Categories
Business

2021- The year crypto took center stage

2021 was a fair year for everybody else but a great year for crypto currencies. Crypto’s growth into a multi-trillion dollar asset has been aided by a number of high-profile organizations and businesses participating in it on a significantly larger scale than previously seen. The two most valuable cryptocurrencies, Bitcoin and Ethereum, hit fresh all-time highs, and El Salvador became the first government to accept cryptocurrency as legal tender.

On 5 November, the Bitcoin price hit an all-time high of $68,000 (about 240 million Uganda Shillings), a significant increase from the $28,000 level it was trading in December last year. The crypto market, on the other hand, has taken a beating. Cryptocurrencies are still a relatively young alternative asset class, and volatility is projected to be a feature of the market for the foreseeable future. Fintech and traditional payment companies began to embrace blockchain and crypto solutions, with PayPal, Venmo, Mastercard, and even Twitter allowing clients to make Bitcoin transactions. 

Massive growth and large market cap gains were seen in digital assets and crypto firms, confirming the sector’s maturity. Coinbase began in 2021 as the world’s largest digital asset listing, with a market capitalization twice that of Nasdaq. This has been beneficial to the industry, as it has increased openness and confidence. The presence of such a large public corporation demonstrates that crypto-related enterprises – and the crypto asset class – should be considered seriously. The cryptocurrency market is currently worth more than $3 trillion.

El Salvador became the first country in the world to recognize Bitcoin as legal tender, which implies that businesses must accept it as payment. The decision drew both praise and condemnation, but it confirms the usefulness of cryptocurrencies as a method for developing economies to sidestep a global financial system that is based on unfavorable loans and aimed toward the world’s wealthier countries and individuals.

We’ve seen efforts to regulate cryptocurrency all around the world. South Africa’s regulators have chosen a pragmatic approach to crypto regulation, announcing draft legislation in 2021.

A number of central banks throughout the world have issued digital currencies. In 2021, Nigeria re – launch the e-Naira, and South Africa is looking towards creating a digital currency.

As the industry becomes more well-known, it is attracting top talent from throughout the world. Users are becoming more knowledgeable about cryptocurrency and how to keep their funds safe.

Categories
Business

Morocco Leads North Africa in Bitcoin Trading

Despite official opposition and statewide cryptocurrency bans, digital currency use is at an all-time high worldwide, and Morocco is no exception.

According to Triple, a cryptocurrency research platform, Morocco had the largest Bitcoin trading among North African countries in 2021, with cryptocurrency ownership reaching 2.4 percent of the population. In Africa, it is the fourth-largest cryptocurrency trader, behind Nigeria, South Africa, and Kenya, with $6 million in cryptocurrency trading in 2021.

Morocco’s cryptocurrency ownership hit an all-time high of $2.18 million in 2020, unaffected by the COVID-induced economic catastrophe.

Despite Morocco’s ban on cryptocurrency, Bitcoin purchases are on the rise, with peer-to-peer trade on LocalBitcoins, a trading platform, reaching new highs in February 2021.

During the month of February, Moroccans transacted about $900,000 in bitcoin. Through a base effect, bitcoin adoption is gaining traction, with a 30 percent year-over-year growth in registration on the LocalBitcoins trading site.

According to experts, the surge in peer-to-peer crypto trading is fueled by both curiosity and FOMO (Fear Of Missing Out). While some traders profit from the soaring speculative value of digital currencies, others see cryptocurrencies as a way to trade without going through a bank.

In 2017, Morocco’s Exchange Office, the country’s foreign exchange regulator, outlawed cryptocurrency trading, citing its distrust about the technology. The Moroccan Central Bank, BAM, has since reported that its board of directors was debating the economic benefits of cryptocurrency adoption.

Governments all across the world are increasingly looking at the advantages of deploying blockchain-backed cryptocurrencies, with countries like Ecuador having previously done so.

Individuals and governments will continue to be concerned about the intractability of digital currencies and their widespread usage in cybercrime in the foreseeable future.

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Reviews

7 Best books about Bitcoin and Blockchain

New year, new resolutions and with the increased popularity around Bitcoin in Uganda, most of us have plans to invest some money in Crypto. Just in time to help you bring those resolutions to life, we have the best books for you to learn more about Crypto currencies.

  1. Digital Gold, Nathaniel Popper

Nearly everything else you’d want to know about the creation and early rise of the leading cryptocurrency is included in Digital Gold. Nathaniel Popper’s book, which was recently revised in 2016 with a new epilogue, begins with early exchanges between Nakamoto and his far-flung associates and then follows Bitcoin through famous events such as the Mt. Gox exchange breach and the shutdown of the illicit Silk Road marketplace. 

  1. The Infinite Machine, Camila Ruso

The Infinite Machine is the first book devoted to the Ethereum blockchain’s history. The Infinite Machine is Ethereum’s equivalent of Bitcoin’s Digital Gold. The intriguing story of Ethereum’s “army of crypto-hackers,” its eight founding members, is meticulously researched and masterfully related in this book. 

Russo explains how one of them, Charles Hoskinson, who went on to develop Cardano, had a radically different vision for Ethereum, and how Ethereum’s main creator Vitalik Buterin—who was just 20 years old at the time—made the crucial decisions that would decide the platform’s destiny. Ethereum’s founding, feuds, hair-raising hacks, and hard forks, as well as its incredible growth and importance in the future of the Internet, are all expertly covered by Russo. Anyone interested in Ethereum or DeFi should read The Infinite Machine.

  1. Bubble or Revolution? Neel Mehta, Adi Agashe, and Parth Detroja

This is the book for you if you’re absolutely new to blockchain and cryptocurrency. Bubble or Revolution aids in the crystallization of some very difficult topics in an approachable and understandable manner. It’s a great place to start your crypto education, since it covers everything from the origins of Bitcoin to the basics and applications of blockchain technology, as well as a basic understanding of altcoins, crypto-economics, and expanding commercial usage.

  1. Bitcoin Billionaires, Ben Mezrich

Bitcoin Billionaires continues up where Mezrich’s The Accidental Billionaires left off, with Tyler and Cameron Winklevoss receiving a multi-million-dollar settlement from Facebook and embarking on a new venture: investing in this strange new thing called Bitcoin. Mezrich follows the evolution of the cryptocurrency space, from the ragtag cypherpunks and libertarians who were drawn to Bitcoin in its early days to the suited-and-booted bankers and investors who sought to put a veneer of respectability on top of crypto’s chaotic subculture.

  1. Out of the Ether, Matthew Leising

Out of the Ether is a book on Ethereum and a book about Ethereum. On the one hand, it follows Vitalik Buterin as he takes his brilliant idea from concept to execution with a broad group of allies—and owing to interviews with numerous co-founders, the disputes and personality clashes are beautifully portrayed.

But it’s also about The DAO’s massive 2016 hack, which was the greatest ETH project of its time and the reason why modern-day Ethereum split from Ethereum Classic. The book discusses Ethereum’s beginnings and the existential threat that threatened to ruin its destiny.

  1. The Sovereign Individual, James Dale Davidson and William Rees-Mogg

This handbook to the then-nascent information revolution, written in the late 1990s, is shockingly predictive in several ways. It foresees the introduction of “cybercurrencies,” the rise of charismatic demagogues in politics around the world, and the emergence of state and non-state “cybersoldiers” who use “logic bombs” to target infrastructure, among other things. 

The basic thesis of the book is that the Internet’s technology and decentralized digital money will usher in a paradigm shift as people relocate their assets into the digital sphere, out of reach of the taxman. It claims that without the authority to raise taxes, nation-states will split, with governments effectively becoming service providers to this new elite.

  1. King of Crypto, Jeff John Roberts

The origin story of the blockchain that started DeFi is told in Infinite Machine, whereas Kings of Crypto is the equivalent of Coinbase, the first major crypto firm in the United States. Despite the real issues crypto purists have about Coinbase’s current state, it remains the industry’s closest thing to a household name, the service that “normies” are most likely to utilize when they’re ready to buy some Bitcoin, and hence the best firm to use to explain the emergence of crypto.

You can find some of these books at all leading book stores in Uganda or you can purchase them on Amazon.

Categories
DeFi

DeFi Tokens Post Double-Digit Gains Amid Crypto Market Recovery

With Bitcoin back above $50,000 as markets go into the holiday weekend, a number of decentralized finance (DeFi) blue-chip tokens are leading the charge, making substantial gains over the last day.

According to CoinGecko, SUSHI, the governance token of the popular Ethereum-based decentralized exchange (DEX) SushiSwap, is up 12% today, trading at $7.55 as of press time.

In early November, the token plummeted from approximately $13 to below $5 at the start of December, owing to infighting within the protocol’s staff, which resulted in the departure of CTO Joseph Delong.

Since then, several proposals for the future governance of the project were introduced, including the onboarding of Daniele Sesta, the person spearheading Frog Nation, a group of DeFi projects including Abracadabra.Money and Wonderland.Money

SUSHI, on the other hand, is still down 10% in the last 30 days. However, in recent days, the token has been on the rise, rising by an astonishing 33 percent in the last week.

New all-time high for LUNA

Meanwhile, LUNA, the Terra network’s native token, appears unstoppable, with a 15 percent gain in the last 24 hours and a new all-time high above $100 earlier today. The coin was trading at $63 just a week ago.

Over the previous seven days, the price of LUNA has risen by 54 percent, with increased demand for TerraUSD (UST), Terra’s dollar-pegged stablecoin, being one of the driving causes behind such a dramatic growth.

UST flipped DAI to become the industry’s fourth-largest stablecoin earlier this week, and more good news came on Friday when the asset started trading on major crypto exchange Binance.

Institutions embrace Aave

According to CoinGecko, AAVE, the native token of Aave, the industry’s most popular lending and borrowing protocol, is up 13% today, reaching a three-week high above $256.

SEBA, a fully regulated Swiss-based digital bank, has proposed to be whitelisted on Arc, Aave’s permissionless DeFi platform for institutional investors, prompting the asset’s latest price movement.

SEBA has noticed “growing institutional demand to access DeFi liquidity protocols like Aave in recent months,” according to the bank.

“SEBA’s customer base has expressed strong interest in participating in Aave Arc, and with its close contacts to money managers in Switzerland and beyond, SEBA is perfectly positioned to bridge institutional liquidities in the Aave Arc protocol,” according to the proposal.

In other news, Ethereum, the world’s second-largest cryptocurrency, is up 4% today, trading at $4,104 as of press time, while the prices of other important assets like Cardano and Solana have risen by 7.9% and 6.6 percent, respectively.

Categories
Business

Kenya will increase cryptocurrency use in 2022 – Bitcoin News for Emerging Markets

According to sources, Kenya could top the worldwide P2P cryptocurrency industry for the second year in a row, according to Marius Reitz, General Manager (GM) of Luno Cryptocurrency Exchange in Africa.

Marius Reitz was noted in the Report pointing to the developing encryption market in East African countries and the Kenyan people’s experience with digital payment systems as reasons for choosing Kenya over the typical heavyweights.

“The encryption business in the country is booming, and several companies are developing blockchain-based solutions.” It strongly positions itself, given its young population, smartphone-connected high heels, and familiarity with digital payment alternatives such as mobile money. Reitz’s reasoning was mentioned in the paper as “as East Africa’s premier cryptocurrency hub in 2022.”

Previously reported on Bitcoin.com Kenya’s peer-to-peer cryptocurrency trade volume has increased, and South Africa has surpassed Kenya as Africa’s second-largest P2P transaction market.

In addition to forecasting that Kenya will continue to dominate the peer-to-peer cryptocurrency industry, the report highlighted Reitz to explain why African enterprises are still having difficulty obtaining foreign exchange through the conventional market. He believes that these African-based businesses will be forced to “consider cryptocurrencies as a viable alternative to cross-border commerce.” However, Reitz was reported in the same report as noting that real success in this area will be contingent on regulatory improvement.

Despite these and other potential roadblocks, Reitz remains certain that Africa is better suited to cryptocurrency adoption than other continents.

Categories
Business

As the IMF warns of impending danger, Kim Kardashian, Elon Musk, and Jack Dorsey are chastised for hyping cryptos

The International Monetary Fund (IMF) is concerned about the global rise of cryptocurrencies, particularly because it is a new sector that is growing at such a rapid pace that it is difficult to keep up with.

Evan Papageorgiou, a Deputy Division Chief at the IMF, told CNBC that the crypto ecosystem has grown tremendously. He stated that the process exhibits a surprising strength and that stress testing was conducted along the route.

People and financial institutions trading on these cryptos, according to MF, lack strong operating and risk standards that would protect them from shock in the event of a disaster.

It claims that the greatest threat to crypto is a lack of proper transparency and leadership, as well as gaps for money laundering and terrorism financing. 

Influencers and cryptocurrency

The Financial Conduct Authority (FCA) of the United Kingdom has issued a warning concerning the link between social media and cryptocurrency investment. Fraudsters utilize social media enthusiasts to help them pump and dump new tokens based on guesses, according to Charles Randell, Chairman of FCA. He claims that some influencers advocate fictitious coins.

Randell said:
“We haven’t seen what will happen over a full financial cycle. We simply don’t know when or how this story will end, but – as with any new speculation – it may not end well.”

Kim gets knocks

Kim Kardashian, an Instagram celebrity with over 200 million followers, was paid to promote a crypto asset on her account earlier this year. Analysts emphasized how little is known about Ethereummax’s owners, the cryptocurrency she supported. Other social media personalities with large numbers of followers, known as influencers, such as Tesla CEO, Elon Musk and Twitter founder, Jack Dorsey, have advertised crypto assets on their pages.

Jack Dorsey and rap musician Jay Z put $500 million into an endowment fund that was initially focused on Africa and India. The fund’s board of directors includes three Nigerians.

Standard Operating Procedure

Another source of concern is that young people are fascinated by the market and frequently make their first investments in cryptocurrency with the help of loans and credit cards. According to information released by the Financial Conduct Authority (FCA) in June, around 2.3 million people in the United Kingdom own cryptocurrencies. 14 percent of them buy them with cash, and 12 percent believe the FCA will safeguard them if something goes wrong. However, the FCA has stated that they will not be protected.

Categories
Business

Bigger gains than Bitcoin: Top – Performing Crypto assets of 2021

Crypto assets had a great start of the year, fell in June, rose again in September, and are now stuck in a rut as we approach the conclusion of 2021. Bitcoin and Ethereum, the two most valuable coins by market capitalization, both achieved all-time highs in 2021 and are expected to close the year up 67 percent and 450 percent, respectively, barring a massive fall in the final week of the year.

However, being at the top doesn’t leave much leeway for making the most significant advances over the course of a year. The year’s biggest crypto market winners were not BTC and ETH.

Data from CoinGecko and Yahoo Finance was used to determine the top performing assets. Assets that existed at the start of the year were used whenever possible. Because many of the coins at the top of CoinGecko’s ranking didn’t exist until 2021, there were some exceptions for firms who had their initial public offerings this year, such as Coinbase, and several meme currencies.

This is not investment advice; we do not recommend that our readers purchase these assets. However, their gains in 2021 are really intriguing.

DeFi token: Lido Staked ETH (stETH)

Market cap was chosen for the DeFi category of this list since it helps reflect how many individuals own the tokens as well as their price. In addition, the market capitalization of stETH has surged by 48,633 percent, from $12.3 million at the beginning of January to $6 billion as of December.

The Lido platform’s native coin for staked Ether is stETH. It enables users to stake their ETH without securing it in any way. When customers deposit ETH, the tokens are created and then burned when they are redeemed. The Lido DAO is in charge of the Lido platform’s staking protocols.

Runners up

Pancake Swap (CAKE), up 5,730%; Frax (FRAX), up 2,495%

Coin: Solana (SOL)

SOL’s price has risen 9,588 percent from January 1, rising from $1.84 to $178.26 per SOL as of 15th of December.

The Solana network’s native coin is SOL. It can be used to pay for staking and transaction fees. To validate transactions, the Solana network employs a proof of history method. Solana is Decrypt’s Coin of the Year due to the growth of not only the price of SOL, but also the development of the Solana ecosystem.

Runners up

Terra (LUNA), price up 9,391%; Dogecoin (DOGE), price up 3,179.54%

Meme Coin: Shiba Inu (SHIB)

SHIB’s stock price has gained 42,349,900 percent since January 1, rising from $0.00000000008 to $0.00003388 per share on December 15.

SHIB is an Ethereum-based ERC-20 token that was launched in August 2020. It was designed as a parody of DOGE, but it has easily exceeded the object of its satire to become the most popular meme coin–at least in terms of performance in 2021. Its price trailed Dogecoin by a large distance as of December 21, but anyone who bought SHIB at the start of the year would be looking at a staggering return.

Runners up

Dogecoin (DOGE), price up 3,180%; Dogelon Mars (ELON), up 2,368%

Publicly traded crypto company: MicroStrategy (MSTR)

MSTR stock has increased by 41% since January 1, rising from $425.22 to $598.59 per share as of December 15.

MicroStrategy, the business analytics and software firm founded by Bitcoin bull Michael Saylor, was not founded as a crypto firm. You may argue that it’s still not a crypto firm. However, its stock is now primarily a Bitcoin play. As of the company’s investor day on December 16, it has 122,478 Bitcoin in its treasury, and the corporate website has a dedicated Bitcoin section where it shares its business playbook on the world’s first cryptocurrency.

Runners up

Coinbase Global (COIN), shares down 20%; Block (SQ), shares down 21%

Publicly traded crypto-exposed company: Nvidia (NVDA)

NVDA’s stock price has gained 141 percent since the beginning of January, from $131.04 to $304.59 per share as of Dec. 15.

NVIDIA is a worldwide technology business that was created in 1993 (during the dot-com bubble). The NVIDIA CMP HX is one of the company’s dedicated graphics processing units (GPUs) utilized by crypto miners. Its earlier GPU, the NVIDIA GeForce RTX 2070, is also popular among crypto miners. Despite the fact that its crypto GPU line has consistently underperformed expectations, the company’s stock has had a fantastic year.

Runners up

Advanced Micro Devices (AMD), shares up 60%; Tesla (TSLA), up 24%

Publicly traded crypto miner: Marathon Digital Holdings (MARA)

MARA’s stock price has grown 252 percent from January 1, rising from $11.01 to $38.73 per share on December 15.

Marathon Digital is a Bitcoin mining firm with a 3.320 Exahash per second facility in Montana and offices in Las Vegas. The company was established in 2010 as the parent company of Uniloc, an Australian software startup. The corporation didn’t truly go into Bitcoin until 2021, when it bought a bunch of mining machines.

Runners up

Hut8 (HUT), shares up 183%; Bitfury (BITF), shares up 180%

Excerpt

Bitcoin and Ethereum, the two most valuable coins by market capitalization, both achieved all-time highs during the year and are expected to close the year up 67% and 450%, respectively, barring a massive fall in the final week of 2021.

Categories
DeFi

How to invest in cryptocurrency

It is no secret that cryptocurrency has become one of the hottest investments especially after the ongoing pandemic that has frozen economies. 

Today, the process of moving money across businesses, customers and governments works through a number of intermediaries and middlemen such as banks, telecom companies, Fintech enterprises, money agents among others.  Cryptocurrencies came about as a means to cut the middleman by creating a new currency that didn’t involve any monetary institutions and avoid unnecessary interchange fees. So the cryptocurrency architecture (blockchain) and “altcoins” (Bitcoin alternatives), disrupt many of these intermediaries and act as a layer similar to the central banks which address the big headache of not holding any liabilities.

This year, cryptocurrency has beaten almost every other asset class, prompting many investors to question if they should add Bitcoin, Ethereum and other crypto-coins to their portfolios. On the market, there are a variety of cryptocurrencies with varying fundamental values. As one invests, they should be aware that cryptocurrencies can appear one day and vanish the next, rendering their investment useless. That’s why it’s crucial to have a cryptocurrency investment strategy in place and understand how to limit your risk. Let’s dive in!

Process
As a beginner, you may want to consider things like transaction fees, the type of cryptocurrencies available on the platform, special offerings like resources for education, and other features that align with your interests and goals, but most importantly, you need to choose a crypto trading service or venue. You can purchase, sell, and hold cryptocurrency by signing up for a cryptocurrency exchange. Using an exchange that allows consumers to withdraw cryptocurrency to their own personal online wallet for safety is often the best strategy. This functionality may not be important to people trying to trade Bitcoin or other cryptocurrencies.

There are many cryptocurrency exchanges from which to choose. TradeStation, Coinbase, eToro, and Gemini, among others, offer an easy, accessible and secure platform to own and transact cryptocurrency. In Uganda, Binance, OKcoin, Kraken, and Huobi have ranked the best exchanges for trading crypto. Because crypto ethos is about decentralization and individual sovereignty, some exchanges allow users to remain anonymous and do not require users to enter personal information. Such exchanges operate autonomously and are typically decentralized, which means they do not have a central point of control. An important thing to note, however, is that when creating a cryptocurrency exchange account you have to use safe internet practices. This includes using two-factor authentication and a password that is unique and long, including a variety of lowercase letters, capitalized letters, special characters, and numbers.

After choosing a cryptocurrency exchange, one needs to connect it to a payment option. At most exchanges, you can connect your bank account directly or you can connect a debit or credit card. Although you can use a credit card to purchase cryptocurrency, it is not a good idea because cryptocurrency price volatility could inflate the overall cost of purchasing a coin. Most Ugandan crypto traders are accustomed to using mobile money payments because they are more convenient and banks tend to impose numerous obstacles and challenges. After selecting your payment option, you can now successfully trade.

Bitcoins or Altcoins

For most newcomers to crypto, Bitcoin(BTC) is usually the first stop when it comes to investing. It’s the most famous blockchain project and the largest cryptocurrency by market capitalization.

However, there are thousands of different cryptocurrencies (altcoins) out there. Some altcoins have their own blockchain, while others use a pre-existing network (such as Binance Smart Chain or Ethereum). Every project has a different proposal, each with its own potential risks and benefits. Whether you want to invest in BTC only or multiple crypto assets is totally up to you. Some prefer to stick to BTC. On the other hand, some people prefer to diversify their holdings with altcoins. Asset diversification removes the risks of investing in only one project. If you have multiple assets, you are less likely to lose significant amounts if one of them fails. Altcoin investments can be risky and, unfortunately, there are many scams around, so it’s very important to do your own research before taking risks. 

How to store your coins

Cryptocurrencies are bought from an exchange. You can compare this to buying stocks on your stock brokerage account from a financial company. With stocks, you can leave them on the brokerage account and you’re fine. For cryptocurrencies, it’s a little different. There is a chance someone could hack into the exchange and steal your cryptocurrencies. This is why you should store your cryptocurrencies on a wallet which could either be an online wallet, or an offline hardware wallet. There are pros and cons to each as well as the difficulty of use especially if you are not tech-savvy. For more information on crypto wallets, take a look at Satsdaily – Crypto wallets: 3 software wallets that can secure your crypto assets

Should I trade or invest?

If you’re investing or trading, you’ll want to think about what you’re buying. The two are often confused, but there is a distinction to be made. Simply put, investing entails selecting assets that you believe in and holding them for a longer period of time. Such a method necessitates a lower level of active time commitment and usually entails a lower level of risk.

Trading, on the other hand, tries to make short or medium-term gains by buying and selling on a regular basis. It takes a lot of time and experience to become a competent trader. A trader must devise more intricate tactics, devote more time to market and trading platform analysis, and manage greater risk. They must also take into account the money spent on trading as well as transaction fees.

Keep in mind that cryptocurrency markets might be more volatile than traditional markets at times. While traders require volatility in order to make money, excessive levels of volatility can also mean considerable danger.

Investing is by far the simplest and safest option for novices. Short-term price adjustments aren’t as essential to investors because they normally consider in terms of years. The basics of a coin are used to make an investment decision (how solid is the project and how likely it is to succeed in the long run). Some people prefer to invest rather than risk their money on short-term changes. Others want to trade frequently in order to optimize their gains. Some people even combine the two. It all depends s on your risk tolerance, plan, and profile.

Again, it’s your choice, but you should never invest or trade with money you can’t afford to lose.

It takes some time to learn how to invest or trade cryptocurrencies. Improving your knowledge is a good way of reducing your overall investment risk, leading to more informed decisions. It’s easy to panic-sell an asset-based on emotion, but the chances of this happening are much lower when you study up on investment and trading.

Categories
Business

China Releases Digital Yuan Wallet

According to statistics compiled by the Cambridge Centre for Alternative Finance, China dominated the Bitcoin mining sector at the start of 2021, minting more than half of all new BTC. Chinese Bitcoin mining had all but vanished by the middle of the year after the government outlawed the process.

Despite the crackdown on cryptocurrency, China accelerated its plans for a central bank digital currency, an electronic version of the yuan that will eventually replace bills and coins, and began piloting the project in various parts of the nation.

According to the South China Morning Post, the government made its e-CNY (Electric Chinese Yuan) wallet publicly available for download via China’s Apple and Android app stores today. (It was previously only available through a private link.) Citizens in the test cities, like Shanghai and Shenzhen, can sign up for the trial version. Foreigners will be permitted to use the app at the Winter Olympics activities next month.

Governments such as Turkey, Czech Republic, The United States of America among others are looking into Central Bank Digital Currencies (CBDCs). These are often backed by distributed ledgers like blockchains, as a method to go paperless and improve security while cutting payment costs and speed. Two countries have launched CBDCs, according to CBDCTracker.org: the Bahamas launched the Sand Dollar in October 2020, and Nigeria released the e-Naira a year later.

However, with a population of 1.4 billion people, China provides the most significant test of state-issued digital currencies to date. By late October, the project’s developer, the Digital Currency Research Institute, claimed that over 140 million citizens had established accounts.

In contrast, Alipay, an Ant Group-created one-stop shop for finances, has almost 90 percent of the country’s citizens as users. Venmo, PayPal, Uber, Geico, and a bank are all rolled into one in Alipay. Tencent’s WeChat Pay is also popular in China.

The digital yuan, as the Carnegie Endowment for International Peace points out, might allow China to break Ant Group and Tencent’s stronghold on payments infrastructure, and the government has stated that it intends to use the e-CNY network to expand financial surveillance.

For those suspicious of the Chinese government’s motives, this is bad news for privacy and the covert usage of cryptocurrencies, says Carnegie:

“Its success could weaken dominant incumbent payment platforms, enabling policymakers to bring these platforms in closer alignment with Chinese financial regulators’ objectives, such as cracking down on unauthorized cross-border capital flows and bitcoin trading.”

In a nutshell, there will be less financial privacy.

Government authorities have been organizing digital yuan lotteries to encourage locals to use the network, distributing a total of 30 million yuan ($4.7 million) to 150,000 inhabitants of Shenzhen and Suzhou.

Categories
Business

Goldfinch raises a $25 million investment from a16z to support its DeFi lending protocol for borrowers in underdeveloped countries.

Despite the enthusiasm that has swept the so-called web3 space in recent months, most of the largest sums of investor money have appeared to be directed toward firms that reach people in the United States. However, an increasing number of companies are focusing on poorer countries, where traditional centralized banking institutions have struggled to meet the needs of their consumers.

Goldfinch is a cryptocurrency startup that is developing a decentralized lending protocol that will allow businesses to obtain cryptocurrency loans without having to possess large quantities of cryptocurrency. Most lending platforms nowadays rely on an end user’s existing crypto collateralization to determine whether they’re a good loan candidate. Securing valuable crypto assets in excess of the loan’s worth provides for safer lending, but it also turns off a lot of potential loan recipients who don’t have large crypto holdings.

The Bay Area startup wants to take a more blended solution to crypto lending with its protocol, building up capital pools and allowing fintech organizations outside the U.S. to make their case to lenders operating on the protocol and get access to funds while showing non-crypto collateral.

The startup tells TechCrunch it has closed $25 million in funding from Andreessen Horowitz’s crypto arm. Other backers include Coinbase Ventures, SV Angel, Blocktower, Bill Ackman and Heli-cap. Founders Mike Sall and Blake West previously worked together at Coinbase before starting Goldfinch in July of 2020. The firm raised an $11 million funding round last June.

But since pooled investing outside of securities regulations isn’t permitted in the United States, Goldfinch is for now ignoring the American market in favor of tapping networks of investors elsewhere — who are primarily focused on developing countries, where obtaining a loan has historically been difficult. The nations having the most loans through the protocol are Kenya, Nigeria, Uganda, and the Philippines.

Tugende, a Uganda business that lends motorcycle riders to borrowers who set up payment plans to buy the bikes over time, is one of the protocol’s backers. Greenway, a company established in India that produces and loans clean cook burners to low-income families, has also received funding.

The Tugende team has put a lot of thought into finding the correct incentive mix for their platform, allowing backers to accept different levels of risk and direct engagement in the platform. Lenders can manage their risk by dividing their overall pool of capital into “junior” and “senior” divisions. 

While junior investors can make direct bets on which organizations they want to support, the senior pool automatically diversifies the junior pool’s portfolio holdings. Because the senior pool is paid out first, it is a less active, more safe wager, but lenders in that pool forfeit a significant percentage of interest in favor of riskier junior pool backers who accept greater risk with more possible gain.