Many Salvadorans report that people are withdrawing the USD 30 Bitcoin bonus that the government gave as an incentive. Neither the government nor Chivo has said anything about the alleged failures in ATMs.

Two weeks after El Salvador adopted Bitcoin as legal tender, the demand for the cryptocurrency looks very high. Dozens of Salvadoran Twitter users refer to long lines to use Bitcoin Chivo ATMs. Several weeks ago, President Nayib Bukele reported that there were about 200 machines throughout the territory.

Some consider this behavior as a sign of interest in the use of cryptocurrency. Others highlight that the country needs more ATMs now that BTC is legal tender.

One of the most common allegations is that Salvadorans go to ATMs to withdraw cash in US dollars. They convert into Bitcoin the USD 30 bond that the government gave as an incentive to use the cryptocurrency.

Twitter user @ Jeremi57XD stated that he needs cash to pay for his studies and denounced that ATMs do not have enough money.

However, many are buying more BTC through those machines. Marvin Ascencio (@ mascencio07) expressed that he has gone to two ATMs, one private and the other Chivo, and most people go to buy rather than withdraw.

Chivo ATMs are Failing

The malfunction in Bitcoin Chivo ATMs joins a lack of cash. Those failures seem to have caused customers to lose money, a local tweeter reported.

Another Salvadoran stated that an ATM was not working for 4 hours due to an alleged update. For his part, @evamenjivar5 added that he did not know if he could already make withdrawals from those machines.

User @ Gueritachula503 also mentioned that the people in charge of ATMs close them too early. However, she said that could be due to the riots in which protesters burned a Chivo ATM.

Neither President Bukele, involved with the adoption of Bitcoin, nor Chivo Wallet, in charge of ATMs and the government wallet, have commented on the matter.

Using Bitcoin is Easier Than Using a Credit Card

Although there have been setbacks, many people welcome the adoption of Bitcoin in El Salvador. For example, Francisco Henríquez considers using this new type of money easier than using a credit card.

That Salvadoran celebrated receiving remittances with Bitcoin without the high fees set by money transfer services worldwide. That is precisely one of the advantages of adopting Bitcoin in El Salvador that the government and analysts have mentioned repeatedly.

The demand for remittances in the Central American country is high as many Salvadorans abroad send money to their relatives. According to the World Bank, remittances represented more than 24% of El Salvador’s Gross Domestic Product in 2020.

In 2019, the country received USD 6 billion in remittances from abroad. El Salvador could skip services like Western Union and MoneyGram if that money were in the form of Bitcoin. That way, Salvadorans would save up to USD 400 million in fees annually, Bukele said.

In addition to the demand for ATMs, 25% of Salvadorans are already using Bitcoin. Bukele stated that more than 1.6 million people already use the Chivo wallet, a figure equivalent to 24.79% of the country’s inhabitants.

By Alexander Salazar

The acquisition of a crypto derivative does not imply buying a cryptocurrency but rather participating in a financial contract with an expiration date. The risks of these financial products due to the volatility of cryptocurrencies make it necessary to do good research before investing in them.

Derivatives are a force that drives cryptocurrencies to become legitimate assets. The increasing number of traders investing in the crypto derivatives market allows the liquidity of the crypto-asset markets to increase.

Crypto derivatives are financial products based on an underlying asset, for which the buyer can buy or sell a product at a predetermined price. For example, when creating a Bitcoin crypto derivative, the cryptocurrency serves as the underlying asset of that instrument.

Likewise, the negotiation of financial derivatives occurs both on the stock market and between the parties. For that reason, the products are easily tradeable while liquidity is high.

The main characteristic of those financial products is that they are a derivative of another asset. Therefore, acquiring a crypto derivative does not imply the purchase of a cryptocurrency but the participation in a financial contract.

Those contracts may, or may not, have a termination date when the parties meet the purchase and sale obligation. Crypto derivatives have caused the price of Bitcoin to rise on several occasions due to the interest that they arouse.

The Types of Crypto Derivatives that Traders Can Find

Futures are financial contracts between parties that determine a term and a price to make a sale. Those financial products are available for stock indexes, government bonds, and precious metals like gold and silver.

Options are financial products that give the buyer the right to buy shares at a predetermined price. They also have an expiration date on which it is possible to exercise that right.

Contracts for difference (CFDs) allow the investor to speculate on the rise or fall of prices. The parties decide to settle the difference in the underlying security from the moment of the agreement.

Risks that Crypto Derivatives Pose to Investors

The negative experiences of individuals and companies with financial derivatives have caused fear about the risks of those products. For that reason, it is advisable to do good research on a crypto derivative before investing in it.

The risks are high and increase with the volatility in the price of Bitcoin and other cryptocurrencies.

Counterparty risk occurs primarily with an OTC operation and has little to do with private investors. However, if the counterparty in a transaction in derivatives files for bankruptcy, the pending position will fall into the company’s assets.

Leverage increases both potential returns and risks, so users should exercise caution. Losses can go up indefinitely, but derivatives can also generate high profits.

According to Binance, crypto derivatives allow investors to diversify their portfolios and have exposure to various cryptocurrencies. They also believe that those financial products serve to protect portfolios from extreme price volatilities and unexpected risks. Likewise, they say that derivatives are essential to promote price discovery.

By Alexander Salazar

The People’s Bank of China said that it would investigate those who do business with cryptocurrencies. That monetary authority has banned cryptocurrency exchanges from operating in the country since 2017.

The People’s Bank of China (PBOC) recently stated that cryptocurrency-related businesses are illegal financial activities. In this way, the highest monetary authority of the country reiterated the national policy against cryptocurrencies.

In that sense, they said they would investigate all those who do illegal financial activities as they are committing crimes.

The renminbi issuing institution explained that the goal is to prevent and stop the uproar regarding cryptocurrency trading in China. The PBOC has expelled exchanges from the country and banned local operations of cryptocurrency services abroad since 2017.

However, that activity has continued to grow even after the Chinese government ended cryptocurrency mining in the country. The Asian giant considers that those assets have disturbed the economic and financial order, leading to criminal and illegal activities.

The PBOC Monitors Suspicious Transactions

Although the People’s Bank of China has banned cryptocurrency activities, it has tightened its supervisory measures to ensure censorship on them.

They mentioned that they would work alongside almost ten national organizations that include the Central Administration of Cyberspace. Among those participating would be the Ministry of Industry and Information Technology, the Ministry of Public Security, and the Banking and Insurance Regulatory Commission.

Those organizations will develop guidelines that they will deploy in all regions of the country, which have fought the supposed risks of cryptocurrencies. In that regard, they will deepen the monitoring and early warnings of suspicious trading activities, basing on online and offline investigations.

China to Deepen Internet Censorship and Banking Restrictions

Of course, the PBOC has prohibited the country’s banks and other payment institutions from offering financial services related to cryptocurrencies. Account openings, fund transfers, clearance, and settlement procedures are out of the cryptocurrency services that they can offer.

Internet companies cannot provide services like trade shows, marketing promotions, and payments for commercial activities related to cryptocurrencies. In case of legal and regulatory violations, the competent authorities will immediately close the Internet applications that do those activities.

In general, no one may disclose, either commercially or promotionally, any information related to cryptocurrencies. In addition, the State will launch a propaganda campaign to tell everyone that using cryptocurrencies in the country is a crime. They seek to educate people and spread public knowledge about the alleged risks of these transparent and open-source protocols.

Censorship against Bitcoin primarily focused on exchanges and brokers, as well as on token issuance schemes. However, the Chinese have been able to continue operating, even by using keywords to avoid identification.

Since the trading by natural persons is not legal, the PBOC investigates them. That institution believes that the activities with cryptocurrencies put the financial stability of the country at risk. The same happens in other countries, whose authorities tighten their regulations on using those assets and even prohibit them.

By Alexander Salazar

A report revealed that Bitcoin, Ether, and Litecoin are the best-known cryptocurrencies in Latin America. Australia imposed a new series of restrictions on Binance, so users must reduce and close their futures positions.

The leading cryptocurrencies on the market recently had a dramatic but timely pullback for those who want to see it. Although Bitcoin, Ether, BNB, and other cryptocurrencies suffered losses of up to 10%, the attraction of big purchases from the bulls resurfaced.

In addition to the cryptocurrency market, the US stock market also sold off amid a downward trend. Maybe fears that the collapse of Chinese real estate company Evergrande will hurt other markets have caused it.

The price of Bitcoin fell to USD 43,000, its lowest level since August 7^th. Meanwhile, the value of Ether fell more than 10% below USD 3,000 for the first time since August.

Cryptocurrencies lose value at a time when some investment banks increase their forecasts on them in the coming months.

Bitcoin is trading at around USD 42,500, while Ether is worth roughly USD 2,989, varying by -3.05% and -2.41%, respectively. The bearish sentiment continues and affects the rest of the cryptocurrency market, according to data from CoinGecko.

After Buying the Dip, El Salvador Now Has 700 Bitcoins

People say that the decline of the price of Bitcoin has been positive as it allowed President Nayib Bukele to buy cheaply.

When the price of BTC fell below USD 43,000, Bukele announced that El Salvador had bought on the drop. In that way, they added 150 bitcoins to the country’s holdings, equivalent to more than USD 6.75 million. That acquisition of the pioneering cryptocurrency brought the Central American government’s account to 700 bitcoins.

That is not the only time the country has taken advantage of a drop in Bitcoin prices. When BTC became legal tender, El Salvador bought 150 bitcoins amid a sudden drop below USD 43,000. At that time, their holdings increased from 400 BTC to 550 BTC, which capitalized up to 700 BTC with their last purchase at low prices.

Diversified Investment is the Main Reason to Choose Cryptocurrencies in Latin America

A report by the public relations (PR) agency Sherlock Communications revealed aspects about adopting cryptocurrencies. According to that study, Bitcoin, Ether, and Litecoin were the best-known cryptocurrencies in the region. With approximately 50 locations, Colombia was the Latin American country with the most Bitcoin ATMs after El Salvador.

Regarding Brazilians, they showed to be more supportive towards the adoption of Bitcoin than Salvadorans. Forty-eight percent of those surveyed said they wanted Brazil to take the same approach to the crypto asset.

Similarly, data from the P2P exchanges Paxful and LocalBitcoins indicated the country with the most money transfers in Latin America is Venezuela.

Binance Will Not Offer More Cryptocurrency Futures and Options in Australia

Cryptocurrency exchange Binance continues to limit its services amid the ongoing global regulatory scrutiny. In recent days, they announced that Australia imposed a new series of restrictions on them. Australian users will have to reduce and close their positions in cryptocurrency futures, options, and leveraged tokens within 90 days.

The fear of using cryptocurrencies has led many countries worldwide to adjust their regulations on them. They have even banned exchanges from trading and warned people not to invest in them. However, the relevance of those assets will not stop as there will always be people who want to buy them.

By Willmen Blanco

According to the finance minister, India may not be ready to follow El Salvador’s lead, but don’t rule out cryptocurrency.

India should not avoid an improving technology like cryptocurrency, but India may not yet be ready to adopt Bitcoin as El Salvador did, according to India’s Finance Minister Nirmala Sitharaman.

The Finance Minister expressed his thoughts about El Salvador becoming the first nation in the world to adopt Bitcoin as a legal tender on September 7.

Now, Sitharaman cited the protests in El Salvador against Bitcoin as an example and said that they show that people care about the currencies adopted in a country.

The leader highlighted that people thinking that other people don’t care about digital currency is normal behavior. But they must consider the fact that these ordinary people took to the streets against the measure.

The minister also said that It is not a question of literacy or understanding. It is also about what extent it is a transparent currency.

As countries have been considering various ways to regulate cryptocurrencies and release their own central bank digital currency (CBDC) projects, India has moved more slowly in space.

Despite the discussions that took effect in 2017, the country still has to take a clear stance on the legal status of cryptocurrencies.

The Contradictions in India

As Sitharaman expresses, the government has already consulted with various stakeholders, including the Reserve Bank of India, which has repeatedly called for a set of prohibitions on cryptocurrencies, especially for payments.

A new committee recapitulated the stance that the 2017 committee established. This committee recommended a blanket ban to penalties that included jail time for a diverse set of infractions.

Sitharaman repeated that the crypto bill is currently waiting for approval from the union cabinet before it gets access to parliament.

Forkast says that while the bills are supposed to get released for public consultation, the government has been very hermetic about the details of the crypto bill.

Neither the content nor the main essence of the bill has seen the light of day yet. It is also unknown if it is going to ban cryptocurrencies or regulate them.

Despite the current regulatory uncertainty, Sitharaman said that India could not afford to ignore cryptocurrencies entirely. The minister highlighted that this is not an era where people should remain silent regarding their environment.

Sitharaman said that India might not be ready to follow the path of El Salvador until they make sure that this futuristic approach becomes a consolidated fact.

India must be Cautious with CBDC

Regarding India and the possibility to create its own CBDC, Sitharaman highlighted that the country must make a cautious and calculated decision.

Last month, RBI Governor Shaktikanta Das said India could release its first CBDC test project in December. The central bank is currently developing a phased CBDC implementation strategy. The governor also stated that the RBI is careful with the CBDC project, which is the first of its kind for their central bank.

By: Jenson Nuñez