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Aadhaar logo seen displayed on a smartphone.

Avishek Das/SOPA Images/Sipa U via Reuters Connect

What We're Watching: Digital money experiences in India, Togo & El Salvador

The advent of digital IDs

In poor countries, many are born without birth certificates or identification, a problem that leaves them unable to participate in modern society because they can’t prove who they are. Those without papers can’t open bank accounts, and governments can’t track transactions conducted entirely in cash, meaning they can’t tax people they can’t find. In turn, this lost revenue makes it harder for countries to provide much-needed public services. Before Aadhaar, a biometric ID system issued in India, more than one billion people in that country, and the government in Delhi, faced this very challenge. The Aadhaar system uses thumbprints and iris scans to establish identities and bring people onto the grid. It provides a unique 12-digit number to every user and allows authorities to transfer funds for state pensions, fuel subsidies, and other government help directly into bank accounts created for people who’ve never had access to such things. In important ways, this system is a triumph in human development, but there is a potential downside: In a country where rule of law isn’t firmly entrenched, if a government can put money directly into your bank account, it can also withdraw it. That power could one day become a tool of coercion that political leaders in countries that use similar ID systems can use to enforce obedience from millions of people. There is also the risk of hacking and identity theft, a problem that can only be managed gradually as problems emerge. These are risks we’ll see in many developing countries in the coming years.

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El Salvador's President Nayib Bukele present the plan of "Bitcoin City."

REUTERS/Jose Cabezas

What We’re Watching: Bukele’s crypto bomb, Somalia needs a president

Has El Salavdor’s crypto experiment bombed?

Mass protests erupted last fall after Nayib Bukele, El Salvador’s youthful, tech-savvy president with an authoritarian streak, announced that the country would begin accepting Bitcoin as legal tender. Many Salvadorans said Bukele’s embrace of the volatile currency would spur inflation and financial instability. Those warnings have proven prescient. In recent days, the crypto world has been caught in a tailspin, in part because global inflation has lowered investors’ tolerance for risk. Bitcoin and Etherium, the biggest cryptocurrencies, have both declined in value by 20-25% this week – and El Salvador is recording losses of about 37% based on what it forked out for crypto in a series of purchases. This has proven to be a disaster for Bukele: two major credit rating agencies predict El Salavdor will default on its loans. San Salvador has an IMF repayment due in January worth a whopping $800 million, and amid ongoing negotiations earlier this year the international lender warned that “Bitcoin should not be used as an official currency with legal tender status.” Still, the enigmatic Bukele continues to double down: this week, he released plans for the Bitcoin city he touted last fall – a smart city based on the use of the flailing currency.

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Much Ado About Crypto | GZERO World

Crypto fans ignore its ups and downs

In the past few weeks, the value of cryptocurrencies has been slashed by half over fear, uncertainty, and doubt (aka FUD) of US interest rate hikes and new regulation.

That means NYC Mayor Eric Adams, NFL quarterback Aaron Rodgers and basketball star Klay Thompson all face pay cuts because they get their salaries in crypto.

Yet, the crypto bros out there have not lost faith.

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Concern About Chinese Tennis Star Peng Shuai’s Safety Isn’t Going Away | World In :60 | GZERO Media

Peng Shuai, China's tennis star, appears safe but questions remain

Ian Bremmer shares his insights on global politics this week with a look at Peng Shuai's public appearance, El Salvador's "Bitcoin City," and Americans' Thanksgiving celebrations.

Why has China silenced its famous tennis player, Peng Shuai?

Well, they haven't completely silenced her in the sense that the head of the IOC, the International Olympic Committee with Beijing Olympics coming up, basically told the Chinese government, "hey, what is the absolute minimum that you can do so that we can get Beijing Olympics back on track?" And they did the absolute minimum, which was a half an hour phone call with her that felt like kind of a hostage phone call. But nonetheless, she says that she is fine and is private and doesn't want to talk about the fact that she had accused the former Vice Premier of sexually assaulting her. That is a fairly heady charge. It was clear, going to get a lot of headlines in the run-up to the Olympics. And she wasn't heard from after that. So big problem for the Chinese in the run-up to the Olympics.

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Demonstrators holding placards against the government's Bitcoin law while making gestures, during the protest. Thousands of Salvadorans took to the streets on El Salvador's Bicentennial Independence Day against El Salvador's President Nayib Bukele and his government's policies

Camilo Freedman / SOPA Images/Sipa USA

What We’re Watching: Salvadorans protest Bitcoin, meet Aukus, no COVID pass no job in Italy

Salvadorans protest Bukele, Bitcoin: Thousands of people took to the streets of El Salvador's capital on Wednesday, the 200th anniversary of the country's independence, to protest against President Nayib Bukele's increasingly authoritarian streak and his embrace of risky cryptocurrency. Last May, Bukele ended the Supreme Court's independence; perhaps unsurprisingly, the court then decided to lift the constitutional ban on presidential term limits — presumably so Bukele can run for reelection in 2024. Meanwhile, last week El Salvador became the first country in the world to accept Bitcoin as legal tender, but the rollout was, to put it mildly, messy. The protesters resent Bukele's dictator vibes and warn that Bitcoin could spur inflation and financial instability. The tech-savvy president, for his part, insists that crypto will bring in more cash from remittances and foreign investment, and remains immensely popular among most Salvadorans. Still, Bukele's Bitcoin gamble could erode his support if the experiment fails.

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El Salvador’s Risky Move to Bitcoin | Future of Singapore Patrol Robots | Cyber In :60 | GZERO Media

El Salvador’s risky move to Bitcoin; future of Singapore patrol robots

Marietje Schaake, International Policy Director at Stanford's Cyber Policy Center, Eurasia Group senior advisor and former MEP, discusses trends in big tech, privacy protection and cyberspace:

El Salvador becomes the first country to adopt Bitcoin as legal tender. Is this a risky move?

Well, it is unclear who ought to benefit most of the President's move to adopt Bitcoin. Poor shopkeepers, wealthy investors, or he himself. With arguments that remittances are expensive and the future is digital, President Bukele leapt forward. But the immediate value drop of Bitcoin was a live reminder of the cryptocurrencies' volatility. One silver lining is that others can learn from the lessons that El Salvador will learn under this new spotlight.

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Can the Taliban’s Non-Inclusive Government Lead a Diverse Country? | World In :60 | GZERO Media

Can the Taliban's non-inclusive government lead a diverse country?

Ian Bremmer shares his insights on global politics this week with a look at the Taliban's interim government, Chinese President Xi's efforts to redistribute wealth, and changes Bitcoin will bring to El Salvador.

A week after the US withdrawal, how is Afghanistan in the transition to Taliban rule?

Well, for now we have the transition government. They said it was going to be inclusive. It's all Pashtuns and it's all men. So it is inclusive of Pashtun men that like the Taliban. But of course, that's not the final government. And the real question is, are they going to have ethnic diversity across the country? And does that in any way forestall the likelihood of a civil war? Does it allow them to govern an incredibly diverse and difficult-to-govern country? And of course, I think we should be quite skeptical about that, but at least for now, the likelihood that the Americans or most advanced industrial economies would open diplomatic relations with them and engage with them in a constructive way still seems very, very limited.

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People use Bitcoin in El Zonte Beach in Chiltiupan, El SalvadorRoberto Carlos Silva, owner of La Zontena store, poses at his business where he accepts Bitcoins at El Zonte Beach in Chiltiupan, El Salvador.

REUTERS/Jose Cabezas

El Salvador’s millennial president bets on Bitcoin

El Salvador will become the world's first country to formally adopt the cryptocurrency Bitcoin as legal tender on 7 September. The move is the brainchild of President Nayib Bukele, a young leader who's eager to shake up El Salvador's economic policy, and is wildly popular with approval ratings of 87 percent. Eurasia Group experts Risa Grais-Targow and Paul Triolo explain how it's all supposed to work.

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