Aurelia Butler

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    in Cryptocurrency

    We must rethink purchasing power parity (PPP) in the cryptocurrency era | Opinion

    Nestled securely and transparently within the realms of blockchain technology, digital assets are scripting a new global financial tale, one that surpasses geographical borders and paves the way for a redefined understanding of purchasing power parity (PPP).Before delving further, it is crucial to comprehend the recent fluctuations in traditional economic measurements. A pertinent example is the notable decrease in the US dollar’s purchasing power, accentuating the necessity to adapt and evolve amidst changing economic landscapes. Through the lens of the Consumer Price Index (CPI) — a barometer gauging the alterations in the price of goods and services over time — it was observed that in 2022, the US dollar could buy merely 92.6% of what it could in 2021. This essentially underscores a 7.4% dip within a year, a result of inflationary pressures.US purchasing power data 2021 and 2022 | Source: U.S. Bureau of Labor StatisticsIn simple words, the erosion of the dollar’s value not only illustrates a numerical downturn but echoes a shift in financial perspectives and methodologies embraced by both individuals and nations globally. At this pivotal crossroads, the cryptocurrency domain rises as a harbinger of potential fairness, casting a ray of hope in a society grappling with entrenched disparities.Over the years, assets like Bitcoin (BTC) have ascended exponentially, presenting a formidable counter to the inflationary trends beleaguering fiat currencies. Since its genesis, the value of Bitcoin has skyrocketed by an astounding 3.4 billion percent, thereby proposing itself as a resilient alternative to conventional financial assets.BTC ROI over the years | Source: Case BitcoinTaking center stage in this narrative is El Salvador, a country that boldly embraced Bitcoin as legal tender in September 2021, stirring discussions and hopeful anticipations across the globe. Early indications suggest a surge in economic welfare for the nation, thereby hinting at a potential positive reshaping of the country’s PPP.EL Salvador GDP per capita PPP adjusted | Source: Trading EconomicsFor those unacquainted with the term, PPP is an economic theory that examines the relative values of different countries’ currencies through a “basket of goods” methodology. This approach aspires to gauge the intrinsic value of a currency, offering a more grounded depiction of a nation’s economic vitality, as opposed to just its market value.Moreover, Asian nations are not far behind, keenly exploring avenues to integrate cryptocurrencies into their financial ecosystems. The broader implication of these developments beckons a reimagined global marketplace, where individuals’ economic prosperity is not shackled by the depreciating value of their national currencies or influenced unduly by central bank policies. Picture an environment where the decentralized nature of cryptocurrencies fosters a more equitable wealth distribution, inaugurating a new epoch of financial stability and inclusiveness.But the question persists — how can cryptocurrencies truly reinvent the foundations of PPP and pave a streamlined pathway for the global populace? Let’s venture further to uncover the transformative potential lying within the nexus of cryptocurrency and purchasing power parity.To comprehend the gravity of this shift, let’s dissect the potential role of cryptocurrencies in bridging the gaps in global PPP:Tangible shifts in global financial dynamicsAs we embrace the digital currency revolution, it’s critical to understand that cryptocurrencies could potentially play a transformative role in recalibrating global financial dynamics. In traditional PPP calculations, goods and services are often analyzed within the confines of national boundaries, not accounting for the disparities in access and availability globally.Cryptocurrencies, on the other hand, could foster a global market where prices converge more organically, without being overly influenced by localized economic policies or fluctuations. For instance, in nations with higher inflation rates, residents might prefer holding cryptocurrencies to preserve their wealth, indirectly steering towards a more standardized pricing level globally.Moreover, the increased adoption of cryptocurrencies in emerging markets, as substantiated by the over 30% usage rates in countries like Nigeria, Turkey, and the UAE, could act as a catalyst in harmonizing economic disparities. By providing a unified medium of exchange, they could potentially dampen the effect of volatile exchange rates, making goods and services more comparably priced across borders, thus making PPP more representative of real-world economic conditions.Cryptocurrency supply factorThe supply of cryptocurrencies can be a significant factor in reshaping the global economic landscape. Fiat currencies, often subject to inflationary pressures due to factors like increased government borrowing or monetary policies, can see fluctuating values which in turn affects the real purchasing power of individuals. Cryptocurrencies, particularly Bitcoin, operate on principles that resist inflation — a capped supply, decentralized control, and transparent algorithms. By potentially serving as a hedge against erratic inflation, cryptocurrencies could foster an environment where individuals in countries with high inflation can preserve their purchasing power, thereby narrowing the discrepancies in PPP.Furthermore, the transparent and decentralized nature of cryptocurrencies can potentially result in more predictable economic policies, promoting stability and trust in the financial ecosystem.Cross-border transactions and remittancesCryptocurrencies stand as a transformative force in facilitating cross-border transactions, a critical element in influencing PPP. Traditional channels of international money transfers are often associated with high transaction fees and unfavorable exchange rates, which can significantly diminish the purchasing power of individuals, especially those in developing countries.Cryptocurrencies can mitigate these challenges by providing a more streamlined and cost-effective solution for cross-border transactions. By reducing transaction fees and processing times, they can enhance the purchasing power of individuals globally. This could potentially result in a more balanced distribution of wealth, fostering a global economy where remittances contribute positively to the economic wellbeing of nations, and consequently, influencing a more equitable PPP globally.Decentralization: a catalyst for economic equalityDecentralization, a fundamental principle underlying cryptocurrencies, holds the potential to be a potent force in reshaping global PPP. By circumventing the need for central banks and financial intermediaries, cryptocurrencies foster an environment that promotes economic equality.In this new financial landscape, individuals will have greater autonomy over their assets, which could potentially lead to a more equitable distribution of wealth globally. This decentralization could curb economic monopolies and encourage competition, fostering a global market where opportunities and financial access are not confined to geographical locations but are widespread and inclusive.Moreover, by removing barriers to entry in the financial markets, cryptocurrencies can potentially foster a more inclusive financial ecosystem where individuals have better access to investment opportunities, thereby promoting economic growth and narrowing global PPP disparities. This democratization of financial access could be a significant step towards achieving a more balanced global economic landscape, where PPP is more reflective of the actual economic conditions experienced by individuals across different nations.In our endeavor to envision a financially cohesive world, it is imperative to scrutinize the profound impact cryptocurrencies are beginning to imprint on economies grappling with hyperinflation, a phenomenon that often distorts conventional approaches to calculating purchasing power parity. When examining the case of countries like Zimbabwe and Venezuela, which have witnessed the plummeting value of their fiat currencies, the role of cryptocurrencies cannot be understated.Unlike traditional fiat currencies, cryptocurrencies offer a decentralized, stable, and universally accepted store of value. This quality could potentially provide a more robust buffer against the volatility experienced in hyper-inflated economies. In this regard, cryptocurrencies could emerge as a sanctuary of stability, recalibrating PPP calculations to mirror the true economic realities of these regions. Through this transformation, nations battling economic instability might find a pathway to regaining financial equilibrium and fostering a healthier economic environment, thus presenting a more accurate reflection of a nation’s economic pulse and offering a more reliable gauge for PPP.In addition to offering a bulwark against hyperinflation, the world of cryptocurrencies brings forth innovative technologies like smart contracts that are poised to revolutionize asset management and the real estate sector — both of which significantly influence a nation’s PPP dynamics. Smart contracts, characterized by their transparency, security, and efficiency, promise to disrupt the traditional paradigms governing real estate transactions. By facilitating a more fluid and accessible market, this technological advancement could reshape the “basket of goods” that underpins PPP calculations. As we stand on the threshold of an economic revolution, two formidable challenges command our attention: the inherent volatility of cryptocurrencies and the burgeoning environmental concerns associated with their proliferation, particularly regarding Bitcoin mining.Let’s delve into the volatility that currently characterizes the cryptocurrency landscape, a fluctuation that poses as both a blessing and a curse. While these dramatic price swings present lucrative opportunities for traders and investors, they remain a significant stumbling block in the path of cryptocurrencies becoming mainstream, and a reliable pillar in calculating PPP. The pressing question then beckons: how can we integrate cryptocurrencies into the global economic structure without the threat of drastic value fluctuations? Currently, the solution seems ambiguous as market sentiments largely govern the cryptocurrency values. The pathway to tempering this volatility calls for concerted efforts from policymakers, financial analysts, and economists to innovate and strategize, crafting a future where cryptocurrencies harmonize with the principles of stability and predictability, fostering a balanced global economy.In parallell, we confront the environmental implications that accompany the stride of cryptocurrencies. The escalating concerns surrounding the carbon footprint of cryptocurrencies, notably Bitcoin mining, cannot be relegated to the sidelines in a world marching fervently towards sustainable practices. As the narrative tilts towards environmental sustainability, the industry finds itself at a juncture where aligning with global sustainability goals becomes not only a necessity but a responsibility. It beckons an exploration into avenues where cryptocurrencies can evolve without exacerbating environmental concerns, fostering a symbiotic relationship with the global movement towards a green economy. In conclusion, we find ourselves at a pivotal moment in history, where the road ahead holds both challenges and opportunities in equal measure. It is a call to action, inviting thought leaders and innovators to steer us into an epoch of economic revolution, leaving the world with a sense of anticipation and a hopeful gaze towards a promising, harmonious future.This article was originally published on Crypto.news More

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    in Cryptocurrency

    $23,000 Bitcoin (BTC) Prediction Changed by Analyst Benjamin Cowen

    Cowen, who is generally bullish on Bitcoin, had predicted a significant drop in the cryptocurrency’s value. However, the lack of volatility and liquidity in the market seems to have worked in Bitcoin’s favor. There simply wasn’t enough downward pressure to drive the price to the $23,000 level as Cowen had anticipated.Source: According to real-time data, is currently trading at $27,123.42 against the U.S. dollar. This price level not only contradicts Cowen’s prediction but also suggests a more stable outlook for the digital asset.The market’s lack of volatility and liquidity, often seen as negative factors, have ironically acted as stabilizing forces in this instance. These conditions have prevented any drastic downward movements, allowing Bitcoin to maintain its value.Cowen’s incorrect prediction serves as a reminder that even seasoned analysts can get it wrong, especially in a market as unpredictable as cryptocurrency. While technical analysis provides valuable insights, unforeseen market conditions can always tip the scales.The change in Cowen’s stance could influence sentiment, potentially leading to more bullish behavior in the market. As Bitcoin continues to defy bearish predictions, it solidifies its reputation as “digital gold,” a resilient asset that can hold its value even in uncertain times.As we move into October, it will be interesting to see if Bitcoin can maintain its current stability or if it will experience the volatility that so many have come to expect from the crypto market.This article was originally published on U.Today More

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    in Economy

    Credit Suisse, Mozambique secure out-of-court ‘tuna bond’ settlement

    ZURICH (Reuters) -Credit Suisse has reached an 11th-hour out-of-court settlement with Mozambique over the decade-old $1.5 billion-plus “tuna bond” scandal, the Swiss bank’s new owner UBS said on Sunday, drawing a line under a damaging dispute it inherited.”The parties have mutually released each other from any liabilities and claims relating to the transactions,” UBS said in a statement. “The parties are pleased to have resolved this long-running dispute,” it added without giving further details.Under the deal, struck one day before a three-month London civil trial was due to start, UBS will forgive part of a loan that Credit Suisse made to Mozambique in 2013, representing less than $100 million, said one source familiar with the situation, who declined to be named because the terms are not public.In Maputo, the Mozambican Attorney General’s Office and Ministry of Economy and Finance said they were calling a joint news conference for Monday morning.The tuna bond case dates back to deals between state-owned Mozambican companies and shipbuilder Privinvest – funded in part by loans and bonds from Credit Suisse and backed by undisclosed Mozambican government guarantees in 2013 and 2014 – ostensibly to develop the fishing industry and for maritime security.But hundreds of millions of dollars went missing and, when the government debt came to light in 2016, donors such as the International Monetary Fund temporarily halted support, triggering a currency collapse, defaults and financial turmoil.The settlement included most of the creditors involved in funding a 2013 loan to ProIndicus, a state-owned Mozambican company, UBS said. DRAWING A LINEUBS, which took over scandal-scarred Credit Suisse amid turmoil in the global banking sector earlier this year, has pledged to resolve Credit Suisse’s legacy legal disputes. Since completing the mega merger on June 12, it has paid $388 million to U.S. and British regulators over dealings with collapsed private investment firm Archegos Capital Management and settled a dispute with a finance blog.The latest settlement leaves French shipping mogul Iskandar Safa and his Privinvest group among key remaining defendants in a High Court battle over the funding and maritime deals that have already triggered U.S. and Mozambican criminal proceedings.Mozambique has alleged it was the victim of a conspiracy and that Privinvest paid bribes to corrupt Mozambican officials and Credit Suisse bankers, exposing the country to a potential liability of at least $2 billion.Privinvest has alleged it delivered on all of its obligations under the contracts and that any payments it made were either investments, consultancy payments, legitimate remuneration or legitimate political campaign contributions.The company did not immediately respond to a request for comment.NYUSI IMMUNITYIn another twist to the complex case, Privinvest on Friday secured permission to appeal against a London High Court decision to grant Mozambican President Filipe Nyusi immunity from the proceedings. Privinvest has argued that if it is found liable, Nyusi should contribute to any damages.Officials in the Maputo government did not immediately respond to a request for comment.Court of Appeal Judge Elizabeth Laing said it was now up to the trial judge to grant any applications for adjournment, a decision seen by Reuters over the weekend showed.In 2021, Credit Suisse agreed to pay about $475 million to British and U.S. authorities to resolve bribery and fraud charges and has pledged to forgive $200 million of debt owed by Mozambique.It has alleged three former bankers, who arranged the bonds and have pleaded guilty in the United States to handling kickbacks, hid their misconduct from the bank. More

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    in Economy

    New Brexit border checks to cost business £330mn a year

    Planned new post-Brexit border controls on animal and plant products imported from the EU will cost businesses an estimated £330mn a year in additional red tape charges, the government has admitted.The confirmation from Cabinet Office minister Baroness Lucy Neville-Rolfe in a letter to a Labour MP follows repeated warnings from the logistics and food industry that the new border checks would drive up food prices.“It will depend greatly on how businesses adapt their business models and supply chains to integrate the new controls regimes. We estimate these new costs of the model at £330mn p.a [per annum] overall, across all EU imports,” she wrote in the letter, seen by the Financial Times.From January European businesses exporting animal and plant products to the UK will be required to submit additional paperwork — export health certificates — with physical checks costing up to £43 a time being introduced from April 2024.The checks are one of 20 new major policy changes between now and the end of 2024 that will impact British companies that trade internationally, according to a report last week published by the Institute of Export & International Trade.The government has said the new border checks, which have been repeatedly delayed since the EU-UK Trade and Cooperation Agreement came into force in January 2021, will add 0.2 per cent to inflation over three years.In her letter to Stella Creasy, the chair of the Labour Movement for Europe, the minister said that checks were required because the lack of a border since Brexit has “made it more challenging to intervene to combat threats to animal, plant and human health”.In contrast to previous Conservative governments that have delayed introducing a border, Neville-Rolfe added that the new border was essential to protect against diseases such as African swine fever that are prevalent in parts of the EU.“It would be dangerous to underestimate the huge costs both to lives and livelihoods that an outbreak of these diseases could cause to the UK,” she added. The letter cited estimates that “around half” of the £330mn annual additional cost was accounted for by export health certificates, but adds that the decision earlier this year to introduce a lighter-touch border meant that the figure represented a “saving” for business of £520mn from the original border plans.Creasy said the controls represented additional costs for businesses as a result of Brexit, not a “saving” and urged the government to urgently rethink its approach. “British companies struggling with border paperwork to import food will have little choice over these charges meaning it’s likely British consumers will have to pick up the bill,” she said. Labour has promised that it will seek a veterinary agreement with the EU if it wins power at the next election, which trade experts have said could reduce the levels of paperwork and border checks in both directions if it was based on sufficiently close alignment with EU rules.But Sam Lowe, trade expert at Flint Global, said the EU and the UK would need to agree to a dynamically aligned “Swiss-style” vet deal — where the UK automatically followed EU rules and submitted to elements of EU legal oversight — in order to remove the need for export health certificates.Veterinary groups and farmers have welcomed the introduction of the new border, arguing it will protect UK biosecurity but also create a level playing field for British exporters who have faced full EU border checks since January 1 2021.However, trade and logistics groups said the border would drive up costs in the short, medium and long term, adding that the £330mn estimate did not represent the full costs to the industry of the last three years of Brexit uncertainty.Shane Brennan, chief executive of the Cold Chain Federation, said: “It is a shame that it has taken so long to just admit this candidly. What is not included in this original estimate is the cost of confusion, delayed deadlines and ongoing uncertainty.” Peter Hardwick, trade policy adviser for the British Meat Processors Association, an industry body, added that even with the simplified certificates there would be a “massive increase” in the amount of work UK border control posts will have to do. “Much play is made of the physical checks being reduced and risk-based [under the revised border model], but the paperwork checks alone will slow things up,” he said.The headline on this article has been amended to reflect the estimated added costs of red tape More

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    in Cryptocurrency

    FTX exploiter moved over $17M in ETH in the last 24 hours

    A significant portion of the 7,749 ETH, worth roughly $13 million, was directed toward the THORChain router and Railgun contract. Furthermore, the exploiter engaged in a swap involving 2,500 ETH, worth around $4.19 million, converting it into 153.4 tBTC at an average price of $27,281 per token.Continue Reading on Coin Telegraph More