April 4, 2022

April 4, 2022

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EmergingCrypto.io Weekly Update March 27 - April 2

Africa

Image Credit: James Wiseman via Unsplash

African crypto adoption hurting African firms: Report by the American University in Cairo

Last week UNLOCK Blockchain reported on a paper published by the American University in Cairo professors, Mina Sami and Wael Abdallah titled, “Does Cryptocurrency Hurt African Firms?” The results of the study concluded that:

1. Cryptocurrency market hurts the firm market value in Africa.

2. The firms operating across different sectors respond disproportionally to the cryptocurrency market. For instance, the sectors that offer low returns in Africa (Industrials, Energy, Financials) negatively respond to the cryptocurrency market. While the sectors that offer high returns (Real Estate and Information Technology) are not significantly affected.

3. The cryptocurrency market has a perverse effect on less experienced and highly indebted firms.

4. The consistent policies of governments to ban cryptocurrency did not work efficiently.

Some interesting factoids referenced in the report include that "57 percent of the continent citizens are still unbanked", "Africa has the world’s largest share of retail-sized transfers in the cryptocurrency market, accounting for almost 30% of all transactions", and "many African countries have the most significant share of cryptocurrency users globally". (Read on EmergingCrypto.io; Read on UNLOCK Blockchain) 

Central Bank of Sudan on the offensive against crypto as national currency sinks and inflation continues to skyrocket

The Central Bank of Sudan was on an offensive last week against crypto use, warning Sudanese crypto users to avoid all cryptocurrencies due to the risks they pose per their announcement via the Sudan News Agency. The Sudanese Pound has been experiencing very high rates of inflation over the last couple of years. "According to the country’s Central Bureau of Statistics, Sudan’s inflation rate averaged 359.09% in 2021, up from 163.26% in 2020. In February 2022, it slowed down to 258.40%" as reported by Cointelegraph. For people in countries with inflation rates this high, decentralized cryptocurrencies like bitcoin are considered primary use cases and a key outlet for these people to preserve their wealth. (Read on EmergingCrypto.io; Read on Cointelegraph)

Asia

Image Credit: Wael Hneini via Unsplash

Crypto payments for real estate in Dubai increase by 300% so far in 2022

Crypto payments for real estate in Dubai has already increased by 300% so far during the first quarter of 2022, and the trend is expected to continue to grow according to UAE real estate industry experts. Investors' preferences for crypto are because "it is a simple, rapid, trustworthy, and low-cost alternative compared to bank transfers." Despite the influx of requests, local real estate companies maintain that crypto-based payments require oversight and regulation by UAE regulators. Earlier in March Reuters reported that the UAE has become THE safe haven for Russians who are looking to liquidate their crypto for either hard currency or real estate. Last week Reuters reported that wealthy Russians are also turning to the Turkish real estate market and using "cash converted from cryptocurrency" to buy property. (Read on EmergingCrypto.io; Read on UNLOCK Blockchain) 

India crypto tax becomes law and imposes a 30% tax on crypto holdings and transfers

The high level of taxation that is coming to Indian crypto users has been making headlines in India over the last several months and that day has come. Last week the upper house of India's parliament approved new tax rules that imposes a 30% tax on crypto holdings and transfers effective April 1, 2022. Furthermore, traders will not be able to offset any losses against their profits and trading pairs will be considered independent for any tax deductions. India's government didn't stop there and also imposed a 1% tax on every crypto transaction that will go into effect on July 1, 2022. Needless to say the Indian crypto community wasn't thrilled by the passage of this law and acts like these could result in a talent brain train in the country of roughly 1.4 billion people. (Read on EmergingCrypto.io; Read on Cointelegraph)

Latin America

Image Credit: Coinbase and 2TM

Coinbase's LATAM play with the acquisition of Brazil's 2TM for $2.2B USD

Coinbase is an unstoppable force in the crypto world as its acquisition spree continues with the $2.2B USD purchase of Brazilian company, 2TM, the parent company of Mercado Bitcoin, LATAM's largest crypto exchange, as reported by Cointelegraph. Brazil is Latin America's largest economy, has one of the most active crypto economies, and Brazilians are some of the most enthusiastic investors and users of crypto. This acquisition gives Coinbase a strong foothold in the Latin American giant as the company continues to expand outside the United States. (Read on EmergingCrypto.io; Read on Cointelegraph) 

Argentina's Tienda Crypto implements the Terra blockchain for UST and LUNA deposits and withdrawals

Brazil's cultural rival, Argentina, is also a hotbed for crypto innovation and adoption. Last week it was reported that Argentine exchange, Tienda Crypto, has opted to implement the Terra blockchain in order to make deposits and withdrawals of LUNA, Terra's native token, and UST, Terra's USD stablecoin, which is currently offering up to 19.49% APY on the Anchor Protocol. CEO of Tienda Crypto, Federico Coldberg, commented that Tienda Crypto offers its users the ability to acquire UST to preserve their wealth and the ability to earn a high interest rate. Argentina has some of the highest rates of crypto adoption and is currently ranked 10th on Chainalysis' 2021 Crypto Adoption Index. (Read of EmergingCrypto.io; Read on Cointelegraph)

Eastern Europe

Image Credit: Israel Palacio via Unsplash

The Russian government's perspective on crypto thaws as officials call to legalize crypto mining

The official Russian perspective towards crypto is fluid. Earlier this year the Central Bank of Russia recommended a total ban on cryptocurrencies and now both the Ministry of Energy and Ministry of Finance are calling for the legalization and regulation of the industrial crypto mining industry. Russian Deputy Minister of Energy, Evgeny Grabchak, said, "The legal vacuum in the field of cryptocurrency mining needs to be eliminated as soon as possible." In addition, the Deputy Director of the Financial Policy Department of the Ministry of Finance, Alexei Yakovlev, is calling for the development of industrial mining, a taxation regime, and to continue to allow individual household miners to operate as they do today without a ban. The arc of the Russian narrative, and the shift in tone, is clearly impacted by the ongoing war in Ukraine and the slew of sanctions that have impacted the Russian economy and Rouble. (Read on EmergingCrypto.io; Read on Cointelegraph) 

The IMF warns that western sanctions on Russia impacts the dominance of the US dollar

Rounding off this week's newsletter, the IMF warned last week that the ongoing sanctions imposed on Russia as a result of their war with Ukraine may result in the reduced dominance of the US dollar, according to Gita Gopinath, first deputy managing director of the IMF, in an interview with the Financial Times. Furthermore, Ms. Gopinath warned that these restrictions could lead to an emergence of small currency blocs based on the trade relationships they have with each other. She also noted that the rising use of crypto in global trade will further impact the dominance of the US dollar and could lead to Central Banks diversifying their reserve assets away from the US dollar towards other assets, including crypto potentially. Despite her warnings, Gopinath did indicate that the US dollar will continue to be the world's reserve currency for the time being. However, the war in Ukraine will amplify the use of digital assets, from crypto to stablecoins and central bank digital currencies (CBDCs). (Read on EmergingCrypto.io; Read on CoinNewsExtra)

Thanks for reading and have a great week ahead!