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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.

Carbon has a bad rep, but did you know it's a building block of life? As atoms evolved, carbon trapped in CO2 was freed, giving way to the creation of complex molecules that use photosynthesis to convert carbon to food. Soon after, plants, herbivores, and carnivores began populating the earth and the cycle of life began.

Learn more about how carbon created life on Earth in the second episode of Eni's Story of CO2 series.

On September 23, GZERO Media — in partnership with Microsoft and Eurasia Group — gathered global experts to discuss global recovery from the coronavirus pandemic in a livestream panel. Our panel for the discussion Crisis Response & Recovery: Reimagining while Rebuilding, included:

  • Brad Smith, President, Microsoft
  • Ian Bremmer, President and Founder, Eurasia Group & GZERO Media
  • Jeh Johnson, Partner, Paul, Weiss, Rifkind, Wharton & Garrison, LLP and former Secretary of Homeland Security.
  • John Frank, Vice President, UN Affairs at Microsoft
  • Susan Glasser, staff writer and Washington columnist, The New Yorker (moderator)

Special appearances by UN Secretary-General António Guterres, European Central Bank chief Christine Lagarde, and comedian/host Trevor Noah.

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Our panel will discuss where things really stand on vaccine development, the political and economic challenges of distribution, and what societies need to be focused on until vaccine arrives in large scale. This event is the second in a series presented by GZERO Media in partnership with the Bill & Melinda Gates Foundation and Eurasia Group.

Apoorva Mandavilli, science & global health reporter for the New York Times, will moderate a conversation with:

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The long-simmering conflict between Armenia and Azerbaijan over a region called Nagorno-Karabakh erupted over the weekend, with more than 50 killed (so far) in the fiercest fighting in years. Will it escalate into an all-out war that threatens regional stability and drags in major outside players?

What's the background? For years, Armenia and Azerbaijan have been at odds over the rugged highlands of Nagorno-Karabakh, which lies between them. In the dying days of the USSR, the two sides fought a bloody six-year war to control the enclave, which was part of Muslim-majority Azerbaijan but mainly populated by ethnic Armenian Christians.

The conflict ended in 1994 with over 30,000 dead, more than one million displaced, and a fragile truce that left Nagorno-Karabakh as a de facto independent state, recognized and supported by Armenia but not by most other countries, including Azerbaijan. Low-level clashes have persisted ever since — including deadly skirmishes in 2016 — and both governments often use the conflict to stoke nationalist flames at home.

Although the trigger for the latest violence is still unclear, bilateral tensions have been rising since mid-July, when 16 soldiers died in border clashes. That violence sparked an uproar in Azerbaijan, where thousands of Azeris took to the streets calling for the army to "recapture" Nagorno-Karabakh. Now, both sides are accusing each other of throwing the first punch, and have declared martial law.

A war over the enclave would resonate far beyond the region. The South Caucasus, where Armenia and Azerbaijan are located, has enormous strategic importance because it is crossed by two major energy pipelines that carry Azeri oil and Caspian Sea gas to Turkey and Europe.

Two outside players — Turkey and Russia — are on opposite sides of the conflict. Turkey has close relations with fellow Turkic Azerbaijan, and historically there is little love lost between Ankara and the Armenians. Moreover, Azerbaijan is Turkey's main oil supplier. Turkey has denied reports that it has sent 4,000 Syrians to fight on behalf of the Azeri army, but Turkish President Recep Erdogan's moves here merit close attention.

Russia is the dominant player in the region. But although it sells weapons to both Azerbaijan and Armenia, Moscow keeps troops garrisoned in Armenia and is, technically, treaty-bound to defend the country. If things escalate further, Vladimir Putin will have to decide whether to honor that obligation. Doing so could quickly put Ankara and Moscow on opposite sides of another nasty war (they already back different sides of the civil war in Libya.)

Finally, Iran also as a stake. It borders both countries, and Azeris are Iran's largest ethnic minority. Although Tehran has traditionally backed Yerevan, and often bickers with Baku over energy and security in the Caspian Sea, the Iranians offered to mediate when the latest tensions began two months ago. Will they try again now?

62: In a referendum over the weekend, nearly 62 percent of Swiss voters said they wanted to preserve freedom of movement between the European Union and Switzerland, which is not a member of the EU. The right-wing Swiss People's Party had proposed imposing migration quotas at the border, saying that the current frontier is basically a... (okay, they didn't actually say it's a "Swiss cheese" but still).

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