Mexico’s Central Bank to Launch its Digital Currency in Next 3 years to “Advance Financial Inclusion”

Mexico’s Central Bank to Launch its Digital Currency in Next 3 Years to “Advance Financial Inclusion,” says the Government

The central bank of Mexico will launch its own digital currency by 2024, announced the Mexican government on social media.

“Banxico reports that it will have its own digital currency in circulation by 2024,” the Mexican government wrote on its official Twitter account this week.

In its post, the central bank said it considers these new technologies and the latest payment infrastructure “very important” and “valuable options to advance financial inclusion in the country.”

Banxico, the monetary authority of Mexico, however, hasn’t confirmed the development itself. The central bank is legally independent of Mexico’s government. An anonymous senior bank official also told Reuters that the announcement was “not official.”

A couple of weeks back, Banxico said in a report that it is actually studying and working on the development of a platform for the implementation of a digital currency but gave no details on timing.

This CBDC project aims to improve financial inclusion by opening accounts for the registration of a digital currency for both banked and unbanked people, the report added.

This week, the central bank of India also said that they need to adopt a basic model for its CBDC.

“Given its dynamic impact on macroeconomic policymaking, it is necessary to adopt basic models initially and test comprehensively so that they have minimal impact on monetary policy and the banking system,” the Reserve Bank of India (RBI) said in a report. “India’s progress in payment systems will provide a useful backbone to make a state-of-the-art CBDC available to its citizens and financial institutions,” it added.

The apex bank further said in its report ‘Trend and Progress of Banking in India 2020-21’ that the CBDC can offer myriad benefits such as liquidity, scalability, acceptance, faster settlement, and ease of transactions with anonymity to its users.

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Author: AnTy

Short-Squeeze into Year End? JPMorgan Says Market and Retail Investors Showing Resilience

Bitcoin continues to trade under $47,000, not showing any strength yet.

While BTC is currency down 32% from its all-time high of $69,000, the cryptocurrency is near its ATH against the Turkish Lira.

As of writing, BTCTRY is currently around 780,000, climbing towards 797,000 ATH hit earlier this month. Against the Turkish Lira, Bitcoin is up 255% year-to-end.

Not just Bitcoin, the Turkish Lira has been plummeting against the USD as well. It crashed to a new all-time low against the USD a day after the central bank again lowered a key interest rate despite surging consumer prices, in line with President Recep Tayyip Erdogan’s economic policy.

“The destruction of the Turkish Lira value is jaw-dropping. This is why bitcoin was invented,” commented Barry Silber, CEO of Digital Currency Group, the parent company of Grayscale.

Potential Capital Outflow

As the Lira continued to fall, the central bank had to intervene, for the fifth time in recent weeks, by selling off more foreign currency in order to prop up the Lira. As the sharp decline triggered a market-wide circuit breaker, Turkey halted trades on all listed stocks. This resulted in the Borsa Istanbul 100 index to drop over 9%.

“The complete capitulation in Turkish equities today may represent a turning point in local sentiment,” said Nick Stadtmiller, director for emerging markets at Medley Advisors.

“Turkish stocks have surged despite a worsening macro backdrop. But now, Turks pulling their money from the stock market may represent an acceleration in the trend of local capital outflows from the country.”

TRY hit a new record low of 17.14 before it was able to recover some of its losses. Since the start of the year, Turkey’s fiat currency has lost 55% of its value against the dollar.

This week the central bank announced that it is raising the key rate by 1% to 14% even though inflation is running at 21%. Since September, the bank has reduced the rates by five percentage points.

In response, Lira is tanking, and a weakened lira is driving prices of fuel, everyday goods, and imports higher.

After TRY lost 37% of its value in the last 30-days, “What follows is a parade of horribles – capital controls, debt default, wage & price controls, & currency reset. By the time you realize you need Bitcoin is may be too late,” said Bitcoin proponent Michael Saylor, whose company MicroStrategy holds BTC on its balance sheet.

Potential Short Squeeze

Ever since the November high, Bitcoin and crypto have been struggling to be bullish after the Federal Reserve turned out to be a bit more hawkish than expected as besides doubling the pace of bond-buying tapering, the central bank is also projecting three rate hikes next year.

However, the market is still expecting a bull rally with froth taken out and funds likely to be done with structural sell flows as the year comes to an end, as per crypto trader Light.

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Not just in the crypto market, but the weakness has also been seen in the equities market as JPMorgan’s head quant Marko Kolanovic noted in the recent report that over the past four weeks, small caps and value stocks corrected 30%, “entering a bear market.”

This sell-off, according to JPMorgan, is related to Fed and the new COVID-19 variant Omicron along with de-risking and shorting from equity and macro hedge funds.

Kolanovic noted that “there is aggressive shorting, likely in the hope of declines in retail equity position and cryptocurrency holdings.” But not just the markets but also retail investors have shown resilience, he added.

“One should note that large short positions likely need to be closed before (the seasonally strong) January, which is likely to see a small-cap, value and cyclical rally. And given that market liquidity is dwindling, the impact of closing shorts may be bigger than the impact of opening them, when liquidity conditions were better.”

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Author: AnTy

After In-App Currency, Dating App Tinder is Ready to Join the Metaverse with “Tinderverse”

After In-App Currency, Dating App Tinder is Ready to Join the Metaverse with “Tinderverse”

Popular dating app Tinder is testing an in-app currency for the users to pay for premium services as well as receive it as rewards for good behavior on the app, said Renate Nyborg, Chief Executive Officer of Match Group that owns Tinder, in an interview at the Reuters Next Conference.

Tinder will give these rewards for a number of things, such as adding more bio profile information and helping people find more connections, she explained.

She further talked about the company’s plans for dating in the metaverse, saying, “From a Tinder perspective, we’ve been talking about a Tinderverse internally, which is more about blurring the boundaries between offline and online.”

Nyborg cited the company’s newly launched Explore feature and interactive events like “Swipe Nights,” which she called one of the best examples of the metaverse.

This adventure-style game allows users to choose their own adventures and match with others based on their choices.

Another popular dating app Bumble also said during its November earnings call that it is preparing for “whatever emerges in the metaverse.”

Nyborg said Tinder was still focused on helping people meet in real life as the COVID-19 pandemic showed that while people could only connect through the internet, it demonstrated the importance of real-life connections.

“The mission is to keep the magic of human connection alive,” she said.

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Author: AnTy

Indian Finance Minister: No Plan to Recognize BTC As Currency; Indians Want Crypto Taxed but Not Legalized

India does not plan to recognize Bitcoin as a currency, said Finance Minister Nirmala Sitharaman on Monday, in response to a question in the Lok Sabha, as per the local report.

When asked whether the government has a proposal to recognize the leading cryptocurrency as a currency in the country, Sitharaman gave a “No.”

On Monday, another minister asked the Ministry of Finance whether the government is aware of the cryptos that are traded in India. He further asked whether crypto trading is legally permitted in India and if the government has allowed crypto exchanges to operate legally in the country.

“Government does not collect information on trading in cryptocurrency. Cryptocurrencies are unregulated in India,” said Pankaj Chaudhary, Minister of State (MoS) in the Ministry of Finance.

Chaudhary further pointed to the Reserve Bank of India’s circular from May 2021 that advised its regulated entities to continue to carry out customer due diligence processes in line with regulations governing standards for KYC, AML, CFT, and obligations of regulated entities under Prevention of Money Laundering Act, (PMLA) and ensuring compliance with provisions under Foreign Exchange Management Act (FEMA) for overseas remittance.

High Court Asks For An Update

On Monday, Bombay high court also directed the Center to update it on the proposed crypto legislation expected to be tabled during Parliament’s ongoing winter session.

The Indian government plans to introduce a new bill, ‘Cryptocurrency and Regulation of Official Digital Currency Bill 2021’, that could bar most private cryptocurrencies.

According to a legislative agenda released recently for the winter session of Parliament, the government will only allow certain cryptos to promote blockchain technology and its uses.

Meanwhile, the direction from the court came as the court is hearing public interest litigation that says in the absence of appropriate legislation, aggrieved persons do not have a redressal mechanism for their complaints.

The petitioner, Advocate Aditya Kadam, said investors face problems as their rights were being violated, and their investments were at risk due to the crypto business being unregulated.

No Legalization Please

Meanwhile, according to an opinion poll, 54% of the people surveyed in India don’t want the government to legalize cryptocurrencies.

More than half of the respondents want the government to tax them like a digital asset held in a foreign country.

The poll was conducted by LocalCircles involving 56,000 people in the last 15 days.

The findings revealed that only 26% of them said crypto should be legalized and then taxed, while the remaining 20% didn’t have a view on it.

“While many Indian citizens have invested in cryptocurrencies, the absence of a robust framework leaves investors open to high risks. This is confirmed by the study findings as 71% of the study respondents have low or zero trust in the same,” said Sachin Taparia, CEO at LocalCircles.

The survey further revealed that about 87% of families don’t have anyone trading or investing in crypto assets, while only 1% have high trust in them.

The majority (74%) also believe crypto advertisements are not highlighting risks effectively, and only 5% are in favor of crypto platform continuing advertisements.

Half of the survey respondents (about 51%) also support the central bank rolling out its own digital currency.

According to a report from the Economic Times (ET) on Monday, RBI is working on the phased implementation of a CBDC.

Entering The Indian Market

Despite the regulatory uncertainty, Singapore-based crypto exchange Coinstore has begun operations in India. It launched its web and app platform and planned branches in New Delhi, Mumbai, and Bangalore for its expansion in the country.

“With nearly a quarter of our total active users coming from India, it made sense for us to expand into the market,” Charles Tan, head of marketing at Coinstore told Reuters. Tan expects the government to come out with a healthy framework for crypto.

There are an estimated 15 million-20 million crypto investors in India, with total crypto holdings of around 400 billion rupees (over $5.3 billion), according to industry estimates.

The exchange further plans to spend $20 million for hiring as many as about 100 employees for the marketing and development of crypto products and services in the Indian market.

Before Coinstore, CrossTower launched its local unit in India in September. Besides India, Coinstore also plans to expand into Korea, Japan, Vietnam, and Indonesia.

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Author: AnTy

Tinder Introducing Virtual Currency, “Useful For Gifting Digital Goods,” in the Dating App

Tinder Introducing Virtual Currency, “Useful For Gifting Digital Goods,” in the Dating App

Tinder, a popular dating app, is rolling out an in-app currency to encourage users to spend more time swiping, scrolling, and even spending real money on the app.

This new feature involving virtual currency will be initially available only in Australia because it’s a market that is representative of the company’s global member base.

The in-app coins will be available to users who remain active on the platform and keep their profiles up to date. It can also be bought with regular money.

The coins can be used to step up a user’s profile by buying Tinder’s perks such as Super Likes or Boosts to help increase the chances of finding a good match.

Typically run on a “freemium” model, dating apps make money when users buy a subscription or pay for extra features.

The in-app currency will be made available later this month.

It was already tested in small markets in the second quarter and was encouraged by the results, said Shar Dubey, Chief Executive Officer of Match Group, which owns Tinder, during its second-quarter earnings call in August.

Tinder expects this latest currency feature to enable more opportunities to earn money from the app. During the company’s second-quarter earnings call, Chief Financial Officer Gary Swidler had said that Tinder users’ “propensity to pay has improved significantly.”

The company expects the coins “will play an important role as the Tinder experience evolves and becomes more immersive because virtual currency is useful in the context of gifting digital goods,” Swidler said in a statement. The virtual currency will be “particularly well received by our members in Asia, who are less used to subscription products,” he added.

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Author: AnTy

Lebanese Rush into Crypto as Fiat Currency Loses Over 90% of Its Value and Inflation Soars

Lebanese Rush into Crypto as Fiat Currency Loses Over 90% of Its Value and Inflation Soars

Lebanese people are turning to cryptocurrency as their fiat currency continues to lose its value drastically.

The Lebanese pound, or lira, has lost more than 90% of its worth in a matter of two years. At the same time, inflation is skyrocketing, with food prices increasing by up to 400% as of December 2020 while clothing prices have risen 560% and furnishing, household equipment, and maintenance soaring by 655%.

“(Security) officers, politicians, media personalities, everyone is buying crypto,” a Lebanese cryptocurrency trader Mario Awad told Reuters.

“Increasingly, it’s also your average person who is trying to get out of the collapsed banks and cut their losses.”

The cryptocurrency market is fueled by the collapse of Lebanon’s financial system in 2019.

The Lebanese pound has been pegged to the US dollar for more than two decades, and by September this year, it slid from 1,500 to the USD to roughly 15,000 on the parallel market.

Citizens are forced to withdraw money in local currency at a passive loss. Even if they take out US dollar-denominated cheques that are sold for a fraction, currently about 20%, of their price.

Last year, the government proposed a recovery plan to the International Monetary Fund (IMF) that estimated the losses in its financial system at about $83 billion.

“It’s funny when people say crypto isn’t real because what we found out in Lebanon is that this digital currency is 100 times more real than the lollars (slang term for USD stuck in Lebanon’s financial system) we have in the bank,” said a crypto enthusiast.

In Lebanon, the popular mode of transaction is peer-to-peer (P2P) on popular apps like WhatsApp and Telegram. The majority of these transactions ranging between a few hundred and a few thousand dollars’ are happening in stablecoins like Tether (USDT).

According to a World Bank report, the country’s economic crisis is likely among the world’s worst since the 1850s due to systemic corruption.

“The developers of bitcoin were definitely thinking about the exact things that happened here … about corrupt institutions with bad monetary and fiscal policies leading to the debasement of currencies,” said a cryptocurrency user.

Lebanese, however, are not just trading crypto but also mining them in a country that suffers power cuts. Crypto miners, however, can take advantage of heavy fuel subsidies that make electricity available in the region at some of the cheapest rates in the world.

However, regulation is still a grey area, with a Lebanese executive at a crypto exchange called CryptoLira saying, “It’s a regulatory desert.”

“For many, that’s seen as good because we’re not living in a country where regulations and politicians give us hope – quite the opposite. But it does harm widespread adoption (of cryptocurrency),” he said.

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Author: AnTy

Making Bitcoin A National Currency is An “Inadvisable Shortcut,” says IMF

Making Bitcoin A National Currency is An “Inadvisable Shortcut,” says IMF

The International Monetary Fund (IMF) took to Twitter to argue against adopting Bitcoin as a legal tender over the weekend. The Twitter post from IMF reads,

“Privately issued cryptoassets like Bitcoin come with substantial risks. Making them equivalent to a national currency is an inadvisable shortcut.”

The organization, which fosters global monetary cooperation and financial stability, also attached a report titled “Cryptoassets as National Currency? A Step Too Far,” authored by IMF’s Tobias Adrian and Rhoda Weeks-Brown.

This year, El Salvador became the first country to adopt Bitcoin as legal tender. This law will come into effect on 7 September, with President Nayib Bukele touting it as a way to reduce the cost of cross-border transactions.

Dante Mossi, the executive president of El Salvador’s development bank CABEI also said that countries like Guatemala and Honduras have the most to gain if Bitcoin helps lower the cost of sending remittances. He also said that Central American countries are eagerly watching to see if it goes well for El Salvador.

“If the cost of remittances drops substantially … other countries will probably seek that advantage and adopt it.”

Last week, the Central Bank of Cuba (BCC) also announced that it is drafting rules for the legal use of cryptocurrencies in commercial transactions and issuing licenses for crypto service providers.

Advantages Shouldn’t Be Overlooked

According to the IMF’s report, new digital forms of money can provide cheaper and faster payments and enhance financial inclusion. Still, countries taking the shortcut and adopting crypto as national currencies is a risky affair.

“Bitcoin and its peers have mostly remained on the fringes of finance and payments, yet some countries are actively considering granting crypto-assets legal tender status, and even making these a second (or potentially only) national currency,” notes the report. If granted legal tender status, crypto would have to be accepted by creditors in payment of monetary obligations similar to currency issued by the central bank. The widespread adoption of Bitcoin would result in macroeconomic stability, it added.

Some risks include government revenues exposed to exchange rate risk, monetary policy losing bite as central banks cannot set interest rates on a foreign currency, and financial integrity could suffer without robust anti-money laundering and terrorism financing measures.

While having substantial risks as a national currency, the advantages of their underlying technologies should not be overlooked, said the report.

“Governments, however, need to step up to provide these services, and leverage new digital forms of money while preserving stability, efficiency, equality, and environmental sustainability. Attempting to make cryptoassets a national currency is an inadvisable shortcut.”

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Author: AnTy

Jamaica’s Central Bank Begins Minting Country’s Digital Currency (CBDC)

Jamaica’s Central Bank Begins Minting Country’s Digital Currency (CBDC)

Central Bank Digital Currencies (CBDCs) have become a hot topic in the last year, with Asian giant China leading the charge.

However, Caribbean nation Jamaica is now at the forefront following its roll-out of its first wholesale digital currency in a recently concluded ceremony.

BOJ To Issue $1.5 million CBDCs By December

The Bank Of Jamaica (BOJ) is planning to issue a total of 230 million Jamaican dollars (JMD), worth approximately $1.47 million in CBDCs, to deposit-taking institutions and authorized payment service providers. This, according to the announcement, is part of the digital currency pilot program ending this December.

The first batch of digital currency was minted to demonstrate the process of creating this digital version of fiat. This was done before the Minister of Finance and Public Service Nigel Clarke Jamaica, BOJ Governor Richard Byles, and the management team from blockchain firm eCurrency Mint.

Commenting on the ground-breaking achievement, Minister Clarke highlighted the pivotal role CBDCs play in the creation of a digital economy for the island country. The minister also promised that necessary legislative structures would be implemented to provide a legal basis for the Jamaican CBDC by the end of 2021.

Clarke has previously emphasized CBDC’s influence in helping Jamaica transition into a digital society. He said it could greatly improve financial inclusion by making financial services available to the unbanked population.

BOJ Governor Richard Byles also believes that Jamaica’s next CBDC adoption step would be to ensure widespread access and acceptance by bringing it closer to users.

Also speaking in the ceremony was eCurrency CEO, Jonathan Dharmapalan who commended the nation for its commitment towards creating a more inclusive financial landscape for its citizens. He also noted that Jamaica has the fastest-moving CBDC project in the world.

Jamaica’s Rapid Progress In CBDC Project

Jamaica has been working on developing a CBDC since early 2020. The bank had originally planned to begin its pilot program in May but was delayed due to unstipulated reasons.

Last year, BOJ disclosed that it was researching CBDCs internally and introduced its new Fintech Regulatory Sandbox. The following month, the apex bank formally invited interested CBDC providers to develop and test potential CBDC solutions in this controlled environment.

The Jamaican Central bank then announced a partnership with eCurrency Mint in March 2021. The technology provider was chosen to support BOJ in testing its CBDC solution. eCurrency Mint was also revealed as the major provider when its national CBDC eventually roll-out begins in early 2022.

Other countries have also been picking up the pace of their CBDC research as no apex bank wants to be left behind when it comes to cross-border payments.

Countries like India already have plans to pilot their CBDCs soon. Last month, Reuters reported that the Reserve Bank of India (RBI) was considering a phased introduction of its CBDC. The Central Bank of Venezuela is also planning to launch a CBDC in October.

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Author: Jimmy Aki

Amazon Is Hiring A Product Leader to Develop its Digital Currency

Amazon Is Hiring A Product Leader to Develop its Digital Currency

Amazon is hiring a Digital Currency and Blockchain Product Lead as it progresses into the cryptocurrency sector.

With $1.83 trillion market capitalization, the tech giant is looking for an experienced product leader to develop Amazon’s Digital Currency and Blockchain strategy and product roadmap.

Based in Seattle, Washington, the position is part of Amazon’s Payments & Experience team.

According to the job posting on the company’s website, the person must understand the digital cryptocurrency ecosystem and related technologies to “own the vision and strategy” for its digital currency and its roadmap.

They will be leveraging the domain expertise in cryptocurrency, blockchain, distributed ledger, and Central Bank Digital Currencies (CBDC) to develop the capabilities and drive the overall vision and product strategy.

Earlier this year, there has been chatter about the company working on an Amazon Coin when it posted a job for “Software Development Manager – Digital and Emerging Payments” with Mexico’s prime members chosen for the new payment product.

Back in 2019, when Facebook announced its stablecoin project Diem previously known as Libra, Patrick Gauthier, vice president of Amazon Pay, said it wouldn’t be creating its own cryptocurrency anytime soon.

“At Amazon, we don’t really deal in the speculative,” Gauthier said at the time.

Earlier this month, Jeff Bezos stepped down as the company CEO and is now exploring space. Andy Jessy is the new CEO who previously ran Amazon’s cloud-computing division (AWS).

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Author: AnTy

Billionaire Ray Dalio Believes Digital Yuan Could Become Global Reserve Currency

Billionaire Ray Dalio Believes Digital Yuan Could Become Global Reserve Currency; Could Run on Ethereum

According to billionaire investor Ray Dalio, the CBDC race seems to be heating up, and China may emerge a winner.

Digital Yuan To Outpace Digital Dollar

Bridgewater Associates founder Ray Dalio pointed out that China’s digital yuan could serve as a threat to the continued dominance of the US dollar in the global marketplace.

Speaking on CNBC’s Managing Asia, the American investor noted that China is clearly at the forefront with its digital yuan program compared to the US, which is still undergoing consultation.

This delay by the world’s largest economy could enable the Asian nation’s digital version of its fiat to become more competitive than a potential digital dollar.

According to Dalio, the US will launch a digital dollar, but it will not be the most competitive digital currency given the US rising debt level. However, he pointed out that it will still be viable given the US position as a market leader.

Earmarking China’s digital yuan, Dalio said it would be the most competitive given its pricing and return on investment. He also pointed out that the digital yuan would be a viable alternative to the dollar if it enjoys international acceptance and comes with attractive interest rates.

CBDCs, short form for central bank digital currencies, have been the rave ever since the decentralization era began with Bitcoin. BTC -1.72% Bitcoin / USD BTCUSD $ 36,661.69
-$630.58-1.72%
Volume 34.62 b Change -$630.58 Open $36,661.69 Circulating 18.72 m Market Cap 686.46 b
2 h HRF Bitcoin Development Fund & BitMEX Disburses $210,000 in Grants to Developers 3 h Marathon’s Mining Pool, Marapool, to Signal for Taproot in a Change of Heart 4 h Riksbank Governor Believes Crypto Regulation is Certain, But Exchanges & Trading Is Already Regulated

They are state-backed digital versions of a country’s fiat and are usually issued by the apex bank. The majority of national banks have launched independent CBDC programs in pivoting to a digital economy.

Even some small countries have launched a digital version of their currency, but China has drawn the world’s attention given the implication of its program.

The digital yuan, which started six years ago, has been labeled a ‘threat’ by financial experts to the US dollar’s position as the world’s reserve currency. Dalio points to a potential toppling of the greenback.

The International Monetary Fund (IMF) data puts China at 2% behind the Pound, Euro, and the Japanese Yen. The US leads with 60%, and Dalio says this may not be for long.

According to the American investor, China’s digital yuan could scale up to 10 and 15% in the next couple of years.

China is close to launching its digital yuan, with pilot tests presently ongoing in its major cities. The forthcoming Olympics in Beijing has been chosen as the official wholesale launch.

The US Federal Reserve is only just picking the cue, and Fed boss Jerome Powell has announced plans to publish a discussion paper on the likely impact of a CBDC in the country.

Smart Contracts Compatible With CBDCs

China is planning to launch a digital yuan and make them ‘smart’ with time, per reports from Sina Finance. This is according to the director of the Science and Technology Supervision Bureau of China’s regulatory commission Yao Qian.

Speaking at the International Finance Forum 2021, Qian said that national banks should not only aim to launch digital versions of their currencies but add smart contract functionality. This will enable it to run on the Ethereum blockchain. ETH -2.63% Ethereum / USD ETHUSD $ 2,630.81
-$69.19-2.63%
Volume 27.35 b Change -$69.19 Open $2,630.81 Circulating 116.12 m Market Cap 305.48 b
4 h Riksbank Governor Believes Crypto Regulation is Certain, But Exchanges & Trading Is Already Regulated 6 h Billionaire Ray Dalio Believes Digital Yuan Could Become Global Reserve Currency; Could Run on Ethereum 10 h Ethereum (ETH) Holders Grows by 8.16 Million, Despite the 60% Drawdown

However, Qian advises that this should not be rushed given the inherent challenges smart contracts come with as the industry is still young. He said that the best approach would be to start with a simple, smart contract and then build more complex ones as security and legality become clearer.

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Author: Jimmy Aki