PM of Luxembourg Encourages Nation to Become Blockchain-Savvy 0 294

By now, the news of cryptocurrencies becoming one of the most valued assets in the world has reached every corner of the planet. As the cryptocurrency and blockchain industry continues to grow, more and more countries are attracted to the technology.

It is understandable why countries such as the United States, China, or Russia, would want to excel in these technologies. The reason is that China and Russia are competing with each other to take down the United States. For now, it is clear that China is taking the lead and may end up becoming the largest economy.

China is doing whatever it can with blockchain technology to ensure it gains prowess over all other digital currencies. It is following the same goal it has been following for several decades and that is to overtake the United States. China can only do it by making its currency the top global reserve currency defeating the United States dollar.

Then there are countries such as India, Pakistan, South Korea, and many more that have one main agenda. The goal is to adopt cryptocurrency and blockchain technology to improve their economy. India and Pakistan are working to adopt crypto-blockchain technology so they can improve their economy and pay off their debts.

Although South Korea is doing the same, it has a different goal in mind while doing so. That goal is to bring itself among the top economies in the world. It was a title that South Korea once held but it lost it due to the pandemic.

In the end, there are countries like Cuba, Venezuela, and Iran that are using crypto-blockchain technology for different purposes. Their purpose is to keep their economies alive while they continue facing harsh sanctions from the United States.

These countries have already suffered enough in terms of their economy and inflation rates. Now they are trying to make a comeback with the help of cryptocurrency and blockchain technology.

Now, there is another country aiming to boost its adoption of blockchain and cryptocurrency technology. Luxembourg is a country whose population is even less than a million, is getting ready to adopt crypto-blockchain technology.

Xavier Bettel, the Prime Minister of Luxembourg recently shared the government’s plan for crypto-blockchain adoption. He stated during a conference that their government is exploring crypto-blockchain technology. However, the country will eventually enter the crypto-blockchain space, as they are willing to take the risk.

He added that this is not the first time Luxembourg has taken a risk in terms of technological advancements and this will not be the last time either.

He stated that the government aims to bring Luxembourg to the frontlines of the crypto-blockchain industry. Therefore, they would need the support of the citizens of Luxembourg to make this possible. He has encouraged the entire nation to become part of the crypto-blockchain technology and see how it works out for them.

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IMF Says Russia and Iran May Use Crypto Mining for Monetizing Energy 0 42

The April 2022Global Financial Stability Report of the IMF has highlighted the consequences of the ongoing Russian invasion of Ukraine. The document said that the role of the US dollar was bound to be affected because of the conflict, as it would lead to the introduction of central bank digital currencies (CBDCs) and the global financial system’s resiliency would also be put to a test. The climate transition goals could also be put at risk because of the priorities associated with energy security. Another issue that would have to be dealt with in the coming years by lawmakers is the ‘cryptoization’ which is likely to occur because emerging markets are experiencing a widespread use of crypto.

IMF cited an increase in crypto trading volumes seen after the introduction of sanctions on Russia to back their statement. This included the financial penalties that had been imposed by Western nations on Russia because of its military invasion. The report said that such cross-border transactions were increasing in the long-term, which means that there would be challenges when it comes to imposing sanctions and managing capital flow. The IMF noted that crypto transactions have increased in both Russia and Ukraine because of the capital restrictions that have been imposed.

However, it is important to note that there has been a fall in liquidity in centralized exchanges where the hryvnia and ruble trading pairs are concerned. Therefore, using crypto exchanges for making large transfers has become rather impractical due to reduced liquidity. But, the IMF admitted that users do have the option of evading some measures via the crypto ecosystem because the identity verification requirements are quite lax in this industry. Hence, the international organization said that blocking new deposits of ruble and freezing crypto assets meant that users could have shifted to non-complying or less transparent crypto platforms and service providers.

Experts at IMF believe that both Russia and Iran could circumvent their respective sanctions via crypto mining. The nations could use their energy resources for generating revenue via crypto mining outside of the traditional financial system. Currently, the countries have a limited share of crypto mining activities, but there is a possibility that it could be increased, considering the size of the mining industry. The IMF quoted estimates showing that almost 11% of the mining revenues of bitcoin could have gone to Russia, which was around $1.4 billion per month, while Iran’s share had been 3%.

Bank of England Says Crypto Assets have Financial Stability Risks 0 81

On Thursday, the Financial Policy Committee of the Bank of England disclosed that they are working on developing a regulatory framework for digital assets. The central bank also made a reference to the sanctions that have been imposed because of the war between Russia and Ukraine in the statements. Bureaucrats and financial regulatory authorities all over the world have become increasingly concerned in recent times that Russia could take advantage of crypto assets to bypass the economic sanctions that have been imposed. The press statement of the BOE said that it was unlikely for crypto assets to provide Russia with a feasible way to get around sanctions at a large scale for now, but there was a possibility they could do so.

Therefore, it is a must to ensure that there are effective public policy frameworksthat can accompany innovation in crypto assets for maintaining the integrity and trust in the financial system. The crypto economy has been highly criticized by some members of the Bank of England for quite a while. Last year in mid-November, Andrew Bailey, the Governor of the Bank of England, had expressed his concerns about the adoption of bitcoin as legal tender in El Salvador. Sir Jon Cunliffe, the deputy governor for financial stability for the central bank, said in the following month that prices of crypto assets could drop to zero.

On Thursday, the report of the FPC talked about financial stability. The committee of the central bank noted that the FPC is assessing the risks to the financial system’s stability and it has concluded that these are currently limited. This is because their size remains limited for now and they are not that connected with the wider financial system. However, the FPC said that if they continue to grow at the same pace, and if they become interconnected with the overall financial system, then these crypto assets could pose a risk to the stability of the financial system.

Since the conflict between Russia and Ukraine began, politicians and lawmakers all over the globe have been discussing, developing, or even proposing laws aimed at regulating and researching digital currencies. The FPC’s statements on Thursday show that the BOE wants to classify crypto assets in the same category as it does traditional financial assets. Not only does the FPC plan on developing a regulatory framework that would govern digital assets, it has also mentioned stablecoins.

The FPC said that a major stablecoin that does not have a reliable deposit guarantee could turn out to be a risk to the UK’s financial system. According to the committee, if they introduce a systemic stablecoin, which is backed through a deposit mad with a commercial bank, it would result in significant risks to the stability of the financial system. All of this talk about crypto has been brought forward because of the Russian-Ukraine conflict and the possibility of the former using cryptocurrencies to evade the tough economic sanctions that have been imposed by Western nations due to its actions.

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