Follow the unveiling of the new Global Financial Infrastructure with me!
by Adi Shemesh
August 30, 2024 If you have attended one of my lectures or used my Crypto Kit, you are now witnessing the exposure of what you already know :)
For my previous post, visit here.
TLDR at the bottom of the post!
Dubai, Russia, Thailand, India, Turkey and Israeli Regulation & CBDCs
For those of you who are new to the narrative, CBDCs Are Central Bank Digital Currencies. They are a new form of government money which is completely digital, and is in full control of the Central Bank. (Meaning, that the central bank controls not only the issuing of the currency, but the code of the currency and can technically make changes to any coin issued and any account, of anyone, at anytime). [For my free Crypto and Economics Dictionary in HEBREW visit here]
The Dubai Court has officially recognized cryptocurrency as a valid form of salary payment in a groundbreaking legal ruling. This recognition signals that crypto is on its path of becoming extremely accepted in everyday transactions.
The Bank of Russia, the Central Bank of the Russia, has projected widespread adoption of the Digital Ruble within the next 5-7 years. This digital ruble is Russia’s new coin, which functions as a CBDC (Central Bank Digital Currency).
Additionally, in August, President Putin passed a new law that legalizes the use of cryptocurrency for international payments by individuals and businesses. This law went into effect on September 1st, 2024.
While these transactions are now legal, the Bank of Russia will be monitoring and regulating them. So—let’s take this into account as well :) [source: Tass - Russian News Agency]
It is also worth mentioning that Russia has been impacted by international sanctions following the war with Ukraine. By creating alternative payment methods using cryptocurrency and the digital ruble, Russia can reduce its reliance on traditional global financial systems, which are influenced by sanctioning nations.
Not long ago, Russia had been largely resistant to crypto in its official financial system—at least publicly ;)
Thailand's government is advancing its plan to distribute CBDC baht to citizens through digital wallets (10,000 baht to each wallet), which will start this month (September 2024).
Citizens can only use these funds in their designated home districts, and the money cannot be spent on items like fuel, alcohol, or online purchases. This initiative involves a "super app" developed by the Ministry of Digital Economy and Society. (No need for banks with CBDCs, right? At least from a technical perspective, that is).
I would like to bring to you attention, that this (and CBDCs in general) marks the first time in history that limitations on money—such as where it can be spent and on what products—are built into the currency itself.
Should we expect such restrictions on our future digital shekel as well?
India is moving forward with its CBDC initiative, with significant adoption among citizens.
Turkey has passed a law that gives cryptocurrencies legal status as intangible fixed assets. This provides a formal framework for the use and regulation of crypto in Turkey.
ISRAEL:
We are definitely seeing the government adopt crypto publicly, while citizens are busy dealing with the current situation in Israel and all the anxiety it creates.
I ran into this issue this week when issuing an invoice for one of my clients (I use Morning, and I like them).Our regulations already allow billing customers in Bitcoin and Ethereum (and paying taxes for it, even though these currencies have nothing to do with the State of Israel or the Israeli government).
Bank? Watch out! The American Section of this Newsletter
48%(!) of corporate donations to political campaigns in the 2024 U.S. election cycle were from cryptocurrency firms This eye-opening statistic, which I believe provides such a clear glimpse into crypto's role in our future, is taken from a report conducted by Public Citizen. The report highlights how crypto firms, like Coinbase and Ripple, significantly influenced federal elections through contributions to super PACs (Super Political Action Committee).
The Federal Reserve Board has announced the final individual capital requirements for all major banks, which will take effect on October 1, 2024.
These capital requirements are designed to comply with the Basel III standards, a global regulatory framework aimed at strengthening banks' regulation, supervision, and risk management. Basel III was introduced after the 2008 financial crisis to prevent future banking crises and requires banks to maintain higher levels of capital reserves.
But what will happen to all the banks?
If we focus on Capital Adequacy, which is only one of the aspects of Basel III, it is estimated (conservatively I believe), that 20% - 30% of the banks in developed countries will not have the right to exist anymore... In developing countries, it is even worse. [My sources: (Knowledge at Wharton) , (McKinsey & Company), (PWC), (PWC)]
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I'll try to elaborate a little on one topic each time. This time, it's this one ^^ So – it might be interesting to know that following the 2008 crisis, the ones who got hurt the most were the people, while the big banks, who were key players in the crisis, were declared as SIFIs (Systematically Important Financial Institutions) and got bailed out.
More interesting to know is that they benefited from their irresponsible/criminal behavior more than people realized.
Since 2008, new banks have barely opened...
Bottom line: Crypto technology is not built to replace currency. It is built to replace banks.
Just like email replaced most of our needs when it comes to post offices.Keep your eye on what will happen with the banks in the next few years and the process. Many things will make their lives harder from now on, not just one thing that will eventually bring most of them down, in my opinion.
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Crypto Drama
A significant Ethereum whale, who originally participated in the 2015 ICO, sold approximately 48,500 ETH, worth around $154 million. By my calculations, based on its dollar value at the time of the sale, this is the second-largest Ethereum sale ever. Also based on my calculations, the anonymous wallet made an astonishing 1,057,879% profit from its original investment during the ICO.
Only 5 days after the huge sale, the Ethereum Foundation itself sold 35,000 ETH worth $93.8 million. It is worth noting that several of the largest sales ever on the network were made by the Ethereum Foundation, which raises serious concerns, as price drops significantly following such behavior.
(As mentioned in my previous Triweekly update as well, the Ethereum curroption will be covered on my soon to be announced Flip the Switch Seminar. Stay tuned :)
Worth noting and noticing - the Ethereum Foundation’s huge transaction was sent to an account in Kraken Crypto Exchange. And why is this interesting, in my opinion? Because just less than a week BEFORE the transaction, it was announced that the SEC’s lawsuit against Kraken would proceed to trial, following the ruling by U.S. District Court Judge William H. Orrick. The lawsuit involves allegations that Kraken operated as an unregistered securities exchange.
Crypto’s acceptance into mainstream consciousness is gearing up
Suisse Gold now accepts cryptocurrencies for purchasing precious metals. According to the announcement, the supported currencies are XRP, Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Bitcoin Cash (BCH), Tron (TRX), Monero (XMR), Dogecoin (DOGE), and Tether (USDT), which can be used for purchasing gold, silver, platinum, palladium, and rhodium.
One interesting question I have for you, is why Suisse Gold would choose to accept Ethereum as a payment option, given that the Ethereum Foundation can influence the price so significantly and negatively through large sales?
[Learn about the significant announcement from the source itself] I also added some screenshots I took for you:
Mastercard has officially launched a new crypto wallet in partnership with Metamask and Baanx, marking a significant publicly known move into digital assets. The wallet combines Metamask’s platform, which allows users to store, send, and interact with decentralized applications (dApps) on the blockchain, with Baanx’s security infrastructure, providing users a way to securely store and manage cryptocurrencies. So from now on, Mastercard clients can even purchase groceries with their crypto.
It is worth noting that these types of solutions have already been in use for a while globally, through other services. (You might have come across this information if you used my crypto guide.)
Also worth noting is that even though this has only become public now, for those who pay attention, the information about Mastercard being ready with their crypto-payments solution has been available since at least December 2023. If you attended one of my lectures, you might remember I mentioned the Bitwise report that discusses this development.
More and more financial instruments based on Crypto...
First, I’d like to mention a saying that keeps proving its relevance in today’s reality: "Not your Keys, not your Crypto!" It’s an important principle to remember and take into account.
Now that we've covered that, I’ve come up with a simple phrase that reflects my thoughts on these instruments: "Not crypto, not crypto."
If you decide to take action, aim to get as close as possible to actual ownership while still feeling safe, calm, and—most importantly—able to stay active (not freezing up due to the complexity and giving up on the whole thing).
Now that I got my disclaimers off my chest, let's get into it!
Nasdaq has filed with the SEC to introduce Bitcoin options trading, which will allow investors to speculate on or hedge Bitcoin’s price movements through options contracts.
For those wondering, this is different from an ETF because it involves derivative products—a completely different product, not another Bitcoin ETF. (ETF = Exchange-Traded Funds)s)
On August 7th, Morgan Stanley authorized its financial advisors to offer Bitcoin ETFs from BlackRock and Fidelity to certain high-net-worth clients. (BlackRock’s iShares Bitcoin Trust and Fidelity’s Wise Origin Bitcoin Fund)
If you're confused about SEC approvals, this might help: Morgan Stanley is leveraging already-approved Bitcoin ETFs, so no additional SEC approval was required for their offering. They are using providers that have already received the SEC’s approval.
However—as of August 31, 2023, the SEC has delayed its decisions regarding multiple Bitcoin ETF applications, including those from BlackRock, Fidelity, VanEck, and Bitwise. Morgan Stanley is still preparing to move forward regardless.
I trust that eventually they will get what they wanted. I would bet on the next 6 months for that. Let's see later if I was right about this :)
That's all for now!
Thank you for reading and joining the journey of discovering the new global financial system!
Adi
For my previous post, visit here.
Want to know more about something? Leave a question in the comments section to let me know, and I'll be sure to answer.
TLDR:
This is a crazy time to be alive. Everything around us seems to be in chaos, and the old world’s infrastructure is loudly falling apart.
Yet, quietly, the new infrastructure of the global financial system is emerging.
This very system which determines how we interact with everyone and everything in terms of value and ownership. It’s hard for us to imagine a world without it.
Unbelievable? Sounds exaggerated?
This massive change, meticulously managed for at least a decade, is being communicated to most of the world's population slowly and in drips.
Those who are wise enough to recognize what is happening and acquire knowledge about it can win big.
You are welcome to follow my blog, visit the website, and learn about the transition of the global economy from an analog to a decentralized digital infrastructure, and its implications.
Knowledge is power, immense power.
Feel free to join and receive the triweekly update email, hear about upcoming open lectures, and discover new products on the site.
Adi Shemesh
Consultant and researcher in strategy, economics, and technology. Founder of the startup Trench and its complementary fashion currency Diamond, formerly with the Central Bank of Israel.
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