President Vladimir Putin has joined the debate on the future of cryptocurrencies in Russia, calling on the government and central bank to work out a common position on their regulation. The Russian leader also emphasized Russia’s strengths as a crypto mining destination.
Putin Asks Ministers and Bankers to Report Back With Consensus on Cryptocurrencies
Russian President Vladimir Putin has added his comments to the ongoing discussion on how to put Russia’s growing crypto space in order. At the start of a video conference with the members of the Russian government, Putin gave his take on “an issue that is currently in the spotlight – the regulation of cryptocurrencies.”
The Central Bank of Russia has its own position, Putin said, acknowledging some of the concerns expressed by the monetary authority. The head of state noted that the bank’s experts believe the expansion of crypto-related activities carries certain risks, first of all for Russian citizens, given the high volatility and other aspects.
The president also pointed out that Bank of Russia does not stand in the way of progress and is making the necessary efforts to introduce the latest technologies in this field. His remarks come after the CBR recently launched the pilot phase of its digital ruble project.
A week ago, Russia’s central bank proposed a blanket ban on a range of operations involving other digital coins including the issuing, use, investing, trading, and mining of cryptocurrencies like bitcoin. Its hardline stance, elaborated in a consultation paper on the matter, was met with opposition from members of the government and parliament in Moscow.
This week, the Ministry of Finance joined the front against the CBR. The head of its Financial Policy Department, Ivan Chebeskov, insisted that the crypto market needs to be regulated, not banned. In his view, the main task is to provide protection for the interests of investors and citizens who use cryptocurrencies, which requires regulation, not prohibition.
According to a report by the business news portal RBC on Thursday, the finance ministry has prepared its own proposal for the regulation of cryptocurrencies without their prohibition. The department suggests all crypto-related transactions should be carried out through Russian banks. It also calls for introducing identification for Russians owning crypto wallets and dividing investors into two groups — qualified and non-qualified.
In his address to the members of the Russian cabinet, Vladimir Putin also stated:
I would ask both the Government of Russia and the Central Bank to come to some kind of unanimous opinion during the discussion, and I would ask you to hold this discussion in the near future, and then report on the results that will be achieved.
The Russian president also highlighted his country’s “competitive advantages” as far as crypto mining is concerned. Putin pointed to the surplus of electricity in energy-rich Russia as well as the availability of a qualified workforce. Russia’s significance on the bitcoin mining map has increased since China launched a crackdown on the industry last year.
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Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.
Image Credits: Shutterstock, Pixabay, Wiki Commons
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Fed report finds most Americans who own crypto tend to be high income hodlers
Only 12% of American adults used crypto in 2021, and the demographic gap between those who invested in it and those who used it in transactions was enormous.
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The United States Federal Reserve Board has included data on cryptocurrency in its new Economic Well-Being of U.S. Households in the 2021 report. The Fed’s ninth annual report looked at survey results from 11,000 people questioned in October and November 2021.
The report indicated financial wellbeing is the highest it has been since reporting began, with 78% of U.S. adults “doing okay or living comfortably financially.” That is an increase of 3% over the last three years. As a diagnostic of financial fitness, the report cites the 68% of Americans who say they could cover a $400 emergency expense using cash or its equivalent alone.
The report looked at cryptocurrency usage for the first time. It found that 12% of U.S. adults held or used crypto in 2020, with 11% holding it as an investment, 2% using it for a purchase or payment and 1% sending it to friends or family. Investors holding crypto “were disproportionately high-income, almost always had a traditional banking relationship, and typically had other retirement savings.” Forty-six percent had annual incomes of $100,000 or more and 89% of those who were not retired had retirement savings. Twenty-nine percent had incomes under $50,000.
The profile of the typical user making transactions with crypto differs starkly from investors. The report claimed that almost 60% of these users had incomes below $50,000, with 20% having incomes under $25,000. Only 24% had incomes above $100,000. Thirteen percent did not have a bank account. That compares with the 6% of adult Americans who lack bank accounts. Twenty-seven percent of those who used crypto for transactions did not have credit cards, compared to 17% of the total population.
Those who used crypto for transactions faced other disadvantages as well. Almost a quarter did not have a high school diploma, according to the results of the report.
WEF 2022: Bankers at WEF see the need for caution and speed on central bank digital currencies
Experts point out sticking points as well as greatest needs in the creation of central bank digital currencies for domestic and cross-border, wholesale and retail, uses.
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The process of introducing a central bank digital currency (CBDC) is fraught with unknowns, some of which were elucidated in a panel of experts gathered Monday at the World Economic Forum in Davos, Switzerland. The panel concluded that good design is key to a successful CBDC, and there are fewer challenges for wholesale CBDC introduction.
Bank of Thailand governor Sethaput Suthiwartnarueput said that although many central banks are considering a CBDC, there is little practical experience with them. The Thai National Bank began proof-of-concept programs in 2018. Its mBridge project began as an experiment in establishing a cross-border wholesale payment corridor with the Hong Kong Monetary Authority and has grown to include the Bank of China, the United Arab Emirates and the Bank for International Settlements. Cross-border transactions using traditional banking technology can take days to complete, while CBDC transactions are much faster.
Suthiwartnarueput said the use of blockchain technology can have unintended consequences. It is good for transparency, he said, but anonymity affects scalability. There is risk in a CBDC’s design because smart contracts require that the handling of every situation be specified ahead of time. He cited the current sanctions on Russia as an example of a potential challenge to CBDC design. The Thai central bank is looking at a “limited pilot” for a retail CBDC in the fourth quarter of this year.
International transactions between persons, especially remittances from workers located in other countries, which make up a market of $48 billion per year, are one of the most pressing use cases for CBDCs. Suthiwartnarueput said CBDCs can carry out such transactions at 50% less expensive and 68% faster than current money transfer technology. Currently, the average fee for a transfer of this type is 6.3% of the transaction sum.
Credit Suisse chairman Axel Lehmann pointed out the rapid progress being made by non-blockchain fast payment technologies and raised questions for domestic retail CBDCs, such as whether accounts with central banks would pay interest. Privacy and intermediation are other thorny issues for retail CBDCs. International Monetary Fund managing director Kristalina Georgieva said, “We feel a little behind the curve” in the creation of retail CBDCs, and Bank of France governor François Villeroy de Galhau agreed, saying a “CBDC is not the monopoly on progress,” and central banks should not waste time in introducing it.
Suthiwartnarueput and the French central banker agreed that cross-border wholesale CBDC settlements may become a reality within five years.
fUSD stablecoin launch and rumors of Cronje’s return send Fantom (FTM) price higher
After a strong 2,000% rally in early 2021, Fantom (FTM) price collapsed alongside multiple altcoins and even though the blockchain has an impressive capability, it has yet to find mass adoption due to the lack of a compelling use case. FTM price hit an all-time high at $3.46, only to collapse to its pre-bull market lows under $0.25 after the failure of the Solidly DeFi project and the departure of developer Andre Cronje.
Three reasons for the uptrend in FTM price are the launch of the first native stablecoin on the Fantom network, new protocol upgrades and partnership announcements, which bring new functionality to the network, and speculation that Andre Cronje is working with decentralized finance (DeFi) protocols on Fantom.
Fantom launches its first native stablecoin
The most notable development to occur in the Fantom ecosystem in the past few weeks was the release of fUSD, the first native stablecoin on the network.
The launch of fUSD comes on the heels of the collapse of TerraUSD and looks to capture some of the capital flight from algorithmic stablecoin by offering an over-collateralized alternative.
On May 20, the Fantom Foundation released an update outlining the maximum collateral factor and minting cap for each supported form of collateral. The foundation also set the fUSD staking reward at 11.3%
The update also included details on Fantom liquid staking, setting a global cap of 150 million staked Fantom (sFTM), removing validators for the list of those eligible to mint sFTM and setting a loan-to-value (LTV) ratio of FTM at 90% for the purposes of minting sFTM.
New partnerships improve sentiment for FTM
A handful of recent protocol updates and new partnerships have also helped to bring a boost in momentum to Fantom, including the launch of Snapsync, which allows new nodes to quickly join the network.
With the integration of Snapsync, the time it takes for new nodes to synch could be reduced from 24 to seven hours, helping to enhance network reliability, improve scalability and create a greater degree of decentralization.
Fantom has also announced that it is currently in the process of launching Gitcoin on the Fantom network to simplify the process of obtaining grants to develop in the Fantom ecosystem.
Fantom also partnered with Unmarshal and XP.Network. Unmarshal is a Web3 infrastructure provider that will integrate its indexing services with the Fantom protocol to give developers easy access to organized and granular on-chain data.
Through the partnership with XP.Network, Fantom users will be able to bridge nonfungible tokens (NFTs) between Ethereum (ETH), BNB Smart Chain (BNB), Elrond (EGLD), Aurora (AURORA), Tron (TRX), Avalanche (AVAX) and Velas (VLX).
Did Andre Cronje return?
Another factor, albeit speculative, bringing a boost FTM price is speculation that well-known DeFi developer Andre Cronje could be contributing toward DeFi development on the Fantom network.
Amid rumors about the return of lead DeFi developer Andre Cronje, the price of the native FTM token has risen by almost 40%. Cronje proposed a number of measures aimed at stabilizing the situation and increasing the sustainability of the Fantom ecosystem as a whole.
— Ashley Torres (@torresamba) May 23, 2022
The speculation started when Cronje submitted an fUSD optimization proposal that designed to solve a major depegging issue with the stablecoin on May 20 . A Fantom wallet that is believed to belong to Cronje has also added more than 100 million FTM over the past two weeks.
VORTECS™ data from Cointelegraph Markets Pro began to detect a bullish outlook for FTM on May 20, prior to the recent price rise.
The VORTECS™ Score, exclusive to Cointelegraph, is an algorithmic comparison of historical and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.
As seen in the chart above, the VORTECS™ Score for FTM spiked to a high of 89 on May 20 at the same time as its price began to increase 62.3% over the next three days.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
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