Autor Cointelegraph By Elizabaeth Gail

House on a hill: Top countries to buy real estate with crypto

House on a hill: Top countries to buy real estate with crypto

Uverejnil používateľ | nov 22, 2022 |

The mainstream adoption of cryptocurrencies has brought immense potential to the fintech industry, and some of the capabilities have spilled over into the real estate market. Subsequently, the real estate sector is evolving to accommodate a new crop of investors who prefer making payments using crypto.The trend of investing in real estate with crypto gained momentum in 2021 following a market explosion that saw Bitcoin (BTC) breach the $60,000 mark. Today, numerous jurisdictions have amended their real estate laws to allow property purchases using crypto due to their transformative impact.Alexander Tkachenko, CEO and Founder of the VNX liquidity mining platform, told Cointelegraph that the full capabilities of crypto in real estate remain untapped.“There is still a huge demand for alternative financial and payment instruments around the world,” he said while adding that favorable regulations would go a long way in creating a more enabling environment for both industries:“Development of regulation that will create clear rules for industry players and protect investors.”Scott Scherer, CEO of Owners Unity — a company that allows homeowners to derive passive income from their assets through a decentralized finance (DeFi) model — echoed Tkachenko, telling Cointelegraph, “Investors and governments have come to accept the fact that crypto is here for the long term.” He added that investors are increasingly using cryptocurrencies to transact due to the efficiency of crypto networks as compared to conventional banks.Anastasia Kor, the chief marketing officer and board member of the innovative MetaFi ecosystem, Choise.com, told Cointelegraph that novel blockchain concepts such as real estate tokenization also appeal to global investors:“The projection that tokenization will help to make real estate more liquid is not far from the truth. Tokenization will position the luxury properties that are confined to a region and make them global and accessible to interested buyers and investors around the world.”So, which countries currently support real estate purchases with crypto?ThailandThailand was among the first Asian countries to legalize cryptocurrency use. The nation presentlyallows real estate buyers to make payments using crypto. Investors who wish to use this mode of payment are required to seek the services of local accredited real estate agencies that accept virtual currencies.While the nation had previously banned cryptocurrency trades, the ban was lifted in February 2014. Today the trading of major cryptocurrencies such as Bitcoin, XRP (XRP), Ether (ETH) and Stellar (XLM) is allowed in accordance with rules stipulated by the Thai Securities and Exchange Commission (SEC).It is worth noting that while individuals are allowed to deal in cryptocurrencies, regulated financial institutions operating in the country, including banks, are not. Consequently, buyers looking to buy property in Thailand using crypto are expected to make use of alternative money transfer systems for transaction settlement.United Arab EmiratesThe United Arab Emirates is a top business destination and is emerging as a major crypto hub, with many international crypto organizations setting up shop in the country to capitalize on the budding status. The nation’s cryptocurrency market has grown multi-fold over the past two years and is projected to grow ten-fold over the next couple of years, all conditions remaining constant.For a long time now, the nation has been a paragon of exemplary architectural marvels which have put the country on the map as a leading Middle East/North Africa real estate powerhouse. Some of the nation’s radical structures have been developed through government-led initiatives aimed at stimulating interest in the local property market.Recent: Election tally: Does blockchain beat the ballot box?The convergence of the crypto and real estate sectors has prompted the establishment to allow the synergy of the two industries in an effort to open up the real estate sector to global investors and accelerate the development of its non-oil economy.Presently,crypto users in the UAE can purchase houses, villas, apartments, and buildings using digital currencies through authorized agencies.On the regulatory front, the central bank has yet to designate cryptocurrencies as legal tender, so there are a few limitations such as the lack of crypto service provision by banks. However, crypto transactions among individuals and some regulated real estate agencies are allowed.TurkeyCryptocurrency usage is high in Turkey, with over eight million Turkish citizens owning digital currencies. Adoption is spurred by myriad factors including runaway inflation, which has led to the devaluation of the Turkish lira. The national currency has lost over 50% of its value against the United States dollar over the past two years.With more people using cryptocurrency to transact, real estate agencies in the country are beginning to accept crypto payments.Investors can acquire property in the transcontinental country through regulated real estate agencies. People who invest at least $250,000 in fiat or the equivalent in crypto in property buys also stand to acquire direct citizenship if they so desire through the Turkish golden visa program.PortugalPortugal isone of the most crypto-friendly nations in the European Union. As such, it comes as no surprise that the government has made it possible for investors to buy real estate property using cryptocurrencies. In previous years, buying real estate with crypto was allowed, but the money had to be converted into fiat for a property transfer to be finalized. This changed in April when new pertinent laws were introduced.The latest statutes allow notaries to ratify real estate deals involving crypto. Additionally, digital currencies don’t have to be converted into fiat for property ownership transfers to be valid. The new rule categorizes these types of trades as barter deals. MontenegroMontenegro is one of the most financially liberal nations in the Balkans, and when it comes to crypto, the nation has no special requirements for cryptocurrency deals, including crypto real estate purchases. Notably, the country has, in recent years, been making conscious efforts to become a major crypto center due to the potential macroeconomic benefits.In April,it awarded Ethereum co-founder Vitalik Buterin citizenship as part of a campaign to woo crypto investors into the country.Real estate investors looking to buy property in Montenegro using cryptocurrencies face few problems so long as the deal is sanctioned by a certified notary.GeorgiaGeorgia has a lot to offer to investors and has many laws that are aimed at encouraging foreign investment. Investors who wish to put their money in the country, for example, pay zero taxes on capital gains including on returns from crypto investments. There are also no currency transaction limits. While it is possible to buy real estate using cryptocurrencies in Georgia, it is important to note that cryptocurrencies are unregulated in the country, so the final purchase figures entered in the property register must be in fiat.Property purchases using crypto can only be carried out through select licensed real estate agencies that offer this service.CanadaOver 2.5 million Canadians own crypto, according to Finder’s Crypto Adoption October 2022 report. This dynamic has led to more real estate firms in the country accepting cryptocurrency payments.For investors looking to buy property in Canada using cryptocurrency, authorized real estate companies that accept cryptocurrency payments to help to ensure compliance.Recent: Is DOGE really worth the hype even after Musk’s Twitter buyout?Some property brokers also provide crypto-to-fiat conversion services to smooth out the process, as property sales in the official registry have to be in Canadian dollars.Crypto users who wish to buy property using digital coins should consult tax advisers before beginning the purchase process in order to avoid tax complications, as Canadian regulations take capital gains taxes on cryptocurrencies seriously.Cryptocurrencies have the capacity to open up the real estate market, which is notoriously illiquid. Allowing crypto real estate buys not only diversifies payment avenues but also makes it easier for international investors who dabble in crypto to acquire real estate assets across the world.

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What the Russia-Ukraine conflict has revealed about crypto

What the Russia-Ukraine conflict has revealed about crypto

Uverejnil používateľ | okt 28, 2022 |

The Russia-Ukraine conflict has tested the capabilities of crypto in a real-world conflict where sanctions and inventive blockchain crowdfunding models abound.The war, which is drawing into its ninth month, has uncovered a raft of blockchain benefits, such as the capacity to support humanitarian endeavors. It has also revealed how much control national authorities can exert over crypto networks.Vadym Synegin, co-founder at IT and crypto solutions provider Tecor, told Cointelegraph that cryptocurrencies have a unique advantage in situations where there is an increased risk of money transfer interruptions due to the centralization of conventional systems.“With most markets controlled by centralized authority figures that can easily buckle under the political tensions, the crypto markets remain more or less decentralized, meaning that their operational efficiencies during periods of crisis are further enhanced,” he said.So, what other aspects has the Russia-Ukraine conflict revealed about crypto?Crypto donations for humanitarian aidThe Russia-Ukraine conflict has shown that cryptocurrencies can be used for fundraising in military conflicts. Notably, the Ukrainian government began accepting crypto donations at the beginning of the year in a bid to enhance donor inclusivity, and this led to the creation of the Crypto Fund of Ukraine.The nation’s Ministry of Digital Transformation is currently in charge of the fund, which was set up in conjunction with Kuna, FTX and Everstaketo buttress Ukraine’s humanitarian aid and military programs. The project has enabled the Ukrainian government to raise over $100 million in cryptocurrency donations so far.That said, some pro-Ukraine crypto fundraising groups have turned to novel crypto instruments such as decentralized autonomous organizations (DAOs) to raise funds for the nation.The UkraineDAO, which is among the most prominent of the lot, was created in February for the sole purpose of providing monetary support to Ukrainian soldiers. The project’s co-founders include Russian critic Nadya Tolokonnikova, who is also a founding member of the Pussy Riot feminist protest group. Other UkraineDAO founding members include PleasrDAO and Trippy Labs, a generative NFT studio. The project has raised over $8 million so far.Among the most notable successes of the UkraineDAO was the recent sale of a nonfungible token (NFT) of the Ukrainian flag that fetched just over $6 million in Ether (ETH). It is currently ranked among the top 20 most expensive NFTs of all time.Recent: Does the IMF have a vendetta against cryptocurrencies?Cointelegraph had the chance to speak with Kayla Kroot, the co-founder of the Koii Network, regarding the current use of crypto in the Ukraine situation. Her company is involved in the development of novel blockchain models, including Web3.According to the executive, cryptocurrencies have enabled citizens caught up in the war to maintain access to their money during these trying times:“Cryptocurrency was developed to help global citizens maintain control of their money.” Kroot also noted the increased use of digital coins by humanitarian groups operating in the nation. “Organizations such as World Central Kitchen performed crowdfunding campaigns. In WCK’s case, this involved accepting donations in ETH. These funds were dispersed with fewer restrictions and oversight, allowing money to more easily get to the hands of those who needed it most,” she added.Scammers take advantage of well-wishersWhile crypto donations have been helpful in furthering the Ukrainian cause, some malicious entities have blighted noble efforts by well-wishers.Some scammer syndicates have attempted to beguile donors by pretending to be representatives of authorized crypto exchanges involved in Ukraine fundraising efforts. Cybersecurity experts estimate that millions of deceptive emails employing the tactic have been sent out so far.Some of the emails contain messages of distress from cybercriminals purporting to be Ukrainians in dire need of financial aid.The influx of such messages subverts the cause of helping Ukrainians by making it harder for the real victims to get the help they need.There have also been reports of scam messages being spread on social media platforms. At this juncture, it is important to note that well-wishers should only donate their crypto via official Ukrainian government channels in order to avoid possible scams.Besides fraudulent posts appearing on social media, scam messages soliciting crypto are also popping up on the dark web.The dark web is an overlay internet network made up of unindexed websites that are invisible to standard browsers and search engines and can only be accessed using special browsers.The dark web is intentionally hidden from regular users for a good reason. It harbors all manner of illegal activity that includes black markets for illegal drugs and guns. Blackhats also use the dark web to sell stolen personal credentials.As such, there is little surprise that scammers are spreading fake messages on the dark web to cheat Ukraine supporters out of funds. Many of the messages have been found to contain links to phishing sites that are designed to steal crypto.According to a McAfee investigation into the schemes, some of the websites utilize fake chatboxes to simulate user activity, while others make use of mock-up donation verifiers to look more authentic.Early on in the Russia-Ukraine war, a more sophisticated group of fraudsters attempted to carry out a scam fundraising effort using the Peaceful World (WORLD) token. This is after the Ukrainian government announced an airdrop and then subsequently canceled it.The scammers launched the fake airdrop hours before the government scrapped the move in favor of NFTs. Industry experts and security analysts were quick to point out discrepancies in the fake giveaway, thereby forestalling the scheme. Governments can limit cryptoSatoshi Nakamoto, the pseudonymous creator of Bitcoin (BTC), developed the first cryptocurrency in order to devolve the control of money away from governments and centralized financial institutions.However, the Russia-Ukraine conflict has demonstrated that it’s possible for regional blocs and major jurisdictions to impose bans and exert control over cryptocurrencies.In October, the European Commission announced sweeping sanctions targeting Russian crypto custodial wallets under the control of European enterprises and exchanges. EU blockchain companies were additionally prohibited from providing crypto custodial services to Russian entities.The new laws were enacted in response to Russia’s invasion of Ukraine in order to prevent Russia from evading sanctions.Previous restrictions placed a trade and deposit limit of up to 10,000 euros on Russian crypto wallets and accounts.Recent EU crypto enactments have forced some major exchanges, such as Binance and Coinbase, which have operations in Europe, to restrict services to Russian individuals and companies to avoid a regulatory clash.Other regulated crypto exchanges such as Kraken, Crypto.com and Blockchain.comhave also ceased providing crypto services to Russian citizens as a result.Meanwhile, Russian authorities seem unsure of how to handle the flurry of crypto wallet prohibitions and the occlusion of major Russian banks from the SWIFT money transfer system. The ban on these systems has effectively locked out the nation from major international financial markets.In July, the Kremlin passed a law that banned the use of cryptocurrencies for making payments. However, the Russian government recently changed its tone. In September, the Russian central bank and the Ministry of Finance agreed to allow the use of cryptocurrencies for cross-border payments.Recent: Bitcoin miners rethink business strategies to survive long-termThe move was designed to promote the use of local crypto exchanges amid rising geopolitical tensions that left many Russians with limited options.The Russia–Ukraine conflict has showcased the use of crypto in community effort settings for the common good. While the Ukrainian government has raised millions of dollars from direct crypto donations, some digital currency fundraising efforts have been undermined by scammers out to make a profit from the war. More crypto advantages and limitations are likely to crop up as use cases emerge in more diverse environments.

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Why crypto remittance companies are flocking to Mexico

Why crypto remittance companies are flocking to Mexico

Uverejnil používateľ | okt 16, 2022 |

Mexico is the second-largest recipient of remittances in the world, according to 2021 World Bank statistics. Remittances to the nation jumped to a record $5.3 billion in July, which is a 16.5% increase year-over-year compared to the same period last year. The steady growth presents myriad opportunities for fintech companies.Not surprisingly, droves of crypto companies are setting up shop in Mexico to claim a share of the burgeoning remittance market.Over the past year alone, about half a dozen crypto giants, including Coinbase, have set up operations in the country.In February, Coinbase unveiled a crypto transfer service tailored to United States-based clients looking to send crypto remittances to Mexico. The product enabled recipients in Mexico to withdraw their money in pesos.Other companies have since joined the foray. In August, the Malaysia-based Belfrics digital currency exchange announced plans to open crypto transfer operations in Mexico. According to the published communique, the firm will start by launching blockchain wallet and remittance service solutions.Another notable company that is jostling for a share of the Mexican crypto remittance market is Tether. In May, the crypto company launched the MXNT stablecoin, which is pegged to the Mexican peso. According to the enterprise, the collateralized digital currency will help customers to navigate volatility and use cryptocurrencies as a store of value. Besides the new entrants, local Mexican crypto companies such as Bitso, which is one of the largest crypto exchanges in the Latin American nation, are already making moves to enhance their reach in an increasingly competitive market.In November 2021, the Mexican firm established an alliance with U.S.-based Circle Solutions. The collaboration allowed the agency to use Circle’s payment system to facilitate U.S.-to-Mexico crypto remittances.Cointelegraph had the opportunity to speak with Eduardo Cruz, head of business operations and enterprise solutions at Bitso, about the factors driving the crypto remittance trend in Mexico. He cited high bank transaction costs, slow settlement times and the lack of access to banking facilities as some of the factors pushing the masses toward crypto remittances. He also highlighted recent alliances that have helped Mexican crypto companies bring crypto remittance services closer to nationals around the world, thereby boosting their adoption. “For example, Bitso’s clients such as Africhange, which recently integrated Canada–Mexico crypto-powered remittance services to Bitso, and Everest, which enables remittances from the United States, Europe and Singapore into Mexico, are offering a cheaper and faster way to send money to Mexico,” he said.Factors driving the Mexican crypto remittance sectorOne of the biggest factors driving the Mexican crypto remittance sector today is the huge Mexican population residing in the diaspora. Presently, the U.S. and Canada have the highest number of Mexican immigrants.According to data released by the U.S. Census Bureau in 2020, there are approximately 62.1 million Hispanic people residing in the U.S. today, with Mexicans comprising 61.6% of this population.Going by 2021 numbers, money sent to Mexico from the U.S. accounted for about 94.9% of all remittances, while Mexicans residing in Canada sent $231 million in the second quarter of 2022.In a nutshell, the rising number of Mexicans migrating to the U.S. and Canada is pushing remittances to new levels, and the high demand is spilling over to the crypto payments industry.The decline of the Mexican peso and the emergence of a strong dollar have also contributed to the spike in remittances over the past couple of years.Recent: Smart contract-enabled insurance holds promise, but can it be scaled?This phenomenon has occurred in previous crises, such as the 2008 financial crisis, which plunged the Mexican economy into turmoil. In times like this, Mexican institutions and investors usually tend to seek refuge in the greenback, which typically has a higher buying power.In March 2020, when coronavirus lockdowns began, the U.S. dollar’s purchasing power jumped by approximately 30% in Mexico. At the same time, the average remittance transfer to Mexico increased from $315 to $343.Today, the availability of dollar-pegged cryptocurrencies allows Mexicans living in the diaspora to leverage the heightened buying power of the USD to make investments and purchases in their home country, hence the higher remittance rates.Greater convenienceBlockchain technology eliminates third-party mediators from transaction processes, which leads to lower transaction costs and less time used when undertaking remittance transactions.Cointelegraph caught up with Structure.fi president and co-founder Bryan Hernandez to discuss the impact of these factors on the Mexican remittance market. His company operates a mobile trading platform that gives investors exposure to traditional and crypto financial markets:“Crypto businesses see a huge opportunity here to streamline (conventional money transfer) processes using blockchain technology. Using crypto, cross-border payments can be made directly with little or no fees instantaneously.” In Mexico, many financial institutions are also located far away from rural areas, and this makes it hard for the locals to access financial services. Crypto remittance solutions are beginning to close this gap by enabling citizens in such areas to access their money without having to travel long distances.Moreover, they are able to serve the unbanked. As things stand, over 50% of Mexicans lack a bank account. This makes crypto remittance solutions convenient for citizens in this demographic, as all that’s needed to receive funds is a crypto wallet address.Another reason why more Mexicans are embracing the crypto remittance fad is their distrust of banks. Mexicans living in the diaspora are sometimes subjected to redlining practices, and this has led to more people using crypto remittance solutions.Dmitry Ivanov, chief marketing officer at CoinsPaid — a crypto payments firm — told Cointelegraph that the wider use of crypto remittance networks in Mexico was bound to boost adoption overall.“The clear advantage of digital currencies is what is paving the way for their broad-based adoption in the country and the Latin American world as a whole,” he said, adding:“The benefits derived from digital currencies have made Mexicans see how exploitative banks have been thus far with their charges, and the general comparative inefficiency has made them distrust traditional financial institutions in general. With a little more regulatory push, the country’s remittance inflow may be dominated by cryptocurrencies.”A few hurdlesBlockchain remittance solutions provide a raft of important benefits to Mexican users, such as fast transfers and lower transaction fees.However, they have to overcome some fundamental challenges to dominate the cross-border payments market. The technical nature of crypto platforms, and limited local currency withdrawal options, for example, present some unique challenges that are likely to slow down adoption.Mexican citizens also still prefer using cash to make payments. According to the 2021 McKinsey Global Payments Report, Mexico was ranked top among countries projected to have high cash usage over the next couple of years. Recent: To HODL or have kids? The IVF Bitcoin Babies paid for with BTC profitsThe research report forecasts that consumer cash payments will account for about 81.5% of all transactions in Mexico by 2025.This presents a major hurdle for crypto adoption in the country, despite rising crypto remittance figures.Going forward, it will be interesting to see how the tech-savvy and crypto evangelists navigate the challenges facing adoption and take advantage of the momentum provided by the growing remittances industry.

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Vietnam’s crypto adoption: Factors driving growth in Southeast Asia

Vietnam’s crypto adoption: Factors driving growth in Southeast Asia

Uverejnil používateľ | sep 27, 2022 |

The Southeast Asian nation of Vietnam now ranks among the top nations adopting cryptocurrencies. Indeed, the country has ranked first on Chainalysis’ Global Crypto Adoption Index for two years in a row.Chainalysis’ research methodology took into account population-adjusted adoption in crypto platforms ranging from centralized exchanges to peer-to-peer (P2P) payment networks. Web traffic to major crypto networks was analyzed to determine countries with the highest interest and adoption percentages.That said, Vietnam’s high adoption rate is a puzzling phenomenon, begging the question: Why is crypto adoption so high in the country?No cryptocurrency taxesThere are numerous reasons why the crypto adoption rate in Vietnam is so high and one of them is that, unlike in the United States and other major jurisdictions where cryptocurrency holdings are taxed, there are no crypto taxes in Vietnam. Right now, the Vietnamese government does not even recognize cryptocurrencies as legal tender. While the nation’s tax authorities have shown interest in taxing cryptocurrencies, they lack the mandate to designate them as taxable assets. As such, Vietnamese law is largely silent when it comes to crypto taxation. Consequently, financial institutions in the country are barred from handling them. However, Vietnamese citizens are allowed to possess and trade crypto.The lack of crypto taxes makes digital currencies ideal as investment instruments, hence the rise in adoption. The trade-off is that Vietnamese law doesn’t protect crypto users in the event of scams or losses. As such, cryptocurrencies cannot be used legally in trade relationships.However, the nation’s financial regulatory agencies are working to come up with elaborate crypto usage guidelines. This is following a July 2021 directive issued by Prime Minister Phạm Minh Chính in which he asked the State Bank of Vietnam to explore the benefits and downsides of digital currencies with a view to draft regulations. The institution is likely to come up with a raft of measures that include tax and user protection guidelines.Cointelegraph had the chance to speak with Gracy Chen, managing director of the Bitget cryptocurrency exchange, regarding Vietnam’s regulatory landscape and the developing situation. According to Chen, clear and robust regulations would allow institutional inventors in the country to start dealing in crypto, and this would be a big win for the industry: “When the regulation actually comes out, it may lead to a short-term impact on local fiat exchange trading, but in the longer term, clear regulation may encourage broader adoption and lay the groundwork for increased retail and institutional engagement since a better-regulated market will provide greater protection and increase trust of investors. So overall, the pros outweigh the cons.” Vietnam has a huge unbanked populationMany Vietnamese have limited access to standard financial services. According to a 2021 study carried out by Statista, the country ranks second among the top 10 unbanked nations. The report highlights that about 69% of the citizenry lacks access to typical banking services.World Bank estimates indicate that just over 61% of the country’s population resides in rural areas, where access to modern banking services is limited. This void is rapidly being filled by cryptocurrency networks. Novel revolutionary blockchain concepts such as decentralized finance (DeFi) are also gaining traction among Vietnamese crypto investors who wish to obtain credit for crypto investment purposes. DeFi is a hypernym for blockchain-based financial networks that provide services similar to those offered by banks. DeFi platforms allow users to earn interest on their money, lend and borrow funds, as well as trade in crypto derivatives. They also enable investors to safeguard their assets using DeFi insurance and don’t require paperwork. This makes them convenient for unbanked Vietnamese, especially those who wish to scale their crypto investments and earn passive income. Notably, Vietnam is ranked second among nations with the highest DeFi usage in the world, according to the 2021 Chainalysis Global DeFi Adoption Index report. RemittancesIn 2021, Vietnamese nationals living in the diaspora sent home over $18 billion in remittances, setting a new record, which made the country the eighth biggest remittance beneficiary in the world. This was a 3% increase from the $17.2 billion recorded in 2020.For Vietnamese who regularly send money to their families in Vietnam, transfer fees are often exorbitant. The surcharges usually include administrative fees and exchange rates. According to World Bank statistics, remittance costs to Vietnam average about 7% as of 2020.Exorbitant fees, in addition to the unbanked population’s lack of access to money transfer services, have made cryptocurrency transfers an appealing option for Vietnamese living abroad to help support their families back home. While blockchains do have transactions fees, they often pale in comparison to those of remittance networks, and furthermore are P2P and don’t rely on a middleman to complete the transaction.The rising popularity of GameFi Blockchain games with financial incentives, often referred to as GameFi, use innovative economic models that allow users to earn rewards while playing. The rewards are usually in the form of nonfungible tokens (NFTs) and cryptocurrencies.As cryptocurrencies are at the heart of GameFi environments, many gamers learn how they work as part of the gameplay, providing another avenue for adoption.According to Chainplay’s State of GameFi 2022 survey in August, 75% of GameFi crypto investors said that they started investing in digital currencies after joining GameFi platforms. GameFi, especially play-to-earn (P2E) games, are immensely popular in Vietnam and have contributed greatly to cryptocurrency adoption in the country.According to a 2021 research report published by data aggregation service Finder, Vietnam ranks sixth on the list of countries with the highest percentage of P2E gamers. According to the survey report, 23% of Vietnamese participants said that they had, at some point, played P2E games.Today, numerous GameFi startups have set up shop in the country due to the pervading NFT gaming culture, and this is, in turn, driving crypto adoption. The developers include Ancient8, Sipher and Summoners Arena.Notably, Axie Infinity, one of the most popular play-to-earn games in the world, has its roots in Vietnam.Chen said that the relationship between GameFi and crypto adoption is part of the reason why both sectors are thriving:“According to data from Google, Sensor Tower, and Data.ai, Vietnam ranks first in Southeast Asia in producing applications and games in stores like Apple Store and Google Play. Meanwhile, the new huge crypto adoption all over the world last year was in part due to GameFi. These two factors are significantly connected, creating massive crypto adoption in Vietnam.” Cryptocurrencies as a hedge against inflationVietnamese citizens have, throughout history, preferred using other national currencies such as the United States dollar during times of economic turmoil and hyperinflation. In recent years, Vietnamese people have also been accumulating assets such as gold to hedge against inflation.At some point in the past decade, the Vietnamese citizens held as much as 400 tons of gold.Of course, the emergence of cryptocurrencies has also led to more Vietnamese citizens using them to hedge against inflation instead of tangible assets such as gold.While the Vietnamese central bank has warned individuals and institutions against dealing in virtual currencies due to their mercurial nature, dwindling faith in the Vietnamese dong has led to more Vietnamese investors turning to digital currencies. According to data derived from Statista, Bitcoin (BTC), which is widely used by investors as a hedge against inflation, is currently the most popular cryptocurrency in the country. The report reveals that search interest in the country for the prime cryptocurrency stands at about 84.5% relative to other cryptocurrencies.Crypto adoption in Vietnam is set to persist as more Vietnamese discover the convenience and possibilities of digital assets. Extensive regulations, however, appear to be a long way off. The State Bank of Vietnam has until 2023 to study the pros and cons of cryptocurrencies and come up with policy recommendations.

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Global inflation mounts: How stablecoins are helping protect savings

Global inflation mounts: How stablecoins are helping protect savings

Uverejnil používateľ | sep 16, 2022 |

Economies around the world are facing a motley of challenges caused by rising inflation. High inflation devalues national currencies, which, in turn, pushes up the cost of living, especially in scenarios where earnings remain unchanged.In the United States, the government has responded aggressivelyto inflation. The nation hit a 9.1% inflation rate in June, prompting the Federal Reserve to implement a series of fiscal countermeasures designed to prevent the economy from overheating. Hiking interest rates was one of them.Soaring Fed interest rates have consequently slowed down consumer spending and business growth in the country.The counter-inflation approach has also strengthened the value of the U.S. dollar against other currencies due to tight dollar liquidity checks. As 79.5% of all international trades are undertaken using the dollar, many countries are now paying a premium for imports to compensate for the dollar’s rising value, worsening inflation in those importing countries.Subsequently, citizens in some flailing economies have started to convert their money into more stable foreign currencies to safeguard their money against value depreciation, and many of them are turning to stablecoins to achieve this.Whitney Setiawan, a research analyst at the Bitrue crypto exchange, told Cointelegraph, “With the U.S. dollar recording steep appreciation against other fiat currencies, most crypto-savvy users have a special interest in holding stablecoins.”Setiawan also predicted that the stablecoin sector was likely to disrupt the remittance industry in the near future due to the medley of benefits that stablecoins offer.“With interest in stablecoins being fueled by various factors, I can predict it will be a matter of time before this asset class topples the remittance industry by a significant margin,” she said.On this last point, remittance companies have indeed been taking notice and have, in recent months, made moves to claim a share of the stablecoin market. MoneyGram, for example, recently partnered with Stellar to offer stablecoin remittance services on its network.What are stablecoins?A stablecoin is a digital currency whose value is often pegged to an asset or regulated by an algorithm to maintain a stable value. Collateralized stablecoins are the most popular and are backed by reserves of their underlying assets. In most cases, their value tracks that of popular national currencies such as the U.S. dollar, the British pound or the euro.This category of stablecoins is used extensively by crypto traders looking to avoid crypto market upheavals and users looking to protect their money against inflation.Other types of stablecoins include commodity-backed, crypto-backed and algorithmic stablecoins.Why stablecoins are ideal as instruments against inflationStablecoins are ideal as instruments against inflation for numerous reasons. One of them is their immutable and borderless nature.The decentralized nature of blockchain technology on which stablecoins operate allows them to travel across borders that may otherwise be closed to cross-border financial activities.Stablecoin transactions are also fast and cost-effective when compared to fund transfers made via commercial bank networks. This makes them convenient for people looking to send and receive money and a hedge against inflation.Another disruptive property that stablecoins possess is their capacity to cater to the unbanked. Approximately 2 billion people in the world today lack a bank account. Stablecoins have demonstrated the ability to reach this marginalized demographic by allowing anyone with a device that can host a digital wallet, like a smartphone or laptop, to use stablecoins.In some developing nations, many people lack the necessary documentation to open a bank account, and so they are shut out of their nation’s main financial systems. Using stablecoins allows this group of users to send and receive money easily and use their monetary assets to hedge against inflation when the need arises.Brian Pasfield, chief technology officer of Fringe Finance — a crypto lending platform that provides lending opportunities to stablecoin holders — told Cointelegraph:“Banks have strict monetary policies that generally taper down the dollar’s supply. This trend makes stablecoins an attractive option for those aiming to access the USD’s value, as they are generally accessible with little barrier to entry.” He also underscored that governments had the ultimate power when it comes to mainstream stablecoin adoption.“The likelihood of them (stablecoins) becoming commonplace and therefore disruptors lies in the hands of governments themselves, which may seek to implement their own solutions or censor the existing avenues,” he said.While governments have been slow to adopt official policies regarding stablecoins, or may even undercut private stablecoins with the advent of central bank digital currencies, there are several countries in which citizens have taken matters into their own hands by using stablecoins to protect their savings.VenezuelaVenezuela has experienced an inflation rate averaging about 3,711% since 1973. The bolivar has lost so much value over the past four decades that it’s had to be reconverted several times. For perspective, the country has had to remove 14 zeroes from its currency over the past 14 years to simplify the monetary scale.Because the Venezuelan bolivar is volatile and has a value that fluctuates throughout the day, it is common practice for traders to list merchandise and service prices in U.S. dollars. Customers who don’t have dollars are usually expected to pay using bolivars, but at the prevailing exchange rate relative to the dollar.That said, dollar bills can, at times, be scarce, and this gap is currently being filled by stablecoins. With internet penetration standing at around 72% as per 2020 statistics, online payment companies supporting stablecoin use have already started to set up shop in the country.The companies include Reserve, a startup backed by Coinbase. Its app is now widely used in Venezuela to buy and sell stablecoins.Even the U.S. government has joined the stablecoin foray and is increasingly using Circle’s USD Coin (USDC) stablecoin to circumvent corrupt government institutions when providing aid to Venezuelan citizens. TurkeyEarlier this month, Turkey’s annual inflation rate hit 80%, with the Turkish lira losing approximately 27% of its value against the U.S. dollar so far this year. In 2021, the lira lost 44% of its value against the greenback. Its steep decline has caused demand for stablecoins to rise as people move to protect their money against inflation.According to data derived from CryptoCompare, the Turkish lira is the second highest fiat-to-Tether (USDT) trading pair and currently accounts for about 21% of all national currency swaps. Tether is a dollar-denominated stablecoin backed by a basket of different assets.The lira is also the second-most traded Binance USD (BUSD) stablecoin pair and is used in about 5.2% of trades. Binance USD is the dollar-denominated stablecoin from major cryptocurrency exchange Binance. The growing popularity of cryptocurrencies in the country has, in the recent past, led to monetary control concerns and prompted the authorities to ban the use of cryptocurrencies as a mode of making payments.However, crypto utility is still high despite the prohibition.NigeriaNigerians are starting to use stablecoins to temper the effects of rising inflation.According to the latest statistics released by the country’s National Bureau of Statistics (NBS), the inflation rate in the country reached 19.64% in July — a 17-year high.According to the NBS report, the cost of necessities such as food, transport, fuel and clothing has risen sharply as a result.The situation has been brought on by climate change, the economic aftershocks caused by the coronavirus and rising insecurity. It has been further compounded by Russia’s invasion of Ukraine, which disrupted crucial import supplies from the two countries. Nigeria imports over $2 billion worth of essential commodities annually from both Russia and Ukraine.Inflation problems are forcing many Nigerians to start using stablecoins to prevent the devaluation of their savings. According to data pulled from Google Trends, Nigeria ranks top among countries with significant interest in stablecoins. Search statistics indicate that the nation has the highest Tether stablecoin search interest in the world.USDT is presently the most traded stablecoin.ArgentinaArgentinians are increasingly turning to U.S. dollar stablecoins to shield their money against high inflation. The country’s inflation rate is expected to hit 95% by the end of the year.Recent developments that have accentuated the demand for stablecoins include the July stablecoin buying frenzy that was triggered by the resignation of Economy Minister Martín Guzmán.Major crypto exchanges serving Argentinian citizens recorded a spike in stablecoin sales in the aftermath of the announcement, with purchases jumping by over 200%.The news also caused the value of the Argentine peso to fall by approximately 15%.Today, Argentinian traders quote dollar prices for high-value items due to the high volatility that’s afflicted the national currency. The Argentine peso has lost over 30% of its value so far his year.Prevailing U.S. dollar trading restrictions have also helped to increase demand for stablecoins.Roadblocks for stablecoinsThere are numerous limitations that prevent the widespread use of stablecoins as a hedge against inflation. One of them is the changing regulatory landscape that threatens to block their use in some jurisdictions. The European Union, for example, is looking to prohibit the use of dollar-pegged stablecoins in the region in the near future. Such embargoes are likely to limit the use of stablecoins as a hedge against inflation.Moreover, most countries lack elaborate policies needed to legitimize the crypto industry. Right now, the stablecoin sector would do with extensive Anti-Money Laundering, tax policy and fraud prevention regulations in order to truly go mainstream, but many countries are unwilling to go this far due to the sheer complexity of such processes.This has led some countries, such as China, Algeria and Egypt, to ban the trading of cryptocurrencies altogether.

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