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Vulnerable economies are turning to cryptocurrencies

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As the world deals with a suite of economic hardships, people are turning to digital currencies bear the brunt

Major events are trickling down and having vast effects on global economies.

These events—like the supply chain crunch, conflict in Ukraine, and the ongoing pandemic—have forced entire economies, businesses and populations to rethink their economic strategy.

In some instances, vulnerable societies have rapidly turned to cryptocurrencies in a desperate bid to get rich quick.

The use of cryptocurrencies increased exponentially during the Covid-19 pandemic, including in many developing countries.

But recent analysis from the United Nations Conference on Trade and Development (UNCTAD) has found if cryptocurrencies become widely used, they could jeopardise the monetary sovereignty of some countries.

Ukraine tops the list for the greatest share of the population who owns cryptocurrency. Russia and Venezuela come in second and third spot respectively.

In most cases, people own these digital coins as a speculative asset. This means users are banking on their investments becoming more valuable in the future.

But this is raising concerns among researchers, like Dr Peter Howson (Northumbria University), and digiconomist Alex de Vries.

In a recent paper, published in Energy Research & Social Science, the pair found “the unsustainable trajectory of some cryptocurrencies disproportionately impacts poor and vulnerable communities.”

For example, the world’s most popular cryptocurrency Bitcoin, requires the same amount of energy as Thailand.

While this thinking tends to refer to the environmental footprint of cryptocurrencies, the researchers also found “cryptocurrency producers and other actors take advantage of economic instabilities, weak regulations, and access to cheap energy and other resources.”

In some cases, government officials have taken the plunge and entered into the cryptoverse. On the second day of the war in Ukraine, the country’s Digital Transformation Minister reportedly asked his team to arrange government wallets for cryptocurrency payments.

Likewise, Afghanistan also turned to cryptocurrencies when the Taliban seized control in August 2021.

“The central bank gave us an order to stop all money changers, individuals, and businesspeople from trading fraudulent digital currencies like what is commonly referred to as Bitcoin.”

Sayed Shah Saadaat, the police headquarters

However, the Taliban has enforced a nationwide ban on these coins, with some Afghans getting arrested for defying the ruling.

Preying on the poor

The United Nations is pushing for the regulation of cryptocurrencies, restrictions on advertising, and a safe, reliable and affordable public payment system to suit the digital era.

It makes sense because some of the world’s poorest and most vulnerable people are likely to be those disproportionately impacted by proof-of-work cryptocurrency mining.

“Recent digital currency shocks in the market suggest that there are private risks to holding crypto, but if the central bank steps in to protect financial stability, then the problem becomes a public one.”

United Nations Conference on Trade and Development

Unlike fiat currencies—like the dollar, pound, or euro—cryptocurrencies are not issued by national governments.

They also eliminate banks and put power in the hands of entire populations.

In El Salvador and the Central African Republic, the national governments have adopted Bitcoin as legal tender.

Other countries, like Nigeria are looking at the representation of digital currencies in the form of a central bank.

Despite concerns about the mismanagement of these digital assets, they appear like they’re here to stay.

Costa is a news producer at ticker NEWS. He has previously worked as a regional journalist at the Southern Highlands Express newspaper. He also has several years' experience in the fire and emergency services sector, where he has worked with researchers, policymakers and local communities. He has also worked at the Seven Network during their Olympic Games coverage and in the ABC Melbourne newsroom. He also holds a Bachelor of Arts (Professional), with expertise in journalism, politics and international relations. His other interests include colonial legacies in the Pacific, counter-terrorism, aviation and travel.

Business

What is causing the crypto market crash?

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Crypto Braced For $300 Million Game-Changer As The Price Of Bitcoin, Ethereum, BNB, XRP, Solana, Cardano And Dogecoin Swing

Bitcoin, ethereum and other major cryptocurrencies are still struggling despite a wave of bullish announcements (and an eye-popping bitcoin price prediction).

The bitcoin price has again crashed under $20,000 per bitcoin, dragged lower by the Fed’s decision to keep interest rates near zero until 2023.

While the US government’s $300 million investment into bitcoin mining is a game-changer, it remains to be seen if it will be enough to boost the cryptocurrency market.

The current cryptocurrency market crash can be attributed to a few key factors.

Firstly, the US government’s announcement of a $300 million investment into bitcoin mining is a game-changer.

This investment will likely increase the hashrate and drive up demand for GPUs, which will in turn push up prices. Secondly, the Fed’s decision to keep interest rates near zero until 2023 is also weighing on the market.

This decision makes it less attractive for investors to put their money into cryptocurrencies. Lastly, there are concerns that the recent bull run was driven by speculation and that the market is now cooling off.

Will the $300 million investment be enough to boost the market?

It remains to be seen if the $300 million investment from the US government will be enough to boost the cryptocurrency market.

While this investment is definitely a positive development, it may not be enough to offset the bearishness in the market caused by other factors such as the Fed’s decision to keep interest rates near zero. Only time will tell how much of an impact this investment will have on the market.

In the meantime,crypto investors should brace for more volatility in the markets.

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Business

Crypto whales exchange $10 million in Shiba coins

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Two large anonymous cryptocurrency wallets exchanged a total of 855,614,973 Shiba Inu meme coins, worth approximately $9.6 million.

The data, published on the WhaleStats website, reveals that these top Ethereum wallet owners have increased their SHIB stash by $134,767,965 in value since September 21.

While it is unclear what the motives behind these transactions are, it seems that the recent surge in demand for Shiba Inu meme coins has led to a significant increase in their value.

With the price of SHIB currently sitting at $0.0016 per coin, it will be interesting to see how these anonymous investors choose to cash out their profits.

So, these whales made a profit of about $649 000 in just three days due to the price increase of both assets.

As the Ethereum blockchain network’s meme currency becomes more popular among cryptocurrency investors and traders, its price is also growing rapidly.

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Crypto

Australia targets rise of China’s digital currency

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An Australian lawmaker wants to tackle the rise of China’s digital currency

Andrew Bragg is the man behind the changes, he’s from the conservative Liberal Party who wants to put restrictions in place to avoid the use of the digital Yuan.

In a draft bill, the MP wants banks to share details about whether or not they have accepted digital currencies from China.

Of course, Beijing is currently running trials of its sovereign currency at the moment.

But it’s left some lawmakers in a rush to get on top of it.

Earlier this year, the U.S. began setting up fresh rules around the digital Yuan .

In Australia, banks that are found to be breaching the rules could be penalised.

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