches on the balance sheets of banks, firms, and households,” it said.
“Cryptoization” could also become a threat to fiscal policy, with digital assets possibly facilitating tax evasion, the IMF added.
The fund urged developing nations to strengthen macroeconomic policies and consider the possible benefits from issuing central bank digital currencies as a response to the rise of crypto.
Jio Profit Increases 24 Percent as Reliance Recovers from Pandemic Slowdown
Lyft Records Over 4,000 Sexual Assault Cases in Long-Overdue Safety Report
NASA Artemis Moon Mission Launch Planned for February 2022
Apple to Establish North Carolina Campus That Will House Up to 3,000 Employees, Increase US Spending Targets
Microsoft Mesh Mixed Reality Platform Launched That Allows Users to Appear as Holograms in Virtual Meetings
Apple, Epic Games CEOs on List of Witnesses in Fortnite Case
Internet3 weeks ago
Apple, Amazon, Facebook, Google, More US Tech Giants Should Be Regulated Where They’re Based: EU Lawmaker
Apps3 weeks ago
Zoom’s Abandoned Five9 Deal Shows Hurdles to Expansion
Uncategorized3 weeks ago
iPhone 14 Pro Models Likely to Get Up to 2TB Storage: Report
Social Networking3 weeks ago
Facebook Whistleblower Frances Haugen Will Urge US Senate to Regulate Company
Uncategorized3 weeks ago
Squid Game Craze: Netflix Sued by South Korea Broadband Firm Over Traffic Surg
Social Networking3 weeks ago
Facebook Whistleblower Frances Haugen Testifies Before US Congress: Top Quotes From the Hearing
Science3 weeks ago
Nobel Prize in Physics 2021 Winners: Syukuro Manabe, Klaus Hasselmann, and Giorgio Parisi
Apps3 weeks ago
Facebook Blames ‘Faulty Configuration Change’ for Nearly Six-Hour Outage