Three German political parties agreed to a coalition deal considering the opportunities of crypto assets and blockchain businesses. The Bank of Russia noted the increasing role of Russia in the cryptocurrency market, suggesting that citizens trade around USD 5 billion yearly.

The Governor of the Bank of England (BoE) Andrew Bailey recently expressed concern about adopting Bitcoin (BTC) as legal tender in El Salvador. He made that statement after President Nayib Bukele announced the launch of Bitcoin City.

The decision of El Salvador to adopt Bitcoin as a currency startled Bailey since he considers consumers may suffer the extreme volatility of the cryptocurrency.

According to Bloomberg, Bailey told the Cambridge University student union that he is worried that any country will choose it as its national currency.

The governor also wonders whether Salvadorans understand the nature and volatility of Bitcoin, which most concern him.

A German Government Cites Cryptocurrencies in Its Coalition Deal

The new German government advocates for an even playing field between traditional finance and innovative business models. In that regard, they recently cited cryptocurrencies in their coalition deal.

Three German political parties agreed to a coalition deal in the last week. It will see the Left Social Democrats (SDP), the Green Party and the Free Democrats take the reins from December.

A translation of the 177-page agreement states that the coalition is calling for a new dynamic. It will consider the opportunities and risks of new financial innovations like crypto assets and blockchain businesses.

The parties said they are adapting the European financial market supervision law to digitization and complex group structures. They seek to guarantee holistic and risk-appropriate supervision of new business models.

The US Now Leads Bitcoin Mining Following the Repression in China

The United States has dethroned China as the world leader in Bitcoin mining after the renewed repression against the industry in the Asian country.

Recent data from the Cambridge Center for Alternative Finance (CCAF) shows that the US accounts for 35.4% of the global hash rate. That represents the total computing power used to mine Bitcoin worldwide in late August, more than twice 16.8% in late April.

The US preceded Kazakhstan and Russia, whose shares were 18.1% and 11%, respectively, compared to 8.2% and 6.8% in April, according to the CCAF.

The share of China has effectively dropped to zero, following the government-imposed ban on crypto mining in the country.

Russians Trade USD 5 Billion Worth of Cryptocurrencies Every Year

According to the central bank of Russia, the citizens of that Eurasian country are among the most active participants in the cryptocurrency market worldwide.

The Bank of Russia recently released a new review on financial stability, noting the increasing role of Russia in that USD 2.8 trillion market.

The institution cited estimates that leading banks reported in July, suggesting the total volumes of Russians. They say that the population trades around 350 billion rubles, equivalent to USD 5 billion, every year.

Nobody is sure whether the Bank of Russia has converted those estimates, as the price of Bitcoin has almost doubled since July. It has gone from around USD 30,000 to more than USD 60,000 in November. Some analysts have forecast that it may even reach USD 100,000 by the end of this year.

By Alexander Salazar

The Banking Committee sent a letter to the CEO of Tether to request information about said stable coin.

The US Senate Banking Committee chairman, Sherrod Brown, wrote a letter to Jean-Louis van der Velde, CEO of Tether, and requesting information on the Tether stablecoin (USDT).

The senator starts the letter by commenting that, according to the latest report of the President’s Working Group on Financial Markets (PWG), stable coins threaten the protection of investors and the integrity of the market.

The exponential use of stablecoins and its relevance for digital asset transactions highlights how much they need to understand the fundamental workings and limits that Tether offers.

Tether is the most famous stable coin on the market. With daily transactions over USD 82 billion, according to CryptoMarkets, it is the most used currency to acquire cryptocurrencies such as Bitcoin or Ethereum. The daily trading volume with Tether is almost triple that of Bitcoin and quadruple that of Ether.

Senator Brown’s Concerns

Brown noted that the market value of stable coins produced by issuers approached $ 127 billion in October 2021, an increase of nearly 500% over the previous year. Additionally, the complexities of digital assets and stable coins and the requirement for robust networks could make it difficult for investors and consumers to understand their roles and risks.

Brown said there are significant concerns with the non-standard terms applicable to the exchange of particular stablecoins, how those terms differ from traditional assets, and how those terms may not be consistent across digital asset trading platforms.

The senator added that although stable coins could get generally minted in exchange for US dollars or other conventional currency, purchasing stablecoins through a trading platform may not bring clients the same rights and advantages of a purchase. Furthermore, clients may have different rights depending on the number of stable coins owned or traded.

So the senator asks Tether a series of six questions to get input from the CEO to help elucidate Tether’s critical work items. The senator approached Tether and asked them to answer the series of questions to clarify certain doubts about the security of investors and consumers.

Tether Background

Earlier, executives at digital asset exchange Bitfinex, closely related to Tether, said that the stable coin receives full back up from assets including cash, cash equivalents, and BTC amid reports that only 74 percent of USDT got backed up.

However, on October 15, 2021, the US CFTC issued an order for Tether and Bitfinex to pay fines of $ 42.5 million. According to the document, Tether had to pay $ 41 million for claims that the Tether stable coin received full support from US dollars.

Bitfinex got required to pay at least $ 1.5 million for illegal transactions when operating cryptocurrency trading platform Bitfinex and by previously violating a CFTC order.

By: Jenson Nuñez

Brad Garlinghouse assured that Ripple remains firm and that the result of this dispute could be very positive, not only for the company but for the crypto world in general.

The legal dispute between Ripple and the US Securities and Exchange Commission (SEC) could finally meet its end in 2022. This information got revealed by the CEO of the company, Brad Garlinghouse.

Garlinghouse stated that the situation with the SEC could end with a favorable result not only for the company but for the industry in general.

Dispute Between SEC and Ripple Could Reach its End in 2022

Garlinghouse’s statements arrived during an interview led by CNBC, where the manager indicated that although the trial has been experiencing a slow process, it has undoubtedly made good progress.

While many legal processes can take entire months and sometimes even years, it is clear to the Ripple CEO that this case could reach its end next year. The CEO said the dispute started when the US entity accused the company of selling unregistered securities back in 2013.

Regarding the repercussions of the case, Garlinghouse highlighted that the current dispute goes far beyond the fate of Ripple as it could include the entire cryptocurrency ecosystem.

This problem could cause serious damage to the crypto environment because the SEC would be attributing misleading judgments to the nature of the XRP, which it could do with any other active crypto asset.

the SEC is Wrong About XRP being a security

The first allegation by the SEC is that the XRP token traded by Ripple would come to be a security. However, Garlinghouse repeatedly rejected this allegation, assuring that those who own the digital currency do not have shares linked to the company so that its operation and existence work in separate ways from the company.

However, during the dispute in court, the SEC tried to make visible that Garlinghouse and the other executives went ahead with the intentions of pre-selling XRP despite knowing that the regulator could have conflicts with it.

On the other hand, the Ripple team alleges that the government entity never ruled on the matter and that it only made such allegations seven years after the pre-sale ended, an argument that would invalidate the complaint filed.

Regarding the case, even though both sides have recorded some victories, the global balance of profits seems to benefit Ripple, which has managed to invalidate various allegations presented by the SEC at the time.

The dispute generated such controversy that even XRP users asked the court to participate in the trial and highlight how the measures promoted by the regulatory entity harmed their commercial activities.

When the dispute began, certain reputable exchanges opted to remove XRP from their commercial listings, which harmed the token’s price in the main international markets. But at the moment, the digital currency is trading at approximately USD 1.05 per unit, and capitalizing on slight gains of 0.5%.

By: Jenson Nuñez

The IMF warns El Salvador against the use of Bitcoin and cites threats to financial stability. While the Blockstream CSO talks about the plans of the Bitcoin City.

The International Monetary Fund (IMF) again warned El Salvador against Bitcoin as legal tender, stating that the measure might carry risks for the financial system. In June, the IMF had warned of their concerns. And it was not the only international entity that showed concern about the situation, so did the World Bank.

In a statement, the IMF acknowledged that Bitcoin and cryptocurrencies, in general, can facilitate efficient payments, but declaring them legal tender would potentially erode financial stability.

According to the IMF, given the high volatility of Bitcoin prices, its use as a legal tender could carry vital risks to consumer protection, financial integrity, and financial stability. Its use also allows contingent fiscal liabilities.

In addition, the agency asked El Salvador to reduce the scope of the Bitcoin Law, in force since September, and strengthen the regulation and supervision of the new payments ecosystem.

How to Feed the Bitcoin City

The IMF warning arrived just days after El Salvador President Nayib Bukele revealed that the country plans to create the first Bitcoin City in the world, backed with Bitcoin bonds.

Bukele announced plans to manage a $ 1 billion “Bitcoin Bond” with a 10-year maturity on Liquid Network. The bond, developed by Blockstream and processed by Bitfinex, will offer a coupon of 6.5% or the annual interest payment rate. Additionally, investors will receive dividends generated from the liquidation of Bitcoin holdings.

Blockstream CSO Samson Mow explained his thoughts about the bullish narrative led by him on El Salvador and its bid to power a Bitcoin city with the energy of a volcano in a Bloomberg TV interview.

When asked why any institutional bond investor would buy this BTC bond, Mow opined that the annualized return to investors could be as high as 146% in year 10, based on Blockstream projections.

The president also added that he thinks there is more than a billion money to connect to this bond with at least 6.5% in line with most bonds worldwide. Also, there is that special Bitcoin dividend for them to run the calculations that at the end of 10 years, Bitcoin is a million dollars.

More Projections

Additionally, Mow cited two projections, first, that Bitcoin appreciates 35% year-over-year. Second, the yield that year would be at least 90% plus the 6.5% coupon. However, if it goes up, there is another conservative model with an API of 140%, plus the coupon of 6.5%.

According to Mow’s speech, the project would attract potential investors who want to dig deeper. Furthermore, when asked why these investors would not buy Bitcoin outright instead of having a 50% stake, the CSO responded: They could purchase Bitcoin outright, but generally, the mandates do not allow them to have cryptocurrencies.

By: Jenson Nuñez