The Cuban government has said it is preparing to recognize and legalize cryptocurrencies in the country. This release follows information reported by CryptoPotato in May that Cuban President Miguel Díaz Canel, in collaboration with other Cuban authorities, was examining the possibility of adopting cryptocurrencies to overcome the economic and financial problems facing the country. country.
In a resolution published in the Cuban newspaper, Official Gazette, the Cuban Central Bank said it set the rules applicable to cryptocurrencies and determine how to issue licenses to providers of related services in Cuba.
Here is an excerpt reported by CryptoBriefing:
The BCC … may authorize the use of certain virtual assets in commercial transactions, and license virtual asset service providers for operations related to financial, exchange and collection activities or payments.
The context: American sanctions and the health crisis.
In 2019, hostile to the Cuban socialist regime, the Trump administration decided to apply economic and financial sanctions against Cuba, including the suspension of transfers from the United States to Cuba. Gone are the days of the normalization of diplomatic relations with the United States reestablished under Obama.
The US sanctions have had quite a negative impact on the Cuban economy. According to an estimate by a senior Cuban official, Johana Tabalada, the US crackdown has cost Cubans around $ 20 billion.
Cubans hoped that Biden’s election to the White House would be a game-changer, but the Democratic candidate has maintained the same position as his predecessor vis-à-vis the Cuban regime. To whoever was the Vice President of the United States under Obama: “the Cuban government does not inspire too much confidence“.
The Gizmodo newspaper reports that Biden said last month:
There are a number of things we would consider doing to help the Cuban people, but that would require different circumstances or ensuring that they will not be exploited by the government.
He went on to say:
For example, the possibility of sending funds to Cuba. I would not do it now because it is very likely that the regime will confiscate these funds or a large part of them.
After the US sanctions, the health crisis also pushed the Cuban economy to the brink of abyss. In recent months, the country suffers from deficiencies in food products and also medicines. What plunged the country into a social and political crisis. In terms of history, the Cuban people are taking to the streets to denounce this alarming economic situation.
Cryptocurrencies: A miracle solution to save the Cuban manna
Cubans live a lot on transfers from their fellow citizens who live all over America, especially those who reside in the United States. As mentioned above, the suspension of US transfers to Cuba has had a major impact on the Cuban economy. To overcome these regulatory concerns, the government is opting for cryptocurrencies as an escape from US dollars.
Cuban authorities have explained that the adoption of cryptocurrencies will be taken for “socio-economic reasons.” They assured that they will do whatever is necessary to ensure that digital currencies are not used in illegal activities. However, the BCC has not disclosed which cryptocurrency (s) will be adopted in the country.
According to the AFP, Cubans were already using cryptocurrencies in their transactions. In fact, the exchange that operates in Cuba, Qbita reported that its platform has nearly 13,000 users and that in 2020, the amount of transactions was $ 354,000. Insignificant, but if a cryptocurrency were to take on the status of a national currency, the figures would be very different.
Cuba in El Salvador’s footsteps
In June, President Nayib Bukele proposed a law to Salvadoran parliamentarians to make bitcoin a national currency. With an overwhelming majority, parliament passed the law to adopt bitcoin as El Salvador’s national currency. This is the first time that a country has decided to nationalize bitcoin on its territory. Nayib Bukele bet on the qualities of “safe haven” of bitcoin but also the transversality of the asset throughout the world which will be an important solution for the transfer sector.
Much like El Salvador, Argentina is seriously considering making bitcoin its national currency as the country’s economy is ravaged by double-digit inflation. Argentine President Alberto Fernández also relies on bitcoin’s “inflation-safe” qualities. A country like Paraguay has also expressed an interest in nationalizing bitcoin.
It would appear that we are at a version of bitcoinization of the economies of Latin America as was the case with dollarization during the decades 80-90.
New Survey Shows Australian’s Love for Crypto is Fueled by These Noble Drives
Australians appear to be more knowledgeable in their investment strategies as many are beginning to buy into cryptocurrencies for the right reasons. As highlighted in a recent survey conducted by BTC Markets, it was shown that acquiring digital assets was not a function of ideas to get rich quickly, rather, investors who are purchasing digital currencies are doing so to build wealth, and for retirement purposes amongst others.
Per the survey, 70% of the respondents to the survey said their sole aim of embracing crypto is to build wealth. This is a possible scenario seeing the high rate of growth of established coins compared to traditional investment assets. 34% of respondents buy-in to crypto so they can fall back on the gains when they retire, with some 28% affirming their aim to be portfolio diversification.
Cryptocurrencies have matured when compared to the level it was in the past decade. Today, institutional investors, as well as retail buyers, are all bullish on Bitcoin (BTC), Ethereum (ETH), and other altcoins with unique fundamentals.
“The motivations for investing in cryptocurrency are many and varied. A majority of respondents to our survey, 70 per cent, say they are looking to build wealth. A significant percentage, 34 per cent, say that one of their goals for investing in cryptocurrency is to retire early.”
The reasons for acquiring crypto also span such needs as paying down for debts (at 12%), and in starting a business claimed by 4% of the respondents.
Diversity in Investor’s Portfolio
The investors who responded to the BTC Markets survey show diversity in their investment portfolios. This trend shows that despite the rising popularity of crypto assets, the bulk of investors are not in it for the frenzy attached to meme-tokens.
Of the total respondents, as much as 63% said they have investments in stocks or shares, 29% have injected capital in investment properties, while 20% said they have funds in precious metals including Silver and Gold. Of the profiled investors, only 20% said they hold only cryptocurrencies.
Drawing on this diversity, the report reads;
“This spread of investments across a wide range of asset classes consolidates the view that a large majority of investors are not using cryptocurrency as a “get rich quick” investment. Instead, it is as part of a carefully considered asset allocation strategy for an overall wealth portfolio”
What changes in the cryptocurrency market with China’s new rules
The Chinese government started a new wave of repression of cryptocurrencies in the country, continuing the bans it has already imposed on the sector in the past, in 2013, 2017 and May 2021.
The People’s Bank of China, together with the country’s main financial regulators, released on Friday (24) a document called “Notice on the Prevention and Elimination of Risks in Virtual Currency Transactions” in which it announces the tightening of measures to repress negotiations of Bitcoin and other cryptocurrencies in the Asian country.
The point that draws the most attention in the document is a new understanding that any person or company that facilitates the negotiation of bitcoin and other cryptocurrencies in the country is breaking the law.
The text states that “the provision of services to foreign exchanges to Chinese residents over the internet is an illegal financial activity” and those who engage in this activity will be investigated in accordance with the law.
The Central Bank has explicitly said that cryptocurrencies such as Bitcoin, Ethereum (ETH) and Tether (USDT) “are not legal, should not and cannot be used as currency in the market”, stating that all “commercial activity related to virtual currency is illegal” .
The agency once again reinforced a request it had already made in June for the country’s financial institutions to help fight cryptocurrencies, preventing their clients from making transactions to foreign exchanges and over-the-counter (OTC) markets.
China attributed the tightening of measures to the rise in the popularity of cryptocurrencies in the country, which “seriously endangers the security of people’s property” and “grows criminal activities such as gambling, illegal fundraising, fraud, pyramid schemes and money laundering”.
At this pace, the document indicates that ordinary people who lose money in investing in cryptocurrencies will no longer be protected by law.
Keeping an eye on exchanges
Chinese journalist Colin Wu, one of the biggest references in the coverage of the cryptocurrency market in the country, told the Bitcoin Portal that it is still difficult to see in practice what changes in the cryptocurrency market with the new wave of repression in China.
“We have to wait, it’s hard to say now. The expectation is to find out how big exchanges like Huobi and OKEx will tackle this, as they still operate OTC tables here. They have a strong government relationship and will make a rational choice”, he explained.
He pointed out that it is already possible to identify that most Chinese companies operating in the cryptoactive sector are looking for friendlier jurisdictions to base their operations on, such as Singapore.
“Singapore is open and tolerant of cryptocurrencies, not just Chinese companies, but many international companies in the area are also moving there, such as 3ac,” explained Wu. “Another reason is that Singapore’s culture is similar to China.”
The government’s hardening has already been able to scare some market participants. The world’s largest Ethereum mining pool, the Spark Pool, announced today that it will no longer provide its services to users in mainland China as a way of “complying with the latest industry regulatory policies.”
Second Wu, the popular NBMiner mining software also confirmed that it will no longer offer technical support services to Chinese customers.
Attack on miners intensifies
At the same time as the Central Bank issued the new restrictions, China’s state planning body, the NDRC, also issued a “Virtual Currency Mining Rectification Notice” that focuses on combating mining.
The text orders electricity providers to stop serving miners through hotlines and increase the cost of energy to $0.05 per kilowatt-hour for identified miners.
The NDRC also urges local authorities to increase the search for illegal mining farms and generally crack down on activities in their territories as a way of phasing out the industry.
According to Colin Wu, larger miners are likely to continue the trend started during the May crackdowns and leave China to operate in other countries such as the United States.
“Meanwhile, small miners must find some factories to mine secretly. If they cannot find a safe place, they will probably have to sell their machines,” he told the report.
Bitcoin remains resilient in the long run
Bitcoin prices were not immune to this Friday’s negative news coming out of China. According to CoinMarketCap, the currency has devalued 3.6% in the last 24 hours, trading at US$42,220.
Although it is already common for the price of bitcoin to react negatively to the Chinese government’s statements, the drop tends to be a passing event, with the cryptoactive being able to recoup its losses in the long run.
According to data from Kraken disclosed by analyst Pete Humiston, bitcoin typically appreciates an average of 53% about 90 days after the FUD news — fear, uncertainty and doubt — departs from China.
Netflix Eyes Mysterious Disappearance of $190,000,000 After Death of Crypto Exchange CEO
One of the biggest mysteries in the cryptocurrency sector is getting fresh scrutiny in a Netflix documentary.
The online video streaming giant says in a tweet that it will air an investigative documentary titled “Trust No One: The Hunt for the Crypto King”.
The documentary focuses on Gerald Cotten, the founder and CEO of QuadrigaCX, Canada’s biggest cryptocurrency exchange until two years ago.
Cotten, a Canadian, died in December of 2018 while on a honeymoon in India, but his death went unannounced until January 2019.
The QuadrigaCX CEO was allegedly the only one with the private keys required to access the crypto assets in the exchange’s custody, believed to be worth $145 million (C $190 million) at the time of his death.
Netflix says the documentary will air starting next year.
“TRUST NO ONE: THE HUNT FOR THE CRYPTO KING
Follow a group of investors turned sleuths as they try to unlock the suspicious death of cryptocurrency multimillionaire Gerry Cotten and the missing $250 million they believe he stole from them. Premieres in 2022″
Cotten’s sudden death in a foreign land and the disappearance of millions of dollars worth of crypto assets led to conspiracy theories that included suspicions that Cotten might have faked his death.
A report by Canadian Broadcasting Corporation in May quoted Cotten’s widow denying the theory, saying through her lawyer that “she was with Mr. Cotten at the time of his death and he is most certainly dead.”
QuadrigaCX entered bankruptcy proceedings soon after Cotten’s death, and by May, the amount recovered to pay the roughly 76,000 creditors totaled $36,357,894 (C $46 million).
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