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HEALTH, WEALTH, AND HAPPINESS

March 8, 2022

"All this time, never minded the hustle

Stop to take a breath, you'll find

It's crazy just how far we've come."

- Jamey Arent, How Far We've Come

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Our official playlist: High-energy music to keep you motivated to invest for the long term, and remind you just how far we've come.


Our Blockchain for Everyone playlist is now available for free on Spotify. Click here to listen.

Whale Reads



Whale Reads

Worthy news for aspiring whales


White House to Order Broad Review of Cryptocurrencies (Wall Street Journal): Finally, the U.S. government is taking crypto seriously. The broad-ranging report will finally bring together the Treasury, Commerce, State and Justice departments to make sense of the landscape, as well as advise on a U.S. digital dollar.


Investor takeaway: Now the real action begins. Strap in.

Your Money is Growing



Your Money is Growing

Truth, in numbers


Meanwhile, the number of people actively using US Dollar Coin (USDC) continues to grow (blue line), with the price becoming more and more stable against the US dollar (grey line):

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Courtesy Glassnode


This is significant, as every dollar into USDC means dollars out of the traditional economic system. Think of USDC as an "on-ramp" to crypto.


Investor takeaway: The US may be late to wake up to what's happening, but at least it's finally rousing from its slumber. We'll keep you posted on what it finds, and what it means for investors.

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The Big Picture

with Evamarie Augustine


Hi Everyone,


Economic sanctions against Russia are continuing—the most recent being the announcement by the United States and the UK to ban energy exports.

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These events have brought SWIFT—the backbone of the global financial system—into the headlines. When Russian banks are limited or blocked from the Society for Worldwide Interbank Financial Telecommunications, these institutions are unable to send and receive vital information in the money transfer process. 


SWIFT is jointly owned by major banks across the world and processed an average of 42 million transactions per day in 2021, which was approximately 11% higher than in 2020. SWIFT differs from CHIPS, the Clearing House Interbank Payments System, a bank-owned, privately operated electronic payments system. Along with Fedwire, these electronic funds transfer services provide clearing and settlement systems for US dollar transactions.  


How does a country operate without a messaging payment system? Even prior to last month’s onslaught and resulting sanctions, several countries, including China, have attempted to move away from the Western-oriented SWIFT. Several years ago, China established the Cross-Border Interbank Payment System, or CIPS, to promote wider use of the yuan in cross-border payments. Dwarfed in size by SWIFT, CIPS processed an average of 12,000 transactions per day in 2021. However, the payment system is expanding, seeing a 75% increase in transaction volume from 2020, with usage by 1,280 financial institutions and 103 countries and regions.


The effort between Russia and China to move away from SWIFT and the West has an extended history. Chinese Premier Li Keqiang signed 38 agreements on a visit to Moscow in 2014 that deepened cooperation on energy and established a three-year currency swap deal worth 150 billion yuan (about $24.5 billion). This deal was renewed for another three years in 2017.


Another incentive to move away from the dollar was the imposition of heavy tariffs on Chinese goods in 2018 and the ensuing US-China trade war. What followed was an agreement in 2019 to replace the dollar with national currencies in international settlements between Russia and China. Such financial coordination helped Russia reduce its reliance on the greenback in trade. 


While 80% of Russia’s total exports were denominated in US dollars in 2013, only a little over half of its total exports today are settled in dollars, with most of the decrease absorbed by its trade with China.


Further, China’s involvement in the Multiple CBDC Bridge aims to address barriers in cross-border fund transfers. China is currently working with the central banks of Thailand, the United Arab Emirates and Hong Kong to explore a cross-border payment project using digital currency. As Russia continues to explore options for its own central bank digital currency, the likelihood is high for a Russia / China collaboration. 


Preparing for Future Sanctions?


Will China’s CIPS help countries prepare for future trade conflicts with the West? According to Professor Nir Kshetri, Bryan School of Business and Economics at the University of North Carolina, Greensboro, businesses in Asia and Europe can already send funds in renminbi to bank accounts in China via CIPS without using the SWIFT system. “CIPS is especially attractive for countries such as Russia that are adversely affected by U.S. sanctions.” 


A similar situation happened in Iran when the U.S. imposed sanctions on the country's import of nuclear-related items from 2006 to 2007. In 2012, the sanctions were expanded to restrict Iran’s exports as well as the country’s access to the global financial system, including SWIFT—with the economic sanctions most acutely felt by Iranian citizens.  


Efforts to move away from the traditional Western system of processing payments include the China National Advanced Payment System (CNAPS), which reportedly processed over 5 quadrillion renminbi (around $800 trillion) in payments in 2019. While CNAPS’s internal messaging systems can facilitate payments without relying on SWIFT, a large share of high-value, cross-border payments still involve SWIFT.


The Journey to the BRI



China’s initiatives also include the Belt and Road Initiative (BRI), a long-term policy and investment program to develop infrastructure and accelerate the economic integration of countries along the historic Silk Road.


Through BRI, China has promised over US$1 trillion in infrastructure projects. There are currently 139 members of BRI, including China, accounting for 40% of global GDP and two-thirds of the world’s population. African nations receiving investments from China-led infrastructure projects under the BRI are also using CIPS.


Stanley Chao is the President of All In Consulting, with offices in Los Angeles, Shanghai and Kyoto. He feels Russian sanctions will only be more impetus for China to accelerate the introduction of the eCNY both domestically and for cross-border transactions and pointed out that recent tests of cross-border transactions include Hong Kong. “If successful, China could roll out their CBDC in Singapore, Thailand and Malaysia. While Russia was not originally on the list, the possibility of the country being pushed to the front will increase when sanctions begin to hit their oil and gas industries.”


Chao believes the main issue is testing the wallet's scalability and ease of use for foreigners who are not accustomed to payment systems such as Alipay and WeChat Pay. As the anticipated chance to test the eCNY during the Olympics failed to materialize due to a lack of foreign visitors, Hong Kong’s pilot should allow for a test of scalability.


In order for China to achieve its global ambitions, its monetary systems need to achieve greater acclimation. The eCNY, the BRI and the current sanctions facing Russia look to provide a perfect collaboration opportunity for the two countries.

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International Women's Day


Today we celebrate International Women’s Day, which the United Nations formally recognized in 1975. While women make up about half of the global population, they lag in finance and economics. In fact, a study by the University of Delaware showed that women made up just 24.5% and 26.9% of economics and finance majors, respectively.


For crypto, the stats are similar—a recent poll conducted by market research firm 3Gem showed that less than half of the participants who said they owned bitcoin were women. Additionally, while less than one percent of men didn't know of bitcoin, four percent of women did not.


Research indicates that a majority of financial decisions are made by women, so why this disparity? Hopefully, 2022 will see more influencers such as @haileylennonbtc@mscryptomom1 and @girlgone_crypto encourage more women to engage and invest in the space. 


In these trying times, I wish everyone peace. As always, thank you for reading. 

Evamarie Augustine

Market Analyst

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Bitcoin Market Journal is a daily newsletter that makes you a better crypto investor. It is created by Evamarie Augustine, Charles Bovaird, Mati Greenspan, John Hargrave, and Alexandre Lores.


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