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.
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.
“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.
U.S. firms like Meta, the parent company of Facebook and Microsoft are going all in on the metaverse. Meanwhile, Chinese companies appear to be taking a more cautious approach amid tighter regulation.
China is looking to invest in the metaverse market as numerous cities rollout policy proposals.
Technology continues to change our lives forever.
As new advancements are released to the public—safety continues to be a major concern.
People are interacting with computers in a different way, with the word Metaverse becoming a buzzword in both the tech and business industries.
While the term, “metaverse” is broad, it refers to a set of digital spaces online—including 3D—that allows people to do many things from socializing and learning to interacting and collaborating.
Analysts say it’s the next evolution in social connection and the successor to the mobile internet.
According to Morgan Stanley, the metaverse market could be worth $8 trillion in the future.
China’s technology giants are investing in the metavese and recently, numerous Chinese cities have announced policy proposals to attract and support metaverse companies.
This comes after tense year of regulatory scrutiny on the countries tech sector.
The Chinese city of Zhengzhou recently announced a series of policy proposals to support metaverse companies operating in the region.
The initiative involves the municipal government establishing a nearly $1.5 billion dedicated fund in an effort to foster growth and development in the industry.
So, is the metaverse taking the world by storm?
Oz Sultan from the Sultan Interactive Group joins us to discuss. #china #metaverse #veronicadudo #ozsultan #regulation #crypto #tech
