Seeds of Wisdom RV and Economic Updates Monday Afternoon 8-5-24
Good Afternoon Dinar Recaps,
Blockchain and Nation-State Infrastructure: Why Bother?
" Financial titans like JP Morgan, Standard Chartered, HSBC, and Goldman Sachs are diving deep into blockchain, spurred on by the SEC’s approval of spot Bitcoin and Ether ETFs and BlackRock’s tokenization initiatives.
However, participation from legacy organizations brings with it a growing risk of reproducing the same kinds of centralized structures that blockchain set out to dismantle.
Additionally, greater involvement from traditional finance attracts stronger regulatory frameworks and more regimented policy structures from nation-state institutions, which risks stifling innovation and limiting the autonomy of our blockchain networks. So, why bother?"
"Not long ago, these financial giants were the loudest critics of crypto’s credibility and efficacy. For context, in 2017, the CEO of JPMorgan Chase famously declared, “BITCOIN IS A FRAUD”.
In this era of heavy skepticism, financial governance in the U.S. looked down its nose at this whole ecosystem—if it even dared to look at all.
Yet now, as the two start to realize the potential upside of Wall Street ETFs, we seem incredibly eager to shine a light on their arrival.
We need to ask ourselves if these major private and public players can be trusted with the future of blockchain ecosystems when they have, for years, continued to struggle with the provision of clear and feasible regulatory frameworks."
"It’s still unclear if digital assets are SECURITIES or COMMODITIES, leading to endless lawsuits and regulatory headaches for major exchanges in the US. These opaque rules and guidelines have fostered a mass jurisdictional exodus, as companies look for legal respite to innovate in other places. "
"To circumvent these centralized points of failure, we need to continue building permissionless and trustless systems that can’t be taken down by the state, regulator, or any one owner.
Decentralized, open-source zero-knowledge (zk) bridges may not be a silver bullet, but they offer a more promising and equitable future.
Distributed, anonymous, and autonomous, these bridges can operate with minimum governmental interference and therefore maximum freedom, empowering participants to move assets freely and generate proofs locally and economically."
"This allows for true interoperability, giving protocols sovereign control without the heavy hand of regulatory requirements. It also makes these bridges nation-state-resistant: if a given bridge provider is regulated out of existence or prosecuted, users can continue bridging using the decentralized infrastructure."
"In this vision, protocols would enjoy greater freedom, with no unnecessary requirements, no user flow restrictions, and no extra security vulnerabilities. Crypto would again become a space where no single country, company, or party has an unfair advantage, effectively returning to the decentralized spirit at the heart of blockchain."
"Imagine instead a world where thousands of blockchains communicate seamlessly—a future where fragmented liquidity becomes a cohesive, high-performance ecosystem.
This vision is within reach. We are on the cusp of making blockchain as efficient and interconnected as the internet itself.
Decentralized, horizontal scalability is the only way forward, making crypto truly useful for the wider global community."
@ Newshounds News™
Read more: Bitcoin
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Cambodia’s Bakong DIGITAL CURRENCY helps address DOLLARIZATION
ANOTHER ARTICLE HIGHLIGHTING THE FACT THAT COUNTRIES ARE CONTINUING DOWN THE PATH TO DE-DOLLARIZE AND RETURN TO LOCAL CURRENCIES.
THIS TREND IS HAPPENING ALL AROUND THE WORLD AND SEEMS TO BE A STRATEGIC PLAN TO BRING IN A GLOBAL FINANCIAL SYSTEM.
"Cambodia has been a heavily dollarized country since it returned to civilian rule in the early nineties. Roughly 80% of transactions are in US dollars. Prior to becoming the Governor of the National Bank of Cambodia, Chea Serey spearheaded the launch of the Bakong digital currency payment system in 2020.
A key aim was to encourage a higher proportion of transactions in the local riel rather than dollars. Based on figures for the first half of 2024, that strategy looks like it’s working."
"Bakong has been a huge success. By the end of last year, the central bank said there were ten million wallets out of a 17 million population. While often described as a central bank digital currency (CBDC), Bakong is closer to a tokenized deposit initiative with the Bakong currency backed by balances at commercial banks."
"One of the key tactics to encourage use of the LOCAL CURRENCY is to only support cross border payments using riel. Bakong has existing cross border payment arrangements for Bakong with Thailand, Laos and Vietnam and is expanding its collaborations with China, Japan, India, Korea, Singapore and Malaysia.
Late last year it partnered with Alipay+, the international arm of the dominant Chinese wallet. Additionally, it’s encouraging local retailers to quote prices in riel."
"There’s another reason the strategy is working. With a prudently managed economy, the riel can hold its own in the foreign exchange markets. It has an unofficial peg of 4000 riel to the dollar, which it has managed to more or less hold for the past 20 years.
During the past ten years it has varied by less than 5%. Given the decline in the US dollar in the last few days, the riel has now slightly appreciated against the dollar over the past year. Other currencies in the region such as the Thai Baht, have depreciated a little."
@ Newshounds News™
Read more: Ledger Insights
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USD/JPY Forecast – US Dollar Continues to Drop Against The Yen
The USD/JPY pair fell hard in the early hours on Monday, as the trading world continues to unwind the overall carry trade, and the Fed is looking more and more likely to cut rates later this year. Ultimately, this is a market that I think will continue to see more and more volatility.
@ Newshounds News™
Read more: FX Empire
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IMPORTANT RIPPLE (XRP) UPDATE
“Ripple USD will be fully backed by a segregated reserve of cash and cash equivalents and redeemable 1:1 for US dollars,” the announcement reads.
▪️Ripple plans to launch a stablecoin called Ripple USD (RLUSD) by the end of 2024, available on XRP Ledger and Ethereum. It promises benefits like deep liquidity for certain trading pairs, instant settlements, and programmable finance.
▪️The SEC has criticized RLUSD as an “unregistered crypto asset,” continuing its ongoing legal battle with Ripple since 2020.
More Attention to RLUSD
Ripple made waves earlier this year when it revealed that it would introduce a stablecoin pegged to the American dollar. At the time, CEO Brad Garlinghouse stated that the product would serve as a bridge between traditional finance and the cryptocurrency industry.
Ripple’s team has still not provided an exact date for the stablecoin’s official release. However, they explained it will be available on the XRP Ledger and Ethereum and should go live before the end of 2024. The team also revealed that the stablecoin will be called Ripple USD (ticker RLUSD).
Most recently, the product was added to the company’s official website, meaning its launch could be just around the corner. “
Ripple USD (RLUSD) is being designed to maintain a constant value of one US dollar. Issued on XRP Ledger and Ethereum blockchains, Ripple USD will be fully backed by a segregated reserve of cash and cash equivalents and redeemable 1:1 for US dollars,” the section reads.
Ripple’s team argued that RLUSD would provide certain benefits, such as deep liquidity for selected trading pairs on centralized exchanges, instant settlements, and programmable finance.
The Clash With the SEC
The upcoming stablecoin has already become a subject of controversy, receiving criticism from the US Securities and Exchange Commission (SEC). Several months ago, the regulator labeled it an “unregistered crypto asset.”
This is not the first confrontation between Ripple and the SEC. The agency sued the firm in December 2020, accusing it and some of its executives of illegally raising more than $1.3 billion by selling XRP in an unregistered security offering.
The legal battle passed through multiple developments in the following years, becoming one of the hottest topics in the crypto space. It reached its trial stage in April 2024, meaning a resolution could be announced anytime.
Some industry participants view the SEC as the underdog in the dispute, pointing to Ripple’s three partial court wins secured throughout 2023. XRP’s price reacted positively to each of those, and it will be interesting to see how it performs once the case is officially closed.
@ Newshounds News™
Read more: Crypto Potato
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Crypto Market Crash Aside: 3 Things to Watch This Week
Things couldn’t get much worse for crypto markets following their largest retreat for more than a year. However, this week’s economic calendar in the US is slow which could limit further volatility.
Crypto markets have fallen below $2 trillion total capitalization in a massive double-digit crash, the likes of which have not been seen for at least a year.
Stock markets in Asia are also reeling this Monday morning following a tech stock rout in the United States late last week.
Economic Calendar August 5 to 9
Monday, we will see July’s final S&P services PMI (purchasing managers index), which provides a snapshot of business conditions in the services sector in the United States.
The ISM services report is also due, which will provide economic indicators for service based on surveys of supply management professionals. Changes in ISM and PMI reports often precede changes in the wider economy.
Thursday has initial jobless claims data, which indicate employment and labor markets in the United States and have a wider impact on the economy.
This week’s light economic events calendar will not have much impact on markets as they are already in freefall.
Economists are forecasting more economic doom and gloom. “All in, we have an economic slowdown for sure, with a high probability that a recession is approaching,” reported Forbes over the weekend.
Crypto Markets Bleed $280B
Crypto markets have dumped a further $280 billion over the past 12 hours resulting in a daily slump of around 13%.
This has dropped total market capitalization back to $1.94 trillion, its lowest level since February. Digital asset markets have dumped more than 20% over the past week as sentiment shifts to bearish.
Bitcoin led the declines with a slump to under $50,000 during the Monday morning Asian trading session. The asset has lost 13% over the past 24 hours in its largest and fastest fall for more than a year.
Ethereum fared even worse, tanking a whopping 21% on the day to $2,200, its lowest level since January.
The altcoins are a sea of red this morning, with most dumping double digits as crypto markets wipe out nearly all gains made in 2024 in the space of a couple of days.
@ Newshounds News™
Read more: Crypto Potato
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IRAQ Central Bank Governor comments on DOLLAR EXCHANGE and FOREIGN REMITTANCES
"Ali Al-Alaq, governor of the Central Bank, discussed the value of remittances sent abroad and the value of the dollar."
"Al-Alaq said in a proclamation got uninvolved of his facilitating in the Place of Delegates that “our unfamiliar cash holds are adequate to make balance on the lookout,” demonstrating that “the National Bank offers in excess of 250 million bucks everyday to meet the necessities of unfamiliar exchange.”
He added, “85% of unfamiliar exchanges are as of now occurring between Iraqi banks and reporter banks WITHOUT GOING THROUGH the US Central bank,” making sense of that “the lodging drive is vital to the bank.”
He explained that “the Central Bank is now heading to cover the financing of the construction of 32 thousand housing units” and that “the volume of loans granted within the real estate initiative amounts to 10 trillion dinars.”
@ Newshounds News™
Read more: Dinar Opinions
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