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Smart Cities Equal Total Control Of Civilization Don’t Take The Bait

Smart Cities Equal Total Control Of Civilization. Don’t Take The Bait. 

As mentioned in a previous article, power companies in Texas automatically raised the temperature of so-called smart thermostats in thousands of homes to help save energy during a heat wave in June 2021. Most people had no idea that their home temperature had been raised nor that the power company's ability to do this was outlined in the fine print of their contracts. 

If what the Texas citizens experienced sounds ominous, it’s just the tip of the iceberg of what the World Economic Forum (WEF) has planned with its smart cities. In this article, we’ll explore smart cities, including who invented them, where they're being rolled out, when they will be complete, and whether or not the WEF’s plans will succeed. 

What Is A Smart City?

The best definition comes from Wikipedia. It's lengthy but needs to be cited because it captures the full scope of smart cities.

 “A smart city is a technologically modern urban area that uses different types of electronic methods and sensors to collect specific data. The information gained from that data is used to manage assets, resources, and services efficiently; in return, that data is used to improve operations across the city. This includes data collected from citizens, devices, buildings, and assets that are processed and analyzed to monitor and manage traffic and transportation systems, power plants, utilities, water supply networks, waste, criminal investigations, information systems, schools, libraries, hospitals, and other community services. Smart cities are defined as smart both in the ways in which their governments harness technology as well as how they monitor, analyze, plan, and govern the city. In smart cities, the sharing of data is not limited to the city itself but also includes businesses, citizens, and other third parties.”

In short,  a smart city is where everything you do is tracked and managed by the government, including what you do at home. This is possible because almost every modern home appliance has internet connectivity, not just thermostats, but fridges, microwaves, TVs, cars, and even home entry systems are all connected these days. In other words, smart cities are the dictionary definition of a digital dystopia. 

Now it's important to note that smart cities and 15-minute cities are different. Although the two terms are used interchangeably, they're not the same, albeit related. Whereas smart cities involve tracking and managing everything you do, 15-minute cities explicitly limit where you can go. Moreover, the primary unelected and unaccountable entity pushing 15-minute cities is the C40 Cities Climate Leadership Group, whereas the primary unelected and unaccountable entity driving smart cities is the WEF. 

Who Brought Smart Cities To Light

The term smart cities had its roots in a marketing initiative called Smarter Cities by Tech Giant IBM in 2008. The enterprise has its roots in a 2008 speech by former IBM CEO Sam Palmisano titled “A Smarter Planet, The Next Leadership Agenda.” Sam's discourse on this topic can still be viewed on YouTube. 

Sam says a lot of the same stuff you hear today. There's turmoil in markets, supply chain issues, accelerating climate change, political tensions arising, an energy crisis, etc. Like today's elites, Sam saw these crises as a “unique opportunity to transform the world.” He talked about how digital and physical spaces are converging, how people demand change, and how this demand should be exploited to “change the game.” 

It sounds like the new normal and the great reset narratives we've heard from almost every government official worldwide since 2020. Today's difference is that the elites have the technology required to impose their will on the average person. The absence of such technology is why smart cities initially had difficulty getting off the ground. 

Amsterdam was the first to pursue a smart city initiative, and it quickly became a reference point for how smart cities should be set up worldwide. Interest in smart cities started to accelerate in the following years, with the European Union announcing a smart cities initiative in 2012 and Singapore following suit in 2014. 


Image source: Google Trends

The search trends for smart cities peaked when the United Kingdom and India announced their initiatives in 2015. 2015 was also the year when Google incorporated a company called Sidewalk Labs, whose purpose was to facilitate the development of smart cities worldwide. There was little coordination around the creation or governance of smart cities until that point.

It all changed on January 1st, 2016, when the United Nations announced its Sustainable Development Goals (SDGs). For context, the SDGs are 17 goals that are supposed to be met by all UN members, basically the whole world, by 2030. This is why you see the date 2030 everywhere. 


Image Source: un.org

The development of smart cities is part of the 11th SDG, which is to “make cities inclusive, safe, resilient and sustainable.” The Smart City Index was developed by the Singaporean University and a Swiss University in 2017 to measure how well smart cities meet these arbitrary goals. Not surprisingly, Singapore has replaced Amsterdam as the gold standard for smart cities.

Whereas Amsterdam's approach to smart cities was traffic management, Singapore's approach includes tracking whether people are littering or smoking in places they're not supposed to. Then in 2018, consulting firm McKinsey & Company published a lengthy report about smart cities. The firm found that “Cities can use Smart Technologies to improve some essential quality of life indicators by 10% – 30%. Numbers that translate into lives saved, fewer crime incidents, shorter commutes, a reduced health burden, and carbon emissions averted." 

The WEF’s G20 Global Smart Cities Alliance

Most institutions that were interested in smart cities after the SDGs were announced came from the public sector. This changed in 2019 when the World Economic Forum announced the G20 Global Smart Cities Alliance on Technology Governance. As per the WEF’s initiatives website

“The G20 Global Smart Cities Alliance unites municipal, regional, and national governments together with private-sector partners and urban residents to focus on a shared set of core guiding principles for the responsible use of smart city technologies.”

Moreover, 

“The Alliance partners with international organizations and city networks to source tried-and-tested policy approaches to these technologies. Our institutional partners represent more than 200,000 cities and local governments, companies, startups, research institutions, and civil society communities. The World Economic Forum serves as the Alliance's secretariat.”

In other words, the WEF will govern smart cities being developed. Did we vote for this? It’s important to note that this announcement came within two weeks after the WEF had announced a strategic partnership with the UN to ensure the SDGs were met. The WEF and its affiliates would provide the private sector coordination and funding as part of this partnership. 

The SDGs also include the development of digital IDs. Furthermore, the WEF and its affiliates used the pandemic to test digital IDs. Alongside this initiative, the WEF also began testing smart cities with the G20 Global Smart City Alliance. In November 2020, the alliance announced 36 so-called pioneer cities from 22 countries worldwide that would participate in a study to understand how the WEF can best govern smart cities. 

That same year, the WEF announced it would begin developing smart cities in Japan, Latin America, and India. If you're wondering why Japan is on the list, it’s because the G20 WEF Alliance was formed during Japan's G20 presidency. Japan's interest in smart cities comes from its own Society 5.0 initiative, which was announced in 2017. 

For many, the Society 5.0 initiative is a terrifying concept; as UNESCO describes it, “Japan’s new blueprint for a super-smart society, Society 5.0, is a more far-reaching concept than the Fourth Industrial Revolution, for it envisions completely transforming the Japanese way of life by blurring the frontier between cyberspace and the physical space.” Note that the Fourth Industrial Revolution is another initiative by the WEF.

The Pioneer City study concluded in July 2021, and the key findings were everything you'd expect. Almost no government accountability, almost no cybersecurity standards, and virtually no privacy. Very little accommodation for people who aren't plugged in and almost no transparency about data use. 

Despite these disastrous results, the WEF continues to work on the “governance” of over 80 smart cities being developed in Japan, Latin America, and India. In May 2022, the WEF announced, "The alliance is planning to launch more networks in Asia, the Middle East, and Africa.” 

One can even argue that the WEF used the pandemic to develop smart cities because the May update specifies that “The Global Smart Cities Alliance on Technology Governance is led by the Forum’s platform for Shaping the Future of Urban Transformation, established during the pandemic. 

Which Cities Will Convert?

Now, if you're wondering which cities will be converted into smart cities and controlled by the WEF, the short answer is all of them. This is simply because the UN's SDGs require all 193 member countries to introduce smart cities by 2030. As such, the only question is when cities will be under the WEF’s control. The goal is to turn every city into a smart city by 2030, but it looks like the WEF and its UN affiliates are rolling out smart cities, one region at a time. 

So right now, the WEF is working on Japan, Latin America, and India and will soon be working on Asia, the Middle East, and Africa. More to the point, except for Japan, the WEF is currently focused on building smart cities in developing countries. This is probably because populations in poorer countries are easier to control and because these populations are begging for some usable infrastructure. 

The most prominent smart cities initiative in a developing country appears to be the one from India mentioned earlier. The smart cities mission of 2015 sought to turn 100 cities across India into smart cities. An August 2021 update notes that Delhi and Nagaland have completed over 70% of their projects, making them the smartest cities to date. While another seven states – Rajasthan, Gujarat, Karnataka, Madhya Pradesh, Goa, Tripura, and Andhra Pradesh – have finished 50-60%. However, many other states/UTs are not performing well. Meghalaya has not completed even a single project.

It makes one wonder when the WEF will shift its smart cities focus to developed countries in places like North America and Europe. It will probably happen once the WEF has experimented enough on developing countries to know how to roll out smart cities without causing a full-scale revolution. That said, some countries in developed regions are not so subtly working with the WEF already. 

The largest smart cities initiative in a developed country comes from the European Union (EU). In September 2021, the EU announced its 100 climate-neutral and smart cities by 2013 mission. In April 2022, the complete list of participating cities was revealed. It’s worth mentioning that the EU’s list doesn't only include major cities; it also includes smaller towns and regions of only 100,000 people. It raises the argument that many may have only signed on because the EU will give €360 million to participants. 

According to the McKinsey report, the smartest cities in Europe in 2018 were Stockholm, Amsterdam, and Copenhagen. The same report notes that New York City, San Francisco, and Chicago were the smartest cities in the United States in 2018. 


Screenshot source: McKinsey report

According to the Smart Cities Index, the smartest cities in 2021 were Singapore, Oslo, and Zurich. The only issue they had was housing. However, this is not the only issue associated with smart cities, and the evidence so far suggests the WEF’s mission will fail. 

A WEF Victory Hangs In The Balance

Believe it or not, the most significant pushback to the WEF smart cities has come from individuals and institutions aligned with the WEF on most other issues. This is because of the use of smart city data for criminal investigations, which you'll recall was highlighted in the Wikipedia definition above. 

These critics have pointed out that smart city data tends to result in the over-policing of specific groups, which goes against the equitable principles of the smart cities concept. This is a bigger deal than you think because the primary benefit of smart cities is crime reduction, at least according to McKinsey. The 2018 smart cities report states, “Incidents of assault, robbery, burglary, and auto theft could be lowered by 30% to 40%.” 

On top of these metrics are the invaluable benefits of giving residents freedom of movement and peace of mind. This is the largest chunk of the overall benefit. Otherwise, pro-WEF critics are also concerned about sharing personally identifiable data. Remember Google's smart city subsidiary, Sidewalk Labs? Their first project was a smart city in Toronto, Canada. The project was shut down in early 2020 after the privacy commissioner resigned in protest. It happened around the time that the average Indian citizen started to become skeptical of the country's smart cities mission. 

By 2020 all the 100 cities selected were supposed to be smart cities. However, only a handful have met the necessary criteria, and there continued to be headlines about delays and corruption. In 2021, some public sector institutions started to oppose smart cities, with Yale University publishing an article titled “Why the Luster on Once Vaunted Smart Cities Is Fading.” The article explains how cities built from scratch to be smart have failed and have been a waste of time and money.  

At the same time, other public sector institutions started to study why smart cities were failing so miserably. Lo and behold, most of these studies focused on the fact that smart cities are at odds with the ambitious social justice goals many smart city types support even more. 

It's not just the public sector either; institutions in the private sector are starting to realize that the cost of rolling out the surveillance infrastructure required is not worth the estimated gains, especially if personally identifiable data can't be sold. Without the private sector on board, smart cities will fail. 


Source: Youtube

One of the best articles yet about the failure of smart cities is titled “Why smart cities aren't the future.” It was published in December 2022 by journalist David Sax, who wrote a book about why smart cities suck, citing, “As many smart city solutions fail to live up to the hype, here’s why the future could rest in analog innovations, not technological ones.”

David refers to Burcu Baykurt, who teaches urban futures and communications at the University of Massachusetts and is the author of the forthcoming book titled  “The City as Data Machine,” which is currently under embargo till April 2024. 

She looks at the legacy of a smart city project Google and Cisco attempted in Kansas City, starting back in 2016, stating that the plan was to attempt a test bed downtown, using sensors, advanced cameras, public Wi-Fi networks, and digital kiosks to connect all sorts of city services and improve them for the mostly poorer Black and Latino residents of the area. The data would reveal gaps in parking, transportation, and policing, which would lead to quicker and better solutions by city staff.

In other words, it was supposed to be the textbook smart city, but here's what actually happened; Burku Baykurt concluded,

”To be honest, it doesn't change much. The hype mobilizes a lot of people. There seems to be change going on. Breathless proclamations are made. Articles are written. Politicians take photos with executives. But in the end, the data is just that: lots of data. And in the Kansas City case, the solutions proposed from that data were so impractical and disconnected from reality (driverless cars and drones rather than buses and more police patrols) that the project quietly died after a few years.”

David ends his article with a fantastic quote, which just so happens to touch on the primary issues that continue to plague the smartest of smart cities, 

“The future of cities lies not in making cities obsolete by upending them through digital utopianism but in doubling down on the analog things that have always made cities great: housing opportunities, economic and cultural diversity, vibrant public spaces, a mishmash of humanity.”

Why Smart Cities Will Fail

In sum, the WEF’s smart cities will fail because they can't appease their ideological allies and cannot coordinate the creation of smart cities from the top down. Never mind that the average person doesn't want to live in a dystopian smart city that the WEF governs. However, this doesn't mean that the folk at the WEF aren't going to try. 

This article about how to resist the great reset explains that the WEF is trying to take control of cities, states, and governments using its network of 10,000 young global leaders and shapers who are being maneuvered into positions of power. 

So be on the lookout for these individuals, as well as any institutions they are associated with. They'll be easy to spot because they will be the ones pushing for digital ID, CBDCs, online censorship, carbon credit scores, smart cities, and all the other UN SDGs the WEF is trying to implement. Also, note that ESG criteria are synonymous with SDG criteria. 

All this information can be overwhelming, so here’s a short video to lighten the mood and have a bit of a laugh. 

As the old saying goes, “Don't be scared, be prepared.” What prepared means varies from person to person, but an excellent first step is being informed. A good second step is telling others who are willing to listen. After that, the rest is up to you. 

 

 

Editor and Chief Markethive: Deb Williams. (Australia) I thrive on progress and champion freedom of speech. I embrace "Change" with a passion, and my purpose in life is to enlighten people to accept and move forward with enthusiasm. Find me at my Markethive Profile Page | My Twitter Account | and my LinkedIn Profile.

 

 

 

 

 

 

Crazy Battle between Securities and Commodity Hangs Crypto in a Regulatory Limbo

Crazy Battle between Securities and Commodity Hangs Crypto in a Regulatory Limbo 

Welcome to the fascinating world of cryptocurrencies, where digital assets have emerged as a disruptive force within the financial ecosystem. However, navigating the regulatory landscape surrounding these innovative forms of currency can be a bewildering experience. Despite their name, regulatory bodies like the Internal Revenue Service (IRS) do not recognize cryptocurrencies as currencies. Instead, they are often categorized as property, which has significant implications for taxation.

Simultaneously, the Securities and Exchange Commission (SEC) has raised concerns about initial coin offerings (ICOs) and their potential classification as securities. This has led to discussions around registration requirements and investor protections in the realm of cryptocurrencies. As a result, the emergence of cryptocurrencies has not only challenged traditional definitions and classifications of commodity and currency but has also blurred the lines between traditional financial instruments and these new digital assets.

Whether you are an investor looking to navigate the legal complexities of the crypto space or simply curious about the evolving nature of digital assets, this article aims to unravel the intricacies of the crypto landscape and shed light on how cryptocurrencies fit into existing regulatory frameworks. By exploring the classifications of cryptocurrencies as securities and commodities, we hope to provide you with a deeper understanding of their implications and the broader impact on the financial world.

Understanding Traditional Assets

To navigate the complex world of assets, it is essential to grasp the classifications established by regulatory agencies like the IRS, CFTC, and SEC for tax and regulatory purposes. While some definitions rely on legal precedents, such as the renowned Howey Test for securities, others may vary across regulatory bodies. Nonetheless, gaining a fundamental understanding of traditional assets is crucial before delving into the cryptocurrency spectrum.

There are three primary categories into which financial assets are typically grouped:

1. Real Estate:
Real estate, as a category of traditional assets, encompasses the land and any structures or improvements attached to it. This includes residential homes, commercial buildings, factories, warehouses, and even natural resources like minerals or water rights associated with the land. Real estate encompasses the tangible, physical properties and resources tied to a specific location.

When purchasing real property, certain fees and additional expenses contribute to the overall cost basis of the property. Specific rules and deductions apply to your taxes when dealing with real estate. By understanding the intricacies of real estate, including the costs involved in property transactions and the tax implications of property ownership, individuals can make informed decisions when buying, selling, or investing in real estate assets.

2. Securities:
Securities are financial instruments that represent ownership or a stake in a company or entity. They include familiar assets like stocks, bonds, and derivatives. The Securities and Exchange Commission (SEC) is the regulatory body overseeing securities in the United States. To shed some light on the legal aspect, in a significant court case called SEC v W. J. Howey Co. in 1946, U.S. securities law defined securities as "investment contracts."

In simple terms, when someone invests in a security, they expect to profit solely from the efforts of the issuer or a third party involved. These profits can come from selling the security at a higher price, receiving dividends, or earning interest. This landmark case established the "Howey test." It was utilized in various SEC enforcement cases, including disputes involving tokens like Ripple's XRP and the creators of NBA Top Shot, a digital marketplace for sports collectibles known as non-fungible tokens (NFTs).

3. Commodities:
Commodities refer to physical goods traded in large quantities on specialized exchanges. They can include agricultural products like corn and wheat and precious metals like gold and silver. Their current market price typically determines the value of commodities. The Commodity Futures Trading Commission (CFTC) oversees certain aspects of commodities trading in the United States.

However, it's important to note that the CFTC's regulatory authority primarily covers wrongdoing related to commodities futures trading rather than spot trading, which involves immediate transactions of physical goods. Spot trading of commodities doesn't fall under the CFTC's direct jurisdiction like securities do under the SEC.

As the popularity of crypto assets continues to soar, questions arise regarding how these conventional asset categories apply to the growing realm of digital assets.

Cryptocurrencies challenge the traditional notions of physical-focused assets, prompting regulators to adapt their frameworks and policies to encompass these innovative financial instruments. Consequently, exploring the distinct characteristics and implications of digital assets within the context of existing asset classifications becomes imperative.


Image source: Crypto.news

Why the Classification of Cryptocurrencies Matters

To truly grasp the different categories that crypto-assets fall into and how it impacts their regulation, it's essential to understand the meaning behind the Howey Test. The Howey Test has emerged as a widely respected method to classify these assets, and it does so by posing these fundamental questions:

1. Is money being invested?
2. Is there an expectation of earning a profit from the investment?
3. Does the investment involve a common enterprise?
4. Are profits generated through the efforts of others?

If a cryptocurrency meets all four criteria outlined in the Howey Test, it is considered a security. This means that promoters are actively marketing these tokens, while investors anticipate earning profits primarily through the efforts of others. SEC Chair Gary Gensler emphasized this point in a statement on September 8, emphasizing the prevalence of token sales where the public expects profits based on the actions of others. By understanding these criteria, individuals can gain insights into how crypto-assets are classified and regulated under the Howey Test.

If a cryptocurrency is classified as a security, it means that the issuers and exchanges of that cryptocurrency must obtain licenses from securities regulators. However, getting these licenses can be pretty challenging, which is why the crypto industry puts a lot of effort into ensuring that their cryptocurrency sales and projects comply with securities laws.

Issuers try to avoid violating securities regulations by focusing on decentralization. If a cryptocurrency is developed in a way that doesn't have a central group driving up its value, it becomes less likely to be seen as security by regulators. This is why decentralized finance (DeFi) projects work towards decentralizing their development efforts and splitting governance through decentralized autonomous organizations (DAOs). 

They also utilize mechanisms like proof-of-stake as a consensus mechanism. The argument behind this approach is that if people are both investors and actively participate in the project's growth, such as by staking the coin or voting in DAO decisions, they are no longer solely reliant on a third party to generate returns, as required by the Howey test.

The risk of classifying cryptocurrencies as securities is that exchanges may choose not to list them to avoid being fined by the Securities and Exchange Commission (SEC) for trading unregistered securities. Cryptocurrencies may face state-specific rules and regulations. For instance, the New York Attorney General filed a lawsuit against KuCoin, and multiple state regulators have teamed up to target a coin featuring Elon Musk's image called TruthGPT Coin. These cases highlight the potential legal complications that can arise.

The SEC has provided guidance on initial coin offerings (ICOs) and digital assets. In their framework for the investment contract analysis of digital assets, the SEC emphasized factors such as the speculative nature of many ICOs and their lack of utility as payment or store of value, which could lead to these coins being classified as securities. Kik, an ICO project, faced legal consequences when its CEO said buying its tokens would result in significant profits. The SEC sued Kik, and the company was fined $5 million, nearly pushing them to bankruptcy.

Conversely, the Commodity Futures Trading Commission (CFTC) argues that cryptocurrencies like Bitcoin and Ether are commodities and can be regulated under the Commodity Exchange Act (CEA). The CFTC's rationale is based on the fact that cryptocurrencies like Bitcoin are interchangeable on exchanges, just like sacks of corn of the same grade have the same value. This determination was reinforced in the CFTC's case against Bitfinex, a crypto exchange, and Tether, a stablecoin issuer, where the agency stated that digital assets like Bitcoin, Ether, Litecoin, and Tether are all commodities.

Determining whether cryptocurrencies fall under the classification of securities or commodities has significant implications for their regulation. It affects licensing requirements, listing on exchanges, compliance with securities laws, and potential legal consequences. These classifications shape the regulatory landscape and play a vital role in how cryptocurrencies are treated within the financial ecosystem.


Image credit: Markethive.com

Where Things Stand in The Ongoing Regulatory Debate

The regulatory landscape for cryptocurrencies is constantly evolving, and it's challenging to predict how it will look in the future. Various stakeholders and factors are involved, making it a complex situation. In the United States, Congress has made efforts to grant the Commodity Futures Trading Commission (CFTC) broader authority to regulate the spot trading of non-securities tokens. Among these tokens, Bitcoin is currently the only one that both agencies, the CFTC and the Securities and Exchange Commission (SEC), openly agree on its classification.

One possible outcome of this ongoing debate is that specific cryptocurrencies may be classified as securities while others are treated as commodities. This would create an even more intricate regulatory landscape where different cryptocurrencies are subject to different rules and regulations.

Alternatively, lawmakers could establish crypto as its distinct asset class, introducing tailored regulations specifically for cryptocurrencies. This approach is largely followed by the European Union, which has implemented the Markets in Crypto Assets (MiCA) regulation. MiCA outlines steps that crypto issuers, wallet providers, and exchanges must follow to protect consumers and ensure fair trading.

However, even with these regulations in place, there may still be some legal areas that need to be addressed on a case-by-case basis. For example, determining whether a particular series of non-fungible tokens (NFTs) must adhere to specific rules. As the discussions continue and regulatory bodies navigate the complexities of cryptocurrencies, it remains a dynamic and evolving landscape with ongoing developments that will shape the future of crypto regulation.

Controversial Guidelines on How Cryptocurrencies Are Classified

The classification of cryptocurrencies has been a contentious issue, with different U.S. regulatory agencies offering their own definitions. The Securities and Exchange Commission (SEC) labeled cryptocurrencies as securities, considering them investment assets that generate returns. This categorization was based on federal security laws and the belief that anything traded on an exchange qualifies as a security, including cryptocurrencies.

However, the Commodity Futures Trading Commission (CFTC) took a different approach. Following a court ruling.pdf, the CFTC gained the authority to regulate digital currencies as commodities, treating them similarly to products like coffee and oil.

Additionally, the Internal Revenue Service (IRS) defined cryptocurrencies as taxable property for federal tax purposes, adding another layer to the classification debate.

Two other agencies, the Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN), also provided their guidelines. OFAC considered digital currency on par with fiat currency, while FinCEN categorized cryptocurrencies as a form of money. These distinctions diverged from other agencies' commodities, property, or asset classifications.

These conflicting definitions within the same government highlight the challenge businesses face in legally classifying cryptocurrencies. However, efforts have been made to bring more clarity. For example, the SEC clarified that it does not consider Ethereum and Bitcoin securities but focuses on Initial Coin Offerings (ICOs). While there is an ongoing debate, this statement narrows the understanding of cryptocurrencies within the United States.

The different classifications can create confusion for businesses, which may struggle to understand which regulations apply to them. This confusion can lead to legal risks if companies fail to comply with the appropriate regulations. It can also discourage some businesses from entering the cryptocurrency market due to the uncertainty and complexity of regulations.

Moreover, the classification can impact innovation in the crypto industry. If a new cryptocurrency is classified as a security, it may deter innovation due to the stringent regulatory requirements. Conversely, if classified as a commodity, it may encourage development due to the relatively less strict regulations.

However, it's important to remember that the regulatory landscape for cryptocurrencies is still evolving, and changes may occur in the future that could affect crypto businesses. Therefore, it's crucial for companies to stay updated on the latest regulatory developments and seek legal advice to ensure compliance.

Classifying cryptocurrencies as securities or commodities is complex, with significant implications for investors and regulators. As the cryptocurrency market continues to evolve, it may be necessary to reevaluate and refine these classifications to reflect this asset class's unique nature accurately.

While the current classifications provide some clarity, they also highlight the need for a more nuanced regulatory framework to accommodate cryptocurrencies' distinctive characteristics. This is a challenge that regulators worldwide will need to address in the years to come.

This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

 

 

About: Prince Ibenne. (Nigeria) Prince is passionate about helping people understand the crypto-verse through his easily digestible articles. He is an enthusiastic supporter of blockchain technology and cryptocurrency. Find me at my Markethive Profile Page | My Twitter Account | and my LinkedIn Profile.

 

 

 

 

UPDATE: Phase Three of the Markethive Wallet Completed Version Now Installed On Markethive What’s Next?

UPDATE: Phase Three of the Markethive Wallet. Completed Version Now Installed On Markethive. What’s Next?

Since Phase Two of the wallet has been integrated and working successfully since November, it’s time to introduce Phase Three. The completed wallet has been installed on the Markethive site. Phase Three is the final stage of the wallet that is now operational for Entrepreneur One (E1) members in a type of Beta version, if you like, before it officially opens to the Markethive community. 

This is a culmination of 5 years of intense early work to reach this point, and we are on that cusp. E1s can currently view the new look of the wallet, particularly the Hivecoin Report. Markethive’s engineers are now systematizing the other fundamental components needed for a synchronous and successful wallet launch. These are the Entrepreneur One Exchange, Markethive Premium Upgrade, and the PROMOCODE system, housed in the new capture page for MARKETHIVE.NET and is for E1s only. 

The non-E1 KYC-approved members will see the banner announcement pictured below until its full release. They also have the opportunity to upgrade to Entrepreneur One to gain early access and take advantage of all the benefits offered, including becoming a shareholder by securing the ILP (Incentivized Loan Program), which will pay a monthly dividend on the net profit of Markethive’s revenue. 

Google Authentication – 2FA Is Moving

One specific adjustment that Markethive will apply is the 2FA. Instead of it being required to log in to Markethive, the 2FA will be moved to the wallet. KYC Application has also been relocated to the Security section of the wallet. Soon, you will find 2FA with the KYC Application and Wallet Security housed under the Security Tab listed in the wallet. 

Until you activate 2FA Google Authenticator, access to the different wallet functions will be restricted. Many exchanges operate similarly. However, Markethive is more than an exchange, so Markethive’s commitment to getting the KYC, ILP, and the complete back-end security totally polished is of the highest priority. 

Along with this change, new signups will be able to utilize the Markethive tools for a short time (30 days). In other words, give it a test drive. However, they won’t get the airdrop or qualify for the micropayments until they are KYC’d. They will be prompted to complete the KYC/2FA process immediately upon joining Markethive to activate these incentives and gain access to the Hivecoin wallet. Failing to do so will result in the termination of their account after 30 days. This process will eliminate abandoned accounts. 

On a related topic, another change is that old accounts that have not been logged into for an extended period will not be terminated. 

Markethive is delivering a bank, not an exchange per se. We are an ecosystem with Markethive Credits, ILPs, Markethive Tokens, or MHVs, used internally for micropayments and the Hivecoin (HVC) with a total supply of 45 million. All these components have value and are the DNA of Markethive, so its security is paramount. Markethive is also working on eliminating all 3rd parties that could disrupt the operations of Markethive. We have already relocated to our sovereign cloud systems and servers. 

Ultimately when the new dashboard is integrated, very little of Markethive’s systems will operate until you complete KYC and 2FA. It will be mandatory to carry out the KYC process and be approved to access the wallet. In the near future, only KYC-approved members will have access to all the services in Markethive, including free members. Until KYC is approved, free members can only observe and comment on the main news feed. 

It’s important to remember that in Markethive’s case, KYC is for the community’s benefit of knowing who they are engaging with and not for governmental regulations, unlike exchanges and others.  It assures Markethive members that you are a real person, dedicated to honest and transparent relationships in business and socially. The purpose is to have an active, dynamic, and secure “hive of people.” Note that once KYC is approved, the documents uploaded to attain approval are all deleted; Markethive does not keep these documents. 

The short selfie video required in the Markethive KYC protocol is kept for the purpose of retrieving access to your account. In the event that you lose your device and the 2FA app required to utilize your Markethive wallet or any other service that requires KYC, the admin will be able to verify you with the video they have. All you’ll need to do is make a video requesting access to your account with the reason why you lost access. 

The video prerequisite is another layer of security to prevent your account from getting hacked. It also prevents members who have signed up but are not verified from hacking or spoofing.   

Coin Storage and Reports

The wallet has two coin storage balances: the Hot Wallet Balance and the Cold Storage Balance. The cold storage part of the wallet is a very secure one-way system. It requires a tremendous amount of authentication to retrieve coins from the cold storage balance and transfer them to your hot storage balance.  

Members who are KYC-approved but have yet to upgrade to either the Premium Upgrade (coming soon) or the Entrepreneur One (currently available) will have a limited withdrawal amount of 0.01 HVC from their cold storage per day. There will be no limit to sending HVC from your Hot Wallet to your chosen self-custody wallet. (Exodus, Phantom, Atomic, etc.) 

The amount of HVC that can be transferred from cold storage to the hot wallet will be unlimited for the E1s. Markethive recommends that once you’ve moved your coins from cold storage to your hot wallet, you move them into your personal 3rd party wallet. E.g., Exodus, Phantom, Atomic, et al., or whatever you determine what wallet is best for you. 

Hivecoin (HVC) is a Solana token but has not officially had the name assigned yet. E1s with early access who want to give the system a test run will need to acquire a specific type of wallet, set up the Hivecoin Meta address, and give it the name HIVECOIN to list it in that wallet. 

HIVECOIN's META address is: APRXuct2fy7yXeSPcS5r4pTdh6P34xhqj1Pio1dyc1j6

There is a Beta group of E1s currently testing it. However, there has been some difficulty in achieving this for some, at this time, including myself; however, you can try it. The Phantom wallet is recommended for Beta until we reach the threshold of having HVC officially named and available to list on various self-custody wallets.  To learn more about self-custody wallets, go here

Please be aware that this takes time, but once it’s done, it’s set in stone if you like, so it has to be incredibly secure and compliant. It needs to be streamlined before the floodgates open. 

Projects In The Works

Several projects are now in the works and will be timed to release at the end of the 30-day Wallet launch announcement. 

Markethive.net Website and Promocode

One of the components and fundamentals required before the wallet’s final release is the Markethive.net Promocode website. The comprehensive website includes navigational links to white papers on many aspects of Markethive and is exclusive to the Entrepreneur One Status.  

The white papers listed include the Role of Community, Markethive Broadcasting, Business Liability, Inbound Marketing, The ILP,  and the Traffic Report. The E1 members will be given promocodes for an incentive with an offer of the Markethive products, such as The Boost or Wheel of Fortune, impressions, and tokens.

The countdown ticker on the website homepage will align with the official launch of the wallet and be the focus of a marketing campaign prior to the release. 

The Premium Upgrade

The Premium Upgrade is another component on the table to be released at the end of the 30-day countdown to the final launch of the wallet. It is aimed at free members who want to take advantage of the many features and benefits that will accelerate their earnings and results. The upgrade has five price levels starting at $9.95 per month. You can find out more about the Premium Upgrade here

Notably, the revenue generated from the Premium Upgrade initiative is primarily income, meaning the ILP holders can look forward to the dividends of their ILP shares.

The Entrepreneur One Exchange 

Another project in the works is the E1 Exchange. (E1X) Upon the final launch of the wallet, the Entrepreneur One Upgrade will not be available for any new or free members from the Markethive administration. However, they can be acquired through our E1X. Here are the preliminary specifications for sellers and buyers. 

Seller Specifications

  • The seller must have an active Entrepreneur One or more than one to sell.
  • The seller can only list E1 accounts singularly. Cannot sell E1s in batches of 2 or more.
  • The seller sets a reserve price. If the reserve price is met by bid or offer, the E1 sells.
  • When an E1 account sells, it automatically transfers to the buyer.
  • When an E1 transfers, it does not include the already earned ILPs or coins.
  • When an E1 sells, it does carry the earned months toward the ILP yearly award.
  • The seller decides what currency is accepted.
  • The currency the seller can set is Markethive Credits, Hivecoin, Bitcoin, and Solana.
  • Listed E1s for sale reveal the earned months towards the ILP yearly reward.
  • The seller decides to run an auction, buy it now, or both.
  • The seller decides to set a "reserve" or “Buy It Now” price or no reserve open offer.
  • Auction bids run for seven days.
  • Buy it now runs for ten days.

Buyer Specifications

  • The buyer must be KYC approved.
  • The buyer can bid against others bidding in an auction.
  • The buyer can make an offer if the auction has no previous bids.
  • If the offer meets the reserve or exceeds, the sale occurs.
  • All sales are final.

Site Specifics

  • New sale offers list at the top. Most recent first, oldest last.
  • Listing can be sorted with the lowest price
  • Listing can be sorted with the highest price

As the Markethive community, we must understand that Markethive’s services, vault loads, accounting, security, and privacy, are all found in the wallet. So Thomas has made a draft video for the new up-to-date wallet. 

WALLET ORIENTATION DRAFT 01

What’s Next?

  • The "new" News Feed
  • Our own Web Conference Rooms
  • The "new" PageMaker
  • The "new" Dash Board

Markethive’s Proactive Innovation (AI)

On another crucial topic, Artificial Intelligence (AI) has become more prominent and prolific recently, with many unwittingly enamored by the concept. However, the reality is, it’s a double-edged sword for humanity that could bring about significant positives and disastrous consequences. The risk of bad actors using it to create chaos, increase the spread of propaganda and untruth, and even seize all computing and weapons systems is very real and extremely dangerous. The threat of AI taking on a life of itself is staggering.  

CEO of Markethive, Thomas Prendergast, expressed that you will not see artificial intelligence at Markethive! In a very heartfelt message, he explained that it is ungodly, threatens your well-being, and seriously violates your privacy and security!

What will you find?

Proactive Innovation.

“Think of it as advanced robotic systems, very complex and sophisticated capabilities controlled by you. Or a limited (AI secured) within the confines of our programming and only developed to produce the results of a well-oiled social network of entrepreneurs who gain and affect the entire Hive. (like our coming NEW newsfeed). 

You will be able to configure and control your algorithm. Your search criteria and activity will never be captured nor sold by us at Markethive. Because you alone control it, and it is yours alone, secured and protected here at the Hive.

This is the message I received in the last few months from prayer, the innovative intuition that has been and will always be the engine at Markethive. Our artificial intelligence is Jesus Christ. Our artificial intelligence environment is the members of Markethive as a community embracing the spiritual solution to the false god of artificial intelligence.  

Hive technology uses the Hive community to shape our technologies to embrace our environment, chart our course and perceptions, and solve our problems with the singular goal of serving the Lord.”

In closing

There will be notifications and floating banners (above) to provide ample awareness of when the 30-day countdown for the official launch of the wallet will commence. That will be your last chance to secure lifetime residual returns with the Entrepreneur One Upgrade with ILP shares. 

All updates and orchestrations are discussed at the Markethive meetings every Sunday at 10 am Mountain Time. (MST)  You can keep yourself up to date with the latest news and developments of Markethive as they happen. To access the meeting room, go to the Markethive Calendar and click on the link provided.

We are so blessed to be part of Markethive as it stands tall and robust, providing a sanctuary for all entrepreneurs in such a dark world. Light will prevail, and Markethive will thrive and prosper to uplift and free every living soul into a life of whole-hearted humanity and abundance on every level. Exciting times are just around the corner. Praise the Lord, our Divine Architect. The fruits of the harvest with the best of humane technology will be at Markethive. You wouldn’t want to be anywhere else! 

 

 

Editor and Chief Markethive: Deb Williams. (Australia) I thrive on progress and champion freedom of speech. I embrace "Change" with a passion, and my purpose in life is to enlighten people to accept and move forward with enthusiasm. Find me at my Markethive Profile Page | My Twitter Account | and my LinkedIn Profile.

 

 

 

 

Also published @ BeforeIt’sNews.com; Steemit.com; Substack.com

 

US Crypto Upheaval Leads to Surprising Boon for Lucky Regions

U.S. Crypto Upheaval Leads to Surprising Boon for Lucky Regions

The U.S. crypto space is in chaos. In recent years, the world has witnessed a rough journey for cryptocurrencies, with their popularity surging to unprecedented heights. However, once a hotbed of crypto innovation, the United States now grapples with a clear regulatory framework. It has become hostile that necessitates a crypto exodus in the country. As the U.S. SEC hostility becomes too much to bear, which other jurisdictions are poised to attract entrepreneurs, builders, and innovators in the FinTech and crypto space?

While causing concerns within the country, this crypto fiasco has inadvertently paved the way for other regions to emerge as potential beneficiaries of the evolving crypto landscape. In this article, we will explore the regions poised to experience Crypto Bliss in the wake of the U.S. crypto fiasco.

Europe's proactive regulations, Asia's crypto-friendly environment, and the global nature of decentralized finance collectively shape a new era of innovation and adoption. As the crypto landscape continues to evolve, these regions will likely play a pivotal role in shaping the future of cryptocurrencies and blockchain technology, opening doors to a world of new possibilities.

Implications of Strict U.S. Crypto Regulations

The implications of U.S. crypto regulations are far-reaching and complex. On the one hand, regulation can provide clarity and legitimacy to an industry plagued by Fear, Uncertainty, and Doubt (FUD). On the other hand, regulation can stifle innovation and limit access to new technologies.

One of the most significant implications of U.S. crypto regulations is that they have created a patchwork of laws that vary widely from state to state. This makes it difficult for companies dealing in cryptocurrency to operate across state lines. For example, New York has implemented BitLicense, which requires companies dealing in cryptocurrency to obtain a license from the state.

Alabama requires a license for selling or issuing payment instruments, stored value, or receiving money or monetary value for transmission. Arizona, Arkansas, and Connecticut have no specific cryptocurrency laws but have issued guidance on the subject. California and Colorado have a licensing requirement for businesses that engage in virtual currency activities. 

The lack of uniformity in regulations hampers the growth and development of the crypto industry, as companies must navigate a maze of compliance requirements and legal frameworks. This adds complexity and costs to their operations and creates uncertainty for investors and consumers.

Moreover, U.S. crypto regulations directly impact the global crypto market. The United States is one of the largest cryptocurrency markets, and any regulatory changes or restrictions can have ripple effects worldwide. For instance, when the U.S. Securities and Exchange Commission (SEC) took a stringent stance on initial coin offerings (ICOs) and classified specific tokens as securities, it sent shockwaves through the industry and influenced regulatory decisions in other countries.

Another implication of U.S. crypto regulations is their effect on investor protection. While regulations aim to safeguard investors from scams and fraudulent activities, they can also restrict access to certain investment opportunities. For example, the SEC has imposed strict accreditation requirements for investing in certain crypto assets, which can exclude retail investors from participating in potentially lucrative ventures.

Furthermore, U.S. crypto regulations impact financial institutions and traditional banking systems. As cryptocurrencies gain mainstream acceptance, banks and financial institutions are increasingly exploring ways to integrate crypto-related services into their offerings. However, the regulatory landscape can be a significant barrier for traditional institutions looking to enter crypto. Complex compliance requirements, potential legal liabilities, and the risk of non-compliance with anti-money laundering (AML) and know-your-customer (KYC) regulations pose challenges for banks, inhibiting their ability to embrace cryptocurrencies fully.

The U.S. crypto regulations' impact on the broader economy should not be overlooked. The crypto industry has the potential to drive economic growth, create jobs, and foster technological innovation. However, overly burdensome regulations can hinder these positive outcomes. By balancing regulation and fostering innovation, policymakers can create an environment that encourages responsible growth and positions the U.S. as a global leader in the crypto space. Still, unfortunately, the reverse is the case.

Uncertainty in the Crypto Space

It is quite notable that even before the emergence of Operation Chokepoint 2.0.pdf, the Securities and Exchange Commission (SEC) had not approved any Bitcoin Exchange-Traded Funds (ETFs). This lack of approval is significant, considering ETFs are key players in market liquidity.

Instead of approving such ETFs, regulators have chosen to drain liquidity. Crypto-friendly banks like Silvergate and Signature were the first to face repercussions. However, the circumstances surrounding their fall were viewed with suspicion, leading lawyers from Cooper & Kirk to suggest that it reflected regulatory overreach targeting the crypto industry.

Throughout 2023, the SEC has been taking aggressive action. The regulatory watchdog has filed complaints against Bittrex, Kraken, Gemini, and Paxos. Binance.US and Coinbase have also been targeted in a culmination of these actions. 

By charging Coinbase as an unregistered securities exchange, the SEC has opened up a wave of legal uncertainty. It is worth noting that the SEC had previously approved Coinbase's underlying business model, a prerequisite for the company to go public under the ticker COIN in April 2021. However, as Coinbase expanded its range of crypto offerings, the SEC now views some of them as "crypto asset securities."

Simultaneously, the SEC needed to provide clear guidance when previously requested, which appears to be a deliberate strategy to establish rules through enforcement in the absence of proper legislation. While Coinbase is taking the SEC to court to seek clarification on securities, the damage has already been done.

In response to the legal uncertainty, Robinhood has announced that it will delist major cryptocurrencies like Cardano (ADA), Solana (SOL), and Polygon (MATIC) on June 27, with the possibility of more delistings based on the SEC's interpretation. Binance.US has halted all USD deposits, and Crypto.com is closing its institutional exchange.

As a result of this legal uncertainty, there has been a significant outflow of liquidity, leading to a $55 billion shrinkage in the total cryptocurrency market cap. Given the increasing fear, uncertainty, and doubt (FUD) in the U.S. crypto space, it raises the question of which crypto-friendly regions will most benefit from this situation.

European Union (EU)

Despite officially entering a recession, the Eurozone is the first major region to establish a comprehensive legal framework for digital assets. Eurostat data reveals that the Eurozone accounts for approximately 14% of global trade, putting it alongside China and the U.S. as the top three players in the market.

The E.U.'s Market in Crypto-Asset (MiCA) regulations are set to come into effect between June and December 2024. This regulatory clarity has prompted Ripple CEO Brad Garlinghouse to identify Europe as a "significant beneficiary of the confusion that has existed in the U.S." in a recent CNBC interview.

Similarly, Paul Grewal, Coinbase's chief legal officer, views the U.S. crackdown on cryptocurrencies as an "incredible opportunity" for Ireland and Europe, as stated in an interview with the Irish Independent. Years in the making, MiCA embodies a balanced and proactive approach to crypto regulation. It encourages innovation while considering financial stability and consumer protection. Here are some key highlights of the MiCA regulations:

• Digital assets are categorized across a spectrum, including e-money tokens (EMT), asset-referenced tokens (ART), crypto-assets, and utility tokens.

• Requirements vary based on market capitalization. For instance, smaller-cap and utility tokens are exempt from providing a whitepaper covering liability, technology, and marketing.

• However, suppose an ART (stablecoin) or EMT exceeds certain thresholds, such as a €5 billion market cap, 10 million holders, or 2.5 million daily transactions with a volume exceeding €500 million. In that case, they are deemed "significant" gatekeepers and fall under the Digital Markets Act (DMA) regulation.

• All crypto companies are licensed as crypto-asset service providers (CASPs), with custodians and exchanges requiring a minimum liquidity threshold of €125,000 and trading platforms needing €150,000.

• CASPs must report user transactions to maintain licenses with the European Securities and Markets Authority (ESMA). This reporting includes transfers between CASPs and self-custodial wallets if the transactions exceed €1,000. CASPs must also record the senders and recipients for hosted wallets, following the "Travel Rule."

While the increased tracking may not be ideal, it represents a significant step towards legitimizing the crypto industry. In contrast, the U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler recently made blanket statements referring to crypto investors as "hucksters, fraudsters, scam artists."

It is also worth noting that Switzerland maintains its position as an innovation sandbox while interacting with the Eurozone. This is why many prominent crypto foundations, such as Tezos and Ethereum, are in Switzerland.

Within the E.U. itself, numerous crypto companies have gained global recognition. Notable examples include the Netherlands-based options trading platform Deribit, Finland's LocalBitcoins, Lithuania's DappRadar, and Ledger, a hardware wallet provider headquartered in France.

Switzerland

Switzerland, famous for its breathtaking landscapes and precision timepieces, is quickly establishing itself as a worldwide center for cryptocurrency businesses. What sets Switzerland apart is its regulatory environment, which plays a crucial role in fueling the growth of crypto enterprises. 

The Swiss Financial Market Supervisory Authority (FINMA) has taken proactive steps to establish clear guidelines for crypto companies, offering them the legal certainty they need to operate. A prime example of this progressive mindset is the "Crypto Valley" in Zug, where numerous blockchain and cryptocurrency startups have found a home.

In 2020, Switzerland solidified its reputation as a crypto-friendly nation by passing the Blockchain Act. This legislation provides a comprehensive legal framework for distributed ledger technology (DLT) and blockchain, ensuring businesses clearly understand their legal obligations and rights.

Another key factor contributing to the success of crypto businesses in Switzerland is the country's robust financial infrastructure. With some of the world's largest banks and financial institutions, Switzerland offers crypto enterprises access to a sophisticated and mature financial ecosystem. This infrastructure, combined with Switzerland's stable economy, makes it an ideal location for businesses operating in the volatile realm of cryptocurrencies.

Switzerland's dedication to innovation and education is also vital in driving the growth of crypto businesses. Swiss universities rank among the world's leaders in blockchain research, consistently producing talented individuals for the rapidly expanding industry. Prominent institutions such as the Swiss Federal Institute of Technology in Zurich (ETH Zurich) and the University of Zurich offer courses specifically focused on blockchain and cryptocurrency, equipping students with the necessary skills to propel the industry forward.

The future appears bright for crypto businesses in Switzerland. The country's forward-thinking regulatory environment, robust financial infrastructure, and commitment to innovation will continue to foster growth in the sector. Furthermore, the Swiss government's openness to new technologies and willingness to engage in dialogue with crypto businesses indicate that Switzerland will maintain its status as a global hub for cryptocurrency innovation.

Dubai

Dubai's government has been actively working to create a welcoming environment for crypto businesses. They understand the importance of regulation and have proposed a comprehensive framework through the Dubai Financial Services Authority (DFSA). They aim to balance addressing concerns like money laundering and terrorist financing while encouraging innovation and healthy competition in the crypto industry.

The Dubai International Financial Centre (DIFC) has also taken steps to foster a crypto-friendly atmosphere. They introduced the Innovation Testing License initiative, allowing fintech firms to test their ideas in a controlled environment before launching them to the public. This approach promotes a safer and more secure environment for businesses and consumers.

Dubai's commitment to technological advancement and its Smart Dubai initiative further enhance its appeal to crypto businesses. They have recognized blockchain technology's potential and implemented it in various sectors, such as real estate, healthcare, and transportation. This integration of blockchain applications demonstrates their dedication to creating an innovative and progressive city.

Furthermore, Dubai's solid internet infrastructure, widespread mobile usage, and extensive data centers provide a strong foundation for crypto businesses to flourish. These resources are essential for the seamless operation of crypto-related activities and ensure businesses can operate efficiently and effectively.

Dubai's strategic location as a bridge between the East and the West adds to its allure as a global crypto hub. It has attracted significant crypto industry players, including renowned exchanges like Binance and blockchain startups like ConsenSys. These companies contribute to the local economy and foster Dubai's vibrant and dynamic crypto ecosystem.

Looking ahead, the future of crypto businesses in Dubai appears promising. The government's commitment to embracing blockchain technology, a favorable regulatory environment, and advanced infrastructure establish a strong foundation for sustained growth in the crypto sector. Moreover, Dubai's status as a global financial hub and its strategic location continue to attract international crypto businesses. As more companies establish their presence in Dubai, the city is on track to becoming a renowned global crypto destination.

Hong Kong

A semi-autonomous region of China has come back into the world of cryptocurrencies. Despite mainland China's ban on cryptocurrencies to ensure the smooth implementation of the digital yuan, Hong Kong has been given the green light for retail crypto trading since June 1.

However, certain restrictions exist for Virtual Asset Service Providers (VASPs) in Hong Kong. They are required to block retail traders from mainland China, and the tokens they list must possess high liquidity, be included in two major indices, and have at least one year of trading history. VASPs must also adhere to various regulations, including segregating customer assets, setting exposure limits, following cybersecurity standards, and avoiding conflicts of interest.

The decentralized finance (DeFi) sector can also flourish in Hong Kong under the Securities and Futures Ordinance, specifically the Type 7 license, with their tokens classified as either futures or securities. As a result of the new regulatory framework, several exchanges, such as CoinEx, Huobi, OKX, Gate.io, and BitMEX, have hurried to obtain VASP licenses in Hong Kong.

Interestingly, Z.A. Bank, a subsidiary of the Chinese state-owned company Greenland and the most prominent digital bank in Hong Kong, has also participated in Hong Kong's e-HKD Pilot Programme initiative. This demonstrates China's full endorsement of Hong Kong's adoption of digital assets for the foreseeable future.

Moreover, Hong Kong's tax regulations on businesses are quite favorable. While individual taxpayers are exempted from the capital gains tax, companies are subject to a single-tier tax system where corporations are taxed at 16.5% on assessable profits.

Singapore

Singapore, a highly developed city-state, has emerged as a major cryptocurrency hub in the Asia-Pacific region. One of the key reasons for this is the absence of capital gains tax, which means that individuals trading or selling cryptocurrencies are not burdened with tax liabilities.

The Monetary Authority of Singapore (MAS) classifies cryptocurrencies as "intangible property" and allows their use as a medium of exchange for goods and services. This is facilitated by homegrown payment provider Alchemy Pay, making crypto transactions relatively easy in the country.

However, it's important to note that businesses in Singapore are subject to a flat corporate tax rate of 17%. Nonetheless, Singapore offers a three-year tax exemption for start-up firms, providing them with a favorable environment to establish themselves and build credit, especially when traditional funding opportunities are limited.

Singapore has attracted major cryptocurrency players thanks to its financial stability and favorable regulations. For example, OKCoin, Coinbase, Binance, and Crypto.com have all set up offices in Singapore. Crypto.com has obtained a Major Payment Institution (MPI) license from the MAS, freeing it from certain thresholds related to its Digital Payment Token (DPT) services. This strategic move safeguards the exchange's operations amidst the SEC's tough stance on similar platforms.

In addition to its crypto-friendly environment, Singapore has been proactive in integrating artificial intelligence (A.I.) and machine learning technologies. The Ministry of Education has already developed AI-powered student learning systems, demonstrating the country's commitment to leveraging game-changing technologies.

As A.I. continues to advance and intertwine with the crypto industry, Singapore is well-positioned to become a hotspot for innovative crypto projects. Singapore's favorable tax regime, supportive regulations, and embrace of transformative technologies like A.I. make it an attractive destination for the cryptocurrency industry, drawing major players and paving the way for future developments.

As the U.S. crypto fiasco unfolds, these favorable regions offer promising prospects for the crypto industry. These regions provide supportive regulatory frameworks, fair tax policies, and a commitment to embracing emerging technologies. By capitalizing on these opportunities, crypto enthusiasts, entrepreneurs, innovators, and businesses can find their version of Crypto Bliss in these forward-thinking destinations.

This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

 


 

 

 

About: Prince Ibenne. (Nigeria) Prince is passionate about helping people understand the crypto-verse through his easily digestible articles. He is an enthusiastic supporter of blockchain technology and cryptocurrency. Find me at my Markethive Profile Page | My Twitter Account | and my LinkedIn Profile.

 

 

 

 

Crypto Regulations: The WEF Want In Recommending A Global Approach For The Crypto Industry

Crypto Regulations: The WEF “Want In” Recommending A Global Approach For The Crypto Industry 

The World Economic Forum (WEF) is notorious for having a far-reaching and perplexing influence over companies and institutions in many countries worldwide. This influence extends to the crypto industry and crypto regulations. The WEF published a crypto regulation white paper in May 2023, which is significant, so we’ll take a look at what they have to say and how it could influence the crypto legislation being proposed worldwide. We’ll also examine how it could affect the crypto market if implemented.


Image source: Weforum.com

The WEF white paper summarized in this article is titled “Pathways to the Regulation of Crypto-Assets: A Global Approach.” The white paper begins with a brief preface by a member of WEF’s Center for the Fourth Industrial Revolution. For context, WEF founder and chairman Klaus Schwab conjured up the Fourth Industrial Revolution. This concept involves replacing all of us so-called serfs with AI and Automation. Another component of the Fourth Industrial Revolution is controlling the population with technology. 

In the preface, the question is asked of how governments can control a borderless, open-source, and decentralized technology. Naturally, the only solution is a globally coordinated approach to regulation. The author of the preface reveals that the WEF has been engaging in “multi-stakeholder consultations” to understand how to roll out global crypto regulations. 

For reference, a stakeholder is a term the WEF uses to describe powerful individuals and institutions, not ordinary people like us. In this case, the author of the preface specifies that the white paper was put together with “significant contributions from members of the Digital Currency Governance Consortium.” (DCGC)

For those unfamiliar, the DCGC was formed in January 2020, including multiple crypto companies. The complete list of DCGC members is private. Still, research on the WEF reveals that Ripple, also the Ethereum company, Consensus, and USDC issuer Circle are all part of the DCGC, as are dozens of prolific personalities in the crypto industry. 

The DCGC has published five reports so far, and the WEF website notes that it is currently in phase two of its master plan, which involves assessing the economic effects of crypto, stablecoins, and central bank digital currencies. (CBDCs) 

The Key Takeaways

The next section of the white paper provides a summary of the key takeaways. Here, the authors argue that global crypto regulations are not only desirable but “necessary.” They seem to suggest this is because of the increasing connections between crypto and traditional finance. The authors explain that many things are standing in the way of global crypto regulations, including: 

  • A lack of universally accepted definitions for different types of cryptos, 
  • A lack of coordination between Regulatory Agencies 
  • Regulatory Arbitrage, meaning some countries are too pro-crypto. 

The authors highlight that many unaccountable and unelected international organizations have been working on global crypto regulations. This includes the Financial Stability Board (FSB) and the Financial Action Task Force. (FATF) The authors admit that the WEF has been in contact with these organizations but insist that academia, civil society, and crypto users will also have a say in global crypto regulations. Of course, the authors don't put a timeline on when we will have a say in this matter; but we have yet to have a say in anything. 

Why Are Global Crypto Regulations Required?

The first part of the report is about why global crypto regulations are required. The authors start by explaining what crypto assets are and include stablecoins under the definition of a crypto asset. Note that these reports seldom refer to cryptos as currencies; they believe cryptos are not currencies. That said, the authors do acknowledge that cryptos have some financial use cases. They say that this is why regulatory scrutiny around crypto has increased. 

As you might have guessed, they refer to the crash of Terra last May and the crash of FTX last November as examples of why regulatory scrutiny is justified. The authors then explain that different jurisdictions have since introduced different crypto regulations. They claim that this increases the risk to the global financial system and benefits bad actors in the crypto industry. 

They also highlight the inconsistency in crypto definitions. The authors then suggest that smart contracts could be one way of ensuring regulatory compliance. This is not surprising considering that the WEF is a massive fan of programmability in payments. Again, the WEF and its affiliates ultimately want to control what people do, and programmable payments are one way to do just that.
 
When it comes to regulating cryptocurrencies, the authors say the first step is identifying where the crypto activity is taking place, if possible. The second step is to determine who is engaging in the crypto activity, and the authors say that privacy coins, personal wallets, and DeFi protocols make this problematic. This is a worry because it implies that personal wallets will be a target of global crypto regulations. 

Although, in fairness, the authors of this white paper don't seem to be that opposed to personal wallets. That's because they know that if you buy your crypto through an exchange with KYC, it's easy to identify which wallet belongs to who with the help of blockchain analytics companies like Chainalysis.  According to the authors, the third step to regulating crypto is determining who is responsible for any crypto activity. They admit this is sometimes difficult, mainly when dealing with decentralized protocols. They note that this will become easier if DAOs become regulated entities.

Crypto And Traditional Finance Connections

In the next section, the authors dig deeper into the connections between crypto and traditional finance. They start by saying that the crypto market’s correlation to BTC's price is a sign of maturity. Now this is arguably incorrect; a decoupling between different crypto categories would be a sign of maturity. What the authors do get right, however, is that institutional interest in crypto has been on the rise. 


Image source: Finoa

They cited a series of statistics from pro-crypto sources, which should be taken with a grain of salt. Genuine institutional interest and investment will come once crypto regulations are introduced everywhere. The authors also note that retail interest in crypto is on the rise and imply that this could cause problems for financial stability. This could explain why some countries, such as Canada, closely aligned with the WEF, have started introducing restrictions on retail investors in crypto. 

Besides contagion risks, the authors correctly underscore concentration risks as another concern. The crypto market relies on a handful of stablecoins, a handful of exchanges, and even a handful of cryptos. Oddly enough, the authors claim that Layer 2s on Ethereum lower this concentration risk. This is odd because many Layer 2s still rely on Ethereum for their security, which logically increases concentration risk, never mind that many of these Layer 2s are highly centralized and backed by the same investors. 

Challenges To Global Regulation 

The second part of the white paper is about the challenges to global crypto regulation. The authors start by reiterating that the absence of universally accepted crypto definitions is the biggest problem. They propose a potential taxonomy but admit that there are exceptions to every crypto definition. They then explain that this is a problem because it makes consensus about specific crypto regulations impossible. It increases the cost of crypto compliance worldwide, making it difficult to protect consumers. 


Image source: Weforum.com

According to the authors, regulatory arbitrage is the second challenge to global crypto regulation. They take issue with the fact that crypto developers can relocate wherever they want. It’s becoming all too clear that the WEF would like nothing more than to control the movement of people. 

On a related note, did you know that the WEF is also trying to turn almost every major city into a Smart City? More about that in an upcoming article. Meanwhile, Smart technology is already causing issues for consumers. 

The authors admit it might still be too soon to push for global crypto regulations. Most governments are still trying to wrap their heads around the technology. Some jurisdictions are further along than others, such as the EU, which recently passed its MiCA crypto regulations. 

The authors then reveal that these early crypto regulations, including MiCA, will come into force starting early next year. This is significant because this could make institutional investors comfortable allocating to crypto again. It means the crypto market could rally starting early next year. And this, coincidentally, corresponds with the next Bitcoin halving. 

The authors also take issue with so-called crypto hubs. They seem to imply that the crypto hub is code for ‘less crypto regulation’ and appear to blame them for causing regulatory arbitrage. If the WEF starts pulling the strings, this could be awkward for places like the UAE, Dubai, Hong Kong, and Singapore

Geopolitics

This ties into another vital angle the authors raised regarding crypto regulations – Geopolitics. International relations are deteriorating, making it difficult for certain countries to comply with global crypto regulation recommendations. It's safe to say that this trend will continue. 

The above relates to the third challenge to global crypto regulation: "Fragmented monitoring supervision and enforcement.” The authors reiterate that a lack of international cooperation is one of the core causes of this fragmentation, coupled with the rapid evolution of crypto-related technologies. 

The authors then provide the FATF's infamous travel rule as a case study. The travel rule requires all transactions above a certain threshold to be tracked and KYC’d. The authors complain about the fact that compliance with the FATF's travel rule has been slow when it comes to crypto. 

While we’re on that topic, you should know that the FATF has reportedly been pressuring countries to restrict or even permanently ban crypto to get off its grey list. Any country on this so-called naughty list is refused bailouts from the IMF, so a clean report from the FATF may be a political priority. If there is any truth to this, crypto hubs could face financial sanctions if they don't comply with the FATF’s crypto recommendations; perish the thought. 

Approaches To Regulating Crypto Globally

The third part of the white paper is about the possible approaches to regulating crypto on a global scale. The authors provide a de facto list of regulations the WEF wants to see. 

  • Crypto-specific 
  • Stablecoin-specific
  • Know Your Customer (KYC) /Anti Money Laundering (AML) 
  • Consumer protection, including restricting retail access to crypto 
  • Strict regulations around crypto marketing 
  • Regulation of DeFi and DAOs 

The authors then detail the five primary approaches to crypto regulation. 

1: The first is Principles-based regulation. This involves regulating around a series of broad principles rather than specific rules. The benefits of this approach are innovation and flexibility. The drawback is regulatory uncertainty. 

2: The second approach is Risk-based crypto regulation and involves applying the same risk/same regulation principle, meaning that crypto should abide by existing financial regulations. The benefit of this approach is regulatory certainty, and the drawback is difficulty in assessing risks. 

Notably, the WEF is a massive fan of this same risk/same regulation approach. It's why you see it in many existing regulatory recommendations for crypto. If that wasn't concerning enough, in this section, the WEF advocates for eliminating cash and going digital to ensure that KYC/AML is followed. 

3: The authors call Agile regulation the third approach to crypto regulation. This effectively allows regulations to evolve in response to new innovations. The benefit of this approach is that it is flexible. The drawback is that it requires much coordination and collaboration with the crypto industry. 

4: The fourth approach to crypto regulation is Self- and co-regulation. It involves allowing the crypto industry to set standards. The benefit of this approach is that it builds trust. The downside is that it can lead to capture; For instance, one company determines all the standards. 

5: The fifth approach to crypto regulation is one we’re all familiar with: Regulation by enforcement. It involves taking crypto companies and projects to court and using the precedent as de facto regulations. The benefit is accountability, and the drawback is zero innovation.

Interestingly, the authors asked their so-called stakeholders which regulatory approaches are best. The results can be seen in the image below. As one would expect, Risk-based regulation is the most popular, especially considering that the WEF is a fan of this particular approach. 


Image source: Weforum.com

The authors confirm that the other unaccountable and unelected organizations, such as the FSB and FATF, have been adhering to the WEF’s Risk-based approach to crypto regulation. It's preposterous to consider just how much influence the WEF has, and this is just the public stuff. 

WEF’s Recommendations for Global crypto regulations.

The fourth part of the report contains the WEF’s recommendations for Global crypto regulations. The authors explain that these recommendations are meant for international organizations, governments, and “industry stakeholders” who are presumably part of the WEF. 

In other words, these recommendations are what most crypto regulations will look like, regardless of what we, the people, say or do. The authors again claim that the average person will get the chance to give their input someday, but we’ll just have to wait and see if that happens. 

The first set of recommendations is specifically for international organizations. These are to;

  • Create definitions for different types of cryptos and crypto activities 
  • Set standards for how these cryptos and activities should be regulated
  • Share data about registered entities with all organizations. 

It brings into question whether ‘registered entities’ include the average crypto user. As it’s the WEF, the answer is probably, yes. After all, the endgame of these international elites is to create a global government with a global digital ID and a global centrally controlled digital currency. 

The second set of recommendations is specifically for governments. These are to; 

  • Coordinate regulations between jurisdictions.
  • Create regulatory certainty for the crypto industry.
  • *Use technology for regulation by design. 

*The latter means regulation at the blockchain level via Smart contracts. Remember, the WEF loves programmability. 

The third set of recommendations is specifically for the crypto industry. They are; 

  • To set standards 
  • To share best practices
  • Ensure “Responsible Innovation.” 

This seems to be code for adhering to ESG criteria, given that the term refers to environmental, social, and economic risks. 

If you've been following articles about ESG, you'll know it's an investment ideology to ensure the UN's sustainable development goals or SDGs are met. Every country is supposed to meet the UN's SDGs by 2030. My research suggests that all the dystopian stuff being pushed has its roots in the United Nation's SDGs, be it CBDCs, digital IDs, smart cities, or online censorship. 

If you've been following articles about ESG, you'll know it's an investment ideology to ensure the UN's sustainable development goals or SDGs are met. Every country is supposed to meet the UN's SDGs by 2030. My research suggests that all the dystopian stuff being pushed has its roots in the United Nation's SDGs, be it CBDCs, digital IDs, smart cities, or online censorship. 


Image credit: Markethive.com

What Affect Will It Have On The Crypto Market? 

So the big question is, how could the WEF’s global crypto regulation recommendations affect the crypto market if implemented? The short answer is that it would result in the crypto industry being absorbed into the existing financial system, which is precisely what the WEF wants. 

The practical effect of Risk-based regulation is that crypto is forced to comply with existing financial regulations. As the authors tacitly admit, these risks posed by crypto aren't always clear. Many argue that the risks are significantly different and justify different regulations. The WEF’s recommendations would make crypto worse than the existing financial system. That's because they would require information about all registered entities to be; 

  1. Shared with international organizations 
  2. Require regulations to be enforced via Smart contracts
  3. Require all cryptos to be ESG compliant 

These three unsuitable recommendations have one thing in common: Governance, more succinctly, control. This article about ESG and Bitcoin explains that the environmental aspect isn't the problem; it's the governance. Bitcoin can't be controlled because it has no traditional governance structure. In case you missed it, this is the core issue the WEF and its allies are trying to address. How do we control something that is designed not to be controlled? 

It's possible, if not likely, that the endgame of the environmental-focused attacks on Bitcoin is to track all Bitcoin miners and nodes. It’s something that the WEF’s global crypto regulations would prescribe because Bitcoin miners and nodes would presumably need to be registered. 

Their information would therefore have to be shared with all international organizations. At that point, it would become possible to control Bitcoin in theory. In practice, the WEF’s global crypto regulations will never come to pass, which the authors have also tacitly admitted. 

In addition to the geopolitical tensions, it's practically impossible to introduce the same crypto regulations in every single country simultaneously. This means that there's going to be some regulatory arbitrage, whether it's intentional or not. This regulatory arbitrage will exist for years, and in some countries, it will persist for decades. 

So long as there's a country out there that the WEF can't influence, it won't be able to entirely corrupt crypto. Also, because crypto innovation is essentially exponential, there's a high likelihood that it will evolve to the point that the WEF and its allies can’t control it. This is the most important takeaway – Crypto is too fast for the WEF. 

Klaus & Co will never be able to keep up, and crypto will eventually win the race. Right now, though, there are many hurdles facing the crypto industry, and the WEF’s white paper suggests that it played a role in putting those hurdles in place. The WEF's fingerprints are there, whether it's the FSB or the FATF. It’s also common knowledge that there are WEF allies in the crypto industry. 

Even so, many in the crypto industry who are on the right side of history, and we at Markethive, genuinely believe that the incentives of crypto are more robust than the WEF’s cronyism. Imagine helping to create a powerful crypto or protocol that allows the average person to preserve their purchasing power, grow their wealth, and maintain their financial freedom. In that case, you are rewarded in every possible way.  

As purchasing power, wealth, and financial freedom continue to erode, the incentive to create robust protocols with crypto will only increase. Eventually, the incentives will become so strong that the WEF’s hurdles will become irrelevant. The people will want freedom, and they will achieve it through crypto. 

This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

References: World Economic Forum, Coinbureau

 

 

Editor and Chief Markethive: Deb Williams. (Australia) I thrive on progress and champion freedom of speech. I embrace "Change" with a passion, and my purpose in life is to enlighten people to accept and move forward with enthusiasm. Find me at my Markethive Profile Page | My Twitter Account | and my LinkedIn Profile.

 

 

 

 

The Great Disconnect: Exploring the Global De-banking of Crypto Businesses

The Great Disconnect: Exploring the Global De-banking of Crypto Businesses.

Cryptocurrencies emerged as a disruptive force, challenging the traditional financial system and centralized control. With their potential to revolutionize cross-border transactions, enhance financial inclusion, and provide secure and transparent transactions, cryptocurrencies gained momentum among investors, businesses, and individuals seeking alternative financial solutions. However, traditional financial institutions have not met this radical shift towards decentralized finance with open arms.

In recent years, a concerning trend known as de-banking has emerged, where banks and other financial institutions systematically sever ties with crypto-related businesses. This process entails closing accounts, denying services, and declining partnerships with companies involved in cryptocurrency-related activities. While financial institutions cite concerns over regulatory compliance, money laundering risks, and reputational damage, critics argue that de-banking stifles innovation and hampers the growth of the burgeoning crypto industry.

This article aims to provide a comprehensive analysis of the global de-banking phenomenon, shedding light on its underlying causes, consequences, and potential implications for the future of cryptocurrencies. By examining real-world examples from various countries and industries, we will delve into the factors contributing to this widespread debanking trend. Additionally, we will explore crypto-related businesses' legal and regulatory challenges, often prompting financial institutions to distance themselves from this sector.

Furthermore, this article will explore the immediate and long-term consequences of de-banking on the affected businesses and the broader cryptocurrency ecosystem. We will delve into the difficulties crypto entrepreneurs encounter in accessing banking services, obtaining loans, and establishing partnerships, as well as the potential implications for financial stability and the overall adoption of cryptocurrencies. 


Image credit: Markethive.com

De-banking Phenomenon

De-banking refers to the systematic severance of ties between financial institutions and businesses whose operations are perceived not to be in line with legal and governmental regulations. This process involves banks closing accounts, denying services, and declining partnerships with companies engaged in such activities. While financial institutions often cite concerns over regulatory compliance, money laundering risks, and reputational damage as reasons for de-banking, critics argue that this approach stifles innovation and hampers the growth of the burgeoning crypto industry.

To truly understand the de-banking trend, we must explore the underlying causes. One of the primary factors is the regulatory landscape surrounding cryptocurrencies. Governments and regulatory bodies worldwide have struggled to keep up with the rapid development of this new technology. The lack of clear and comprehensive regulations has created an uncertain environment for financial institutions, leading them to adopt a cautious approach.

The anonymity and pseudo-anonymity offered by some cryptocurrencies have raised concerns about potential money laundering and illicit activities. While the blockchain technology behind cryptocurrencies provides transparency, it can also be exploited by individuals seeking to conceal their identities and engage in unlawful practices. Although wary of potential legal and reputational risks, many financial institutions have chosen to distance themselves from the crypto industry.

The debanking phenomenon is not limited to a specific country or region; it is a global trend affecting businesses operating in the cryptocurrency space worldwide. For example, many crypto-related startups have struggled to establish banking relationships in the United States. Banks often view these businesses as high-risk due to regulatory uncertainties and the perceived association with illicit activities.

As a result, companies have faced difficulties accessing basic banking services, such as opening business accounts and obtaining loans. Europe has also witnessed a similar debanking trend. Several major European banks have halted services to crypto-related businesses or imposed severe restrictions, hindering their ability to operate smoothly. The situation in Asia is no different, with countries like Iraq imposing a de facto ban on cryptocurrencies and financial institutions wary of engaging with crypto-related entities.

Traditional lenders are reluctant to extend credit to companies operating in the cryptocurrency space due to perceived risks and uncertainties. Access to capital is needed to improve the growth and expansion of these businesses, limiting their potential for innovation and development. These entrepreneurs face significant challenges in accessing banking services, which are vital for day-to-day operations. Without a bank account, businesses struggle to receive and manage funds, pay employees, and transact with suppliers. This creates a substantial operational burden, forcing companies to rely on alternative and often less efficient solutions.

The impact of de-banking extends beyond individual businesses to the broader adoption of cryptocurrencies. The inability to establish partnerships with financial institutions inhibits the integration of cryptocurrencies into the mainstream financial system. It hinders the ability of consumers to use cryptocurrencies for everyday transactions, limiting their utility and slowing down the overall adoption process.

However, it is crucial to consider the perspectives of all stakeholders involved in the de-banking debate. Financial institutions are tasked with ensuring regulatory compliance and managing risks associated with the cryptocurrency industry. With increasing regulatory scrutiny, banks face immense pressure to prevent money laundering, fraud, and other illicit activities. By distancing themselves from crypto-related businesses, they aim to protect their reputation and avoid potential legal repercussions.

Regulators, however, grapple with the challenge of striking a balance between fostering innovation and safeguarding financial stability. Developing clear and effective regulatory frameworks for cryptocurrencies is a complex task that requires careful consideration of the unique characteristics of this digital asset class.

Crypto enthusiasts advocate for a more collaborative approach, where financial institutions work with the crypto industry to address concerns and find mutually beneficial solutions. This includes implementing robust know-your-customer (KYC) and anti-money laundering (AML) measures and enhancing transparency and cooperation between regulators and industry participants.

Moreover, de-banking crypto-related businesses can have significant implications for financial inclusion. Cryptocurrencies have the potential to provide financial services to individuals and companies that are underserved by the traditional financial system. For example, in many developing countries, traditional banking services are limited, and many individuals and businesses rely on mobile money services to manage their finances. 

Cryptocurrencies have the potential to provide an alternative to these services, offering faster, cheaper, and more secure transactions. However, the de-banking of crypto-related businesses can limit the ability of these individuals and companies to access these services, further limiting their financial inclusion.

The Impact of De-banking on the Crypto Industry

Lack of access to traditional banking services can create significant operational challenges for crypto-related businesses. Moreover, the lack of access to conventional banking services can also limit the ability of crypto-related businesses to establish partnerships with other companies and organizations. This can limit the potential for collaboration and innovation in the industry, further limiting the growth potential of cryptocurrencies.

The potential implications of these challenges for financial stability and the overall adoption of cryptocurrencies are significant. Without access to traditional banking services, crypto-related businesses may be forced to rely on alternative banking relationships or operate entirely outside the conventional financial system.

This can create significant risks for financial stability, as these businesses may be more vulnerable to fraud, money laundering, and other forms of financial crime. Without the ability to easily convert cryptocurrencies into fiat currency, many consumers and companies may hesitate to adopt these assets as a form of payment or investment.

There are several reasons why some banks and financial institutions decide to de-bank crypto businesses. Some of them are:

 Regulatory uncertainty: Cryptocurrencies' legal status and regulation vary across jurisdictions and are often unclear or inconsistent. This challenges banks and financial institutions to comply with anti-money laundering (AML), counter-terrorism financing (CTF), and other rules and regulations. Some banks and financial institutions may prefer to avoid dealing with crypto businesses altogether rather than risk facing fines, sanctions, or legal actions.

•  Compliance risks: Even if the regulation of cryptocurrencies is clear and consistent, banks and financial institutions still face compliance risks when dealing with crypto businesses. For example, they may have difficulty verifying their crypto customers' identity and source of funds or have to deal with complex and costly reporting requirements. Some banks and financial institutions may also be concerned about the reputation risk of being associated with crypto businesses involved in illicit activities or scams.

•  Volatility: Cryptocurrencies are known for their high price volatility, which can pose risks for banks and financial institutions that provide services to crypto businesses. For example, if a bank offers a loan to a crypto company that uses cryptocurrencies as collateral, the value of the collateral may fluctuate significantly and affect the repayment ability of the borrower. Similarly, suppose a bank provides a payment service to a crypto business that accepts cryptocurrencies as payment. In that case, the value of the payment may change drastically between the time of the transaction and settlement.

 Competition: Cryptocurrencies are also seen as a potential threat to the traditional financial system, as they offer alternative ways of storing and transferring value that may challenge the dominance and profitability of banks and financial institutions. Some banks and financial institutions may view crypto businesses as competitors rather than customers or partners and seek to limit their growth or market share by debanking them.

Operation Chokepoint

Operation Chokepoint, introduced in 2013 by the United States Department of Justice (DOJ) under the Obama administration, primarily focused on combating fraud in high-risk industries by pressuring financial institutions to sever ties with specific businesses. The operation targeted sectors such as payday lending, firearms, ammunition sales, online gambling, and debt collection. The strategy involved pressure on banks and payment processors to cut off services to these industries, effectively choking off their access to the financial system.

The primary concern driving Operation Chokepoint 1.0 was to curtail fraudulent activities in industries that posed higher risks. The DOJ expressed concerns that some businesses in these sectors were engaged in deceptive practices, leading to consumer harm and financial losses. By leveraging its authority and coordinating with other regulatory agencies, the DOJ sought to disrupt the economic infrastructure supporting these industries and minimize their ability to carry out activities.


Screenshot: Twitter

The connection between Operation Chokepoint 1.0 and Operation Chokepoint 2.0 lies in extending the original concept to the crypto industry. Operation Chokepoint 2.0 indicates the application of similar tactics employed in the initial operation to the crypto industry. Just as Operation Chokepoint 1.0 sought to target high-risk sectors by pressuring financial institutions, Operation Chokepoint 2.0 involves exerting pressure on banks, payment processors, and other financial service providers to sever ties with cryptocurrency-related businesses. 

The victims of Operation Choke Point 1.0 are thus all too familiar with what the participants in the crypto economy are now experiencing. The campaign begins with a series of vague policy pronouncements and ominous warnings issued as informal guidance to the banks. Then there is a flurry of decisions by banks to terminate their banking relationships with the targeted industry, of accounts closed either without any explanation or with the decision being attributed to “compliance requirements,” to “your business being outside of our risk tolerances,” or to “risks associated with your business.” All these are gimmicks to destroy the crypto industry.

Examples of De-banking in the Crypto Industry

It has been a common practice for banks to distance themselves from companies they perceive as high-risk for many years. However, the de-banking of crypto-related businesses has become increasingly prevalent in recent years as the industry has grown and regulators have struggled to keep up with the pace of innovation.

Binance US is halting US dollar deposits and withdrawals from its platform as of June 13, 2023. This comes after the US Securities and Exchange Commission (SEC) filed a lawsuit against Binance and its CEO, Changpeng Zhao, for allegedly violating securities laws and operating an unregistered exchange. The SEC also asked a federal court to freeze Binance US assets.

The de-banking of Binance US could be a concern for the crypto community because it could affect the liquidity and accessibility of the crypto market in the U.S. Binance US is one of the largest crypto exchanges in the country, with over 2 million users and more than $1 billion in daily trading volume. 

If Binance US users cannot deposit or withdraw fiat currency, they may have to resort to other platforms or methods that could be more costly, risky, or inconvenient. Moreover, the SEC's crackdown on Binance could signal a more aggressive and hostile stance towards the crypto industry, which could discourage innovation, investment, and adoption of digital assets.

On May 18th, 2023, Binance Australia announced that it had suspended Australian dollar (AUD) PayID deposits "with immediate effect" due to a decision made by its third-party payment service provider. It also said that bank transfer withdrawals would also be impacted. According to Binance Australia's statement, its payment processor's partner bank Cuscal had decided to end AUD deposit services for Binance Australia without providing any specific reason. 

In July 2022, FTX, another major crypto exchange, lost its banking partner Signature Bank after the SEC filed a lawsuit against the company for allegedly operating as an unregistered securities exchange. FTX had to suspend its U.S. operations and refund its customers. Signature Bank said it ended its relationship with FTX due to “regulatory concerns” and “reputational risk.”

One of the most high-profile examples of de-banking in the crypto industry is the case of Bitfinex. In 2017, Wells Fargo, one of Bitfinex's banking partners, announced that it would no longer process wire transfers for the exchange. This move left Bitfinex unable to process withdrawals for its users, leading to a significant drop in trading volume and a loss of trust among its user base.

Another example of de-banking in the crypto industry is the case of Coinbase. In 2017, the US-based exchange was forced to suspend trading in Hawaii after failing to secure a banking relationship in the state. This move left Coinbase unable to serve its Hawaiian customers, highlighting the challenges crypto-related businesses face in obtaining banking relationships. 

These debanking cases illustrate some of the challenges and uncertainties that crypto businesses face in the U.S. and Europe, significantly as regulators increase their scrutiny and enforcement actions against the industry. In contrast, regulators and policymakers postulate that debanking is necessary to protect consumers and investors from fraud and risk, but is that their true intention for doing that? If the government had full control over Bitcoin and other altcoins, which gives them enormous control over your financial freedom, would they have aggressively fought against the industry? Think about that.

The Future of De-banking in the Crypto Industry

The future of de-banking in the crypto industry is a topic of much debate and speculation. While it is likely that the de-banking of crypto-related businesses will continue in the coming years, there are also signs that the industry is beginning to adapt to these challenges.

One of how the industry is adapting is by exploring alternative banking relationships. Some of these businesses are beginning to work with smaller banks or payment processors that are more willing to work with them. These alternative banking relationships can help these businesses access the traditional financial system while mitigating cryptocurrency risks.

Some countries are beginning to develop more supportive regulatory frameworks for cryptocurrencies. For example, in the United States, the Securities and Exchange Commission (SEC) has started to provide more guidance on the regulatory status of cryptocurrencies, which has helped to clarify the legal landscape for crypto-related businesses.

Similarly, the European Union has developed a comprehensive regulatory framework for cryptocurrencies, known as the Fifth Anti-Money Laundering Directive (5AMLD). This framework requires crypto-related businesses to register with national authorities and comply with anti-money laundering and counter-terrorism financing regulations.

These more supportive regulatory frameworks can mitigate the perceived risks associated with cryptocurrencies, making it easier for banks and other financial institutions to work with crypto-related businesses. These frameworks can build trust in the crypto ecosystem, making it more attractive to mainstream investors and companies.

As the industry continues to evolve, regulators, banks, and crypto businesses must work together to build a more inclusive and supportive financial ecosystem that embraces the potential of digital assets while mitigating the associated risks. By working together, these stakeholders can help to build a more resilient and sustainable financial system that benefits businesses, individuals, and the global economy.

 

 

About: Prince Ibenne. (Nigeria) Prince is passionate about helping people understand the crypto-verse through his easily digestible articles. He is an enthusiastic supporter of blockchain technology and cryptocurrency. Find me at my Markethive Profile Page | My Twitter Account | and my LinkedIn Profile.

 

 

 

 

What are the Indicators of the Next Crypto Bull Market? Are they at odds?

What are the Indicators of the Next Crypto Bull Market? Are they at odds?

Recognizing if a crypto bull market is returning depends on which indicators we look at ultimately. Some indicators suggest that a bullish crypto market is just around the corner, while others suggest that the bear market will soon reoccur. This article examines these conflicting indicators, sheds light on what they signify in simple terms, and elucidates where the crypto market could be headed.

Price Action

First up is price action, as it’s everyone’s favorite indicator. Many crypto experts define a crypto bull market as a long period of positive price action. In other words, multiple months of higher highs and higher lows for the most significant cryptos. As the graph below indicates, BTC has had four consecutive months of positive price action, which began in January. BTC is, therefore, in a new bull market, according to Coinbureau’s basic definition. 


Screenshot: Coinmarketcap.com

However, there are a few caveats: First, this multi-month rally has yet to happen for most major altcoins apart from ETH.  Almost every major altcoin has been moving sideways over the last four months. In an actual crypto bull market, you see breadth in the positive price action meaning that most altcoins ride on BTCs’ coattails. 

The absence of this effect is evidence of a bear market rally, not a bull market. ETH's price action can provide additional proof of this being a bear market rally. ETH didn't have the same double top as BTC during the previous bull market. ETH’s price action looked more like what you'd see in a standard market cycle and could be due to institutional investment. 

Comparing ETH’s price action to the famous Wall Street cheat sheet suggests we're just past the anger stage. That said, ETH could easily be in the disbelief phase that comes before the beginning of a new bull market. 


Image credit: Newtraderu.com

This ties into the second caveat, and that's trading volume. Data from Coinmarketcap suggests that trading volume for BTC has continued to decline as prices have risen. This effect is even more pronounced for ETH. This divergence of increasing prices and falling volume is further evidence of a bear market rally and also suggests that a reversal could be imminent. 

However, this decline in trading volume could be due to institutional investors investing in crypto via centralized proxies like futures contracts that are settled in cash due to concerns around crypto regulation. It would explain why ETH's trading volume is so low relative to BTC. 


Screenshot: Coinmarketcap.com

Also, ETH has been looking extremely weak against BTC and has been in a long-term downtrend against BTC since around July of last year. The same trend can be seen in most major altcoins. Again for this to be an actual crypto bull market, there must be breadth and broad participation, at least among most major altcoins. 

To be fair, we could soon start to see more money rotate out of BTC into ETH and most major altcoins. If this happens, it will be additional evidence of a new bull market. For the time being, though, Bitcoin dominance continues to increase. For context, Bitcoin dominance measures how much of BTC’s total market cap comes from crypto. Bitcoin dominance is currently at around 46% and has been in a long-term uptrend since last September, showing no signs of slowing. 

Regulations 

If BTC doesn’t rotate into ETH and the most significant altcoins, it could be due to another factor previously mentioned: Crypto regulations. Like it or not, crypto regulations are required for institutions to invest their trillions into the crypto market. The largest institutional investors are based in the United States. US institutional investors were likely the most significant contributors to the previous crypto bull market. Unfortunately, the regulatory situation in the US has deteriorated significantly over the last few months.

In addition to the threats against specific crypto projects and companies by the SEC, the Fed and other banking regulators have been actively working to de-bank the crypto industry. Their primary targets have been 24/7 payment systems analogous to the Fed's upcoming Fed Now payment system. 

Stablecoin issuers are at the top of the Fed's hit list. It’s problematic because the crypto industry relies heavily on stablecoins to function. If anything were to happen to a stablecoin issuer in the United States, it could severely damage the crypto market and be a disaster for the entire DeFi niche. 

However, not all stablecoin issuers are based in the United States, and most crypto trading happens against offshore stablecoins, namely, Tether’s USDT. This means the crypto market would be mostly fine if a US-based stablecoin were taken down. A crackdown on a US stablecoin issuer may also not materialize. More importantly, other countries with many institutional investors are introducing sensible crypto regulations. 

This article about the countries that will drive the next crypto bull market discusses that the list includes the UAE, Saudi Arabia, Hong Kong, Singapore, and France. These jurisdictions will introduce these sensible crypto regulations very soon. France has technically done so already. The Markets in Crypto Assets (MiCa) regulation was passed by European politicians less than a month ago. Money is already flowing into EU crypto startups as a result.

Moreover, it looks like Hong Kong is next. Officials there recently announced that crypto licensing requirements would be revealed by the end of the month, with retail access to crypto coming on June 1st. Lots of money from the Chinese Mainland may enter the crypto market via Hong Kong. It's also likely that lots of crypto companies will relocate to the region. That's because Hong Kong requires banks to open accounts for crypto clients.

This is significant because crypto companies in crypto-friendly jurisdictions, like the UAE, are still reportedly struggling to open bank accounts. The caveat is that crypto investment from Hong Kong will reportedly be limited to the largest cryptocurrencies by market cap, and crypto niches like DeFi could be completely off-limits. Even so, there are many ways of accessing altcoins once you've acquired a crypto like BTC or ETH. 

Notwithstanding, the passing of favorable crypto regulations in these countries will likely be enough to increase the conviction in crypto’s recent price action and confirm that it's the beginning of a new bull market. However, this assumes that macro conditions encourage crypto investing in these regions. 

Interest Rates 

Interest rates are the primary macro factor moving the crypto market, specifically the interest rate decisions coming from the Federal Reserve. The fact that the Fed is near the end of its rate hiking cycle has contributed to the recent rally. Another contributor has been the expectation that the Fed will soon be forced to pivot, i.e., start lowering interest rates. Investors believe the Fed will do this in response to a crisis; an example could be the stress in the commercial real estate sector.

The irony to this expectation is that if the Fed is forced to pivot in response to a crisis, chances are the situation will also crash the markets. Case in point, sudden rate cuts have historically corresponded to stock market crashes, not rallies. A rate cut may have the same effect on the crypto market. However, in the absence of a crisis, only falling inflation will convince the Fed to pivot. As it happens, headline inflation has fallen fast over the last few months. The question is whether inflation will fall to the Fed’s 2% target, and the answer here is unclear. 


Image source: In2013dollars.com

Core inflation figures of all kinds suggest that services-related inflation isn't coming down nearly as quickly. If core inflation gets stuck at 4%, the Fed will likely keep interest rates slightly above that level. The longer the Fed keeps interest rates high, the higher the likelihood that markets will crash, that something in the financial system will break – or both. Risk assets like cryptocurrencies could be hit the hardest because they rely on lower interest rates for positive price action. 


Image source: Advisor Perspectives

For those who are wondering why this is, the answer is liquidity. Liquidity is the amount of money circulating in the market and the economy. As interest rates rise, liquidity gets drained out of the financial system as people rush to pay off more expensive debts and have difficulty accessing loans. As it happens, the supply of money in the US economy, as measured by M2, has been shrinking faster over the last few months than in decades.

This situation should have caused risk assets like crypto to crash, but they pumped instead. The simple explanation is that there is more to the world than the United States. Although the money supply has decreased in the US, countries like China and Japan have continued to stimulate, and this money has been slowly but surely finding its way into US assets. The caveat is that this stimulus may not continue for much longer, at least in China, where economic growth is returning. 

Another reason why risk assets have rallied is because of the Fed and the treasury. The Fed recently expanded its balance sheet in response to the banking crisis. Meanwhile, the treasury has been spending money from its de facto checking account due to the debt ceiling, which is increasing liquidity. However, the Fed's balance sheet recently started decreasing again, and the debt ceiling will soon be raised, allowing the treasury to reissue bonds. Both factors could further drain liquidity, further prolonging a crypto bear market. 

Geopolitics

As stated earlier, there is more to the world than the United States. Much of the world has been trying to escape the US dollar. This could positively affect the crypto market during the next bull cycle. Some countries, such as Iran, reportedly use crypto for trade, and others, such as Russia, may follow suit. This could change crypto's categorization from a risk asset to something analogous to a commodity, like gold, at least in these regions. 

Steady crypto demand from these regions could create a price floor for significant cryptos like BTC and ETH, the same way central banks created an apparent price floor for gold, and they accumulated record levels of gold last year. This was predominantly due to the sanctions against Russia, which caused many central banks to think twice about keeping large reserves in US dollar assets. 

In retrospect, sanctions could be the catalyst that killed the dollar. While these central banks haven't begun accumulating crypto yet, the Bank for International Settlements announced last December that central banks will be allowed to hold up to 2% of their balance sheets in crypto starting in 2025. By then, the crypto bull market should be in full swing, and if it's not, that will likely be the catalyst that kicks it off. Some central banks may have begun secretly accumulating crypto already. 

Additionally, trust in the financial system is deteriorating at a rapid rate, and the crypto market will continue to grow as trust in the traditional financial system continues to decline. This is evidenced by how much the crypto market pumped in response to the banking crisis. If the banking crisis continues in some form, you can expect to see more of the same positive price action for most cryptocurrencies.

Even if the banking crisis doesn't continue, central bank digital currencies (CBDCs) are coming, and they could have the same effect on the crypto market. The reason is that CBDCs will allow governments and central banks to control how you spend and save. As with the banking crisis, the average person will quickly realize that government money is not a safe place to store their wealth and will seek alternative stores of value.

The average person will likely allocate a small percentage of their portfolio to assets outside the financial system, including crypto. This percentage will become more extensive as these alternatives become easier to use. It's already happening worldwide; individuals and institutions are turning to crypto because their currencies are collapsing, their banking systems are struggling, or because CBDCs are being rolled out. This combined buying could set a price floor for many cryptocurrencies; this price floor will likely rise as the appeal of traditional currencies continues to decline. 

As such, we could be at the beginning of a crypto super cycle, or at least a crypto market cycle unlike any other. The caveat to this is that the incumbents will not go quietly. This potential supercycle will likely be accompanied by unprecedented price volatility as entities in the existing financial system try to crush or control crypto. Some would say this has already started, and the recent price action is proof.

The Crypto Market Cycle

As you may be aware, crypto tends to follow a four-year cycle and is believed to be because of the Bitcoin halving, which occurs roughly every four years. The last Bitcoin halving happened in May 2020, and what followed was an almost two-year-long crypto bull market. However, many argue that the crypto bull market began before the previous halving. BTC had already been in a strong uptrend for months, hitting $14k in May 2019. That early 2019 rally looks eerily similar to the one we're seeing now, four months of green; all be it with much more volume. 

This begs the question of whether history will repeat itself, specifically whether BTC will experience a flash crash that retests its bear market lows of around $15K. In theory, this is unlikely because the previous flash crash, when we saw BTC sink to about $3K, was caused by the beginning of the pandemic in March 2020. 

In practice, however, this is still possible, and that's because there are so many similar catalysts to choose from. 

  • A 2008-style financial crisis caused by commercial real estate, 
  • a war between China and the US over Taiwan, 
  • civil wars due to inflation and political polarization, 
  • or that global cyber attack predicted by the World Economic Forum. 

Even if history repeats, a retest of the crypto bear market lows will likely be short-lived. The fact remains that we're in the same time frame when the previous crypto bull market arguably began – one year before the next Bitcoin halving, which is scheduled for April 2024. However, this analysis only applies to BTC. 

As shown in the graph below, the historical price action of most major altcoins flatlined between May 2018 and the Bitcoin Halving in May 2020. You'll also see that most of them only hit their bottoms during the pandemic flash crash. This means that even if the crypto bull market has begun, you still have at least a year to accumulate your favorite altcoins, and you may still manage to catch the bottom of some of them. 


Screenshot: Coinmarket.com

The caveat is that some of these altcoins will never recover, especially if interest rates stay higher for longer. However, the effects of high-interest rates on the crypto market are not evident because the crypto market has never experienced a period of sustained high rates. Some argue that most cryptocurrencies, possibly even prominent altcoins like ETH, will not fare well under such conditions.

For established Proof of Stake cryptos, like ETH, the yield on staking rewards needs to be higher than the yields on traditional financial investments to capture the interest of institutions. In some cases, the rewards must be much higher to compensate for the additional risk of investing in crypto, e.g., Crypto vs. Bonds. 

For most other altcoins, there needs to be lots of speculation to receive heavy inflows, and these levels of speculation and inflows require lower interest rates. Some say the most speculative cryptos are all the Ethereum competitors, as they stand to capture the most value if they succeed. 


Image credit: Markethive.com

Speculation

As shared by Delphi Digital, “Crypto has primarily been a speculator’s market, and that’s still true today. But speculation isn’t inherently evil. The term “speculation” tends to carry a negative connotation. But, like most things, it sits on a spectrum. Hype and excitement drive interest, which attracts capital and gives entrepreneurs the resources to build innovative products leveraging new technologies.” 

Without speculation, capital wouldn’t flow to such risky ventures, and society would still be stuck in the stone age or the throes of tyranny due to escalating adverse events of today. Arguably, speculation is more than beneficial; it’s imperative at this stage. The crypto industry has gone through multiple hype cycles, each fueled by speculation on the back of emerging innovation triggers. Each hype cycle brought more attention, users, and capital to the crypto ecosystem and built upon the advances made by those previously.

This article explains why experts say a bear market is a good thing. There’s much truth in the mantra “bear markets are where you build” – many of today’s prominent protocols and applications were built in the depths of prior downturns. In the early stages of any emergent technology, much attention must be focused on the technical aspects of what’s being built.

The building is on one side of the equation; demand is on the other. It’s what’s needed to maximize the value of all the sweat equity that goes into bear market building. Demand leads to more usage, leading to faster feedback cycles, and better products, leading to more demand and use.

The visionaries and entrepreneurs see the need for innovation as the increasing pressure from the centralized totalitarian regime orchestrated by globalists tightens. To shift the balance of power, decentralization with an alternative financial system to the one currently failing us is a solution. 

A primary example of this is Markethive – The Ecosystem for Entrepreneurs. It is a community-funded pioneer in the blockchain and cryptocurrency space's social media, marketing, and broadcasting sector. 

Markethive is consistently delivering new integrations and updates to its platform in preparation for its launch into the crypto industry, and the timing couldn’t be better. It’s an entirely different animal and one of the most promising projects in the entire social media and marketing niche, with varied use cases and real-world applications that have the potential to change the media landscape. 

This next-generation platform perfectly exemplifies how this technology can benefit more people beyond just leveraged speculation. Markethive provides valuable utility for its community that understands the potential of applications in this new world.

This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

 

 

Editor and Chief Markethive: Deb Williams. (Australia) I thrive on progress and champion freedom of speech. I embrace "Change" with a passion, and my purpose in life is to enlighten people to accept and move forward with enthusiasm. Find me at my Markethive Profile Page | My Twitter Account | and my LinkedIn Profile.

 

 

 

 

 

Climate Change a Geoengineering Myth?

Climate Change, a Geoengineering Myth?

In this article, I examine the concept and process of geoengineering as it relates to climate change, with particular scrutiny on whether geoengineering is solving a problem or engineering a problem.  

As we continue through to the halfway point of 2023, the so-called emergency issues of the climate have once again come to the fore as the health topic of covid 19 regresses somewhat, although, as we shall see later, none of these things are standalone events.

As I write this article, pilot sites have sprung up in England, which are trial runs of 15-minute cities. It is based on the idea that everything you need can be accessed within a 15-minute radius. If you venture out of that zone, you risk fines and possible imprisonment. It is directly connected with the climate agenda, which you can read more about in Agendas 21 and 30.

I start with a speech by Prince Charles where he spoke of the need for a war-like approach to climate change in the form of a military-style campaign. On reflection, it sounded like more of a confirmation of something that was already happening.


Image Source: archdaily.com 

What has humanity done to deserve such impending and extreme restrictions, with all the hallmarks of a more permanent lockdown? Let’s start with some definitions of the issue at hand.

The reported ‘climate crisis’ appears to stem from a belief about the threat of global warming to the survival of this planet. Regular conventions and summit meetings have been held since the 1960s to discuss the severity of this perceived issue and plan accordingly. In tandem, there have also been summit meetings on population control, such as the International Conference on Population and Development in Cairo in 1994, suggesting that both themes are connected.

Here is a video of scientist Carl Sagan explaining the greenhouse effect to Congress. According to the Council for Foreign Relations, there is a consensus of opinion about the science concerning climate change. 

They cite a summary of that science from David Victor, an American Professor of International Relations, who summarises that the earth's temperature is rising at unprecedented rates, which will result in damaging effects across the world. 

He puts this down to human activities using fossil fuels, deforestation, coal, oil, and natural gas. As a consequence of these activities, greenhouse gasses such as carbon dioxide have been emitted in sufficient amounts to cause the planet to trend toward global warming.

There are a group of climatologists that dispute this stance in that they claim there is no emergency as such. These include climatologists Dr. Judith Curry and Dr. John Christy.


Image source: World Climate Declaration.pdf

Moreover, a global network of over 1100 scientists and professionals known as the “Global Climate Intelligence Group” or The CLINTEL Group has prepared an urgent message explained in this article.

Perhaps the use of the phrase climate change is something of a tautology since the earth is not a static ecosystem. If indeed there is a climate crisis, is it as described by the powers that be, or does the issue lie elsewhere?

FALSE PROPHECIES or INEXACT SCIENCE

Since as far back as the 1960s, many global leaders and political figures have been sending out alarming warnings in the form of predictions. This X22 report cites some of them from a Twitter feed. Here is a paraphrase of some of the identified warnings:

  • 1966 – No more oil in 10 years
  • 1967 – Dire famine forecast by 1975
  • 1970 – Nitrogen build-up will make all land unusable 
  • 1970 – Ice Age by 2000
  • 1974 – Ozone depletion will make life perilous
  • 1980 – Acid rain will kill life in lakes
  • 1989 – Rising sea levels will obliterate nations if nothing is done by 2000
  • 2008 – Al Gore predicts an ice-free Arctic by 2013
  • 2009 – British Prime Minister says we have 50 days to save the earth

None of the above has come to pass. This poses a fundamental question. Bearing in mind that science and political science are not one and the same, are the above merely false prophecies from the domain of political science, or is it a case of science not being so exact as to be predictable? 

Maybe both have some truth to them, yet as this short clip about an ongoing project in Greenland shows, context and relativity are essential in research.  In this project, ice is extracted from the ice sheet in Greenland over thousands of years to determine temperatures during that time. 

Their results underline that when certain political authorities raise the alarm about the increase in warming by 1.5 degrees, they need to put relativity in context. In isolation, you can make research support many inaccurate viewpoints.

There is a third, more serious consideration when we consider context and the interface with political science. What if the political powers in question are creating the problem and then creating a solution to put the control of power firmly in their domain? 

To appreciate why this is an important consideration, I refer to the book The Creature from Jekyll Island by G Edward Griffin, a highly acclaimed documentarist and writer with a flair for taking the complexity out of complex subjects to make them easier to understand. This book first came out in 1994.

Although the creature referred to in the title is the Federal Reserve, and the book focuses on the nature of its creation and the money agenda, various interconnected threads arise in his discovery which has a direct bearing on the climate agenda.

Griffin makes reference to the influence of the Fabian School of Economics in London, whose underpinning ideology was the achievement of a new world order by a more covert expression of socialism as opposed to a more forceful approach, such as what is experienced in communism.

In this approach, money moves from the government and, through various means, gets recycled back to them, which helps to give them more control and power and ultimately morphs them into a new world order, now known as the great reset. Back then, they discussed a one-world currency too.

Within this context, a new unconventional war was proposed in the pursuit of one-world governance, whose echoes found their way into Prince Charles's speech, and it has more to do with eliminating life than enhancing human lives.

It involves the Council of Foreign Relations, and The Club of Rome, who seek to express this ideology, and everything we are witnessing today is coming out of that playbook. I will return to this shortly. Within this historical context, we now look at a process called GeoEngineering.


Image Source: Wikimedia Commons

GEOENGINEERING

Britannica defines geoengineering as ‘the large-scale manipulation of a specific process central to controlling Earth’s climate for the purpose of obtaining a specific benefit.’

Solar radiation is a key influencing factor in how much is absorbed by the earth and reflected into space. The earth’s surface, cloud formation, and gases in the air are all dynamics in this process. Solar radiation management as a core theme of this process means a combination of technologies would need to be created and managed for this to happen.

Few would deny that our earth needs to be taken care of in a much more responsible way. I recall watching a documentary called A Plastic Ocean years ago, in which it was plain to see that our oceans are polluted due to human neglect.

The industrial revolution saw an increase in certain gas emissions and air pollution by corporate giants far beyond what any one individual could emit, but does the climate agenda change amount to such an issue of significant human neglect that it now requires geoengineering to correct the imbalance? 

Collectively harm has been caused to the earth, so one could understand the corrective application of technology to restore balance to the earth’s ecosystem. However, in light of the findings of The Creature from Jekyll Island, it is necessary to probe further as to whether geoengineering is being deployed for a benefit or otherwise.

There is a data-rich website specifically dedicated to examining this question and the core related issues, and recently a powerful documentary was released called The Dimming.

The Dimming documentary examines weather modification through the dimming of the sun and looks at its implications for survival and living. It also examines the driving motivation behind geoengineering. 

It scrutinises the extent to which geoengineers are experimenting with nature’s life support systems and examines whether they have considered the adverse effects of their methodology. In this documentary, certain things are debunked, namely:

1) Geoengineering as an experiment on the populous for nefarious reasons is a conspiracy theory.

2) The trails people witness in the sky are simply condensation trails and not artificial trails, which the layman calls chemtrails.

The documentary reveals vital point-to-point data extracted from cloud layers and other research and discovered:

1. A list of patents supporting geoengineering that goes back by at least 100 years.

2. Planes and aircraft are designed and fitted with nozzles for the express purpose of solar radiation management and the emission of chemicals into the sky to dim the sun.

3. Verification of trails that are not condensation trails, as we have been officially told, but emissions that cause artificial cloud formations designed to dim the sun and alter the ionosphere, resulting in weather modification.

4. Significant levels of aluminium in the cloud layers, which, when transmitted through nanotechnology, can get through the blood-brain barrier to cause serious illnesses such as dementia. 

5. Methane deposits and craters pose an even greater threat than carbon dioxide over time.

6. The motive of military weather control by 2025.

The key objective of leading geoengineers, supported by government and military intervention, is to put 10-20 million tonnes of nanoparticles infused with certain chemicals into the sky on an annual basis.

Geoengineer and author David Keith argues for this necessity of emitting chemicals to dim the sun and cool the planet. He also adds that hundreds of thousands will die in this cause, and he sees no ‘moral hazard’ in this – this is the collateral damage we must accept for the greater good. He uses competitive language, such as winners and losers, suggesting this is not really about collaboration.

If you look at what is happening through four significant elements which form part of the building blocks of life, you will notice how the welfare of humanity is under assault from all angles.


Diagram: Anita Narayan

For example, the blocking of the sun has implications for the life-enhancing process of photosynthesis. Clean air and water are needed to sustain all life forms. The earth and its soil layers determine forest and plant growth.

To expand your research into geoengineering and forest fires, view this PDF called ‘Forest Fire as a Military Weapon.’ More recently, this article exposed the probable cause of the so-called forest wildfires in California in 2017. To explore the water element of flash flooding, watch this video.

An example of the overall impact on Earth and forestation can be viewed in this video. Aside from the artificial cloud formations, hurricanes provide another perspective of geoengineering processes in action through the air.

Each natural element and area is connected and impacts another in this giant ecosystem. Is geoengineering behind why bees are now falling out of the sky, and plankton are dying? 

The domino effect of current geoengineering is described in the documentary. On the one hand, sulphuric acid is released from aircraft to deplete the ozone layer. Combine that with the release of aluminium, barium, strontium, and manganese, which are manipulated by high radio and microwave frequencies to alter the ionosphere, which then alters weather patterns.

One consequential scenario is where warm water goes where it should not go. Methane deposits get released from frozen players in places like the Siberian tundra and rise into the air.

Over a 10-year period, the accumulation of methane in the air is said to be at least 100 times more potent than carbon dioxide. There is evidence of methane blowouts in certain parts of the globe that look like massive craters.

Our documentarists discovered that there is enough methane in these deposits to turn our planet into Venus several times over. This is reportedly being covered up. If this is true, it means a far more serious situation has been created by geoengineering.

It is one thing to err and go off balance and then to correct a course of action. It is quite another to allow it to descend to incompetence or, worse still, corruption if deliberately intended.

At best, the powers that be have gone too far, and instead of pulling back and finding a balance between risk and reward, they are now accelerating the very problem they say they are trying to avert. Life in all its forms is under assault.

The conclusion from the documentary is that the consideration of adverse effects has not just been omitted – it has been overridden. This has not happened by accident but by design, and now we have a more serious climate problem as a result of the current agenda of geoengineering.


Image Source: Geoengineeringwatch.org

The many patents reveal that this has been planned for a long time and that the reduction rather than the welfare of humanity is uppermost in mind. Recall that this is something Bill Gates has heavily invested in, and the trail of money is revealing in itself.

Furthermore, the military has a clear objective and plan to ‘own’ the weather by 2025. Why such extreme measures? The common argument is that it is for defence reasons. So who or what is the enemy?

From this documentary alone, the sun is a focal point of attack in the geoengineering process, and humanity, not including themselves, is deemed to be the causative agent in the demise of the climate. 

FROM GEOENGINEERING to ENGINEERING

What has become clear not just from this documentary but from the declassified information concerning covid 19 is that the strategy of ‘gain of function’ has been applied with military precision to natural assets and that humanity is not simply potential collateral damage for the greater good.

To bring this point home, let’s now return to the book, The Creature from Jekyll Island, where non-conventional forms of war were discussed to weaken the natural immune systems of the economy and life itself in order to give way to a new world order.

The Iron Report 0f 1966:

The report From Iron Mountain documents the discussions of a think tank group focussing on new and alternative war-type mechanisms by which they could achieve their agenda and strengthen government while subjugating the masses to their plan. 

Many of its participants belong to the Club of Rome and/or the Council of Foreign Relations. Various real or imaginary fear-inducing global threats were discussed, such as extreme poverty, alien invasion, and poisoning the environment.

The citations below summarise their strategic thinking:-

This is what Jacques Cousteau’s had to say in his interview with the United Nations in 1991:

“Should we eliminate suffering diseases? The idea is beautiful but perhaps not beneficial for the long term….In order to stabilise world population, we must eliminate 350,000 per day.”

The Club of Rome concluded that the fear of environmental disaster would be an appropriate substitute for conventional war, and Bertrand Russell echoes this.

“War, as I remarked a moment ago, has hitherto been disappointing in this respect, but perhaps bacteriological war may prove more effective. If a Black Death could be spread throughout the world once in every generation, survivors could procreate freely without making the world too full..”

The First Global Revolution report in 1991 extends this theme further;

“In searching for a new enemy to unite us, we came up with the idea that pollution, the threat of global warming, water shortages, famine, and the like would fit the bill… All these dangers are caused by human intervention…The real enemy, then, is humanity itself.”

Whatever you think of this report, and no matter which angles you view it from, what is clear is that it describes what is playing out before our eyes.

You can see the same actors at work. For example, besides our governments, Bill Gates has invested heavily in the dimming of the sun, just as he has invested heavily into vaccines and stated that they should be a compulsory requirement for all. You see Klaus Schwab regularly talking about a new world order. You see the move toward a CBDC.

This is a giveaway to the totalitarian state imposed on us as part of a new world order. The 15-minute cities are just another twist of the knife, a component of that climate agenda. Psychological strategies, including fear and propaganda, with military-type interventions are being deployed, and their processes are poisoning us.

This is not simply geoengineering gone wrong but an engineered plan in which humanity is both the subject of experimentation and the intended target for the greater good of a few power-hungry groups. Money, power, and control are dominating themes in which the global powers separate themselves from humanity.

A more severe climate issue has emerged based on the fallout of geoengineering practices rather than the original issue it purported to solve.

We are dealing with an engineered climate agenda with elements of truth and massive deception.  Now it is imperative to sort fact from fiction and recreate a different reality based on truth.

FROM ENGINEERING to REVERSE ENGINEERING

So what can we do with this knowledge, and how do we redress what is going on from an individual and collective standpoint? The good news is that this can be stopped, and a combination of things needs to come together for a new healthier, and peaceful reality to emerge.

The remedial viewpoint would be to do your own research and do everything you can to strengthen your immune system, including growing your own food. The geoengineering website has many awareness-raising materials and community action plans to tackle the various issues.

However, for long-term results and to reverse engineer the impact of the damage sustained so far, I agree with the documentary's conclusion, which relays that lasting change has to be an inside-out approach. 

Start by clarifying the objective and work back from that – this is the essence of reverse engineering. What’s worse than the agenda being laid out before us is a scenario where humanity remains paralysed by fear and does nothing to change things. 

What is more empowering than the prevailing agenda is that humanity awakens, not simply to what is going on, but awakens to their true core nature, so they can rise above the fears of current reality to imprint and create something new on a practical front. 

Here are some tips on how to get out of neutral gear and mobilise accordingly:-

TIPS

1. Revisit the natural laws of the universe and re-evaluate your partnerships with people and the things around you. How strong and harmonious are they? Adjust your alignment accordingly.

2. Research those who are void of conflicts of interest in order to move toward truthful reporting. 

3. Use Vandana Shiva’s book on Oneness v The One Percent to develop a framework of action so you can become an Ecopreneur, not just an Entrepreneur.

4. Know yourself, meaning grasp your true potential and the power of your mind. The other side knows and executes this well, albeit for detrimental effect.

5. Adjust your attitude and create better experiences. For example, if you pick litter up from the ground, do so because you care about mother earth and not simply to correct someone else's neglect. One creates an experience of genuine care and gratitude, and the other can create an experience of irritation and resentment. You choose.

6. Know that every action you take, whether individual or collective, counts. That certainty will create its own 100th Monkey Effect.

7. Be willing to share your gifts and resources, no matter how small or big. Spontaneous acts of kindness create a true community, spreading like positive wildfire and spreading light that will dispel any darkness.

It's time for the Ecopreneur to rise!

 

 

About: Anita Narayan. (United Kingdom) My life's work is about helping individuals to greater freedom through joy and purpose without self-sabotage, so that inspirational legacy can serve generations to come. Find me at my Markethive Profile Page | My Twitter Account | and my LinkedIn Profile.
 
 

 

 

 

Stablecoins: The Anchors in the Storm of the Global Economic Crisis

Stablecoins: The Anchors in the Storm of the Global Economic Crisis

The global economic landscape is undergoing a remarkable transformation as the winds of change sweep across borders and the concept of de-dollarization takes center stage. De-dollarization, a term that has gained significant traction in recent years, signifies a paradigm shift aimed at reducing the reliance on the U.S. dollar in international transactions. This phenomenon has captured the attention of economists, policymakers, and financial experts worldwide, heralding a potentially seismic shift in the global economic order.

A confluence of factors has fueled the momentum behind de-dollarization. Geopolitical tensions, trade wars, and the ascent of emerging economic powers have all played instrumental roles in reshaping the global economic climate. In the face of these multifaceted challenges, an intriguing alternative has emerged – stablecoins. These digital currencies, designed to maintain a stable value and minimize the volatility associated with traditional cryptocurrencies, have garnered considerable attention and are poised to disrupt the prevailing financial status quo.

This article aims to delve deep into the concept of stablecoins and elucidate their relevance in the context of de-dollarization. We will explore stablecoins comprehensively, and their potential implications for the global economic landscape. By shedding light on stablecoins and their intricate relationship with de-dollarization, this article aims to provide readers with a nuanced understanding of this fascinating development and its potential ramifications.

Historical Background: The Rise of Stablecoins

We can trace the rise of stablecoins as a significant player in digital currencies back to the early years of cryptocurrency development. While the concept of stable value digital currencies has existed for decades, the advent of Bitcoin in 2009 sparked a revolution in the financial world and laid the foundation for stablecoins to emerge.

In the early days of cryptocurrencies, Bitcoin gained attention for its decentralized nature and potential as a peer-to-peer electronic cash system. However, its extreme price volatility hindered its practical use as a medium of exchange and store of value. Bitcoin's value fluctuated wildly, often experiencing significant price swings within short periods.

Recognizing this volatility as a significant barrier to mainstream adoption, developers, and innovators in cryptocurrency began to explore ways to create digital assets that maintained a stable value. Their goal was to bridge the gap between the advantages of cryptocurrencies, such as efficiency and borderless transactions, with the stability of traditional fiat currencies.

The first stablecoin, Tether (USDT), was introduced in 2014 to address this issue. Tether value was pegged to the U.S. dollar on a 1:1 ratio, providing stability and liquidity for cryptocurrency traders. Despite its controversies and regulatory scrutiny in subsequent years, Tether laid the groundwork for stablecoins and demonstrated the demand for digital assets with stable values.

As the cryptocurrency market matured, stablecoins gained traction, leading to the development of alternative types of stablecoins beyond fiat-collateralized ones. One notable development was the introduction of commodity-backed stablecoins. These stablecoins were designed to be backed by tangible assets like gold or oil, providing stability through the inherent value and strength of the underlying commodities.

Another type of stablecoin that emerged was algorithmic stablecoins. These stablecoins utilized complex algorithms and smart contracts to maintain their value stability. By automatically adjusting the supply and demand dynamics, algorithmic stablecoins aimed to achieve stability without needing direct collateralization.

The popularity and adoption of stablecoins expanded significantly in 2019, especially during periods of market volatility. Stablecoins offered a refuge for traders and investors seeking to preserve the value of their assets during market downturns. Their stability and liquidity made them an attractive alternative to holding traditional fiat currencies in uncertain economic conditions.

The concept of stablecoins gained further momentum with the rapid development of blockchain technology and the rise of decentralized finance (DeFi). Stablecoins became an integral part of the DeFi ecosystem, providing a stable and reliable medium of exchange, collateral, and liquidity in decentralized lending, borrowing, and trading platforms.

Today, stablecoins continue to evolve and diversify, with many projects and protocols entering the market. Governments and central banks have also started exploring the potential of central bank digital currencies (CBDCs) as a form of stablecoin, aiming to leverage the benefits of blockchain technology while maintaining control over monetary policy.

The historical background of the rise of stablecoins showcases the ongoing quest for stability in digital currencies. From the early days of Bitcoin to the present era of DeFi and CBDCs, stablecoins have emerged as a promising solution to address the volatility inherent in cryptocurrencies. With each passing year, their relevance and importance in reshaping the global financial landscape continue to grow, making stablecoins a fascinating phenomenon to observe and explore.


Image credit: Markethive.com

The Great Currency Shift

De-dollarization, a trend gaining momentum in various parts of the world, is driven by geopolitical tensions, trade wars, and the rise of new economic powers. Countries like China, Russia, and Iran have been actively reducing their dependence on the U.S. dollar in international transactions, and this trend is expected to continue in the coming years. It will potentially have an impact on the stability of stablecoin.

The implications of de-dollarization for stablecoins and the broader crypto market appear chaotic at first glance. As the use of the U.S. dollar declines, demand for stablecoins pegged to the U.S. dollar, such as Tether (USDT) and USD Coin (USDC), may decrease. This shift in demand could create opportunities for alternative stablecoins pegged to other major currencies like the euro, yen, and yuan.

According to Bloomberg, the Chinese yuan surpassed the U.S. dollar as China's most popular cross-border currency, rising to a high of 48% of transactions from a low of almost 0% in 2010. This is an illustration of the de-dollarization process in operation.

If the U.S. dollar loses its dominance as the global reserve currency, stablecoins pegged to the dollar would also lose their value and stability. To address this issue, there is a need for new stablecoin legislation to bolster the U.S. dollar. The Circle founder has suggested that Congress pass new stablecoin legislation to strengthen the greenback and prevent de-dollarisation's adverse effects on stablecoins. However, some experts argue that weaponizing the dollar will destroy its reserve currency status, leading to a further rise in de-dollarization


Image credit: Markethive.com

The Future of Stablecoins

Stablecoins can revolutionize how we conduct financial transactions, particularly in the context of de-dollarization. They can provide a secure and stable means of conducting cross-border transactions, investments, and hedging against currency fluctuations. However, governments must address several regulatory challenges and opportunities to ensure widespread adoption.
The future of U.S. pegged stablecoin will depend on several factors, including the continued dominance of the U.S. dollar in the global economy, the development of stablecoin regulations, and the ability of stablecoin to adapt to changing market conditions.

According to CoinMarketCap, every stablecoin with a market cap exceeding $1 billion is pegged to the U.S. dollar, which suggests that stablecoin's success is closely tied to the strength of the U.S. dollar. However, as de-dollarization continues to gain momentum, stablecoin may need to explore alternative pegs to maintain its stability and relevance in the market.

Stablecoins can be created in a variety of methods, but the ones that are currently in use are exogenous (backed by assets from outside the stablecoin's ecosystem) and fully/over-collateralized. Moving away from U.S. pegged stablecoins may likely not result in liquidity problems as long as the stablecoins have enough collateral, especially when a large amount of the collateral is held as highly liquid assets.

Several stablecoin projects are already addressing the challenges of de-dollarization and enhancing financial inclusion. One example is the Stellar network, which uses its native stablecoin, Lumens (XLM), to facilitate cross-border transactions and provide low-cost remittance services. Another example is the MakerDAO project, which uses its stablecoin, Dai (DAI), to provide a stable store of value that is not subject to the volatility of other cryptocurrencies.

Regulatory Challenges

Stablecoins are still largely unregulated, and concerns about their potential impact on financial stability and consumer protection exist. Regulators around the world are grappling with how to regulate stablecoins. This is a concern since stablecoins are very different from conventional crypto. Stablecoins cannot survive as they do without special national regulations. Regulation is a highly jurisdictional issue since, as we can see, crypto laws do vary slightly in different countries.

In the U.S., stablecoin regulation could be more explicit, but the SEC needs to make that happen. The United States may be delaying their response because they intend to release the digital dollar. Additionally, several organizations, including the Commodity Futures Trading Commission (CFTC), the Office of the Comptroller of the Currency (OOC), and the Financial Crimes Enforcement Network (FinCEN), must apply their own federal rules to stablecoins. In addition to federal requirements, states may have their own rules, further complicating the situation. 

Japan has been seeking to regulate cryptocurrencies uniformly. However, because of their peculiar character, stablecoins are expected to undergo special regulation, much as the nation may not even regulate the U.S. dollar-pegged Stablecoins as cryptocurrencies; instead, laws may be based on the real asset they are backed by.

In a developed nation like Singapore, stablecoins are said to comply with legal requirements if the Securities and Futures Act (SFA) is applicable. Before creating a stablecoin there, one must take caution because they come under such regulations. The digital asset shouldn't have any issues functioning in the Singaporean economy if it can comply with certain regulations.

Regarding stablecoin regulation and cryptocurrency in general, Russia has been highly erratic. The nation declares that particular "digital rights" laws put out by the government in 2019 must be followed by crypto-related crowdfunding platforms and projects. Stablecoins are not specifically mentioned in this law; thus, it is reasonable to presume that the same restrictions apply to assets backed by fiat as well.

General Guidelines Regarding Stablecoin Regulation

You are now aware of the many regulations that apply to stablecoins. But because cryptocurrencies are a worldwide commodity, it's critical to recognize the global legislation parallels. Fiat-backed currencies, for example, all plainly emphasize the transfer of value. Therefore, governments will need to ensure that parties may use stablecoins without risk. To prevent these transactions from being utilized for tax avoidance, they will also need to declare them.

The issue of what to do with the stablecoins follows. Some people could utilize them to send money overseas for payments. Others could view them as an alternate means of holding and investing in commodities like gold. Finally, these nations must consider global stablecoin law. In other words, they should observe how other countries accomplish the goals they seek to achieve. Authorities must also discuss if a single worldwide regulatory approach is preferable to several separate ones.

Stablecoins have emerged as an alternative to traditional currencies, offering stability, security, and transparency. In the context of de-dollarization, stablecoins have the potential to play a significant role in navigating the future of the global economy. However, several regulatory challenges and opportunities must be addressed to ensure widespread adoption. As the world shifts away from the U.S. dollar, stablecoins will become increasingly relevant, providing a secure and stable means of conducting cross-border transactions, investments, and hedging against currency fluctuations.

This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

 

About: Prince Ibenne. (Nigeria) Prince is passionate about helping people understand the crypto-verse through his easily digestible articles. He is an enthusiastic supporter of blockchain technology and cryptocurrency. Find me at my Markethive Profile Page | My Twitter Account | and my LinkedIn Profile.

 

 

 

 

Citibank Report Says Asset Tokenization a Killer Use Case for Blockchain and CBDCs What About Crypto?

Citibank Report Says Asset Tokenization a “Killer Use Case” for Blockchain and CBDCs. What About Crypto?

Citibank's latest global perspectives and solutions report claims that tokenizing financial and real-world assets could be the "killer use-case" and a multi-trillion dollar opportunity. The report focuses on Asset Tokenization as the “killer use case” that blockchain needs to drive a breakthrough, with trillions of dollars worth of securities tokenized by the decade's end, forecasting up to $4 trillion. 

Citi is an investment bank on the list of the “Too Big To Fail” banks. Its 165-page research report is titled ‘Money, Tokens, and Games. Blockchains Next Billion Users and Trillions in Value’ and contains bold projections for Blockchain, NFTs, and Central Bank Digital Currencies. 

The report noted that the crypto industry is “approaching an inflection point,” and conversations by a few key figures in the crypto industry were aggregated in the research paper. The list includes Algorand founder Silvio Micali, Aave founder Stanley Kulechov, Ava Labs president John Wu, Polygon Labs president Ryan Wyatt,  and even Zooko Wilcox, the founder of Zcash.

The report pdf is very long, so here’s a summary of a few noteworthy sections and some counter-arguments of why it may be a little askew in these areas. Could it be intentional, or  maybe it’s just wishful thinking on their part? And what does it mean for the crypto industry?


Image credit: Citi GPS pdf
 

Report’s Brief Introduction 

The report begins with a brief introduction from Kathleen Boyle, the managing editor at Citibank, who, presumably, put this report together. She commences by explaining that the potential of blockchain has been overlooked primarily because it's a back-end technology, not a front-end technology like ChatGPT. She says successful blockchain adoption will be achieved when “Blockchain has a billion-plus users who do not even realize they are using the technology.” 

However, she does not say this adoption will come from crypto; it will come from Central Bank Digital Currencies (CBDCs). She also implies that the trillion-dollar opportunity of asset tokenization will come from the blockchains that power these CBDCs, not cryptocurrency blockchains. 

This starkly contrasts what the crypto headlines say about the report. – As DeFi Edge points out there are already some prominent crypto protocols focusing on real-world asset tokenization. This underscores the importance of whenever you hear an institution, be it a mega bank or a government, talking about the benefits and potential of blockchain technology, 99% of the time, they are not talking about cryptocurrency. In almost every case, they talk about private and permissioned blockchains they will control. 

This is why it's a bit scary to see Kathleen explain that blockchain needs “decentralized digital identities, zero-knowledge proofs, oracles, and secure bridges to achieve mass adoption.” She's probably not talking about the same technology we use in crypto. She's talking about different technology. Kathleen also notes that “regulatory considerations are also necessary to allow adoption and scalability without ‘hindering innovation’.” 


Image credit: Citi GPS pdf

Kathleen and her crew estimate the mass adoption of blockchain, not crypto, is 6 to 8 years away. Some would argue that the mass adoption of crypto will come much sooner than that, and the value of the assets tokenized on cryptocurrency blockchains will exceed the $4 trillion the report is projecting. Moreover, the sentiment of crypto heavyweights et al. believes the adoption of CBDCs and asset tokenization on private blockchains will be much lower than the authors' pitch. 

That's because data from the Bank for International Settlements (BIS), the bank for central banks, shows that only 4% – 12% of people will voluntarily adopt CBDCs. The same goes for tokenized assets on private blockchains. If governments control these blockchains, then having all your assets tokenized means you won't truly own them; the government will own them. This is precisely what entities like the World Economic Forum are pushing for. This article explains how you can reject what the globalists are planning.

Central Bank Digital Currencies – CBDCs 

The first part of the report worth covering is about CBDCs. The report projects that between 2 and 4 billion people will voluntarily adopt CBDCs. This is inconsistent with the adoption projections from the BIS and actual CBDC adoption in countries like Nigeria, where adoption is a fraction of a percent. 

It begins by revealing that the obsession with CBDCs comes from the fact that they will allow governments and central banks to micromanage monetary and fiscal policy. In other words, they can control how much you can spend, how much you can save, what you can buy, and so on. Citi’s authors estimate that as much as 20% of all the currency in circulation will be converted into CBDCs by 2030. They also claimed that; 

“The successful launch and adoption of CBDCs would lead to more stablecoin projects becoming mainstream. This is because the stablecoin protocol is now able to hold reserves in CBDCs, which are more stable and liquid than money market instruments.” 

For context, stablecoins are currently backed primarily by US government debt. This is a double-edged sword because it allows the US government to subsidize its spending but also risks crashing the bond market in the event of a stablecoin run. It sounds like stablecoins will soon be backed by CBDCs instead. This is concerning because if CBDCs back stablecoins, it gives governments and central banks de facto control of all the stablecoins in circulation. 

This, in turn, would give governments and central banks control of cryptocurrencies, whose ecosystems rely on stablecoins, such as Ethereum. Ethereum creator Vitalik Buterin said that stablecoins like USDC would have the power to decide future blockchain forks. What’s needed is a genuinely decentralized stablecoin to be developed that will protect crypto projects, like Ethereum, from future stablecoin control. 

The authors list countries that are working on CBDCs and include notes about which technologies they're using. Australia and Norway appear to use Ethereum as part of their CBDC development. It's safe to assume they will use some private version. To their credit, the authors also list risks associated with a CBDC rollout. These include competition between central banks because of currency competition, a loss of privacy, a loss of bank deposits leading to financial instability, and limited adoption. Critics argue that the latter isn't a risk.


Image credit: Citi GPS pdf

Regarding the adoption aspect, the authors highlight the less than 0.05% adoption rate of Nigeria’s eNaira and the slow adoption of the Bahamas Sand Dollar, with FTX’s collapse and C-19 said to be contributing factors to the loss in momentum. This makes their projection of wide-scale CBDC adoption that much more implausible. They blame the absence of said adoption so far on a lack of financial literacy. Arguably, financial literacy is precisely why people aren't adopting CBDCs. 

As explained in this article, it’s important to note the difference between CBDCs and cryptocurrencies. Certain institutions are already trying to market CBDCs as having the same benefits as cryptos as cryptocurrency adoption continues to rise.

Citi’s report presents timelines for when some CBDCs will be deployed. It states a digital Euro will be up and running around 2026. The digital pound will be ready by 2030, but the digital dollar is yet to be determined, and it slams the few brave US politicians for trying to stop its development. 

Decentralized Social Media – DeSo

The second part of the report is about decentralized social media (DeSo). Unfortunately, this chapter is relatively short because DeSo is highly critical due to the overwhelming efforts of governments to censor the internet. This article explains that governments worldwide are in the process of passing online censorship laws. In the European Union, these online censorship laws have already passed and are set to go into force in June this year. 

Since trust in institutions has been declining for decades and slumped after all the pandemic restrictions, their need for this crackdown makes sense. Trust in institutions is crucial for the financial status quo to continue. The recent banking crisis exemplifies what happens when that trust is entirely lost. This is why the authors note that “Blockchain's ability to create a shared, immutable, digital record of transactions could also help users see where particular information originated in order to judge its credibility. This could help build trust.”

The catch is that trust only exists when the blockchain is trustless. The report also notes that with DeSo, “ownership of content and control over the distribution channels remains with users.” This is required to resist online censorship, and it's the same principle that underlies all crypto. You are only financially free when you own and control your assets. 

The report’s authors include a conversation with Aave founder Stanley Kulechov; the remainder of the section is an interview with him. This is primarily because Stanley and the Aave team are working on the Lens protocol, a decentralized social media protocol that will serve as the backend for future DeSo platforms. Stanley believes that games and social media might be how most people become aware of blockchain technology. 

They are unaware that a monolithic crypto project in the DeSo space has been in development and is now up and running for the most part. The founder and architect of Markethive, Thomas Prendergast, envisioned the dystopian system we are experiencing currently and is ahead of the curve with a decentralized platform incorporating a social, marketing and broadcasting network for entrepreneurs that services as a cottage industry. Markethive is an ECOcentric DNA system. 

The Markethive ecosystem culminates with its unique, comprehensive economic center housing the wallets and account facilitation for the user, with merchant accounts for eCommerce facilitation, and enables creators to monetize their content. Its cryptocurrency, Hivecoin, is the cornerstone of this decentralized economic sanctuary and is a portal to sovereignty and financial freedom with gamification thrown in. This is where people are learning about and experiencing crypto and blockchain technology. 

Decentralized Digital Identity – DID

Another section of the report is about decentralized identity. Citi starts with a spooky sentence: "Decentralized identity is a core technology component that will enable regulatorily compliant uses of blockchain while still preserving anonymous/pseudonymous access.” 

They seem to suggest that the purpose of decentralized digital ID is not to do things like interact with cryptocurrency protocols but to be the “identity layer for the entire internet.” Logically, this means whoever controls this identity layer will have unprecedented power. 

Moreover, the report specifies that decentralized digital ID “Does not imply a lack of centralized parties in identity issuance or verification, but that the mechanism of owning, sharing and verifying identity is done in a permissionless, decentralized manner.” 

This is a problem because if the issuance and verification of a decentralized digital ID are centralized, the issuer or verifier can revoke your ability to interact with online services. That's not decentralization, underscoring the need for crypto to find a way to issue and verify digital ID in a decentralized manner. 

Consider that a decentralized digital ID tied to a government-issued document is no different from a centralized stablecoin. Ponder a scenario where your government-issued ID is digitized like the CBDCs backing stablecoins. Additionally, governments worldwide are actively working on rolling out Digital IDs. Countries are at different stages, but skepticism and pushback have existed. 

Naturally, the authors say that the need for digital ID comes from the relentless data collection by big tech. They don't say that most of these big tech companies are aligned with governments and that these so-called decentralized digital IDs will likely just provide this data directly to said governments. 

The authors showcase the recently released Polygon ID as an example of a decentralized digital ID solution, and the infographic suggests that it's built exactly how the authors describe it. There's a centralized issuer and verifier – you only control what you reveal on-chain. 


Image credit: Citi GPS pdf

The report also provides an example of an actual decentralized digital ID: the Ethereum Name Service (ENS). ENS lets you buy a decentralized domain name ending in .eth for those unfamiliar. It has no central issuer or verifier; it's entirely decentralized and is run by a DAO. With that said, you could argue that DAOs aren't that decentralized due to their governance structures. 

The authors appear to argue that an actual decentralized digital ID isn't a solution because it's not tied to so-called verifiable credentials such as government-issued IDs. Instead, they shill their version of decentralized digital ID, which they also call “Self-sovereign identity. They then provide examples of self-sovereign identities and include digital IDs developed by Microsoft and the European Union. To add insult to injury, the authors omit centralized control as one of the risks associated with this technology but imply that crypto is a risk. 

Smart Legal Contracts – SLC

The last part of the report is about so-called Smart Legal Contracts (SLC), also called Contracts 2.0. The authors start with a statistic, and that's that 60% – 80% of all business transactions involve a contract. They note that companies lose 9% of their profits and miss out on an additional 40% of profits from bad contracts. Nick Szabo is the creator of Smart Contracts; however, SLCs are not the same as his smart contracts. It’s the authors that deem them an official subset of Smart Contracts but with different characteristics. 

They clarify that smart legal contracts have no universally agreed-upon definition, but the main difference is they don't involve blockchains. Smart legal contracts are also legally enforceable in their countries of origin. By contrast, legal enforceability is rarely a consideration in smart contracts.

This begs the question of why smart legal contracts are required at all, and the authors reveal the answer. “Smart legal contracts are more dynamic to changing circumstances – to achieve legal compliance, they must include terms that allow them to be paused, modified, or rectified.” 

It sounds like the authors are insinuating that smart contracts cannot be legally compliant due to their immutability. If smart legal contracts don't exist on blockchains, can be adjusted on a whim, and occasionally require human execution, as noted by the authors, then it begs the question of what makes SLCs different from a standard digital contract. The authors don't have a clear answer here. 

To their credit, they concede that smart contracts are likely to be much more popular than smart legal contracts because they provide the following benefits. 

  • They can exist indefinitely.
  • They are transparent.
  • They are tamper-proof.
  • They are secure.
  • They are built on a single source of truth. 

This section of the report is long and consists of the authors tripping over themselves to try and explain why smart legal contracts are the future despite being objectively inferior to smart contracts.


Image credit: Markethive.com

What Does This Mean For Crypto?

So here’s the big question – What does Citibank’s report mean for crypto? If anything, it reveals that institutional investors are looking at the crypto industry through a radically different lens from us retail investors. CBDCs, de facto digital IDs, and changeable smart contracts are not crypto. 

The few sections of the report about crypto were much shorter than those about dystopian technologies inspired by crypto. As mentioned, the chapter about decentralized social media was the shortest of all and could be interpreted as not a coincidence. 

Consider that the purpose of cryptocurrency is to replace megabanks like Citi, as well as most of the institutions that the other authors of this report work for. The first step to this replacement is the awareness of what crypto offers and why it's valuable. This information can be found on social media for now; however, with all the plans and legislations to continually broaden censorship of what authorities deem as mis/dis-information may see it disappear from the mainstream. 

In fact, leaked documents from the Department of Homeland Security stated that the US government was looking to censor information on social media, which fosters distrust in the financial system. Whoever still doubts that the government would resort to censoring financial information look no further than the recent banking crisis. In the subsequent hearings about the crisis, multiple US politicians pointed to social media as the cause of the bank runs that precipitated it. 

If you read this article about bank bail-ins, you'll know that US government officials discussed censoring discussions of bank runs on social media in their bank bail-in simulation late last year. It's more than likely that other governments would secretly consider the same behind closed doors. Now, I mention all of this because Citibank's report is part of what can only be described as an ongoing information war against cryptocurrency by the establishment. 

Another example is mainstream media articles about how Bitcoin mining is killing the planet, which is untrue. When it becomes clear to the establishment that they are losing this information war, they will resort to censorship to ensure that the trust in their increasingly unstable financial system remains. 

This crossroads is coming sooner than people think because everyone is waking up to CBDCs. People are also starting to wake up to the fact that not all cryptocurrencies are created equal, and the establishment is co-opting some crypto projects, companies, and technologies to usher in a dystopian new system. This system requires a digital ID; their fake decentralized digital IDs are the trojan horse. 

Always remember that blockchain does not equal crypto, and take every statement about crypto from megabanks and central banks with a massive grain of salt. The same goes for headlines about how mega and central banks embrace crypto. The likelihood is that they're doing the exact opposite. 

 

 

This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

 

Editor and Chief Markethive: Deb Williams. (Australia) I thrive on progress and champion freedom of speech. I embrace "Change" with a passion, and my purpose in life is to enlighten people to accept and move forward with enthusiasm. Find me at my Markethive Profile Page | My Twitter Account | and my LinkedIn Profile.