Willis Asks Kevin About Digital Currency Stuff

Willis Asks Kevin About Digital Currency Stuff

Here’s another digital-age story. Last month, Venezuelan President Nicolas Maduro announced plans for a “sovereign cryptocurrency.” It will be known as the “petro” because it’s backed by crude oil. Maduro says Venezuela will raise $5.9 billion by issuing 100 million units of the new digital coinage at $59 apiece. Venezuela’s opposition-led Congress says this is illegal.


I don’t get it, and I’m not sure Nicolas Maduro does either, but apparently Russia, China, Iran, India, and Estonia are also considering some form of sovereign digital currency. I better ask Kevin Allison what’s going on.

Hey Kevin, what’s a sovereign cryptocurrency?

Good morning, Willis. It’s digital money that uses clever computer code to let people buy things without going through a bank or other financial intermediary. Bitcoin, the first cryptocurrency, was created as an alternative to government-issued fiat money. But a sovereign digital currency would be issued by the state — in the case of the petro, a government in Venezuela that has presided over disastrous hyperinflation.

How is a cryptocurrency different from the money in my wallet?

Your cash, known as fiat money, is backed by a central bank, which can fire up the presses and print more. Cryptocurrencies are backed by code, which makes their total supply a design decision. The total number of Bitcoins that can ever be “mined” was hard-wired into the programming from the start. Other currencies, like Ethereum, don’t limit the number, but that could change. Governments will have to decide whether their cryptocurrencies’ supply would be fixed or variable.

Why would a government want a sovereign cryptocurrency?

To revolutionize commerce and governance by creating a decentralized, tamper-proof method of registering changes in — OK, just kidding. Venezuela’s government probably just wants to raise cash, evade sanctions, and counter US influence. By cutting out financial middlemen like banks, cryptocurrencies exist outside the global payments system, which runs on the US dollar. While some countries are eyeing other benefits, there’s a reason why it’s Venezuela, Russia, and Iran that are most aggressively investigating sovereign cryptocurrencies.

Why would I want to buy a sovereign cryptocurrency?

You’re right to wonder. Is the cryptocurrency secure? Is it easily convertible into cash? Would transactions be anonymous, or would they be tracked? These are open questions.

Should I care about this?

It will create financial opportunities that might not be available today in countries with underdeveloped banking systems. We should all care about that. On the flip side, national cryptocurrencies might also make it easier for governments to track what you buy and sell. That should worry anyone who cares about privacy.

Vaccines are the best hope to end the COVID-19 pandemic. But rich countries are hogging most of the doses, with more than 83 percent of shots administered to date having gone to residents in high- and upper-middle-income countries. Most poor countries will have to wait years to achieve widespread vaccination, according to one study.

To address this inequity some stakeholders are pushing hard for waivers to intellectual-property (IP) rights through World Trade Organization trade rules so that manufacturers in poorer countries can make their own vaccines locally. India and South Africa have been leading the charge, which would essentially mean that deep-pocketed pharma companies like New York-based Pfizer, for instance, would have to hand over the keys to the kingdom, allowing local companies in New Delhi and Johannesberg to make generic versions of their vaccines.

Unsurprisingly, the debate has gotten fiery, with passionate arguments emerging both for and against.

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Carl Bildt, former Prime Minister and Foreign Minister of Sweden, shares his perspective on Europe In 60 Seconds:

What are the Russians up to against Ukraine?

We simply don't know, except the fact that they're concentrating a huge amount of military forces. And you don't do that for nothing or for fun. They are there for a purpose, to have pressure or to undertake limited to larger operations. We simply don't know. And when Putin delivered his State of the Union speech the other day, he didn't say a thing about this. They are now talking about withdrawing the forces. But let's wait and see. They have talked about withdrawing forces from Syria for a long time, but we haven't seen that as of yet.

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Australia rips up Belt & Road deal: Australia cancelled two 2018 deals signed between Victoria, Australia's wealthiest state, and the Chinese government, that committed the two sides to working together on initiatives under China's Belt and Road infrastructure development program. Foreign Minister Marise Payne said that the agreements "were adverse to our foreign relations." Similar deals between Victoria and institutions in Iran and Syria were also abandoned by the Australian government this week, under a 2020 law that allows Canberra to nullify international agreements struck at local and state level. (Australian universities say the "foreign veto bill" amounts to "significant overreach.") Meanwhile, Beijing hit back, calling the move "unreasonable and provocative," and accusing Canberra of further stoking divisions after a series of escalatory moves by both sides that have seen China-Australia relations deteriorate to their worst point in decades. Chinese investment in Australia dropped by 62 percent last year, a massive blow for Australia's export-reliant economy.

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50: The US will aim to cut its greenhouse gas emissions by 50 percent from 2005 levels by the end of the decade. The Biden administration's commitment, double the goal set by Barack Obama almost six years ago, was announced to coincide with a virtual Earth Day climate summit attended by dozens of world leaders.

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Russian president Vladimir Putin on Wednesday threatened an "asymmetrical, rapid, and harsh" response for anyone that dares to cross a "red line" with Russia.

What's the red line? Putin says he'll decide on a case-by-case basis. And the cases at the moment are growing: the US has sanctioned Russia over cyber crimes; Putin critic Alexei Navalny is near death in a Russian prison; the Czechs say Russia blew up a Czech munitions depot; and as many as 120,000 Russian troops are reported to be massing along Russia's border with Eastern Ukraine.

Which is to say: there's potentially a Sol Lewitt's-worth of red lines to ponder now.

Europe has been hit by a green wave in recent years. Green parties in countries as varied as Germany, Belgium, France, Ireland, Finland, and Sweden have made sizable electoral gains, with some now sitting in national governments.

The Green phenomenon seems to be gaining yet more momentum in the lead up to some crucial European elections (Germany, France) in the months ahead. What explains the green shift, and where might this trend be headed?

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More than 930 million doses of COVID-19 vaccine have already been administered globally, and another 1 billion more are expected to be manufactured by the end of May. Most of the manufacturing is concentrated in a small group of countries. While some — like China, for instance — are exporting roughly half of the shots they make, others — mainly the US — are keeping most of the supply for domestic use. Meanwhile, export controls have been a particularly thorny issue in the European Union and India, where governments have come under intense pressure to stop sending vaccines to other parts of the world amid sluggish rollouts at home. We take a look at what the world's top manufacturers are doing with the vaccines they are producing.

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