President of Iran Requests to Create a Strategy for Crypto-Mining and the Adoption of Cryptocurrencies

Maria Rodríguez
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President of Iran Requests to Create a Strategy for Crypto-Mining and the Adoption of Cryptocurrencies

The government of Iran issues licenses for cryptocurrency mining.

Hassan Rouhani, President of Iran, issued a direct order to his government cabinet related to cryptocurrencies. In the statement, the President expressly asks to develop a national strategy that will help the country adopt and use cryptocurrencies.

During a seminar dedicated to strategies to improve the national economy, last week, Rouhani talked to the representatives of government institutions such as the Central Bank of Iran (CBI), the Ministry of Information and Communication Technology, and the Department of Energy. The President’s request was related to the creation of a strategy capable of developing a sustainable cryptocurrency mining system.

According to some press reports, Rouhani also mentioned the need to create a regulatory framework around the crypto industry, as well as to establish a reserve fund for accumulated profits from mining.

This request comes a few days after the Iranian press reviewed the words of a parliamentarian who assured that the Parliament would be preparing a law capable of improving the regulation of the exchange houses that operate in the country, as well as establishing control methods to avoid illegal acts with digital currencies.

Some experts point out that this law would seek to be stricter with exchange houses operating in Iran, and would force them to enter a licensed control register led and controlled by the Central Bank of Iran (CBI).

Likewise, economic experts point out that these control measures follow a strategy that would avoid capital flight and help prevent internal money laundering.

Prison Penalties and Fines

A few weeks ago, the President of the United States, expressed his concern about some news which affirm that Iran would use cryptocurrencies to avoid the economic upheaval that the country faces.

Iran established that the use of cryptocurrencies is legal in its country since 2019, and also allowed the digital mining industry to take importance in Iran. However, the new law would seek to establish order and a legal framework around this economic activity.

For this reason, Iran established the issuance of licenses certified by the BCI and would allow mining companies to carry out a full economic activity, which includes the possibility of mining and selling the assets. Some reports indicate that, in the first months, the Bank of Iran authorized the issuance of up to 1,000 mining licenses.

According to a Bitcoin Mining Map report, Iran has currently managed to obtain 4 % of all BTC hash rate in the world. Some analysts do not understand why Rouhani, the President of Iran, established tight control over crypto assets in his country.

However, analysts consider that this decision could be part of a strategy to avoid the decapitalization of the country and avoid economic instability since some governments consider cryptocurrencies as an unstable and volatile digital asset. That is why Iran considers it is important to create a strategy to regulate the crypto-mining activity in the country.

By María Rodríguez

Public Notary Uses Blockchain Technology to Certify Signatures in a Brazilian City

Maria Rodríguez
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Public Notary Uses Blockchain Technology to Certify Signatures in a Brazilian City

The notary assured that the Digital Blockchain Certificate will serve to certify the signature on the Internet.

A public notary in the Paraíba region of Brazil has decided to use blockchain technology to establish a system for recognizing signatures on documents.

According to the information about this initiative, the system will be able to read and recognize any signature made on a document from the Internet. The proposal could drive a big change in how many documents are certified, facilitating, in the future, legalization, registration, or any other public procedure.

According to the local media report Turismo Em Foco, the public notary Azevedo Bastos has introduced this new method to his way of working.

In the words of the notary, this blockchain tool would serve to improve how notaries process the documents, optimizing speed, and reinforcing the security of the documents. Furthermore, the notary hopes that, by using digital solutions, citizens will increase their confidence in public registry activity in the Brazil region.

The informative report pointed out that even users’ data will be much more secure than in the traditional way. This is because a backup system in the cloud will store the information. In this way, notaries will only use the data of the users for the moment of establishing the signature.

Bastos commented that, through this method, users will have access to their signatures at any time of the year. This system is a useful tool for the circumstances that the world is going through due to the Covid-19 pandemic. “This digital service was created to give more speed and flexibility so that our clients have their recognized signature, in documents accessible at any time of the day, 365 days a year and, mainly, in light of the circumstances that we are experiencing,” the notary said.

The Operation of the Blockchain Operation System

Bastos explains that this system seeks to certify, in different ways, the identity of the user who is about to use his signature.

Bastos mentioned that the user will obtain a “blockchain id”, which will provide the client with a unique number to have access. This is a digital certificate that will be able to recognize the client’s signature. Clients can use this signature in all the procedures that electronic channels allow.

Once the signature is enabled, the system will use data that public authorities provided, which will help verify the authenticity of the signature and the user’s data.

To end the process, the client must receive a video call with an official, who will perform a simple questionnaire. When finished, the notary will validate the signature and the user will obtain his blockchain ID. Azevedo Bastos added that “this system provides a high level of security concerning the identity of the client.”

To sign documents, the official explained that it will only be necessary for the user to download the application, and just by using the QR code scanning system, the notary will verify the data for use.

By María Rodríguez

Next Cryptocurrency Epicenter May Be in Africa

Alexander Salazar
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Next Cryptocurrency Epicenter May Be in Africa

The African continent outperforms Latin America in P2P trading volume. Everything seems to indicate that Africa will become the next cryptocurrency epicenter.

Cryptocurrency adoption is making important strides in the African continent, with trading volumes and regulations gaining greater acceptance. The community wonders whether Africa will become the next cryptocurrency epicenter.

A recent report by Arcane Research and Luno found that Uganda, Nigeria, South Africa, Ghana and Kenya were frequently in the top 10 countries regarding Google searches for the word “Bitcoin”.

The report also describes the continent as one of the most promising regions for cryptocurrency adoption. It highlights the combination of low adoption cryptocurrencies in Africa with a strong possibility of dominance.

New Adoption of BTC in Africa

Companies highlight that Africa has a young population, frequent monetary crises and currency failures, large unbanked or under-banked populations, and expensive means of payment. Therefore, Africa may be a great cryptocurrency epicenter in the near future.

The report found that South Africa has the highest percentage of ownership or use of cryptocurrencies in Africa. Nigeria has dominated trading volume on the continent for a while. However, it has 11% of cryptocurrency users now, preceded by South Africa with 13%.

Similarly, South Africa ranks fifth in cryptocurrency adoption among connected citizens worldwide.

In recent days, South Africa released its second largest weekly volume in the peer-to-peer (P2P) Bitcoin (BTC) market. According to data from LocalBitcoins, there was a trading volume of almost USD 1.65 million in BTC.

In this sense, the increase in trading activity caused the total P2P trading volume in South Africa to exceed that of Kenya, which recently obtained 1.95 million US dollars through trade on LocalBitcoins and Paxful.

Likewise, the South African financial regulator issued a policy document last month. It stated that crypto assets and activities related to virtual currencies can no longer remain outside the regulatory perimeter.

Peer-To-Peer Trade Increases across Africa

Nigerian P2P trading is also reaching all-time highs, producing USD 9.2 million in weekly combined trading.

On the other hand, Kenyan trade has recently experienced a rebound. LocalBitcoins trading between BTC and the Kenyan shilling had its second strongest week. A graph shows that BTC trading in Kenya increasingly rebounds every day.

Other African countries like Morocco and Egypt have also reached highs in trading activity in recent weeks. This is the reason why, the increase in volume across the continent has also made P2P volume in Sub-Saharan Africa exceed, for the first time, that of Latin America. This positions Africa as a new epicenter of cryptocurrencies.

BTC trade in Latin America has declined since the start of the COVID-19 pandemic. However, P2P Bitcoin trading volumes in Africa have continued to rise. In this sense, the continent has registered its third consecutive all-time high in trading activity.

This may be due to the large number of young people and great economic difficulties in African countries. One of the best ways to trade and grow is through cryptocurrencies like Bitcoin.

Over USD 14.6 million in Bitcoin recently changed hands among African users of the P2P cryptocurrency markets LocalBitcoins and Paxful. Sub-Saharan Africa ranks fifth in volume, behind North America, Eastern Europe, Latin America, and Asia-Pacific.

There is an increase in P2P transactions in the African continent and a similar rebound due to the health crisis linked to COVID-19. This probably indicates that the continent will be the next cryptocurrency epicenter.

By Alexander Salazar

Exchanges Record Lowest Point Regarding Amount of Bitcoin

Willmen Blanco
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Exchanges Record Lowest Point Regarding Amount of Bitcoin

This represents an annual reduction of 11% in the amount of Bitcoin on exchanges. This is about 60% of the total supply of Bitcoin issued in more than 12 months.

Last May 25th, the total amount of Bitcoin that cryptocurrency exchange wallets hold decreased to its lowest point in 18 months, to just 2.3 million, according to data estimates from Glassnode. The decrease establishes an annual reduction of 11% in the number of bitcoins held on exchanges.

In the same period, the amount of Ether on exchange wallets increased by more than 7%. Some market participants see this as a sign that Bitcoin investors are increasingly taking direct possession of their cryptocurrencies.

Avi Felman, Head of trading for Stamford-based BlockTower Capital, said that people are aggressively accumulating, and market participants seem to have more time preferences these days. He stressed that he thought that the trend was going to continue.

A proportion of these active Bitcoin accumulators, usually motivated by their ideology, are the so-called “holders of last resort.” This is a label that implies that they never have the intention of selling, regardless of market movements.

Kraken Bitcoin strategist Pierre Rochard said that these types of investors partially contribute to the decline in the balance of Bitcoin on exchanges, by continuing the accumulation in the long term and safeguarding their bitcoins. Kraken is the largest cryptocurrency exchange established in the USA that is based on its liquidity, according to data from Crypto Watch.

Rochard added that the improvement in fiduciary rails also contributes materially to this trend. This allows arbitrage traders to be more capital efficient, thus keeping less Bitcoin.

It is important to note that the analyses of data from the blockchain, of the balances of exchanges, are only an estimate. Some exchange addresses could be overlooked or unknown to data aggregators. However, the bearish trend is pronounced. According to Rochard, the data on the blockchain are not perfect and the new wallets of the exchanges could be lost.

Brokers as Possible Reason for Decline

Some others see that the abandonment of bitcoins from exchanges is for a reason completely unrelated to inveterate and strong-willed investors. According to them, it is rather due to the promotion and prioritization of brokers.

Felman added that there are currently few alternatives for holders to keep bitcoins on an exchange if they want to trade them. However, new offers in the main brokerage space will lead to higher exits from specific exchange wallets.

For example, the trading and lending company Genesis acquired Vo1t, as part of its strategy to become a full-service prime brokerage, last May 21st. Tagomi, a leading digital asset brokerage acquired by Coinbase, is the best of the San Francisco-based exchange to expand its institutional trading service.

Regardless of the reason, a steady decline in the supply of Bitcoin on exchanges implies a strong level of confidence among holders. That is the opinion of Yan Liberman, former associate at Deutsche Bank and co-founder of the digital asset research group Delphi Digital.

Liberman added that about 60% of the supply of issued bitcoins has not moved in more than 12 months. These types of events have been precursors to previous bullish cycles.

By Willmen Blanco

According to Grayscale, Central Bank Digital Currencies Could Lead to Bitcoin Adoption

Willmen Blanco
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According to Grayscale, Central Bank Digital Currencies Could Lead to Bitcoin Adoption

A CBDC would replicate the fiat currency model, according to Grayscale. The firm considers that forcing the use of CBDC would highlight the advantages of Bitcoin.

There is an increasingly widespread interest by central banks in issuing their own CBDCs (digital central bank currencies). Official fiat currency issuers have seen the public’s increased interest in the so-called stablecoins or cryptocurrencies anchored to other assets, while Bitcoin continues its course of adoption and recognition in the world.

This interest and the possible launch of digital currencies in various countries could open a new gateway to Bitcoin, according to the cryptocurrency investment firm Grayscale.

A study, titled “Central Bank Digital Currencies [CBDC] Highlight Bitcoin’s Value Proposition,” notes that any hypothetical CBDC would have to deal with various challenges in the face of mass adoption. However, its success could benefit the increased use of Bitcoin and other cryptocurrencies.

If CBDCs are successfully launched, the infrastructure and education that would accompany the use of these bearer assets could serve as a gateway to further adoption of Bitcoin and other digital currencies.

A possible mobilization of fiat currencies to the digital infrastructure would highlight the fact that Bitcoin is special, not because it is digital, but because it is a scarce, uncompromising, and apolitical cryptocurrency open to be used by anyone. In summary, the contrast would be clearer and would highlight the advantages of Bitcoin.

However, the report makes it clear that, despite those possible advantages, “Bitcoin is not waiting for CBDCs.” According to Grayscale, the cryptocurrency, created just over 11 years ago, is rapidly gaining visibility on its own.

CBDCs Have No Resemblance to Bitcoin

The study, which Grayscale published on its website on May 27th, also highlights the differences between these centralized digital currencies and the main characteristics of Bitcoin and other decentralized cryptocurrencies.

Among these differences, the firm notes that any central bank would have full control over all the aspects of CBDCs. These would include their issuance, the tracking of transactions, and even the possibilities of censoring the latter. They would also be able to veto their use outside their jurisdiction and impose restrictions on them, as is currently the case with fiat currencies.

Grayscale argued in their report that CBDCs would probably increase the government’s ability to monitor transactions. The firm concludes that these currencies are intended to be digital versions of fiat currencies and represent many of the same characteristics.

The growing interest that Grayscale refers to is based, among other data, on a survey by the Bank for International Settlements (BIS). In that consultation, which 66 central institutions answered, almost 60% said that they were exploring the possible impact of stablecoins.

Central banks, such as those of China, France, England, and South Korea, have performed tests or have the issue on their agenda. Sweden is another country that has already started testing the digital version of its currency. Regarding the case of China, probably the most prominent, the Asian nation has not yet defined the schedule for the launch of its digital currency.

By Willmen Blanco

Argentine Authorities Add More Controls to Crypto-Transactions

Maria Rodríguez
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Argentine Authorities Add More Controls to Crypto-Transactions

The measure is part of a set of actions to control the foreign exchange market in the country.

Recently, Argentina’s Financial Intelligence Unit (FIU) issued a report where it announced that investigations related to cryptocurrency transactions in the country have begun.

The statement states that the institution seeks to have information about the operations that users conduct in Argentina with digital assets. Besides, the FIU will impose new controls on these operations to determine if they are part of fraudulent intentions. “To adapt the system of prevention of money laundering and terrorist financing,” that is the main objective of FIU.

The statement expressed, last May 20th, that any institution in charge of supporting these transactions should take into account the considerations that FIU takes regarding these digital assets:

“Due to the increase in transactions with virtual currencies and, in line with the general recommendations of the Financial Action Task Force (FATF), the Financial Intelligence Unit (FIU) has alerted the Obligatory Subjects (banks, stock companies, notaries, trusts, foundations, among others) so that they dedicate themselves to tracking and analyzing the maneuvers with cryptocurrencies.”

In this way, and due to the increase in the volume of operations with crypto assets, the authorities asked these companies that operate in the country to provide detailed information on their activities.

Also, the statement warns that, by using these types of technologies, the companies could be violating international standards that go against the use of crypto assets in illegal activities such as money laundering and terrorist financing. Therefore, the use of cryptocurrencies could benefit “people who seek to circumvent international standards and avoid the preventive system of Money Laundering and Terrorism Financing,” the FIU said.

According to local press reports, the document does not detail specific measures. Besides, the document has not imposed any deadline to establish ordinances and control these illegal activities. However, the FIU asked different NGOs, which receive donations in cryptocurrencies, to release information about the operations they conducted and how they did it. In this way, all the areas that involve digital currencies must adjust to the request.

Experts in economics highlight that these measures are part of the dismantling of the parallel currency market. For that reason, a complete financial adjustment accompanies these actions and seeks to avoid the flight of dollars in the Argentine financial market.

One of the measures that the Argentine government has taken is the control of the capital or control on currency exchange. This control has prevented citizens from acquiring dollars freely. Economists highlight that this could have been the trigger for the currency market to increase its operations in recent months.

Argentina has been experiencing economic difficulties for a few years now, which is why some of its citizens have taken measures to protect their finances. The hyperinflation that the Latin American country is experiencing has pushed Argentines to acquire foreign currencies instead of the local currency. However, the hard exchange control and the volatility of the parallel currency market has made Argentines find greater stability and security in cryptocurrencies.

By María Rodríguez

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