The Bigger the Hit to a Country’s GDP, the Higher the Stock Market Jumps

The US economy shrank by an annual rate of 32.9% between April and June, the sharpest contraction triggered by the coronavirus pandemic since the second world war.

This economic shock in April, May, and June was over three times as sharp as the previous record of 10% in 1958 and about four times the worst quarter during the Great Recession.

“This is something we have never seen before,” said Jason Reed, assistant chair of finance at the University of Notre Dame.

“At first I felt it was like a natural disaster that had hit the entire country at the same time. Now it is evolving into something worse than that.”

The record-settling fall in the gross domestic product, the broadest measure of economic activity compared to the same time last year after for the second week in a row following a four-month decline 1.43 million Americans filed for unemployment benefits last week.

Economists expect the economy to recover sharply later this year, but the recent rise in infections across the US is clouding that outlook.

Interestingly, during this time, the S&P 500 jumped 24% thanks to all the money printing the Federal Reserve did. After the initial $3 trillion stimulus package, another trillion-dollar aid is expected soon. For now, Congress is struggling to strike a deal on the new round of financial support.

On Wednesday, the Fed said the US economy is facing significant challenges from the coronavirus pandemic and vowed to continue to take aggressive action to support the economy to recovery.

The US’s GDP report came as Germany, Europe’s largest economy, recorded a slump in economic growth, contracting by 10.1% in Q2, the most significant decline since 1970, while its stock market DAX jumped 28%.

The fall in GDP came as parts of the US economy shut down in an attempt to halt the spread of coronavirus across the country. The closures led to a historic number of layoffs that sent unemployment soaring to levels not seen since the 1930s Great Depression.

Now, as the first month of the third quarter comes to an end, the S&P 500 jumped 3.6% in July. But it was precious metals that stole the show.

Gold jumped 10.6% this month and broke the 2011 record to hit a new all-time high in Q2. This has been in part due to a 1.6% decline in the US dollar index, which further hit over two-year low with a 4% decrease in July.

Meanwhile, bitcoin the ‘digital gold’ woke from the slumber just last week and spiked 23.6% in July, after a 68% jump in Q2, now trading above $11,300.

“Gold, Silver, Bitcoin all hitting, or going, to new ATH,” said Max Keiser adding the bad news is all of this is because,

“global central banks are staging a debt-for-equity coup disenfranchising 7.6 billion people who will be left for dead unless they have some Gold, Silver, Bitcoin.”

Read Original/a>
Author: AnTy

BIS Annual Report Reveals Increased Activity in CBDC; Emphasis on Policy Not Competition

The Bank for International Settlements (BIS) Annual Economic report has revealed that Central Bank Digital Currencies (CBDC) are gaining popularity and could play an essential role in the digital innovation era.

Covered in a particular chapter ‘Central banks and payments in the digital era,’ the report paints a picture of the ongoing activity in this space. Notably, the COVID-19 pandemic and Libra proposal are some of the factors that significantly accelerated research and development on CBDC’s.

The Switzerland headquartered organization has since encouraged central banks to consider CBDC’s noting the underlying opportunity in digital policy creation:

“One option at the frontier of policy opportunities is the issuance of CBDCs, which could amount to a sea change.”

The Push Factors

According to the BIS report, COVID-19 has accelerated the shift towards digital ecosystems, not sparing payment networks. The report highlights that there has been a sharp decline in cash transactions leading to a surge in e-commerce services.

Consequently, financial watchdogs are also embracing the new ‘normal’ hence the efforts towards CBDC’s in recent months.

As the U.S issued stimulus checks at the height of the pandemic, the vulnerabilities of its payment ecosystem were highly exposed. The BIS report points out that social inequalities attributed to payment ecosystems can, therefore, be solved with CBDC frameworks:

“The crisis has amplified calls for greater access to digital payments by vulnerable groups and for more inclusive, lower-cost payment services going forward.”

Another factor was Libra’s announcement back in 2019; the Facebook-led project sounded a warning for regulators globally as per the report. Before this, most had taken a laid-back approach with minimal activity in research. However, the Libra proposal has awakened a CBDC frenzy within a year.

Focus is on Policy, Not Competition

While private stablecoin proposals may have spurred the move towards CBDC’s, the organization said that regulators are focused on the policy as opposed to competition.

“CBDC issuance is not so much a reaction to cryptocurrencies and private sector ‘stablecoin’ proposals, but rather a focused technological effort by central banks to pursue several public policy objectives at once.”

At the moment, China is the most advanced jurisdiction in a CBDC integration. The Asian superpower rolled out a pilot for the digital yuan as soon as it emerged from the COVID lockdown. The PBoC backed digital currency is expected to equip China’s watchdogs with access to digital payment ecosystems.

With most of the population already using Alipay and WeChat, a migration towards digital monetary policy might not be complicated. Other nations that have signaled they will embrace a CBDC include Italy and France, which are both ready for a digital Euro.

Read Original/a>
Author: Edwin Munyui

Ripple Emerges In the 28th Spot on CNBC’s 2020 Top 50 Disruptive Companies

CNBC has announced its 8th annual Disruptor top 50 list and the blockchain payments provider – Ripple – has been ranked 28th in the list released on Tuesday.

CNBC stated that the list is meant to identify as well as recognize private enterprises whose solutions and innovations are influencing competition among businesses as well as in the market at a higher rate. CNBC stated:

“The startups [that made] the 2020 Disruptor list are at the epicenter of a world-changing in previously unimaginable ways, turning ideas in cybersecurity, education, health IT, logistics/delivery, fintech, and agriculture into a new wave of billion-dollar businesses.”

Apart from Ripple, renowned crypto-friendly app Robinhood also landed at number 46.

The process involved about 1,355 companies that were considered eligible for nomination back in April. The list was then reduced to 180 startups. CNBC then decided to add an extra evaluation step where firms were required to explain how the COVID-19 pandemic had affected their overall business.

The announcement explained that the majority of those that ended on the list had positive outcomes ranging from increased products, new hires, recent product launches as well as product pivots to aid in dealing with the challenges occasioned by the virus.

Ripple has been on an expansion mission starting from January when the coronavirus crisis began by adding an extra 50 partners from across the globe, with its total number of partners now being 350. The firm is currently working on a payment corridor in Brazil.

Despite the positive news, it seems that the ranking of Ripple on CNBC’s list had little impact on the value of its token, XRP. At the time of publication, XRP’s value had risen by merely 1.81% and was trading at $0.195.

The CNBC announcement also noted that most of the listed companies have already entered the coveted billion-dollar business class. Thirty-six of the businesses are already ‘unicorns,’ meaning that their valuation has reached $1 billion. The 50 companies have so far raised more than $74 billion in venture capital and are cumulatively valued at approximately $277 billion.

Read Original/a>
Author: Joseph Kibe

Libra Would Help Usher In ‘Higher Prices’ for Facebook Ads, Says CEO Mark Zuckerberg

During Facebook’s annual shareholder meeting on May 27, 2020, the founder, Chairman, and CEO of the social media giant, Mark Zuckerberg talked about how Libra benefits the company financially. Zuckerberg said,

“Not just Libra, but all of the commerce work that we’re doing is that you should really think about it in terms of our ads business.”

He explained how the auction is an important property of the ads business which means, they don’t set a price, rather every business can just bid for themselves what an ad is worth to them.

This means they can offer the lowest possible price.

It also means those businesses will be interested in bidding more because they will get more and the idea behind offering additional tools, whether it’s around commerce like Facebook Shops or around payments like Libra or Facebook Pay, is to make commerce be more effective for businesses. Zuckerberg said,

“When they run an ad, somebody who clicks on that ad is now going to be more likely to buy something because they actually have a form of payment that works that’s on file, then it basically becomes worth it more for the businesses to bid higher in the ads than what we see are higher prices for the ads overall.

So that’s broadly the strategy around going deeper on commerce and payments.”

Updating the core infrastructure of payment

During the call, he also shared that the payment is an area where the core infrastructure hasn’t been updated in a very long time.

Transferring money or paying for things between countries is still often very difficult as such,

“there are a lot of opportunities with Libra to make the process of commerce and payments helpful — a lot easier.”

This, he believes, isn’t good for people around the world but also the economy overall. He said,

“And we will be able to participate in some amount to that value creation ourselves through higher prices in ads if businesses are succeeding using these tools.”

Just this week, Facebook renamed the wallet Calibra to Novi — a combination of two Latin words: Novus which means “new” and Via meaning “way,” to distance it from the Libra digital currency.

“People were confusing Libra and Calibra all the time,” said David Marcus, Facebook’s head of blockchain. “In hindsight, it’s hard to blame them.”

Libra digital currency was first announced in June 2019 as a global currency that would be nearly free to send across borders. However, since then the project has faced many hurdles.

The fiat-backed digital currency would be governed by the Libra Association made up of 27 companies and nonprofit organizations. Its first chief executive officer, Stuart Levey, was also named earlier this month.

The Association hopes to launch the Libra currency by the end of this year.

Read Original/a>
Author: AnTy

Bitcoin (BTC) Accounts for Under 2% of Total NGOs Payments: Global NGO Tech Report

In the 2019 research report of the annual Global Non-governmental Organizations (NGOs) Technology Report, Bitcoin (BTC) and other cryptocurrencies ranked poorly as a payment option across the 5,352 institutions in 194 countries sampled. The report focuses on the overall use of technology across NGOs globally to offer services, payment options, and network across their industry and with sponsors.

Bitcoin Payments Below 2% of Total Payments

The adoption rate of BTC as a payment channel is still low across NGOs, the report states. With over 85% of the NGOs worldwide offering online payment channels for fundraising purposes, only 2% of these choose BTC as a means of payment. A huge chunk of the sponsors still use legacy financial payment options such as credit and debit cards, bank transfers, and PayPal to contribute to the NGOs.

Despite the high volumes exchanged across the platform this year and a price increase of over 150% since Jan 1, Bitcoin is yet to grow as a global currency payment option. In the past 24 hours, over $300 million USD worth of Bitcoin has been transacted, representing a 90% drop in volume transacted since hitting a monthly peak of $3 billion USD daily volume of transactions.

Data from Blockchain.com

Africa leads in Bitcoin payments

According to the Global NGO tech report, Africa leads in the number of Bitcoin payments to NGOs registering 5% of payments. Africa’s digital payment systems are growing at a magnificent pace with developments such as mobile money payments spreading across the continent like wild fire. Crypto payments to NGOs in the region rank higher than other regions in the world which conventionally process about <1% to 3% in virtual currency payments.

The report also highlights the growth of legacy digital payments across the continent. It states,

“64% of NGOs in Africa accept credit card payments on their website, up from 50% in 2018. 28% accept mobile money and 5% accept cryptocurrency—both are higher rates than any other region.”

Bitcoin Rough Patch

Since hitting a yearly high of $13,700 USD in June, Bitcoin’s journey has not been so positive. A number of governments across the world including Hong Kong’s latest crypto regulations are looking to regulate the use of cryptos across their jurisdictions as they fear a case of failing monetary policy.

Furthermore, the institutional interest seems to be plummeting as the regulation uncertainties on the industry persists. According to BakktBot, a twitter page dedicated on Intercontinental Exchange’s, Bakkt, showed a slow start to BTC Futures trading volume with only 72 BTC traded in the first 24 hours. Since the launch the volume has not been promising with less than 50 BTC traded daily in the past 72 hours.

Read Original/a>
Author: Lujan Odera

India’s Second Largest Company, Reliance Industries, to Incorporate Blockchain All Across the Country

During the 42nd Annual General Meeting of Reliance Jio Infocomm Limited, an Indian mobile network operator fully owned by Reliance Industries, Founder, Shri Mukesh D. Ambani has shared how the firm will be investing in three next generation technologies’, among which includes focus depicted in blockchain technology, edge computing and virtual and mixed reality content and cloud infrastructure.

The conference went live on Facebook on Sunday, August 11, 2019.

Speaking of blockchain uses, Ambani praised the technology for its ability to support data privacy along with plans that the company has in store for the country.

Here’s why he believes blockchain has potential in contributing towards the Indian economy:

“Using blockchain, we can deliver unprecedented security, trust, automation and efficiency to almost any type of transaction. This is a vital capability for India, especially for modernizing our supply chains, agriculture produce and other goods, which produces the life form for our economy.”

He further argued that the blockchain uses will go as far as promoting innovation in coming up with newer models that support data privacy. Ambani shared that the overall aim is to ensure control of one’s data belongs to said rightful owners and “not by corporates”.

This is an issue that he seems to be passionate about as he went to highlight that Indian data should not leave the country because it is the country’s “wealth”.

That said, the Founder shared Jio Infocomm’s future efforts over the course of 12 months. In particular, the firm plans to install “one of the largest blockchain networks” across India entailing tens of thousands of nodes in operation.

Read Original/a>
Author: Nirmala Velupillai