China’s Lehman Moment? Crypto Market Takes Note of Real Estate Giant Evergrande’s Debt Crisis

While the crypto market is contemplating the effect of Evergrande’s possible fallout, Tether has clarified that it is “doesn’t hold and never held,” commercial paper issued by Evergrande.

Real-estate giant Evergrande is looking more and more like the Lehman Brothers moment of China as investors brace for its collapse. According to experts, the Chinese Communist Party (CCP) will have to save the company, whose collapse would send shockwaves across the global economy.

Capital Economics estimated that the company has around 1.3 trillion yuan ($200 billion) in pre-sale liabilities as of the end of June.

Lehman Brothers collapsed in September 2008, dissolving $600 bln in US assets leading to the worst market crash since the great depression.

This week, anxious investors protested at the Shenzhen headquarters of the company as Evergrande said it is facing “unprecedented difficulties” but denied rumors that it is about to go under.

But on Tuesday, in a statement to the Hong Kong stock exchange, Evergrande said it had hired financial advisers to explore “all feasible solutions” and warned that there was no guarantee it would meet its financial obligations.

Evergrande blamed “ongoing negative media reports” for damaging sales in the pivotal September period.

“Evergrande’s collapse would be the biggest test that China’s financial system has faced in years,” said Mark Williams, chief Asia economist at Capital economics.

This, of course, poses a serious problem for CCP as Evergrande is a longstanding symbol of the country’s economically productive urbanization, and its business model is representative of “China’s highly debt-dependent growth model,” said Jean-François Dufour, head of French, China-focused consulting firm DCA Chine-Analyse.

Founded in 1996, the company pursued a very aggressive growth strategy and raised $9 billion in its IPO on the Hong Kong Stock Exchange in 2009. It now controls 778 real estate projects in 223 Chinese cities and directly employs nearly 200,000 people while claiming to have indirectly created more than three million jobs.

Reportedly, the company had only $13 billion to its name as of late June, while it is due to pay $15 billion to creditors by the end of 2021.

At the same time, banks are reluctant to lend them money, on top of which, “It’s become more complicated because of the restrictive monetary policy the government is currently pursuing,” Frédéric Rollin, an investment strategy adviser at Pictet Asset Management, told French 24.

According to Rollin, in 2020, compared to the US companys’ debt representing 85% of the gross domestic product (GDP) and 115% in the eurozone, Chinese companies’ debt represented 160% of its GDP.

With Evergrande bound to take at least one bank down with it if it goes bankrupt, China needs to prevent Evergrande from going under. And these shockwaves are to be expected to be felt beyond China because it counts big international companies like BlackRock, Allianz, and Ashmore among its investors.

This week, even the crypto community took notice of this, with Adam Cochran of Cinneamhain Ventures arguing on Twitter that “Currently both Tether and Circle hold commercial paper, and while I think it unlikely that either would have large swaths of Evergrande bonds, the whole market will reel a bit.”

Tether meanwhile clarified that it doesn’t hold any commercial paper issued by Evergrande; rather, its vast majority of the commercial paper is in A-2 and above rated issuers.

“Doesn’t hold and never held,” tweeted Paolo Ardoino, CTO of Tether and Bitfinex.

Meanwhile, Cochran is expecting the shockwaves to be felt in crypto as well because “while we can hope that crypto one day becomes a flight from the tradfi markets, right now its sufficiently intertwined to its movements.”

“This is a very big deal indeed,” said Matthew Graham, CEO of crypto VC firm Sino Global Capital, adding, but “for real estate and tradfi.”

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Author: AnTy

What Exactly are the Implications of El Salvador Declaring Bitcoin a Legal Tender for Crypto

A “big win” for crypto, El Salvador’s Bitcoin adoption has implications for the US and may result in a domino effect which seems to have started with Paraguay hinting at something “important” with BTC.

Over the weekend, Bitcoin Conference 2021 came to an end with the announcement that El Salvador is declaring Bitcoin a legal tender. The legislation will be introduced to make it the world’s first sovereign nation to adopt bitcoin as legal tender, alongside the U.S. dollar.

A legal tender is basically a form of money that is recognized as a satisfactory payment for any monetary debt, but there is no obligation on the creditor to accept the tendered payment.

Unlike China banning Bitcoin, sending the prices crashing, this news didn’t have any visual impact on the price. As trader Hsaka noted, “Price reaction to pre-announced announcements is rarely a function of the content of the said announcement.” As per him, it’s a pretty big win for the market, a “landmark moment.”

The market is actually still trying to understand what this means for the leading cryptocurrency. While some are extremely excited, many are dismissive, and others are hopeful.

Nayib Bukele, President of El Salvador, took to Twitter to share that if just 1% of Bitcoin’s $675 billion market cap is invested in the country, that would increase their GDP by 25%.

As for Bitcoin, it “will have 10 million potential new users and the fastest growing way to transfer 6 billion dollars a year in remittances,” a big chunk of which is lost to intermediaries, he added.

The leading cryptocurrency would basically be doing what it set out to, banking the millions of unbanked and providing financial freedom to them. Bukele noted that 70% of El Salvador’s population doesn’t have a bank account and works in the informal economy. He said,

“Financial inclusion is not only a moral imperative, but also a way to grow the country’s economy, providing access to credit, savings, investment, and secure transactions.”

El Salvador has taken the route of Bitcoin to mitigate the negative impact of central banks, which control the supply of a currency.

“Small countries can now finally insulate themselves from the effects of dissolute monetary policy. Go Bitcoin to get to higher ground,” said Balaji Srinivasan, a former Coinbase CTO, and General Partner at Andreessen Horowitz. While a “big move,” it needs to be seen how it will be executed, said Srinivasan, according to whom,

“Every country that’s not the USA or PRC will go crypto to retain sovereign transaction and communication channels. And so will tens of millions of American and Chinese citizens.”

This even has implication for the US because if El Salvador passes the legislation to recognize BTC as legal tender, the cryptocurrency would likely become “money” under the US commercial law as it defines money as “a medium of exchange currently authorized or adopted by a domestic or foreign govt.”

Bitcoin proponent U.S. Congressman Warren Davidson also embraced the countries’ move on Twitter.

While in itself, this news may not individually impact Bitcoin in a big way, and it makes sense some are skeptical given that El Salvador’s GDP is smaller than Grayscale Investments’ AUM, this move can be the stepping stone for bigger things to come.

Not only is this likely to have Bitcoin treated as any other foreign currency by banks, but it could also create a domino effect with other countries to follow suit. Already, it seems to be having an effect with Paraguay hinting at Bitcoin adoption.

“As I was saying a long time ago, our country needs to advance hand in hand with the new generation. The moment has come, our moment. This week we start with an important project to innovate Paraguay in front of the world!” tweeted Carlos Antonio Rejala Helman, Deputy of the Nation. “The real one to the moon BTC & PayPal.”

Some skeptics are also pointing to the authoritarian direction Bukele has taken for their concerns about Bitcoins’ latest support. However, in a nation plagued by corruption and deadly violence, 39 years old Bukele is “extremely popular, with an approval rating of over 90% during his second year in office,” noted a Redditor who claims to be from El Salvador.

“The adoption of Bitcoin as legal tender is HUGE news for this country,” said the Redditor adding, “Most legislators have come forward saying they will back the bill.”

Additionally, much like Miami, which is working on becoming a crypto hub of the world, El Salvador is also working on attracting the masses by offering immediate permanent residence for crypto entrepreneurs. No property tax and no capital gains tax on BTC already works in its favor.

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Author: AnTy

China FUD: Three Self-Regulating Bodies Reiterate Country’s Anti-Speculation Stance on Crypto

China FUD Back into Effect as Three Self-Regulating Bodies Reiterate Country’s Anti-Speculation Stand on Crypto

Affecting the cryptocurrency prices since 2013, China banning Bitcoin FUD is back amidst the ongoing market volatility, sending BTC price back in the 42k-46k range.

The price of Bitcoin went back under $42,700 and is yet again at the center of the inner $42k-$46k range, thanks to the same old China FUD permeating the cryptocurrency market.

Despite being as old as nine years, China banning Bitcoin never fails to induce a market sell-off. And that’s exactly what happened after Reuters reported that China is banning financial institutions and payment companies from providing services to crypto-related transactions.

As Qiao Wang of DeFi Alliance noted, “China didn’t just ban crypto. It’s reiterating an anti-speculation law from years ago.”

Three Chinese organizations viz. The National Internet Finance Association of China (NIFA), the China Banking Association (CBA), and the Payment and Clearing Association of China (PCAC) jointly issued a note where it reiterates the country’s previous stance on crypto businesses.

All three of these bodies are self-regulatory organizations and not regulatory agencies. They are reiterating the same old stance because they deem speculative crypto trading in the country amidst ongoing market volatility to be “seriously infringing on the safety of people’s property and disrupting the normal economic and financial order.” The statement reads,

“Financial and payment member institutions shall not provide insurance services that relate to virtual currencies or directly and indirectly offer crypto-related services for their clients, including but not exclusive to crypto-related trading, custody, lending, and settlement; accepting virtual currencies as a payment tool; exchanging virtual currencies with the Renminbi.”

The statement echoes China’s stance towards crypto space in 2017 when they prohibited ICO activities and banned crypto exchanges from offering fiat-to-crypto services, and at the time, they had the same requirements in place for financial institutions to not be involved directly or indirectly with crypto.

Interestingly, just last month, the vice governor of the People’s Bank of China (PBoC) called Bitcoin and stablecoinsinvestment alternatives” as opposed to currencies.

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Author: AnTy

Tesla CEO Now Sets His Eyes on DeFi, But The Elon Effect on Price Is Absent

Tesla CEO Now Sets His Eyes on DeFi, But The Elon Effect on Price Is Absent

Tesla CEO Elon Musk continues to get deeper and deeper into cryptocurrencies, having covered Doge, Bitcoin, NFT to now DeFi.

On Thursday, Musk took to Twitter to announce “Don’t defy DeFi.”

This obviously sent the Crypto Twitter (CT) into euphoria and, of course, to Musk’s comment section with their memes and shills.

“Replacing banks with code,” commented David Gokhshtein.

Arthur_0x of DeFinance Capital took this as an opportunity to propose adding support for fiat-backed cryptos as well. “Do allow us to pay for Tesla in stablecoins as well,” commented Arthur.

Bitcoin Fork or Doge?

Just yesterday, Musk announced that the electric car maker would now be accepting Bitcoin as payment. Adding to this bullish news is the fact that any BTC received will be retained as Bitcoin and not converted to fiat currency.

The company’s supporting documentation clarified that any crypto asset other than Bitcoin, name mentioning the forks BCH and BSV, isn’t accepted. “Our Bitcoin digital wallet is not configured to detect or receive digital assets other than Bitcoin,” the company said.

Internet entrepreneur Kim Dotcom argued that Bitcoin transactions involve high costs compared to its fork Bitcoin Cash (BCH). BCH -0.21% Bitcoin Cash / USD BCHUSD $ 478.21
-$1.00-0.21%
Volume 2.43 b Change -$1.00 Open $478.21 Circulating 18.69 m Market Cap 8.94 b
8 h Tesla CEO Now Sets His Eyes on DeFi, But The Elon Effect on Price Is Absent 1 d Free Crypto Trading App Robinhood Files S-1 Paperwork With SEC to Go Public 4 d Fortress Investment Offering an Early But Discounted Payout to Mt. Gox Creditors

“Try and buy a Soda with Bitcoin,” Dotcom tweeted while sharing that Bitcoin’s median fee is $8.92 while BitcoinCash’s median fee is a mere $0.001.

“Over half of all cash payments worldwide are under $10. BCH is serving the mass market, not just the 1%,” he said. “That’s why Bitcoin Cash.”

Musk responded to Dotcom’s argument with “Fair point.”

Musk also responded with the emoji of a pair of eyes to one Twitter user, suggesting that Dogecoin DOGE -1.30% Dogecoin / USD DOGEUSD $ 0.05
$0.00-1.30%
Volume 1.09 b Change $0.00 Open $0.05 Circulating 128.91 b Market Cap 6.62 b
8 h Tesla CEO Now Sets His Eyes on DeFi, But The Elon Effect on Price Is Absent 1 d Free Crypto Trading App Robinhood Files S-1 Paperwork With SEC to Go Public 6 d Robinhood Is Working Fast on A ‘Wallet’ Feature; CEO says Might Add New Coins Too
would rather be the best choice with “fast speeds and low fees,” making for ”an actual spendable cryptocurrency.”

Not Effect on Price

Musk’s announcement sent the price of Bitcoin higher above $57,000, only to lose all the gains the same day. Today the BTC price fell even lower to $50,350, down 18.5% from March 13 all-time high shy of just $62,000. BTC -2.33% Bitcoin / USD BTCUSD $ 51,579.86
-$1,201.81-2.33%
Volume 66.93 b Change -$1,201.81 Open $51,579.86 Circulating 18.66 m Market Cap 962.71 b
5 h Coinbase Selected By Meitu For $90 Million Crypto Purchase and Custody 5 h CBOE Now Wants Back In, CEO says ‘Haven’t Given Up’ on Bitcoin Futures & We ‘Need’ to be Here 6 h $1.2 Billion Liquidated on Binance, Taking the Lead like Always, on Bitcoin’s Drop to Nearly $50k

As we started to see with DOGE, Musk’s tweets about crypto, which has been increasing in number, have been losing their effect on prices, or they soon get reversed as in Bitcoin’s case.

As for the DeFi market, the prices have been declining since yesterday in tandem with Bitcoin and that continues today with DeFi coins down 10% to 20%.

This week, the DeFi sector has wiped out about $15 billion from its market cap, which currently stands at $82.8 billion, as per CoinGecko.

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Author: AnTy

Maker (MKR) is the Latest Crypto Pumping on Coinbase Pro Listing Announcement

Last week, OmiseGo (OMG) saw the “Coinbase Effect” after the US-based cryptocurrency exchange announced its listing. Following the support, they even airdropped OMG to users who didn’t receive the tokens in 2017.

This week the latest cryptocurrency to enjoy this effect is Maker (MKR).

Today, Coinbase Pro announced the launch of Maker and the digital currency has already soared over 35% to $465. In 2020, so far, MKR has recorded negative returns of 7.42%.

Maker is supported on Coinbase Pro and starting Monday, June 8, it will start accepting inbound transfers of MKR. Trading will begin for MKR/USD and MKR/BTC 9 AM Pacific Time (PT) the following day but only “if liquidity conditions are met.”

This isn’t the first time Coinbase has launched support for Maker. Back in April 2019, Coinbase Pro added support for MKR along with EOS (EOS) and Augur (REP) but “due to limited liquidity,” trading for the cryptocurrency couldn’t proceed.

The 26th largest cryptocurrency will now be once again available in all Coinbase supported jurisdictions except for New York.

The ERC20 token is a utility and governance token of the Maker system that manages another ERC20 token, the DAI stablecoins.

Back in June 2019, Coinbase also added DAI as the first stablecoin to its Earn Program which joined EOS, XLM, ZEC, BAT, and ZRX.

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Author: AnTy

US Congress Members Reintroduce ‘Digital Dollar’ in Automatic Boost to Communities Act

  • In the wake of the devastating effect that COVID-19 has had in the past few months across the U.S, the House of Representatives are set to discuss a digital dollar bill in the coming weeks.
  • Could the said $2000 monthly stimulus package be distributed to Americans directly into their digital wallets?

The U.S government has begun distributing the COVID-19 stimulus checks in a bid to boost the economy. In a new development in the Lower House, Representative Rashida Tlaib (D-MI) is looking to introduce a digital wallet in the new bill titled, ‘Automatic Boost to Communities Act (ABC)” to which the $2000 extended monthly payment will be distributed to. The Act reads:

“No later than January 1, 2021, the Secretary shall offer all recipients of BOOST payments the option to receive their payments in digital dollar wallets.”

The ABC Act was introduced to the Lower House on Thursday with several members supporting the bill including;

  • Jesús García (D-Ill.)
  • Alcee Hastings (D-Fla.)
  • Alexandria Ocasio-Cortez (D-NY)
  • Ilhan Omar (D-Minn.)
  • Ayanna Pressley (D-Mass.)
  • Bobby Rush (D-Ill.)
  • Jan Schakowsky (D-Ill.)
  • Nydia Velázquez (D-NY)
  • Delegate Eleanor Holmes Norton (D-D.C.).

The bill aims to improve access of financial services to Americans connecting the Federal Reserve directly to the citizens. The short term $1200 stimulus is currently underway but some Americans are yet to receive the check as the system faces some challenges with third parties.

The initial stimulus bill included a “digital dollar” payment system to allow seamless disbursement of the funds but was later removed without explanation.

The ABC Act aims to transform the digital payments field during this pandemic and beyond looking into various forms of payments including digital wallets, debit and credit cards, online payment systems and access to mobile payment systems.

Direct Competition to Libra?

The current news comes just hours after the Libra Association announced its plans to develop a multi-currency and single-currency backed stablecoin in its updated whitepaper.

Libra platform aims to offer unbanked and underbanked users a digital wallet account that holds the tokens backed by dollars, euros, pounds, and yen. The development of a digital dollar may prove to cause direct competition to the Facebook-led project.

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Author: Lujan Odera

Govt’s May Accelerate Digital Payment And CBDC Research Due to COVID-19: BIS

Bank of International Statements (BIS) recently released a research report on the effect of the COVID-19 pandemic to the overall payment system. According to the research, the virus is causing fear and uncertainty as physical cash sees a dip in usage in favor of digital payments. Additionally, the report from BIS states there may be an acceleration in the development of government-backed digital currencies such as central banks CBDCs.

Public fears cash over COVID-19 pandemic

In the third bulletin of BIS titled, “COVID-19, Cash, and the Future of Payments” the bank highlighted the growing fear of the use of physical cash, despite scientific evidence of low chances of contracting Coronavirus through cash. This growing fear may set in a rush across governments in the quest to develop CBDCs and other digital forms of payments, the report further states.

“Looking ahead, developments could speed up the shift toward digital payments. […]The pandemic may amplify calls to defend the role of cash – but also calls for central bank digital currencies.”

However, with half of the world lacking these digital payments, a sudden shift to such payment systems may set a divide especially in these times of the pandemic. The researchers said,

“If cash is not generally accepted as a means of payment, this could open a ‘payments divide’ between those with access to digital payments and those without.

This could open a divide in access to payments instruments, which could negatively impact unbanked and older consumers.”

A broader look into digital payments

Governments across the world including Asia, Africa, the Americas, and Europe have started embracing digital payments on mobile phones and digital currencies. The U.S government stimulus bill proposed a digital ecosystem to disburse the funds to millions of Americans.

Argentinian governor, Jorge Capitanich of Chaco province, urged the use of digital payment systems across his state to phase out the use of physical fiat money during an internet call with the President, Alberto Fernández

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Author: Lujan Odera

EU’s Upcoming AML Regulation Forces Bitcoin Payments App Bottle Pay to Shut Down

  • EU’s 5th anti-money laundering directive coming into effect on 10th January 2020
  • To not force this onto the community, Bottle Pay will cease its operations
  • Users need to remove any payment page links and withdraw all funds by Dec. 31

Bitcoin payments platform Bottle Pay has decided with a “heavy heart” to shut down its services rather than become subject to the new 5th anti-money laundering directive, announced the firm.

Bottle Pay, a faster and simpler way to make your BTC payments has been seeing huge user growth over the last few months. But the company will cease operating from 31st Dec. 2019.

Protecting the Interests of Users

Being a UK-based custodian Bitcoin wall provider, the company is required to comply with the new 5th anti-money laundering directive as per EU regulation that is coming into effect on 10th January 2020.

This directive limits the anonymity related to virtual currencies and wallet providers. It will further enhance the powers of EU Financial Intelligence Units and provide them with access to broad information.

Because this would require the company to collect additional personal information that the company says would alter the “current user experience” radically and negatively, they are shutting down. They aren’t willing to force this onto the community.

“To maintain our integrity as service providers, and to protect the interests of our team, investors and users, we have taken the painful decision to shut Bottle Pay down completely rather than become subject to these new regulations.”

What do you need to Do?

Now that Bottle Pay is shutting down, no new sign-ups and deposits will be accepted. The team has already taken off its bots on social media and funds that have been already sent using them will be returned to the sender within 7 days.

So, make sure you remove any payment page links that you have created from your social profiles. The company also advises uninstalling the Bottle Pay browser extension.

Withdrawal function will be taken offline and all the wallets will be closed on Dec. 31. Hence, you have to withdraw all funds to another Lightning wallet before that. Any remaining funds in wallets will be donated to the Human Rights Foundation.

For now, the company has no plans to open the company at a future date.

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Author: AnTy

Crypto Community Donates Over 200 Books on Bitcoin in a Single Day to Educate Congress

Crypto Community Donates Over 200 Books on Bitcoin in a Single Day to Educate Congress
  • #BitcoinForCongress campaign is in full effect as in just over 24 hours 200 books on Bitcoin has made their way to the members of congress
  • The goal is to reach all 535 US legislators and educate them about Bitcoin

As part of ‘Bitcoin For Congress’ campaign, the crypto community has donated more than 200 books on Bitcoin to the Congress in just over 24 hours.

This campaign was started by enthusiast and the author of the children’s book “Bitcoin Money: A Tale of Bitville Discovering Good Money,” that goes by the moniker, The Bitcoin Rabbi on Twitter. His goal is to reach all 535 US legislators and educate them on the concept of Bitcoin.

On July 18, he took to Twitter to announce this campaign called ‘Bitcoin For Congress’ after the congressional hearings on Facebook Libra that extended to the cryptocurrency market.

#BitcoinForCongress

This week, US lawmakers grilled Facebook on its cryptocurrency project. Last week, Bitcoin took center stage when first the Fed Chairman Jerome Powell compared Bitcoin with gold calling it a store of value.

However, soon after the US President Donald Trump and Treasury Secretary chimed in but the remarks weren’t as good as Powell’s, at least until you analyze it deeply like the cryptocurrency community.

While Trump tweeted that he is not a fan of Bitcoin and cryptos, adding that Bitcoin is not money, is highly volatile and based on thin air, U.S. Treasury Secretary Steven Mnuchin said they are a “national security issue.” Both are concerned about cryptos use in

“illicit activities like cyber crime, tax evasion, extortion, ransomware, illicit drugs, and human trafficking.”

“It is clear that the lawmakers in Washington need a lot more education about Bitcoin,” wrote The Bitcoin Rabbi.

Let’s Educate the Congress

Per this campaign, to participate, you have to pay $8 and The Bitcoin Rabbi will send a copy of “Bitcoin Money” to any congress member your choice on your behalf. The book will also involve a “respectful letter” to help explain Bitcoin. You can also order multiple books for multiple representatives.

As for why the children’s book, he says there are already great books and educators that have a “powerful effect” in DC, but they need a basic

“children’s level understanding of Bitcoin.”

“Lets flood Congress with Bitcoin education, one book at a time,” he added.

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Author: AnTy