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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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Challenges and Risks Associated with NFT | Cyber In :60 | GZERO Media

NFTs: Hype, mainstream growth - & implications

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:

How wild is the NFT art world? And are there any loopholes behind the trend?

Well, to start with for me, the prices are insanely wild. It looked like a small circle of already wealthy fans are enjoying this new type of speculation. And while I love art, I think there's a world of difference between the Bored Apes and Van Gogh. And I have not quite discovered any appealing cutting-edge creativity in the NFT space. And meanwhile, the loophole are many, there is unauthorized use of images for NFTs, but also risks of money laundering and inflating prices artificially. And the whole hype reminds me a bit of Tulip mania, when in the Netherlands between 1634 and 1637, bulbs were sold for as much as 10 times the annual salary of a skilled artisan.

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US Secretary of State Antony Blinken (L) and Russia's Foreign Minister Sergei Lavrov arrive for security talks at the Hotel President Wilson.

Russian Foreign Ministry/TASS

What We’re Watching: Ukraine diplomacy, India’s no-campaign election, Italian presidential conclave, Burkina Faso coup, Russia moves on crypto

Ukraine diplomatic blitz. The US and the UK have withdrawn some staff from their embassies in Kyiv, and NATO countries put more troops on standby amid an ongoing flurry of diplomacy to stop Russia from invading Ukraine. After playing defense for his boss over Joe Biden’s controversial remarks about Russia and Ukraine, US Secretary of State Antony Blinken warned of a severe response if any Russian forces cross the border. However, Blinken — who is trying to shore up a united front with Europe while keeping the Russian dialogue open — turned down Ukraine’s demand for preemptive sanctions against Russia. Also, the UK accused the Russians of planning to install a pro-Moscow leader in Kyiv. Meanwhile, on the ground both sides continue to beef up their military presence. While the first US weapons arrived in Ukraine, across the border Russia moved troops and equipment to Belarus, Ukraine’s northern neighbor and a staunch Moscow ally. Blinken is expected to continue talks this week with the Russians, but there’s an X factor: China. Xi Jinping, whom Vladimir Putin now calls his “old friend”, probably doesn’t want the upcoming Beijing Winter Olympics to be marred by a hot war in Europe, so perhaps he’ll try to talk his pal out of an invasion.

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Biden Sticks With Powell As Fed Chair Amid Rising Inflation | US Politics In :60 | GZERO Media

Biden sticks with Powell as Fed Chair amid rising inflation

Jon Lieber, head of Eurasia Group's coverage of political and policy developments in Washington, shares insights on US politics:

Why did President Biden renominate Jay Powell to be the chairman of the Fed, and who's his No.2, Lael Brainard?

Well, Powell by all accounts has done a pretty good job of managing the Fed through the coronavirus pandemic. He dusted off the playbook, first pioneered by Chairman Bernanke during the financial crisis, and he's largely continued the relatively easy monetary policy of his predecessor at the Fed, now Treasury Secretary, Janet Yellen. With inflation growing the way it has over the last several months, Biden now owns the policies of the Fed and is essentially endorsing what Powell has been doing and giving Powell the political cover to continue to keep rates low for longer, or as many people expect, raise them slightly over the next 12 months in order to fight inflation.

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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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Do unregulated cryptocurrencies undermine US sanctions? | Cyber In :60 | GZERO Media

Do cryptocurrencies undermine US sanctions?

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:

Do cryptocurrencies make it harder to enforce foreign policy sanctions?

Well, that is exactly what the Biden administration worries about. As part of growing concerns of whether unregulated currencies undermine a whole host of policies, sanctions and foreign or trade policy should be a priority area. And just like others who wish to evade tracing of their wealth or transactions, the very states or their sanctioned entities should be assumed to resort to all options to evade restrictions while continuing to do business. So having cryptocurrencies undermining the ability to enforce strategic goals logically raises eyebrows in Washington.

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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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