Author: Lillie Bennett

The East African Community (EAC), a group of central banks in an African economic union is unsure whether plans to create a single currency for the region before 2024 are realized. One reason why the single currency will not take root is because of the failure of some member countries to meet the targets set out in the roadmap.

A report from the East African states that members of the six-nation East African Community believe the common currency will reduce costs for converting currencies. The EAC has set the goal of achieving a single currency in the 2022-2026 period. This will help eliminate cross-border volatility and reduce exchange rate volatility.

In a communiqué reportedly issued on August 22, EAC stated that the delays and other obstacles meant that the regional bloc could not have a single currency in 2024, as was planned.

‘The Committee observed that delays have been made in achieving the targets in the EAMU [East African Monetary Union] roadmap, and that there are many challenges that could hinder the timely implementation of the EAMU protocol. The EAC communique stated that the Committee had pledged to work closely with the EAC Secretariat, and other stakeholders, in order to accelerate the pending activities of EAMU protocol.

Harmonization of Monetary & Forex Policies

The EAC acknowledged that the creation of a single currency regionally has been difficult, but it claimed that there had been some progress in the central banks of partner countries.

The East African report cites the achievements of central banks such as the creation of the East African Monetary Union, as well as harmonization of forex-monetary policies.

Other accomplishments include the harmonization and improvement of regulatory frameworks, cybersecurity enhancements, and measures to strengthen payment systems.

Felipe Medalla (the governor of Bangko Sentral ng Pilipinas, the country’s central banking system) shared his views on cryptocurrency in an interview published Friday.

Medalla was asked, “What is your opinion on cryptocurrency?” He responded:

It shouldn’t be banned. But, I don’t think it should be called cryptocurrency.

According to the central bank governor, cryptocurrency is ‘not used for actual payments’ because it’s volatile. He suggested that cryptocurrency be called ‘crypto assets’ to emphasize the fact that currency can’t be volatile.

Medalla then attacked bitcoin’s environmental impacts, saying that it is “bad for the environment” because of the fact that miners consume more electricity than some countries.

He said that crypto is a “good thing” since it ‘is an alternative to government in countries with so much economic and financial repression. The central banker said that crypto is also useful in avoiding monitoring by the government. He added that this raises the question of what social benefits it can achieve.

Medalla stated that although the government may not be perfect in all cases, it is contributing to the common welfare.

Because of what I said, my opinion is that its value may be too high.

The central banker of the Philippines spoke about the cryptocurrency market crash. “It’s already happened that it has collapsed. Right? Right?

My advice is to never invest money you can’t afford to lose if you are going to purchase this.

Medalla stated that the Philippine central bank’s crypto policy was not intended to be used to evade anti-money laundering.

He said that exchanges are ‘where crypto assets are exchanged for bank deposits or currency’. It is the policy of the central bank to enforce all the rules necessary to prevent money laundering, particularly to finance criminals.

According to Coinbase, long-term bitcoin investors have managed to keep their holdings even though speculators fled, driving the cryptocurrency down below $20,000

In the Tuesday monthly outlook, David Duong, Head of Institutional Research at Coinbase stated that recent BTC sales were almost entirely by short-term speculators.

Investors’ continued holding of cryptocurrency is a sign that they are confident that it will survive the Federal Reserve-induced bear markets and eventually flourish as digital gold or fiat alternatives.

Duong called the retention of bitcoin ownership by investors a positive indicator of sentiment, as it ensures demand-supply balance in face of speculator buying, which is a common feature in a bear market.

Coinbase Analytics has tracked on-chain data that shows that investors hold approximately 77% of total bitcoin supply. Although the number is slightly lower than the January high of 80% in early January, it still exceeds the 60% peak during the 2017 bull run. In 3.5 years, a substantial amount of wealth was transferred from traders or speculators to investors.

The report, titled “The Elusive Bottom”, defines long-term investors to be wallets that hold the cryptocurrency for at most six months.

Speculators aretypicallysophisticated participants or retail traders who purchase assets for short periods and employ strategies to profit from short-term price gyrations. Speculators as well as traders are more sensitive than others to macroeconomic changes, such as changes in Fed policy.

Bitcoin is now less than half its previous value, at $20,000 in 2017. This is primarily due to the Fed’s decision not to withhold liquidity to combat high inflation.

Many trading firms and miners, who are responsible for creating coins, have had to sell off their assets to remain solvent due to poor risk management in the crypto industry. Three Arrows Capital, with billions under management, went bankrupt . The bankruptcy of the fund has affected several prominent crypto companies, including Celsius Network and Voyager Digital, a lending platform.

Duong stated that “Solvency worries have caused an accumulation of realized loss, exposing vulnerabilities within other parts of crypto ecosystem,”

According to coinDesk data, Bitcoin was trading at $19,680 as of press time. This is a 0.5% decrease in 24 hours.

The Federal Financial Monitoring Service of the Russian Federation (also known as Russianmonitoring) is currently trying to uncover around 400 cases where cryptocurrencies are involved. Yury Chikhanchin (director of the agency) revealed the number to President Vladimir Putin.

They are being worked on by the financial watchdog together with representatives of both the Ministry of Internal Affairs and the Federal Security Service (FSB), a high-ranking official said. He also stated that 20 criminal cases have been filed against law enforcement officials in relation to digital assets.

Chikhanchin commented on the volume registered by his department for crypto turnover and acknowledged that Russians continue actively to use cryptocurrency platforms based in other countries. He elaborated:

This phenomenon is still ongoing. Only on two foreign exchanges, several hundred thousands Russian citizens are involved in transactions that amount to tens or hundreds of billions.

The regulator was quoted by RBC’s crypto outlet. He said that these transactions are not just settlements or investments. Yury Chikhanchin believes that some of these transfers may be related to criminal activity.

Official data from earlier this year shows that there were more than 1,500 court cases in Russia relating to cryptocurrency and crypto mining by 2021. 62% of them were criminal cases. Most of these were related to drug trafficking. These numbers indicate a 40% annual growth.

Russia has yet to regulate its crypto-space with a law “On Digital Currency” that lawmakers will be reviewing during the fall session at the State Duma (the lower house of parliament).

Moscow’s intuitions agree that the ruble should be the sole legal currency. However, officials are looking into the possibility of allowing crypto payments for small settlements within international trade.

Monday saw representatives of the South Korean government meeting with the People Power Party to discuss issues relating to crypto space. These consultations took place in the wake of last month’s collapse of the terrausd UST algorithmic stablecoin (UST) and its sister coin terra LUNA (LUNA), which affected many South Koreans.

Arirang revealed that Korean lawmakers and officials are considering a new law to protect investors and prevent such crashes. They urge the crypto industry also to develop its own regulations, which would include safety mechanisms.

According to the English-language TV channel, South Korea’s cryptocurrency assets market was valued at 55.2 trillion Korean won (or around $43 billion) at the time of writing. The rapid growth of the market over the last few years is evident in the fact that 24 licensed cryptocurrency exchanges in South Korea process an average daily transaction volume of 11.3 trillion won (over 8.7 billion).

However, South Korean authorities believe that the current regulations are inadequate to deal with rapid expansion. The government of South Korea and the country’s most powerful political force have called on the sector for ‘voluntary regulatory actions’. Meanwhile, many countries are looking at the effects of digital currencies on their economic policies and financial systems.

Arirang said that more than a dozen crypto-related bills were pending in Korea’s National Assembly. The country’s Financial Services Commission plans to introduce additional legislation to protect investors from the volatility of the crypto market.

Lee Bok-hyun, Governor of Financial Supervisory Service, was quoted as stating that he believes a fair regulation system is necessary. This would enable the crypto asset market to experience responsible growth, he said.