Bitcoin headed for weekly drop amid exchange crackdown

Bitcoin headed for weekly drop amid exchange crackdown
Bitcoin was trading little changed on Friday, but headed for a weekly decline. (Shutterstock)
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Updated 16 July 2021

Bitcoin headed for weekly drop amid exchange crackdown

Bitcoin headed for weekly drop amid exchange crackdown
  • Bitcoin trading 5 percent lower in the week
  • Italy joins global crackdown on crypto platform Binance

LONDON: Bitcoin was set for a weekly decline as regulators continued a global crackdown on cryptocurrency exchange Binance and Federal Reserve Chair Jerome Powell speculated that central bank digital currencies may make cryptocurrencies less useful.

Bitcoin was trading little changed at $31,783 at 1:14 p.m. GMT on Friday, after experiencing its biggest slide in 10 days on Thursday. The world’s most traded cryptocurrency was 5 percent lower in the week.

Binance is not authorized to carry out activities in Italy, the country’s market watchdog said on Thursday, joining a string of global regulatory moves against the cryptocurrency exchange.

It is unclear whether the regulator had requested that local Internet companies block Binance’s website, or whether it has referred the case to magistrates. A Binance spokesperson said its website did not operate out of Italy and that the Consob notice had no direct impact on its services. He declined to comment on the letter.

Scrutiny of the cryptocurrency sector is growing across the world, with regulators worried over consumer protection and the use of digital coins for money laundering and other criminal activities.

Britain’s financial watchdog last month barred Binance — one of the world’s biggest exchanges — from carrying out regulated activities in the UK. Watchdogs in Thailand, Japan, Germany and the United States have also targeted the platform.

Binance was last month the world’s biggest exchange by spot trading volumes, data from CryptoCompare showed, with trading volumes in June at $668 billion — a near 10-fold jump from July 2020.

It offers a wide range of services to users across the globe, from crypto spot to derivatives trading. However, on Friday, it said it had stopped selling stock tokens — digital versions of equities — as Hong Kong's regulator moved against trade in the tokens.

Fed vs. stabelcoins

Fed Chair Powell on Wednesday said one of the stronger arguments for the US central bank to set up a digital currency is that it could undercut the need for private alternatives such as cryptocurrencies and stablecoins.

Asked during a congressional hearing if having a digital currency issued by the Fed would be a more viable alternative than having multiple cryptocurrencies or stablecoins emerge in the payments system, Powell said he agreed. A stablecoin is a cryptocurrency that attempts to peg its value to a conventional currency such as the US dollar.

“I think that may be the case and I think that’s one of the arguments that are offered in favor of digital currency,” Powell said during a hearing before the US House of Representatives Financial Services Committee. “That, in particular, you wouldn’t need stablecoins, you wouldn’t need cryptocurrencies if you had a digital US currency — I think that’s one of the stronger arguments in its favor.”

Fed officials will be broadly examining the digital payments universe in a discussion paper that could be released in early September, Powell said. He described it as a key step that accelerates the Fed’s efforts to determine if it should issue a central bank digital currency, or CBDC.

Digital euro

Elsewhere on Wednesday, the European Central Bank formally launched a pilot project to create a “digital euro”.

“Our work aims to ensure that in the digital age citizens and firms continue to have access to the safest form of money, central bank money,” ECB president Christine Lagarde said in a statement.

The initial “investigation phase” is to last two years and will focus on the digital euro’s design and distribution options, before a final decision is taken on whether to proceed.

A digital euro would be an electronic version of euro coins and banknotes held in a digital wallet, potentially allowing eurozone citizens for the first time to have accounts directly with the ECB.

A key challenge will be to balance privacy demands with anti-money laundering regulations, with experts saying it’s unlikely a digital euro can offer the same kind of anonymity as cash.

To avoid taking business away from commercial banks, ECB executive board member Fabio Panetta told reporters the amount of e-euros individuals can hold in their digital wallets could be capped, for example at around 3,000 euros ($3,500).


Coffee prices surge as Brazil frost hits crops

Coffee prices surge as Brazil frost hits crops
Updated 7 min 3 sec ago

Coffee prices surge as Brazil frost hits crops

Coffee prices surge as Brazil frost hits crops
  • The commodity has rocketed by a blistering 60 percent since January

LONDON: Coffee prices surged this week to multiyear peaks, extending stellar gains this year after frost damaged crops in the world’s biggest producer Brazil.

The futures price for Arabica coffee, one of the South American nation’s top commodity exports, soared on Friday to just over $2 a pound, the highest level since 2014.

The commodity has rocketed by a blistering 60 percent since January.

Lower quality Robusta coffee, mainly grown in Asia, leapt to an October 2017 peak of $1,993 per ton, capping a near 40 percent gain so far this year. “Several reasons explain the astronomical gains for coffee prices,” Rabobank analyst Carlos Mera told AFP, citing mainly the devastating weather conditions in Brazil.

Mera also blamed soaring transportation costs and political unrest in No.3 producer Colombia.

Brazil suffered a historic drought earlier this year.

That was followed by damaging frosts this week at key plantations in Minas Gerais — a southeastern inland state that produces 70 percent of the nation’s Arabica beans.

Sub-zero temperatures have “sparked defoliation of crops and even kill the youngest plants” that are crucial for future harvests, Mera said.

Arabica has also been heavily impacted because the crop has a biennial plant cycle, whereby low-yield production one year is followed by bumper output the following year.

The market rallied “on freezing temperatures in Brazil growing areas last night,” added Price Futures Group analyst Jack Scoville on Friday.

“Freezing temperatures were reported in much of Minas Gerais and Parana and also in Sao Paulo.

“It is not yet known how extensive the damage was but ... a significant part of the cop got hurt.

“It is flowering time for the next crop and the flowers were frozen and will drop off the trees,” he added, noting, however, that the weather was now turning warmer.

At the same time, world coffee demand is picking up this year as global economies reopen from the deadly coronavirus turmoil.

That has stimulated demand for Arabica, which tends to be used in coffee shops and restaurants, unlike the lower grade Robusta favored for making instant
coffee granules.

While conditions are ripe for high prices, commodity economist Philippe Chalmin explained that the cost of coffee has been particularly low in recent years, pointing out that a pound of Arabica cost more than $3 in May 2011.

“Coffee producers have experienced a very long price crisis,” Valeria Rodriguez, Head of Advocacy & Public Engagement at the fair trade association Max Havelaar, told AFP.

“In the last four or five years, most of them have been working at a loss,” she told AFP.

“If the crop is smaller, it means that there are coffee producers somewhere in Brazil who will have no coffee to sell, and therefore no income,” she warned.

The rising prices are being passed on to consumers, “but slowly,” according to Mera.

“Roasters use the futures market to hedge themselves against short price increases, so it usually takes three to nine months to see the effects at retail level,” he explained.

“Even then, the increases at retail level are much more moderate,” he said with other components such as transport, packaging and marketing contributing to the retail price.

The current rise in coffee prices is also part of a wider context of inflation in the cost of raw materials, whether agricultural or industrial — with copper and tin both breaking records in recent weeks.


Greece’s first underwater museum opens ancient world to tourists

Greece’s first underwater museum opens ancient world to tourists
Updated 10 min 46 sec ago

Greece’s first underwater museum opens ancient world to tourists

Greece’s first underwater museum opens ancient world to tourists
  • Greece has made diving part of its focus to attract visitors since legislation passed in 2020

ALONNISOS: Emerging from the crystal-clear turquoise waters of the Aegean Sea, Hans-Juergen Fercher has just returned from his fourth dive to where mounds of 2,500-year-old pots mark the site of an ancient shipwreck — and Greece’s first underwater museum.

“This is a combination of diving and archaeological diving. It is diving into history,” says the 48-year-old psychiatrist after pulling himself onto the deck of the Triton dive boat.

“It makes it special and unique.”

The museum beneath the waves at Peristera, a rocky outcrop off the island of Alonissos, opened in 2020, though the site has been largely mothballed until now due to pandemic restrictions. As Greece opens up its vital tourism industry, the site offers an example of a new and more sustainable source of revenue. Divers like Fercher and Lisette Fredelund are willing to pay €95 ($110) a dive — about 50 percent more than the cost of a regular recreational scuba outing — for a guided tour of a site once the preserve of professional archaeologists.

More wrecks have been discovered in the area — the middle of the country’s largest marine reserve — holding out the prospect that more such museums will open.

Greece has made diving part of its focus to attract visitors since legislation passed in 2020 making it possible to access such sites, Tourism Minister Harry Theoharis told AFP. “This is a type of tourism that attracts people all year round, a special audience that pays generously to dive,” he said, adding that 10 new diving parks are ready to be licensed under the process provided for by the legislation.

Due to the depth and technical difficulty of the descent, only qualified divers are allowed to visit the wreck of a ship that was delivering goods when it foundered, around the 5th Century B.C.

More than 4,000 two-handled amphorae are anchored in the sand, their positions marking out the outline of the wooden vessel, the remains of which have been washed away over time.

With four other wrecks discovered nearby, the goal is that they will in turn become accessible, adding Alonissos to the must-do list for divers around the world.


$9.3m invested in confectionery industry in Saudi Arabia

$9.3m invested in confectionery industry in Saudi Arabia
Updated 15 min 37 sec ago

$9.3m invested in confectionery industry in Saudi Arabia

$9.3m invested in confectionery industry in Saudi Arabia

RIYADH: Saudi Arabia Ministry of Industry and Mineral Resources revealed that the volume of investment in the Kingdom’s confectionery industry reached SR35 million ($9.3 million) as of July 15, 2021.

The ministry said the funds were pumped into 1,066 factories in the Kingdom.

A report recently issued by the National Center for Industrial and Mining Information indicated that investments in sweets and chocolate factories constitute 1.38 percent of the total investments. According to the report, foreign investments in the confectionery sector amounted to 3 percent of the total investments while the percentage of the Saudi investors in the sector reached 92 percent.

The report said the Riyadh region has the highest number of chocolate factories.


UK financial watchdog warns consumers over CoinBurp crypto launch

UK financial watchdog warns consumers over CoinBurp crypto launch
Updated 25 July 2021

UK financial watchdog warns consumers over CoinBurp crypto launch

UK financial watchdog warns consumers over CoinBurp crypto launch
  • CoinBurp said last week it had raised $6 million to build a platform for buying and selling non-fungible tokens (NFTs)

LONDON: Crypto broker CoinBurp has no authorization for a planned launch of its $BURP token and initial exchange offering on Monday, July 26, Britain’s Financial Conduct Authority (FCA) said on Sunday in the latest crack down on crypto trading.
CoinBurp said last week it had raised $6 million to build a platform for buying and selling non-fungible tokens (NFTs), digital assets that are attracting interest from some investors but also scrutiny from regulators worried about the risks.
“The firm does not yet hold full FCA registration under the money laundering, terrorist financing and transfer of funds (information on the payer) regulations ... but has submitted an application for the FCA for registration,” the FCA said in a statement.
Although CoinBurp is listed on the FCA’s temporary registration register, this does not allow any firm to claim to be registered or authorized by the FCA, the watchdog said.
“Whilst firms with this status can continue to trade, such firms and their personnel have not yet been assessed as fit and proper, and we have not yet determined their application for the purposes of the money laundering regulations,” the FCA said.
CoinBurp, which could not be immediately reached for comment, says on its website that “$BURP is coming! Be the first to know when we launch our very own utility and governance token.”
“Building this product means that CoinBurp — as a regulated broker — will have NFTs listed on the market and can be made available for investors in large and small quantities,” it said in a press statement on Friday.
The FCA statement is the latest in the watchdog’s warnings to consumers they could lose all money in crypto assets.
In June, the FCA said that Binance, one of the world’s largest cryptocurrency exchanges, cannot conduct any regulated activity and issued a warning to consumers about the platform, which has since come under growing regulatory scrutiny globally.


Tencent ordered to end exclusive music contracts

Tencent ordered to end exclusive music contracts
Updated 24 July 2021

Tencent ordered to end exclusive music contracts

Tencent ordered to end exclusive music contracts
  • Chinese regulators step up enforcement of anti-monopoly laws

BEIJING: Internet giant Tencent was ordered by regulators to end exclusive contracts with music copyright holders, adding to increased enforcement of anti-monopoly and other rules as Beijing tightens control over online industries.

Tencent controls more than 80 percent of “exclusive music library resources” following its 2016 acquisition of China Music Group, the State Administration for Market Regulation said on Saturday. It said that gives Tencent the ability to get better terms than competitors receive or to limit the ability of rivals to enter the market.

Tencent Holdings Ltd., best known abroad for its WeChat messaging service, has a sprawling business empire that includes games, music and video. It is among the world’s 10 most valuable publicly traded companies, with a stock market value of $680 billion.

In order to “restore market competition,” Tencent must end exclusive music copyright contracts within 30 days, the market regulator said in a statement. The company is barred from requiring providers to give better terms than competitors receive.

Tencent promised on its social media account to “conscientiously abide by the decision.”

Regulators are stepping up enforcement of anti-monopoly, data security, financial and other rules against Tencent, e-commerce giant Alibaba Group and other companies that dominate entertainment, retail and other industries.

The enforcement has hurt the stock market value of some companies. Shares in ride-hailing service Didi Global Inc., which made its US stock market debut last month, are down 21 percent after regulators announced a probe of its “network security” and ordered the company to overhaul handling of customer data.

Regulators have publicly warned major companies not to use their market dominance to keep out new competitors.

Tencent was blocked by regulators on July 10 from combining its game platforms Douyu and Huya on the grounds that might reduce competition.

On Wednesday, the Chinese internet regulator reprimanded Tencent, Alibaba, microblog platform Sina Weibo and e-commerce service Xiaohongshu for allowing sexually suggestive stickers or short videos of children to be distributed on their services.