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Illustration cryptocurrency bitcoin, Suqian, Jiangsu province, China, January 3, 2024.

REUTERS

US regulators give a huge kiss to crypto

The past year and a half has been brutal for cryptocurrencies, as a barrage of bad news, scandals, and bankruptcies fanned suspicions about the credibility of digital coin.

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Jess Frampton

The dollar is dead, long live the dollar

Every now and then, a story about some country seeking to diversify away from the US dollar kicks off a frenzy about the inevitable collapse of dollar dominance. Lately, there’s been more than a few such headlines, including:

Naturally, these have provided a fertile ground for gold bugs, crypto shills, hyperinflation truthers, techno-libertarians, anti-imperialists (read: anti-US zealots), and run-of-the-mill grifters to stoke fear about the dollar’s imminent death and its supposedly catastrophic consequences for the United States and the global economy.

But even mainstream media outlets and smart, well-meaning analysts have gotten swept into the current wave of hysteria.

Doomsayers offer numerous reasons for the dollar’s demise. They point to everything from China’s meteoric rise to superpower and the emerging multipolarity of the global system, to America’s stagnant productivity growth, chronic fiscal deficits, monetary expansion, growing debt burden, trade wars, financial fragility, and imperial overreach, to challenges from disruptive technologies like central bank digital currencies and crypto-assets.

Yet rumors of the dollar’s death are greatly exaggerated. Going by most usage measures, the dollar remains incontrovertibly dominant in global trade and finance, if a little less so than at its apex.

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The Graphic Truth: Crypto's annus horribilis

Crypto bros can't wait for 2022 to be over. The year kicked off with cryptocurrencies riding the wave of the global post-pandemic economic boom. But then Russia's war in Ukraine upended global markets and worsening inflation prompted central banks to start hiking rates, which slashed investors' appetite for risk. What's more, a string of scandals — mainly the collapses of the TerraUSD stable coin and the FTX crypto exchange — undermined overall trust in crypto, leading to the worst annual performance in the industry's history. We track how Bitcoin and Ethereum, which together accounts for more than half of global crypto transactions, have traded since the beginning of the year.

Biden's Africa Summit won't gain influence for US without investment
Biden's Africa Summit Won't Gain Influence for US Without Investment | World In :60 | GZERO Media

Biden's Africa Summit won't gain influence for US without investment

Ian Bremmer shares his insights on global politics this week on World In :60.

What does Biden hope to achieve from his Africa summit?

Dozens of African leaders in Washington DC, potentially the most stillborn summit the Americans have hosted since the Summit of the Americas, Latin America, in LA months ago, because the United States doesn't have much of a strategy. Certainly want to have more influence given how much the Chinese have been economically locking up so much of the political orientation of these countries. But that means money, and the Americans, this is at the end of the day not the top priority, not even close for the United States, given GDP and given role in the world. So I suspect it's going to be a lot of happy talk. There'll be some political alignment, but it's not going to be a lot of influence.

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Logos of FTX and Binance, crypto exchange competitors.

Reuters

What We're Watching: Crypto chaos, China-El Salvador trade, inflation across the Atlantic, Biden-Xi meeting

Is this crypto’s Lehman moment?

The crypto market’s bad run got even worse this week after FTX, a major crypto exchange, imploded. Headed by billionaire crypto-star Sam Bankman-Fried, FTX was revealed to be in a dire financial position earlier this week, and Binance, the largest exchange and an FTX competitor, considered bailing FTX out, but dropped the idea at the eleventh hour when it became clear FTX was insolvent and its customers couldn’t withdraw assets. Federal investigators are now looking at Bankman-Fried to find out whether his company violated financial regulations. Not only did Bankman-Fried lose more than 90% of his $16 billion fortune in mere days, but the news also sent the broader crypto and stock markets into a tailspin. Bankman-Fried, a big Democratic donor, had been making inroads in recent months with lawmakers on Capitol Hill to shape regulation with favorable terms for the crypto industry. But lawmakers and other crypto lobbyists will now want to distance themselves from the crypto king facing serious allegations of financial impropriety.

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A woman holds a black cross with a sign against Bitcon during a protest against President Bukele's government in El Salvador.

Reuters

Hard Numbers: Salvadorans snub crypto, Chinese heart QR codes, Nigerians go cashless, Europeans shop online

2: El Salvador's crypto bro President Nayib Bukele has gone all in on Bitcoin, but his citizens are not yet sold on crypto for remittances, a lifeline for the economy. So far this year, only 2% of the money from Salvadorans working abroad was sent to their families using digital currencies.

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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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ECB President Christine Lagarde during a news conference in Frankfurt, Germany.

REUTERS/Wolfgang Rattay

Hard Numbers: ECB hikes rates, US seizes crypto-ransoms, Argentina plays with fire, jet stream breaks up

11: Faced with the highest inflation in the EU’s history, the European Central Bank on Thursday raised interest rates by half a percentage point. It’s the first hike in 11 years, bringing the rate to zero (the ECB had been running negative rates for almost a decade to spur sluggish growth).

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