Brazil’s Central Bank Governor Expects Crypto Investment in Country to Surpass $9 Billion

Brazil’s Central Bank Governor Expects Crypto Investment in Country to Surpass $9 Billion

Brazilians have already bought more than $4 billion in crypto this year up to August, as per the central bank report.

The total value of cryptocurrencies purchased by Brazilians this year has exceeded $4 billion, according to the data released by the Central Bank of Brazil in a report last week.

A total of nearly R$ 23.3 billion, $4.270 billion has been traded from January to August-end. In August, the purchase value was $496 million.

In August, Roberto Campos Neto, the president of Brazil’s central bank, also said that they need to pay attention to cryptocurrencies as they are here to stay. “We need to reshape the world of regulation,” he added.

The value of crypto assets bought by Brazilians reached its peak in May at $756 million. That month, the Brazilian market broke a record by trading R$ 826 million ($150 million) in Bitcoin in a single day.

But since then, they saw a drop in June and July at $695 million and $583 million, respectively. Still, these numbers have been much higher than the figures reported earlier this year in February at $386 million and $357 million in March.

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Last week, Deputy Governor for Monetary Policy at the central bank, Bruno Serra, said the Brazilians investment in crypto assets abroad is potentially three times greater than in American shares. He further said that there is a potential for this investment in crypto to reach R$ 50 billion (more than $9 billion in USD).

Serra also believes that people’s interest in cryptocurrencies is unlikely to fade anytime soon.

Earlier this month, as we reported, a bill advanced through Brazil’s House of Representatives, which has been in development since 2015, to regulate cryptocurrency in the country.

The bill calls for creating clearer definitions of crypto, will require virtual asset service providers to register, and further aims to crack down on crypto crimes by imposing higher fines and harsher prison sentences.

After being approved by a special committee of the Chamber of Deputies, the bill is currently in the hands of the Chamber’s Plenary, and once green-lit by them, it will advance to the Senate to be discussed before finally going to the president for a final nod.

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Author: AnTy

China’s National Development & Reform Commission Adds Crypto Mining to Outdated Industry

About two dozen cryptocurrency firms have fled the country after PBOC explicitly warned foreign platforms about providing services to its citizens, calling them illegal financial activities.

In less than fifteen days since the People’s Bank of China issued new regulations to crack down even more strongly on the cryptocurrency industry in the country, more than 20 such companies have stopped providing services to users in China or have completely withdrawn from the Chinese market, according to a local report.

On Friday, the National Development and Reform Commission further added virtual currency mining back to its outdated industry category; an action expressed in the PBOC’s notice last month.

The NDRC first started publishing this industry reform catalog in 2005 and grouped industries into three categories to encourage, restrict or eliminate them.

According to the latest draft, crypto mining is an industry that uses outdated production processes and equipment.

Exchanges Shutting

This time the central bank has strengthened its regulations against crypto and explicitly warned foreign platforms about providing services to Chinese citizens, declaring them illegal financial activities.

The campaign has served as a “clearer signal to the cryptocurrency industry that the space for relevant institutions and professionals is being squeezed more and more,” said Su Xiaorui, a senior analyst at research firm Analysys.

Today, Justin Sun’s Poloniex exchange announced that it will cease its operations in mainland China as it cannot comply with the local laws only to inform later that their “last email was wrong.”

In its first email, Poloniex had said that the platform would restrict its operations from 7th October, 4:00 am (UTC), and that it had stopped its registration facilities on 4th October.

Executives Leaving

Leading crypto exchange Binance swiftly stopped registering new mainland Chinese users following PBOC guidelines. Another popular crypto exchange Huobi said it would phase out access to existing Chinese users by this year’s end, and earlier this month, it yet again issued an announcement confirming the details of the withdrawal of users in China.

This week, Huobi COO Zhu Jiawei further announced his exit from the company. Founder and chairman Li Lin clarified in a WeChat post that their COO had already quit in April, but they delayed publicizing the information to avoid negatively impacting the company. Binance’s chief financial officer Zhou Wei also left the company in May.

However, both the exchanges were already forced to move out of China in 2017 when Beijing stopped hosting fiat to crypto transfers. But until this year, Chinese users were still able to access those services through over-the-counter (OTC) services and crypto-to-crypto transactions.

No More Support

Other platforms like TokenPocket, BitMart, and BHEX have also stopped providing their services to Chinese users.

Miners like SparkPool, which is one of the largest Ethereum mining pools and data providers, have all fled China as well. Alibaba has banned the sale of crypto mining equipment, NBMiner, which develops management software for graphics cards, is no longer offering tech support to users in China, and the operator of the Feixiaohao app also ceased its operations in the country.

Even HyperDAO, which offers decentralized financial (DeFi) services, said it would no longer discuss cryptocurrency on Chinese social media and had quit all business on the mainland.

Major data aggregators CoinGecko, CoinMarketCap, and TradingView, are no longer accessible in mainland China either.

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Author: AnTy

Southeast Asian Country, Laos, Authorizes Trading and Mining of Cryptocurrency

Southeast Asian Country, Laos, Authorizes Trading and Mining of Cryptocurrency

In a policy shift, Laos has approved the mining and trading of cryptocurrencies in the Southeast Asian country.

Analysts see this move as a logical step for an inland Communist-controlled country that has surplus hydropower.

The debt-laden country has its domestic tourism industry severely impacted by the pandemic, and while it has a strong power generation capacity, domestic demand is relatively small and weakened.

This shift to crypto comes after last month, the central bank of Laos issued a notice warning the public about the use of crypto assets.

This week, the Prime Minister’s Office said six companies, including banks and the construction groups, were authorized to start mining and trading crypto assets while relevant ministries draft regulations governing their use.

A host of ministries led by the Ministry of Technology and Communications in coordination with the Ministry of Finance, Ministry of Energy and Mines, Ministry of Planning and Investment, and the Ministry of Public Security will work with the Bank of Laos (BOL) and the national utility the Lao Electric Power Company to regulate the industry, reported the Laotian Times.

The research findings and consultation between ministries and relevant organizations will be discussed at a meeting later this month.

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Author: AnTy

China’s State Media Promotes Bitcoin Miners Going Green in Country & Points to Wasted Energy

Ahead of the politically sensitive 100th anniversary of the ruling Communist Party on July 1, the country is also trying to cool down speculation in other asset classes just like crypto.

China has been increasing its efforts to crack down on crypto mining and trading since last month, which helped push the price of Bitcoin down.

However, as we reported, the strict measures have been particularly taken ahead of the politically sensitive 100th anniversary of the ruling party on July 1 and are not limited to the crypto sector.

These measures extend to banks, education, and the internet. SpartanBlack, of crypto fund The Spartan Group said,

“China’s crackdown on crypto wasn’t specific to crypto only…they are trying to cool down speculation in multiple asset classes.”

This week, China stepped up its campaign to rein in commodity prices and reduce speculation. State-owned enterprises were ordered to limit their exposure to overseas commodities markets by the State-owned Assets Supervision and Administration Commission.

Also, the National Food and Strategic Reserves Administration will soon release state stockpiles of metals, including copper, aluminum, and zinc, and will be sold in batches to fabricators and manufacturers. This resulted in most metal prices in Shanghai falling along with shares of metal companies in China and Hong Kong. Jia Zheng, a commodity trader with Shanghai Dongwu Jiuying Investment Management Co. said,

“We haven’t seen the country release state reserves for years.”

“This will boost short-term supply, sending a bearish signal to the market.”

Meanwhile, the scrutiny on overseas commodities positions is aimed at “curbing excessive speculation as prices are overheated and could bring risks to SOEs,” said Jia.

Earlier this month, the Chinese top financial regulator also instructed major creditors of China Evergrande Group, including Industrial & Commercial Bank of China Ltd., to conduct a fresh round of stress tests on their exposure to the world’s most indebted developer.

Idle Energy

Meanwhile, some of China’s largest stock software has stopped providing BTC market data in response to regulatory requirements in the cryptocurrency space.

Moreover, when using an iPhone to log in to some cryptocurrency apps in China, a police prompt appears reading: “You are visiting an overseas niche website, please browse with caution.” However, one can log in normally after closing the prompt, noted local media publication Wu Blockchain.

While the regulators are curbing crypto mining in several provinces, Chinese state media-owned CGTN is now promoting Chinese Bitcoin miners going green amidst the pressure. Arthur Lee, CEO of SAI, a bitcoin, and computing company, told CGTN,

“Bitcoin miners thrive in the country because of the cheap electricity, easy availability of land, affordable labor, and safety. But things have changed for us in recent years because of the recent regulatory changes.”

Lee further shared that they are collaborating with power generation companies to use the excess energy generation to mine Bitcoin and prevent energy wastage. “The cheapest energy is where the energy is idle,” he said.

The publication then goes on to note that around 17.1% of total wind-generated power went to waste as of 2017, and in 2019, China wasted 2.7%, or 1.24 billion kilowatt-hours (kWh) of solar power, and 4% or 4.35 billion kWh, of wind energy, according to the country’s National Energy Administration (NEA).

“China’s State Grid had set a goal for the new energy utilization rate at above 94 percent for 2020.”

“We should not forget that bitcoin mining generated huge tax revenue and created job opportunities, helping country’s fight against poverty,” said Liu Changyong, professor at Blockchain Economic Research Institute. He added,

“There is a risk of losing a sector that was nurtured from 2013 to 2017. Policymakers, power companies, and bitcoin miners should come together to resolve the issue.”

Such steps would be a “win-win deal for everyone.”

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Author: AnTy

Second Bitcoin ETF Goes Live in Canada as US Firms Await SEC Approval

Canada has approved an exchange-traded fund from Evolve Funds Global Group Inc. The country is blazing the trail, while American firms hope 2021 finally becomes the year of the Bitcoin ETFs.

Canada’s crypto space continues to grow significantly as the country marks yet another milestone in adoption.

This week, Evolve Funds Global Group Inc., a financial services firm in the county, secured approval for a Bitcoin exchange-traded fund (ETF)

Evolve Joins the ETF Club

Official documents have shown that the Ontario Securities Commission (OSC), Canada’s financial regulator, has approved Evolve’s launch of its ETFs, providing additional exposure to investors looking to get into the crypto market.

A receipt published yesterday also showed that the company had partnered with Cidel Trust Company, a subsidiary of Cidel Bank Canada, to provide custody, while the Gemini Foundation will be a sub-custodian.

Evolve only filed the prospectus for its ETF earlier this month. Per the filing, the ETF will have two ticker symbols – EBIT for Canadian-denominated units, and EBIT.U for American-denominated units. Both variants will provide exposure to daily price movements of Bitcoin in the respective country’s fiat currency.

The fund will track price data using the Bitcoin Reference Rate from CF Benchmark, which aggregates data from several BTC/USD markets into a single-day benchmark index.

The fund’s prospectus explained that it hopes to provide holders to price movement while reducing tracking error by using specific creation and redemption processes.

To achieve this goal, the fund will invest in long-term BTC holdings purchases through several platforms – including Gemini NuSTAR LLC. Evolve has also gotten conditional approval to list on the Toronto Stock Exchange (TSX).

The fund is available in all of Canada’s provinces and three territories.

Evolve’s fund is only the second ETF to be approved by the OSC this month. Last week, the agency greenlit the Purpose Bitcoin ETF, an investment vehicle from Toronto-based investment firm Purpose Investments. The fund will offer units denominated in USD and CAD, with a 0.75 percent management fee. Like the Evolve fund, it also plans to list units on the TSX.

“The ETF will be the first in the world to invest directly in physically settled Bitcoin, not derivatives, allowing investors easy and efficient access to the emerging asset class of cryptocurrency,” Purpose Investments said in its announcement.

Uncle Sam Lags Behind

Over in the United States, there is some hope that the new administration – and, by extension, new head at the Securities and Exchange Commission (SEC) – will be more welcoming of a Bitcoin ETF.

This year, crypto investment firm Bitwise Asset Management filed for an ETF with the SEC, hoping to make it through for the third time. New York Digital Investment Group (NYDIG), a crypto-focused investment fund, has also made a similar application, with investment banking giant Morgan Stanley acting as an authorized participant.

While several ETF applications have come and gone, none has passed through the SEC’s iron barrier. However, with the new administration showing a propensity towards progressive crypto policies, the anticipation of approval is high.

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Author: Jimmy Aki

Pakistan Regulators Look to Build Friendly Framework for Digital Assets

Pakistan seems to realize the potential of digital assets in the financial future as the country seems geared up for formulating a new framework to regulate cryptocurrencies such as bitcoin. This is highly bullish since Pakistan was among the very few countries that in mid-2018 blanket banned digital assets in any form. It wasn’t until April of 2019 that regulators started to change their minds.

The Securities and Exchange Commission of Pakistan (SECP), on November 6th, released a consultation paper about regulating digital assets. The paper mentioned that the finance ministry is looking to make new laws as they look at the regulatory frameworks set by other countries.

SECP believe digital assets is a “start of a new era of digital finance.” The consultation paper further noted that to propel this new digital finance era, a new set of frameworks would be required to drive its adoption.

“Digital assets also known as Virtual Assets, and Crypto Assets are the start of a new era of Digital Finance, and demand innovative regulatory measures and approaches by the regulators across the world.

This could only be possible by initiation of a new era that re-invents regulatory regime/measures as they are known to the regulators globally today.”

It is also important to note that many developed countries in the West are currently discussing launching a Central Bank-issued Digital Currency (CBDC); however, the consultation paper makes no mention of any such plans by Pakistani financial watchdog. At present, they are only focusing on regulating private digital assets such as bitcoin.

The paper made a note of two types of tokens, namely security tokens and utility tokens, where the regulatory body sees a security token as an important tool that might help in fractionalizing real-world assets and digitize them.

The paper mentions that they have 2 choices as regulators; restrict digital assets due to current rules or take a ‘let-things-happen’ approach. Which they mention that they are heavily leaning towards the do-no-harm approach.

The paper also welcomed feedback from the stakeholders of the decentralized space in developing the new framework.

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Author: James W

Iran to Use Bitcoin for International Trade, Bypassing the Dollar Due to US Sanctions

With the latest amendment to the legislation, Iran has become the first country to use cryptocurrencies at a state level for import funding.

The Iranian Cabinet amended legislation to redirect digital currencies into the funding mechanism of the Central Bank of Iran (CBI) for imports, as per the report by the official The Islamic Republic News Agency (IRNA). The report by the CBI and the Ministry of Energy said,

“The miners are supposed to supply the original cryptocurrency directly and within the authorized limit to the channels introduced by the CBI.”

The limit on crypto for every miner will be decided by the level of the subsidized energy used for mining and the Ministry of Energy’s instructions.

This could create a war of hash rate in the Bitcoin space as China continues to lose its share while Kazakhstan, Iran, Malaysia, and Canada record an increase, as per Cbeci.org.

Iran’s share particularly has increased by over 2% in April 2020 from 1.74% in Sept. 2019.

Iran’s cryptocurrency move isn’t new and is a necessity for a country that is strapped for international currencies. In August 2019, it officially legalized crypto mining but banned trading in an attempt to take advantage of its subsidized electricity and extract taxes.

Iran’s fiat currency, the Iranian Rial, has also fallen as the country struggles with inflation, currently at 34%, for the past three years. Its economy has also been contracting since last year; this year, it did -10% a quarter. About a year back, Brian Hook, the US Special Representative for Iran had noted that,

“The regime is struggling to acquire the foreign currency they need to procure imports such as machinery, industrial inputs, and consumer goods.”

Earlier this year, the nation allowed power plants to operate large scale Bitcoin mining operations.

Given that Iran is also in the grip of US sanctions, it is bypassing the dollar and officially using Bitcoin. The country is also considering creating its own digital currency.

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Author: AnTy

Leading Iranian Power Stations to Supply Clean Energy to Crypto Miners

Iran has gradually become one of the leading crypto-mining hotspots in the world after China. The country turned to crypto amid growing concerns over its economy due to inflation and sanctions from the United States. The government regulated crypto mining a couple of years back, and since then, the crypto mining industry has flourished to become one of the key industries.

A few months back, the government authorized power plants in the country to mine bitcoin. It seems many power companies in the country are now willing to sell the electricity to the growing population of crypto miners in the country.

As per the latest report published in a local daily dated September 21st, Iran’s Thermal Power Plant Holding Company (TPPH) plans to sell their surplus electrical supply to crypto miners. TPPH is one of the largest power companies in Iran, and the reports suggest that the company is already in talks to hold a tender for supplying surplus electrical energy from three of its powerplants to crypto mining farms in the country.

The Iranian government’s expenditure on building an infrastructure for energy production has borne fruits, and the county has seen great progress in producing electricity. However, the government has also restricted power companies to stable price regimes, limiting these power companies from making great profits. Thus, supplying the surplus energy to crypto miners can prove a big revenue booster for these firms.

Energy Companies to Supply Only Clean Energy

The government has allowed for the distribution of surplus energy to crypto miners; however, this surplus energy needs to be clean and green. As a result, the power companies can only sell electricity produced from clean natural sources like wind and solar rather than ones generated by burning fossil fuels.

At present majority of crypto mining is done via fossil-fuel based electric power, which is available to the miners at subsidized rates. However, the move from TPPH could prove to be a big game changer and could pave the way for the use of clean and green energy for crypto mining.

In fact, Iran has single-handedly brought down the percentage of clean energy used for crypto mining due to the cheap price of fossil-fuel generated electricity. The country has also seen a significant rise in the mining operations ever since the government decided to regulate the mining industry rather than putting a blanket ban. There have been several rumors from time to time that the Iranian government is looking to launch its own central bank-backed digital currency, but nothing concrete has come out of it yet.

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Author: James W

China Should Seize the ‘First Mover’ Advantages of Launching A CBDC: PBoC

China should aim at becoming the first country to issue digital currency as part of its efforts to internationalize the yuan and lessen its over-dependence on the world’s dollar-dominated payment system, the People’s Bank of China (Chinese central bank) said.

The commentary appearing in China Finance, a People’s Bank of China run magazine, opined that the rights and capacity to offer and control digital currencies is set to become the ‘new battlefield’ among various sovereign nations. The article also claims that issuance and the circulation of virtual currency will alter the current international financial system.

The article argues that China should aim at becoming a first mover in the digital currencies space and calls for the acceleration of the development of the country’s CBDC.

“China has many advantages and opportunities in issuing fiat digital currencies, so it should accelerate the pace to seize the first track,” says the article.

Also, the article argues that data feedback from a Chinese central bank-issued digital currency (CBDC) would be vital for the development of a national monetary policy, which is imperative for economic recovery in the post-pandemic landscape.

The article also revealed that PBoC’s digital currency research outfit had filed approximately 130 patents related to crypto applications touching on issuance, circulation, and implementation.

The People’s Bank of China’s research institute was founded in 2015 to look at the feasibility and implementation process of digital currencies, to reduce the costs of circulating fiat currency and enhance policymakers’ grip in the money supply ecosystem.

Last month, various state-run Chinese commercial banks embarked on large-scale piloting of the digital wallet, which is a step closer to the highly awaited official launch of the digital currency. PBoC revealed last month that about 400 million people are involved in the piloting program for a digital yuan.

The Chinese central bank is looking forward to using the digital yuan during the 2022 Winter Olympic Games.

The article concludes that digital yuan can help in breaking the dollar hegemony in the international monetary system.

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Author: Joseph Kibe

CoinDCX Becomes The First Indian Crypto Exchange To Launch Token Staking Services

Indian cryptocurrency exchange, CoinDCX, becomes the first in the country to launch simple staking services for its users. First reported on Coindesk, the staking service will launch with three tokens Tron (TRX), Harmony (ONE), and Qtum (QTUM).

Speaking on the latest developments, CoinDCX CEO, Sumit Gupta, confirmed the staking service would not carry fees or hidden charges. The Mumbai based digital asset exchange is built to promote retail staking with low minimum balances required to stake. A minimum of 100 ONE (~$1), one QTUM (~$3), and five TRX tokens (~$0.1) is required with an annual return of 8-10%, 6-10%, and 5-10% respectively.

Gupta further said the exchange would pool the staking deposits from customers in a bid to increase their staking rewards while simplifying the staking process. Additionally, CoinDCX will also measure the optimal reward system by offering staking rewards through their partner exchange, Binance, or directly on the blockchain.

The exchange has raised over $5 million in 2020 in a bid to expand its products and market base. In March, following the landmark Indian Supreme Court ruling against the crypto ban, CoinDCX raised a $3 million Series A funding round from BitMEX and Bain Capital. The exchange further extended its raise by $2.5 million, led by Coinbase Ventures and Polychain Capital, to increase the company’s market share and encourage crypto adoption in India.

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Author: Lujan Odera