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Venezuela announces to pay passport fees in Cryptocurrency Petro

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According to Bloomberg, the Vice-President of Venezuela, Delcy Rodriguez, recently announced that passport issuance fees can only be paid in the government-created cryptocurrency Petro as of November 1, 2018. The official wallet is already available in Google Play store, but the people will not be able to use it until November 5th. Moreover, the Petro will be tradeable on some of the biggest exchanges, such as Binance and OKEx.

Additionally, the fee of a passport has increased to 7,200 ($115.77) bolivars to get a new passport. In November, this will increase to two Petros for a new passport and 1 Petro for an extension. The move comes at a time of mass emigration from Venezuela due to its deep economic crisis. What’s interesting is that What is worth mentioning is that the average monthly minimum wage in Venezuela is four times less than the cost of the increased passport fee. According to Blomberg the reason for the high fees could be due to the scarcity of the passports.

The use of cryptocurrency is the latest move by Venezuela to control the side-effects of inflation and a crippling economy by using cryptocurrencies to circumvent capital controls.

Latin American newspaper El Universal sighted Rodriguez as saying: “in the case of Venezuelans who are abroad, until the first day of November the cost will be $200 for issuance and $100 for extensions.”

Socialist President Nicolas Maduro has stated that the cryptocurrency would be the cornerstone to help the country get out of economic crisis. However, a report by Reuters found that it is not a “functional financial instrument”.

Furthermore, there arises some controversy about the digital viability of the Petro. The core developer of Ethereum Joey Zhou pointed out in a Tweet posted last week that petro has allegedly plagiarised parts of its whitepaper from the GitHub repository of Dash. This generates a question mark whether the Petro will be able to do some meaningful work in helping the country get back on its feet.

Venezuela’s mass emigration & Economic crisis

Giving you a brief background of Venezuela’s currency which is facing downward spiral these days. Since the start of this year Venezuela’s currency, the Venezuelan Bolívar, has fallen by more than 99 per cent. In stark contrast, the opposition-led Congress estimates that the annual inflation is 200,000 per cent.

It seems that the raising of the passport fees is an attempt to stop locals from fleeing the country. According to the United Nations, around 2.6 million Venezuelans have fled the country, with most of them heading to other South American countries. From that figure, about 1.9 million have left since 2015, under Maduro’s governance.

 

 

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Barclays, a British financial service stops working on Crypto project

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According to some sources, Barclays, a British multinational service company has stopped doing work on a cryptocurrency trading project, in the latest twist for banks hoping to tap into the rapidly growing sector. There was speculation in April 2018 that Barclays Bank Plc. was considering introducing a cryptocurrency trading desk to join Goldman Sachs Group in the initiative. It may appear that it will not be happening, at least for now.

Not too long ago, the financial institution was interested in doing positive development in the crypto world. Earlier this year, the investment bank in this regard put together a senior team to look at how it could incorporate the trading of digital assets into its markets business. The initiative, however, has been put “on ice”, in other words, it has been delayed, one of the people said.

Read Also: IMF says the rapid growth of Crypto market will impact global financial system

 Tyrer worked alongside Marvin Barth, head of FX and emerging markets macro strategy at Barclays, on the project. Lee Braine, a senior technologist at an investment bank, and consultant Matthieu Jobbe Duval also worked on the venture.

The sources informed, the four were exploring whether cryptocurrencies could be a viable long-term asset class, whether Barclays’ clients are interested in the project and what IT infrastructure would be required.

Barclays’ chief executive Jes Staley told the bank’s annual general meeting in May that Barclays remained careful of the regulatory and compliance issues surrounding the asset class. “There is the possibility of cryptocurrencies being used for activities that the bank wants to have no part of,” he said.

The decision to shelve the project will be of interest to the UK’s lender’s rivals, many of which have been exploring ways to profit from the explosion of interest in cryptocurrencies.

JPMorgan transferred Oliver Harris into the newly-created position of head of crypto-strategy in May, while Goldman Sachs said it is looking into opening a desk for trading cryptocurrencies.

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Zambia’s Central Bank says Bitcoin is not legal in the country

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Zambia’s central bank has said that cryptocurrencies like bitcoin are not legal tender in the country.

As you know that many nations are introducing friendlier policies for blockchain technology and there’s a positive development overall in the Blockchain industry but Zambia has a different point of view when it comes to cryptocurrency. The Bank of Zambia (BoZ), responsible for creating and implementing monetary policies for the world’s 105th largest economy, explained their stance against the use of cryptocurrencies in contrast to the growing public interests in the field.

According to a local news report. The central bank admitted that it was receiving a lot of inquiries related to Bitcoin’s legal status in Zambia, and they had to “safeguard the interests of members of the public and to maintain the integrity of the financial system” with its official stance on the digital currency.

BoZ believes there are certain clauses in their financial constitutions, naming Section 30 which do not allow giving Bitcoin a legal status in Zambia. BoZ stated that clauses and said they are the barrier in the way of Bitcoin and similar digital assets from having a legal tender status. Also, the bank agreed that they had no constitutional power to disfigure or ban the local crypto market under the existing legal framework.

“Firstly, Section 30 of the Bank of Zambia Act vests the right to issue notes and coins exclusively in the BoZ. To date, BoZ has not issued any form of cryptocurrency. Cryptocurrencies are not legal tender in the Republic of Zambia; Secondly, BoZ does not oversee, supervise nor regulate the cryptocurrency landscape. Consequently, any and all activities related to the buying, trading or usage of cryptocurrencies are performed at owner’s risk.”

BoZ also issued a warning regarding the investment in cryptocurrency. The bank said that the investors should be aware of the risks associated with the use of cryptocurrencies. It added money laundering, consumer protection (related to hacking and fraud), and terrorism financing to its statement, reminding that they will not be able to offer any legal recourse to crypto users if they get subjected to any of such online crimes.

As of now, the Zambian crypto community does not constitute any significant trading activity to the global crypto volume. The country does not have an active local exchange, and the local crypto traders mostly rely on either foreign crypto exchanges or peer-to-peer desks to conduct their transactions. It might be due to the lack of crypto education in a country where only 11.6 percent of people have an internet connection, according to a World Bank report.

What do you think Will Zambia ever give a legal status to cryptocurrency or not? Let us know in the comment section or email at aqsa9990@gmail.com

 

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IMF says rapid growth of Crypto market will impact global financial system

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The International Monetary Fund (IMF) has stated in a recently released report that the rapid growth of Bitcoin and crypto could impact the international finance system.

The report entitled “World Economic Outlook: Challenges to Steady Growth” published by the IMF read:

“Cybersecurity breaches and cyberattacks on critical financial infrastructure represent an additional source of risk because they could undermine cross-border payment systems and disrupt the flow of goods and services. Continued rapid growth of crypto assets could create new vulnerabilities in the international financial system.”

Despite the 80 percent decline in the valuation of the crypto market, the industry has seen some of the most positive developments regarding the institutionalization, regulation, and development of cryptocurrencies as an emerging asset class in the past nine months.

Led by existing companies like Coinbase and Gemini, major financial institutions in the likes of NYSE, Cboe, and Goldman Sachs have started to strengthen the infrastructure of the cryptocurrency market, allowing both high profile retail traders and institutional investors to allocate large amounts of money in the asset class.

As the cryptocurrency sector continues to grow at an exponential rate, the IMF emphasized that it could create vulnerabilities in the financial system. Because cryptocurrencies are considered alternative currencies with value, a growing number of hackers have started to target digital asset trading platforms with sophisticated tools and hacking methods.

Jeon Ha-jin, the chairman of South Korea Blockchain Association said,

“Stealing cryptocurrencies is similar to stealing cash, and exchanges will continue to be targeted by hacking attacks in the long-term. It is as important to establish systems to deal with the aftermath of hacking attacks as integrating various methods to prevent hacking attacks.”

In South Korea, the third largest cryptocurrency exchange market behind the US and Japan, exchanges have begun to insure their funds through trusted insurance providers like Samsung to add an additional layer of security and investor protection.

Gemini, a leading cryptocurrency exchange in the US alongside Coinbase, also recently obtained insurance services from Aon to ensure that in an unlikely event of a security breach, the exchange is able to cover user funds and holdings fully.

Emin Gun Sirer, a professor at the prestigious Cornell University and a highly regarded expert in the space of cryptocurrency and blockchain, stated that the acknowledgment of cryptocurrencies as an asset class by the IMF is optimistic for the industry.

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