El Salvador becomes the first bitcoin nation

El Salvador becomes the first bitcoin nation
A man wearing a protective face mask with the image of Salvadoran President Nayib Bukele poses for a picture at a bitcoin ATM in San Salvador, on Tuesday. AFP
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Updated 08 September 2021

El Salvador becomes the first bitcoin nation

El Salvador becomes the first bitcoin nation
  • The country bought 400 bitcoins worth around $20 million ahead of Tuesday’s launch

RIYADH: El Salvador on Tuesday became the first country in the world to adopt bitcoin as legal tender, although it suffered teething problems when the government had to unplug a digital wallet to cope with demand.

President Nayib Bukele, who pushed for adoption of the cryptocurrency, called for help from users who had already downloaded the government-backed app, to test if it was now working properly.

“Could you please try to register and post in the comments if there are any errors or if the whole process works fine?” the president wrote on Twitter.

Bukele said using bitcoin will help Salvadorans save $400 million a year on commissions for remittances, while giving access to financial services to those with no bank account.

El Salvador purchased 150 additional bitcoins on Tuesday, Salvadoran President Nayib Buekele said on Twitter.

Bukele said El Salvador was “buying the dip” after prices of the currency dropped sharply on Tuesday morning.

The purchase of 150 bitcoins, worth about $7 million, came after El Salvador bought 400 bitcoins worth around $20 million ahead of Tuesday’s launch. 

“El Salvador accepting bitcoin as a legal tender is a significant milestone for both the country and future of cryptocurrencies,” Abdullah Mashat, an analyst on cryptocurrencies, told Arab News.

He said: “Of course, accepting a cryptocurrency has its own unique challenges and that’s something El Salvador will soon discover.”

“This step won’t be the last from sovereign governments and I expect some other progressive governments to follow in order to attract global attention and more foreign direct investments,” Mashat said. 

Earlier on Tuesday, Salvadorans trying to download the Chivo digital wallet, which the government has promoted, promising $30 of bitcoin for each user, found it was unavailable on popular app stores. Then Bukele tweeted that the government had temporarily unplugged it, in order to connect more servers to deal with demand.

Bukele blamed Apple Inc., Google and Huawei’s app download platforms for the delay.

"Release him! @Apple @Google and @Huawei," Bukele wrote in one of his tweets, which was accompanied by a red-faced "angry" emoji. The wallet was later available from Huawei.

Prior to Bukele’s tweet, a growing number of users on social media platforms including Twitter and Reddit were calling on people to buy small amounts of bitcoin to support the El Salvador plan, Bloomberg reported.

Nigel Green, chief executive and founder of deVere group said: “It’s almost universally recognized that the future of money is inevitably digital, in some form or another.”

“I believe this is a threshold moment in the evolution of digital currency and that it ushers in the start of a new world as we can expect more nations, especially those with developing economies, to follow El Salvador’s historic lead.”

He acknowledged that there are significant risks associated with the move, including the possibility that El Salvador will run out of dollars and that institutions such as the IMF may not view a country that has adopted bitcoin favorably.

Decline

A selloff in cryptocurrencies widened on Tuesday, with bitcoin weakening nearly 4 percent while smaller rival ether fell more than 6 percent.
Bitcoin, the leading cryptocurrency, traded lower on Tuesday, falling by 8.73 percent to $44,771.04 at 6:08 p.m. Riyadh time and Ether slipped by 12.46 percent at $3,156.60, according to data from CoinDesk.


SISCO’s subsidiary LogiPoint acquires Elite Group

SISCO’s subsidiary LogiPoint acquires Elite Group
sisco.com
Updated 12 sec ago

SISCO’s subsidiary LogiPoint acquires Elite Group

SISCO’s subsidiary LogiPoint acquires Elite Group
  • The transaction is to be funded through bank financing and direct cash investment

Saudi Trade and Export Development Co. (LogiPoint) has acquired Elite Group through Green Dome Investments LLC, according to a bourse filing by its parent Saudi Industrial Services Co. 

The transaction was concluded on Nov. 25, with LogiPoint’s investment in Green Dome valued at SR58 million ($15 million).

SISCO expects the impact of the transaction to be shown in the consolidated financial statements of the fourth quarter of 2021, through LogiPoint.

The transaction is to be funded through bank financing and direct cash investment. 

Elite Group is an integrated land freight and courier solutions provider in the region. 


Bahrain outlook improves on fiscal reforms, S&P says

Bahrain outlook improves on fiscal reforms, S&P says
Image: Shutterstock
Updated 39 min 17 sec ago

Bahrain outlook improves on fiscal reforms, S&P says

Bahrain outlook improves on fiscal reforms, S&P says
  • The agency said it expects the government to benefit from additional financial support from its Gulf neighbours

S&P Global Ratings has revised Bahrain's outlook to 'stable' from 'negative' on the back of new fiscal reforms aimed at improving non-oil revenues and cutting state spending, the ratings agency said in a statement.

Rated below investment grade, Bahrain was bailed out to avoid a credit crunch in 2018 with a $10 billion package from wealthy neighbours, Saudi Arabia, Kuwait and the United Arab Emirates.


That money was linked to a set of fiscal reforms, but after the coronavirus crisis strained its finances, Bahrain in September postponed plans to balance its budget by two years and announced plans to increase a value-added tax.


"The Bahraini government recently announced additional fiscal reforms to strengthen non-oil revenue and rationalize expenditure. These measures, along with the more supportive oil price environment, should improve the sovereign's fiscal position", S&P said in a statement this weekend.


The agency said it expects the government to benefit from additional financial support from its Gulf neighbors, if needed.


Bahrain will double value-added tax to 10 percent next year, a move which S&P estimated could contribute receipts of about 3 percent of gross domestic product in the next few years, up from about 1.7 percent this year.


The Gulf state is also planning to rationalize operational government expenditure and social subsidies in 2023 and 2024, a move which shifts the focus of its reforms more on the spending side than on raising non-oil revenues.


"We believe there is higher implementation risk in expenditure rationalization as the delicate political and social environment on the island, which has constrained the government's efforts, persists", S&P said.


Bahrain has in the past backtracked on some reforms as its Sunni Muslim rulers feared that austerity moves would bolster the majority Shi’ite-led opposition and stir more of the unrest that rattled the country since the 2011 Arab Spring uprisings.


How Omicron is affecting Middle East markets

How Omicron is affecting Middle East markets
Image: Shutterstock
Updated 53 min 16 sec ago

How Omicron is affecting Middle East markets

How Omicron is affecting Middle East markets
  • Oil prices stumbled in their biggest decline since April 2020

DUBAI: The new COVID-19 variant, Omicron, has prompted global economic concerns, as fears of its spread begin to affect stock markets and oil prices. 

Saudi Arabia’s main market, the Tadawul All Share Index, opened 5.3 percent lower on Sunday, trading near 10,700 points. 

The Dubai Financial Market was down 8.49 percent.

Oil prices stumbled in their biggest decline since April 2020, with Brent prices dropping 11.55 percent to $72.72 per barrel when markets closed on Friday, while WTI slid 13.06 percent down to $68.15 per barrel.

The variant was first discovered in South Africa and had also since been detected in Belgium, Botswana, Israel, the UK, Australia and Hong Kong.

Within the Middle East Israel is the only country to have reported a case of the new variant so far, but some governments in the region have issued travel curbs to prevent the virus from spreading. 

On Sunday, Saudi Arabia expanded the list of African countries where it barred travel because of Omicron, adding Malawi, Zambia, Madagascar, Angola, Seychelles, Mauritius and the Comoros Islands.

The Kingdom earlier halted flights to and from South Africa, Namibia, Botswana, Zimbabwe, Mozambique, Lesotho and Eswatini.

Other Middle East countries, including the UAE, Bahrain, Morocco, and Jordan have issued similar measures. 


Saudi stock market drops 5.3 as Omicron sparks global concern

Saudi stock market drops 5.3 as Omicron sparks global concern
Updated 53 min 1 sec ago

Saudi stock market drops 5.3 as Omicron sparks global concern

Saudi stock market drops 5.3 as Omicron sparks global concern

Saudi Arabia’s main market, the Tadawul All Share Index, opened 5.3 percent lower on Sunday, trading near 10,700 points.


Aramco prepares work on its largest non-associated gas field

Aramco prepares work on its largest non-associated gas field
Updated 28 November 2021

Aramco prepares work on its largest non-associated gas field

Aramco prepares work on its largest non-associated gas field
  • The Saudi-listed firm claims it to be the “largest non-associated gas field” in the Kingdom

DUBAI: Saudi Arabia’s oil giant Aramco is marking the start of its development of the Jafurah unconventional gas field on Nov. 29. 

The Saudi-listed firm claims it to be the “largest non-associated gas field” in the Kingdom. 

The move is part of the Kingdom’s push to commercialize its unconventional resources and expand Aramco’s integrated gas portfolio.