Archive for Cryptocurrencies

Crypto inclusion in Biden’s infrastructure bill is misguided : deVere CEO

By George Prior

– Cryptocurrency exchanges in the U.S. will be shunned by investors and the Biden administration will force the multi-trillion dollar sector of the future of money away from America, affirms the boss of one of the world’s largest independent financial advisory, asset management and fintech organisations.

The comments from deVere Group’s CEO and founder Nigel Green follow the U.S. government signing the $1.2 trillion infrastructure bill into law, weighing on the shares of publicly owned, U.S.-based exchanges.

Why? Because within the infrastructure spending package is language increasing the tax reporting requirements for cryptocurrency transactions. This has been fiercely opposed by the digital currency sector and investors.

Mr Green says: “We’ve seen the U.S. infrastructure bill get signed, which initiated a sell-off from traders who are worried about increasingly levels of regulation and taxation.

“The inclusion of the extra reporting clauses for crypto is a huge miscalculation from the Biden administration.

“With additional reporting, which is onerous and costly, many investors will not choose a U.S.-based cryptocurrency exchange. They will simply go somewhere else; to another exchange, based away from the over-reach of the U.S. authorities.”

He continues: “And as such, this extra burden will likely move a large part of the growing cryptocurrency industry itself out of the United States.  This is a sector now worth more than $3 trillion – and it can only be expected to expand exponentially.”

Despite recent price drops in Bitcoin, after the fresh all-time high, Mr Green believes that inflation, amongst other factors, will help keep driving prices higher for the short to medium term.

“It’s a global issue as businesses have been raising prices as supply chain bottlenecks and a shortage of qualified workers push up costs.

“And it’s one that is likely to last until at least the beginning of the second quarter of 2022, when pressures should start to ease.

“Against this backdrop, and amid some peaks and troughs along the way as markets never move in a straight line with traders taking profit, we can expect to see the price of Bitcoin and other major cryptocurrencies continue their upwards trajectory.

“Bitcoin is widely regarded as a shield against inflation mainly because of its limited supply, which is not influenced by its price.”

This ‘inflation shield’, says the deVere CEO, will bring to the crypto market growing investment from major institutional investors, bringing with them capital, expertise and reputational pull – and further driving up prices.

The deVere boss concludes: “History will show that the inclusion of additional reporting for crypto transactions in the U.S. infrastructure bill was a huge error.

“It will have the effect of investors choosing non U.S.-based exchanges and moving much of the crypto sector – the industry of the future of money – out of America.”

About:

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.

This New Cryptographic Technology Seals Data, Repels Tampering By Hackers & Ransomware Attackers

Source: Streetwise Reports   11/19/2021

Streetwise spoke with Raymond Pomroy, CEO of SoLVBL, and investor and advisor to SoLVBL, Rahim Allani, to learn more about the company’s new security technology “Q by SoLVBL.”

SolVBL

SoLVBL Solutions Inc (SOLV:CSE) has been granted patent protection for its cryptographic data-sealing innovation, Q by SoLVBL TM, which can swiftly authentic data, including financial transactions, using a proprietary data sealing method.

“Q by SoLVBL technology uses a digital stamp or seal around the data that assures your data has not been tampered with.”

 —Rahim Allani, SoLVBL Investor and Advisor

The Company announced that, in less than two years, it was granted a patent for “Q by SoLVL’s method and seal deployment system for immutable transactions” by the U.S. Patent and Trademark Office.

The Company concedes that, while no system is unhackable, “Q by SoLVBL technology uses a digital stamp or seal around the data that assures your data has not been tampered with,” explained Rahim Allani, an investor and advisor to SoLVBL. Using a private blockchain to ensure credibility of the data, Q by SoLVBL operates without having direct access to the data itself, providing an additional level of security.

In an age of ransomware and digital data manipulation, the security of data stored and exchanged on behalf of an institution’s customers and constituents is of paramount concern. Sensitive data, personally identifiable information, financial and personal records, protected health information, intellectual property, data, and governmental and industry information systems, are both mission critical and particularly prone to threats and hacks.

Raymond Pomroy, CEO of SoLVBL called the patent “a validation of its technology and a critical milestone that will boost the reputation of the company. (The award marks) a key steppingstone in our journey to profitability.” Further, he believes the patent enhances SoLVBL’s strength in negotiating business development, partnership, and sales opportunities with international organizations.

The enterprise-level data protection platform is capable of serving as a digital payment instrument, a means of fraud protection, or as a central authority for verifiable data repositories. The Company’s flagship technology, Q by SoLVBL or “Q”, can currently produce over 135,000 transactions per second, Allani said, using off-the-shelf server equipment, which can be upgraded as market requirements demand higher speed. “The need for execution speed will be a factor in the future, and we expect that Q by SoLVBL’s transaction speed will continue to grow, to meet the future needs of banks and financial institutions.”

Allani said the Company sought patent protection for its flagship technology for three reasons. Patent protection would lend credibility with large financial institutions; it would preserve shareholder value; and finally, the intellectual property would be an asset in the event the company would be bought or acquired in the future. Allani pointed to Q’s speed and proprietary sealing technology as particularly suitable to protecting financial transactions.

SoLVBL has targeted four industries for adoption, including Next Generation 911 digital evidence; financial services/digital financial platforms; medical applications; and IoT infrastructure.

SoLVBL plans to monetize its Q Authenticity Platform by collecting $0.001 from each financial transaction conducted on the network, a convention banks are familiar with from credit card platforms they interact with.

SoLVBL is working to develop other ways to authorize and encrypt data to securely transfer funds in the digital domain, as well as aid in securing Next Generation 911, chain-of-custody authentication for digital evidence and supply chain sensors such as trackers.

Global fraud detection and prevention is expected to grow to a US $63.5 billion market by 2023, according to the Company. “With all the hacks and ransomware occurring, I believe that number will grow,” Allani said.

“We are actively pursuing the 911 vertical and we are in discussions with financial institutions.” Next generation 911 (NG911) is new technology that allows the public to share richer, more detailed data— videos, images, and texts —with 911 call centers of local, county, and state governments and law enforcement, who need to ensure the validity of the images for evidence or emergency response. There are 6,100 call centers in the U.S., he said.

In the health care arena, SoLVBL signed a Memorandum of Understanding very recently with Empower, a health care provider. Allani said the opportunity with Empower “opens up a new vertical for us. That should open the door to more health care opportunities.”

The pre-revenue Company also announced this week that it had engaged the institutional sales and trading team of Research Capital to advise on trading and market-making, and to extend its reach to Canadian investors.

Allani serves as Managing Director and head of OCI Canada, which has been an early investor in and advisor to SoLVBL. Research Capital assisted the Company in raising $4 million in capital from investors.

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Disclosures:
1) Gerri Leder compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None. His/her company has a financial relationship with the following companies referred to in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with SoLVBL Solutions. Please click here for more information. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security

3) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

4) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of SoLVBL Solutions, a company mentioned in this article.

 

Liquid Avatar Leverages Blockchain Tech for Age Verification & NFTs

Source: Streetwise Reports   11/13/2021

In a recent conversation with Streetwise Reports, David Lucatch, CEO and president of Liquid Avatar, talked about the company’s multifaceted approach to bringing blockchain technology to people’s everyday experiences and transactions.

Liquid Avatar Technologies Inc. (LQID:CSE; LQAVF:OTCQB) is
breaking new ground for blockchain technology. The company
is taking a multifaceted approach to applying blockchain technology: through the verification, management, and monetization of Self Sovereign Identity which includes functions such as age verification in retail and promoting virtual assets (i.e., non-fungible tokens, or NFTs).

No More Checking IDs in Convenience Stores?

Selling age-restricted products in convenience stores is about to get easier if Liquid Avatar’s technology takes off. Traditionally, customers have to show personal identification, such as a driver’s license, to prove their age in stores. The clerk then has to verify the customer’s age and confirm which products they are eligible to purchase. Liquid Avatar’s Smart Age technology may change the entire experience.

“Today, clerks in the Ontario market have about a 90% success rate in checking identity for age-restricted products. However, millions of people go through convenience stores every day. A single failure can lead to fines and a loss of the ability to sell age-restricted products,” David Lucatch, CEO and president of Liquid Avatar, told Streetwise Reports. There are more than 8,000 convenience stores in the Ontario market and more than 22,000 across Canada.

Why Does Age Verification Matter?

In Ontario, the penalty for violating the rules can be substantial. Fines to corporations may exceed $100,000 for failing to ID a person who appears to be younger than 25 years old in Ontario. The store owner may also be held responsible for the violation in some cases. Losing the ability to sell age-restricted products like tobacco, lottery tickets, and, in some locations, alcoholic beverages would be a major blow to most convenience stores.

“In most organizations, there is a lot of training provided to convenience store clerks to verify IDs. However, we have to realize that the clerk may be busy and may not verify the ID fully. In addition, there is a high level of turnover in some parts of the convenience store industry,” Lucatch explained. As a result, some convenience store employees may not perform age verification checks in every instance.

Losing the ability to sell age-restricted products is a significant concern for convenience store owners. According to the Canadian Convenience Stores Association, tobacco and tobacco-related products account for 29.1% of total sales revenue on average. These product categories are even more significant in terms of profitability. Fourteen percent of total gross profit, on average, comes from these two products. It’s not just tobacco, either. Lottery commissions account for 6.7% of gross profit at convenience stores. In Ontario, the minimum age to purchase lottery tickets is 18, and the age to purchase tobacco and alcohol products is 19.

QR Code Age Verification

The Liquid Avatar Technologies approach to age verification eliminates the need to check an ID manually. Instead, consumers download an app with biometrics capabilities. When a user makes a purchase, the convenience store clerk has to scan a QR code.

“The clerk receives a yes or no response from the system regarding which age-restricted products can be sold. There is no personal information like name, address, or date of birth displayed,” Lucatch explained.

In February 2021, the Company launched the Liquid Avatar mobile app and acquired more than 10,000 downloads, which were used to gather feedback. The company has now initiated its public launch in the U.S. and Canada. As the launch becomes successful, the company may expand to other industries with age-restricted sales, such as bars and restaurants.

Selling Virtual Land and Assets

The old saying about real estate — they’re not making any more of it — may not be valid anymore. Oasis Digital Studios Limited, a subsidiary of Liquid Avatar, is launching a virtual world called Aftermath Islands.

“We had a lot of previous clients and related parties come to us and say, ‘Look, you’re already creating your own assets. Could you help us with NFTs?’” Lucatch explained. After reviewing the NFT opportunity further, Liquid Avatar decided to pursue it by launching Oasis. Oasis has recently been tasked by a new client to manage and develop Aftermath Islands.

“In Aftermath Islands, you will have the ability to buy virtual land, build on it, and interact with other people. There will also be games and quests,” Lucatch commented. At this time, there is limited information about what kinds of games will be available in the virtual environment.

Aftermath Islands plans to launch a series of islands over time with different themes. “If you’re a Bitcoin enthusiast, you might want to buy virtual land nearby other Bitcoin enthusiasts,” Lucatch commented. “Subsequent releases will not be at the introductory pricing level,” he continued. In late October, users can buy “virtual plots” of NFTs in Aftermath Islands. Plots range from single lots representing 1000m² to larger limited parcels consist of 4 plots together, and they can go as large as 100 plots put together.

Partnering With L.A. Comic Con

Thanks to a new partnership, promoting Aftermath Islands just got easier for Oasis and Liquid Avatar Technologies. On October 26, Liquid Avatar was named a digital innovation partner for L.A. Comic Con. Event participants will be able to use Liquid Avatar technology to access VIP events as well as a digital wallet. Liquid Avatar also plans to offer a scavenger hunt powered by augmented reality (AR) for event participants.

Scheduled for December 3–5, L.A. Comic Con will feature Nichelle Nichols (who played Nyota Uhura on Star Trek) and Tom Kenny (the voice actor behind the SpongeBob character). In 2019, the pop culture event attracted more than 120,000 fans.

Disclosure:
1) Bruce Harpham compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor/employee. He/she or members of his/her household own securities of the following companies mentioned in the article: None. He/she or members of his/her household are paid by the following companies mentioned in this article: None. His/her company has a financial relationship with the following companies referred to in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with Liquid Avatar Technologies Inc. Please click here for more information. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
4) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

 

Stablecoins: these cryptocurrencies threaten the financial system, but no one is getting to grips with them

By Jean-Philippe Serbera, Sheffield Hallam University 

– Cryptocurrencies have had an exceptional year, reaching a combined value of more than US$3 trillion (£2.2 trillion) for the first time in November. The market seems to have benefited from the public having time on their hands during pandemic lockdowns. Also, large investment funds and banks have stepped in, not least with the recent launch of the first bitcoin-backed ETF – a listed fund that makes it easier for more investors to get exposure to this asset class.

Alongside this has been an explosive rise in the value of stablecoins like tether, USDC and Binance USD. Like other cryptocurrencies, stablecoins move around on the same online ledger technology known as blockchains. The difference is that their value is pegged 1:1 to a financial asset outside the world of crypto, usually the US dollar.

Stablecoins enable investors to keep money in their digital wallets that is less volatile than bitcoin, giving them one less reason to need a bank account. For a whole movement that is about a declaration of independence from banks and other centralised financial providers, stablecoins help to facilitate that. And since the rest of crypto tends to go up and down together, investors can protect themselves better in a falling market by moving money into stablecoins than, say, selling their ether for bitcoin.

A substantial proportion of buying and selling of crypto is done using stablecoins. They are particularly useful for trading on exchanges like Uniswap where there is no single company in control and no option to use fiat currencies. The total dollar value of stablecoins has shot up from the low US$20 billions a year ago to US$139 billion today. In one sense this is a sign that the cryptocurrency market is maturing, but it also has regulators worried about the risks that stablecoins could pose to the financial system. So what’s the problem and what can be done about it?

The problem with stablecoins

Initially introduced in the mid-2010s, stablecoins are centralised operations – in other words, someone is in control of them. Tether is ultimately controlled by the owners of the crypto exchange Bitfinex, which is based in the British Virgin Islands. USDC is owned by an American consortium consisting of payments provider Circle, bitcoin miner Bitmain and crypto exchange Coinbase. Binance USD is owned by Binance, another crypto exchange, which is headquartered in the Cayman Islands.

There is a philosophical contradiction between the decentralised ideal of cryptocurrencies and the fact that such an important part of the market is centralised. But also, there are serious questions about whether these organisations hold enough financial reserves to be able to maintain the 1:1 fiat ratios of their stablecoins in the event of a crisis.

These 1:1 ratios are not automatic. They depend on stablecoin providers having reserves of financial assets equivalent to the value of their stablecoins in circulation, which adjust with supply and demand from investors. The providers promise they have reserves worth 100% of the value of their stablecoins, but that’s not quite accurate – as can be seen in the charts below.

Tether reserves

Pie charts showing Tether's reserves
Tether

USDC reserves

Grant Thornton

Tether holds 75% of its reserves in cash and equivalents as of March 2021. USDC has 61% as at May 2021, so both are some way short of 100%. A large part of the assets of both operations are based on commercial paper, which is a form of short-term company debt. This is not cash equivalent and poses a solvency risk in the event of a sudden collapse in the value of these assets.

So what could derail the machine? Currently there is almost unlimited money in circulation, interest rates are still at record lows and with the US government having just voted to accept another economic stimulus package worth US$1.2 trillion, the supply of money is not likely to be reduced significantly any time soon. The only element that could challenge this abundance of money is inflation.

There are several possible inflation scenarios, but the market currently still considers the “goldilocks” scenario to be the most likely, with inflation and growth rising together at high but manageable levels. In this case, central banks can let inflation run at 3%-4% levels.

But if the economy overheats, it could lead to an explosive situation of high inflation and economic recession. Lots of money would be moved out of risky assets and bonds into safer havens like the US dollar. The value of those riskier assets, including commercial paper, would fall off a cliff.

This would seriously damage the value of the reserves of stablecoin providers. Many investors with their money in stablecoins might panic and try and convert their money into, say, US dollars, and the stablecoin providers might be unable to give everyone their money back at a 1:1 ratio. This could drag down the crypto market and potentially the financial system as a whole.

Regulatory actions

Regulators are certainly worried about the stability of stablecoins. A US report published a few days ago by the President’s Working Group on Financial Markets said that they potentially pose a systemic risk, not to mention the danger that a huge amount of economic power could end up concentrated in the hands of one provider.

In October, the US Commodity Futures Trading Commission fined Tether US$41 million for claiming to be 100%-backed by fiat currency between 2016 and 2019. Bank of England Governor Andrew Bailey said in June that the bank was still deciding how to regulate stablecoins but that they had some “difficult questions” to answer.

Overall, however, it seems that the response from the regulators is still tentative. The President’s Working Group report recommended stablecoin providers be forced to become banks, but delegated any decisions to Congress. With several big providers and such a burgeoning international market, my worry is that stablecoins may already effectively be too big and disparate to control.

It is possible that the risks will reduce as more stablecoins arrive on the market. Facebook/Meta has well publicised plans for a stablecoin called diem, for instance. Meanwhile, central bank digital currencies (CBDCs) will put fiat currencies on the blockchain if and when they arrive. The Bank of England is to consult on a digital pound, for example, while the EU and especially China are also moving ahead here. Perhaps the systemic risks of stablecoins will be reduced in a more diversified market.

For now, we wait and see. The speed at which this unnerving risk has emerged is certainly a concern. Unless governments and central banks move up a gear on regulation, a 2008-style crisis in digital assets cannot be ruled out.The Conversation

About the Author:

Jean-Philippe Serbera, Senior Lecturer, Sheffield Hallam University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

 

Bitcoin price rise to continue into 2022 as inflation fears grow?

By George Prior

– The Bitcoin price is likely to continue its skywards trajectory until at least the second quarter of 2022 amid continuing global inflation fears, predicts the boss of one of the world’s largest independent financial advisory, asset management and fintech groups.

The prediction from Nigel Green, CEO and founder of deVere, comes as the world’s dominant cryptocurrency hit another all-time high at $69,000 on Wednesday.

It followed data revealing that inflation has surged to a 31-year high in the U.S., raising the prospect the Federal Reserve will raise interest rates sooner rather than later.

Mr Green says: “Prices paid by U.S. consumers jumped the most since 1990 last month, climbing a staggering 6.2% from a year earlier.

“This latest data out of the U.S. will only compound global fears about inflation as price pressures run hot around the world.

“Inflation in the UK could rise above 5% by early next year, Euro area annual inflation is 4.1% in October 2021, up from 3.4 % the month before, and the cost of goods leaving Chinese factories surged by another record rate last month – 13.5% – and there are increasing signals that consumers are now feeling the pain.”

He continues: “It’s a global issue as businesses have been raising prices as supply chain bottlenecks and a shortage of qualified workers push up costs.

“And it’s one that is likely to last until at least the beginning of the second quarter of 2022, when pressures should start to ease.

“Against this backdrop, and amid some peaks and troughs along the way as markets never move in a straight line with traders taking profit, we can expect to see the price of Bitcoin and other major cryptocurrencies continue their skywards trajectory.

“Bitcoin is widely regarded as a shield against inflation mainly because of its limited supply, which is not influenced by its price.”

This ‘inflation shield’, says the deVere CEO, will bring to the crypto market growing investment from major institutional investors, bringing with them capital, expertise and reputational pull – and further driving up prices.
Earlier this week, as he accurately predicted that Bitcoin would hit fresh all-time highs, Mr Green said that other cryptos can also be expected to move to the upside.

“Bitcoin’s gravitational pull on other digital assets will show itself again this week, pulling up other major cryptocurrencies as it maintains its own strength.
“We can expect those cryptos involved with fintech development, such as Ether, Solana and Cardano, to do particularly well.”

He concludes: “In this inflationary period, Bitcoin has outperformed gold, which has been almost universally hailed as the ultimate inflation hedge – until now.

About:

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.

Nigeria’s digital currency: what the eNaira is for and why it’s not perfect

By Iwa Salami, University of East London 

– Nigeria recently became the first African country to introduce a digital currency. It joins the Bahamas and the Eastern Caribbean Central Bank in being among the first jurisdictions in the world to roll out national digital currencies. The Conversation Africa’s Wale Fatade asks Iwa Salami what a digital currency is and whether Nigeria can achieve its aims of introducing the currency.

What is a digital currency and how does it work?

A digital currency is a means of payment or money that exists in a purely electronic form. Central bank digital currencies are issued and regulated by the nation’s monetary authority, or central bank, and backed by the government. They are different from existing electronic central bank money, which is provided by central banks but can only be used by banks and selected financial institutions. When financial institutions pay each other, they pay in reserves from accounts held with a central bank.

Before central bank digital currencies, the only way consumers could use money that is a direct liability of a central bank was with physical cash. Existing digital retail payment from customer deposits accounts in banks are based on money that is the liability of the institution providing the account, not a central bank. A central bank digital currency is a direct liability on the central bank and is available to all households and businesses giving them access to electronic central bank money.

It can be transferred or exchanged using technologies such as blockchain. Blockchain is a system of storing records of transactions across a network of computers.

Nigeria’s digital currency will be the digital form of the Naira and will be used just like cash.

A central bank digital currency is not a cryptocurrency. Cryptocurrencies, such as Bitcoin, are not currencies in most countries since they are not a generally accepted form of payment. Although they are still widely referred to as cryptocurrencies, they are best described as digital assets, or crypto-assets.

The Bahamas, Saint Lucia, Grenada, Antigua and Barbuda are among the seven countries that have launched central bank digital currencies.

Why has Nigeria launched a digital currency?

The Central Bank has given several reasons for launching the eNaira. It is to:

  • promote and facilitate financial inclusion
  • enable direct welfare disbursements to citizens
  • facilitate diaspora remittances
  • reduce the cost of processing cash
  • improve the availability and usability of Central Bank money
  • increase revenue and tax collection
  • support a resilient payment system
  • improve the efficiency of cross-border payments.

The introduction of the eNaira will enable peer-to-peer payments, cutting out ‘middle men’ or the use of intermediaries, such as financial institutions.

What are the risks and how can they be mitigated?

One is its potential to disrupt existing banking systems. This could occur if citizens decide to hold digital currency instead of keeping their physical Naira in a bank account. This would mean that banks would not have money to grant loans and other financial products. It could result in banks raising their interest rates as an incentive for customers to keep deposits within the banks. But then interest charged on loans would also go up to cover interest on savings.

However, since the eNaira is non-interest bearing and the Central Bank can place transaction and balance limits on certain eNaira wallets, this risk is minimised.

The second risk is operational. For example, if IT systems were to fail or if there were technological glitches, or cyber-attacks. These can compromise user privacy. The Central Bank will need robust technology and IT security systems.

Closely linked is reputational risk to the Central Bank if the operational risks materialise. They are likely to have a huge impact on its credibility and reputation both domestically and globally.

When the Central Bank takes on this new function – issuing the eNaira and maintaining a central ledger of all transactions – it might find it harder to perform its key function of ensuring a safe and sound financial system since its focus could be diverted towards managing the eNaira system in addition to carrying out its other functions in the domestic economy.

A possible way to lighten this burden is through creating synthetic central bank digital currencies. This idea was put forward in 2019 in an International Monetary Fund paper. In such a system, the central bank does not directly manage the system, but outsources tasks to private institutions. Financial institutions issue the digital currency, which is fully backed by central bank money.

Closely linked is the risk of the system being used to launder money and finance terrorism. Financial institutions would need strong systems for combating these threats, supported by national legal infrastructure.

Another risk is around data protection and privacy. The Central Bank claims that the:

eNaira system is built with deep considerations around privacy and data protection and in compliance with the National Data Protection Regulations.

However, as the system is designed in line with the guidelines to prevent the illicit flow and use of funds which require identifying transacting parties and the details of their transactions, proper systems need to be in place to ensure that the privacy rights of users of the eNaira system are not violated.

There’s also a need to educate people about the eNaira. Although the central bank says there are ‘campaigns to deepen the understanding of eNaira amongst the population’ it is unclear what this entails. Citizens need to know the difference between the digital representation of cash deposits in bank accounts and the eNaira in digital wallets.

Is Nigeria ready for it? If not, how can the gaps be addressed?

Nigeria could certainly pull this off, provided the technology infrastructure and the technological know-how are in place. It is stated that the eNaira shall be administered by the central bank through the Digital Currency Management System to mint and issue eNaira but it appears this system has been built by Bitt, a global financial technology company. It provides digital currency and stablecoin solutions to central banks, financial institutions and ecosystem participants worldwide. As such, the maintenance of the eNaira system would very much depend on the technological strength of this company and the extent to which they are retained to provide a maintenance framework for the system.

Another issue is the electricity crisis and lack of widespread access to the internet across the country. These should be immediate priorities for the Central Bank, and the government, to resolve for the eNaira system to be successful. It is good to see that there’s a plan for the system to be usable while offline.

Another challenge that the poor may have in accessing the eNaira system is the difficulty of attaining digital identity. The eNaira design plans to use the existing Bank Verification Number and National Identity Number regime. Getting the documents needed for these is expensive and cumbersome.

As Nigeria has the largest population on the continent, spearheading this process could signal the start of a regional monetary integration. If central bank digital currency arrangements could work together across the continent it could solve the challenge of the inconvertibility of African currencies. This could help intraregional trade, which has been challenging to achieve in Africa. With the African Continental Free Trade agreement now operational, the successful launch of the eNaira might be a step towards regional monetary integration in Africa and potentially a regional central bank digital currency.The Conversation

About the Author:

Iwa Salami, Reader (Associate Professor) in Law, University of East London

This article is republished from The Conversation under a Creative Commons license. Read the original article.

How Many Trees Does It Take To Offset Cryptocurrencies’ Carbon Foot Print?

By ValueWalk

– Crypto mining entails the constant expansion of processing power dedicated to mining tasks, resulting in higher energy consumption. As cryptocurrencies like bitcoin and Ethereum hit sky-high prices, there is a non-negligible carbon and energy downside to their mining, which generates emissions of up to 120 million tons of CO2 into the atmosphere per year.

In fact, amid the 2021 United Nations Climate Change Conference, Sweden’s regulators have said that mining bitcoin and other cryptocurrencies based on the proof-of-work (PoW) algorithm could prevent the country and the European Union from complying with the Paris Agreement on Climate Change.

As the world’s economies are looking at ways to decelerate global warming, how many trees should they plant if they were to dampen the impact of crypto mining, and which cryptocurrencies are the biggest culprits?

Environmental Impact

As cryptocurrency adoption increases and financial interest soars, so does the environmental concerns about these digital assets. According to a Forex Suggests report, a greater spotlight is being shone on the climate impact of crypto trading, “as many investors are wary of the sustainability of the sector and how well it will be able to adapt to any new regulations on CO2 emissions.”

The same report asserts that bitcoin is the most energy-intensive largest polluting crypto, as it uses 707 kWh and generates 1060.5 lbs. of CO2 per transaction –more than half a ton. Ethereum is second with 62.56 kWh of energy consumption and a total of 93.84 lbs. in

CO2 per transaction.

“Despite being far more efficient than bitcoin, this is still a very high energy cost that produces a worrying amount of CO2,” the document asserts. In third place is Bitcoin Cash, with 19.957kWh of energy use and 28 lbs. of CO2 per transaction.

As both bitcoin and Ethereum position themselves as the most popular and polluting cryptocurrencies, investors will start worrying about possible regulation by governments on their mining, especially in China, which could have a severe knock-on effect on crypto markets.

Most Polluting In 2020

Last year, bitcoin’s CO2 emissions reached 59.9 million tons, which –according to the Forex Suggest report– would have been offset by having planted a whopping 299.6 million trees. “This makes Bitcoin an incredibly unsustainable cryptocurrency that will need to reform the way it functions in order to adapt to a low-carbon world.”

In the same year, Ethereum emitted 16.6 million CO2 tons, which would have required 84.3 million trees to counter the striking number. Despite producing much less CO2 throughout 2020 compared to bitcoin, Ethereum is still operating at an unmaintainable rate, making it one of the dirtiest cryptocurrencies in 2020.

In third place, Litecoin generated 257,343 tons of CO2 and required 18.522 kWh for its mining process, which could have been offset by having planted 1.3 million trees. According to Investing, Litecoin was trading at $220.400 on Monday 8, up 10.31% on the day –the largest one-day percentage gain since September 3.

Biggest Increases

Bitcoin Cash was the cryptocurrency that increased its emissions the most in 2020-2021. At the current pace, it is bound to release 1.3 million tons of CO2 into the atmosphere this year, which represents a whopping 748% increase. Although not as polluting as bitcoin and Ethereum, Bitcoin Cash uses 18.957 kWh of electricity per transaction.

Reporting the same trend, Cardano showed the second-biggest increase in CO2 emissions, topping 551.35% –Cardano is very popular in crypto-investors portfolios. “However, unlike other big-name cryptos, Cardano uses a Proof-of-Stake (PoS) blockchain which requires much less energy and processing power than the Proof-of-Work (PoW) blockchain used by the market leaders.”

Stellar made it to the top 3 in terms of CO2 emissions increase with 189.6%. The Stellar Consensus Protocol is much more efficient than PoW or PoS as the cryptocurrency emitted by far the least CO2 between 2020 and 2021 –23.99 tons– despite having the highest number of transactions.

Article provided by ValueWalk

 

Getting paid in Bitcoin will become the norm: deVere CEO

By George Prior

More than a third of millennials and half of Generation Z would be happy to receive 50% of their salary in Bitcoin and/or other cryptocurrencies, reveals a new survey.

The findings from a global poll carried out by deVere Group, one of the world’s largest financial advisory, asset management and fintech organizations, show that 36% of those born between 1980 and 1996; and 51% of those born 1997 and 2012, would welcome their jobs to pay in digital currencies.

More than 750 clients under the age of 42 of the organization’s deVere Crypto app were surveyed in the UK, Europe, North America, Asia, Africa, Australia and Latin America.

The research comes as New York City mayor-elect Eric Adams announced plans to take his first three paychecks in Bitcoin, in his latest move to compete with Miami as one of America’s top crypto hubs.

Of the findings, deVere CEO and founder Nigel Green comments: “The results of this poll underscore what we have known for a long time: that younger generations are embracing cryptocurrencies largely because they are ‘digital natives.’

“They’ve been influenced by the enormous surge in tech as they came into adulthood. They are comfortable using and see the value in and massive potential of digital currencies.

“They appear to trust an autonomous decentralized digital currency and payment system over a traditional system where legacy financial institutions and governments are in control.”

He continues: “With more than a third of millennials and half of Gen Z happy to receive 50% of their salary in Bitcoin and/or other cryptocurrencies, they clearly believe that crypto is the inevitable future of money.  And I agree with them.

“They see the inherent value of digital, borderless, global currencies for trade and commerce purposes in increasingly digitalized economies in which businesses operate in more than one jurisdiction.

“Cryptocurrencies make a lot of sense in today’s world.”

The results of the survey come as Nigel Green correctly predicted that Bitcoin would hit new all-time highs – and it did so on Monday evening.

The second largest cryptocurrency by market cap, Ethereum, also reached fresh highs.

He noted in the media on Monday morning: “Bitcoin’s gravitational pull on other digital assets will show itself again this week, pulling up other major cryptocurrencies as it maintains its own strength.

“We can expect those cryptos involved with fintech development, such as Ether, Solana and Cardano, to do particularly well.”

The deVere CEO and founder concludes: “As interest, demand, and regulatory acceptance continues to pick up already impressive momentum, naturally, there will be a growing number of people willing to have their salaries paid in Bitcoin and other cryptocurrencies.

“Indeed, one day it will be the norm.”

About:

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.

Bitcoin pushing towards fresh all-time highs this week

By George Prior

Bitcoin could hit fresh all-time highs this week, which will bring upside to other cryptocurrencies, particularly those directly involved in fintech development.

This is the bullish prediction from Nigel Green, the CEO and founder of deVere Group, one of the world’s largest independent financial advisory, asset management and fintech organisations.

The ultra-bullish prediction comes as prices are on an upward trajectory and as Australia’s regulator, the ASIC, has become the latest watchdog to approve spot ETFs in the world’s two largest cryptocurrencies, Bitcoin and Ethereum.

Mr Green comments: “It’s taken a week or so longer than the Bitcoin bulls would’ve liked, but overnight on Sunday the world’s largest crypto took off again.

“It reclaimed its previous high of $64,900 from April and is closing in on its all-time high spot price of $66,000 from 19 October.

“Bitcoin will maintain its strength and is likely to shoot further this week, possibly hitting fresh all-time highs, as this current ‘take off’ generates further interest and momentum, attracting even more retail investors.”

He continues: “In addition, Australia’s securities watchdog has followed other global regulators, by giving the green light to the highly anticipated spot exchange-traded funds (ETFs) in a move that has provided a framework for other countries to follow suit.

“This move – especially when other regulators do the same, which they will – will mean that not only more retail investors will pile in but, crucially, more institutional investors such as family offices, hedge funds and real money asset managers will further increase their exposure into digital assets.

“They will bring with them unprecedented levels of capital and stability to the famously volatile crypto market. This will further drive prices skywards.”

The deVere boss goes on to add that the U.S. Securities and Exchange Commission (SEC) would be the “tipping point” in regard to ETFs.

“I believe that the Wall Street’s top regulator will eventually approve a spot Bitcoin ETF.

“A U.S.-based spot Bitcoin ETF would give the sector an unseen level of legitimacy and act as the ultimate tipping point for the market as it will allow corporates to buy and sell quickly and have direct exposure to the crypto itself, unlike with a futures-based ETF.”

As Bitcoin moves towards fresh all-time highs, other cryptos can also be expected to move to the upside, says Nigel Green.  His observation follows Solana and Ether both hitting record highs last week.

“Bitcoin’s gravitational pull on other digital assets will show itself again this week, pulling up other major cryptocurrencies as it maintains its own strength.

“We can expect those cryptos involved with fintech development, such as Ether, Solana and Cardano, to do particularly well.

“Bitcoin is just the start of the fintech revolution which is redefining and reshaping the way that all financial services are delivered.”

He concludes: “This is going to be another good week for crypto investors as interest and demand, as well as regulatory recognition, take flight again.”

About:

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.

 

Bitcoin’s All-Time High Foretold Before U.S. ETF Launch

“A developing upward wave is in progress”

By Elliott Wave International

On Oct. 20, Bitcoin climbed to a new all-time high above $66,000 — quite a rebound from its price level just below $30,000 as recently as July.

At that time, the sentiment was quite bearish. Here are just a couple of sample headlines:

  • Bitcoin: [Investment Firm Chairman] Says Price Can Crash to $10,000 (Bloomberg, July 9)
  • Why You Should Worry About the Next Crypto Crash … (Money, July 20)

All the while, Elliott Wave International’s head crypto analyst Tony Carrion was saying, in effect, “hold your horses. Bitcoin’s run is far from over.”

In the “Cryptocurrency” section of the July Global Market Perspective (a monthly Elliott Wave International publication which covers 50+ worldwide financial markets), when the grandaddy of digital currencies was still in freefall, Tony told subscribers:

Bitcoin [is] at or near the end of its [Elliott wave] correction.

Short, sweet and to the point.

Well before July was over, Bitcoin found a bottom and has been in “bounce back” mode ever since.

The message of the Elliott wave model was the basis for Tony’s prescient Bitcoin call.

In the September Global Market Perspective, Tony again got right to the point in his Bitcoin analysis:

A developing [upward wave] is in progress.

And, as all Bitcoin observers know, that upward Elliott wave has persisted well into October.

Yet, on Oct. 20, the headline of a major financial website stated (CNBC):

Bitcoin jumps to new high above $66,000 after landmark U.S. ETF launch

But as just described, Bitcoin’s new all-time high was in the cards, according to the Elliott wave model, months ago.

As of this writing on Oct. 25, Bitcoin is trading a little below that all-time high.

What’s next?

Get insights by reviewing the charts with Bitcoin’s Elliott wave count, which are found in the “Cryptocurrency” section of the Global Market Perspective.

The Elliott wave model is ideally suited for emotional markets like cryptocurrencies and it can help you to anticipate Bitcoin’s next big trend shift.

If you’d like to learn about the Elliott wave model, or need to brush up on your knowledge, you are encouraged to read Frost & Prechter’s Wall Street classic, Elliott Wave Principle: Key to Market Behavior. Here’s an excerpt from the book:

Most important, the Wave Principle often indicates in advance the relative magnitude of the next period of market progress or regress. Living in harmony with those trends can make the difference between success and failure in financial affairs.

If you’d like more insights into the Wave Principle, realize that Club EWI members are granted free access to the entire online version of the book.

In case you don’t know, Club EWI is the world’s largest Elliott wave educational community and is free to join. Members are under no obligations and enjoy free access to a wealth of Elliott wave resources on investing and trading, as well as Elliott Wave Principle: Key to Market Behavior.

Follow the link to become a Club EWI member and get your free access to Elliott Wave Principle: Key to Market Behavior.

This article was syndicated by Elliott Wave International and was originally published under the headline Bitcoin’s All-Time High Foretold Before U.S. ETF Launch. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.