The Central Bank of Brazil started a discussion about the digital real’s creation, their national CBDC, according to the representative in the entity.

The economist Fabio Araujo, representative of the Central Bank of Brazil, highlighted the possible development of a Real Digital during a public hearing before the Committee on Science, Technology, Innovation, Communication, and Information Technologies of the Brazilian Senate.

At the same time, he took advantage of being on that Senate committee to speak about the bank’s position against cryptocurrencies, calling them speculative.

 The Real digital

Araujo stated at the hearing that the bank is still discussing society’s need for a central bank digital currency (CBDC). Araujo also unveiled that the Central Bank of Brazil still sustains meetings with various entities and personalities that could help build the Real Digital project.

Senator Rodrigo Cunha stated that the use of digital currencies is a discussion that needs a resolution due to the lack of information on the matter. He said there is still a strong need to discuss the issue.

 He stated that digitization is a reality in the life of the citizens, in various fields, but there is still a lack of information on how it will work with money in circulation in a country like Brazil

In this regard, it is also worth considering that the Brazilian Minister of Economy had already revealed in November 2020 the possibility of a Brazilian CBDC for 2022. This news also came from the president of the central bank himself a year ago.

Cryptocurrencies Still Have a Negative Reputation

According to the Central Bank spokesperson, they are considering that CBDC does not mean at all that they approve cryptocurrencies. The economist explained that the entity’s position remains to be negative in this regard.

Brazil is a pioneer country in South America when it comes to the creation of a Bitcoin ETF (exchange-traded fund).

It is also ranking among the 20 nations in the world with the highest crypto adoption. At the same time, the authorities have been aware of the increasing rate of scams.

Brasil, and the Study Conducted by Chainalysis

In a report made by the Chainalysis team, there is a measure of the countries that register the highest levels of adoption. There are some aspects that the study takes into consideration, like the volumes of transactions mainly carried out by natural persons.

Although the first five places accommodate Vietnam, India, Pakistan, Ukraine, and Kenya, one aspect that draws a lot of attention is the presence of Latin American countries within the ranking.

In this sense, Chainanalysis ranked Venezuela in the seventh position. Argentina is in 10th place; Colombia follows in 11th place, and finally, there is Brazil in position 14.

By: Jenson Nuñez

Cryptocurrencies are tools to hide the trail of funds. Criminals would be withdrawing funds with cryptocurrencies to other nations like Nigeria.

Central American migrants who get to pass through Mexico, seeking to cross the northern border into the United States of America, would be suffering extortions in exchange for cryptocurrencies, according to Santiago Nieto Castillo, leading head of the Financial Intelligence Unit (UIF).

Nieto Castillo recently made these statements during a meeting with members of the National Migration Institute, as stated by the Mexican government in a statement that appeared on August 27.

The spokesperson of the FIU revealed that they have identified various cases in which cryptocurrencies have been some kind of tool to pay extortion and ransom for kidnappings. Criminals have appealed to this medium as a way to avoid the current laws and be able to enter their profits into the financial system or to take their profits abroad.

The authorities don’t know how the criminals operate and how many cases the use of cryptocurrencies has been identified, but the officials alleged more than 2,000 reports involving more than 1,500 people.

Nieto Castillo explained an example of an operation of more than 150 million dollars, although he did not clarify whether it represented those involving cryptocurrencies or referred to more general cases that get closer to human trafficking or kidnappings.

Additionally, the representative of the FIU clarified that they are still trying to identify the criminal groups related to these reports. In this regard, he pointed out that the agency is working on the complete identification of criminal groups and the financial routes followed in the northern triangle of Central America and Mexico.

The FIU and its Position On Cryptocurrencies

Among Mexican organizations, the FIU gives particular attention to cryptocurrencies, the exchanges involving all these currencies, and operations with them in general.

In September of last year, the government entity had received up to 2,400 reports of suspicious activities from various bitcoin and cryptocurrency exchanges that operate in that nation.

Of those 2,400 reported cases, only two corresponded to illicit activities that the FIU got to detect. The director of this entity, Santiago Nieto Castillo, indicated in a series of statements to the press that one of them got related to human trafficking and another a group of hackers who wanted to hit the financial system.

In both cases, the criminals used cryptocurrencies as a tool to carry out their illicit activities. In addition, this year, Nieto Castillo himself spoke about a considerable number of exchange sites that operate illegally in Mexico. Nieto Castillo also mentioned there were at least 12 platforms of this nature, and they were fully present in the Mexican market without any registration.

By: Jenson Nuñez

Argentine regulation establishes that there is a limit on the purchase of foreign currency. Pesce expressed that the matter caused concern to the BCRA and said it is necessary to educate the population.

Miguel Pesce, the president of the Central Bank of the Argentine Republic, recently spoke about using cryptocurrencies. He said they allow citizens to pay for services but not to evade exchange laws. Besides, he stated that their volatility is adverse, so people cannot use them as valuable assets.

Before the Argentine Chamber of FinTech, Pesce asserted that the BCRA would not allow using cryptocurrencies to evade exchange laws. The inhabitants of Argentina can only buy USD 200 per month or its equivalent in any other foreign currency. They can only conduct those exchange operations in entities authorized through the Single Free Exchange Market. However, there is a proliferation of unauthorized trading of the so-called blue dollar.

The Population Should Receive Education to Understand Cryptocurrencies

Pesce told Ignacio Plaza, president of the Argentine Chamber of FinTech, that this issue worries the mother bank of the country. For that reason, he believes it necessary to educate people to prevent falling for scams and losing money due to misinformation.

The official criticized the volatility of cryptocurrencies due to their scarcity, which he does not consider desirable in any currency. He questioned their adoption as a means of payment and stated that they are not assets to safeguard value.

The president of the BCRA even rejected the term cryptocurrency as it refers to what is hidden or opaque. Since that is contrary to what a currency should be, he thinks it is not a good name. However, he acknowledged that those assets favor access to the capital market.

Concerning central bank digital currencies (CBDC), Pesce denied that Argentina would work on them. He stated that the country already has the infrastructure but needs to invest in other sectors. However, he mentioned the discussion about that issue by the G20 and various tests in other European countries.

Finally, Pesce expressed his concern about the demand for electricity consumption of cryptocurrencies. He stated that it is necessary to solve that problem to allow those assets to continue to develop. However, recent reports indicate that Bitcoin (BTC) mining consumes less than 0.1% of the world’s energy.

Plaza Considers that Cryptocurrencies are a Superior Technology

Unlike Miguel Pesce, Ignacio Plaza said that he considers cryptocurrencies to represent a superior technology. He acknowledged that they still raise doubts like the Internet did in the 1990s but stated that they are still in an early stage. He believes that crypto assets are the future and will transform the world.

The president of the Argentine Chamber of FinTech expressed that the country must build on this new technological and financial model. He argued that, otherwise, Argentina would be a customer of other countries that do.

Plaza referred to the relevance of FinTech companies in the financial scheme and the interoperability between banks and digital payment platforms. Finally, he said that people are experiencing a transition between cash and virtual money.

By Alexander Salazar

The current accumulation patterns of the Bitcoin and Ethereum networks are very similar. A report by Glassnode indicates that both networks entered an accumulation phase in March.

The price of Bitcoin (BTC) and Ether (ETH) may rise significantly in the coming months. That is what the investors who continue to accumulate both cryptocurrencies seem to consider.

The latest report by Glassnode reveals that the number of coins three months old or less steadily declines. In other words, there have been increasingly few currency transfers in the short term. That suggests that people prefer to think about taking profits in the long run.

The report indicates that the two networks show very similar accumulation patterns at the moment. Concerning Bitcoin, more than 50% of the supply of coins is between three months and three years old. For their part, those who invest in Ethereum speak of 70% in this time range.

Those bullish trends in the coin supply of both assets started around March, Glassnode reported. That reflects strong demand for buying and holding throughout that bullish market.

The number of Bitcoin and Ether (ETH) addresses with balances above zero has also been increasing. The first cryptocurrency on the market is close to its all-time high, while the second has already exceeded its.

The Activity Falls as Investors Keep Saving

The authors of the report highlighted a divergence between the price and on-chain activity of Bitcoin and Ethereum. Besides, they said that the number of transactions processed daily had dropped considerably.

In that sense, the experts noted that that is historically abnormal for a large-scale bullish market. Additionally, they stated it is not uncommon for the dynamics before the rise and fall of supply.

That steep decline in the activity could be a bearish sign, but current accumulation dynamics suggest robust underlying demand.

Analysts added that such investor performance shows that the upward cycle of the market is still continuing. However, they recommend paying attention to the oldest coins. If users start spending said coins, it could be a signal that invalidates the current accumulation phase.

Experts have consistently reported that this is a phase of accumulating rather than spending cryptocurrencies. Many analysts and researchers have been reiterating this situation in recent weeks.

The Supply of Bitcoin Has Undergone Further Reduction

Renowned analyst Willy Woo takes a very bullish position on the Bitcoin environment. He considers that the supply of BTC has seen the most dramatic reduction during this phase. For that reason, he expects the price of the pioneering cryptocurrency to keep rising.

In a recent newsletter, Woo stated that this is the second major reaccumulation of this cycle, which will lead to a breakout to the upside. He believes that the supply and demand dynamics suggest a price of USD 60,000. Based on the supply shock model, Woo argues that holders have entered the long-term maximum accumulation zone.

While there is a consolidation of the price of Bitcoin below USD 50,000, this zone has remarkable stability. The analyst says that those areas tend to anticipate a significant price movement.

By Alexander Salazar

The amount of ETH that burns has exceeded the number of tokens issued per day. By the end of August, only 40% of transactions based on EIP-1559 occurred on the network.

Data from Coin Metrics indicates that Ether’s (ETH) annual net inflation rate has fallen to levels around 1% and 3%. The reason is the burning of the native cryptocurrency token of Ethereum implemented with the London fork.

A total of 173,407 ETH worth more than USD 650 million have burned since then, according to Etherscan statistics. That amount represents a reduction of more than 35% of the annual issuance of the coins on that network.

Coin Metrics agrees with that data, noting that the burning of Ether sometimes exceeded its issuance since the update. Experts take that fact as a deflationary signal, as the number of tokens in circulation has decreased.

Although the deflationary trend became noticeable a few days after the hard fork, it has been more apparent in recent weeks. The burning of base rates permanently eliminates the circulating supply, partially canceling the new one.

According to Coin Metrics, if the ratio between total ETH issued and that burned is less than 1, more ETH than issued burns. The burning of Ether has reached that level several times after the activation of the EIP-1559 upgrade.

The Burning of Tokens Helps Make the Network Deflationary

One of the most significant changes introduced on Ethereum with the London fork was the burning of tokens. It is part of the new fee scheme seeking to make the network deflationary and lower high fees.

For that reason, there have been two types of fees since the activation of EIP-1559. The base rate burns every day while miners receive the priority fee to process block transactions faster.

Consequently, the inflation level of the Ethereum blockchain has decreased significantly. However, the reduction in the fees could materialize in the longer term, with the activation of Ethereum 2.0.

A few weeks ago, Coin Metrics said the causes of the low issuances of some ETH blocks include the sales of NFT. Initially, they boosted base rates on Ethereum, but the subsequent burning of tokens contributed to turning some ETH emissions negative.

Those operations contribute to burning base fees and cause gas rates to rise considerably during the minting of NFT collections.

Not All Ethereum Wallets Have Implemented EIP-1559

Priority rates (or tips) have accounted for around 20% to 30% of the total daily fees of Ethereum, says Coin Metrics.

The blockchain analytics firm says that the percentage of priority fees is still low. They expect more wallets to implement EIP-1559 transactions natively.

Coin Metrics observes an acceleration in the daily percentage of transactions using EIP-1559 compared to the legacy fee mechanism. The former has gone from representing 23% of the operations shortly after the hard fork to just over 40% by late August.

In this sense, the percentage of transactions based on the new fee mechanism should continue to increase in the coming months. In that time, the wallets will receive an update for supporting the new format.

By Alexander Salazar

Gensler suggested that the connection between world markets requires that money flow each passing microsecond. He considers cryptocurrencies securities as they comply with all the aspects that the current legal framework highlights.

The cryptocurrency market is gaining ground as new investors seek to benefit from the scalability and volatility of those assets. That worries the large regulatory entities responsible for guaranteeing consumer or investor protection. For that reason, the chairman of the US SEC considers it necessary to establish rules to control their use worldwide.

The US chairman of the Securities and Exchange Commission, Gary Gensler, mentioned that multiple nations must collaborate to make that possible. That would facilitate and accelerate the maturation process of the cryptocurrency market as long as they consider investor security.

Gary Gensler Expects Europe to Help Regulate the Cryptocurrency Market

The official made multiple relevant points, which he discussed with various European regulators with whom he met. They discussed the growing use of cryptocurrencies in the world, besides other aspects of considerable importance.

Gensler suggested coming together to regulate cryptocurrencies properly, especially since world markets are connected. He explained that this makes it necessary for money to flow between them every passing microsecond. He also noted that new financial technologies are changing the way companies and individuals invest.

The SEC chairman said that the cryptocurrency market is in a neutral position regarding emerging technologies. However, he stated that it is necessary to start working on regulations to control it. He thinks no emerging financial innovation will prosper unless it is within the framework of public policy. He added that only the incorporation of new markets would allow them to mature and guarantee investor security.

Gary Gensler Considers that Cryptocurrencies are a Security and Must Have an Appropriate Regulation

Gary Gensler also told European regulators that he considers cryptocurrencies or tokens securities. They comply with all the aspects that the current legal framework highlights. Therefore, consumer protection must be at the forefront of regulations on crypto assets.

He stated that he believes that there are great entrepreneurs behind many of those digital assets or tokens. Besides, he said that an investing public expected to make a profit based on the effort made. He believes that US laws reviewed by the Supreme Court often make investment contracts securities.

For that same reason, Gensler believes that every security should be under surveillance and meet high disclosure standards to protect investors from fraud. However, he added it was necessary to adopt technologies like that of a cryptocurrency and learn from them. He explained that countries could do that even if they have totally different rules and policies.

Cryptocurrencies play a relevant role in the world economy, and many regulators seek to control their use. The SEC chairman believes that such financial innovations must be in a public policy framework to thrive. He highlighted the importance of including user protection when drafting regulations on crypto assets.

By Alexander Salazar