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Are Cryptocurrencies A New Alternative To Remittances Or A New Addiction?

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Governments around the globe, including the so-called honorable and democratic nations like Turkey and the not-so-democratic countries like China, have been trying to bridge the burgeoning cryptocurrency sector.

Cryptocurrencies

Cryptocurrencies

One of the myths associated with cryptocurrencies is that they will provide a suitable and cheaper alternative to traditional money transfer instruments. The current financial regimen may be fraught with disadvantages, but does Crypto give a more convenient way to transfer funds or remittances?

Cryptocurrencies accounted for 1% of the volume of worldwide cross-line remittances.

Remittances are described as sending cash to help their families and networks back home. Therefore, it is a very crucial part of GDP for some nations. The total value of worldwide remittances amounted to US$700 billion in 2020. Of this amount, US$540 billion is noted to have been shipped off low-and center pay nations, as per the World Bank data. El Salvador is a very striking example, and it received US$6 billion as remittances. However, Cryptocurrencies accounted for 1% of the volume of worldwide cross-line remittances reports analyticsinsight.net .

Digital currencies will surely add up to the options available for the consumers, and it will indeed have an effect in the coming times. However, it is an option with several pitfalls and uprooting cash for many families who keep on depending on it.

Cryptocurrency is not an inexpensive option to other forms of money transfer.

As opposed to the existing myth, cryptocurrency is not an inexpensive option to other forms of money transfer. It is not even a simple form of money transfer since it involves the intricacies of changing over Crypto to/from nearby monetary conditions. Buying goods or services with any crypto coin must be converted into local currency in almost all circumstances. Hence it is torture for the millions of people who depend on remittances to cover their daily needs.

A recent overview revealed that for the ordinary American moving cash to take care of daily needs, which includes food (73%), medical care (59%), and lodging (54%). Crypto can ever act as a lifesaver since most ordinary Americans rely on it quickly. For the likes of Elon Musk and others, cryptocurrency may serve as a welcome indulgence. Still, beyond that, for a typical American, the nonerosion of the value of his saving is of the top priority. The volatility of Crypto pales when compared to other forms of currency.

 

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Russia’s Move to Regulate Cryptocurrency Puts Other Nations on Notice

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Russia will enact new regulations on cryptocurrency including tax standards, by February 18

Russia accounts for 11% of the BTC mining in the world. So Russia is all set to regulate the cryptocurrency sector reports blockworks.co. Moreover, Russia’s move to regulate the cryptocurrency sector will spur other nations to follow suit.

The Russian Government and Central Bank have drawn up a framework to draft new legislation or amend existing laws to oversee crypto as a currency. The measure will help to cushion the economic impacts of digital assets.

Cryptocurrency will become a part of the present financial regimen

According to Anto Paroian, chief operating officer at digital assets investment fund ARK36, Russia’s action must be seen in the perspective that cryptocurrency is here to stay, and this realization is finally dawning on nations. Cryptocurrency will sooner or later become a part of the present financial regimen. The political and economic costs of banning cryptocurrency are much greater than the inherent risks of the system.

Nick du Cros, head of compliance and regulatory affairs at CoinShares, feels that the measures will signal nations to enact local regulations quickly rather than wait for the big seven to make decisions. Nick talked about the political forum made up of Canada, France, Germany, Italy, Japan, the UK, and the US.

US could fastrack its own laws to regulate crypto

Russia giving a “sympathetic” ear to cryptocurrencies, including putting digital assets on its balance sheet, will also pull the US out of its stupor and look closer to the cryptocurrency segment.

Anthony Pompliano, the founder of Pomp Investments, said that there is global competition in developing a decentralized, open system where anyone can access the system. Once your adversary adopts it, you will have no other option but to embrace it.

The US will closely watch the events leading to February 18, when Russia will draw up the legislation about cryptocurrencies. Russia’s central bank last month has proposed restrictions on the circulation and trade of cryptocurrencies. It also proposed to regulate crypto mining. However, Russian President Vladimir Putin supports a plan to tax and regulate mining, referring to Russia’s “competitive advantages” from crypto mining.

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American Minorities Could Turn To Cryptocurrencies To Pay Their Bills

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The US population contains a large number of crypto holders. The crypto market witnessed a boom in recent years, and despite the recent market crash, digital currencies are likely to increase in worth in the future. Millions of US investors are inclined towards this market due to high returns over a short period. CNBC reports that around 24% of crypto holders are Hispanic. The survey report shows that a large percentage of the minority community has crypto assets; the research shows that minorities can pay their hefty bills in cryptocurrencies due to their diverse investment portfolio.

American Minorities Can Clear Their Bills In Cryptocurrencies: Check Details

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Majority Of Crypto-Holders Are Minorities

CNBC quoted Charlotte Principato, financial service analyst at Morning Consult, who said, “The majority of crypto owners are white, but they’re also disproportionately Hispanic. There are communities out there that need better ways to pay, and that is one cryptocurrency’s big promises, especially for Bitcoin.” The rise in inflation in neighboring countries will encourage minorities to increase crypto assets. The report suggests that payments in crypto are likely to increase in the coming months. Several digital platforms allow workers to receive their salaries or pay their bills after converting USD into the desired cryptocurrency.

The Crypto Industry Has Grabbed Many Eyeballs

The crypto market is full of risks and potential data breaches, so investors and traders need to remain cautious of providing sensitive information. Bitwage offers a variety of services for efficient crypto transactions. The platform seeks to help investors understand the market pattern and derive optimal profits. Several individuals choose crypto due to its efficient and low-cost operations; the market has recently witnessed a steep rise in investment.

CNBC quoted Ben Weiss, CEO of CoinFlip, who said, “Whether you’re unbanked or not, whether you’re investing or not, we want to be there for the average person to get crypto. We don’t want to see the same issues of wealth inequality.” Millions of global investors need to ride the volatility and huge risks associated with unpredictable returns. Several investors prefer long-term investments over day-to-day trades; this ensures a significant return despite the current ups and downs.

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Cryptocurrency rules and scenario in different European Nations

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BTC Mining

Cryptocurrency has increased and has intruded into every aspect of commerce. It has been least regulated and often tainted by fraud, money laundering, and hacks — it has often felt like a complete free-for-all.

However, in recent times, efforts to regulate cryptocurrencies are on, and authorities in Europe are finally taking steps to rein in the industry.

The approach to regulating crypto has been varied and ranges from banning crypto ads in the UK and Spain to tighter background checks in Estonia to a largely hands-off system in Switzerland and Malta reports sifted.eu.

For the fans of cryptocurrency, bitcoin, Ethereum, and other coins are the ultimate store of value equivalent to gold. However, to detractors, cryptocurrency is another bubble waiting to burst. Skeptics say that the investor will lose all his money sometime in the future.

Regulators want to crack down on crypto companies, especially those which invest heavily in advertising and creating hype. So Europe is perfecting a methodology that will make it easier to trace crypto payments and prevent money laundering in Brussels.

Estonia-From open door policy to restricting crypto-activities

Estonia was the first nation to grant crypto licenses. It attracted substantial initial interest. Estonia has since revoked almost 2,000 of these, and only around 400 licensed companies remain. It is alleged that billions of Euros in dirty cash had floated through the Estonia-based bank branch of Denmark-based Danske Bank from 2007 to 2015 in one of the largest illicit money scandals. After this scandal, Estonia tightened its rules for cryptocurrencies.

Spain-Rules for Crypto adverts

As such, Spain has no specific rules on cryptocurrencies. However, it is imposing restrictions on social media influencers’ crypto promotion. The latest rules specify those influencers and their sponsors to pre-notify a stock market supervisor of some posts and to warn of crypto’s risks or face fines. Fines for non-compliance could reach €300k.

EU –Making Crypto more traceable

European Union regulators want to make crypto more traceable. Any entity that transfers crypto assets will have to collect details of senders and recipients to help authorities crackdown on dirty money. A bill is also in the offing which seeks to outlaw anonymous crypto wallets just as anonymous bank accounts are already banned under EU anti-money laundering rules. The law will apply to 27 EU states.

The UK-Adverts under watchful eye of FCA

The UK, like Spain, had scant regulations but has started to apply rules. All crypto adverts will have to be approved by Financial Conduct Authority. Thus the UK will designate crypto akin to financial promotions for stocks and insurance products, with possible fines of severe breaches.

Sweden-Wants its own CBDC

This nation is terrified that cryptocurrency will replace Krona. As a result, the government has fast-tracked the development of its own central bank digital currency. Sweden’s Riksbank, the world’s oldest central bank Governor, is highly skeptical about Bitcoin, and the country has also called for a European ban on energy-intensive bitcoin mining.

Switzerland-Rolling the red carpet

While other nations are thinking of curtailing the crypto sector, the Swiss are keen to promote it and gain a prominent crypto fintech. As a result, Swiss regulators have worked faster than their counterparts and perfected a completely new crypto legal regime last year, recognizing “tokenized securities” on a blockchain as having the same legal standing as traditional assets.

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